Comments on: Ban, tax, regulate – government vs. free market http://www.moneyhoneyblog.com/ban-tax-regulate-government-vs-free-market/ There Is Nothing To Fear From Truth Wed, 21 Dec 2011 06:16:13 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Petra http://www.moneyhoneyblog.com/ban-tax-regulate-government-vs-free-market/comment-page-1/#comment-1682 Petra Wed, 28 Apr 2010 05:34:08 +0000 http://www.moneyhoneyblog.com/?p=586#comment-1682 G., yes, indeed. And we've witnessed it again today with the Goldman hearing farce. Senators who not only have no understanding of investment banking, market making, or how the markets work in general, but also refuse to look at the true culprits behind the housing bubble and collapse. Bankers and speculators, hated by the public even in the best of times, are the perfect scapegoat. Jayhawk, what you mention here are several separate issues. Mutual funds, for the most part, are quite straight forward, investing in equities (or govt/corporate bonds) for the most part. Of course in any crisis and/or recession, these securities suffer, and so wealth is (at least temporarily) lost. That is unfortunate but there is no amount of regulation that could ever change that. There is a risk with any investments, and those not able or willing to take that risk would, I'm afraid, have very little option besides cash (which, in my opinion, is worse due to negative real returns). Free markets regulate themselves quite well - the problem is, we don't have a free market. It has been destroyed long ago thanks to government interventions. The fact that interest rates are too low is exactly the problem; loose monetary policy (and government meddling in the markets) led to misallocation of capital and excess speculation, fueling the housing bubble (and many other bubbles over the past century), and interventions - incl. bailouts - simply distort the markets and market behavior further. Yet we are bound to continue on that path, as policy makers refuse to acknowledge the true causes of the crisis, and in fact carry on with the exact same destructive policies that created the problems in the first place. G., yes, indeed. And we’ve witnessed it again today with the Goldman hearing farce. Senators who not only have no understanding of investment banking, market making, or how the markets work in general, but also refuse to look at the true culprits behind the housing bubble and collapse. Bankers and speculators, hated by the public even in the best of times, are the perfect scapegoat.

Jayhawk, what you mention here are several separate issues. Mutual funds, for the most part, are quite straight forward, investing in equities (or govt/corporate bonds) for the most part. Of course in any crisis and/or recession, these securities suffer, and so wealth is (at least temporarily) lost. That is unfortunate but there is no amount of regulation that could ever change that. There is a risk with any investments, and those not able or willing to take that risk would, I’m afraid, have very little option besides cash (which, in my opinion, is worse due to negative real returns).

Free markets regulate themselves quite well – the problem is, we don’t have a free market. It has been destroyed long ago thanks to government interventions. The fact that interest rates are too low is exactly the problem; loose monetary policy (and government meddling in the markets) led to misallocation of capital and excess speculation, fueling the housing bubble (and many other bubbles over the past century), and interventions – incl. bailouts – simply distort the markets and market behavior further. Yet we are bound to continue on that path, as policy makers refuse to acknowledge the true causes of the crisis, and in fact carry on with the exact same destructive policies that created the problems in the first place.

]]> By: jayhawk44 http://www.moneyhoneyblog.com/ban-tax-regulate-government-vs-free-market/comment-page-1/#comment-1104 jayhawk44 Fri, 02 Apr 2010 21:50:07 +0000 http://www.moneyhoneyblog.com/?p=586#comment-1104 How on God's green earth can you say that markets regulate themselves when credit agencies gave AAA ratings to complex instruments and sold them to mutual funds.? People like myself have no cushion to lose that kind of money. Interest rates are so low that investments are limited. Mutual funds are supposed to spread risk as were derivatives. What happened here was dishonest. It was fraud to rate these investments as AAA. They contained known Ninja loans. The fact that the disclosure of these toxic assets was known to only a few people and were off-balance sheets is asking for trouble. How on God’s green earth can you say that markets regulate themselves when credit agencies gave AAA ratings to complex instruments and sold them to mutual funds.? People like myself have no cushion to lose that kind of money. Interest rates are so low that investments are limited. Mutual funds are supposed to spread risk as were derivatives. What happened here was dishonest. It was fraud to rate these investments as AAA. They contained known Ninja loans. The fact that the disclosure of these toxic assets was known to only a few people and were off-balance sheets is asking for trouble.

]]> By: goldstandard http://www.moneyhoneyblog.com/ban-tax-regulate-government-vs-free-market/comment-page-1/#comment-957 goldstandard Thu, 25 Mar 2010 15:14:44 +0000 http://www.moneyhoneyblog.com/?p=586#comment-957 Hi Petra, this is good article. I read it with pleasure. The point you made about hatred toward "greedy speculators" is most interesting. I believe also, that "speculators" are mentioned every time something goes wrong. And... when I think about it ..., "speculators" are always alone. (Unless they stick to other speculators.) People never forgive success, that is a peculiar function of human mind. Poor people need enemy. And able politicians know about it. Have a nice day, G. Hi Petra, this is good article. I read it with pleasure.
The point you made about hatred toward “greedy speculators” is most interesting. I believe also, that “speculators” are mentioned every time something goes wrong. And… when I think about it …, “speculators” are always alone. (Unless they stick to other speculators.) People never forgive success, that is a peculiar function of human mind. Poor people need enemy. And able politicians know about it.
Have a nice day, G.

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