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r3020
Senior Advisor

The sheep get confused

When the shepherds fight among themselves.

 

snip-

But Warren directed her sharpest words at an unnamed set of people who have recently downplayed the role of big banks in the financial crisis and questioned the value of breaking up big banks — an apparent reference to the Nobel Prize-winning Krugman.

“There’s been a lot of revisionist history floating around lately that the Too Big to Fail banks weren’t really responsible for the financial crisis,” Warren said. That talk isn’t new. Wall Street lobbyists have tried to deflect blame for years. But the claim is absolutely untrue.”

“There would have been no crisis without these giant banks,” Warren continued. “They encouraged reckless mortgage lending both by gobbling up an endless stream of mortgages to securitize and by funding the slimy subprime lenders who peddled their miserable products to millions of American families. The giant banks spread that risk throughout the financial system by misleading investors about the quality of the mortgages in the securities they were offering.”

On Friday, Krugman argued that the financial crisis wasn’t really a problem of too big to fail, but rather a failure to regulate so-called shadow banks — a broad term including just about every financial activity beyond traditional loans and deposits.

 

http://www.huffingtonpost.com/entry/elizabeth-warren-big-banks_us_570ea9d6e4b03d8b7b9f52aa?section=p...

6 Replies

Re: The sheep get confused

That probably means that when she's elected in 2010 she'll have to hire Bill Black or Stephanie Kelton at Treairu instead of Krugman. Krugman a big Hillary fan and is very anti-Sanders. This back and forth is a piece of that. It's been going on for a while. How do your favorite candidates line up on the matter? Cruz's wife should be a valuable source of inside for him. And of course, Warren and Krugman are both wrong. It was "those people", those less than desirable "others" who lied to and deceived unwitting loan officers in astronomical numbers with no intention of ever paying the loans back who caused the massive crisis. Everybody just knows that.

Re: The sheep get confused

Pretty much an accurate reflection of the Clinton/Sanders divide on the matter. There's a flock of fatter High Info sheep on the other side of the aisle who generally remain in unity on the matter- they just want to eliminate whatever modest regulation was put in place following the collapse. Because gubmint is bad and if you let those people win on anything the next thing you know we'll be buying the collectivist climate change hoax and eating gay wedding cake.

 

FWIW, I'm at a loss to find any compelling public interest in having any bank that is large enough to present systemic risk should it fail. Likewise for any commercial bank having an investment bank arm, or for any investment bank to be other than a private partnership where the partners have their own money at risk. Or, for financial machinations to enjoy any prefential tax treatment.

 

There may actually be a compelling case and it could be that the wackier elements of the Fat Sheep flock get it right by a little. It could be that since we've ceded the financial activities of The Empire to Wall Street over the last 35 years that extracting ourselves from it will be almost as difficult as extracting ourselves from the committed course of endless losing colonial warfare and the massive spending associated with it. And if you're a Fat Sheep you might prefer the slow collapse of The Empire if you remain relatively fatter than the others.

 

Whatever the route out might be, it isn't the gold standard or Bob n' Betty sitting down at the kitchen table to balance the family budget, as much as that might appeal to the Common Sense crowd And anyway, the last place any real reform is going to come from is the GOP, regardless what odd lots of sheep they usher into the flock.

 

 

 

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Re: The sheep get confused

The irony of a wings/thumper/nativist drawing attention to a disagreement on technical points on an issue between people who at least recognize the importance of the matter is overwhelming, in light of the civil war that is likely to completely blow up the party that he falls back on. What a classic.

Re: Speaking of The Sheep...

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schnurrbart
Veteran Advisor

This just in!!

Craig Milligan of Indianola, IA just crowned Grand Champion Sheep Dancer for 2016!!

r3020
Senior Advisor

Re: The sheep get confused

They both miss the point. Those banks would never have grown so big if not for government guarantees.