LOL. There are plenty of arguments against regulation in financial markets, but this is hilarious.
OT in a survey of 18-26 years olds
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LOL. There are plenty of arguments against regulation in financial markets, but this is hilarious.
Hilarious? Tax payer bailouts to the tune of billions of dollars is hilarious to you? Wow!
There are no "arguments" to regulation in financial markets, it's better referred to as monetary history. In other words, since this is all so funny, tell me a time prior to 1913 in human history (so you have plenty of time to investigate) in which a no risk environment existed in ANY financial market. Just find one. IF you find one, lets compare it to what happened just a few years ago in the housing market (only), never mind numerous other markets, and I will demonstrate a zero risk financial world that regulation, and only regulation creates.
Let me know when you are ready, so we can all laugh together
Hilarious? Tax payer bailouts to the tune of billions of dollars is hilarious to you? Wow!
There are no "arguments" to regulation in financial markets, it's better referred to as monetary history. In other words, since this is all so funny, tell me a time prior to 1913 in human history (so you have plenty of time to investigate) in which a no risk environment existed in ANY financial market. Just find one. IF you find one, lets compare it to what happened just a few years ago in the housing market (only), never mind numerous other markets, and I will demonstrate a zero risk financial world that regulation, and only regulation creates.
Let me know when you are ready, so we can all laugh together
Bear Stearns definitely agrees that there was zero risk in the market.
Exactly, heavily regulated securitized assets, i.e. zero risk. These idiots (geniuses, depends on who's perspective) rode the system as far as it would take them and absolutely made a killing, literally decimating the average person on the way, millions lost their homes. This is what the young people see today, they view this as "capitalism" in action. It couldn't be any further from the truth.
You literally have no idea what you're talking about. The securitzarions involved in the crisis (Mortgage Backed Securities, Colateralized Debt Obligations, and the Credit Default Swaps written on the CDOs) were largely unregulated. Securitizations have only recently begun to be regulated through retention requirements on the issuer of the underlying assets.
But I'm sure in your completely deregulated universe you'd prefer to allow issuers of asset backed securities to offload all assets, because free market and all (i.e., maintain zero risk on the ABS. See what I did there?).
Regulated, yes regulated banks, were/still are all the banks involved in the crap you listed. Now take a step back for a moment and read what I just wrote.
So if a bank is regulated, which they ALL are, and they essentially do something that is illegal, is the act therefore "unregulated", as you say it is? No, as I said before, the bank is using the vehicle of regulation (they are backed by the Federal Reserve as last resort, the Federal Reserve is regulated by a board, that board is "regulated" by Congress) to perform acts of crime. This is ALL one big regulated crime orgy! It got exposed, and guess what, now we get to throw more "regulations" at it, like you posted above, to solve a regulation problem. Does this sound like a familiar government solution to you?
In a free market, i.e. capitalism, it is 100% impossible to ever form asset securities based on bad collateral from houses (as in the housing crisis). No way in hell you get people (private business or individuals) to invest in toxic investments like that. You know and I know as soon as you or I sniff something bad you are not going to put money into it, that IS the risk involved and that crap would have NEVER got off the ground. And as soon as people back away from it, they (banks) lose their asses committing crimes. I know exactly what I am talking about. I'm sorry if you don't want to understand what I am saying because I can tell you are smart enough to.
There's no point in yelling past eachother. I took exception to you claiming we are (or the economy during the housing bubble was) in a zero-risk environment, because that's patently false (see the collapse of Lehman and Bear Stearns). But I don't think that's particularly relevant to either of our arguments here.
About 70% of my economics education came from Clemson professors trained at Chicago, and I am firmly a capitalist. But as long as you have externalities (a concept Adam Smith himself never really acknoledged), moral hazard, and other market distortions, some regulation is necessary for efficient markets. Precisely how much regulation is a loaded question better suited for people far more intelligent than I am.
This is an absurdly shortsighted way to look at things. The value of an education shouldn't be tied directly to someone's income or ability to get a job. That's stupid. Have you ever been in a roomful of people who are only business majors? It's pretty dull. That would an awful thing for the populace as a whole.
Absurd loan debt is a problem, sure. But society isn't worse off having a lot of people who studied the humanities. The fact that you called out Art History and English and not History and Political Science--majors that have equally little "value" in terms of getting a job but are full of right-leaning students--tells me that you probably just think this is some "liberal" problem.
I'm not yelling, I probably tend to write in capital or bold too much (bad habit) for better expression, that's all. I actually enjoy the conversation to pass the time before I head to the beach and pull for the Tigers this weekend.
Going back to the younger generation, and maybe this includes you, I don't know, they view capitalism from their TV screens and what the media talks about. They don't live it, as we don't either. At it's root, capitalism is the most simple form of economic theory. If you strip all the jargon away, you are left with you, what you produce and the customer. Any sane human being would want to follow this method because it is the most naturally "fair" method to perform transactions. The only thing missing is money. Once money is introduced, which it was thousands of years ago for this very reason, a phenomena occurs which is referred to as spontaneous order. In today's day and time, it is literally millions of transactions that take place all for the sole purpose to seek out the correct supply and demand based on price.
In order to introduce any regulatory action, you have to upset the series of actions between you and the customer, it may sound over simplified, but it is really that simple. If a regulation is put in place, what happens is price discovery becomes perverted by an action other than supply and demand. As I mentioned in an earlier post, this is a form of price manipulation. Spontaneous order is the ONLY way to achieve the correct price for any product produced on the face of this Earth and allocate the correct resources accordingly.
If you do not follow this method, what occurs is referred to in the media as "bubbles", i.e. housing bubbles, automobile bubbles, dot com bubbles, student loan bubbles, the list can go on and on because this is the world we live in now and the term capitalism takes the blame. If you are firmly a capitalist, you would not stand for any regulations whatsoever simply because price discovery does not exist in it's natural form via capital (land, labor, machines, buildings, etc.), investment and risk. Those three things determine if anything will be built/made anywhere. I can go on and on but I have to go now. Go Tigers!
This is an interesting conversation, and I'm sure we can have a friendly argument about again. I'll change my stance for you to firmly for efficient markets.
Go tigers and enjoy the beach.
