Inside Job

[ralis]

Just a few minutes to start this thread and will post thoughts later. This documentary is a must see as to the causes and effects of an unregulated Wall Street.

 

 

 

[Chang]

Looks interesting. Thank you for making us aware of this film.

[ralis]

Looks interesting. Thank you for making us aware of this film.

 

I rented it through Netflix. I believe Encaphalon recommended this documentary some time ago.

Edited February 8, 2012 by ralis

[joeblast]

The first words out of Spitzer's mouth was telling

 

"the regulators...they didnt even want to do their job"

 

or something of the like.

 

Ergo more regulations would have fixed the problem? Perhaps Clinton shouldnt have signed the repeal of GS wait, we cant blame him for that!

 

It begins with bad rules, poorly implemented.

 

I'm sure this movie is going to take a close, honest look at root causes, yes? *holds breath*

[idquest]

I didn't watch the movie but I researched the topic in the course of my study. THe market of derivatives in 2007-08 was fully unregulated; all the trade was over the counter. Nobody even knew how much of derivatives were traded. What is more, even Garvard graduates didn't really understood the pricing models of derivatives. That is everybody used the same formulas but how those formulas reflected the reality - well, now we know they didn't reflect the reality at all.

 

Bernanke was actually against regulation. This is in addition to his famous estimate of the subprime mortgage as a 'no issue' for the American economy. And now he is building the next bubble which is going to emerge manyfold vaster than the previous (that is 2008) one.

[JustARandomPanda]

Bernanke was actually against regulation. This is in addition to his famous estimate of the subprime mortgage as a 'no issue' for the American economy. And now he is building the next bubble which is going to emerge manyfold vaster than the previous (that is 2008) one.

 

This may be true. However, I'm not sure ANY Fed Board (Chairman included) would be permitted to raise interest rates even if they wanted to.

 

1. The recovery is weak. There are still large sections of the country hurting from both the Wall Street shenanigans and from the mortgage debacle and the subsequent meltdown.

 

2. Raising interest rates would have both an immediate and longer range negative impact on production of both services and goods and would have an impact on an already-weak economy. Although I wonder if by keeping interest rates so low it is masking how "sick" or economy really is. *shrug*

 

3. The Fed has both stable prices AND preventing widespread unemployment in it's charter. And Congress regularly reminds them that What Was Once Given May Yet Be Taken Away. [aka the Fed dissolved]. And like any institution - private or public - once it has power it wants to keep it.

 

4. The bailouts have had the effect of devaluing the dollar. It takes more money to buy the same amount pre-meltdowns. This is concurrent with the weak economy.

 

4. Current American society has been conditioned to squawk much more loudly at rising and persistent unemployment than low interest rates (dang it you can't be that Rugged Self-Made Individual that makes His Own Destiny if nobody hires you or buys your services). And of course everyone LOVES to consume. The end result is that we are seeing a massive transfer of wealth from Savers to everyone else - Rich or Poor. Unfortunately this has it's most pernicious effect on Poverty-Stricken Savers trying to get their ass out of poverty.

 

Society's reply?

 

"Oh well. Sucks to be you, eh?"

 

"Now get a job you F'n Slob."

[idquest]

This may be true. However, I'm not sure ANY Fed Board (Chairman included) would be permitted to raise interest rates even if they wanted to.

Agree that no permission will be granted

 

1. The recovery is weak. There are still large sections of the country hurting from both the Wall Street shenanigans and from the mortgage debacle and the subsequent meltdown.

So what? This is scare tactic

2. Raising interest rates would have both an immediate and longer range negative impact on production of both services and goods and would have an impact on an already-weak economy. Although I wonder if by keeping interest rates so low it is masking how "sick" or economy really is. *shrug*

Not necessarily, scare tactic again.

 

3. The Fed has both stable prices AND preventing widespread unemployment in it's charter. And Congress regularly reminds them that What Was Once Given May Yet Be Taken Away. [aka the Fed dissolved]. And like any institution - private or public - once it has power it wants to keep it.

Any country needs a Central Bank. So do the USA. If you want the bank system functioning in the USA you'll need the Central Bank aka Fed in some fashion. Nobody is going to dissolve the Fed.

 

4. The bailouts have had the effect of devaluing the dollar. It takes more money to buy the same amount pre-meltdowns. This is concurrent with the weak economy.

Don't really get what you are saying here.

 

4. Current American society has been conditioned to squawk much more loudly at rising and persistent unemployment than low interest rates (dang it you can't be that Rugged Self-Made Individual that makes His Own Destiny if nobody hires you or buys your services). And of course everyone LOVES to consume. The end result is that we are seeing a massive transfer of wealth from Savers to everyone else - Rich or Poor. Unfortunately this has it's most pernicious effect on Poverty-Stricken Savers trying to get their ass out of poverty.

Totally agree. Transfer of wealth is the main reason of keeping the rates at zero. Fed (and those who influence it) are thieves stealing money from savers.

[ralis]

Agree that no permission will be granted

 

 

So what? This is scare tactic

 

Not necessarily, scare tactic again.

 

 

Any country needs a Central Bank. So do the USA. If you want the bank system functioning in the USA you'll need the Central Bank aka Fed in some fashion. Nobody is going to dissolve the Fed.

 

 

Don't really get what you are saying here.

 

 

Totally agree. Transfer of wealth is the main reason of keeping the rates at zero. Fed (and those who influence it) are thieves stealing money from savers.

 

Interest rates have been kept low so that investment banks such as Goldman Sachs can borrow money from the Fed discount window at less than 1%. In turn, these banks use that money to manipulate the markets in their favor. HFT or high frequency trading. A Google search will reveal much. I never believed that lower interest rates were for the greater good at this time. Banks are still tight with any loans.

 

Low interest rates do not attract investors, either domestic or foreign. Google 'carried interest rates' for a detailed explanation.

Edited February 9, 2012 by ralis

[JustARandomPanda]

Any country needs a Central Bank. So do the USA. If you want the bank system functioning in the USA you'll need the Central Bank aka Fed in some fashion. Nobody is going to dissolve the Fed.

 

The U.S. was founded without any kind of Central Bank whatsoever and did just fine for a long time without one. Returning the power of coining money to the People as was specifically set out in the U.S. Constitution would go a long way toward shaking up the status quo.

 

2. Raising interest rates would have both an immediate and longer range negative impact on production of both services and goods and would have an impact on an already-weak economy. Although I wonder if by keeping interest rates so low it is masking how "sick" or economy really is. *shrug*

Not necessarily, scare tactic again.

 

You think the above point is just a scare tactic? I say there are powerful Factions in society that have a vested interest in not letting it be known just how bad the fallout was from the Derivatives and Mortgage Debacles.

 

If it's a total wash then Interest rates can rise and we'll see nada in the outcome for prices or jobs. So why isn't this happening? I submit that if they didn't deeply suppress interest rates as is being done now we'd see the economy nosedive and calls to regulate Wall Street, Shadow Banking institutions, The Fed, Fanny Mae/Freddie Mac, etc would grow so loud, so frequent and so hopping mad Congress would blink in the showdown and be forced to act in ways the Powers-that-Benefit-From-the-Status-Quo would deeply resent.

 

 

Nobody is going to dissolve the Fed.

 

The only permanent thing in this universe is that things change. Only that which has no beginning will never come to an end. You and I may be long dead by then but yes, someday it will do exactly that - dissolve.

[joeblast]

4. The bailouts have had the effect of devaluing the dollar. It takes more money to buy the same amount pre-meltdowns. This is concurrent with the weak economy.

bingo. easiest way for them to 'steal money' is to simply make what's in your pocket worth less.

 

http://theeconomiccollapseblog.com/

[zerostao]

savings and loan scandal, housing bubble burst, all the same game, same players.

[humbleone]

Interest rates have been kept low so that investment banks such as Goldman Sachs can borrow money from the Fed discount window at less than 1%.

 

Sadly in the last 10 years, we have seen the greatest transfer of wealth from the US treasury to the rich 1%

 

Banks made $13 Billion from below market rates bail out money. Bloomberg News was blocked for two years by one lawsuit after another by Banks to keep it secert. Bloomberg finally won its freedom of information lawsuit.

 

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/28/BUGK1M523B.DTL&ao=all

[idquest]

The U.S. was founded without any kind of Central Bank whatsoever and did just fine for a long time without one. Returning the power of coining money to the People as was specifically set out in the U.S. Constitution would go a long way toward shaking up the status quo.

Somebody has to issue money into the economy so that the money supply is adequate for the economy. Usually it is done by central banks; and by Feds in the USA. When you say 'returned to People', do you suggest this function be assumed by the Congress? Do you think that would be better than Feds? Because even much weaker countries than the USA realize it is much better and safer to keep the function of printing the money out of hands of politicians and they protect their central banks from the direct political influence as best as they can.

[Vanir Thunder Dojo Tan]

and yet still we are not banding together with seeds and soil?

 

 

 

What's up with that?

 

 

 

Oh right, 'people "LOVE" to be consumers'...

[joeblast]

Somebody has to issue money into the economy so that the money supply is adequate for the economy. Usually it is done by central banks; and by Feds in the USA. When you say 'returned to People', do you suggest this function be assumed by the Congress? Do you think that would be better than Feds? Because even much weaker countries than the USA realize it is much better and safer to keep the function of printing the money out of hands of politicians and they protect their central banks from the direct political influence as best as they can.

Perhaps not a dissolution, but a very thorough auditing is quite rightly called for.