Posted on 11/07/2009 6:27:16 AM PST by Daisyjane69
I think this reinforces the concept that capitalism without morality will not work.
However, I was on the exercycle ... did she really base her entire desire to regulate this industry on two (count them ... 1 ... 2) incidents over the course of ten years? One lawsuit (P&G) and one fund collapse (LTCG) in a market how big? That doesn’t sound like a huge problem.
In hindsight, perhaps it was. Perhaps regulation was called for.
But the real trouble is that immoral people are willing to take unacceptable risks with other people’s money.
And the problem with the derivative market is that 99.9999% of America doesn’t have a clue what they actually are.
I often suspect the architects of CDS’s don’t even know what they are either.
So - the value of that market exceeds the value of our entire economy? Possibley the world economy?
Does that sound right?
There is something very wrong with those products!
Yeap just another anti capitalist hit piece by PBS.
Don’t take this personally or the wrong way, but, with all due respect...you’re nuts.
Capitalism thrives on a level playing field. If presented that way, there is NO better system. It WINS ten times out of ten every time on a level playing field. Key word being LEVEL.
You’ve not only missed the putt, missed the green—you’re on the wrong course.
This is about investments, the details of which were being deliberately hidden from the investors (go back and watch that part about no computers, no pencils, no paper, and no yellow pads). And they see to it that NO regulator ever gets to see the books, nothing ever sees the light of day. Just “trust me?” Are you shitting me?
I recommend you visit pensiontsunami.com and poke around. I don’t have time to dig it up now, but I will this weekend: video exists of salespeople selling these very derivatives to teachers of the Milwaukee school system (some rule about videotaping these transactions in Wisconsin, evidently) and you can see for yourself how rosy and safe they sold these investments to be. All without never being under a single regulator. They weren’t worth the paper they were written on. This is the system you are defending.
The contributions of these teachers are GONE, as are those of their retirees. Due to the laws in place, the taxpayers are funding this incredible shortfall.
Soon, it will bankrupt the state of Wisconsin.
Mark....thanks for the review. ANYTHING PBS puts out, you have to take with a pillar of salt.
my parents - along with millions of other investors, had never heard of swaps. But their influence reached into their retirement as well - due to the products their advisor invested in, as well as from the derivative-induced crash that was inevitable.
Have they learned their lesson?
No - it’s still going on - and they’re inventing new derivatives.
Look at what just happened to Harvard - the “smart” folks don’t know how to manage these transactions either.
As far as I can tell, they’re a fancy way of selling insurance fraud.
I don’t see it. This video blames lack of regulation of the derivative market for *all* of our problems. Deregulation of the market.
It says NOTHING about congressional REGULATION of the housing market causing the housing collapse.
The only thing I feel that Greenspan did really wrong was keep interest rates too low for two long. Debt should hurt.
This piece blames REGAN for our mess and portrays Clinton as a poor doop that followed in Regan’s footsteps. It is a leftist hit piece.
I mean, what other regulations do you want to do away with?
Weights and measures, next?
I’m no fan of stupid regulations. Hell, the other day Obama and his cronies came down on a cereal mfg just because they listed “antioxidant” on their box, finding it a violation of some kind. To protest, I bought a box of that cereal WITH the warning on it. Just to prove a point.
But let’s not confuse ourselves and equate financial anarchy with freedom and liberty, as though they are twins. Because that is just dumb.
Investors have the right to know that their products have crossed at least one set of hairy eyeballs, to make sure things are on the “up and up.”
Kindest regards....
~dj
No, it doesn’t blame Bush.
It says, “It’s Regan’s fault! It’s Capitalism’s fault! Ayn Rand was a bad influence! We need more Socialism and government regulation!”
I thought the video well done, although it somewhat glosses over Congress’ role in this mess (both the Republicans in the late 90s, and the Dems today). The act of prohibiting any INVESTIGATION of oversight rules is unconscionable, and to have not reversed that is beyond that.
Clearly, the biggest fallacy in Greenspan’s thinking was that he didn’t believe financial companies would leverage themselves so highly that they would go under— he thought the “market” would prevent that. The underlying cause was that compensation packages were no longer based on actual creation of wealth, but in churning paper profits (the ultimate Ponzi scheme) everyone is happy as long as the market goes up....
hh
“I didn’t like how they went after Rand, as if part of Rand’s philosophy was that fraud was part of “free market” and should not be regulated.
That was one theme throughout the show I thought was ridiculous - that part of “free market” belief was acceptance of fraud.
But other than that - I was surprised at their criticism of a DEMOCRAT president’s team.
While it is true Brookesly was advocating regulation - most people will agree that common sense regulation should protect citizens against deception and fraud.
She was concerned about the potential of a domino affect if these products went bad - and she was right.
Of course Sowell was right about the boom and bust - but that is what made the swaps go bad - and when the swaps went bad it created a financial black hole.”
I agree completely. Protecting people and institutions from deception and fraud is fine. But this piece blames Regan and free market principles for everything that’s wrong. It says nothing about the Democratic Congress’s role in this mess. That their efforts to regulate the market brought us to this mess.
“No - it’s still going on - and they’re inventing new derivatives.
Look at what just happened to Harvard - the “smart” folks don’t know how to manage these transactions either.
As far as I can tell, they’re a fancy way of selling insurance fraud.”
That’s my understanding, too, and I’m disgusted. Even simple transparency rules (e.g., buyer needs to be informed that “this security is a bundle of unsound mortgages” or “this credit default swap is based on a bundle of unsound mortgages which will fail in the event of a sudden deflation of the real estate bubble”) would be helpful. What are congress and the administration doing?
I don’t agree at all. Anyone that thinks leveraging $5 billion into $1 trillion- all on paper- isn’t thinking “capitalism” through properly. Capitalism is about the creation of real wealth by producing products and making a company more valuable through real assets, not by creating mounds of “wealth” that exist on paper only.....
hh
I don’t believe this was meant to address the entire economic issue; it’s specific to what was done via the stock market.
While the CRA and Clinton putting it on steroids is the genesis of things (we all know that) it’s how they directed the money AFTERWARDS that has landed us in this soup, hence the derivatives and their evil stepchildren.
We all know...all of us...that codifying into law bad loans to people who can’t pay them back was stupid. (Why is Obama never called on this, btw? He was an ACORN lawyer who sued Citibank via CRA. He acts like he has never known such a thing.)
This documentary should have addressed (but did not) how those shitty loans were packaged into things that were sold and given AAA ratings by Moody’s et al.
This is simply about the Wall Street side of things and how they moved heaven and earth to prevent detection and regulation.
Focus, people. We’re not tryin’ to reinvent the wheel, here.
The “level playing field” you refer to is the “RESPECT” portion of my argument. Information collection is the responsibility of both parties in any transaction.
Example: I purchase a certain brand name food product at the grocery store based on the item, the reputation of the producer and the reputation of the STORE and I trust that they will not try to poison me with ANY food that they sell and I choose to buy the food.
Second example, I am in a far away country, I walk off post and see a little smiling street vendor setup and grilling food in the open air. Above his grill is a hand written sign that says, in broken English, “GOOD MEAT”. Do I trust and respect that vendor enough to buy and actually eat his offerings?
I could end up in sickbay or dead as a result of EITHER situation! The chances are better that the “Good Meat” stand is going to make me dead than the grocery store because of past performance. It is a matter of respect and trust that I put into the decision, based on MY information about the transaction and my willingness to accept that level of risk.
These markets are incredibly complex and the more information that is available on which to make a decision, the better and I have no issue with increased information as part of the rules. If someone were to try and use those “no computers, no pencils, no paper, and no yellow pads” that SHOULD be the biggest RED FLAG about what YOU are getting into. That sounds like organized crime and you might think that you were going to participate in a crime, not be shown the secret formula for Coca Cola.
The pension plans that are in trouble for getting into the types of “quick, pain free profit” that they were looking for were essentially gambling with the funds and got in OVER their intelligence “head” and INFORMATION COLLECTED. The ADMINISTRATORS of the plans should be either fired or held responsible for these decisions by the PENSIONERS. All you are looking to do is blame the system, and it is the PEOPLE, not the system that caused this problem.
And seeing as you are the first to dissolve into name calling, “with all due respect ... you’re nuts.”, it is apparent that you are not worth anymore of my time.
OK. I hear what you are saying about the focus being on a fairly narrow and specific source of the many sources of our problem, and I agree you are right about the specific criticism being right on.
However, I ask you to consider that when Henry Waxman (and others) talks about his ideological differences over free markets he isn’t referring to transparency or simply reinstating/implementing margin requirements. In my opinion, the problem focused on here as “the cause” is an outcome of prior government intervention AND a failure to appropriately regulate.
The part of the documentary that you have missed is the SECRECY that troubled Ms. Born. It was deliberate, not accidental.
You and I both agree that two parties entering a transaction should be on the level. We have NO disagreement.
The point of this documentary (I’m thinking) is, in part, to make clear that these instuments were being sold as “safe” despite the fact that no regulator ever was allowed to glance at them. When Ms. Born objected and sought to inject some sunshine...well the video speaks for itself.
I apologize for the “you’re nuts” mention. I guess I got a bit carried away. I’m sorry; please forgive me if you can.
I agree with 99.9% of your post. I truly do.
But there has to be a modicum of safety in the marketplace. It’s one thing for people to be standing on the corner selling heavy brown paper bags of things; they know they are taking a chance of getting a bag of rocks.
But it’s quite another to allow sales reps to head over to pension boards and represent funds as “safe and profitable” when these reps carry the imprimatur of safety and sanction. In the millions of dollars.
kindest regards,
~dj
Let me be clear here:
I think the Harry Waxman gig was the left wing PBS bias just BUSTING out. I don’t think they could help themselves!
We didn’t really think PBS could do this without a “dig” at us, did we?”
LOL
Well, no .... :)))
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