The sub prime crisis impacting the markets these days have made me to pour out my observations.

We all know by now, the stunning manner in which the sub prime housing mortgages were created in the United States of America, in the first place, and then rated before converting into mortgage backed securities and sold to gullible investors around the world.

Well. Put the cart before the horse or horse before the cart? The inquisitive, intelligent investor – small or big – should always question the borrower and himself whether the investment is worth considering. This question should be answered at all times – because every time, situation changes.

The way we have risk factors built into the pricing of a product or service offering, we should have past defaults also loaded in the pricing of a financial (or investment) product. As the name goes, these past default compensation will be permanent in nature. It is a different matter – such marks up go to the new investor instead of compensating the investor who has been defaulted (or deceived?). As long as the payer remains the same – the same country or its citizens, corporate or individual, it is okay. You pay a price for the past deeds.

Well. This approach will definitely put a stop to such massive squandering of gullible small investors around. It is another equally important aspect, whether such small investors can be penalized for their knowledge or lack of it in such high stakes international ‘cover’ operations indulged in by big countries and big names!

Coming to credit rating practices – we know by now very well, how this can be propped up or pulled down. If a friendly country, corporate or group of customers were to be promoted and rewarded, at the time or just before, they resort to international begging (oh.. borrowing should be the parliamentary language), leading ‘international’ ‘rating’ agencies come out with their ‘up gradations’. On this basis, fence sitters or other one time small investors form an opinion and go in for investing their life time savings with the fondest hope that everything would be fine with the report card produced by the rating agencies.

It may be another cover story how such rating agencies pull such strings at the last minute to make the small investors lose their life time savings. We should have a rating system for such rating agencies. It can be a very good business proposition. Just follow up the ratings awarded by the rating agencies and closely monitor such beneficiary rateds! You may have some interesting patterns!

Well. Loss is nothing. Life is full of them. There is always a price tag… We really cannot improve something or create anything new unless we are willing to give up something. This is a fundamental truth of life that everyone must learn to accept.

But the real loss is the time spent on thinking over, deciding on the next course of action, getting advice or feedback from the so-called self-appointed self-servers - SCSASS specialists. If our small time small investors spend their time on further productive efforts, they can benefit themselves much more…