Since I have not been posting very often, mostly because of new back problems and a cold virus which kept me off my feet for over a week, I want to catch up a little with thoughts that have been running through my head. I have been making some comments at other blogs, but haven't mustered the energy to post here. This post consist of comments I made on other blogs.
This comment I made at Gypsy Scholar in response to this post, Professor Jasper Kim on the Financial Crisis, is my take on the financial crisis.
I think it was the speculators that got over their heads, more so than the immigrants and poor people, but blaming those people is so gauche. That did not create the financial crisis, it was that funny paper that banks bought and sold, formerly known as MBS', CDO's, CDS' and other derivatives. People made money hand over fist on these sales and the banks and other financial institutions were stuck with the bad paper, most of it far removed from the original mortgages. Even if every mortgage had been paid, eventually the worthlessness of some paper would have caused failure. No one will say it but Bernard Madoff was not the only one running scams. This is my view of the financial crisis, which I think is as true as anyone else's. I came to this conclusion based on listening to what the economist, bankers and pundits have said, not on any knowledge of economics.For those not familiar with the acronyms MBS = mortgage backed securities, CDO = collateralized debt obligations, and CDS = credit default swaps .
At another blog, ResurrectionSong, I commented yet again where most think they know what will work to solve the financial crisis. This is a response to another comment.
I also would say this also is an era of financial ignorance. We all have our take on what happened, like me, but like most, I can't propose any solutions. There may be some who know enough to provide a real solution, but we would not recognize it if we saw it? For some that would be because of ignorance and others, because it went contrary to their ideological beliefs. I really wish we could have an unbiased scientific approach to this financial crisis.
"I’ve yet to hear one piece of regulation that was axed that contributed to the mess, and I’ve yet to hear one plausible alternate history where this mess wouldn’t have happened. (Emphasis on plausible.) “
You see I have read another blogger who says the opposite, whom should I believe? My common sense tells me that I don’t have enough knowledge to discern that. It also tells me that anything said here as a solution, has a high probability of being as right as the President’s proposals. Its all ideology, because you have no proof as to what will work. We have never seen in our history the exact same problem with opposite solutions. Many say what FDR did prolonged the depression, but there isn’t any proof, just a best guess that fits into a particular ideology.
We live in an era of bullshit, because we do fear the unknown, that outlier.