Comments on: People didn’t drown the markets; a bad system did Sun, 28 Jul 2013 14:34:09 +0000 hourly 1 By: Street Dog Thu, 01 Jul 2010 15:38:28 +0000 People did cause it, they were Fed and took on limitless credit on non-durables.

I suppose we overplayed our hands with our warped idea of the efficiency Frontier.

Great article.

By: td Thu, 01 Jul 2010 11:50:02 +0000 I think there is a significant difference between trying to time your jump out of a bubble market and being so immersed in it that the pop threatens to take down your entire company and most of the world’s economy with it and that kind of foolishness is entirely avoidable and deserves blame both before and after the fact

By: garrisongold Thu, 01 Jul 2010 10:35:38 +0000 So all the “intelligent” insiders, the smart money on Wall Street, the Fed, the banks and mortgage company executives, the investment banks packaging up and securitizing the loans, the people in charge of Fannie Mae, the executive and congressional oversight branches of government, the rating agencies, etc., they knew there was a gigantic bubble that would eventually burst, but they were keeping that dirty little secret to themselves.

The only people that didn’t know, were the “little” people, dumb enough to buy a home for their family at outrageously inflated prices that only the smart people knew would soon not only wreck the economy, but ruin the “little people’s” financial lives as well? The stupid little suckers with their life savings tied up in mutual funds and 401k’s? The joke’s on them, huh? It’s all just a gigantic ponzi scheme, and we should expect the entire system to blow up eventually, but in the mean time, wink and nod and play along, and dance to the music if you want to prosper and thrive, or even keep your job at the very least?

No one’s accountable, it’s just the way the game’s played suckers? I guess for the “little people”, the question becomes “what other dirty little secrets is the investment community and government oversight body’s hiding amongst themselves”?

I agree, it’s just as I thought! I applaud you for having the guts to say it.

By: Nicholas C. Arguimbau Thu, 01 Jul 2010 02:59:02 +0000 Some ardent British Imperialists became Commies in the thirties because they concluded Marx was right when he said a cyclical crash occurs in a capitalist system when so much money accumulates at the top that the general pulic, supposed to serve as both producers and consumers, no longer have enough money to consume what they produce, e.g. single family houses. And it is true that concentration of wealth reached extreme levels in the twenties and in the last decade.But as the public’s ability to buy gets tighter and tighter, the folks with the money keep on investing it in the old ways because, as this author says,it is true that if the music keeps playing you have to keep dancing. What else are they going to do? Concentration of wealth reduces the overall demand for consumer products, because after all how much Diet Coke can you drink just because you’re a billionaire? So they’ve got nothing to do but riskier and riskier investments in stuff for which they overestimate the demand. That’s what the dot com bubble was about and certainly what the housing bubble was about. The risky investments and the concentration of wealth are part and parcel of the same thing. That’s what caused this mess, and the borrow-and-spend-and-deregulate culture into which we lapsed beginning around 1980 allowed a recurrence of both inexcuaable concentration of wealth (Some of the wealthiest of the wealthy say its inexcusable and they should know, right?) and a din of “Take the risk and win big” music encouraging risky investments from casino gambling for the poor and McMansions for the middle class to leveraged funds for the wealthy, making us all dance in one great frenzy until nothing was left.