The blame du jour obviously falls on President Bush, in no small part since we're coming off an election year when everything was blamed on the guy and it is now politically expedient for Democrats to pin the blame on the anyone but themselves since they no hold all the reins of elected offices.
Cute politics, but is it fair?
Let's set aside the atrocious escalation of questionable credit fueled by Fannie Mae and Freddie Mac, in which Beltway Democrats played a huge role. Instead, let's consider the behavior shown in this article on how someone with $20,000 in annual income pre-qualified to purchase a $1.5 million condo.
Can any government regulatory regime, let alone one President, stop individuals from making incredibly bad choices? Likewise, can such government oversight eliminate instances of shady and improper activity in the private sector?
It's much like the idea of severe gun restrictions. Just because firearms are outlawed, doesn't mean a less than well-meaning individual is going to abide by such legal limits.
Moreover, by definition bubbles in business activity are created by poor individual choices and improper and/or foolish corporate behavior occurring in large aggregate quantities. Recall the crash of tech stocks in 2000 and beyond, when a whole host of people - and entire industries - woke up to the fact that ".com" didn't necessarily mean success or financial windfalls.
"Irrational exuberance" is a fact of human behavior. While government can establish rules and regulations that mitigate such behavior - it cannot eliminate such misdeeds entirely. And government certainly has never been very good at all - for a variety of reasons - in attempting to regulate new and rapidly evolving industries and markets.
All to say, is the feel good, blame game of "Bush did it" really a prudent path for Democrats?
Oversimplification of economic reality can certainly lead to political gain. That occurs in small part because the American public has long placed too much credence on the idea that government (and thus elected officials, especially the President) deserves credit or blame for economic cycles. By chance, there might just be two sides to that coin.
Posted by Eric Earling at February 20, 2009 04:42 PM | Email ThisThe Bubble was simply the result of the Fed pressures to keep interest rates low, government pressures from both parties to lower lending standards that made borrowing available to more and more people, and more credit to spread around about home ownership.
With easy credit came more home buyers. Slow growth in supply and high demand from more and more buyers, made suddenly eligible for money they shouldn't have been given, forced costs of homes increasing under the increasing demand of easy credit. Fannie and Freddie pushed the credit industry over the edge by buying up trillions in bad debt at the time when we could have acted to stop the insanity and moderate the crisis. But one party didn't want it to stop, and obstructed to the end to allow it to run its course.
There were plenty of people, including many of those coerced into taking advantage of the insanity, that knew it was wrong. But with government the biggest cheerleader and defender of the insanity, who can be surprised that people didn't figure, "hey, if I go down so does everyone else"?
Commercial mortgages will be next, and perhaps worse than residential mortgages. The worsening economy under Obama's insane spending and nationalization policies will determine how bad it eventually gets.
Posted by: Reality on February 20, 2009 05:16 PMBull puckey. The Bush administration made about 20 separate attempts to increase regulations on just the financial train wreck that the subprime mortage industry was becoming. John McCain in 2005 had a bill in front of the Senate calling for just such restraining regulation. All of those constructive moves were politically stifled by Congressional Democrats, who were reaping the political "credit" for getting high-risk borrowers into low-equity, low-payment, temporarily low-interest loans whose payments they couldn't maintain. They planned all along to blame the financial "debits" on Bush, with the fervid help of the MSM.
The huge payoffs from Fannie and Freddie, in the form of bonuses, inflated salaries and campaign contributions, didn't go to Republicans. They went to Barney Frank, Chris Dodd, Obama himself, Joe Johnson, Franklin Raines, Jamie Gorelick and Rahm Emmanuel - among others.
Try another fib.
Posted by: Insufficiently Sensitive on February 20, 2009 06:39 PMThe failure rate of these would have been a burden, but would not have brought down the whole mess EXCEPT that as time went by people who qualified for a $300,000 mortgage also took advantage (equal protection under the law) and bought "their dream home" by taking a mortgage using the same ( remember equal protection under the law) lending standards. People who would qualify under the old standards for a half million were now "qualified" to buy a million dollar place. Real estate "professionals" were raking in cash and so was "The Greatest Generation" as they benefited from the law of supply and demand being artificially squeezed by all of this artificially generated "demand." People wanting gambling money were also able to take out a second using the new criteria.
Republicans are totally guilty, may be even more so, for not addressing this. They knew what was coming, but did NOTHING to stop it. NOTHING. Got it, NOTHING. There were a few, but the Republicans as a whole did NOTHING. Don't point the finger of Democrats, point it at POLITICIANS. With a FEW examples, very Goddamned few (all Republican) POLITICIANS are responsible. Think about this when you give money to ANY politician.
Money was flowing into State and federal coffers as the sales prices went through the roof taxes on the transactions were tracking the sales price rise as well as the increased number of purchases. People in the housing building and mortgage industry were raking it in and paying income taxes as well.
Look geniuses, it was the Goddamnes stinking filthy Republican politicians who were all over squandering future generation's hard earned dollars to borrow dollars to build Ted Stevens stupid bridge to an island with the population of a bird cage. Get real. It isn't so much Democrats who are the problem, it is politicians,
What this was was is theft by "The Greatest Generation" from all who follow. They want their free prescriptions, increased profit on their real property, the opportunity to buy bonds that "pay" (to build a worthless bridge in Alaska) etc. And theft by people (politicians) who wanted to increase the tax receipts to buy votes, the wealth of the wealth of younger generations. Yea, tell me how much they love their kids - I ain't buyin' it.
Look, I just got back from Mesa and every one there seems to think they have a "right" to live it up on what selling their (artificially inflated) real property provides them. I lay this mess primarily at the feet of those who both spawned the loser generation that came of age in the 60's and the 60's generation and those who came of age in the 70's (The Me Generation). I came of age in that generation and hated it then and I did so, with good reason.
These are the people who stole from later generations and only now are younger people waking up to the fact that they didn't pay attention to, and recognize, what these Goddamned crooked perverts were doing. The majority celebrated the acknowledged "fact" that it is all about me. I never did. But then I lived in "low income housing" as a tot and had parents who did not subscribe to that ethic. The unfortunate part of the prosperity of the 50's and 60's is that so many did not recognize that development of character is what raising great future generations is all about.
I'm still trying to discern exactly which generation of Americans set this decline in motion. Was it the WWII generation, or was it the generation that preceded them that did not bring up people to be good parents.
I can remember my brother laughing when I called people 60 years and older the newest "parasite class" back in 1992. My brother is very smart and when I explained myself he agreed that he recognized the dynamic that was in play. So if my assessment it was the children born in the 30's that became America's first class of parasites. Their parents loved them, but simply didn't have the intellectual ability to recognize that the Hoover administration (planned economy and every thing else) and the Roosevelt administration (with the nanny state) was feeding them a line of shit. And so to many parents raised their children to be parasites or to rely on Uncle Suga'. That is where I am leaning as I write this. It really began in the thirties.
Clinton was their boy, the people I talk about above overwhelmingly elected him. GWB, who I came to refer to as Curious George was clueless and now we have someone who is committed to continuing to placate these parasites in Chetah.
Hold on tight, it's goin' to be a rough ride. The only hope is revolution by the generations who are the true victims here - my nieces' and nephew's and my daughter's generation.
Don't think they (the younger generation of winners) don't recognize what the dynamic is - I have twenty something nieces and nephews who are worked up to a pretty good state of being pissed the hell f'n off.
They and their friends are saying "let those holding the worthless paper suck rocks" (again the generations I referenced above). They knew what the score is, and the younger generation of future leaders is saying "screw em'."
Once I explain that "rescuing the economy" is all about making sure those who participated in and accepted the ethic of "The Me Generation" feels no pain (at the upcoming generations' expense) they recognize what was in play as this developed. Let them suck rocks.
By the way, my nieces and nephews are college educated and were made to "make their own way" even though they are upper middle class. They only got help when they had already done all they could do for themselves, and they have all worked their asses off. They benefit from being raised in homes where they enjoyed the trappings of what they will someday inherit financially, but not a Goddamned one of them was allowed to nurse at the tit that their parents and grandparents slaved for while growing up and getting an education.
Nobody owes them a Goddamned thing except respect for what THEY have achieved. We help them to achieve when they have exhausted all other options (and we kick their ass into gear when they need it), we hand them nothing.
I'm almost 50 and my three month old daughter will benefit from the same ethic. My siblings had children in their twenties but I started late and my (hopefully many) children will be treated the same as the kids that came up while we all were all struggling. They will get all the help they need AFTER they have done all they can do for themselves. PERIOD.
Enjoy the trappings of being born into a family that has a strong work ethic, but don't expect to "do your own thing" and have your family to just think that you are "God's gift to humanity" and cater to your every want or to hand you money just to placate you. You are going to have to learn how the world really works.
God (and the world and your parents) helps those who help themselves.
Posted by: JDH on February 20, 2009 07:09 PMFollowup: Does Congress or the President write laws?
Posted by: pbj on February 20, 2009 07:11 PMMeanwhile, a bunch of Clinton era thugs got rich off of running the government run organizations that dolled out all of the unsubstantiated loans, and then got out while the getting was good.
Bush's biggest blame lies in his usual awe-shucks nature where he was willing to pander to the other side of the aisle rather than get tough when toughness was desperately needed. Neocons are almost as big a failure as Progressives, and the two together are a deep recession/ depression creating monster.
Posted by: Jeff B. on February 20, 2009 07:26 PMPolitical leaders can make some differences in public perceptions and sometimes can affect the mood of investors, but the market is driven by all sorts of independent factors that politicians can't really do more than watch.
That doesn't stop them from taking credit in good times though.
Posted by: deadwood on February 20, 2009 07:31 PMIt is like two bank robbers robbing a bank in front of everyone and then outside the bank when confronted they start arguing about how it was robber 1 that planned it so he is at fault and robber 1 says it was robber 2 that pulled the gun and asked for the money so he is at fault. The crowd starts to argue and in the meantime the two walk away to go rob the next bank.
WAKE UP! They are robbing us blind and you guys are letting them get away with it!
Posted by: Lysander on February 20, 2009 08:46 PMIt's pretty simple and clear. If there was no market for no document/interest only loans, then mortgage companies wouldn't have popped up everywhere to grant mortgages and sell them off.
Posted by: Thomas B. on February 20, 2009 10:00 PMOf course, the Republican Party OBVIOUSLY can do no evil...
Posted by: demo_kid on February 21, 2009 08:28 AMClinton didn't balance the budget, the Congress did that--Clinton just took the credit...
Posted by: Bill H on February 21, 2009 09:12 AMIn this case, 'promoting affordable housing' was a mendacious label for diverting the supposedly safe savings of A into the hands of a credit-unworthy borrower B so that crooked politicians of the Clinton administration could take credit for B's temporarily-improved fortune. Fannie and Freddie, with their obscene mortgage-backed 'securities', provided the shield which prevented honest investors from evaluating the enormous built-in risk.
The whole scheme was crooked from day one, and had nothing whatever to do with housing that any honest person could afford. The travesty was that the rich people who got richer are still flush from their ill-gotten salaries and bonuses and campaign contributions from Fannie and Freddie, and that they are all Democrats with names like Barney Frank, Chris Dodd, Barak Obama, Joe Johnson, Franklin Raines, Jamie Gorelick and Rahm Emmanuel.
Posted by: Insufficiently Sensitive on February 21, 2009 09:59 AMBush is in the lead - most of the dirty work happened on his watch and he could have used the Executive Order to reregulate lenders.
Posted by: KS on February 21, 2009 10:02 AMAs is rather normal with so many well intentioned feel-good liberal ideas it wasn't exactly well thought out. Forcing banks to make loans to people without sufficient income will cause the price of housing to inflate. Liberals artificially tinkered with the loan market and look what happened. A home you had to qualify to buy for $60,000 in 1980 shot up in value to $250,000 in a mere 20 years and you no longer had to "qualify" to get a loan to buy it.
Yeah, yeah, there are crooked lenders out there, and the left as always wants to place the blame on capitalism. Even crooked lenders weren't dumb enough to lend money to people that they knew wouldn't be able to repay their loans. Only liberals are that dumb.
Posted by: Bill Cruchon on February 21, 2009 10:17 AM"Hope latest victim of economy"
Gosh how did that happen? It certainly wouldn't have anything to do with the media's constant stream of doom and gloom starting last summer? No that couldn't have had anything to do with it. I couldn't possibly have anything to do with a President that has pumped fear and pessimism into Americans day after day since his inaguration.
There exist all sorts of economic theories and none of them are perfect. The one I believe in the most has to do with faith. As long as you believe in the economy and continue to participate it will do well. The moment people lose faith they quit buying, companies begin to lay off people and the downward spiral continues. Obama feeds this with his constant messages of further gloom ahead.
A cynical commentor would think Obama wants the economy to continue to decline as a convenient reason for his party to enact their platform. Only the most cynical right wing nuts would believe that Obama is actually as far left as blowhards such as Limbaugh and Hannity say he is.
Of course, the Republican Party OBVIOUSLY can do no evil...
Gee, President Bush has been criticized here many times for not pushing the oversight he wanted, and the GOP in general for not standing up and asking more.
We've yet to see any of your Marxist Slavers denounce a SINGLE of your comrades regarding their complicity in this fiasco.
So put up or shut up, Slavery Party Failed Abortion. Go on record as condemning Frank and Dodd for ignoring the warning signs in 2003 and 2004 and stating that "there is no problem with Freddie Mac/Fannie May".
Do you have the intellectual and moral strength to actually do it? To avoid being a hypocrite?
My guess is no...
Posted by: Shanghai Dan on February 21, 2009 11:41 AMThey are still just like the mean little snots they were when they were kids.
At least on our side we can talk about how McCain was a rotten RINO candidate, and that Bush was way too eager to make nice and compromise with the left, and should have vetoed a ton of pork spending bills.
Lefties still think Carter was a wonderful President, and Al Gore, one of the planets hugest phony hypocrites is one the their biggest heroes.
Posted by: Bill Cruchon on February 21, 2009 12:00 PMIn the grand scheme of things, I can certainly say that both parties share responsibility.
On the other hand, your ilk doesn't care about "responsibility". You're completely blind to how the Republicans and their quest for tax cuts and deregulation do their part to destroy these systems. You don't want a "well-functioning economy", you only want a kleptocracy for you and your friends.
Then again, you're living off the backs of Chinese slave laborers. Why should I expect any notion of reason or fairness from you?
@29: And the right HAS any responsibility whatsoever? What a laugh. Tell me another good one.
Like, for example, how Republicans love to line up at the trough for pork, perhaps?
Posted by: demo_kid on February 21, 2009 12:51 PMOnly a lefty would be so brainwashed as to think Presidents are empowered to govern, like Stalin, by decree, or Executive Order, or other antidemocratic means.
And only a malicious lefty would bring such ignorance (well, lies and misdirection, maybe?) to a discussion as to assert the 'dirty work' happened during the Bush administration. For the record, the kick-start of the housing bubble was the Clinton Administration's expansion, in 1995, of Carter's CRA, coercing banks to lend huge amounts of good money to bad borrowers. Without that travesty of law, the whole subprime catastrophe would not have been possible.
Posted by: Insufficiently Sensitive on February 21, 2009 12:54 PMOk fine. Now, Demo-kid show us exactly how Republican "deregulation" led to the housing bubble burst. What did Republicans "deregulate" specifically and how might that be tied to the current economic situation?
Back up the talking points with some specifics.
Thank you for proving my point. Good to know that you are simply a partisan troll of the most extreme Marxist variety.
Zai hui ni da ben dan hou zi!
Posted by: Shanghai Dan on February 21, 2009 01:22 PMI think his analysis is spot on and he also addresses the "theories" that those on the left have attempted to put out there--including the canard that Gramm-Leach-Bliley (repeal of Glass-Steagall) was a "cause". If anything, this repeal may have HELPED the credit meltdown, since otherwise, the commercial retail banks would not have been able to purchase the investment banks and investment banks would not have been able to restructure as commercial banks.
He says "I believe that a strong case can be made that the financial crisis stemmed from a confluence of two factors. The first was the unintended consequences of a monetary policy, developed to combat inventory cycle recessions in the last half of the 20th century, that was not well suited to the speculative bubble recession of 2001. The second was the politicization of mortgage lending."
Here's the whole thing:
Deregulation and the Financial Panic
I don't think you need a subscription to read it, but I'm not sure, since I have one.
Haven't received that devastating evidence yet from Demo_kid.
Well, maybe he's out enjoying this beautiful, sunny day. Or perhaps he's prowling through archives of the Huffington Post for evidence. That would have to be a lot of fun.
Posted by: Bill Cruchon on February 21, 2009 03:33 PMWow, what a big surprise.
You know, this works every time. Ask a liberal for specific evidence to back up the nonsense the flows from their keyboards and they either insult you, or simply disappear.
We can make these trolls either go away or be honest. All we need do is ask them to support their arguments with facts.
I suspect they will go away real fast.
Posted by: Bill Cruchon on February 21, 2009 06:29 PM#31 - Obama seems to like them, doesn't he ? Look, in Bush's case, Congress did not want to act - when the Dems controlled it. In this case, this would have been warranted - noting the current consequences. If you think otherwise, why not when Congress is obstructionist ?
Posted by: KS on February 21, 2009 08:39 PM@36: Hours later not one word of specific evidence has been provided by Demo_kid to back up his blather.
Unlike lazy right-wingnuts, I actually have to work on the weekends. I'll get to it when I get to it. Still, while I can agree that monetary policy was partly to blame, the second claim that the "politicization of the mortgage lending industry" was to blame is not completely convincing nor even-handed.
Then again, quoting one of the fellows that got us into this mess seems disingenuous!
Posted by: demo_kid on February 22, 2009 04:24 PMSo what "regulations" did the GOP tear down that led to the fiasco? That's your assertion - back it up.
Posted by: Shanghai Dan on February 22, 2009 04:29 PMSo, go ahead, dream up some lie that says the GOP is bad and the reason the housing market collapsed, but that President Clinton is clean and right about everything he signed.
Go ahead, try to twist that one...
Ni shi ben dan, Slavery Party Failed Abortion!
Posted by: Shanghai Dan on February 22, 2009 04:49 PMJust a hint, Demo_kid, you might want to have your facts at hand before your fingers hit the keyboard. If I may make a suggestion you might also dig into those myths you believe in apparently on nothing more that faith. You might discover what a lot of us have. Leftists are liars.
Posted by: Bill Cruchon on February 22, 2009 05:05 PMHOPE AND CHANGE!
Posted by: Shanghai Dan on February 22, 2009 05:13 PMIf we hold their feet to the fire and ask them to support their arguments they will slither away. Shining the light of truth on them is the best thing we can do. It works every time.
Finally they'll go away and we won't have to read "Bush lied us into war" and "Caribou Barbie has a daughter who is an unwed mother" and all the other mean-spirited tiresome talking points the left uses instead of actually having a real discussion about issues.
They'll never go away entirely and if leftists want to have a real discussion if course we would all welcome it. When they make statements let's make 'em back them up. As we've seen that makes them very, very uncomfortable. Might make a few of them look in the mirror, too. That would be a good thing.
Hmmm... shall we start with the deregulation of credit default swaps by the Gramm-Leach-Bliley Act? Or maybe we can talk about when the Office of the Comptroller of the Currency prevented state governments from investigating national lenders for predatory lending and fraud? (That certainly conflicted with Bush's attempts to promote an "Ownership Society"! Good thing the office was part of the executive, right, and could take care of some of these problems without action from Congress?) Perhaps we can discuss the role appraisers had in outright fraud? The inflation of the housing market due to speculators? Exotic mortgage instruments that shouldn't have been granted to uninformed homebuyers? Maybe a completely nonsensical monetary policy on the part of the Fed? Nearest I can tell, NONE of those had to do solely with trying to get lower-income folks into homes through the CRA. They had more to do with a government that was not eager to put the brakes on an economic sector when the good times were rolling because of their slavish devotion to greed and economic growth at all costs, and a widescale abandonment of responsible lending practices and calculation of risk by the lending industry as a whole.
With regards to Clinton's signing statement, I have no intention of defending him. Clinton was a moderately successful Republican president in my mind. Just because I'm on the left doesn't mean that I need to believe all of the crap Democrats shove my way, or to even claim that the Democrats weren't responsible at all for this mess. However, idiots like you on the right seem so hell-bent on blaming the CRA for a problem that is far greater than that, and can be laid at the feet of BOTH parties. The problems with the market aren't confined to the lower end of the housing market at all (which they would be if the CRA was the only problem in play), nor are they limited to the areas or institutions serviced by the CRA. Heck, even a dimwit can see that it's in the best interests of lending agencies to get rid of the CRA simply to boost their bottom line (and ONLY their bottom line), and to hell with the consequences in the communities they would no longer serve.
But hey, why take responsibility for YOUR share of the mistakes, right? Executive agencies had the power to stop this by using their regulatory powers and they didn't, but why NOT simply pass the buck and blame poor people instead? It's the Republican way, of course.
So kyss meg i raeva, fanden.
@41: Just a hint, Bill-O... very few of the idiots that post on here provide their own backup sources. I'm not going to post an entire research paper every single time you fold your arms and say that you don't believe in gravity, or basic economics, or any one of a number of things I don't quite have time to explain to you.
Heck, I could provide you with all the details you want, and I'm not going to change your mind. Nothing is going to swerve you away from pure, rabid partisanship, even if that will end in disaster.
As far as stereotypes, I don't think that I indulged in any here right now, at least not as foul as what I'm called here on a regular basis. "Party of adults" my a**! The level of discourse on here is akin to grade school... the level to which the content, debate format, and immaturity sinks on a regular basis is astounding. Figures that any representatives of such a morally and intellectually bankrupt political philosophy would have to stoop that low to try to make their points.
And before you can say "I know you are but what am I" again, I'm not the genius that throws out all of the right-wing slurs whenever my toes get stepped on. As the Traitor says, nong si gang du. (Did I get that right? Needed to ask a friend of mine from Shanghai. One that I actually respected, of course.)
GLB (passed in 1999 and signed into law by Clinton--not Bush) had NOTHING to do with credit default swaps (CDS's). GLB did repeal Glass-Stegall. Glass-Steagall is what required Bank of America to sell off Transamerica in 1933--it required separation of various financial entities, including retail banks, investment banks and insurance companies. GLB did not have ANYTHING to do with the problems in the financial industry. Getting rid of the Glass-Stegall restrictions allowed some of the investment banks to be saved in ways that could not have happened under Glass-Stegall.
I don't think CDS's even existed in 1999, when GLB was passed. I believe the first CDS proposal I saw was around 2002 or 2003. Perhaps you are confused with the Commodity Futures Modernization Act, passed in 2000 (and signed into law, again, by Clinton).
Do you even know what a credit default swap is--how it functions? It is simply a way for a financial entity who has too much C1 risk (that's credit risk), to reduce that risk, or to reduce the amount of credit exposure they have to a specific credit, without having to sell the bonds that one has from that entity.
For example, let's say you have $100 million of exposure to GE and you are now a bit uncomfortable with that exposure. Rather than selling some or all of the $100 million, you could buy a CDS where you lay off your GE credit risk to the counterparty in exchange for paying an ongoing premium.
The worry that surfaced with CDS was the counterparty risk associated with the transaction. If the counterparty was not able to hold up their side of the contract, then the C1 risk would resurface on your balance sheet. However, even with the situation we have in the financial industry, the CDS market is performing surprisingly well.
Do you have specific data showing that it is a problem? If not, why do you even bring this issue up? It seems obvious that you don't know anything about the issue and you have just seen others bring it up--kind of like throwing everything up against a wall and seeing if it will stick. This one doesn't.
Posted by: Bill H on February 23, 2009 08:49 AM
With regards to Clinton's signing statement, I have no intention of defending him. Clinton was a moderately successful Republican president in my mind.
OK, so now we know just how Marxist you really are... Enjoy Lenin and Stalin, there's no use even talking with you anymore when your view of reality is so insanely skewed that Clinton is a Republican!
Posted by: Shanghai Dan on February 23, 2009 09:29 AMThe kicker is in the Private Securities Litigation Reform Act of 1995
Posted by: Acid Brain on February 23, 2009 12:20 PMI didn't deny that Clinton signed it. It was pushed through a Republican Congress, with a Republican sponsor.
Perhaps you are confused with the Commodity Futures Modernization Act, passed in 2000 (and signed into law, again, by Clinton).
You're correct. I mixed that one up. I should have just said "general deregulation through GLB and related Acts". Mea culpa.
Do you have specific data showing that it is a problem? If not, why do you even bring this issue up?
I'm familiar with the Economics 101 explanation of what derivatives are, thank you very much. My objection does not stem from your description, but from how derivatives trading is used in practice, specifically with regards to how risk is calculated by many parties in the market and incorporated into investment strategies. Any type of derivative is essentially gambling, except that financial analysts claim to know the odds far, far better than they actually do. Personally, I don't give a crap about whether some random person gambles their money away, but when risk is miscalculated on a grand scale (like it has been in some quarters... AIG, for example), that does not lead to a well-functioning market. Neither does widescale derivatives trading for speculative purposes, and not actual mitigation of one's own credit risk.
But hey, of COURSE regulation would be a bad thing! Why enforce collateral requirements, or limit CDSs to parties with an actual vested interest in mitigating risk, for example? That would get in the way of the whole market-as-Vegas attitude!
@46: Brilliant. See what I mean? You're so much of a fool, you can't see the forest for the trees. Why don't you try actually arguing instead of slinging pointless and meaningless insults?
Posted by: demo_kid on February 23, 2009 12:33 PM