No argument. I was merely cowing the traditional line. The line that continually rewards enormously rich, but overly-greedy companies and bankers with a layer of insulation known as "economic stability". This is why I disagree with deepblue. Arguing that the failures are unpreventable should necessitate a rethinking of our nation's inability to "let them" fail. If not regulation with the intent of stabilization, then what's the impetus for taxpayers to shell out the coin?
Other countries regulate their financial system. The British are doing pretty damn fine with theirs. It's total hogwash from the phony libertarian crowd to push against regulations on the charge that we won't be competitive.
yes but you're still cutting off your nose to spite your face. there was a little event in the 1930's last time banks were failing, yes america survived, but it was helped by a little war that boosted the economy.
That's just a very naive way of looking at the problem. The big issue is not people are defaulting, but rather investors did not understand the risk factors in those financial products. If the risks are properly understood, then there won't be the demand on those papers, and in term you won't see much of the zero down, negam mortgages. Even at 20% down, there are still risks for default or prepay. The game played has always been matching risk with rewards. People make money when there is some mis-match. Unless banks are stopped from coming up with new ideas, you will never be able to prevent these from happening.
How are they regulated more than we are, they issue the same kind of MBS, CDO as we do, they enter into same type of swap agreements with us, they are hurting from subprime as well. They are far from doing damn fine.
The bubble in the 1920s was created directly because of this new idea that we could loan money to banks at an artificially low interest rate and cover it by printing money. Then we had droughts that kept us in the mess. Prior to the Reserve Banking System, we had banks fail, panics, and recessions, but the effects weren't nearly as bad. Please understand that I don't necessarily want to get rid of the Federal Reserve. But if it stays and continues to loan money at artificially low rates, we will continue to have these exagerated booms and busts. If the Fed set the reserve rate at (for example) 5 or 6% and left it there all the time, inflation would be manageable, and the artificial instability would disappear.
