Posted on 10/31/2009 6:54:29 PM PDT by Coleus
ping for later
“In truth, the economic meltdown we are now experiencing is a result of government intervention, not the free market. “
No, gov’t deregulated and the “free” market went to town and now we have a big depression. It is to be expected that unbridled greed will do things like this.
parsy, who thinks markets need regulation and anybody who don’t after this meltdown is a few pickles short of a full jar.
Yeah, this was caused by too little government. LOL!
Just for laughs, what regulations were removed that led to this depression?
parsy, who thinks FEELS markets need MORE regulation and anybody who don’t after this meltdown is a few pickles short of a full jar.
Just for laughs, what extra regulations will prevent something like this from happening again?
Start here:
parsy, who will send you more
Start here:
parsy, who will send you more
If the rest of the stuff you'll send is this funny, don't bother.
Oh, its no bother. I like making people laugh. Besides, I occasionally learn stuff from you whenever I can prod you into making positive statements.
http://www.crashopedia.com/index.php/Main_Page
parsy, the prodder
No need to link to outside sources, let's hear it in your own words.
You feel that deregulation led to the current situation.
Which regulation(s) did the government remove?
Why repeat the repeal of Glass Steagall, the Brooksley Born thing, and CommMod of what 99-2000, when it is all in one site like crashopedia? And that site has a surplus of cites and links. If you are really curious, that is a good place to start reading.Plus a whole lot of info is available daily and in the archives over at Naked Capitalism.
Now for my little amateur ideas-first reinstate Glass Steagall, which helps whittle the TBTF down, put all derivatives on exchanges, and fix positions limits. Eliminate derivatives which are simply side bets, like the old bucket shop stuff. Regulate energy commodity just like ags. I would also work to discourage day trading and impose a transaction tax and implement minimum stock holding periods of at least 30 days.
parsy, who thinks the links are still your best bet
Excellent! How did their repeal lead to the mess?
Glass Steagall repeal allowed investment banks and depository banks to combine and which allowed them to grow. It also interlinked the dickens out of the banks. Not regulating derivatives, let all the CDO stuff grow real real big to something like 600 trillion or 1.4 quadrillion, who knows. As you pointed out, “debits and credits” tend to cancel out but when you have a notional value that large, it don’t take but a few % of f*ck ups to equal trillions of dollar shock wave thru system.
Now, there are still derivatives which are unwinding a year later. AIG was making doo doo pots full of moneys writing them so they wrote a big bunch and in the process got themselves way the heck over leverages. When it started to unwind, they didn’t have the money. I think I read that GS didn’t even have the money and wsas in fact owed money by AIG.
If the real estate market didn’t have all the multiple CDO stuff written on it, the real estate downturn would not have crashed anyone but the goobers who overlent. They might have lost half of their money on a bad day, but probably less. But, because all the big guys were derivatived up, betting for and against the housing market, they were exposed to the downturn.
Now, what do you think caused the meltdown? And, what do you think could be done systemically to prevent or lessen a future bo bo like this?
parsy, who is using the cattle prod now
The combination caused the recession? How?
As you pointed out, “debits and credits” tend to cancel out but when you have a notional value that large, it don’t take but a few % of f*ck ups to equal trillions of dollar shock wave thru system.
Derivative shock waves caused the recession?
When it started to unwind, they didn’t have the money.
You may be at the edge of stumbling onto something. When what started to unwind (still nothing to do with your original claim)?
If the real estate market didn’t have all the multiple CDO stuff written on it, the real estate downturn would not have crashed anyone but the goobers who overlent.
Multiple CDO stuff? How is that different from single CDO stuff? And what does this have to do with deregulation?
Now, what do you think caused the meltdown?
Why did the banks hold so much subprime paper?
parsy, who is using the cattle prod now
Now your muddled thinking makes more sense. You shouldn't prod yourself with high voltage, you'll sound like a liberal.
Let me repeat myself:
It seems pretty clear to me.I found this at crashopedia. There seems to be plenty of documentation. If you don’t believe it, I don’t know what to say. If you think banks holding too much sub-prime paper is what caused it, please explain why. How much were they holding and how much did it decline? What part do you think derivatives played in this and if you think none, why are all thes people sayingthatit did??? Why did AIG go down the tubes and Lehman Brothers down the tubes?
You’re asking questions and I am giving you the sites where I have done my reading. If you have a different idea, please set it forth. Give me some cites and I will read yours.
In the meantime, it looks to me like I have answered your questions.
parsy, who wishes you weren’t so passive-aggressive
Documentation of what? That deregulation caused the crisis?
If you think banks holding too much sub-prime paper is what caused it, please explain why.
You don't think sub prime loans were a big money loser? A driver of higher real estate prices? Did you ever wonder why big banks held so much of that paper?
What part do you think derivatives played in this
What do derivatives do exactly? They don't lose money to a big hole in the sky.
You’re asking questions and I am giving you the sites where I have done my reading.
Giving me sites with dozens of links in response to my question isn't a great help.
parsy, who wishes you weren’t so passive-aggressive
I'm wishing you didn't regurgitate the MSM line with no back up.
If you have a different idea, please set it forth.
Here's my idea. No banks were brought down by their investment bank division. No investment banks were brought down by their banking division. So much for Glass Steagall.
Derivatives weren't regulated before, so their deregulation didn't cause our problems.
Keep looking for that good old regulation that was erased that would have prevented this mess.
Yeah, scary stuff. But nobody lost money to a hole in the sky.
Derivatives don't cause loses. They can transmit losses.
CDOs didn't cause trillions in losses, all they could do is move those losses from one place to another.
Think about it. If you're still confused tomorrow (I crack myself up), I'll try to help some more. Nite.
“Derivatives weren’t regulated before, so their deregulation didn’t cause our problems.”
Yes they were. Many states had bucket shop laws and insurable interest laws. The CMA specifically pre-empted these regulations.
parsy, who can find this link too if you need it
Are we at least off the idea that Glass Steagall would have some how prevented the housing bubble or the recession?
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