On a recent “Fora” Joseph Stiglitz, Naomi Klein and Hernando de Soto discussed the market melt down, some interesting facts.
• There is $ 600 Trillion of unregistered derivatives in the system.
• The Total world GDP per year is $55 Trillion
• The top two Hedgefund Chiefs received golden parachutes of $3 Billion each.
• Greenspan argued strongly that derivatives should not be regulated he thought that reputations of the players would keep it nice. The only true free market ever
• Even after losing all this money and being bailed out are paying lobbyists to stop laws against the sub prime mortgages renegotiating loans.
• At that stage Nov 10th no one knows who owes what.
Mr de Soto sees it as fundamentally a failure of property law i.e. the paper and the asset backing. All three seem to believe.
• Ban derivatives
• Spend the bail out money by spending it to refinance mortgages (build trust in the paper from the bottom up).
• More stringent corporate and banking regulations (debt to cash ratios).
• They also criticised the separation between those with the decision makers (power) and the investors. (A point I’ve been stressing for some time)
• Off balance sheet transactions to qualify for outrageous bonuses.
• THEY ALL AGREED THAT IT WAS A PMORE A POWER ISSUE. (Another issue I’ve been championing.)
BTW. They mentioned 6000 families (royals) own 80% of UK land. Ya royalty?

‘Free’ (sic) marketeers, Given that what the US does effects us all can you still rationally justify your stance of minimal change, limited regulation etc.?
Every one what do you think …please no at hominem attacks.

Since that date greenspan has appeared before Congress. He has stated that he was wrong to expect the free market to behave.
The free market, like perpetual motion engines and turning base metals in gold is a wonderful idea but simply cannot work.

There is a wealth formula (see Schweickart after capitalism p92) Essential global wealth distribution is in the following ratio:
1% owns 33% of the world's wealth. 9% owns another 33% and 90% owns the balance. That ratio seems to hold had at all levels - in other words within any community you will find that sort of ratio.

Good Morning examinator,

I think I'll leave this topic to
you and other financial wizards.

However the following website may be
of some interest:

www.news.cornell.edu/stories/Nov08/Hockett Perspec.html
"History is Key in Solving Financial Crisis."

what we are lacking is true figures
its two quadrillion
not 55 trillion

the wealth 'formula' isnt the reality either
facts cant keep up with this bail out
the number earlier this year is 5 percent own 96 percent

other factors are 'shareholdings'
companies owning companies
[look at any stock you see most is crossheld by other companies]

not real people
[you pay a share of your wages BUT DONT OWN ANY STOCK]
nor get any of the discounts nor any of the gain

its a great gift to gambel on the stock market[tax free]
with others money
knowing two million accounts in australia alone will get lost
knowing gambeling on paper isnt gambeling [its pyramid selling]

where you give them money [in todays value]
that they MIGHT pay back in hyper inflated dollars

sometime in the distant future
near half a life time away

the 'free' market hasnt turned base metal into gold
its turned paper promises into their own real asset
using it to buy up our real assets
and speculate [gamble] with the rest

[even speed camera revenue is turned into securities]
where the cameras themselves are what your trust fund is investing in

this left/right 'triviality'
prevents us doing now
what govt should have done yesterday
[take back the federal reserve],

that creates money/credit at whim
for private gain

[while charging ursury and fees upon even depositors]
real inflation is well abouve any 'intrest' they might pay
thus add in theft
by deflating its buying worth

as well as buying up the instruments and media
that could threaten their monoploy position via exposure

OUG,
Give the three talking are real experts Stigilitz is a nobel prize winning economist and president of the World Bank,
deSoto is no slouch either, I would like to know where you got your figures from. Have a look at the fora contains some terrifying details. which is really my point.

The $600 billion is not real money. Imagine a casino that approves bets worth more than the house. Lets say the house is woth $1000. I pay them $5 for a high odds bet that returns $1,000,000. I win. The casino goes broke and all sorts of other bad things happen, but did the $1,000,000 ever exist? Not on your life. Yet $600 billion is being reported as if it was real money that will have a real effect on the global economy.

And as for Greenspan - this "market" thing he talks about is not a market I would recognise. In the markets I know and love, everybody knows what is being bought and sold. No one can claim to be selling a 1Kg of gold, but then deliver 1Kg of lead painted with gold. Allowing this would kill the market, obviously.

Greenspan and his "free-market" mates created the conditions under which that could happen. Under the guise of "removing regulation" to allow the "markets to be free", he removed the oversight. That oversight created the transparency which meant everyone knew what was going on. Example: look up CDO's on wikipedia. They are really an insurance policy on a loan but called a CDO to avoid the tight regulations on insurance. As a consequence people insured things with CDO's they didn't own. Effectively CDO's became bets on whether loan would be repaid, or ultimately on whether a company would fail. I hope the connection to the casino example is obvious.

In general, if everyone is going to understand what is bought and sold things have to be kept simple. Thus regulation has a lot to say about what can be bought and sold, to keep arbitrarily complex things from getting to the market. In the financial world, complexity is the paint on the lead. It is no accident that the destruction of our financial markets was proceeded by a sharp rise in complex derivatives.

There is nothing wrong with derivatives, provided everybody knows what they are. Greenspan oversaw the removal of the rules ensuring everybody did know.