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Post by redwolf on Jan 25, 2008 13:59:43 GMT -6
From the Financial Times: The start of the great unwinding"This is hyperfinance. In the space of five frenetic days, stock markets have plunged and recovered; the US Federal Reserve has cut interest rates to 3.5 per cent; so-called “monoline” insurers, revealed as a small but vital valve in the financial machinery, have wobbled; and one Jérôme Kerviel has lost €5bn for a venerable French bank.
If the US suffers a recession in 2008 or 2009 it will not be due to an industrial decline or an oil price shock. It will be a recession that began in the financial system. The response of the general public is confusion, tinged with horror, at how intangible finance can impinge on their daily lives. Even some bankers and traders must be struck by the chaos their business can unleash, and feel awe at just how powerful they have become.
A fundamental question therefore arises: is the financial system broken, corrupt and in need of reform; or is the system sound, yet subject to external pressures, notably heavy monetary stimulation, with which it could not easily cope? On that diagnosis rests the future of our highly liberalised financial markets."www.ft.com/cms/s/0/02f4b5b8-cb78-11dc-97ff-000077b07658.html
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Post by unlawflcombatnt on Jan 26, 2008 1:04:41 GMT -6
This an outstanding article, showing exactly how the housing-rate cut-financial innovation debacle developed.
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Post by guest on Feb 3, 2008 19:38:34 GMT -6
Both the financial and the political system are broken.
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Post by unlawflcombatnt on Feb 4, 2008 3:47:48 GMT -6
Both are even beyond broken. Both are actually counterproductive, rewarding counterproductive activity with unjustified bonuses, while propping up management incomes through Corporate Welfare.
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Post by guest on Feb 4, 2008 18:17:26 GMT -6
Agreed, worst then broken. The Republicans deregulated the economy, which allowed the corporate and financial pirates to take over and along with Bush and the Fed, bring on this crisis. The Republicans, lead by Tom Delay and K Street, turned lobbying into legalized bribery and have allowed the corporations to buy Congress and to take over America. Yes, worst then broken.
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