I was just correcting your ass about the war thats all. I am not out to say good jew or bad jew. If I were a jew I would have been a neo con too. I am just not afraid to call a spade a spade. Just because I do not like gay marriage does not mean I am a homophobe. Just because I think Neo cons were founded by Jews and their policy of turning the middle east into a democracy was Pro Isreal does not make me anti Jew.
I am not sure about your literacy but your reading comprehension needs work. Where did I call you a neocon? My "too" was not referring to you, I was using it to show this was not an I hate neo cons because they are jews rant - If anything I think their about face from socialism was brilliant. If I were Jewish and million of my brethren were wiped out 60 years ago or so- I would have wanted to establish a homeland as well. but you need to become less arrogant and learn your history. You might also want to work on your Catholic and Neo Con history. you might want to start here... http://en.wikipedia.org/wiki/Neoconservative apologies will be accepted - especially when caused by ignorance. for all these who believe I am arrogant. arrogant and correct is not so bad - arrogant and wrong is not ag good combo.
1. first of all based on the speculative nature and incorrect conclusions of your diagnosis, I would say that was a self diagnoses for you. 2. When I see someone get something as basic as one of the policies behind the Iraq war and Bushes goal for the middle east so very wrong because they have bllinders on, I correct them. 3. My discussion of neoconservatism was not rooted in any type of hatred or bias. You were the dipshit who made the Catholic illiteracy comment. You were the one who pulled the race/jew card on me. If you went through my posts here - you would see I defended Israel in the past. 4. You really need to adjust your worldview because you are not seeing things correctly, even in chit chat.
I agree that human nature is a main cause of bubbles, but I think it's clear that leverage makes them bigger than they would otherwise be, and spreads the effects from the bubble sector to the general banking sector and thus the economy. With free banking, and especially full reserve banking, bubbles popping would be like 2000-2002 - causing pain the in related sector and amongst foolish speculators, but not fucking up the rest of the economy. The difference in real estate bubbles is the fact that the fractional reserve banking system is so exposed to that asset class, and so heavily leveraged. A financial system where banks take deposits, then lend them out under conservative terms, would be far more stable. Higher risk activities can be financed through venture capital, the stock market, junk bonds, angel investing etc. Right now, you have people depositing in banks, thinking it is cash aka safe, whereas in many cases it's a massively leveraged bet on massively leveraged real estate speculators. The social consequences of letting them suffer the results of their own actions are too unpalatable for the voting majority in any democratic society, therefore the cost of the errors gets transferred to the conservative, sound, and/or productive members of that society. If populations are going to steal my money to bail themselves out of their misguided rampant speculation and greed, then I would much prefer they are either prohibited or limited from speculating in the first place. Leave it to people who can actually handle the consequences without trying to thieve from others. It either needs some constitutional-type legislation (in countries which have that) or a very strong culture of personal responsibility to prevent this kind of thing happening. Right now neither is in evidence.
What about personal responsibility? What about due diligence? What about researching things properly before shovelling millions or billions of your customer's money into junk products? No one was forced to buy these products. The only people burned were either very bad at investment research (a tiny minority), or lazy people who couldn't be bothered to do it, and thought that seeing a rating agency AAA tag absolved them of any market risk. If the latter were true, then the securities would have had AAA yields i.e. a small premium over Treasuries - the fact that they had fat yield spreads made it *obvious* to anyone with a modicum of investment knowledge that they were risky. You don't get fat yield with no risk, everyone knows that. Are you really trying to say that investors were somehow compelled to buy these securities? They could have put their money in government bonds and slept sound at night. They made a *choice*, freely taken, to chase higher yields. They were smugly thinking that they were safe and somehow getting one up on the market, by getting high yields and patting themselves on the back about the AAA rating. Literally 5 seconds thought would have made any intelligent person realise that high yield usually means high risk. Literally a day's work or less would have shown that these securities were not of equivalent safety to the normal AAA standard. Hell, I never even read a Moody's or S&P report, didn't run any numbers at all, and knew they were junk that should be shorted into oblivion. How come these professional investing institutions, with millions at their disposal to spend on research, did not see this? It is very simple - they were greedy, they were lazy, and they were stupid. If someone is greedy, lazy, and stupid in other walks of life, they are rightly blamed for whatever misfortunes they bring on themselves in advance. This is not like the Madoff scandal where normal people got fleeced and had no real way to know themselves (in that case, I would agree with you that the fiduciaries and advisors were in the wrong, or at least negligent). We're talking about professional investors who screwed up by not doing their homework, not widows and orphans who got fleeced by a convincing con-artist. It's very simple. Institutions saw AAA and fat yield, and greedily chased it, without bothering to do the homework, the little that was required to spot they were garbage dumps. They got their comeuppance and a refresher course in the principles of risk/return trade-offs. They have no one to blame but themselves and their shoddy, 3rd rate work.
Being *allowed* to invest in A rated or higher in no way *compels* you to invest in junk that has erroneously been given A ratings or higher. There were plenty of AAA securities that were relatively sound - why did they choose the garbage? And what's wrong with comparing the signalling role of the VIX with that of credit ratings? The VIX serves as an assessment of risk. A credit rating is also an assessment of risk. They have their differences but they also have certain things in common.
Funny stories. Of course, during the recent run up in grains and commodity prices, it was the evil speculators again, this time pushing prices up. One wonders why they waited 2 whole decades to run grains from generational lows to epic highs, if they were such good manipulators couldn't they have done it in a few weeks and retired young? Besides, by definition a profitable speculator needs to buy lower than they sell. Whereas being long near the top of a bubble and short near the low of a bust is pretty much the exact opposite of that.
And where did you "cut and paste" this article from? It might help your credibility on this website if you were to use your own words, and not someone else. Just a thought.
You can't be serious. The VIX is an actual quantitative measurement of what is being reflected in the market place. A credit rating is obtained via subjective research and is PAID FOR by the issuer of the security. Can you say conflict of interest? Duh.