capitalism and the credit crunch

[jeffrito]

The message below was posted to prove how easily some people are fooled.

 

This story is a hoax.

 

You can read an explanation here: http://www.telegraph...t-a-trader.html

 

---------

wow... mindblowing stuff

 

do you ever think this credit crunch thing is man made?

 

nwo and capitlaism exposed

 

http://www.youtube.com/watch?v=BaoQciSU188

Edited September 16, 2012 by jeffrito

[Marblehead]

do you ever think this credit crunch thing is man made?

Of course it is man made. Cause by the greed of many men (and women), and this is not to exclude the greed of many of the governments that are involved in it.

[Jetsun]

I wonder how much planning or intent was behind the economic crisis, it has given an excuse for many industrial countries to take action to eventually make their economies more competitive so they can compete with countries like China. Plus it may lead to more European integration which wouldn't be tollerated without a crisis, with much of Europe effectively being dictated to by Germany (where have we heard that before?)

[eye_of_the_storm]

Good thread!

 

The game is rigged...

 

indeed

[Marblehead]

Good thread!

 

The game is rigged...

 

indeed

I laughed but it's really not funny.

[ralis]

For more background on this, watch Bill Moyers interview with former CEO of Citigroup, John S. Reed. Reed was instrumental in lobbying Congress to repeal the Glass-Steagal Act. The Act was created to separate investment banking from traditional commercial banking.

 

 

http://billmoyers.com/episode/full-show-how-big-banks-are-rewriting-the-rules-of-our-economy/

[eye_of_the_storm]

If anything is going to get us through this mess it will be humour... I think

 

for those aware ... that have by some miracle escaped from the padded cell... this game... as you said..isn't all that funny.

 

recognition is the beginning of redemption

[GrandmasterP]

Market Forces wll prevail whatever emerges from the current mess. Just as they always have done. Hence we are all posting via something made in China. Cos,currently that's the cheapest option ensuring greater profit.

Perfectly natural way to be irrespective of wherever the profit goes to.

[idquest]

For more background on this, watch Bill Moyers interview with former CEO of Citigroup, John S. Reed. Reed was instrumental in lobbying Congress to repeal the Glass-Steagal Act. The Act was created to separate investment banking from traditional commercial banking.

 

 

http://billmoyers.co...of-our-economy/

I researached this issue a bit in the course of my professional studies. It is clear for me that the lack of regulations was a major contributing factor in the severity of 2007-08 crisis. The prior withdrawal of regulations was backed on all levels of governments. One of the fiercest fighters against all regulations ironically was Alan Greenspan whose job description included oversight of the bank system of the USA.

Now seeing how Republicans fight against regulations again one could wonder how short memory people may have...

[joeblast]

ah the old conflation of "capitalism" with "oligarchical cronyism"...

 

while the repeal of GS didnt help matters, it was a secondary event that revealed more symptoms of the problem but wasnt really *the* huge systemic thing that threw feedbacks into positive territory. if GS hadnt have been repealed we'd still be in this mess. the form would be slightly different but not by much. GS was just specifically repealed to let JPM and Chase join up and for no other reason - because the money shakers (cant say makers because they dont make a fn thing) discovered they could shake even more money without it in their way.

 

look, not a darn thing wrong with capitalism and the free market - so long as that's what they are and not complete bastardizations thereof. you cant call the high frequency algorithm trading that takes place these days "the free market" because it isnt. its more along the lines of what Peter did in Office Space - write a program that skims a little bit and go woooooow as those fractions turn into a huge whopping sum. fact of the matter is, "more regulation" would not have helped the ridiculously poor implementation and enforcement (guffaw) of the regulations on the books. regulation should be direct, clear, simple - not hundreds of pages long with as many hundreds of loopholes contained so that friends of the writers will have a convenient mechanism by which to keep more of their un earned cash.

 

what it all boils down to is failure of government at a great many levels. regulators are government entities. if the SEC were interested in regulating instead of giving the appearance of having regulated, we'd be speaking of a different story. instead there's a revolving door between TBTF and regulatory agencies, the federal reserve's interests are damn near indistinguishable from the TBTF banks' interests. all the fed has done in the last decade and change is to prevent the market's normal housecleaning mechanism from functioning, then everyone declaring that there would be cataclysm were that mechanism restored. simply put, the SEC should have been able to see what the eventual progression of HFT and the bundling of any and all debts into some benign "package" that can be effectively sold off to someone else who will shriek and try to get rid of it as soon as they find out what it really is, and were the fed not the self serving entity it is then it would know that zero interest rates merely encourages debt and punishes prudent behavior (savers) and not subject the populace to that just so the ponzi wheel can keep turning...with each injection of liquidity, each action having less and less of an impact until the point of hyperinflation is reached, helicopter drops no longer work because there's a vortex ring state at the end of that tunnel.

 

I suppose in some context you could say that its TBTF's fault for buying the politicians, but that exculpates the politicians who were bought. had the politicians acted in the ideal manner there would not have been buyings of political influence.

 

part of the failure of government is the government wants to do too much - as we can see by almost anyone and everyone who wanted to be part of the euro was told "make a promise and its all good" and nobody followed up or cared if the promises were kept because it was all about the political infrastructure. money corrupts, power corrupts. the Progressives have been at it for a hundred+ years trying to set up their one world government and tying everyone together at the left nut via finances has been the preferred mechanism, and the government-banking dichotomy has been washing each others hands for far too long.

 

and of course since the TBTFs had a lot invested over in europe, that's why the fed bought trillions of it - because again their interests are not congruent with america's or the american people's interests, their interests are very highly correlated with that of TBTFs.

 

at this point the interests of the fed are loosely correlated with that of the american gov - the gov lets them have their monetary power and skimming, and the gov gets in return a vast money pit it gets to use when it doesnt have the money to do something but wants to do it anyway (or, when it realizes that it cant tax its way to the money, so it needs to circumvent legit methods and get these things done via the back door so they wont have a populace wanting to hang them from lamp posts - and people wonder why we have so much more government than we're willing to pay for.)

 

we simply cannot keep having our government borrowing 40 cents out of every dollar it spends.

 

QE in no way helps anyone but the banks, who are still working like mad individually to deleverage themselves of all the bad bets they knowingly made - look at the data and you see QE 2 was priced into the market before it came along....QE3^infinity was priced into the market before it was announced...

 

the fed isnt so much a political entity as it is its own self serving (and by virtue of structure) and TBTF entity.

 

 

so the problem is twofold, and at root of it is failure of government - because government is the entity that is enabling the fed and TBTF to continue their rigged casino and HFT skimming operations. that's why OWS is a failure, because they are only targeting the banks, and that's why the tea party isnt as immediately effective, because they're only focused on the government abusing its pocketbook that contains the citizens money and largely havent realized the gun pointed at them that is the central bank.

[billb]

What does TBTF stand for? And also QE, OWS, and HFT?

[ralis]

What does TBTF stand for? And also QE, OWS, and HFT?

 

To Big To Fail, Quantitative Easing, Occupy Wall Street and High Frequency Trading. Joeblast believes in the illusion of laissez faire markets which have never existed except in the minds of Milton Friedman, Ron Paul, Ayn Rand et. al. Given the propensity for dishonesty, greed and criminal activity, regulations are of absolute necessity.

Edited September 24, 2012 by ralis

[billb]

Thank you and what exactly is Quantitative Easing?

[eye_of_the_storm]

Quantitative Easing

 

[Jetsun]

Thank you and what exactly is Quantitative Easing?

 

It's printing more money to pay your debts which devalues your currency, which is one of the main reasons why the economy collapsed in Germany in the 1930's. They are doing it in the UK now to pay off debts on loans

[joeblast]

To Big To Fail, Quantitative Easing, Occupy Wall Street and High Frequency Trading. Joeblast believes in the illusion of laissez faire markets which have never existed except in the minds of Milton Friedman, Ron Paul, Ayn Rand et. al. Given the propensity for dishonesty, greed and criminal activity, regulations are of absolute necessity.

and ralis believe in the benevolence of keeping a small oligarchy in control of everything so that the entirety of the world may be centrally planned out to a T, with good, fair results dictated, mandated for everyone! keep the average man down so that he may not rise above that average, disparage those who have attained some measure of success because hey, that's coming directly at the expense of some poor person...

 

iotw every bit the fiction he ties to foist upon my words, which you can easily get translated for you at dailykos, huffpo, any of the leftist progressive sires out there that think our problems are because of rich people and not because the powers that be dont do their jobs, being more concerned with lining their own pockets and those of friends instead. big companies are bad because they're big and they stomp on the little guy, so...yeah, let's get people in office who cozy up to the biggest and screw all the rest, ralis would say I'm speaking exclusively of republicans but like gram says they're all a bunch of crooks!

 

let me ask yall, where is the biggest failure in the system? is it regulators, is it lack of legislation, is it the big companies, is it the poor people, is it Congress, is it the presidential administration (which directs a lot of the regulatory agencies), is it the entrepreneur, is it the small banks...the big banks...the federal reserve...is it the city and state gov...?

[ralis]

and ralis believe in the benevolence of keeping a small oligarchy in control of everything so that the entirety of the world may be centrally planned out to a T, with good, fair results dictated, mandated for everyone! keep the average man down so that he may not rise above that average, disparage those who have attained some measure of success because hey, that's coming directly at the expense of some poor person...

 

 

What you have stated is an outright lie! I never have advocated such a system in anything I have ever posted here. Your incessant need for political drama is an elaborate ruse to derail the topic of conversation by shouting down the opposition.

[joeblast]

Hey, we've been at this for how many years now? You spit your breakfast on the screen at the slightest extrapolation of your words no matter how small or how accurate, yet you feel free to extrapolate mine to whatever lengths you deem fit at the moment. So is it the whole two way street thing you're really against? Its ok when I do it but if someone else does it, throw a fit? "Bush spent too much so that means we can just go spend five times as wildly?" and drain the swamp in the process, right? hah! You're not even intellectually honest enough to admit the government's errors, you push your skewed memes, what do you expect in return?

 

the "credit crunch" happened because the government abused its position, and then laxed rules to make it so they could keep spending, and encouraged everyone else to spend spend spend also - while an eyedropper of the theory might produce a little benefit, a half gallon is enough to make the patient sick.

 

 

and with ridiculously skewed incentives, political considerations outweigh cold hard facts and considerations thereof, leading to:

the 'grossest misallocation and mispricing of capital in the history of mankind',

 

what flows downhill besides water?

Edited September 24, 2012 by joeblast

[idquest]

let me ask yall, where is the biggest failure in the system? is it regulators, is it lack of legislation, is it the big companies, is it the poor people, is it Congress, is it the presidential administration (which directs a lot of the regulatory agencies), is it the entrepreneur, is it the small banks...the big banks...the federal reserve...is it the city and state gov...?

This is a good question. I'd say none of the above were the primary reasons for any bubbles and/or past recessions/depressions. What I've noticed is that the systems, like USA financial system for instance, tend to spiral themselves to 100% of efficiency or close to it. That results in extremes in business cycles. Whether this is good or not depends on a personality preferences. Some people like is extreme, some people like it moderate. As we here are sort of study daoism that teaches balance as a main point, I'd expect the preferences here leaning towards the balanced approach. Doesn't seem to be the case.

As for regulations, I think they are necessary to smooth the extremes resulting from the human nature, but again this is a matter of preferences. There are people who make good money during crisis, they would advocate the highest efficiency of the system and as a result the widest extremes.