Bankers Need To Recconect With Their Morals?

[Svartalf]

Hey, if you wanna ignore somebody who predicted the crash in 2000 and owns one more Nobel Prize than you, fine.

I refer you to my previous posts.

Argument from authority fallacy much?

Argument from authority is only a fallacy if the cited authority isn't actually an authority.

This one has a Nobel Prize.

You should probably bother to actually research what logical fallacy arguments mean before you try to use them in an actual argument.

Just sayin'.

Even the Nobel is not a guarantee... the ones for Peace and Literature have been awarded countless times to undeserving critters, and even the serious ones like medicine have at times been given to utter quacks... remember how they gave the Prize for Medicine to the guy who invented lobotomy?

[Schneibster]

Sure, but this one's a macroeconomist, specializing in international trade, and currently working as a columnist for the New York Times.

If I'm gonna cite an authority, he's it. And I also got another Nobel Prize winner, and a professor of economics at Cal State Berkeley who both say the same thing; the one at Berkeley is teaching it.

And the one I was talking about at first predicted right where we are now in a book published in 2000, and predicted the original stimulus was too small in 2008.

[mistermack]

Ummm, I need to point out that it's rioting, and they're short of money because the economy's fucked up which is pretty much why they're rioting.

It's kinda obvious.

No it isn't. That's a totally unwarranted set of assumptions.
Firstly, you don't know that they're short of money. Secondly, that's not necessarily why they are rioting.

Plenty of people who ARE short of money don't riot. And plenty of the rioters had good jobs.

[Schneibster]

It's all a coincidence.

OK.

[mistermack]

It's all a coincidence.
OK.

It's just a false connection. The riots started because the cops killed a popular guy, claiming that he was armed. It was a very dubious killing, and not many people believe the official version. And the police have form for lying about people they kill in London.

That sparked it, and then it took off because the Police, probably through knowing that they had caused it, didn't hit them head on as soon as they started.
That gave them the confidence to ratchet it up, and for others to join in.

We had similar riots in the past. There was no link to the economy. It's just a calculation, can I get something for nothing without getting caught? AND, it's a thrill.

It's not poverty. People all over the world live in dire poverty that these guys could never handle.

[Seth]

Moral Bankers would destroy the economy by not giving debt to people who should not have debt,

If you call fiscal responsibility "destroying the economy."

The problem with giving debt to people who should not have debt was not created by bankers, it was created by socialist and progressive government regulations that forced banks to issue credit to uncreditworthy persons merely because they were minorities.

Had it not been for the Community Reinvestment Act, enacted under that boob Carter, and it's expansion under the direction of Barney Frank and Chris Dodd and others of their ilk, who flatly coerced the large banks into granting mortgages to people who could not afford to repay them, and which created an entire industry of predatory mortgage lending protected and supported by Frank and Dodd using their power over federal banking regulators, banks and mortgage lenders never would have made those risky loans in the first place, and the Credit Default Swap scheme as "insurance" for investors in highly-risky toxic mortgages would never have been invented, and people who lied on their credit apps (a felony) to get a mortgage they couldn't afford would have remained what they were and should have always been in the absence of sufficient income: Renters.

Given the fact that if the bankers refused to loan to unqualified applicants (which in a free mortgage market they ALWAYS DO), and the fact that they were subject to regulatory actions by the feds that would DESTROY them as banks if they refused to make toxic loans, at the behest of Barney Frank, they had no choice but to knuckle-under to Frank and Dodd and make the loans. So, predictably, they created a mechanism to protect their assets by bundling toxic mortgages as risky investment portfolios and selling them to credulous investors on the promise that the "credit default swap" system created by AIG (mostly) would cover them if the mortgages went into default, as the banks knew many of them eventually would.

The banks were doing what banks do, they were investing money belonging to OTHER PEOPLE (depositors and investors), but they were being FORCED by the government to invest it in very, very risky ways, so they tried to cover their asses, and thereby the investments of their depositors and investors, who expect a return, not a loss. So far, nothing inherently "immoral", other than Frank and Dodd's meddling with the free market for mortgages in order to achieve a Progressive/leftist/socialist sociopolitical agenda of "a house in every pot" at the expense of the banks and the economy.

The only "lack of regulation" involved was Frank and Dodd's meddling and the failure of the SEC to declare the CDS scheme as an "insurance" product, which would have required AIG to have enough liquid capital to cover ALL claims in the event of a claim. That turned out to be a huge mistake on the part of the SEC, but not one related to a LACK of regulatory authority, but rather on incompetence at the SEC. The SEC already had plenty of regulatory authority to scrutinize and put a stop to the CDS scheme or require it to be fully-funded, or alternatively to tell the banks that the CDS's were illegal and investors in the toxic mortgage securities were going to be strictly on their own and would lose their asses if the mortgage holders defaulted, which is what SHOULD have happened.

When people predictably began defaulting on their mortgages, the CDS claims rolled in and AIG defaulted, which put the banks at risk, so they went to the government (even as Barney Frank was lying through his teeth days before the crash by saying that the system was not in trouble) for a bailout. Nor was it immoral for them to do so because it was THE GOVERNMENT that forced them to make the toxic loans in the first place. It was immoral for the government to issue bailout funds that went to the INVESTORS in the toxic mortgages, however. Any bailout money involved should have been directed towards paying off, paying down or catching up all of the defaulted mortgages that were issued only because the federal government forced them to be issued, which makes the federal government liable for the defaults.

That sort of bailout would have been morally justifiable. But that's not what happened. What happened is that the banks and the investors got bailed out, and the defaulting mortgagees got nothing. And THAT was the utterly immoral act, and the government bears most of the blame (including both Bush and Obama) for allowing that to happen. It's particularly egregiously immoral on Obama's part, given how he also defrauded secured investors (secured bond holders) in the GM bankruptcy and handed the assets that belonged to bond holders over to the labor unions instead, something Bush never did.

So, it all comes back to Progressive/socialist meddling with the housing market and the mortgage industry by Carter and a long list of meddlers, culminating in Bush, Obama, Barney Frank and Chris Dodd that caused the problem, and the crash, in the first place. It wasn't any "immorality" on the part of bankers. They were just doing as Frank told them to do, on pain of being driven out of business entirely, and they were rightfully trying to protect their investors. When the government offered them a bailout, they took it, because they owed it to their depositors and investors to do so.

[Seth]

Try to impose new rules on the banking system and they will work for a while. Then some institution will discover it can make a slightly better return by "bending" those rules and before you know, its all fucked up again.

No, see, they even know how to take care of that. The problem this time was that they dismantled the warning system, which they never should have been permitted to do. They won't be again, when this is all over; every time they try we just point to this and the Great Depression. That's enough proof for anyone.

And they didn't even manage to run it all the way off the tracks, the way they did in 1929. Some of the things we did after that kept it from ever getting that bad again. So far, anyway; and it looks like people are done fucking around and are now paying attention.

Indeed. The only aspect of the Occupy movement that I actually completely agree with is the "take your money out of the big banks" movement.

I've advocated for some time now that people eschew the big, international conglomerate banks in favor of small, local banks and credit unions, which keep the money you deposit in your own community.

Unfortunately, the Progressives are at war with small local banks and are shutting them down left and right by misusing their federal regulatory authority to declare banks "insolvent" when they are anything but insolvent. Progressives want to shut down the small independent banks and centralize all banking in a few large companies, who are easier to regulate and coerce, and eventually take over (a Marxist dream) completely.

People can short-cut this attempt to centralize the banking system by dumping the big banks and funding their local banks.

[Pensioner]

As soon as I read this first paragraph from Seth’s post “The problem with giving debt to people who should not have debt was not created by bankers, it was created by socialist and progressive government regulations that forced banks to issue credit to uncreditworthy persons merely because they were minorities.” I thought I would not bother reading the rest of the bullshit, same old.

[Seth]

...The problem this time was that they dismantled the warning system, which they never should have been permitted to do. They won't be again, when this is all over; every time they try we just point to this and the Great Depression. That's enough proof for anyone...

The Great Depression alone should have been proof enough for anyone.

It wasn't.

Humans is dumb.

...Ten years from now, the lessons from this financial rout will all be forgotten and the merry-go-round will be off again.

10 years? It was forgotten by some in 10 minutes. The banker-wanker-tory classes over here, and the tea-party muppits in the states, have already entirely convinced themselves that it was too much regulation - not too little - that got us into this mess.

Actually, it was too much regulation, combined with some egregious example of failing to enforce EXISTING regulations that got us into this.

It was the Community Reinvestment Act enacted under Carter and expanded by Barney Frank and Chris Dodd and their ilk, combined with a specific regulatory FAILURE by the SEC that caused the housing bubble, and its subsequent crash, in the first place. In a free market for mortgages uncoerced by the government, those toxic loans NEVER WOULD HAVE BEEN MADE by bankers, and all the extra, unnecessary houses that were built because there was a flood of government-coerced and insured mortgage money out there would never have been built, and the liars who falsified their credit apps to get a mortgage (a felony) would never have had the chance to borrow money they could never hope to pay back, and there would have been no "mortgage-based securities" to drive the credit default swap scheme, no defaults, and no crash.

So, it is the absolute truth that it was "excessive regulation" that caused the problem. Absent the Community Reinvestment Act and it's Progressive agenda of making homeowners out of people who simply could not afford to be anything other than renters, none of this would have happened.

[Seth]

As soon as I read this first paragraph from Seth’s post “The problem with giving debt to people who should not have debt was not created by bankers, it was created by socialist and progressive government regulations that forced banks to issue credit to uncreditworthy persons merely because they were minorities.” I thought I would not bother reading the rest of the bullshit, same old.

Typical socialist Alinsky-style smears and tactics. You can't be bothered to actually use reason and logic because it conflicts with your Marxist ideology that has you believing that you're entitled to the fruits of other people's labor and that bankers loan money to people who obviously can't afford to pay it back all on their own, without government coercion.

This is nothing short of delusional denial because when left alone by government and not forced into it by regulatory threats, bankers do not loan money to people who can't afford to pay it back.

If they did, they would be out of business in a heartbeat. Bankers aren't stupid, but they are vulnerable to government intimidation, coercion and regulatory meddling, which is what caused the problem.

[Cormac]

It is a nonsense to suggest that a "reconnection" is required. It suggests a prior time of moral and ethical banking. Such a time never existed.

That doesn't mean to say that a culture change isn't needed.

But it also has to be said that the vast majority of people who pronounce on banking and markets have absolutely no idea about what banking and markets really are.

[Seth]

...The problem this time was that they dismantled the warning system, which they never should have been permitted to do. They won't be again, when this is all over; every time they try we just point to this and the Great Depression. That's enough proof for anyone...

The Great Depression alone should have been proof enough for anyone.

It wasn't.

Humans is dumb.

They fought the fixes while FDR was putting them in place,

That's because FDR was a fuck-witted Progressive economic moron, and they knew it.

and they fought the Keynesian economics that said how to fix it.

That's because they knew that the Keynesian economists were pinheaded morons who don't understand either human nature or economics.

They brought in Hayek when stagflation hit, and pretended that Keynes was all wrong and we needed this whole new Austrian thing instead.

That's because Hayek brilliantly pointed out why Keynes was all wrong and why socialist, centrally-planned economies can, and do, never work and always end in economic ruin.

Then they went down to Argentina and tried their shit out, and it went down in flames.

It didn't crash because of anything they did, it crashed because of endemic and irreparable corruption in the government.

So they all ignored it and deregulated everything, and pretended it would be OK.

Lie. "They" didn't "deregulate everything."

In 2008, it crashed and burned.

Because of the Progressive/socialist seeds of government meddling sown by Carter with the Community Reinvestment Act finally germinated and the weeds that resulted choked the economy into crashing.

Now they're trying to pretend it wasn't them despite the proof having been splattered from hell to breakfast.

Nice of you to ignore the actual facts. You polemics are not persuasive because they demonstrate gross ignorance.

Instead, the real economists figured out what they'd forgotten to allow for, and moved on with neo-Keynesian economic theory, which precisely explains what just happened and how we could have avoided it, and what the fastest way is to fix it, including Greece. No one's listening, but there's a Nobel-Prize-winning economist blogging and writing a column for the New York Times who's been talking about it for years. His name is Paul Krugman.

Krugman is a Progressive/leftist who is as deeply deluded as FDR was, and is just as narcissistically wrong as every other Keynes acolyte.

We learned from FDR that you can't tax and government-spend your way out of a depression. His idiotic "New Deal" policies, many of which were flatly unconstitutional and were overturned by the Supreme Court, extended the depth and length of the Great Depression by a decade or more.

[Seth]

Hey, if you wanna ignore somebody who predicted the crash in 2000 and owns one more Nobel Prize than you, fine.

Don't call me naive or stupid for thinking you're not very bright, though. And I note that in fact you don't know much about macroeconomics and didn't deny it.

You're naive and stupid for thinking that Krugman knows what he's talking about. The Nobel Prize is notoriously left-wing in it's dissemination, so it's not surprising that Krugman, a Progressive and leftist Keynesian "economist" would win one. But it means fuck-all when it comes to actually understanding macroeconomics or any other kind of economics.

Anybody who utilizes Keynesian economics is necessarily and obviously an ignorant fuckwit who doesn't understand economics or human nature.

Centrally-planned and controlled economies never work. Free markets always work. And that's all that needs to be said.

[Azathoth]

You forgot the Nobel prize being controlled by the Jews to further their agendas.

[Schneibster]

Whoa.

Guess I hit a nerve.