So, the Yankees didn’t make it into the post season. October is going to feel a little different this year. The epic failure of the powers that be and the Economy have been in the news of late and while I despise most of the views and the philosophy of Ben Stein he wrote something recently that I stumbled on via Daily Kos that seemed VERY interesting.
Here is the link to it:
http://finance.yahoo.com/expert/article/yourlife/109609;_ylt=AihYXGa_2tf9PJDeCl.2G0S7YWsA
The part(s) that fascinated me…
"The crisis occurred (to greatly oversimplify) because the financial system allowed entities to place bets on whether or not those mortgages would ever be paid. You didn't have to own a mortgage to make the bets. These bets, called Credit Default Swaps, are complex. But in a nutshell, they allow someone to profit immensely - staggeringly - if large numbers of subprime mortgages are not paid off and go into default.
The profit can be wildly out of proportion to the real amount of defaults, because speculators can push down the price of instruments tied to the subprime mortgages far beyond what the real rates of loss have been. As I said, the profits here can be beyond imagining. (In fact, they can be so large that one might well wonder if the whole subprime fiasco was not set up just to allow speculators to profit wildly on its collapse...)
These Credit Default Swaps have been written (as insurance is written) as private contracts. There is nil government regulation of them. Who writes these policies? Banks. Investment banks. Insurance companies. They now owe the buyers of these Credit Default Swaps on junk mortgage debt trillions of dollars. It is this liability that is the bottomless pit of liability for the financial institutions of America."
*Many of us have already said this, including a LOT of prominent economists like Michael Hudson. These people knew the loans they were making were bad loans. They knew the money wouldn't be paid back. Which has always bothered me...why did they make bad loans on purpose? For short term gain? Well, yes, at least as far as some of the people involved go, like mortage agents in banks who worked on commission. But the people in charge were letting them make these loans. Why?*
I have been reading a book by Naomi Klein called “The Shock Doctrine”. Here is a synopsis…
The book argues that the free market policies of Nobel Laureate Milton Friedman and the Chicago School of Economics have risen to prominence in countries such as Chile under Pinochet, Russia under Yeltsin, the United States (for example in New Orleans after Katrina), and the privatization of Iraq's economy under the Coalition Provisional Authority not because they were democratically popular, but because they were pushed through while the citizens of these countries were in shock from disasters or upheavals.
Sound familiar? I don’t want to put on a tin foil hat just yet but this is a very dangerous time we are living in.
*DAG!*
Current likes: Going to the “Monet To Picasso” exhibit with K (we were “The Sneakers”), The Force Unleashed-Xbox 360, The Shock Doctrine & the Miami Dolphins CRUSHING the Pats.
Dislikes: My Zombie like state on the mornings I wake up for work (it’s early SON!), The BYU corner at my work & ignorance, even though it really IS bliss.
