Mil - Observer The Community Reinvestment Act forced banks to undertake lending activites that undermined capitalism. ie give money to people who couldn't repay it. A recipe for disasrter and it was biought on by the socialists in Congress. That's why you should

Your current diatribe just proves my point and it shows you lack reasonableness in your approach.

You seek only to blame and label those who don't share your ideology and you cannot accept the cupubability of those who share you idealogy...

And as usual when you realise you've lost the debate you resort to ridicule, invective and personal abuse.

Sigh, will you never learn.

For those still in thrall to delusions of the neolib regime, it should now be obvious how this crash has its determinants in large-scale, high-level trade of packaged debt (whether termed CDO, MBS, exotic, etc.), under a very artificial and vast protective layer of derivatives trade. While this magic show kept returning figures of an almost entirely monetarist rather than physical growth, the system's architects got constant praise, Nobel prizes and other deference. Such stratospheric status of neolib gurus, funny money traders, and their lackey pundits itself became an important commodity or political force, and they will not relinquish their privileges, however clearly undeserved.

Hence the greatest heist ever: the bail outs.

Governments' massive, ongoing bail outs of banks prove how neolib financiers have subverted and subordinated the political system, particularly in the west. Neolibs' latest effort to sustain their exalted status depends also on strenuous, creative spin to deflect attention from both their incompetency and their criminality. Hence the shift: macro—micro; structural monetarism to personal foibles; usurers' collective failure and non-provision of choice, to poor individual consumer's gullibility even irresponsibility!

keith - your haughty claims are self-evidently fraudulent. Between 1977—1999, there was almost no such farm-out of non-repayable debt as associated with recent sub-prime frenzies. Your pettiness here parodies even your own low, vaudeville standards – keep sacrificing those goats in your exclusive secret society and exclusive club ;-)

TOYB – we should call your own ideology and dogma here. “Runaway climate change”? Yes, still a HOT topic in the western media, even during some of the coldest winters for decades. You mention Tim Flannery, but what “clear thinking” can we expect from him? Pumping sulphur into the atmosphere to combat “global warming”, as Tim “Australian of the Year” recently proposed? Perhaps your own mind inhabits or even represents “a finite world”, but myself and several billion others will appreciate how well current nuclear technology has advanced, for example, to offer our children a future – as distinct from ruthless depopulation and an agrarian hell serving such parasitic green dullards as Sting and Prince Charles.

mil-observer

And of course, as you assure us it was all the fault of the neo-cons or whatever so long as socialists aren't implicated in any way, the melt-down could not have happened without the toxic loans.

Your illogical rants just keep on proving my point about you socialists.

Sigh, get over it. Why do you keep dwelling in the past?

"Sigh, get over it. Why do you keep dwelling in the past?"

That's okay, Keith. You stick to reading the stock market reports.

Hopefully though, there are enough people out there who ARE dwelling on the past, if not in it, and are learning from its lessons, so that we won't find ourselves in this place ever again. For too long, we've allowed ourselves to be lulled into a false sense of security, as each new generation of pumped-up Wall Street worshippers has assured us that the crashes of the past could never happen again.

History IS important, Keith. You should try learning from it.

MilObserver - your points about the origins of the current financial crash are well-made. I would suggest that instability, crises + crashes are systemic features of finance-dominated capitalism - see what Thorsten Veblen had to say about an earlier phase of this especially rapacious & predatory economic system. The reason it is rapacious & predatory is a function of the systemic competitive pressures & the incentives towards excessive greed associated with them. This has become all too apparent in recent weeks & years.

I'm not sure why you mentioned Tim Flannery, Sting or Prince Charles, none of whom I made the slightest reference to. It is drawing a rather long bow to suggest that to speak of ‘runaway climate change’ is a form of dogma and ideology. I am aware that there are climate change sceptics, including yourself it seems. However, whether or not climate change is ‘real’ and / or human-induced, is above all a scientific question that should be determined on the basis of evidence. I am far from being alone in believing that climate change is both real and human-induced, and there is an abundance of evidence for that view. If you want to challenge it here, at least provide a bit more evidence than anecdotes about cold winters.

Similarly with respect to the issue of nuclear power: there are many good, evidence-based reasons to feel (a) concerned about a whole-scale embrace of this technology, not least the question of what to do with the waste, and (b) how sustainable a solution it is to the energy conundrum, given that uranium, like oil, will likely have its own peak in production in the not-too-distant future (http://www.theoildrum.com/node/2379).

Rather than place all my faith in technology, I prefer to work with those around me towards cultivating ways of life that are more in keeping with the carrying capacity of the planet. This does not have to entail ‘agrarian hell’ or population culling, neither of which I support. It’s worth remembering though that the current system already produces versions of agrarian and urban hell for most of humanity

Fractelle,

You consistently refuse to accept the role that Fannie Mae and Freedie Mac’s subprime directive, courtesy of Democrat politicians, played in creating this problem in the first place. Banks sold sub prime loans because Fannie Mae and Freddie Mac were buying. These GSE’s then repackaged these subprime loans as mortgaged backed securities, which were given high credit ratings because they were supposedly gov’t backed. This poison was then spread through the system because not only were they profitable, but they were also considered low risk.

You seem to have this idea that a bank loan is a right, and that paying it back is optional.

Your point about derivatives demonstrates you total lack of understanding of finance. That wouldn’t be a problem, except you are holding yourself out as, if not an expert, then someone who knows what they are talking about.

Derivatives ARE important part of an economy. They provide investors with an ability to manage their risk exposure. A simple example is a farmer who has corn. If he thinks that he may not get the price for the wheat he grows, he can enter into a futures contract to sell his wheat for cash on a certain day. This then reduces his risk of not selling his wheat, and it reduces the risk of the buyer in not being able to source wheat.

You say >> “There's simply no way that ... the U.S. housing market could possibly threaten the economic health ...

First Fannie Mae and Freddie Macs held HALF of all mortgages in the US. That’s something more like 6 trillion dollars. Then there was the 81 other public companies filing for bankruptcy this year. Furthermore, no one believes that the 435 billion written off was the end of the matter. The fear in the market is that more is undoubtedly coming. Secondly, the economy has been affected by a credit crunch, with banks and other financial entities refusing to lend money to other organizations because of a fear that they might go belly up before the loan was repaid.