It’s getting SCARY out there folks…

[Anonymous]

“I’m no bank officer nor regulator, but c’mon, the FSLIC sure didn’t prevent the S&L crisis, nor has the FDIC prevented silly lending by our banks this time around.”

What happened?

In the mid 1980’s under the thrall of anti-regulation Reagan Republicanism, the legislature removed many standards and requirements, and allowed S&L’s to do things they were never allowed to do before. (they were restricted for good reason thanks to lessons learned in the the Great Depression)

They were intentionally deregulated at the behest of their conservative owners, who made out like bandits on the way up—and socialized the inevitable losses to the taxpayer through RTC.

Hundreds of billions were lifted from our pockets while the chattering classes went on and on about “welfare queens”.

OHFEO and FDIC are restricted by Congress and operationally OHFEO is subject to Treasury Secretary (and we know now just how independent the captains of government are from the political nomenklatura). The bank-owners have strong political power.

Nah, the only thing that works is for smart, experienced folks to have their own money at risk. That’s called ‘equity.’

And how do you enforce that? The regulator enforces higher reserves for risky loans, therefore the bank has to put more of its own capital at risk, instead of free money from uncle Fed. Just like how a big down payment means that housedebtors have ‘skin’ in the purchase and realize they could blow their wad and lose actual hard-earned cash in foreclosure.

Even Bernanke has drunk the koolaid of ‘no regulation to preclude asset bubbles’. I knew Greenspan was a true zealout but I thought BB would have been better. I think he’s more serious on inflation than Greenspan but still he’s a toady of the Masters of the Universe. He knows that the political master class wins so much by allowing them to do whatever they want on the way up (little regulation if it hurts their quarterly profits and bonuses)—because if everybody fails all at once it’s a ‘systemic’ problem and government money comes in to bail them out.

It’s legal racketeering. Private profits for a few rich connected people, socialized losses for the masses.

[Anonymous]

“I’m no bank officer nor regulator, but c’mon, the FSLIC sure didn’t prevent the S&L crisis, nor has the FDIC prevented silly lending by our banks this time around.”

What happened?

In the mid 1980’s under the thrall of anti-regulation Reagan Republicanism, the legislature removed many standards and requirements, and allowed S&L’s to do things they were never allowed to do before. (they were restricted for good reason thanks to lessons learned in the the Great Depression)

They were intentionally deregulated at the behest of their conservative owners, who made out like bandits on the way up—and socialized the inevitable losses to the taxpayer through RTC.

Hundreds of billions were lifted from our pockets while the chattering classes went on and on about “welfare queens”.

OHFEO and FDIC are restricted by Congress and operationally OHFEO is subject to Treasury Secretary (and we know now just how independent the captains of government are from the political nomenklatura). The bank-owners have strong political power.

Nah, the only thing that works is for smart, experienced folks to have their own money at risk. That’s called ‘equity.’

And how do you enforce that? The regulator enforces higher reserves for risky loans, therefore the bank has to put more of its own capital at risk, instead of free money from uncle Fed. Just like how a big down payment means that housedebtors have ‘skin’ in the purchase and realize they could blow their wad and lose actual hard-earned cash in foreclosure.

Even Bernanke has drunk the koolaid of ‘no regulation to preclude asset bubbles’. I knew Greenspan was a true zealout but I thought BB would have been better. I think he’s more serious on inflation than Greenspan but still he’s a toady of the Masters of the Universe. He knows that the political master class wins so much by allowing them to do whatever they want on the way up (little regulation if it hurts their quarterly profits and bonuses)—because if everybody fails all at once it’s a ‘systemic’ problem and government money comes in to bail them out.

It’s legal racketeering. Private profits for a few rich connected people, socialized losses for the masses.

[JWM in SD]

Hear, hear Dr Chaos. Finally someone on this is who gets it instead of sticking their head in sand.

[JWM in SD]

Hear, hear Dr Chaos. Finally someone on this is who gets it instead of sticking their head in sand.

[latesummer2008]

Transfer of Wealth… It has been going on for Ages ! Nothing is different now except the people at the top don’t wear white wigs any more. It’ll take some time to clean up this !@$%#%*& mess. And then it will start over again with a new round of the masses.. Exactly what happened in the 80s Dr. Chaos, yet this time will be worse. Could spark a Global meltdown. Let’s hope not, but this stinks bad, to me.

I wouldn’t advise touching any real estate, right now…

http://westsideremeltdown.blogspot.com

[latesummer2008]

Transfer of Wealth… It has been going on for Ages ! Nothing is different now except the people at the top don’t wear white wigs any more. It’ll take some time to clean up this !@$%#%*& mess. And then it will start over again with a new round of the masses.. Exactly what happened in the 80s Dr. Chaos, yet this time will be worse. Could spark a Global meltdown. Let’s hope not, but this stinks bad, to me.

I wouldn’t advise touching any real estate, right now…

http://westsideremeltdown.blogspot.com

[Anonymous]

Yeah, you’re right, Dr. C., trust the regulators. They are omniscient.

Just ask the diabetics who’ve been taking FDA-approved Avandia, who have a 64% increased risk of heart-related death and a 43% increased risk of having a heart attack.

You can trust regulators. I don’t.

[Anonymous]

Yeah, you’re right, Dr. C., trust the regulators. They are omniscient.

Just ask the diabetics who’ve been taking FDA-approved Avandia, who have a 64% increased risk of heart-related death and a 43% increased risk of having a heart attack.

You can trust regulators. I don’t.

[drunkle]

isn’t that point he was making? that *de*regulation is the cause of the problems:

http://seattletimes.nwsource.com/html/businesstechnology/2002606640_drugtesting06.html

you’re right tho. you can’t trust regulators put in place by republican politicians.

[drunkle]

isn’t that point he was making? that *de*regulation is the cause of the problems:

http://seattletimes.nwsource.com/html/businesstechnology/2002606640_drugtesting06.html

you’re right tho. you can’t trust regulators put in place by republican politicians.

[luchabee]

Oh, please.

These problems typcially occur when there are hybrid markets with both partial deregulation and regulation, e.g., California’s energy prices where state energy companies couldn’t increase prices but the energy costs to supply consumers were steadily increasing. Therefore, PG&E went belly up.

This new regulation frenzy is the same type of thinking that has created the Sarbanes/Oxley monster. What did we get? Companies staying private and not going public and billions (if not trillions) of lost dollars and hundreds of companies no longer going public in the U.S. and instead turning to Asia to do their I.P.O.s

Yes, I feel very sorry for the people that were hurt with these scandals (and agree with government assistance, to some degree), but this is why proper asset allocation is needed and not having your entire portfolio in Enron stock when you are 62.

Are there problems with deregulated markets? Sure, it is called human greed and the business cycle. (Some people call this “life.” Perhaps you have heard about it?) Are there blow-ups like the S & L debacle and Enron? Yes. Are the costs passed on to the taxpayers? Sometimes. (On the other hand, what about labor’s demands in the auto market that may result in much of this industry going overseas in the next 2o years? Isn’t that a crime against the younger generations who will no longer have jobs because of excessive demands by Baby Boomers in unions? So, maybe, we should regulate unions more?)

So, one must ask is it worth it and efficient to create billions and billions of dollars in government regulation and thousands of more governement workers to attempt to enforce something that happens on occasion and can be addressed when it does with government assistance?

Moreover, is this wise with globalization? We might protect ourselves from some disaster down the road, but be a bloated, regulated economy unable to compete with India or China, leaving only government workers with quality jobs.

Additionally, your cure seems to be government regulation and you talk about the promise of government intrusion into the market. With that said, the S&L crisis will be nothing compared to the likely collapse of government programs like Social Security and Medicare in the next 10 to 20 years.

Yet, you want to add more government workers and inefficient layers of government to regulate the private sector which is far better run than the US government?

Also, talk about passing on expenses to taxpayers? How about the trillions of dollars that will have to be paid by younger taxpayers like myself or the rampant inflation that will result when the government attempts to spend itself out of trouble. (Granted, this problem might be partially remedied with millions and millions of young immigrants comming in to support this scheme and fundamentally changing American society as well).

So, I’ll pass on the hyper-regulation card. Despite its occasional mini-disasters, deregulation and competition has been an essential force in improving the American-way-of-life. Sure, have the government use its muscle if need be (with prosecution and civil enforcement), but don’t hamper our economy with needless regulation and causing millions of jobs to melt away to more stream-lined economies in Asia.

[luchabee]

Oh, please.

These problems typcially occur when there are hybrid markets with both partial deregulation and regulation, e.g., California’s energy prices where state energy companies couldn’t increase prices but the energy costs to supply consumers were steadily increasing. Therefore, PG&E went belly up.

This new regulation frenzy is the same type of thinking that has created the Sarbanes/Oxley monster. What did we get? Companies staying private and not going public and billions (if not trillions) of lost dollars and hundreds of companies no longer going public in the U.S. and instead turning to Asia to do their I.P.O.s

Yes, I feel very sorry for the people that were hurt with these scandals (and agree with government assistance, to some degree), but this is why proper asset allocation is needed and not having your entire portfolio in Enron stock when you are 62.

Are there problems with deregulated markets? Sure, it is called human greed and the business cycle. (Some people call this “life.” Perhaps you have heard about it?) Are there blow-ups like the S & L debacle and Enron? Yes. Are the costs passed on to the taxpayers? Sometimes. (On the other hand, what about labor’s demands in the auto market that may result in much of this industry going overseas in the next 2o years? Isn’t that a crime against the younger generations who will no longer have jobs because of excessive demands by Baby Boomers in unions? So, maybe, we should regulate unions more?)

So, one must ask is it worth it and efficient to create billions and billions of dollars in government regulation and thousands of more governement workers to attempt to enforce something that happens on occasion and can be addressed when it does with government assistance?

Moreover, is this wise with globalization? We might protect ourselves from some disaster down the road, but be a bloated, regulated economy unable to compete with India or China, leaving only government workers with quality jobs.

Additionally, your cure seems to be government regulation and you talk about the promise of government intrusion into the market. With that said, the S&L crisis will be nothing compared to the likely collapse of government programs like Social Security and Medicare in the next 10 to 20 years.

Yet, you want to add more government workers and inefficient layers of government to regulate the private sector which is far better run than the US government?

Also, talk about passing on expenses to taxpayers? How about the trillions of dollars that will have to be paid by younger taxpayers like myself or the rampant inflation that will result when the government attempts to spend itself out of trouble. (Granted, this problem might be partially remedied with millions and millions of young immigrants comming in to support this scheme and fundamentally changing American society as well).

So, I’ll pass on the hyper-regulation card. Despite its occasional mini-disasters, deregulation and competition has been an essential force in improving the American-way-of-life. Sure, have the government use its muscle if need be (with prosecution and civil enforcement), but don’t hamper our economy with needless regulation and causing millions of jobs to melt away to more stream-lined economies in Asia.

[luchabee]

What else would you regulate? How about credit cards? Maybe car loans? How about people buying cell phone plans that are too expensive?

How many government workers should we hire to enforce these laws. A lot, you say? (Then it is expensive and we will pay more taxes.) Not a lot? (Then an ineffective measure and another pointless government agency.) You would say “enough” to enforce the regulation. We have heard that before with government agencies.

Should we have regulated the stock market, too, before the dot.com crash? Maybe limit an individual’s exposure to the market? Have them “read” pages and pages of disclosures before investing (in securities or homes)?

You are pretty old school, Doctor. Maybe, it is time to update your education?

[luchabee]

What else would you regulate? How about credit cards? Maybe car loans? How about people buying cell phone plans that are too expensive?

How many government workers should we hire to enforce these laws. A lot, you say? (Then it is expensive and we will pay more taxes.) Not a lot? (Then an ineffective measure and another pointless government agency.) You would say “enough” to enforce the regulation. We have heard that before with government agencies.

Should we have regulated the stock market, too, before the dot.com crash? Maybe limit an individual’s exposure to the market? Have them “read” pages and pages of disclosures before investing (in securities or homes)?

You are pretty old school, Doctor. Maybe, it is time to update your education?

[latesummer2008]

Mini Disaster? R U Kidding? Real Estate Fraud encouraged by the government to get us out of an economic hole? Well we have a hole, alright. I’m sorry, but letting arguably, the most unscrupulous industry have free reign on consumers is NOT what our GOVT should be emphasizing. Just a bad quick fix, that has made things WORSE.

Wake up and smell the coffee…

http://westsideremeltdown.blogspot.com

[Author]

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