10-20-2011, 11:57 AM
LOL, Kelena.
Yeah, tried to read it Daniel, but the all caps made my eyes scream.
Rob, I absolutely agree with what you said about the manipulators of wealth.
That book I recommended earlier, by Paul Krugman, has a chapter called "banking in the shadows" that I found enlightening. It refers to nondepository institutions that are not subject to banking regulations, even though they act as de facto banks. The non-bank financial system, which as he explains had great vulnerability to "runs" or panic, but were not required to have any of the protections that banking reform laws of this century put in place to avoid a repeat of the great crash.
For example, the auction-rate security system, which had 400 billion dollars in it, collapsed in 2008. I'd never even heard of this stuff before I read the book. Just one example of the many things on the margins that went wrong and had huge consequences on the regulated banking system.
Also the ripoff of the national pension systems: supposedly safe because they purchased only AAA securities, folding because the CDO (collateralized debt obligation) system wasn't really safe and the pensions ended up owning lots and lots of subprime mortgages that went into default.
So many people manipulating investments and risk -- that is what made things go under. It was a giant Ponzi scheme. People like to blame flippers, but those were the small fry (and what is wrong with renovating property?).
Yeah, tried to read it Daniel, but the all caps made my eyes scream.
Rob, I absolutely agree with what you said about the manipulators of wealth.
That book I recommended earlier, by Paul Krugman, has a chapter called "banking in the shadows" that I found enlightening. It refers to nondepository institutions that are not subject to banking regulations, even though they act as de facto banks. The non-bank financial system, which as he explains had great vulnerability to "runs" or panic, but were not required to have any of the protections that banking reform laws of this century put in place to avoid a repeat of the great crash.
For example, the auction-rate security system, which had 400 billion dollars in it, collapsed in 2008. I'd never even heard of this stuff before I read the book. Just one example of the many things on the margins that went wrong and had huge consequences on the regulated banking system.
Also the ripoff of the national pension systems: supposedly safe because they purchased only AAA securities, folding because the CDO (collateralized debt obligation) system wasn't really safe and the pensions ended up owning lots and lots of subprime mortgages that went into default.
So many people manipulating investments and risk -- that is what made things go under. It was a giant Ponzi scheme. People like to blame flippers, but those were the small fry (and what is wrong with renovating property?).