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  #11  
Old 09-18-2008, 09:30 PM
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Strange, since most of the analysis I've heard in the past week blame de-regulation for much of the current economic collapse... a trend that has run rampant for the past eight years in the name of corporate profits.

Oil speculation jacking up gas prices needlessly (except for high profits) being just one example. Please note how gas prices have fallen nearly a dollar from earlier in the year... and all without ONE extra barrel of domestic oil being pumped off our shores. Clear evidence of price manipulation, not any change at all in supply... except, of course, American motorists finally getting wise and conserving on fuel consumption at the pumps, which gutted the oil speculators into selling out.
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  #12  
Old 09-19-2008, 12:25 AM
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Very high level speculation has a part to play. I have a friend whose son-in-law works in the Financial sector in London. Most of his job is balancing theoretical sums of money and moving them from place to place, thus making them theoretically more valuable. For so long a lot of the financial system seems to have been made up of 'imagined' wealth, not underpinned by actual assets.
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  #13  
Old 09-19-2008, 09:41 AM
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Quote:
Originally Posted by MissionTrek08 View Post
Strange, since most of the analysis I've heard in the past week blame de-regulation for much of the current economic collapse... a trend that has run rampant for the past eight years in the name of corporate profits.

Oil speculation jacking up gas prices needlessly (except for high profits) being just one example. Please note how gas prices have fallen nearly a dollar from earlier in the year... and all without ONE extra barrel of domestic oil being pumped off our shores. Clear evidence of price manipulation, not any change at all in supply... except, of course, American motorists finally getting wise and conserving on fuel consumption at the pumps, which gutted the oil speculators into selling out.
De-regulation?! What de-regulation? there are so many regulations out there that it makes me sick, literally.
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  #14  
Old 09-19-2008, 09:46 AM
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My thing is this:

We, the taxpayers, are paying 80 billion dollars to AIG and Fannie Mae and Freddie Mac to bail them out because they have bad money management skills....

Why don't we get loans? Why don't they reduce the interest rates and make it easier for people to obtain loans. I mean...realisitically...we're saving them from themselves. We're working every day to save them...why shouldn't we benefit from OUR hard work?
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  #15  
Old 09-19-2008, 06:43 PM
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De-regulation?! What de-regulation? there are so many regulations out there that it makes me sick, literally.
Take a moment to review the economic fallout and corporate greed which arise from Enron and the deregulation of the electric utility industry. That example (among many) is enough to make anyone sick, I can agree with you on that.
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  #16  
Old 09-19-2008, 08:04 PM
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Originally Posted by admiralroot View Post
The answer is liberalism. The government has made so many regulations that is almost imposible to do anything, and the proposed tax hikes will make our economy slump even futher. and the government bailouts of fredie mac and fannie may and AIG don't help, they need to fail, thats capitalism. but if we know that the government will back us up when we go bankrupted, then the business people won't make responsible dicisions because the government would back them out if things go sour.
Please - liberal bash all you want but make sure you do some reading first. Please particularly note the part about free markets, which you espouse in your post. Perhaps you too are... a liberal! Eeeep!
-----------------------------------
Classical liberalism (also known as traditional liberalism[1] and laissez-faire liberalism,[2], market liberalism[3] or, in much of the world, simply called liberalism) is a doctrine stressing individual freedom and limited government. This includes the importance of human rationality, individual property rights, natural rights, the protection of civil liberties, constitutional limitations of government, free markets, and individual freedom from restraint as exemplified in the writings of John Locke, Adam Smith, David Hume, David Ricardo, Voltaire, Montesquieu and others. As such, it is the fusion of economic liberalism with political liberalism.[2] The "normative core" of classical liberalism is the idea that laissez-faire economics will bring about a spontaneous order or invisible hand that benefits the society,[4] though it does not necessarily oppose the state's provision of a few basic public goods.[5] The qualification classical was applied in retrospect to distinguish early nineteenth-century liberalism from changes in liberal thought during the 19th and early 20th centuries, especially the "new liberalism" associated with Thomas Hill Green, Leonard Trelawny Hobhouse,[6] and Franklin D. Roosevelt,[7] which grants the state a more interventionist role in the economy, including a welfare state. Classical liberalism is not to be confused with the ideology that is commonly called "liberalism" today in the United States, as "classical liberalism" is closer in economic aspects to what today is a claimed current of "conservatism" in the U.S.[8]
Ludwig von Mises, Friedrich Hayek, Murray N. Rothbard and other followers of the Austrian School developed even further the liberal ideas, culminating in Minarchism and Anarcho-Capitalism, which are the main flags of libertarian politics. They, together with Milton Friedman, are credited with influencing a revival of classical liberalism in the 20th century after it fell out of favor beginning in the late nineteenth century and much of the twentieth century.[9][10] In relation to economic issues, this revival is sometimes referred to, mainly by its opposers, as "neoliberalism". It must be said that the German "ordoliberalism" has a whole different meaning, since the likes of Alexander Rüstow and Wilhelm Röpke have advocated a more interventionist state, as opposed to laissez-faire liberals[11][12].
Libertarians of a minarchist persuasion use the term "classical liberalism" almost interchangeably with the term "libertarianism",[13] while the correctness of this usage is disputed (see "Classical liberalism" and libertarianism, below). Nevertheless, if the two philosophies are not the same, classical liberalism does resemble modern libertarianism in many ways.[14]
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  #17  
Old 09-19-2008, 10:40 PM
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Originally Posted by jerhanner View Post
Please - liberal bash all you want but make sure you do some reading first. Please particularly note the part about free markets, which you espouse in your post. Perhaps you too are... a liberal! Eeeep!
-----------------------------------
Classical liberalism (also known as traditional liberalism[1] and laissez-faire liberalism,[2], market liberalism[3] or, in much of the world, simply called liberalism) is a doctrine stressing individual freedom and limited government. This includes the importance of human rationality, individual property rights, natural rights, the protection of civil liberties, constitutional limitations of government, free markets, and individual freedom from restraint as exemplified in the writings of John Locke, Adam Smith, David Hume, David Ricardo, Voltaire, Montesquieu and others. As such, it is the fusion of economic liberalism with political liberalism.[2] The "normative core" of classical liberalism is the idea that laissez-faire economics will bring about a spontaneous order or invisible hand that benefits the society,[4] though it does not necessarily oppose the state's provision of a few basic public goods.[5] The qualification classical was applied in retrospect to distinguish early nineteenth-century liberalism from changes in liberal thought during the 19th and early 20th centuries, especially the "new liberalism" associated with Thomas Hill Green, Leonard Trelawny Hobhouse,[6] and Franklin D. Roosevelt,[7] which grants the state a more interventionist role in the economy, including a welfare state. Classical liberalism is not to be confused with the ideology that is commonly called "liberalism" today in the United States, as "classical liberalism" is closer in economic aspects to what today is a claimed current of "conservatism" in the U.S.[8]
Ludwig von Mises, Friedrich Hayek, Murray N. Rothbard and other followers of the Austrian School developed even further the liberal ideas, culminating in Minarchism and Anarcho-Capitalism, which are the main flags of libertarian politics. They, together with Milton Friedman, are credited with influencing a revival of classical liberalism in the 20th century after it fell out of favor beginning in the late nineteenth century and much of the twentieth century.[9][10] In relation to economic issues, this revival is sometimes referred to, mainly by its opposers, as "neoliberalism". It must be said that the German "ordoliberalism" has a whole different meaning, since the likes of Alexander Rüstow and Wilhelm Röpke have advocated a more interventionist state, as opposed to laissez-faire liberals[11][12].
Libertarians of a minarchist persuasion use the term "classical liberalism" almost interchangeably with the term "libertarianism",[13] while the correctness of this usage is disputed (see "Classical liberalism" and libertarianism, below). Nevertheless, if the two philosophies are not the same, classical liberalism does resemble modern libertarianism in many ways.[14]
Just because someone carries the label, doesn't mean they necessarily fit the definition. And therein lies the problem. Just like he said.
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  #18  
Old 09-20-2008, 04:52 AM
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To make it short, unlike normal companies one cannot let banks go bankrupt unless one wants to repeat the Great Depression. That's why the government has to interfere now. Do we like it? No. What are the alternatives? Socialise banks or better regulate them to prevent them from doing too high risk business.
What simpel extra rule do we need? If a bank sells a credit and rebuys it afterwards, it still has to underlie it with equity.
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  #19  
Old 09-20-2008, 09:02 AM
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Botany Bay Botany Bay is offline
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What happened? Its complicated. Fraud, thats what happened.

Interest rates are low. That makes loans cheap. I start a business, get me a loan of, lets say, 1.000.000 dollar and promise to pay 2.000.000 back in ten years.

Now I ring the doorbells of trailors. I promise the people cheap loans to buy houses. I give you 100.000 dollars and you promise to pay 200.000 back in ten years. You dont have a job? No problem. Your house will be worth 500.000 in ten years.

More and more people buy houses and housing prices rise. Now the building trade starts to build houses like mad. They speculate housing prices to rise indefinitly. The sky is the limit!

One day the market is fed up with houses. Prices decline.

The people in their new houses get trouble paying their loans back. They loose their new houses and I never get to see my money again.

Not my problem. I have sold the loan allready to someone else. I told this doofus that ten people owe me 2.000.000 dollar. If he gives me 1.5 million now, he will make 0.5 million profit in ten years. I faked documents to make my customers look wealthier then they are. The doofus agrees. Now I pay back my loan, the 1 million to my bank and have made 0.5 million profit in a very short time.

The doofus is a bank that now has a portfolio of loans worth nothing. They never will see their money. But why shall I care?

The result is a financial market infested with phony loans and foul deals. You live in your trailor again, the banks are in trouble while I enjoy my time on my new yacht. It has a whirl pool.

Right now the doofus banks face bankruptcy. Where could they get the money for my yacht from? Well... YOU! The american people. You take all the debts and pay it back with your tax money. Congratulations fools! You now pay my American Dream.

I DRINK YOUR MILKSHAKE!!!

http://de.youtube.com/watch?v=5q_SHlu9haw

Last edited by Botany Bay : 09-20-2008 at 09:24 AM.
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  #20  
Old 09-21-2008, 09:10 AM
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I have to disagree with you, BB.
If you buy a house on pump and finance it via itself, i.e. because you believe house prices continue to rise, you can hardly blame the bank if house prices don't continue to rise.
It's like you buy stocks and the nice gentleman at the bank told you that stock market indices rose about .12-. .15 per year for the last 20 years (the actual annual yield of the past 100 years is about .07 or .08) and you believe him that this is a natural law and then stock markets crash and then you complain about it.

The single best explanation about what is going on at the moment is Hyman Minski's (a non-mainstream economist) financial instability theory. He describes very neatly the concepts of speculative or Ponzi financing (snowball systems, like e.g. the German public pension system) which cause financial markets to be unstable, something beyond the usual equilibrium fetish.

http://www.levy.org/pubs/wp74.pdf (it is a quick read, only 9 pages)
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