Commentary | Hyde Park: The XYZs of the economic crisis

Part II of The Daily’s guide to absurd financial realities

L is for Lehman Brothers – Think of this as the story, “The Little Engine that Could.” Only in this case, instead of the engine completing the seemingly impossible task of dragging a large shipment over treacherous terrain, it accumulated a total debt of $700-billion and nearly destroyed the economy. I think I can, I think I can!

M is for Madoff – As in Bernard Madoff, a modern-day Charles Dickens villain, who through a giant pyramid scheme stole over $50-billion from his clients. Some of his clients include big-time Hollywood directors, multinational banks, universities, and charities. While awaiting trial, he was sentenced to house arrest in his $7-million home. I’m told that devouring a baby would net him three months in a minimum security prison.

N is for Naked Position – When you go naked, you take a position. For instance, owning 500 shares of General Motors that isn’t protected from loss or hedged. It’s a fairly common practice. When an institution like AIG insurance goes naked, it loses about $100-billion. Believe it or not, I did not just put this here to make a cheap sex joke.

O is for Overnight Rate – Whenever you hear or read something about interest rates being lowered or raised, it’s referring to this – the rate at which commercial banks can borrow money from the central bank.

P is for Pieces of Paper with No Intrinsic Value – According to the critics of the economic bailouts, this is something produced by the institutions we have bailed out. According to me, this perfectly describes a university degree. So that being said, where the fuck is my bailout?

Q – How many words in the English language begin with “Q?”

R is for Real Estate – “Also a synonym for risk-free investment because of the relative safety and stability of real estate. Real estate investments rarely fall making them the best place to put your money.” – A dream I had last night where I was speaking to a financial advisor from 2003.

S is for Stimulus Package – A large sum of money invested by the government in things such as public works projects and job creation initiatives. A stimulus package is like taking a mixture of drugs that may give you an amazing high, but if mixed improperly might do nothing, cause a bad trip, or kill you. Let’s hope the Obama Speedball, err $819-billion stimulus package, doesn’t kill us.

T is for Too Big to Fail Policy – There are certain things in this economy that depend on the existence of a few large firms. Problem is, which firms make up that list? A more apt analogy perhaps would be like deciding which member of a pretentious indie rock band to eliminate without compromising their indie cred. The monotone lead singer, the weird chick in the back who does nothing but clap, the triangle player with the asymmetric haircut, or the bassist who’s always wearing shirts that make reference to early nineties pop culture?

The rest of the letters don’t have words or terms I can use, so I’ll end it off with a thought. We are now living in a world where the various governments of the world have spent $10-trillion on bailouts to rescue their respective financial sectors because it’s too big to fail after years of telling us that they’re isn’t enough money for education, health care, or the environment. Instead of placing blame or trying to argue who should get how much, maybe the question we should be asking is should anything be allowed to become “too large to fail” in the first place.

Duong Pham is a U3 Economics student. Send him your alphabetic solutions at duong.pham@mail.mcgill.ca.


Comments posted on The McGill Daily's website must abide by our comments policy.
A change in our comments policy was enacted on January 23, 2017, closing the comments section of non-editorial posts. Find out more about this change here.