Quote from Landis82:
Once again, you find yourself talking in hypocritical "circles" with "twisted" logic that boggles the mind.
First off, it's pretty funny how you claim that leverage isn't the issue, yet you provide no example whatsoever of a "regulated" market place that allows 33:1 leverage and has gotten itself into trouble.
Moreover, you ironically talk about how leverage isn't the issue, but that the Fed was to blame for the kind of leverage that has been used.
So how can the Fed be blamed for the use of leverage, when ( according to you ) . . . "leverage isn't the problem" and does not create any "danger" in the marketplace?
Furthermore, are you trying to tell everyone here that all of this leverage was created by the Fed because they drove rates to zero??? When were all of these strategies employed? When were rates last at zero?
I look forward to your answer to the above 3 points that I just made.
Please enlighten all of us by being specific in your response.
Thank You.
First, you ducked every insistence to explain and defend your "too big to fail" mantra in the last Fed intervention debate.
Frankly, I think you're full of shit. Your posts contain the same half-baked logic and glossed-over talking points as the "tell-all" explainers written by the WSJ.
So, you want your questions answered. Okay. I'll be a good sport.
Your first question is stupid ignorance.
Cheap money ALWAYS creates fiat booms then busts.
Massive credit expansions create asset explosions and horrendous mal-investment. When rates are incrementally raised, those tenuous business models and investment schemes that burn cheap money go under, and the whole POP is underway.
So your first question is a red herring.
CHEAP MONEY - that spawns prolific leverage - always ends badly.
Your argument puts the cart before the horse.
And we don't need money @ 0% to be considered cheap. Pull a long term 30 year chart up. We're at historical lows.
Quote from Landis82:
Moreover, you ironically talk about how leverage isn't the issue, but that the Fed was to blame for the kind of leverage that has been used.
So how can the Fed be blamed for the use of leverage, when ( according to you ) . . . "leverage isn't the problem" and does not create any "danger" in the marketplace?
Reading comprehension isn't your strong point. We can all be sure of that!!
It was only at your incessant bitchings that I pointed out that "terribly destructive" leverage (BOO HOO!) was created by the Fed to begin with!!
I don't care about leverage one way or the other.
Its stable rates and FISCAL ACCOUNTABILITY that are the chief concern to any STABLE ECONOMY.
You want to solve monetary ineptness with more managerial authority.
You want endless bailouts when the whole system needs ACCOUNTABILITY to run efficiently!
You're either a closet socialist or a mindless armchair quarter-back who thinks he's got it all figured out.
Elites have tried to run economies for centuries. Its like predicting the weather. Too big to control.
What regulation IS NEEDED is that barring the sale or purchase of derivatives in which neither party controls an equivalent stake in the underlying.
That would mean all the exposure on credit default swaps - that you nary said a whimper of - would be eliminated to the tune of actual outstanding debt.
No domino's can fall at that point. No trillions compounded on trillions and banks blowing over like reeds in the wind.
Then, let the FUCKERS FAIL. And I'm sure a SOB like you will be holding CITI all the way down.
