While we were busy watching comey Republicans were busy helping banks

[agent00f]

It was also lack of controls throughout the system- securitization, fractional reserves & you name it. They were playing the "I'll buy your shit if you'll buy mine" game in a round robin fashion of turning mortgage liabilities into bunk bond assets so that they could offer collateral to borrow in the repo market to keep the whole thing afloat. When repo lenders pulled the plug they were screwed because their bonds weren't paying off. They couldn't meet the overhead to keep the doors open unless they were underwriting bonds that investors no longer wanted to buy. All the hedging in the world doesn't matter if your counterparties are in the same boat as you, because they can't pay, either.

If their investment bank went down the tubes they still had the money made driving it into the dirt.

More technically, CDO's & such mathematically turn risk localized to individual loans (ie a borrower defaulting) into systemic risk of the market performance in general. That's where they were getting the free lunch from, at least when the market was flat or going up. Of course when the market goes down everyone is screwed instead of the just some who just happened to have the worse loans. That's why the system as a whole needs regulation against these sort of bets due to the consequences of volatility beyond just the speculators.

It's a difficult and expensive job, and degenerates are just the sort to cut off this necessary service in exchange for ethnic social status.

 

[Exterous]

So, returning to the regulatory structure of the Ownership Society would be "less bad" than the current situation

You really need to work on your reading comprehension as that's not what I said. It would be less bad to repeal everything than to pass the Republican bill. The Republican bill is not yet the current situation

Not to mention that small banks have been in decline since Reagan-

Just because the number of small banks have been decreasing that doesn't mean we need rules tens of thousands of pages long that further encourage the decline. Mass centralization of our financial industry is risky and the bill actually encourages the growth of massive financial institutions.

 

[Jhhnn]

You really need to work on your reading comprehension as that's not what I said. It would be less bad to repeal everything than to pass the Republican bill. The Republican bill is not yet the current situation

Yeh, we could just return to the regulatory structure of 1928 by repealing everything.

The problem with Repubs, as you've noted, is that they'll enable top down class warfare every chance they get. You might be right in saying that what they propose could be worse than no regulation at all which is why I'm opposed to them messing with it at all.

We're confronted with the same sort of bullshit that occurred during the Bush years- cut investor class taxes, flood the financial markets with hot money seeking returns, cut regulations so that market makers can take as much of it as possible for themselves, then pretend that nobody could have foreseen the consequences.