Shortsighted Morons

[marcus_sez_vote]

I've been worrying about this for a while but the Director of National Intelligence Blair at least is highlighting the problem. Putting aside the moral and ethical issues of fleecing Americans and the world for all their cash, the people involved in the financial crisis have made things a whole lot less safe. There were already projections of

Comments

Emperor's New Clothes

[darkwhimsy]

The thing you have to remember is that the people responsible for this particular crisis don't use resources from third-world countries, and they don't sell products. They never produced anything whatsoever... just contracts on financial products. Essentially they were creating profits and thus "money" from thin air.

It worked great (for them) while it lasted, but given the absence of anything behind it it couldn't last forever. It's really just the pinnacle of the Greater Fool theory.

Re: Emperor's New Clothes

[marcus_sez_vote]

Ok I can agree with that. Yet even solid companies, once darlings of Wall Street, are now cutting jobs and may be in risk of disappearing. The "invisible hand" of the marketplace seems to have slapped allies of capitalism around rather than actually aiding one another. It boggles my mind how politicians in league with these people can still remain committed to their positions.

What's really depressing is to contemplate the traders in these derivatives who somehow managed to get out of the market before it crashed and have their profits squirreled away.

Be well.

Re: Emperor's New Clothes

[darkwhimsy]

Even people who didn't pull out early may end up making a bundle (or rather, keeping much of the bundle they made). The government is - for understandable albeit I think misguided reasons - really trying NOT to wipe out the shareholders even as they shovel money into these companies. So the taxpayer, rather than the shareholder, is likely to end up paying most of the cost.

Re: Emperor's New Clothes

[evilmagnus]

So I was thinking about this last night.
I'm a firm believer in wiping out the shareholders and nationalizing the banks until they can be sold for a profit. But I know why the government really doesn't want to do that - because their shareholders were institutional investors, i.e. mutual funds and pension plans. The financial sector was a good, safe bet if you were a brokerage looking to stash a few billion of {some state}'s pension plan.

Wipe them out, and all of a sudden you've got even more losses (above and beyond regular market declines) taken by folks who were planning to retire in a few years time, who had invested their money with nice, conservative mutual funds who had in turn bought nice, safe financial stocks. Not to mention the further strain it'd put on State pension plans.

We think we have unemployment problems now - it'd be worse if we have more 50s and 60s and 70 year olds still trying to stay in the labor market.

Re: Emperor's New Clothes

[russiandude]

This article seems to follow what you are saying, if I understand it correctly?

http://www.iht.com/articles/2009/02/12/business/yen.php?page=1