Guy is a idiot with a phd. Caused this easy credit,lax regulation in the first place that triggered this massive recession along with many other factors that he didnt have a cause in. Ya,probably peddling a book.
Waiting for( I owe the IRS 44k ) Geitner to leave and write a book and join Wall street with the other rats he helped bail out.
Last edited by shah1266; July 9th, 2011 at 10:42 AM.
I think after Greenspan made his "Irrational Exuberance" statement back in 1996, the political pressure became so intense that he basically became "Mr Easy Money" afterwards and surrendered the Fed's informal mandate to "take away the punch bowl once the party gets going".
More important than his prognostications is his dramatic fall from grace - there was a time when he was The Man on Wall Street - now he's a second-class citizen.
that idiot is still one of the greatest macro economist minds out there and certainly, unless you actually hold a phd, a lot smarter than most....
further, he is correct... all that QE1/2 did was buy our own debt.. so in one hand we issue debt, and with the other one we bought it back and also bought back all the short term the chinese sold us that we had sold them... futhermore; EMEA region, makes up as he states a significant portion of intl conglomerates profits.. only thing is that those profits usually dont make it back home and cant be taxed anyhow... but the point is that any drop on those earnings will impact the sheets of the us counterparts...
he might have screwed up a few things, but he also did right a lot of things... so lets not label a guy that has shaped more than most of us ever will.
not arguing their screw ups, you missunderstand me ... and in terms of responsibility... well, americans are not very good at having any ownership or taking personal responsibilities... so lets just leave it at that..
btw, as to regular folks having to pay for a long time... are those the same regular folks that decided to over-extend themselves by getting into mortgages that they could never afford in the first place?... lastly.. please dont forget that capitalism doesnt promote social responsibility... so nothing should surprise us..
anyhow, my argument has to do with the label assigned of "idiot with a phd" by someone that might have done very little, well basically 0 more than likely, when compared to greenspan...
of course, I am making an assumption that @shah1266 has done very little when compared to greenspan, which could be the wrong assumption, but I would stick to that assumption until proven otherwise.
are you saying that media, and congress (our regulators), are right on the money and have told us the truth? let us not be naive about what we see in the media or we are told by polititians...
the truth is what we will never know the truth of what truly happened or what might have happened...
lastly, please know that is standard practice in financial services to always offset/hedge risk... so yes, in one hand a CDO might have been created, but with the same transaction it would have been insured against failure... let's not forget the issue for the failure was the fact the underlying assets were crap given the quality of the borrower... had the borrowers never defaulted, the underlying income stream would have been fine... but then again, the borrowers overextended ... nothing like borrowing 300K at adjusting rates when making $25K a year ... you get my point... those that made bets hoping for a default, basically looked at the underlying and expressed their views given what they saw .. and also because the trend was unsustainable..
lets just be happy that AIG ended up being nationalized... IMO that was the only true failure that would have been catastrophic given all the risk they had insured... but that is just my opinion, nothing more.
I dig a lot of what your saying and agree with many of your points.
(I think we're on the same page, so no argument here.)
Hedging is cool. Profiting off other people's stupidity is also cool.
I purposefully used 'philosopher kings' in my response title to suggest that those at the helm should be more responsible and ready to intervene.
There's too much at stake. Imagine a whole generation of university grads not reaching their potential (productivity) because of an extended downturn etc. etc. etc.
I have friend that is PHD level economist and I'm in awe of his intellectual capacity. At the same time, you can bet that a lot of 'regular blue collar folk' were smart enough to realize that NINJA mortgages etc. were house of cards ready to fall. You can have the smartest people in the world on the gov't payroll but without the proper check and balances things can go terribly wrong. e.g. I pointed to that documentary to show that politicians & corporations can influence (pay off) university professors/regulators to skew data to pass or get ride of certain laws. I certainly don't put American media/congress on a pedestal but certain positions should be untouchable. Lets face it. Historically, you always seem to get these 'black swan' effects that our greatest intellectuals seem to miss.
You rightly stated that 'capitalism doesn't promote social responsibility' but perhaps it should? Many fear left-wing socialism, but without some level of regulation people get nutty and things get out of hand and Tulip mania type irrational exuberance. There's a reason that CANADA and their banks came out ahead of this mess. r-e-g-u-l-a-t-i-o-n. I'm sure ICELAND sees the picture clearly now.
Lastly, this documentary looks really interesting. (Although, I'm sure painful to watch)