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The Forum > Article Comments > Financial crisis or financial sting ... > Comments

Financial crisis or financial sting ... : Comments

By Selwyn Johnston, published 4/11/2008

While almost the entire Western world is in recession it is not yet openly admitted by our elected representatives.

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Sorry mate. Got as far as:

"somehow ratings agencies were able to rate them"

and I realised it was 2:36am and so didn't read anymore.

During the euphoria the 'ratings agencies' couldn't rate them due to a lack of transparency. So. They got the issuers to do the ratings for them and got paid for it.

The 'ratings agencies' didn't care as long as the fees came in and the free market ideologues protected them.

For example, Moody's financial statements from 1998 to 2007 state that 'structered finance rating revenue' increased from under $200m to over $800m.

Good thing this all happened in Litigation City.

Anyway you probably know the old saying about kicking, trust and a broken leg.
Posted by Neutral, Wednesday, 5 November 2008 1:59:07 AM
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Socialised banking? No thanks. Would anyone in their right minds seriously trust, say, the current NSW government to handle their life savings?

It's worth remembering that despite the current (and other) blips, the capitalist system has steadily raised worldwide incomes since the end of World War II. Compare that with the poverty and famine in communist states like the USSR and -- on a lesser scale -- the enormous unnecessary suffering caused by years of socialist rationing in the UK, which market forces could have resolved in a matter of months. Capitalism may have produced some murky bathwater, but we still have a clean baby.
Posted by Jon J, Wednesday, 5 November 2008 5:06:41 AM
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Great call, Selwyn, on the pressing danger in Gordon Brown's fakery purporting a "New Bretton Woods" (Lie Number One), which would only try enforcing a corporatist regime of the same monetarist idiocy via a strengthened IMF. Maybe it's worth mentioning that Sir Alan Greenspan is Brown's "financial advisor" too! Kinda puts the right caveat on Greenspan's insincere and evasive Mea Culpa before Congress. Remember too that Greenspan was one of the creators of the derivatives bubble and its much-lauded "wonder drugs" of collateralized debt-trade.

Jon J, please leave out the "Cap/Soc" dichotomy here. The eastern bloc states fell due to similar - though less protracted - monetarist dynamics of unpayable debt. Such monetarist misconceptions of ideology explain just why Marxism-Leninism offers only a more corporatized, centralized and more rigid model of "state capitalism" than the sick Neo-Lib monster we face now.

I know such binary simplicities as "left-right" and "capitalist-socialist" dominate our mainstream press and major political parties, but it seems OLO contributors have developed a more sophisticated understanding of these issues - a sophistication matched by Selwyn Johnston's gutsy and independent call for the state to get out of the whorehouse and resume its proper responsibilities.
Posted by mil-observer, Wednesday, 5 November 2008 9:06:13 AM
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