Mr. Obama. Does no one inform you about what is happening?

Sir, I read President Barack Obama’s “Now for a firewall to stop Europe’s crisis spreading” October 28, and it makes me wonder about who is supposed to inform the US President about what is happening, as obviously he is not. 

The financial fire started with the AAA rated securities backed with lousily awarded mortgages to the subprime sector, which had become too popular with the banks because, as these were officially perceived as not-risky, they could be purchased against only 1.6 percent in capital, which allowed therefore the banks to leverage their equity 60 times and more, something which of course must sound pure music for the ears of bonuses recipients. 

When that “not-risky” AAA was discovered to be very-risky, the banks had to immediately look for other officially “not-risky” and where they for instance found Greece, and swamped it with credits until Greece also drowned. 

And so now they are looking for new officially “not-risky” borrowers, who they can lend to without much scarce bank capital being required. Therefore, in the current fire, the flames are jumping from one officially-“not-risky” tree to another officially-“not-risky” tree and the last standing officially-“not-risky” tree will presumably be the US dollar and US public debt, but once the flames reaches there, it will also burn. 

The only way to start building a firewall, or to rebuild what has been burned already, is to allow banks to lend to the officially-“risky”, like those small businesses and entrepreneur s and which, as a class, have never ever been the cause of a systemic bank. Mr. President may I humbly remind you of that when the going gets risky, we need so urgently the risky risk-takers to get going.