An honest assesment of the subprime Meltdown.

[armor99]

I read this online today. I thought it was one of the best articles I have read in a long time. It did not play favorites, and very clearly explains and contrasts the opposing viewpoints of both sides. It was so good... I felt the need to share it with the forum.

http://finance.yahoo.com/expert/article/economist/67468;_ylt=Asg1I6gQ5d7zWoUXI8lAhDW7YWsA

 

[Eyerishgold]

Interesting article. Thanks for posting it.

 

[brewer12345]

Just looks like a soapbox speech on why we should all bow down before (changed wording to be more family-friendly) Milton Friedman's corpse. Ho-hum. Throw another copy of "Atlas Shrugged" on the bonfire, honey, I'm cold.

I am no fan of a heavy handed regulatory response to all of this, since it would make things worse. However, the feddle gummint clearly has a resposibility to keep the banking system operational, as it is ultimately backed by the taxpayers. Part of that is policing the mortgage lending and securities dealings of banks, and appparently it also requires making sure the securitization market reopens at some point.

 

[jIMOh]

Let the people suffer.

You cannot fix stupid.

 

[haha]

I am no fan of a heavy handed regulatory response to all of this, since it would make things worse. However, the feddle gummint clearly has a resposibility to keep the banking system operational, as it is ultimately backed by the taxpayers. Part of that is policing the mortgage lending and securities dealings of banks, and appparently it also requires making sure the securitization market reopens at some point.

Hyman Minsky has written whole books on this very point. His message is that financial risk has been laid off onto the taxpayers, so the market participants have almost no incentive to behave responsibly. The regulators must regulate to avoid the creation of repeating bubble cycles that pile risk on risk and eventually explode into the faces of the citizens.

Ha