Subprime Lesson #1
Q. Why did the US lending institutions lend money to people who couldn't pay it back?
A. Because the people who could pay it back didn't need a loan. … No use lending to them … they've already got plenty of money.
["Clarke and Dawe: the comic duo you can bank on", Australian Broadcasting Corporation, 14 March 2008.]
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I welcome comments -- even dissent -- but I will delete without notice irrelevant, rude, psychotic, or incomprehensible comments, particularly those that I deem homophobic, unless they are amusing. The same goes for commercial comments and trackbacks. Sorry, but it's my blog and my decisions are final.
on Thursday, 20 March 2008 at 18.20
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A question I'd like answered is, "Where is all the brave talk about entrepreneurship and assuming risk to make money?"
On sunny days when the economy is perking along tolerably well, we hear that so much from people in the financial industry, corporate America, even small-business types, and of course, conservative Republicans and Libertarians.
But then, when the economy is on it's back and gasping, and when there's been some really big outrage against consumers, investors and taxpayers by some quarter of the business world, all that brave talk goes away. That's how it was when we learned us taxpayers would have to clean up the savings and loan mess, $450 billion worth in today's dollars. And then there was Enron. and then there was the mutual funds illegal trading chicanery and insider dealing. And so on.
It seems risk is a highly transferable burden, yet a wholly owned talking point.
I file this wisdom under "Lessons frequently learned and quickly forgotten by most Americans."
on Thursday, 27 March 2008 at 15.46
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It would seem to me that the speculative financial markets have very successfully managed their risk by underwriting it with tax-payer money, wouldn't you say?
I still recommend a turning away from the ideas that corporations have Constitutional rights and somehow deserve to be free of regulation.
on Thursday, 27 March 2008 at 22.00
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Actually, given the history, you'd think most corporate trustees and executives would want a fairly high degree of regulation. Arthur Andersen was one of the so-called Big Five (or is it Big Four?) accounting firms until it went out of business in the wake of the Enron collapse. I'd be willing to bet most of those who lost their job now wish AA had been regulated vigorously. Same goes for many of AA's former big-business clients.