Then we are in big trouble!

[NCcorntrader]

Pal

I understand your frustration but I would ask- do you think it is the role of government role to restrict individuals or entities from entering into private contracts? That is after all what commodities contracts are, namely, a binding contract between a willing buyer and seller. My point is for the government to on the one hand pump money into the system and on the other hand try and control where the money goes is a colossal mistake.

By the way, I dont think ALL of the QE money is going into commodity speculation- but, since we are talking about such huge sums, if only a tiny fraction is used it can have a large effect due to leveraging.

I guess I am saying there are clearly flaws in the system but more government interference and regulation in my view is a big mistake. 

[Palouser]

Let's look at this differently. There are functions of modern economics where regulation is not only appropriate - but necessary. The debacle in 2007 with Wall St is a prime example. When others irresponsible actions slam all of society. I know how the argument goes - let 'them' go down. Hmmmmmm That's NOT the lesson of the Great Depression. We don't need more of that but, in fact, that's what we have gotten. The Ayn Rand/Greenspan approach was an absolute failure resulting in disaster. That's absolutely clear. No more Polly Anna approach to laizze fair. When an entity only suffers I say let them go and give them an anchor. Where it drags down society in a big way as a result - mitigate the damage - better yet, be in a position to prevent irresponsibility among institutions that are licensed and expected to live up to certain responsibilities for getting cooperation from the government and society at large.

Let [go] to the statement of 'giving them money and controlling where it goes'. Making sure lending practices live up to recognized good business practices by banks, bailed out with public money to prevent even more pain and suffering by those not even involved in the debacle already caused by these companies, is the only SANE policy if we're bailing them out because of prior poor practices. This has nothing to do with controlling lending or government interference. Banks routinely put restrictions on what money lent by them can be used for and they ask for collateral. Why should the government (us) do differently? If banks don't want to be consumer banks then they can break agreements with the government and the banking community and do something else. Nobody is stopping them.

Frankly, I STILL don't believe significant QE2 money has made it to the pits. There are lots of other pools of money around for that. But I think it makes for a good story. [I'm going to need some evidence that it has since there seems to be a good  case that it hasn't]

[sw363535]

Pal,

I agree.

Don't you think--these "regulators" have just lost credibility after 20+ years of creating new, targeting, adjusting, changing, and using regulation, in the name of Economic Stimulus,  until they have lost credibility.  Local lenders have more employees serving regulators than customers.  Seems like we are approaching the same issues as China only from the other direction.

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Your statement creates the question "Is it right for the banking regulator to step in and become a lendor?  And Does the regulator now live by it's own rules?

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"The banks are just sitting on all that stimulus money"----Is a statement I keep hearing.  Do you think that is right?  If so what was the need for the stimulus in the first place----wouldnt it have been sucked up by creditors?

[Palouser]

Meaningful and necessary regulation did not lose credibility. The ideological and political appointees (Greenspan, and executive branch and Congress) who more or less crippled regulation because of their Polly Anna views have lost ALL credibility on the idea capitalism has the willingness or motivation to regulate themselves. These aren't community based operations anymore - and when they were there were severe problems from time to time. Adam Smith recognized the role of regulation and knew business leaders would try and stack the deck in their favor if given a chance to band together. The push to demonstrate ideological purity in a perfect world has gone altogether to far. If you're going to believe in 'survival of the fittest' then you're going to be living in a jungle. Modern civilization cannot be a jungle.

Here are the facts.  In the jungle you can identify friend and foe - if you see them in time. In the modern world you cannot defend yourself from predatory practices when you walk in the door. Look at MF Global. In the information age you can't see the essential facts regarding complex financial institutions. It's no different than testing batches of concrete for a huge sports stadium to assure the many citizens that may depend on its safety. You want survival of the fittest and nonregulation in that instance? That would be the height of stupidity. If you ran a campaign on that premise you'd deserve being laughed off the stage. That is where we are today with large financial institutions and global business. Any other view is just posturing in an attempt to manipulate.

[sw363535]

thanks,

Most of the folks who favor an unregulated position, probably are isolationist at heart also.   We are way beyond that in a business sense.  

The one world view of the left may not materialize but an intertwined world market place is here to stay.

Thanks for your enlightened views.