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  • Because the crisis happens under the current administration, they want to take advantage of it, instead of messing up with it and get blamed.

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    • Originally posted by Oscar View Post
      So, the markets seem to have calmed down...thanks to the state interventionism.:)

      The conclusion one can draw about the recent events is that the state is still, and will always be, a central player in the economy...

      First it's a given that the US will apply more and stricter regulations to correct the abuses of certain lending practices.

      But some continue to blame the state for the crisis, well IMHO the opposite seems from be closer to the truth. It's because regulators were asleep (= no regulation) during the heydays of the subprime bonanza that this crisis occured.

      In more regulated markets such as the ones in continental Europe a crisis of this nature would have never happened.
      Oscar,

      Bang on.

      The government may not have any place in owning and managing business but it is absolutely essential as a Regulator, especially in the Financial Services Industry
      "Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God?" ~ Epicurus

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      • Originally posted by Oscar View Post
        In more regulated markets such as the ones in continental Europe a crisis of this nature would have never happened.
        But the European regulators did not stop European Banks doing questionable transactions in American markets, so even with regulations Europe could not stop Northern Rock from failing.
        A grain of wheat eclipsed the sun of Adam !!

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        • Originally posted by Jay View Post
          But the European regulators did not stop European Banks doing questionable transactions in American markets, so even with regulations Europe could not stop Northern Rock from failing.
          Which sort of underscores the point that regulation is an absolute must for the financial industry.

          Bankers will always put the profit motive above their duties as protectors of their depositor's money, so it is basically the regulatory institutions who need to protect the interests of all
          "Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God?" ~ Epicurus

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          • The only problem is we dont have a global regulator and its not even possible to have an authority with global powers.

            There are plenty of loopholes that banks can use to do questionable transactions like opening up subsidiaries in countries like Liechtenstein or Mauritius or some banana country to get some profits.
            A grain of wheat eclipsed the sun of Adam !!

            Comment


            • Originally posted by mudwhistle View Post
              We're supposed to be in the middle of the worst financial crisis since the Great Depression. And what is Congress getting ready to do?

              Get the hell out of Washington. Like rats leaving a sinking ship Congress is going on recess.

              I think this is a good thing but don't you think they should at least stick around and try to solves some of the problems they caused rather then leave when things start to get tough.



              The only thing Democrats are good at is pointing fingers, not solving problems.
              We keep hearing here about how the US economy is not real flash. I heard one of our Pollies talking on the Radio today, saying that the American banking system is under protected and when something like this happens; the banks are looking a bit shaky.

              Now the US Govt has bailed out Freddie Mac and Fanny may, it may be an idea to put into force a protection scheme that protects investors from major banks going wheels up. I also heard an American commentator using the "D" word. That could only strike fear into the masses don't you think?

              Freddie
              Never hold your farts in, they run up your spine, and that's where shity ideas come from.
              vēnī, vīdī, velcro - I came, I saw I stuck around.

              Comment


              • Originally posted by Jay View Post
                The only problem is we dont have a global regulator and its not even possible to have an authority with global powers.

                There are plenty of loopholes that banks can use to do questionable transactions like opening up subsidiaries in countries like Liechtenstein or Mauritius or some banana country to get some profits.
                A global authority is not required, in my opinion. The Central banks and Governments entities usually have enough teeth to ensure that offshore banking subsidiaries would not mess things up

                E.g. 1: Say ICICI Bank intends to open an investment company in Seychelles. RBI and long GoI can have legislation that affects this decision either way

                E.g. 2: Say an Offshore banking company wants to start an investments and brokerage firm in the US. They will still be regulated by the whole host of US regulators.

                Bottomline, wherever financial firms may chose to operate from, they are still subject to regulations in their home country and their area of operations.
                "Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God?" ~ Epicurus

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                • BBC says that Bush has brought in nationalisation!

                  Chucking in a trillion dollar to salvage greed!

                  That much for the virtues of capitalism!


                  "Some have learnt many Tricks of sly Evasion, Instead of Truth they use Equivocation, And eke it out with mental Reservation, Which is to good Men an Abomination."

                  I don't have to attend every argument I'm invited to.

                  HAKUNA MATATA

                  Comment


                  • Originally posted by antimony View Post
                    Bottomline, wherever financial firms may chose to operate from, they are still subject to regulations in their home country and their area of operations.
                    True, but you put too much trust on the Government to enact laws and the regulator who implements it. ;) IMO for every law there is a loophole and the greedy bankers would find one.

                    Also not all nations have comparable regulations, in your example, if say a UK regulator says no for a particular transaction in the US, which is legal in the US, then what if the bank decides to open up a subsidiary in Liberia where the transaction is legal and do it from there to the US??
                    A grain of wheat eclipsed the sun of Adam !!

                    Comment


                    • Originally posted by Ray View Post
                      BBC says that Bush has brought in nationalisation!

                      Chucking in a trillion dollar to salvage greed!

                      That much for the virtues of capitalism!
                      Sir,

                      The way the US financial industry has been run and managed for the past several years may not be the best example of how a capitalistic system should run.

                      A capitalistic system runs on human initiative which is turn fuelled by greed (I know, not the best way to describe the protive motive, but true enough). In my mind the best capitalistic system needs to have a watchful eye over it to see that everyone's interest is protected and also that people are not taking short term decision which have a hgh negative impact on the long term.

                      I think the government has brograted that regulatory responsibility, which has made people (both businesses and ordinary folks) take stupid decisions.

                      It is an irony that the Government has to increase its activity during the watch of a fiscally conservative administration

                      By the way, I had written in my previous posts that GLBA was introduced during the Clinton Administration. To give the full story, it was actually introduced by 2 Republican Congressmen. The bill was made veto proof by the then Republican COngress and Preseidnet Bill Clinto had no option but to sign it.

                      Gramm-Leach-Bliley Act - Wikipedia, the free encyclopedia
                      Last edited by antimony; 19 Sep 08,, 18:39.
                      "Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God?" ~ Epicurus

                      Comment


                      • Originally posted by Ray View Post
                        BBC says that Bush has brought in nationalisation!

                        Chucking in a trillion dollar to salvage greed!

                        That much for the virtues of capitalism!
                        Profits were transferred to shareholders and losses to the public. Its so ironic.
                        Would the govt go behind Fuld to get his 20 year compensation package? No.

                        Atleast, AIG bondholders and preferential stockholders got something to cling on. Its the poor day trading public left high and dry, but then its an inherent risk they were aware of.
                        A grain of wheat eclipsed the sun of Adam !!

                        Comment


                        • Originally posted by Jay View Post
                          True, but you put too much trust on the Government to enact laws and the regulator who implements it. ;) IMO for every law there is a loophole and the greedy bankers would find one.
                          Jay,

                          I used to be a greedy banker;); I know that my breed will actively search out loopholes. In corporate terms, it will be termed as "product innovation" and B-school grads will line up for jobs like that ;)

                          Originally posted by Jay View Post
                          Also not all nations have comparable regulations, in your example, if say a UK regulator says no for a particular transaction in the US, which is legal in the US, then what if the bank decides to open up a subsidiary in Liberia where the transaction is legal and do it from there to the US??
                          The UK regulator decides whether it is ok for a UK based company to open a subsidiary in Liberia. It is upto the US regulator to decie on that particular transaction. If they are not sleping on their jobs or sleeping with their banking comrades, then they would know what type of transactions they would want to allow keeping in mind everyone's interest.

                          Have you noted that short selling has been banned for 799 companies?
                          "Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God?" ~ Epicurus

                          Comment


                          • Antimony,

                            It is all excuse for a total failure of a system.

                            Too much of free wheeling and greed with no social responsibility or social morality!

                            Actually, it does not matter to me. It is their lives.

                            What matters is their holding it as a shining star and sole panacea for all ailments of the world!

                            It has proved to be a failed Idol! And that too under a Govt that championed so vigorously that all things bright and beautiful was the sole prerogative of the USA! And I believed that!

                            It has out me in a quandary if India, which is following the US, and which I support, is on the right track or should we moderate before it is too late!

                            The US has had to nationalise and go the Socialist way. 80% of AIG is owned by the Govt of the USA!
                            Last edited by Ray; 19 Sep 08,, 20:07.


                            "Some have learnt many Tricks of sly Evasion, Instead of Truth they use Equivocation, And eke it out with mental Reservation, Which is to good Men an Abomination."

                            I don't have to attend every argument I'm invited to.

                            HAKUNA MATATA

                            Comment


                            • Originally posted by Ray View Post
                              Antimony,

                              It is all excuse for a total failure of a system.

                              Too much of free wheeling and greed with no social responsibility or social morality!
                              Sir,

                              I disagree, we have had 7 decades in the US without a bank run within a capitalist system because checks and controls were built in place. Then you remove those checks and balances and interested parties get the idea that its a free for all.

                              Results: complete collapse.

                              If you want a good game invest in a solid umpire, else its gonna end up in a mess
                              Last edited by antimony; 19 Sep 08,, 20:13.
                              "Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God?" ~ Epicurus

                              Comment


                              • Then you remove those checks and balances and interested parties get the idea that its a free for all.
                                Is that anyone's fault but that of the so called freewheeling capitalism that is so touted as the way to go?

                                Who did it?

                                Non Americans?

                                What are you trying to justify?


                                "Some have learnt many Tricks of sly Evasion, Instead of Truth they use Equivocation, And eke it out with mental Reservation, Which is to good Men an Abomination."

                                I don't have to attend every argument I'm invited to.

                                HAKUNA MATATA

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