President Barack Obama Message Board

STOCKTALK

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Politics : President Barack Obama

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To: sylvester80 who wrote (33659)	9/20/2008 11:19:54 PM
From: Bread Upon The Water	Read Replies (4) of 149317

Its a lot more complex than that---I think, but am not certain, that these collaterized obligations (derivatives-- which Buffet in 2003 in his annual Newsletter called weapons of mass financial destruction) arose late in the Clinton era. They were a new product that Wall street could sell to let financial institutions take on more risk by hedging their bet with this insurance. And they were legal---there was a regulatory void as to where they were concerned. No one wasn't quite sure how to address them and even if they were causing a problem or a good thing. Now we do know the answer to that question and we'll get bipartisan regulation. It wasn't a Republican plot to rule the financial world that went astray. It was more that the money changers came up with more "oil' to grease the wheels of commerce and it became too much of good thing inasmuch as the money guys thought, fallaciously, that they could manage more risk. At least that's my take on it unless someone here can identify the proverbial smoking (financial) gun.

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