But it was government and monetary policy that allowed it to get out of hand. Wall Street couldn't do this all by themselves. Could they? Surely, the government and the Fed would have known what the outcome will be. All you have to do is look through a history book. It's kind of like the obese mom with the obese kid. If the obese mom didn't keep feeding and buying the obese kid junk, the kid wouldn't be obese. After all, the obese kid doesn't know well enough when to stop eating. But the mom does, and she enables him.
Dude - learn how to read body language. Bernanke and Paulson were scared witless. Do some research about the culture of the big banks -- they really were that stupid. I do believe in cycles. Fraud run amok, disgust of govt leeches etc are human behavior that seem to build up and blow up time and time again throughout history. Now -- if there is a real semi-conspiracy going on with the banks and govt right now -- it could be that Morgan Stanley and some of the others are trying to artificially suppress the price of oil - in order to bankrupt Iran and possibly Russia. But that would not be a conspiracy. The big banks have never made honest money -- this would just be another example...
Important distinction: It may have been stupidity and greed of Wall Street that created the problem. Why and when it failed remains unclear. Some conspiracists credit Meredith Whitney with (unexpectedly) stumbling upon the scheme and blowing a whistle.
I believe it was orchestrated, but I also believe in cycles...as the following quote illustrates, from "The Decline and Fall of the Athenian (American) Republic", c.1799. "The average age of the world's greatest civilizations has been two hundred years. These nations have progressed through this sequence: from bondage to spiritual faith; from spiritual faith to great courage; from great courage to liberty; from liberty to abundance; from abundance to selfishness; from selfishness to complacency; from complacency to apathy; from apathy to dependence; from dependency back to bondage." --Sir Alex Fraser Tyler and the following youtube vid gives more support to the "planned" theory... http://www.youtube.com/watch?v=MjdezOnvTeQ&feature=related
When this was all getting going strong in the early 2000's -- There were knowledgeable people who told the Merrill Lynch CEO that OTC derivatives would bring down his company. Those people were laughed at. Meredith Whitney was simply the first person with a voice saying this that the mainstream investment press had to listen to.
It's simple, the government system in the US is broken. They knew about the problem but just as mother of a fat kid thinks that her kid is not that fat, the government thought that surely the problems can't be so serious. The Wall street & the banks payed big money for the campaigns of all the politicians sitting in the senate and congress to vote as they liked. There was a lot of money for everyone until the fantasy and reality got so far apart that the it became unbearable and something had to give. The slowdown and later crash in the housing market was the trigger that brought the financial house of cards to the ground. There should be a campaign finance reform beside the financial system reform and you can bet there it won't fix everything and other crashes will happen in the future. The government is and always will be one step behind the private sector.
If you think this was orchestrated -- then you must believe that there is some sort of ending to this - I assume - that would be semi-good for the Fed.. When it comes time that the Fed needs to sell assets from their balance sheet to withdraw liquidity (fight inflation) you will have a big laugh at what is on there. The 3 trillion in securities that the Fed has taken on so far are the bad of the bad. Some of these securities were based on nothing more than the sniff of an asset bundled up into a performance contract and leveraged up hundreds of times. No money manager in their right mind will ever take these assets from the Fed.
Never trust an Academician to RUN one of the most important post in the world; specially if he's got a MODEL!!!!
CLASSIC!!!! <object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/Z1eFdUSnaQM&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/Z1eFdUSnaQM&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>
"You have attributed conditions to villainy that simply result from stupidity" "Logic of Empire," Heinlein (1941) (Not to mention, a heaping helping of greed for good measure...)