Matt
Active Member
Agree. However, the whole conservative idea of small government seems to be backfiring, right? It's now painfully obvious that insurance/banking/loan companies need to be heavily regulated.
Dakryn's Batshit Theory of the Week
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The Ozzman
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Mathiäs;7652152 said:
Well, Greenspan was an idiot for not regulating the OTC derivatives market (look it up because I don't feel like providing a link. There's plenty of shit on the OTC Derivatives market). Greenspan said something to the effect of: OTC derivative markets aren't susceptible to manipulation
O FUCKING RLY?!
This is why the whole bailout is a fucking Catch-22. No one knows what is going to happen either way. These are strange times. I think if the bailout happens and the 700 billion is spent solely on this bailout and no other projects, it will probably work.
Also, Clinton was a fucking idiot for repealing part of the Glass-Steagall Act.
Finally, I'd like for you to define what you mean by 'heavily regulated'. I think regulation is in order now, but how 'heavy' is the main issue.
zabu of nΩd
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Well, his wife is actually dead in that picture.
"When his wife died of cancer, Alamo claimed that she would be resurrected and kept her body on display for six months while their followers prayed. It would be 16 years before her body was returned to her family."
http://www.cnn.com/2008/CRIME/09/23/alamo.evangelist.raid.ap/index.html?cfm=seatoverthere
zabu of nΩd
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The Ozzman
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Matt
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The Ozzman
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Mathiäs;7653255 said:
Yeah, pretty much.
EDIT: Are you going to answer how heavily regulated business should be? I think this is a good subject.
rms
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Matt
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Oh sorry I didn't even see the question. I think businesses that hold as much economic influence as AIG did should be heavily regulated, so they don't doing stupid things like hand out millions of sub prime mortages and collapse when people can't pay them. Businesses that affect the whole world need to be controlled imo.
I don't how that would be done though.
The Ozzman
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Mathiäs;7653535 said:
Again, this is due to Clinton repealing part of the Glass-Steagall Act. He, in effect, said that bank holding companies (like CitiBank) could get into insurance, mortgages and securities along with traditional commercial banking activities (which is why they are now known as CitiGroup). That wasn't allowed before, so people shouldn't say it's only Bush's fault.
AIG is a different animal. Not only do they have the SEC breathing down their becks, but they have the NAIC as well because of the insurance products they offer. The way accounting is done when it comes to statutory accounting is completely different from GAAP accounting. It's more stringent in my opinion.
As far as I know, AIG didn't really hand out direct mortgages. What they did was invest (through their financial products division) in mortgage backed securites and credit default swaps.
Mortgage-backed securities are when you take a shit ton of mortgages, put them into one pool and sell off parts of them as individual assets in order to gain capital. The person who then owns the security gets the interest payment every month as a 'dividend' so to speak. When you do this, you take on a huge amount of risk obviously. People take on sub prime debt because there's a chance for better return (though the risk is similar).
Credit default swaps are when one entity sells insurance to another entity in case a third entity defaults.
For example, if GE were to sell insurance to JP Morgan to protect the risk default of Goldman Sachs since JPM has debt instruments from Goldman Sachs. There's tons of info on CDS now, so just Google it.
Most of what has been going on deals with internal issues within these companies. It seems as though the traders weren't even monitored within their own company. The head traders weren't monitoring trades and were getting too risky with their trades. I don't consider Credit Default Swap investments as a proper 'hedge'. I consider them as 'speculation'. When speculation takes the place of hedging your risk, there are bound to be fuck ups.
I basically gave you what is happening in laymen's terms (I hope).
zabu of nΩd
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Huh? Bloomberg isn't a Congressman. I was suggesting that he should be one (or even President). Seems like he'd do a better job than most.
The Ozzman
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Yeah, he'd be good as Secretary of the Treasury or Fed Chairman. I don't think he'd fuck things up at all.
Matt
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The Ozzman
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Matt
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Probably just the ones with massive amounts of cash. As I said, the only things that need (heavy) regulation are the big things.
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Matt
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So this bullshit debate is pissing me off. Palin still hasn't answered any questions and Biden's answers haven't been what I would have expected.
