Re: [MLUG - DISCUSSION] why our economy is a mess

["Jonathan King" <EMAIL:PROTECTED>]

On 12/3/07, Brent Deterding <EMAIL:PROTECTED> wrote:
> A financial whiz I am not - but I've done more reading than the
> average joe. What you say doesn't jive with my understanding of this
> recent crisis.
>
> It is my understanding that greed and bad decisions are at the root
> cause of this current situation - and I don't think either party
> controls the greed on Wall St. or in the boardrooms of the investment
> houses or of the mortgage brokers.

So I don't think the partisan angle adds very much to this at the
moment, but I would like to point out that the regulatory environment
was very lenient, and there were financial products being offered both
to individuals and to institutions that were very poorly understood by
anybody, and I don't think it is out of order to suggest greater
regulation of instruments like CDOs and SIVs, which have the unique
ability to cloak unbelievable amounts of risk in a security that might
"look" like it is really AAA. Because many governmental and
non-governmental agencies already have in place regulations (for good
reasons) limiting what kinds of investments are deemed appropriate for
(say) short-term cash holdings, we need to make sure that things
getting those qualified ratings are really qualified to have them.

I would say more, but this is a very busy day for me.

jking

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