Comments on: Regarding the Economic Free-Fall http://www.fascinationplace.org/2008/12/03/regarding-the-economic-free-fall/ Michael Rawdon's webjournal Mon, 06 Sep 2010 14:33:02 -0700 http://wordpress.org/?v=2.9.2 hourly 1 By: Staffan http://www.fascinationplace.org/2008/12/03/regarding-the-economic-free-fall/comment-page-1/#comment-57526 Staffan Sat, 06 Dec 2008 10:58:06 +0000 http://www.fascinationplace.org/?p=1172#comment-57526 Thank you Michael, This is a most interesting read. I am not into comics at all, and that's completely unappealing to me. But this is important. How come so very few professional analysts worldwide actually saw what was coming? Are they serious about what they are doing, or just amateurs making guesses, following hunches, making it up as they go along? I am amazed they can still remain in employment. It's the biggest scandal of all that the banks can be allowed by law to mismanage people's money this way. It would never be acceptable in any other field of business. Thank you Michael,

This is a most interesting read. I am not into comics at all, and that’s completely unappealing to me. But this is important.

How come so very few professional analysts worldwide actually saw what was coming? Are they serious about what they are doing, or just amateurs making guesses, following hunches, making it up as they go along? I am amazed they can still remain in employment.

It’s the biggest scandal of all that the banks can be allowed by law to mismanage people’s money this way. It would never be acceptable in any other field of business.

]]> By: Michael Rawdon http://www.fascinationplace.org/2008/12/03/regarding-the-economic-free-fall/comment-page-1/#comment-57525 Michael Rawdon Fri, 05 Dec 2008 00:41:30 +0000 http://www.fascinationplace.org/?p=1172#comment-57525 J.D.: And why should that stop you? :) J.D.: And why should that stop you? :)

]]> By: J.D. http://www.fascinationplace.org/2008/12/03/regarding-the-economic-free-fall/comment-page-1/#comment-57523 J.D. Fri, 05 Dec 2008 00:14:23 +0000 http://www.fascinationplace.org/?p=1172#comment-57523 Heh. I was going to link to this post in the link roundup I'm doing right now, but I couldn't find a way to do it without seeming gratuitous and indulgent. I mean more than I already am. :) Heh. I was going to link to this post in the link roundup I’m doing right now, but I couldn’t find a way to do it without seeming gratuitous and indulgent. I mean more than I already am. :)

]]> By: Subrata Sircar http://www.fascinationplace.org/2008/12/03/regarding-the-economic-free-fall/comment-page-1/#comment-57522 Subrata Sircar Thu, 04 Dec 2008 21:44:40 +0000 http://www.fascinationplace.org/?p=1172#comment-57522 The people with the most to gain found a way to game the system, such that they reaped the rewards and fobbed the risks off onto others. It's not clear that regulation would help; the people who best understood how to regulate the system were the ones who had the most to gain by avoiding the regulations. Not all of those people were unethical - probably far from it - but it really only takes two Enrons to turn a disaster into a recession. The biggest problem we have now is whether to throw good money after bad or just suffer. Most of the discussion I've seen comes back to those two choices, and it's certainly not clear to me which is worse. (Fundamentally, there's no way to replace the billions of dollars of wealth that's been eliminated from the system; the tangible assets backing the system simply aren't worth their former evaluations - namely, property - and a small but finite portion of that has been syphoned off into the hands of a few individuals, but probably not enough to make recovery worth the effort.) For the black-humor version, try this: <a href="http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true&pli=1" rel="nofollow">The Financial Crisis Explained with Stick Figures</a> The people with the most to gain found a way to game the system, such that they reaped the rewards and fobbed the risks off onto others. It’s not clear that regulation would help; the people who best understood how to regulate the system were the ones who had the most to gain by avoiding the regulations. Not all of those people were unethical – probably far from it – but it really only takes two Enrons to turn a disaster into a recession.

The biggest problem we have now is whether to throw good money after bad or just suffer. Most of the discussion I’ve seen comes back to those two choices, and it’s certainly not clear to me which is worse. (Fundamentally, there’s no way to replace the billions of dollars of wealth that’s been eliminated from the system; the tangible assets backing the system simply aren’t worth their former evaluations – namely, property – and a small but finite portion of that has been syphoned off into the hands of a few individuals, but probably not enough to make recovery worth the effort.)

For the black-humor version, try this:

The Financial Crisis Explained with Stick Figures

]]> By: Brian Cole http://www.fascinationplace.org/2008/12/03/regarding-the-economic-free-fall/comment-page-1/#comment-57520 Brian Cole Thu, 04 Dec 2008 08:34:55 +0000 http://www.fascinationplace.org/?p=1172#comment-57520 I don't see anything inherently wrong with tranches of BBB products getting rated AAA if the subordination is high enough. It seems clear, though, that the ratings agencies didn't know what they were doing any more than anyone else. I don’t see anything inherently wrong with tranches of BBB products getting rated AAA if the subordination is high enough. It seems clear, though, that the ratings agencies didn’t know what they were doing any more than anyone else.

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