Financial Crisis Was Avoidable, Inquiry Finds

midlifebear

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not trying to get anybody angry, but i do hope everyone is also writing to all of your elected officials as much as you write on here.

Not only do I regularly communicate via mail, phone, and e-mail with my elected officials, I know most of them on a first name basis -- even though I spend the majority of my life OUTSIDE the USA. And last year I stayed for more months that I cared to in the USA to help my "elected officials" win. And most of them did -- including Harry Reid.

How many here can say they've been in the same room (in fact, within garroting distance) of Sharron Angle? Thought so. Fortunately, killing things, especially other human beings, is against my belief system.

I wasn't and still am not terribly thrilled to have Harry as my Senator. But the alternative was so much fucking worse. And --- surprise, surprise --- several of my very good friends (who, sadly are Republican) won positions in county government. I also campaigned and voted for them. Just imagine!:eek:

But in many instances there were no Democrats running as opposition candidates and the option was "same ass holes as usual" or "new" Republicans -- men and women who know me, know I'm gay, consider me a friend and trust me with their children. Plus, they know we have a great deal in common regarding jobs and keeping the wild and woolly West wild.

My greatest contribution in the last election was to provide hours of HD video of our previous County Sheriff cutting and bailing hay while he emphatically claims he was working full-time as Sheriff in the Sheriff's office. Not only did we nail the Republican asshole for not doing his job and receiving a paycheck for not doing his job, we were able to clean house of more than a handful of County Deputies who no one -- Republican or Democrat or Anything -- could stand; especially one guy who had video taped himself having sex with his 14 year-old step daughter and another guy who felt that county property was for his personal use and didn't see any conflict of interest "borrowing" ATVs from the Sheriff's Office to go Elk and Deer hunting.

And how about you, Mr. Pierced? Have you done anything except turn the cushions on your couch in the last two years? You haven't made me angry, but you have captured my interest. :smile:
 
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maxcok

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Take a history lesson. All the regulations that came out of the Great Depression is what kept it from happening again until the Masters of The Universe on Wall Street worked hard, real hard, during the last 20 years to get them all undone. They got their wish and guess what happened? Nope. No surprise.
Borrowed from concurrent thread:
If I'm not mistaken weren't there a bunch of regulatory controls put on the market after the Great Depression to prevent it from happening again? And weren't those controls systematically eliminated over the past 40 or so years because they hindered innovation and expansion and were a drag on the free market system? One of the two political parties has pushed that agenda relentlessly, I forget which one. And weren't a whole lot of new financial instruments and shell games dreamed up that hardly anyone understood, designed to suck pure profits out of the market, out of thin air? And didn't wise economists like Alan Greenspan tell us not to worry our tiny little heads about such complicated things, that the market would govern itself? I mean, how could this happen?

Fortunately, everyone's learned their lessons, and there'll be no more greed or manipulating the system to take short term gains wherever possible. And fortunately someone tossed a TARP over all those sliced and diced CDO's and CDS's and absorbed them into the system where they sit like ticking time bombs, so nobody has to see them, or think about them, or bother trying to unravel them, or find out how completely worthless they are. And fortunately, the current administration was able to enact, on paper at least if not in practice, a fig leaf of token financial regulation overhaul to address the problems that led to near total global financial collapse, in spite of overwhelming resistance from one of the two political parties, I forget which one again. And even though that party I can't recall right now is openly determined to rip this little paper fig leaf to shreds, burn it to ashes, and grind it to dust, I'm sure we have nothing to worry about, right?

I mean, there's no way it could happen again, right?
 

lucky8

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not trying to get anybody angry, but i do hope everyone is also writing to all of your elected officials as much as you write on here.

They don't give a shit...they only pretend...the issue is light years beyond their levels of comprehension and most of them know it

But they do know the number one rule of politics...don't fuck with the big rich guys, no matter how hard they are fucking you...which in all honesty, is the reason this all happened. No one was willing to even look at the big guys much less question what they were doing
 
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mexdude

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Back in 1994 we had a huge economic crash here in mexico, i still remember well, it was hard, we did ok, we did felt it, but my mom and dad had good jobs, so we went better than other people, and recently the president of that period spoke what was the real cause, and it was something so stupid, that i couldnt believe it, pretty much the leaving president knew that he had screw it, so they worked up a devaluation plan for the currency so it would be slowly, (like it was in the 2001 crash, it was bad, but not like 1994), but the recently elected president just tossed up the plan, and put a economic chief that pretty much had no idea of the screw of the past president, so in a month damage was beyond repair, yea it happens like that sometimes
 

midlifebear

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Back in 1994 we had a huge economic crash here in mexico, i still remember well, it was hard, we did ok, we did felt it, but my mom and dad had good jobs, so we went better than other people, and recently the president of that period spoke what was the real cause, and it was something so stupid, that i couldnt believe it, pretty much the leaving president knew that he had screw it, so they worked up a devaluation plan for the currency so it would be slowly, (like it was in the 2001 crash, it was bad, but not like 1994), but the recently elected president just tossed up the plan, and put a economic chief that pretty much had no idea of the screw of the past president, so in a month damage was beyond repair, yea it happens like that sometimes

Mexdude is sort of an oracle. In 1994 México simply issued new money (both coin and paper) after removing two zeros off of everything. Suddenly $10.00 Pesos were $1.00 Peso. The only people who seemed to survive were those Mexicans with US Dollar accounts in Mexican banks. But there was a run on US Dollars and they could only take out enough each week to live. But the Mexican Treasury did one thing and continues to do one thing rather clever. A 10 Peso coin has heft, feels good in your hand and still weighs about as much as a 10 Peso coin from the 1970s. And you can buy things and still get change back. You can't buy a lot of things, but psychologically most Mexicans would agree that a handful of 10 Peso coins is a lot better than counting the same amount in 1 Peso coins.

By the way, anyone remember when the US Dollar sign had two vertical slash marks instead of just one . . . and when that changed? The Peso historically always had one vertical slash mark. Therefore, back in the 70s it was possible to tell when things were priced in US Dollars or Mexican Pesos. It's just little things, but they add up to a big difference.
 
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Big_Red

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Very, very well said guys! The fact is, the regulatory bodies which oversee most industries are made up of the very people who they're regulating. This is known as the revolving door in Washington. You work for a massive company, then "resign" and go to work for the government, regulating the company you used to work for. After spending some time in the public sector you "resign" again, get re-hired by your old employer and collect a big, fat payout. Usually offshore, so it can't legally be traced to you. This is the current state of affairs today. And it is this very state of affairs which fomented the financial crisis to begin with.

Oh, and one more thing: you actually pay for this shit with your taxes! :wink:

Yes the crisis was predicatable and preventable, but more regulation won't stop it happening again. The major problem is the systemic concentration of financial wealth (i.e gov'ts and major banks), these entities grow so big they're potential downfall threatens national and global stability, so instead of working to serve us we end up working to save them. This is an economy in reverse!

The solution is the dispersal of wealth and free markets, but for many reasons doing this voluntarily and sensibly is impossible, so instead we'll carry on until our governments eventually go bankrupt. Only this morning the Japanese were downgraded by a major ratings agency.

Bugger all regulation - lots of forms to fill, but all practically designed in concert with the very companies who needed watching. Toothless sheep watching over wolves as I remember it.

I think AIG's derivatives arm which caused an $85Bn bailout was being monitored from 4,000 miles away by one man & his dog - & even the dog had as much knowledge of the business that they were doing. Scandalous.

Not one lying CEO in jail. Not one cent taken back from their bonuses.

Even Madoff didn't have his records looked at for decades. Regulation?
 

stratedude

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:confused13: How do you control greedy impulses without regulation?

And by "control" I mean "take over."

And by "greedy" I mean "successful."

And by "impulses" I mean "diligent actions."



Yours is a bullshit question only a demagogue or an ignoramus would ask.
 

Big_Red

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WOW. You really think that so-called "regulation" of the financial industry has anything to do with political partisanship??

Here's a little history lesson of my own:

-Reagan deregulated the S&L industry, allowing for massive concentration of wealth in few people's (i.e. Neil Bush) hands

-Greenspan "appointed" by Reagan

-After crash, $500 billion bailout by GHW Bush

-Greenspan "reappointed" by GHW Bush

-Clinton "approved of" by banker-dominated Trilateral Commission for Democratic ticket

-Greenspan "reappointed" by Clinton several times

-Clinton heavily deregulates Wall Street regs which affect the largest companies in the S&P 500 (i.e. Private Securities Litigation Reform Act)

-Christopher Dodd, Phil Gramm (and Phil Gramm's wife), and many others work tirelessly to give bankers what they want (i.e. Repubs and Dems)

-Clinton repeals Glass-Steagall II (passed in 1933) in November of 1999 with the heavily Repub sponsored Gramm-Leach-Bliley Act, as his final gift to the bankers who put him, and kept him, in office

-The largest banking mergers in history (JP Morgan and Chase Manhattan Bank, etc.) follow

-Even more power is granted to bankers under GW Bush with more "regulation", and smaller banks are squeezed out as competition

-After crash, more than $700 billion is printed and given out to banks, which then use most of the money to buy out their now penniless competitors

-The latest bailout was very much crafted by agents in both parties and then executed by Obama

I don't know about you, but I don't see much of a pattern there^^ with respect to political party. If you're not convinced by this- and you're free to check any of the above points with textbooks and encylopedias- then that's just fine. You'll believe whatever you want to believe.

Lastly, a few mega banks (18 primary dealers at last count) does not a free market make. Having the government come in and selectively regulate weaker competition, have them fail or be bought out, and then deregulate is the antithesis of a free market.

One of the two political parties has pushed that agenda relentlessly, I forget which one. And weren't a whole lot of new financial instruments and shell games dreamed up that hardly anyone understood, designed to suck pure profits out of the market, out of thin air? And didn't wise economists like Alan Greenspan tell us not to worry our tiny little heads about such complicated things, that the market would govern itself? I mean, how could this happen?
 
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deleted15807

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Here's a little history lesson of my own...........

:sleeping::sleeping::sleeping:

Not much 'history' since you conveniently flushed the prior 50 years of dull banking and no financial collapses thanks to regulations. The 'free market' is a myth. It can never be 'free'. Humans are simply unfit for such a system.
 

Big_Red

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No financial collapses?? What do you call 1973-74?

As for 1933-71, that was when gold theft was legalized by the government, and ownership of it criminalized. The Federal Reserve and government used that looted wealth to bail out the economy, make war twice, and then bail it out again. When they made war a third time, other countries fought back and looted the Federal Reserve of most of its gold to balance the dollar's value under the agreement they had in place (Bretton Woods). In 1971, the Fed and the government welched on that agreement when Nixon closed the gold "window" at the Fed, and the dollar was floated on the world currency market. Double-digit inflation rates soon followed.

If the free market is a myth (ridiculous, but I'll go along with it for the sake of argument), and you clearly disagree with such a system, then what should be in its place?

Not much 'history' since you conveniently flushed the prior 50 years of dull banking and no financial collapses thanks to regulations. The 'free market' is a myth. It can never be 'free'. Humans are simply unfit for such a system.
 

maxcok

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:confused13: How do you control greedy impulses without regulation?

And by "control" I mean "take over."

And by "greedy" I mean "successful."

And by "impulses" I mean "diligent actions."

Yours is a bullshit question only a demagogue or an ignoramus would ask.
My "bullshit" question is the very essence of the topic and goes to the absolute heart of human nature as it affects financial stability. Calling me a "demagogue" and an "ignoramus" is not only wildly inaccurate, insulting, and entirely uncalled for, it is the height of irony. You reveal yourself to be nothing but an angry reactionary jackass, and as such, unworthy of response. However, if only for the benefit of other readers, I will respond.

Greed, along with its cousin Fear, are the basest of human emotions, and they drive most destructive antisocial behavior. There will always be those who want to amass all the coconuts into their own pile, even though there are more than enough for the whole tribe, and then use their fortune to manipulate and enslave everyone else. The rich and powerful will abuse their wealth and power to amass ever greater wealth and power, by hook or by crook, damn the rest of us, and damn the consequences. Sadly, there will always be individuals among us who are incapable of transcending their basest human nature, incapable of achieving a more civilized and altruistic level of consciousness. Without proper controls on the obsessive greed of those individuals, and by extension soulless entities like corporations and financial institutions, everyone else suffers, and the financial system and society itself cannot function or even survive. Greed is insatiable. It cannot govern itself. It's really that simple.

I said exactly what I meant to say in my prior post. I don't need you to translate, reinterpret, or put your spin on it. In the future if you cannot take what I say at face value, I would advise you to shut the fuck up.
 
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maxcok

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"The 2008 financial crisis was... caused by widespread failures in government regulation" -- (from Sargon's post)

Okay, that part is complete bullshit. Too much regulation caused that clusterfuck. Not too little. But everything else is true. It was the greed of shareholders and management that lead to that corporate mismanagement and heedless risk-taking by Wall Street
:confused13: How do you control greedy impulses without regulation?
Let them go bankrupt, for one. And throw management pricks in jail for conning their customers and investors. Very simple, actually.
That doesn't even answer the question first of all. What you're talking about is what happens in the aftermath, not how you prevent it from happening in the first place. So in an unregulated system the "too big to fail" financial instutions go belly up, which causes every other financial institution and insurer they do shady business with to go belly up, which is virtually all of them, dragging the US and the entire global financial system down the toilet, everyone's money is worthless, and we have a worldwide depression that makes the 1930's look like a cakewalk. "Very simple, actually." Brilliant. I'm nominating you for a Nobel prize in economics. :rolleyes: :Flush:
WOW. You really think that so-called "regulation" of the financial industry has anything to do with political partisanship??.
Try to keep up. No, I think, in fact I know, that deregulation of the financial industry has everything to do with partisanship:
. . . weren't those controls systematically eliminated over the past 40 or so years because they hindered innovation and expansion and were a drag on the free market system? One of the two political parties has pushed that agenda relentlessly, I forget which one.

Here's a little history lesson of my own:

-Reagan deregulated . . . .
I hope you don't mind I condensed your "little history lesson" to its essence. The election of Reagan in 1980 signaled the beginning of the end for responisble financial regulation, which culminated in the crash of 2008. Weirdly, in your determination to disprove a partisan agenda in your "little history lesson", you proved just the opposite. With the exception of Dodd, who I agree was too compromising and conciliatory especially late in the game, if to minor influence, and Clinton, who I agree caved to Republican pressure and signed legislation at the end of his term I sorely wish he hadn't, "all of the repeals and legislation you outlined were "pushed relentlessly by Republican presidents and/or Republican majorities in Congress", to paraphrase myself. Everyone and everything else on your list was a Republican, or appointed by a Republican, or was legislation pushed by Republicans, and you didn't catch even half of it. Congratulations on disproving your own thesis.

If you're not convinced by this- and you're free to check any of the above points with textbooks and encylopedias- then that's just fine. You'll believe whatever you want to believe.
:rolleyes: Why don't you go first?


Footnote:
-After crash, more than $700 billion is printed and given out to banks, which then use most of the money to buy out their now penniless competitors
If you think $700 billion was "printed" and given to banks, you really have no business discussing economics.
 
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deleted15807

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So in an unregulated system the "too big to fail" financial instutions go belly up, which causes every other financial institution and insurer they do shady business with to go belly up, which is virtually all of them, dragging the US and the entire global financial system down the toilet, everyone's money is worthless, and we have a worldwide depression that makes the 1930's look like a cakewalk. "Very simple, actually." Brilliant. I'm nominating you for a Nobel prize in economics. :rolleyes: :Flush:

Exactly. This is what all the 'free marketeers' simply refuse to acknowledge. That we are all connected and you simply cannot let 'too big to fail' institutions fail. The failure is letting 'too big to fail' institutions exist. Once they do you have no realistic choice but to rescue them.

Every country in this financial crisis rescued thier large financial institutions. None of them let them go down the tubes like Bush did with Lehman Brothers. It was that single spectacular mistake that made everyone head for the hills. If you are going to rescue them as Bush did with Bear Sterns then you need to rescue them all. Nothing upsets MrMarket than uncertainty. And at first they wondered if what was happening on WallStreet would affect MainStreet. Well they're not asking that anymore. And that's not a good thing but it is what it is.
 

HUNGHUGE11X7

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Not much of a surprise here but it is the 'official' government finding. The lesson is it could all happen again as not much has changed. And what has changed the Republicans want to undo.
Financial Crisis Was Avoidable, Inquiry Finds


WASHINGTON — The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a federal inquiry.
This is exactly what the intelligent economists (ones not on Fascist news payroll) have been saying all along. It should really come as no surprise . Hopefully this will make the American public demand that the FIN-REG bill be stronger, more like Canada has to prevent the NEXT disaster which is on the horizon.

~HH~
 

Big_Red

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That doesn't even answer the question first of all. What you're talking about is what happens in the aftermath, not how you prevent it from happening in the first place. So in an unregulated system the "too big to fail" financial instutions go belly up, which causes every other financial institution and insurer they do shady business with to go belly up, which is virtually all of them, dragging the US and the entire global financial system down the toilet, everyone's money is worthless, and we have a worldwide depression that makes the 1930's look like a cakewalk. "Very simple, actually." Brilliant. I'm nominating you for a Nobel prize in economics. :rolleyes: :Flush:

The system, as it is, is corrupt to the core. The crooked institutions who fomented the crisis should be permitted to fail to clean out the rot. There is no evidence that doing so would "
make the 1930's look like a cakewalk". That's fear mongering right out of the international bankers' playbook. And if you have any evidence, other than the Great Depression, that that would happen, I'd sure love to see it.

Every country in this financial crisis rescued thier large financial institutions.

I'll provide some evidence of my own. For perfect examples of either route being taken, take a look at the two "eyes": Iceland and Ireland.

Iceland's entire banking system collapsed to the point that their obligations were several hundred percent larger than their entire economy. They rejected all bailout offers and folded. Their stock market collapsed by more than 95%, as did their currency. But look at where they are now. After only 3 years, they're coming out of their funk and that country does NOT resemble America in the Depression-era. They're not starving. There are no bread lines. They're not descending into chaos and total anarchy.

Ireland, on the other hand, chose to have the IMF come and bail them out. Now they'll be subject to that institution's SAP's- structural adjustment programs- which will force the government to sell off all their most valued assets to fund their astronomical obligations to the IMF. The people's will be damned. The IMF runs that country now and will continue to do so for the foreseeable future. In a decade, Ireland may very well resemble Bolivia or another piss poor South American country from the 80's. So much for not allowing "too big to fail" institutions to go bankrupt, eh?

Try to keep up. No, I think, in fact I know, that deregulation of the financial industry has everything to do with partisanship:

I hope you don't mind I condensed your "little history lesson" to its essence. The election of Reagan in 1980 signaled the beginning of the end for responisble financial regulation, which culminated in the crash of 2008. Weirdly, in your determination to disprove a partisan agenda in your "little history lesson", you proved just the opposite. With the exception of Dodd, who I agree was too compromising and conciliatory especially late in the game, if to minor influence, and Clinton, who I agree caved to Republican pressure and signed legislation at the end of his term I sorely wish he hadn't, "all of the repeals and legislation you outlined were "pushed relentlessly by Republican presidents and/or Republican majorities in Congress", to paraphrase myself. Everyone and everything else on your list was a Republican, or appointed by a Republican, or was legislation pushed by Republicans, and you didn't catch even half of it. Congratulations on disproving your own thesis.
I'm not going to go through the list of well over 1,000 politicians who brought the economy to ruin, looking for which party each one belongs to, just to please you. Did you miss my earlier post in this thread about political corruption and the revolving door between the public and private sectors that makes it possible? Or did you just read it and immediately throw it out because my points make your blood boil?

The fact is that politicians of all stripes have already been bought and paid for many times over by the very people they're supposed to be regulating. Therefore, having them construct more regulations will have little effect- or completely the opposite intended- because the entire system is corrupt and broken in the first place. There is a permanent conflict of interest in Washington and burying your head in the sand and pretending there isn't, isn't going to somehow make you right.

Footnote:
If you think $700 billion was "printed" and given to banks, you really have no business discussing economics.
Oh yes, that's exactly what I meant! You got me there!!! Don't you remember how CNN covered the clogged highways with all the trucks taking their paper money to the big banks in Wilmington and the rest of America? :rolleyes::cool::tongue:
 
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arkfarmbear

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My "bullshit" question is the very essence of the topic and goes to the absolute heart of human nature as it affects financial stability. Calling me a "demagogue" and an "ignoramus" is not only wildly inaccurate, insulting, and entirely uncalled for, it is the height of irony. You reveal yourself to be nothing but an angry reactionary jackass, and as such, unworthy of response. However, if only for the benefit of other readers, I will respond.

Greed, along with its cousin Fear, are the basest of human emotions, and they drive most destructive antisocial behavior. There will always be those who want to amass all the coconuts into their own pile, even though there are more than enough for the whole tribe, and then use their fortune to manipulate and enslave everyone else. The rich and powerful will abuse their wealth and power to amass ever greater wealth and power, by hook or by crook, damn the rest of us, and damn the consequences. Sadly, there will always be individuals among us who are incapable of transcending their basest human nature, incapable of achieving a more civilized and altruistic level of consciousness. Without proper controls on the obsessive greed of those individuals, and by extension soulless entities like corporations and financial institutions, everyone else suffers, and the financial system and society itself cannot function or even survive. Greed is insatiable. It cannot govern itself. It's really that simple.

I said exactly what I meant to say in my prior post. I don't need you to translate, reinterpret, or put your spin on it. In the future if you cannot take what I say at face value, I would advise you to shut the fuck up.


In my youth a very wise man told me that every decision a person makes is made out of one of two emotions: fear and/or greed. I scoffed at his cynicism but soon realized that he was correct. Viewing people's actions through that lens has made me much more understanding and forgiving than I was in the past.