Ok keep in mind that you are talking to someone who does not get any of this. All I am trying to do is formulate talking points for soft McCain/Obama voters who bring this up. You did help to educate me on some things. But other parts fly right over my head as it will with my targets.
I appreciate that my proposal may have been a little too “pollyannaish” How about this:
We have have to change the way that we do business in this country in regard to loans. Recent events prove that our banking laws in general need review. John McCain is by far the better choice to oversee this overhaul due to his experience in the financial ebb and flow over the last two decades as a US senator. Barack Obama will not be up to this challenge as a constitutional professor.
I am talking to elderly retired professional folks from a rainbow of backgrounds. Please help me modify this message. Thanks.
That’s a very simplistic talking point and I suppose it would do unless you have someone like me in your audience. I’m not a finance professional. I’m just a retired engineer and then a retired farmer.
Part of the problem, I would add, is that many to most older folks in financial markets (both on and off Wall Street) are unfamiliar with the surge in derivatives and derivative exposure in the world. Understanding the instruments themselves is difficult enough; understanding the impact during times like this is even harder.
Too many people, both in DC and on Main Street, no longer have a functional understanding of how the current banking system really works. In the last 10 years, the financial markets have rapidly evolved far, far beyond the instruments that were available and involved in the market crash of 1987. Wall Street is going to need to be re-regulated to control the systemic risk that their new instruments create.
Who should do this regulation (the Fed or the Treasury) is a matter for the next administration.
THE problem, IMO, is that DC is just so far behind the learning curve of how Wall Street is creating and peddling these new derivative instruments, that Congress might as well be the caveman club attending a lecture on particle physics.
The basic thing to keep in mind is that huge pools of bonds were created, backed by mortgages on inflated real estate, with the expectation that the housing market would rise forever. There’s more, but many of those financial assets, bonds, are wiped out in value.
When real estate recovers, things will settle out. Not before. The problem now is that this thing has the possiblity of spreading.
McCain really needs to get someone who is up to speed on what Wall Street does (or used to do). We need sensible regulation.
Before someone flames me again for using the R word, I believe the free market needs to operate, but the government needs to set the rules of the financial game. Right now, its the wild, wild west.
Speed limits on the highways are regulations — I wouldn’t want to drive without rules of the road.....