Korean Job Discussion Forums

[bangbayed]

[canuckistan]

Quite amazing even the most august financial institutions would extend themselves far beyond what they had on deposit.

All of this has been like a pyramid scheme--everyone was making money with each repackaging/sale of debt, taking their %.
Worked well until it all went to *beep*. Like most pyramid schemes.
The guy left holding the bag these days would be the taxpayer.

Why require sensible bonafides in selling mortgages when you're just going to sell them on, make your % and have your hands washed of the debt? Wall Street did not seem to care.

VOLUME, not financial soundness of your clientele.

[Join Me]

As much as I love to blame Bush for everything it was interesting watching Greenspan try to play dumb over his role in this whole mess. For years the whole world would stand by with baited breath at the mere thought that Greenspan was about to open his mouth. Funny...looks like he didn't know sheeeet!!! He sure played the role well though so I give him credit for pulling that off for so many years.

[ontheway]

The headline to this is completely misleading and wrong.

I watched Greenspan and listened to his words.

He said that he never thought that housing prices would decline, that he had never seen such a decline and never expected it. That is why he didn't believe that the inflationary bubble that he had created in housing, to reinflate the collapsed inflationary bubble from the dot.com crisis, would ever collapse.

In essence, the failure he admitted was his own failure to realize the an inflationary housing bubble would collapse just like any other inflationary bubble.

He tried to put it on the banks by asserting that he thought the banks' self interest would prevent the collapse of the bubble. But he should have known that the collapse was inevitable, as Ron Paul, Peter Schiff, myself and others have been saying for decades.

The devastation caused by massive socialistic interventions into the marketplace are so heavyhanded, evil and onesided that they destroy the delicate balance of the natural economic ecosystem.

The evil, socialist Federal Reserve caused the collapse. Greenspan essentially admitted that, but tried to give himself wiggle room saying that he didn't know it would happen.

You can tell he's lying. He did know that it would likely happen, but he hoped that it wouldn't. He was hoping that the economics that he studied, knew, supported and believed in was wrong and that the socialist/keynesian boneheads were right. He gambled and lost. We all lost.


Another way to think about it:

An Insurance company spreads the risk to other insurers, in the case of fire insurance for example, through reinsurance contracts so that they do not cover all the buildings in large contiguous areas, even if they are the original underwriter, to prevent against corporate failure in a major citywide fire. Even so, if the government firebombs the whole country, that company and the whole fire insurance industry would collapse.

[sharkey]

BUT BUT BUT BUT THATS SOCIALISM!!!!!!!!!!!! ( ALL AMERICANS RUN AWAY SCARED)

[ernie]

so really it's the public's fault for presuming that their leaders have an inherent interest in shielding their institutions and taxpayers from risk.

[bangbayed]

[bangbayed]

[canuckistan]

When the democrats talk about doing it, it's "socialism" ....when the Republicans actually do it, it's "capitalism".

[JMO]

[JustJohn]

Quite interesting. I do think the Republican jibe is a little out of place: Both Republicans and Democrats are partially socialist, but Democrats are most certainly a notch more so.

I think The jury is still out on socialism in many respects, at least in my book. I think one look at Russia can tell us the full blown socialism doesn't work. However, many European countries have been practicing moderate forms of socialism for a while now and seem to be doing just fine.



As a footnote, I think the Americans being against socialism thing is more about ideals than economic policy. The U.S. was founded by a group of people with a rabid thirst for personal freedoms, and not much has changed. People feel like socialist policies impinge on those freedoms, hence the aversion.

[ontheway]

[JustJohn]