Comments on: Michael Lewis on … Whatever the Hell is Happening on Wall Street http://www.coyoteblog.com/coyote_blog/2008/11/michael-lewis-on-whatever-the-hell-is-happening-on-wall-street.html Dispatches from a Small Business Sun, 21 Mar 2010 02:42:23 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Ragnar Danneskjold http://www.coyoteblog.com/coyote_blog/2008/11/michael-lewis-on-whatever-the-hell-is-happening-on-wall-street.html/comment-page-1#comment-14682 Ragnar Danneskjold Sat, 15 Nov 2008 16:02:05 +0000 http://www.warrenmeyer.net/coyote_blog/2008/11/michael-lewis-on-whatever-the-hell-is-happening-on-wall-street.html#comment-14682 <p>"I have seen people observe that this is an indictment of capitalism because so many people made such bad mistakes. Sure. No one said capitalism is a gaurantee against stupidity, or even fraud."</p> <p>If we had a capitalist system, then it might be appropriate to indict capitalism for a crisis this large.</p> <p>But of course, the government:<br /> - has a fiat currency<br /> - has deliberately kept interest rates artificially low to "inject liquidity" to fix the previous recession caused by the previous govt-created bubble<br /> - has regulatory control of the banks, including both offering them carrots as well as threatening them with sticks to change their behavior<br /> - the implied or real promise that the gov't would guarantee bad debts</p> <p>In fact, the correct name for our current system is "fascism" which is a system of nominal private ownership and public control.</p> “I have seen people observe that this is an indictment of capitalism because so many people made such bad mistakes. Sure. No one said capitalism is a gaurantee against stupidity, or even fraud.”

If we had a capitalist system, then it might be appropriate to indict capitalism for a crisis this large.

But of course, the government:
- has a fiat currency
- has deliberately kept interest rates artificially low to “inject liquidity” to fix the previous recession caused by the previous govt-created bubble
- has regulatory control of the banks, including both offering them carrots as well as threatening them with sticks to change their behavior
- the implied or real promise that the gov’t would guarantee bad debts

In fact, the correct name for our current system is “fascism” which is a system of nominal private ownership and public control.

]]> By: TXJim http://www.coyoteblog.com/coyote_blog/2008/11/michael-lewis-on-whatever-the-hell-is-happening-on-wall-street.html/comment-page-1#comment-14681 TXJim Thu, 13 Nov 2008 23:16:53 +0000 http://www.warrenmeyer.net/coyote_blog/2008/11/michael-lewis-on-whatever-the-hell-is-happening-on-wall-street.html#comment-14681 <p>I would add there is a Story 0: mismanagement of the dollar. This is the root of the problem. Until Congress changes the Fed's charter from targeting unemployment tea leaves and changes it to a price rule, we will be stuck with this. But apparently some people like it that way or we wouldn't have the system we have. On the bright side, I can't wait to hear the explanations that fly when the Fed lowers to zero and nothing good happens.</p> I would add there is a Story 0: mismanagement of the dollar. This is the root of the problem. Until Congress changes the Fed’s charter from targeting unemployment tea leaves and changes it to a price rule, we will be stuck with this. But apparently some people like it that way or we wouldn’t have the system we have. On the bright side, I can’t wait to hear the explanations that fly when the Fed lowers to zero and nothing good happens.

]]> By: MattJ http://www.coyoteblog.com/coyote_blog/2008/11/michael-lewis-on-whatever-the-hell-is-happening-on-wall-street.html/comment-page-1#comment-14680 MattJ Thu, 13 Nov 2008 14:17:53 +0000 http://www.warrenmeyer.net/coyote_blog/2008/11/michael-lewis-on-whatever-the-hell-is-happening-on-wall-street.html#comment-14680 <p>Egan Jones (http://www.egan-jones.com/) has been trying to break into the rating business for years. There are structural, governmental obstacles to any new rating agencies. Hopefully they will be the new model for rating agencies going forward.</p> Egan Jones (http://www.egan-jones.com/) has been trying to break into the rating business for years. There are structural, governmental obstacles to any new rating agencies. Hopefully they will be the new model for rating agencies going forward.

]]> By: Xmas http://www.coyoteblog.com/coyote_blog/2008/11/michael-lewis-on-whatever-the-hell-is-happening-on-wall-street.html/comment-page-1#comment-14679 Xmas Thu, 13 Nov 2008 13:33:28 +0000 http://www.warrenmeyer.net/coyote_blog/2008/11/michael-lewis-on-whatever-the-hell-is-happening-on-wall-street.html#comment-14679 <p>I read that article yesterday, it was awesome.</p> <p>I think Moody's and S&P really, really shot themselves in the foot. Ratings agencies require that you trust their ratings. If they go and hand out AAA ratings on a bunch of bundled BBB crap, how can you trust any of their ratings anywhere else?</p> I read that article yesterday, it was awesome.

I think Moody’s and S&P really, really shot themselves in the foot. Ratings agencies require that you trust their ratings. If they go and hand out AAA ratings on a bunch of bundled BBB crap, how can you trust any of their ratings anywhere else?

]]> By: PrestoPundit http://www.coyoteblog.com/coyote_blog/2008/11/michael-lewis-on-whatever-the-hell-is-happening-on-wall-street.html/comment-page-1#comment-14678 PrestoPundit Thu, 13 Nov 2008 06:11:58 +0000 http://www.warrenmeyer.net/coyote_blog/2008/11/michael-lewis-on-whatever-the-hell-is-happening-on-wall-street.html#comment-14678 <p>He doesn't put it front and center, but Lewis does nail the Fed for setting interest rates far below the natural rate.</p> He doesn’t put it front and center, but Lewis does nail the Fed for setting interest rates far below the natural rate.

]]> By: Ken Nielsen http://www.coyoteblog.com/coyote_blog/2008/11/michael-lewis-on-whatever-the-hell-is-happening-on-wall-street.html/comment-page-1#comment-14677 Ken Nielsen Thu, 13 Nov 2008 05:33:24 +0000 http://www.warrenmeyer.net/coyote_blog/2008/11/michael-lewis-on-whatever-the-hell-is-happening-on-wall-street.html#comment-14677 <p>Nice article - well argued.</p> Nice article – well argued.

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