The cause of the recession is clear; People signing up for loans they couldn't pay.
Printable View
The cause of the recession is clear; People signing up for loans they couldn't pay.
Quote:
Originally Posted by Norma
Yeah, I'm amazed at all of the people who seem to be blaming Obama or even Bush for what's going on right now. That shows a staggering level of short-sightedness...
And I agree, the US and the UK (and other countries) are likely to fall harder before things get better...
nixon was the best of all...
The cause of the recession is clear; a trillion dollars of war debt to China that wasn't even considered part of budget, the almost complete deregulation of the banking system and unchecked profiteering on bundled debt sold as derivatives.
Quote:
Originally Posted by trish
And how do you explain away all those loans that people got that they couldn't afford to pay?
Because the Dems in the house believe houses are a right when it really is up to people to go and find housing for themselves.Quote:
Originally Posted by PomonaCA
Quote:
Originally Posted by JerseyMike
Sir, you are a racist for saying that! I don't know why you are, you just are.
You are a dumbass commercial banker if you give a man earning 15 Gs a home loan for a half million dollar home.
Except the bankers didn't really care if Joe Broke couldn't pay off his mortgage or not because they were all going to be bundled and sold by Wall Street as AAA securities.
The smartest guys in the room always cry 'ignorance' when one of their scams gets found out after the fact.
EXACTLY. Were the appropriate regulations in place, Joe Broke would not have been approved for such a loan, and there would have been no incentive to give him one in the first place.Quote:
Originally Posted by giovanni_hotel
Quote:
Originally Posted by trish
The question is why is Joe Broke going for such a loan? Or is it better I ask "How will you paint Joe Broke as the victim in all this?"
Joe Broke goes to the real estate agent, who wants to make a big commission, and who given the current banking practices convinces Joe Broke this is the smart move to make. Joe consults the bank, and the bank says, "Yeah, you can afford this loan, easy. We approve you." Is Joe being snowed? Yes. Is he being stupid? Yes, but most first time home buyers are by definition inexperienced in these matters and rely heavily on what the experts tell them. Is Joe a victim? I don't care if you paint him as a victim or not. Is Joe the culprit? Certainly not. The banks are the culprits and those deregulators on the dole of banking lobbyists are the culprits.
Quote:
Originally Posted by trish
So Joe Broke signs the loan that he knows he won't be able to live up to.
Who's running the scam?
No. Where did I give you that impression? Joe has been snowed.Quote:
So Joe Broke signs the loan that he knows he won't be able to live up to.
I didn't say it was a scam, though I do confirm the gist of Giovanni's post. It was all perfectly legal. Though if you ask who expected to profit from the situation, I'd say just about everyone involved thought they were going to profit. Joe thought he was buying a nice house. The real estate agent got her commission. The bank bundled the debt and sold it for a profit. The broker who bought the derivative thought it was a worthwhile risk. That's the way bubbles work in a deregulated market.Quote:
Who's running the scam?
So the guy gets a house that he can't afford. This is how the world works when morality is relative. And when new regulatory controls are in the hands of immoral politicians, you will have your empty victory. Political capital.Quote:
Originally Posted by trish
This recession has NOTHING to do with "Joe Broke".Quote:
Originally Posted by PomonaCA
This recession has EVERYTHING to do with monetary policy,The Fed and Wall Street.
No. Joe loses the house and his equity because he can't afford it.Quote:
So the guy gets a house that he can't afford.
Banking regulations need neither be moral nor immoral. They are simply needed to govern the stability of the banking and economic system; just as a steam governor is neither moral nor immoral but regulates the stability of the engine.Quote:
And when new regulatory controls are in the hands of immoral politicians...
What victory? I not at war with anyone, I simply want a healthy and stable economy.Quote:
you will have your empty victory.
Quote:
Originally Posted by trish
Banking regulations in the hands of immoral politicians. That's what the left is screaming for, strict government control of the economy. And when you have that, you will have your empty victory. Political capital.
Now you're just repeating points that have already been answered.
We went through a major housing bubble in the '80s. When it burst, it crashed the entire savings & loan industry.There was an S&L on every corner, but when the smoke cleared, there probably wasn't a half dozen in the country with open doors.
There was one in the '70s too. It didn't get bad enough to crash the financials because the "stagflation" slowed it down & the oddball baloon loans were exposed early for the scam they were.
I guess my point is that this isn't a recent or 'right now' problem. It's just minor tweaks on the same crap over & over. Everybody's forced to jack up profit margins by whatever means because they're hedging against inflation. Stable margins don't work when everything's unstable. The problem isn't politics or any of the other crap that most of the bitching's about. The problem's inflation. The only ones charged with the fight against inflation are the Fed, & all they can do tighten credit. We already have tight credit, & you see what that does. The economic templates don't work because this inflation is artificial. The currency market is a skimming operation, & there's a direct corelation between the amount being skimmed & the rate of decline. Shut it down. You do that by pegging the currencies to each other & fixing the exchange rates.
Housing didn't crash the banks. It was a major factor, but they were leveraged way beyond solvency. Still are. The CDOs were a fraud, & it really needs to be prosecuted. The problem is that all this junk paper is still floating around out there & nobody knows exactly how to clear it off the books. It's going to take a while.
Actually most of the " foreign" cars in the US market are actually built in the USA.Quote:
Originally Posted by russtafa
They are also built to higher quality standards and have more advanced technology and systems.
Back into this thread after being out of town-
All your comments were read and welcomed. It's what makes this a great country in that we can have these debates openly and freely.
He'll NEVER get re-elected, so we just have to deal with him for another couple years.
We need to send a message in the next elections - change the power and hoipe he doesn't screw it up anymore!
Peace!
Journalist John Pilger has an interesting take on Obama:
YouTube- John Pilger Obama Is A Corporate Marketing Creation
I think the regulations have long been in place. Banks and financial houses were required to have cash reserves equal to a certain percerntage of their loans. Over a period of time the requirements were relaxed. I think that during Bush II some were not enforced, and direct permission was given that it was not nescessary to have cash reserves, to major players like Bears and Stearns.Quote:
Originally Posted by trish
Subprime crisis impact timeline - Wikipedia, the free encyclopedia@@AMEPARAM@@/wiki/File:Lehman_Brothers_Times_Square_by_David_Shankbo ne.jpg" class="image"><img alt="" src="http://upload.wikimedia.org/wikipedia/commons/thumb/5/53/Lehman_Brothers_Times_Square_by_David_Shankbone.jp g/220px-Lehman_Brothers_Times_Square_by_David_Shankbone.jp g"@@AMEPARAM@@commons/thumb/5/53/Lehman_Brothers_Times_Square_by_David_Shankbone.jp g/220px-Lehman_Brothers_Times_Square_by_David_Shankbone.jp g
2004: U.S. homeownership rate peaks with an all time high of 69.2 percent.[62]
One major point is the the Republican mantra that government regulation is only restricting business from making profits is proven wrong here.
- Following example of Countrywide Financial, the largest U.S. mortgage lender, many lenders adopt automated loan approvals that critics argued were not subjected to appropriate review and documentation according to good mortgage underwriting standards.[63] In 2007, 40% of all subprime loans resulted from automated underwriting.[64][65]Mortgage fraud by borrowers increases.[66]
- October:SEC effectively suspends net capital rule for five firms—Goldman Sachs, Merrill Lynch, Lehman Brothers, Bear Stearns and Morgan Stanley. Freed from government imposed limits on the debt they can assume, they levered up 20, 30 and even 40 to 1, buying massive amounts of mortgage-backed securities and other risky investments.[67]
I think that which you call a "racist phony religion" is called Christianity. It is my understanding that "Black Liberation Theology" is/was encouraging US Black to indentify with the stories of the children Israel, in the Bible. And in fact all Christians are taught the lessons Israel in the Bible. Taking Chirstianity to the gentiles was a major factor in making this happen.Quote:
Originally Posted by Kramer
I do believe that the Rev Wright was showing signs of an age related mental condition at the end. And I believe that is why he retired. But to say that Obama and others listened to racist theolgy for twenty years, is only wishful thinking for those who want to take power, and their sympathizers.
One question: Politicians are immoral' in relation to whom; religious minsters, bank presidents, atheletes, or whom? And what about you? Have you ever been to a party, and excepted free refresments? Or have you ever paid a woman's way, in what we call a 'date', in anticipation of expected rewards?Quote:
Originally Posted by PomonaCA
I do believe that there needs to to be more reform, however to prevent undue influence of our legislators.
& you would put those regulations in the hands of whom?Quote:
Originally Posted by PomonaCA
Irrespective of what you might think of the government, there isn't anybody else, & I mean nobody, to look out for the interests of the general public. Who else is going to do it? You? Some Wall St banker or stock trader? Why don't we just turn the rules over to the hedge funds or insurance companies? I'm sure AIG would jump at the chance to take control. They were handling everything just fine until the government stepped in, right?
Get a grip.
Quote:
Originally Posted by hippifried
The problem is both politicians and bankers are human and prone to the same shortcomings that the general public are prone to. The difference is that the government can enforce it's policy shortcomings with GUNS. Add in that society seems to be getting less honest and you can see what our problem is.
The declining morality of our civilization that is the problem. It's not strictly the banks or the politicians or society. It's a lack of integrity in all 3.
A society governed solely by laws is a poor society. A society government by a static sense of right and wrong and laws is a better society.
What we've developed in the west is a tacit belief that if it's not illegal, it's OK. As we can see, taking and making bad loans is not illegal, so people think it's OK.... and in the case of the borrowers, they are being told that they are the VICTIMS of "predatory lenders" when in fact they are just as guilty.
The government role here is a necessary evil but if I have to chose, I'd take reckless business over reckless government anyday.
Me too, that's why we need responsible banking laws to check reckless banking practices. You can always "fire" your representatives; it's not so easy to fire the greedy and the reckless working on Wall Street.
WHY do 56% of Americans think he is doing a horrible job ? Its a CBS poll.Quote:
Originally Posted by TSCURIOUS
Freaking Communist that needs to be shipped to Siberia ASAP .
Oh and his wife stays in $2500.00 a nite hotel rooms in europe to go shopping. Thats his economic stimulus . How about a cow poker up the ass.
The honesty ratio is the same as it's always been. When you turn a bunch of people loose with unlimited money & no rules, they crash the system every time. The government is under constant scrutiny, & we have the opportunity to turn the whole thing inside out every 2 years. We don't have to trust the government. It's a fishbowl, & anybody can look. When was the last time you had a say in, or a peek at, what your banker or even your 401K was doing? The problem? The problem is that we keep turning a bunch of compulsive gamblers loose with other people's money.Quote:
Originally Posted by PomonaCA
Everybody likes to talk a bunch of morality, but what is it? As far as I can figure, morality is nothing more than adherence to the universal code of human interaction, AKA the principle or ethic of reciprosity, AKA the "golden rule". Everything else is arbitrary. But we're innundated with religious, philosophical, & ideological bullshit that just confuses the issue. As far as I'm concerned, morality is a real simple concept, & I actually agree with your statement to an extent. But there's so much confusion that I don't know exactly what you're talking about.Quote:
Originally Posted by PomonaCA
Agreed, & again, it all comes back to reciprocity. We don't stress the concept enough.Quote:
Originally Posted by PomonaCA
Everybody's playing the hedge. Inflation favors the long term borrower, unless the income source dries up. ARMs are a hedge against that, in favor of the lender. If you're late on a payment, your rate goes up & so does your payment. Sub-prime teasers are predatory because the lender knows full well that the rate the loan was based on is temporary, & that the chances are good that the borrower is going to get into trouble as soon as the payment goes up. A few percentage points can double the payment on a 30 year loan. The initial lender doesn't care because they're going to palm it off on somebody else as quick as possible, & the borrowers don't understand the potential pitfalls. We gripe about the ignorant borrowers, & that's ok, but can you figure compound interest? Most people can't, & don't have one of those specialty calculators that the realtors & car salesmen carry around in their pockets.Quote:
Originally Posted by PomonaCA
I fail to see the difference between some guy going down to the payday lender to keep his lights from going out & the banker that goes to the discount window or LIBOR to balance out their overnights & hang onto their AAA rating. Well... The obvious difference is the margin of course, but it's the same principle. Short term borrowing covers the lag time between money out & money in. It's a shuffle game & it works if you're careful. Credit cards & equity lines work the same way. It's easy to get into trouble though. This is what got all those banks, non-banks, & wannabe banks into trouble. They were over leveraged & constantly borrowing on the overnights through LIBOR. Investment banks couldn't borrow from the Fed if they'd wanted to, & none of them wanted to get audited. These guys had already blown through your money & were just living on a borrowed dime. It got completely out of hand, they all knew it, & nobody cared because the money was roling in on a right now basis. It's all about the dailies anymore.
No way. The money industry has crashe twice in as many decades, & that crashes everything else. There's no self restraint at all because these guys don't really have any skin in the game. None of it's their money. If any of them were personally responsible for their actions, there wouldn't be any of this recklessness. The most reckless things the government has done, other than starting wars to misdirect attention, was to lift the regulations. It doesn't work. There's over 300 million people here, & you can't govern by ideology. Everybody has their own.Quote:
Originally Posted by PomonaCA
Compulsive gamblers? Who's that? Because the term "gamble" better describes people who were takings stated income and interest only loans. You know? The people who were betting other peoples money on rising property values. It's not just the bankers, it's both sides of the credit markets. Blaming only the bankers is typical, non-productive class warfare plain and simple.Quote:
Originally Posted by hippifried
This is just more religious intolerance from you. You disagree with religion in general so you can't help but make savage attacks on it because, afterall, according to your beliefs, humans are animal.Quote:
Everybody likes to talk a bunch of morality, but what is it? As far as I can figure, morality is nothing more than adherence to the universal code of human interaction, AKA the principle or ethic of reciprosity, AKA the "golden rule". Everything else is arbitrary. But we're innundated with religious, philosophical, & ideological bullshit that just confuses the issue. As far as I'm concerned, morality is a real simple concept, & I actually agree with your statement to an extent. But there's so much confusion that I don't know exactly what you're talking about.
Ok, I fail to see who's to blame here. The banker or the guy who TOOK THE LOAN and owed it to himself to understand it to the best of his ability and perform as agreed on it. Or wait, are you arguing that the general public is incapable of reading and therefore needs nanny to step in and govern private business?Quote:
Everybody's playing the hedge. Inflation favors the long term borrower, unless the income source dries up. ARMs are a hedge against that, in favor of the lender. If you're late on a payment, your rate goes up & so does your payment. Sub-prime teasers are predatory because the lender knows full well that the rate the loan was based on is temporary, & that the chances are good that the borrower is going to get into trouble as soon as the payment goes up.
Yes you are. You are arguing that people are incapable of understanding the terms on documents they are signing. Thanks. I guess this is how you convince yourself that we're all just a bunch of helpless citizens waiting for the government to come save us. For someone who doesn't believe in a God, you sure want to make the government yours.Quote:
A few percentage points can double the payment on a 30 year loan. The initial lender doesn't care because they're going to palm it off on somebody else as quick as possible, & the borrowers don't understand the potential pitfalls. We gripe about the ignorant borrowers, & that's ok, but can you figure compound interest? Most people can't, & don't have one of those specialty calculators that the realtors & car salesmen carry around in their pockets.
I don't know what your point here was except to point out to many that you're just another guy with novice real estate exposure plagiarizing from Andrew Murfin. Banks and near-banks? This shit is 25 years old. Borrow from someone who's actually relevant these days, will you?Quote:
I fail to see the difference between some guy going down to the payday lender to keep his lights from going out & the banker that goes to the discount window or LIBOR to balance out their overnights & hang onto their AAA rating. Well... The obvious difference is the margin of course, but it's the same principle. Short term borrowing covers the lag time between money out & money in. It's a shuffle game & it works if you're careful. Credit cards & equity lines work the same way. It's easy to get into trouble though. This is what got all those banks, non-banks, & wannabe banks into trouble. They were over leveraged & constantly borrowing on the overnights through LIBOR. Investment banks couldn't borrow from the Fed if they'd wanted to, & none of them wanted to get audited. These guys had already blown through your money & were just living on a borrowed dime. It got completely out of hand, they all knew it, & nobody cared because the money was roling in on a right now basis. It's all about the dailies anymore.
Quote:
No way. The money industry has crashe twice in as many decades, & that crashes everything else. There's no self restraint at all because these guys don't really have any skin in the game. None of it's their money. If any of them were personally responsible for their actions, there wouldn't be any of this recklessness. The most reckless things the government has done, other than starting wars to misdirect attention, was to lift the regulations. It doesn't work. There's over 300 million people here, & you can't govern by ideology. Everybody has their own.
The government didn't lift regulations so much as replaced regulation with a political ideology. This is what I'm talking about when I use the term "Political capital". If you put the power of money in the hands of a politician, especially a politician with an axe to grind, they will use that power to, as they say "Level the playing field". Well, they leveled the playing field and we're worse off for it.
Wow spud. You sure like to jump to a lot of misguided conclusions.
Where do you come up with all this silly rhetoric. You an adherent of bugeyed Becky the new age prophet, or just another dittohead?Quote:
Originally Posted by PomonaCA
When all this crashed, there was over $50 trillion in credit default swaps floating around just in the US. That dwarfs the US GDP. Not really sure, but that may be more than the planetary GDP. These aren't the bundled mortgage CDOs. These are just naked bets on whether the CDOs & other weird financial products would pay or fail. No skin in the game. Don't own the bundles. Just laying a bet with markers, partially backed by the investments of actual people who have no idea that any of this is going on. It's really not about housing. The "foreclosure crisis" that hit in 2006 just turned the lights on so people could see what was happening. These guys were just creating money out of thin air. It took 2 years for the press to analyze this nonsense. It's still unclear, but very little of it paid off. How do you clear the books? You don't know what you're talking about.
??????? Well gee, it must be quite an edge to be able to read minds & be so sure of what somebody else thinks. Can your ouija board see the powerball numbers?Quote:
Originally Posted by PomonaCA
What does religion have to do with morality?
You don't know what you're talking about.
You fail to see because you're looking to affix blame to fit into this McCarthyesque "class warfare" fantasy your're trying to promote. It's pretty easy to see that you've never taken out a home loan. This isn't private business. It's other people's money. Without all those bank accounts, retirement accounts, brokerage accounts, & whatnot, the capitalist system collapses. People shouldn't have to rely on trust. We have the federal government to make sure these guys are on the up & up. That's one of the reasons they exist. You don't know what you're talking about.Quote:
Originally Posted by PomonaCA
Reality check. Nobody's dealing with the lenders. You can't get past the broker who's selling that financial product. You don't even see the final papers until you go in to sign. If you're experienced & have the extra cash, you take a lawyer with you Most people don't understand this shit. They think they're buying a home & taking out a mortgage, like Mom & Dad did, when they're really signing on to a trust deed. The more complicated the product, the less likely it is that the lendee will understand the details. First time buyers are at the mercy of whoever's explaining the legalese & bank jargon to them. You don't know what you're talking about.Quote:
Originally Posted by PomonaCA
I have no earthly idea who Andrew Murfin is, & I don't care enough to look him up. You don't know what you're talking about.Quote:
Originally Posted by PomonaCA
You're just a parrot. You don't know what you're talking about.Quote:
Originally Posted by PomonaCA
1. A "60 Minutes" piece describes the practice of credit default swaps, also know as CDO's and 'derrivatives' as legalized gambling. Since 1999 when the practice became legal some has estimated that there are trillions of dollars of obligations out there. But since the practice was entirely unregulated, there are only estimates. This also contributed to the financial crisis when companies like Bears and Stearns were not able to 'pay off their bets'. So point is that it was gambling on a large scale.Quote:
Originally Posted by PomonaCA
2. I disagree that morality is getting worse. I think were just getting more news about people's behaviors. Plus there are more ways to do traditional things like stealing money. It's the same behavior, just a new way of doing it.
3. "Level the playing field"? Studies have shown the the top percentage of wealth now own more of the total wealth. There has been a consistant theme since Reagan, that letting the wealth pay less taxes would be good for the economy. I argue that polictician have favored things which help the weathiest rather than 'level the playing field'. Bush's tax cut, while waging war, was a big increase on the federal deficit. Has this created more jobs? I think the governments suspending of regulations to such firms as Goldman Sachs, in 2004, (as I have quoted in previous post in this thread), does fit into your definition of "political capital". However this is another example of politicians helping big money interest, just the opposite of 'leveling the playing field'.
And the the spin doctors say taxes are being raised, when the reality is that tax cuts are due to expire. The working class pays a good percentage of their income to the government for social security. The framing of information is a important tool to manipultate public opinion.
I think this is the key point in discussing policy, and is dramatically misunderstood by the overwhelming majority of commenters.Quote:
2. I disagree that morality is getting worse. I think were just getting more news about people's behaviors. Plus there are more ways to do traditional things like stealing money. It's the same behavior, just a new way of doing it.
By literally every objective measure of the human condition, we are better off now than at any time in human history. People live longer, are healthier, have more wealth, are better educated, are safer, and enjoy greater degrees of civic equality and political freedom than ever before.
Those making the "moral" argument will ignore all this evidence because "morality" is not an objective measure. I say morality is increasing, PomonaCA says it's decreasing, and we're both correct because one's system of morals is inherently subjective.
But in terms of things like freedom, equality, and justice, human beings across the globe are unquestionably better off now than 1,000, 100, 50, or even 10 years ago.
I agree that things are better overall & getting better as we speak. Each generation loses some of the xenophobic fears & brings the world a little closer together, to make life just a bit easier for the next one. That's not just the American dream. Every human being (sans a few jerks) strives for that & has since prehistory.Quote:
Originally Posted by thombergeron
However: I disagree that morality is necessarily subjective. The problem is that too many people claim the authority to dictate morality. Morality isn't about arbitrary rules, & can't be dictated by people who claim to speak for the omniscient, or that they've designed the ultimate ideology, or that they have a philosophical edge by reading libraries full of mumbo jumbo. Morality's about how we treat each other on a personal level. The principle/ethic of reciprosity, or the "golden rule" the universal code. Look at all those philosophers & prophets. What are they talking about other than the code? The discussion always comes back to that because that's the basis of the behavioral concept of right & wrong. Our conscience kicks in by our asking ourselves how we would feel if we were on the other side of the contemplated action. If you can't relate it to the code, it's not a moral issue. Arbitrary rules have nothing to do with morality. It's all quite simple, despite the continual efforts to make it complicated.
The Rabbi Hillel the elder (circa 100 BCE), when asked to state the law to settle an argument, said:
"What is hateful to you, do not do to your fellow: this is the whole Torah; the rest is the explanation; go and learn"
Can't get much simpler or authoritative than that.
Quote:
Originally Posted by thombergeron
How moral are we if the 'civil equality' you talk about is mandated by federal law? That's not morality, that's FEAR of governments and the repression of free speech. Is it moral if a black guy applies for a job, is hired and every time he turns the corner, someone calls him a nigger?
Are we more moral in a society that enforce gay rights at the point of a gun or lawsuit? That's not morality, that's fear.
And is safety a barometer of freedom and safety? Is it moral to demand that bikers wear helmets? Is that real freedom? You laugh now but give it time. Soon the government will dictate how many calories you take in, how much alcohol you take in, when you go to sleep and how much electricity you use. After all, we have to keep you SAFE from all that fossil fuel pollution.
I argue that laws reflect the will of the majority of people. It is only fear for the minority of people who disagree. Perhaps the people do not agree with the specific penalties for the law, but they agree that something should be done to promote safety, (In the case of bike helmets), and the law adresses that issue. Even nations we think of as dictatorships, usually have legislators who are responsibles for common laws that their people live by.Quote:
Originally Posted by PomonaCA
I must point out that freedom and morality are two different things. It would be freedom to shoot people, who disagree with us, or to drive home after having 8 drinks at a bar. I say concepts of safety and rights are based moral concepts. Now personally think our seatbelt laws do more harm in penalties than good. But in my state laws which required motorcyclists to wear helmets, was repealed. Freedom prevailed oever saftey in that case.
Sorry I missed this part of your post, before I made a related post. I want to add that it's amazing to me that credit default swaps were illegal until 1999 or 2000, but there was 50 trillion of them out there within, say 7 years. Most people give credit to Republican sponsor Phil Gramm for writing the the bill. Bill Clinton did sign it. My point is it was the perfect experiment for the Republican philosophy that non government interference would create prosperity. I think it just created volitility. That exchange of money did not end up creating productive goods which would benefit the general public as manufacture labor, etc.Quote:
Originally Posted by hippifried
Do you know anything about how the new finance law affects these transactions? I agree with mostly all of what you have written in this thread.
I haven't gone through all the details of the new law yet. I don't think CDSs are outlawed though. I'm not sure it's possible to put the genie back in the bottle with so much junk paper floating around out there, without a systemic recrash. I know there's new rules on what the banks can issue, & selling naked bets could very well be a big no no for them under the new law, but I'm not sure what it does to regulate the insurance industry. The CDS, in its current form, was a creation of AIG, & most of it ran through them. It was sold as insurance & risk abatement. Very few people fully understand how these things actually work. The people I've seen who do, regardless of party affiliation or political bent, all agree on one thing: That the attempt at risk abatement didn't work & actually added to the risk.Quote:
Do you know anything about how the new finance law affects these transactions? I agree with mostly all of what you have written in this thread.
It wasn't just them of course. Over the course of a decade, Congress systematically gutted financial regulations. Especially the antitrust provisions that disappeared under Gramm-Leach-Bliley. Everybody likes to talk a bunch of free market capitalism, but monopolies & even mega-consolidations are really anathema to a free market. Stifling competition & creating a "too big to fail" situation makes it impossible for the markets to regulate themselves through competition. Kinda makes you wonder who the real commies are.
You're quite confused here. In a democratic republic, like we have right here, the authority of the state derives from the consent of the governed. That's what's commonly referred to as "elections." A state's legitimacy is based, in part, on a monopoly of the use of violence, that is, it's ability to protect its citizens from both without and within.Quote:
Originally Posted by PomonaCA
All this stuff is written down. Try John Locke, Max Weber, etc.
It's not altogether surprising that a fearful little bigot interprets everything around him in the context of fear, but that's not actually how things work here. Law is based on the social compact, the desire of a polity to cooperate for the collective benefit of all. If you only obey the law because you're afraid of the government's guns, then you're a sociopath, and your earlier reference to "morals" is all the more confusing.