Korean Job Discussion Forums

[pkang0202]

http://www.nytimes.com/2008/12/12/business/12scheme.html?pagewanted=1&_r=1&em

[Tiger Beer]

From my understanding, A LOT of people knew exactly what was going on. It seems like everyone and their brother and sister knew the entire housing scam was insustainable. They knew Americans couldn't continue to buy more and more housing and more at higher and higher inflated prices.

I think the real reason the government didn't stop it, and actually encouraged it - I recall many times Bush encouraging Greenspan and the Federal Reserve to keep interest rates to 'stimulate the economy' with that idea that 'every American should be able to invest in a home', particularly as housing prices kept going out of reach of more and more Americans. It also added to numbers that made the economy look like it was just fine despite massive military spending and massive borrowing and debt.

In reality, the economy looked kinda okay as it was running on an overinflated housing market. It gave false illusions that the economy wasn't nearly as unhealthy as it seemed and looked. So while the Administration and others who had the power to stop such a large scam, decided to 'ignore it', as perhaps no one would notice, or it might work itself out in some way or another according to 'free market' principles.

But...that didn't quite happen that way. There was also STRONG 'free market' talk going on, in that pretty much anything that goes on, should happen, as that is just free market. An anti-regulation streak runs high within the Republican Party and it's supporters, making it ripe for exploitation unfortunately as well.

[mises]

[canuckistan]

The danger signs of Madoff-style ponzi schemes:

http://www.chron.com/disp/story.mpl/business/6167085.html

The most telling being the consistently incredible rates of return.

No one beats the market like that.

10-11% averaged over 5 years is considered to be good investing. Key word: averaged.

Anything more with no significant downs over 5 years (despite downward market movement) should raise flags. Common sense questions about Madoff's "incredible" returns were cast aside by greed.

As mentioned in the article...Ponzi schemes don't like decreased returns lest they provoke investors to cash out and the jig is suddenly up.

[RJjr]

A $50,000,000,000.00 pyramid scheme? If that's not "too big too fail" then I don't know what is. Bush, Congress, Paulson, and Bernanke need to call an emergency session and bail out Madoff with our tax dollars! A Madoff bailout would cost us only twice as much as the proposed auto bailout!

[mises]

This is just the start.