Word: danger
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...pricing of risk." He went on: "That encourages excessive risk-taking, and sows the seeds of a future financial crisis." Why the change of heart? "Decisions about the balance between liquidity and moral hazard is a judgment we are making almost daily," he told the committee, referring to the danger that lending to banks in this way only encourages them to take risks knowing the central bank will bail them out. Speculation he was leaned on by the government to inject the cash got short change. "This operation was designed entirely in the Bank," he hit back. "I give...
...Bank of England had agreed to make an unspecified amount of emergency funds available to it, worried depositors began retrieving their savings. Although the Bank's move aimed to reassure punters, it only served to spook them. Worried that the lender - Britain's fifth-largest mortgage provider - was in danger of insolvency, savers across the country rushed to clean out their accounts, ignoring assurances from the bank's CEO and Britain's Financial Services Authority (FSA) that Northern Rock's capital reserve was sound...
...fact that Northern Rock has never really been in serious danger of going bust throughout this crisis scarcely mattered amid the clamor to withdraw funds. "When people hear the words 'emergency' and 'bail out,' then concerns outweigh those statements saying 'the bank's solvent,' " says Nic Clarke, a banking analyst at Charles Stanley in London. "It doesn't really matter if the rationale is right or wrong - they're voting with their feet...
...Your Money and Your Brain, author Jason Zweig says humans are wired to act this way. The amygdala, a tiny, -almond-shaped knob of tissue in the brain, responds to potential risk by flooding the bloodstream with stress hormones such as corticosterone, which enable us to react quickly to danger. These emotional warning flares can be lifesavers if, say, you encounter a snake, but the sudden waves of emotion make it hard to stay calm in the face of a whipsawing market. Zweig says brain scans reveal that merely being told that you're losing money is enough to make...
...denounce them as pacifists and vote them out of office, Rep. Marcy Kaptur (D-Ohio) wondered at the timing. "Three weeks before election seems to be an odd time to be authorizing war." While many senators (including Kerry) parroted bogus stats supplied by Iraq "experts" on the imminent danger Saddam posed to the U.S., Rep. Jay Inslee (D-Wash.) counseled caution: "There is no victory in the destruction of one tyrant while breeding 10,000 terrorists." John McCain, a Vietnam POW for five years, voted for the war; but a few used Vietnam as a warning from history...