Democrats versus Republicans

[PBzeer]

So you want the government to guarantee investments now? Markets are cyclical, they go up, they go down. You don't get the gain, if you aren't willing to take the pain. (I didn't hear anyone complaining when they were making the big bucks on their retirement accounts)

[sailaway21]

Originally Posted by sck5

sailaway

most of us who have gotten our quarterly retirement fund statements sure do wish the government had expanded a bit in the direction of regulating the insane excesses of the financial wizards on Wall St. The meltdown didnt come out of the clear blue sky - It came because the government decided to "let the markets self-regulate". One of the ways markets do that is with periodic crashes. Most of us dont like that. I bet you dont either. This didnt have to happen and we need to expand the regulation enough to make sure it doesnt happen again.

You might wander over to the market crash thread. There is ample evidence that the regulation was, in fact, adequate and that the proximate cause of the collapse was other government forces demanding that bad paper be issued to untrustworthy mortgage risks.

As the Beezer says, I doubt we heard you squawking about double digit returns from the market under self-regulation the last decade or so. Typical lib...you're only willing to accept the existence of sunny days. And it's government's job to keep the clouds away. You'd love Canada.

[PBzeer]

Got a kick out of this ad:

[PBzeer]

Have to wonder if perhaps the One was breathing a sigh of relief about the returns from Georgia last night. Since the Dems can't get to 60 now in the Senate, he can let the GOP do his dirty work on anything he doesn't particularly want to sign into law, but not veto.

Was interesting that Chamblis almost tripled his total over Martin.

[sck5]

I am very glad you guys arent in charge of financial regulation. I would class you in the category "not sane" if you think that crashes like we are experiencing are a just fine, perfectly OK thing that we should do nothing about. Fortunately, you are outnumbered. And since you asked, yes, I and many others would happily take lower profits in the good years if that meant we could avoid events like we are having now.

Again, this didnt have to happen. It was predictable. And we can and should prevent a recurrence.

[sailaway21]

Originally Posted by sck5

I am very glad you guys arent in charge of financial regulation. I would class you in the category "not sane" if you think that crashes like we are experiencing are a just fine, perfectly OK thing that we should do nothing about. Fortunately, you are outnumbered. And since you asked, yes, I and many others would happily take lower profits in the good years if that meant we could avoid events like we are having now.

Again, this didnt have to happen. It was predictable. And we can and should prevent a recurrence.

If it was so damn predictable, it wouldn't have happened. Where do you get the cockamamie idea that government can somehow regulate profits so that we do not have either recession or market downturns?

As usual, if it's possible to misinterpret something, you will do so.

[sailaway21]

sck5,
Please take time to read this article fromThe Atlantic as it's probably the best over view of the current mess I've seen to date. And it explains why it can, and will, happen all over again some time in the future. It's a fairly long article but it does go a long way towards explaining how almost everyone acted rationally and yet this still happened. Ironic that I found it shortly after your last post.
Why Wall Street Always Blows It - The Atlantic (December 2008)

[AdamLein]

Originally Posted by sailaway21

Why Wall Street Always Blows It - The Atlantic (December 2008)

Great article, if also greatly depressing. The only way I can see for a rational person to avoid such eventualities - which are effectively luck-driven - is to never be leveraged more than 100%. But credit is the lifeblood of our economy; it's what makes us prosperous in general, and it would also appear that the people who get ridiculously rich do so through a judicious application of credit.

So are the choices relative poverty but absolute security (a cash-only lifestyle) vs. the chance of unavoidable recessions (by taking my chances with the credit system)?

[wind_magic]

Originally Posted by AdamLein

So are the choices relative poverty but absolute security (a cash-only lifestyle) vs. the chance of unavoidable recessions (by taking my chances with the credit system)?

That's what the voluntary simplicity crowd says.

I think they have a point, it does seem like quite a coincidence that most people's expenses rise to the level of their income (or exceeds it) no matter what their income is.

[sck5]

It was predicted by many economists including Roubini and Krugman, years ago. And who ever said controlling profits directly was what was needed? What was (and still is) needed is better capital adequacy. The reason the deregulation fanatics oppose this is because less capital means more profits, at least when times are good. When times are bad, unfortunately, it means bankruptcy which doesnt faze the leaders of these institutions because they are going to walk away with multimillion dollar severance packages anyway.

Most of us think we can do a bit better than this and are OK with somewhat lower profits if that is the result of better regulation.

And Bush et. al. WERE warned, but they didnt want to hear it. They werent alone, but the fact is they DID get warnings and continued not wanting to regulate adequately much as you yourself continue to not want it even in the face of obvious disaster.

What does it take to convince you? As for me, if the price of willy nilly deregulation is a stock market crash and the de facto nationalization of the country's insurance and mortgage markets along with lots of its banks then I for one think that is a really lousy outcome. And we could and should have avoided it.