Posted on 11/23/2012 2:28:04 PM PST by ex-Texan
https://www.youtube.com/watch?v=lWDdcD-1xoo&feature=related
Here’s a comedy routine regarding the sub-prime crisis from back then, two British guys. Funny, but sadly pretty true.
Absolutely not. I don’t blame Bush. He repeatedly warned Congress about the problem and was denounced by Pelosi, Reid, Frank and other d’bags.
In an expanding bubble:
Sellers were greedy and raised prices.
Lenders were greedy and wrote bad notes.
Appraisers were greedy and inflated property values.
Buyers were greedy and expected appreciating home values.
Speculators were greedy and expected big returns on flips.
Traders were greedy and developed new instruments to trade.
Developers were greedy to sell bigger and bigger houses.
Governments were greedy and saw a bigger tax base.
I can only assume that you are responding to the first half of my first sentence, when I wrote four paragraphs. I have read your entire rant and can respond to all of it, but why bother? You probably would not read it.
The most valuable things to understand about economics are the principles of supply and demand curves taught in basic-level courses. More advanced economics seem to concern themselves with how to pretend that the laws taught in Econ 101 don't apply. One of the major points in my switching from a conservative to a liberal was realizing that the rules in Econ 101 don't just say what will happen without government intervention. They also say what the "unexpected" side effects of government intervention are going to be.
I wish more people would realize what really happens in a bubble: people pay ever increasing amounts for goods whose actual value never changes very much. People don't lose money when the bubble bursts; people who buy things for more than they're worth are simply giving money to the people who sell them at such prices, in the hope that someone else will give them money.
You might want to check out Post 32. I didn’t think you were blaming Bush.
You might want to check out Post 32. I didn’t think you were blaming Bush.
I am a little confused by your post.
“One of the major points in my switching from a conservative to a liberal was ...”
So you were conservative, but are now liberal?
“... realizing that the rules in Econ 101 don’t just say what will happen without government intervention.”
But they do. Econ 101 describes market transactions in the absence of government intervention. At some point (perhaps econ 101, perhaps intermediate economics), there is a discussion of government actions such as price controls.
Your post makes more sense to me if you switched from being a liberal to being a conservative. Perhaps that is what you meant to say.
The truth has two parts in this debacle.
The first truth began with the Community Reinvestment Act. It is not honest that the author implies that it was the banks idea to give mortgages to unqualified individuals. That losing proposition was forced upon them by Carter, Clinton, Cuomo and their ilk.
Banks don’t like to lose money. Distort free capitalism and the system will tank. Forced to make money losing loans, banks found a way to make them winners in a Ponzi scheme that ended with the insurers and Federal bailouts.
What goes around came around. It started with the Feds and it ended with the Feds using our money. Jail the bankers after you jail Barney Frank, Cuomo, and Raines.
The best part of this article is the attack on derivatives. Many of them should be banned altogether.
I would simply have to know about derivatives in order to agree to banning them.
As I understand it, mutual funds are derivatives, and I see nothing especially wrong about mutual funds. Mutual funds make it possible to own a basket of stocks. Such a basket has less risk than owning an individual fund. On the other hand, you have to pay someone to manage the basket of funds, so you may lose out in the end. Caveat Emptor. If the government objected to mutual funds, I would prefer a warning letter or negative TV ads as better than an outright ban.
I'm sure you were considering more exotic derivatives. I don't understand them so I steer clear of investing there. Should no one be allowed to invest? That seems a little draconian. What about a football player who bets against his team? That is a problem because of the huge conflict of interest. If something so clear cut applied to a particular derivative, then I would be open to an outright ban. I would have to know the specifics.
correction:
“individual fund” should have been “individual stock.”
You are correct. I spoke too broadly. I have no issue with mutual funds. But the complex derivatives contribute to market volatility and inability to analyze the value.
I suppose Caveat Emptor could apply, but the very purpose of market regulation was to stop that approach.
I have said this all along, greed will destroy this nation, it is not merely financial greed, no, it is also greed by those who see their skin color as allowing them to have precedent over others, illegals will never stop advocating for amnesty or illegal immigrants ‘till everyone is of the same shade of color, it is insanity driven by sheer greed, a political greed, yet greed all the same.
Where did you get that I blamed Bush? And the point is mortgage backed securities were not regulated as other banking activities were. Your response has no connection to my post.
A simple search will allow you to find hundreds of thousands of pages of banking and mortgage regulations. You are very wrong.
Well, I guess you need to join the Barclay defense team, and tell UK High Court Judge Julian Flaux that his October ruling was wrong-headed and you can explain why.
The judge, I’m sure, will be interested in why he should overturn his assessment that Barclays engaged in subterfuge to hide the scope of the Libor rigging and ordered Barclays to defend itself against the Guardian Care Homes claims.
Maybe with your vast knowledge of Libor rules you can get the American and British regulators to reverse the £290m fine against Barclays for manipulating the Libor and inter-bank rates between 2005 and 2009.
Let me know how it turns out.
You need to distinguish the difference between “breaking the law” and “there are no laws”.
Finally, some sense on this thread.
Neither funny nor largely true, I’d say.
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