Proposed reforms, both left and right, are unlikely to have any effect on the continuing massive misappropriation from the financial system. It is absurd that people are discussing obscure details of the credit swap market. To fix the financial crisis, we have to revoke, or at least denounce and denigrate, Marie Curie’s Nobel prize. When they gave a Nobel prize to Marie Curie for being female, that did not hurt anyone except more deserving potential Nobel prize winners. But handing …
Category: economics
Yale Harvard and Basel style Free Enterprise
Basel II is tens of thousands of pages of regulations, no one knows how vast it is, because not all the regulations can be found in any one place, but it could all be replaced by two simple rules: Politically correct victim groups shall always find it easy to borrow money, regardless of their ability or intention to pay it back, and politically well connected businesses shall always make money, regardless of whether they are competently run or not.
Official statistics smell of official truth
Mandel points out that there is something mighty funny about official US economic statistics.
China catching up
The NYT reports Liang Huoqiao, a 22-year-old plastics worker, joined a small group of men and women studying a 40-foot-wide list of companies seeking workers. “You can walk into any factory and get a job,†he said. … He expected his pay to double in the next five years and added that he already had set his priorities. “For sure, I want to buy a car,†he said. “Car first, then maybe marriage later.â€
Wishing for a chinese crash
Their beliefs about China are incoherent, internally inconsistent, and mutually contradictory, showing that they don’t really believe what they believe. I suspect that what they really believe is that basing a society on self interest is morally wrong, and therefore must surely be punished by the heavens.
Tough on wall street
To show how tough they are, congressmen summoned Goldman and Sach’s executives to Washington, and harshly ranted at them for selling their customers securities based on mortgages that they knew or should have known were $##%, while at the same time continuing to pour great gobs of taxpayer money all over Goldman and Sach
The crisis explained
Substantial parts of this article are pillaged wholesale from Ryan Barne’s excellent account of the crisis, and Mortgage Guarantee Insurance’s colorful account of the crisis. I steal from the best. And thanks to the commenters that pointed out numerous errors. In 2001, the Federal Reserve began cutting rates dramatically, dropping to 1% in 2003, in order to stimulate the economy. This produced a boom, and especially a housing boom, in 2002. A housing boom was a rational and appropriate response …
Basel II and the destruction of civilization as we know it.
Thus the decision as to what is a safe loan is moved to politics and the government bureaucracy, far far away from anyone who knows the borrower or has actually seen the assets.
Bank “deregulationâ€
It is often claimed that the disaster was produced by deregulation. What deregulation you may ask? Well, mostly, the dismantling of Glass-Steagall. I don’t think dismantling Glass-Steagall caused the crisis, but it is undeniable that if Glass-Steagall had remained in effect, the crisis would have been far less severe, for Glass-Steagall restrained financial institutions from being too big to fail. It was the biggest institutions, the institutions too big to fail, that behaved the worst, and lost the largest proportion …
Mortgage Fraud, predatory borrowing:
There have been numberless highly successful prosecutions for predatory lending, even though there is no plausible evidence that predatory lending has ever happened in recent decades, nor has such evidence ever been presented in court, nor is it plausible that predatory lending could be profitable except for lenders who break the borrowers legs and arms in the event of default.