[FoRK] The Wrecking Crew - A Low, Dishonest Decade

Bill Stoddard wgstoddard at gmail.com
Wed Jan 20 13:43:45 PST 2010


On 1/20/10 3:46 PM, Ken Ganshirt @ Yahoo wrote:
> --- On Wed, 1/20/10, Bill Stoddard<wgstoddard at gmail.com>  wrote:
>    
>> Correct, but completely useless, conclusion. 
>> Government regulation is a simple fact of life.  We can
>> work to reduce it but it will always exist and pretending
>> otherwise is just pie in the sky idealism.  One of the
>> recent problems is that wall street was willfully ignorant
>> (maybe willfully negligent) in managing the obvious risk
>> presented by cheap/free credit underwritten by the
>> Fed.
>>
>>      
>
> I'm sorry .... what risk?
>    
My reply to Jeff was a rambling rant; I used his post to get on my 
soapbox.  My apologies Jeff... I actually don't disagree with what your 
saying.

The 'risk' was the loans made to people who, upon a moments reflection, 
clearly could not afford to pay them off.  The iBankers gladly bought up 
these loans, sliced 'um into pieces, conjured away the risk (or so they 
claimed) then repackaged the glob and sold it to god knows who and 
pocketed some nice coin off the transaction.  Wash, rince, repeat. As 
long as the music played, had to keep on dancing.  The ibankers that 
claim they 'just didn't know' about the risk are liars, quite simply.  
They are hiding behind academic fud. While it may be impossible to 
'prove' in a court of law,  that these jokers were criminals certainly 
passes my sniff test.  See Celente for some great rants.

In the past, iiuc, banks would not have been permitted to participate in 
'investment' activities. Were this reg not repealed by Clinton, iirc, 
the fallout might have been limited (emphasis on 'might') to ibanks.

Some famous person whose name I can't recall said something like 'never 
let a good crisis go to waste'.  I am wondering if we missed an 
opportunity to clean house.. what would have happened if the goverment 
just let the house of cards fall; no bailouts, no stimulus, nothing. 
(and then maybe stepped in to directly repair some of the damage to 
individuals 'stable values funds' with an upper limit of, say, 200K per 
account)?  It would have been (and still would be) horrific for sure, 
but it would have purged enough systemic rot in our free market 
capitalist system to last us another 200 years.  I am less hopeful now 
that this experiment with democracy will actually survive another 100 
years on current course and direction.

Bill




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