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Discussion in 'Politics, Religion, Social Issues' started by clevin, Jul 11, 2008.
I guess letting the market regulate itself isn't that great of an idea after all, is it!
Ugg, what's to regulate? The mess of the 1980s was addressed in hindsight by Congress. However, much of the mess of the 1980s was caused by banking regulations imposed by Congress. They didn't have the foresight to envision derivatives. Okay, so they now use hindsight to regulate derivatives. What's next? Nobody knows.
Further, with the movement of economic power to the middle east, who's gonna regulate what goes on in Dubai?
From Bill Bonner, in today's "Daily Reckoning":
"This week began with alarm bells. First Bridgewater Associates broke the glass and pulled the handle; it said the conflagration in the credit markets might lead to losses four times higher than previous estimates – at $1.6 trillion. A lot of money – even for someone who lives in London.
Bridgewater helpfully pointed out that this was just the beginning; the world would lose an additional $12 trillion in foregone credit. When the going is good, each ounce of a bank’s share capital grows into as much as a pound of credit available to borrowers. But when the cycle turns, the shrinkage takes your breath away. Remove a dollar from a bank’s balance sheet and you wipe out a ten-spot of credit. Bad news for people in Britain and America who are accustomed to living off of credit. Bad news for their economies, too. Without access to the fire hose of easy credit, the consumer economy goes up in smoke."
"Outside the Bank of England and the U.S. Fed lies some $5.3 trillion in central bank reserves. In foreign government pension reserves and other accounts is another $6.1 trillion. Add $3 trillion more now in the hands of Sovereign Wealth Funds. The IMF says these SWFs will grow to $12 trillion within four years. Morgan Stanley estimates a $17.5 trillion pot by 2017. Altogether, this is enough moolah to buy control of every public company in Britain and America combined."
At the rate these folks are buying the U.S. assets, we'd wind up trying to regulate our landlords. Granted, Congress is already showing that you can't fix stupid, with that silly notion about suing OPEC. And these cretins are supposed to regulate people with real money? The only ones at present who can be regulated? They're broke.
Somebody is about to earn an instant 5-15 billion dollars in profit when they take over the bank.
Yeah, either the Chinese or the Russian SWF will buy it for chump change...