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      12-17-2011, 05:29 AM   #18
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Originally Posted by Javi335 View Post
banks rule all, so finally the economy depends of individual privates choices. The rest, is absolutely secondary just as presidents are puppets and politic is pure shit to take you looking the other way
The thing about credit markets, as mismanaged as they have been in recent years, is that they are not only essential, but market making. The Fed interjects by setting interest rate, and a major contributor to the subprime mortgage crisis was gov't participation in the market through fannie mae and freddie mac, while unable to act as pure monopolist enterprises their subsidy was quite clear... as The SEC has brought civil fraud charges against six former top executives at Fannie Mae and Freddie Mac, saying they misled investors about risky subprime loans the mortgage giants held when the housing bubble burst. Additionally, according to an NPR report a year or so ago (and I don't usually like agreeing with NPR), regulatory obligations were not carried out by the SEC, rather privately contracted organizations acting as the SEC, supposedly enforcing SEC regulations. Incentives here clash, as the regulatory bodies seek a raison d'etre, their enforcement gets lax; likewise the more lax the enforcement, the more employable they are as "regulatory firms" for banks. Both sides had incentives to cheat.

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another thing, is it a coincidence China's raise, Irak, Afganistan, Libia and Iran matters, and the the crisis?
We, meaning the USA, have seen the emergence of China for a long time. There have in fact been a few contractions in US GDP during the time period acknowledging China's comparative labor advantage. A long ass time, in fact, to the point where we were sending over CIA agent/economists since the 50s. While officially a communist government, when this function of the economy broke down in the late 70s, China has become 90x more productive, largely differentiating on price point. China has been growing as a single nation in congruence with all G7 nations in aggregate, which is remarkable, it's GDP/capita places it mid pack in IMF ratings. This differentiation by price point (comparative advantage) is an indication of western economic thought implemented in a fashion where both countries "win," but the USA being the larger country in the sense of market making, most instances in which it is purported China is taking advantage of the USA, is actually the opposite, especially with attention paid to the Chinese Renminbi ties to the USD, and "dumping" which is a complaint completely beyond me, who would be against foreign trade partners subsidizing their exports to the US making their goods impossibly cheap to us being a bad thing is beyond me completely. There is the argument of anti-competitive behavior, which is validated until one accounts for the reason that the product in question is imported rather than produced domestically is due to a prevailing comparative advantage in the first place, one realizes that export subsidies simply provide us with would be cheap goods for even cheaper.