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Was the lack of regulation on financial derivatives the main cause of our economic collapse? Or was it the easy money that Fanny Mae and Freddie Mac were giving out for home mortgages like there was no tomorrow? I would say that it was both, but there were other factors involved as well. The way I see it is that there was overregulation on one hand, Fanny and Freddie, while on the other hand there was under regulation when it came to these derivatives. I believe that this economic crisis we find ourselves in can be laid squarely on the shoulders of our federal government. They were the ones, along with the Feds, who made regulations that provided easy money for the taking, which was the cause of the housing bubble, which would have to collapse eventually, that is why they call it a bubble, because it is unsustainable. I believe it’s good that they are now proposing regulations on these insane casino style derivatives that have no economic value for our country. I just hope that congress does not do what it is famous for, which is to overreact to a problem, and in the process, make it worse. jbranstetter04
“For he that hath, to him shall be given: and he that hath not, from him shall be taken even that which he hath.” Mark 4:25 KJV
It’s Biblical law, who is the hath? who is the hath not? in America and the World, it’s better to be rich. trust me, it’s easier to figure out how to build wealth for yourself and your family than it is to fix the problems with the economy of America. Understand the Federal Reserve controls the money, I would like to know who controls this private organization?
Did you even listen to what Mr. Greenberger is saying? Three times the money was lost, not because people couldn’t afford their mortgages, but because of the UNREGULATED bets made by financial institutions, that people couldn’t pay their mortgages! 3X! So it’s not “both”, it’s mostly a lack of regulation of OTC derivatives. Don’t fall for the tea party blather.
WHEW. Explained in simple , no bullshit jargon terms. Now I understand why we;ve been royally screwed over.
As far as i know – the first forms of derivatives were invented to secure things like the stable prices of the crops and harvests and they have been really helpful for the business. But when there are so many players in the game, including insurance companies who haven put aside nothing for back up, and one can bet on anything..it’s pretty easy to turn this whole financial instruments into a casino. But even in the casions thay have some rules – they at least make sure that you don’t win
this is a fantastic video.
I just can’t figure out for the life of me why these crooks are not in jail. What is going on here??? Why aren’t the right questions asked to the thieves of the corporate world? A person who works his/her ass off to create a life of wealth and prosperity ends up paying for some big hot shot bankers casino bet on a low income mortgage????? HOW DOES SHIT LIKE THIS JUST SLIDE BY?!?! These people are an absolute embarassmennt to our country, the world, and the entire human race.
trust me im the last person to wanna fight and condone violence, but short of armed revolution, do you really see these bankers or the politicians who allowed them to do what they did, ever getting their just desserts?
rothschild.
@miramfm us Americans really are to dumb for our own good.
@miramfm: what he says is mostly oversimplified. Derivatives are very useful financial instruments if they’re handled well. Swap contracts facilitate many transactions and open up the door for profit. More regulation is needed however. The core problem is that regulators have no idea how these instruments work, what they mean in entirety, and they never get the big picture.
Swap contracts market is estimated at a little over 232 trillion USD. Why dismantle this industry?
@miramfm Your largest city, Auckland, also engages in swap contracts in trying to hedge against currency exchange risks when it comes to investments and interest rates on the loans they take out.
@jaschar99 Yeah, so instead of “stop drinking the kool-aid”, we should tell these inbred idiots to “stop drinking the tea”>
A / I / FUCKIN [G] WILL INSURE WETHER or not you dick would fall off or get hard ifffffff !you had a premium…..
450 trillion dollar market??? our biggest cash crop is gambling???
Financial Derivatives are Worthless and are now at 2.5 Quadrillion, more than the Gross Domestic Product of the entire world.
If we were hypotethetically actually able to pay off the Financial Derivatives, we would wipe out the human race.
Financial Derivatives are Financial Weapons of Mass-Destruction.
They are the primary cause of the current Global Economic Depression.
The productive nation-state economies of the world have been undermined and destroyed by the parasitical structures of Financial Oligarchism. This Oligarchy is making a “world-wide grab” for raw materials and food supplies.
Insurance on Bets on Loans to people that aren’t expected to make the payments?
That sounds like trouble.
If they’re un-regulated, why bother paying them back? If they’re fiat bets, based on nothing, if they’re not paid back, nothing would happen (minus confidence). Strange indeed. All sounds like a set-up. However, going further, I don’t blame the bankers, I would too, if I were forced to give loans to people that were not capable of paying them. Gotta love leftist politics!
If they’re un-regulated, why bother paying them back? If they’re fiat bets, based on nothing, if they’re not paid back, nothing would happen (minus confidence). Strange indeed. All sounds like a set-up. However, going further, I don’t blame the bankers, I would too, if I were forced to give loans to people that were not capable of paying them. Gotta love leftist politics!
@mbdulka
What happened was like in that movie, where the bad guy is surrounded by the law enforcement, who wants him to tell them how to defuse the bomb. With no chance of escaping the bad guy puts his gone to his head and says: “Drop your weapons, or I’ll shoot!” That’s what Goldman Sachs did, and the foolish people in Washington gave in, when they should have let them fail.
you’re wrong, most people realize what is going on, trust me I live here. Why do you think the republicans lost last election.
Derivatives were illegal from 1932 to 1983 until Ronald Reagan brought it back. Some economists and scholars argued that it was derivatives, not the sub-prime mortgage market, that brought down our economy in ’08. The derivatives bubble is at $1.5 quadrillion and has provoked the downfall of many banks like Bank of America and Bear Stearns. Governments should freeze derivatives and set them aside for at least five years or for the duration of the crisis, whichever lasts longer.
Fucking idiot citizens.
Heh – low view count indeed.. You know whats even funnier? Derivatives in wallstreet are deliberately difficult for the ‘average’ American to figure out. Which immediately renders the majority as disposable slaves to the system. Only the very few highly competent mathematicians can truly see through the derivatives.. sadly most of them work in wallstreet
Capitalism ftw!