unusualmusic_lj_archive

a bathtub. Deregulate, deregulate, deregulate, and let the market decide! Until your greedy chickens come home to roost, that is. Then

Federal Gov't the world's largest housing company: AIG sells 79.9% itself to Federal Government,for 85 billion dollars

Privatize the profits, socialize the losses. And remember kids, regulations to prevent this kind of shit? Are ALWAYS bad. And we ALWAYS need less government.

EDIT: This is the bottomline
Real Reform Means Reinstituting Glass-Steagall at Full Strength and Breaking Up Financial Conglomerates

Nor should risk be transfered much if at all. Risk must stay with the people who issue the mortgage. If they know it'll be off their books they won't do proper due diligence, and no one else can do it. At most, risk should be transfered once and must be transfered in whole and understandable form, rather than taking 20 different incomes steams (or more), melding them together, chopping them into tranches and selling them to people who really have no idea what they're buying, while you've booked your profit and washed your hand, so even if you sold them crap, hahahah, it's their crap now (or so you think.) Risk must be assumed only by people who can understand it and manage it and who are exposed to the consequences of their decisions. (Ability to manage risk, but knowledge that if they don't they will get hurt.)

Now let's talk about this idea that the Fed should basically regulate everyone, with the SEC occasionally peeping over it's shoulder to see whether market manipulation is ocurring. This is necessary because there are, as Obama points out, no longer clear cut differences between banks, insurance companies, investment banks, brokerages and so on. The repeal of Glass-Steagall put an end to those differences. Glass-Steagall, remember was put in place during the Great Depression to stop another Great Depression from occuring. One of the things that people who lived through the 20s believed caused the Great Depression was not having clear cut boundaries between the businesses, again so that risk was divided appropriately and so that fewer companies became "too large to fail".

But somehow we think we know better than the people who lived through the last Great Depression; the people who lived through the 20's and the last great market crackup. So we've repealed most of Glass-Steagall and allowed everyone to be in everyone else's pockets, huge financial conglomerates to mushroom into monstrosities, and allowed unregulated "innovative" financial "products" like collateralized debt obligation (CDOs) to grow into such monstrosites that financial markets were huge multiples of the entire real world economy.

Then it all comes crashing down and people claim to be surprised.MORE

I don't particularly agree that Obama really gets it the way that this author thinks he does, see this comment but McCain has the adviser that lobbied for and inserted the damn bill into the must pass bill of spending that Clinton had to sign.