Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Gib Bogle who wrote (71926)	12/30/2009 10:18:57 PM
From: Maurice Winn	2 Recommendations Read Replies (1) of 74559

Yes, but as soon as we absolve people from the consequences of their personal decisions, whether they are following the mob so feel safe, or not, we get into carnage. Look at the horrors resulting from the welfare state in NZ for example where infants and young children are regularly tortured to death. The communist idea is superficially attractive - all in together, one for all and all for one and all that good kumbaya stuff which in practise works badly, or not at all. There is jargon for it = moral hazard. The Germans must have felt pretty good about themselves too, shouting sieg heil and marching and singing. Often what seems like a good idea at the time en masse very quickly turns to custard. China does a good line in mindless patriotism, marching and obeying these days too, which could have very unpleasant results given the 100 million spare young males. Sure, Adolf was happy to be the leader, but the following mob has the main responsibility because if they didn't show up to his rally, he'd look a bit silly strutting around glowering. I had a look at buying a house in Escondido USA in 2006 but it was about twice the price I thought reasonable and I wasn't thinking of taking on 100% mortgage with a dodgy low-paid job. It's ridiculous that people blame Fannie and Freddie for lending them money. The shareholders of Fannie and Freddie could reasonably be angry with their managers for making dopey 100% loans to people with no visible means of support for obviously over-priced houses. But customers blaming a company for supplying them what they want to buy is ridiculous. Customers have to decide for themselves whether the thing being sold is a good thing for them. It would be an insult for a supplier to tell a customer that they are not allowed to buy. A seller of a Rolls Royce shouldn't presume to tell a buyer that they are not the right sort of person to buy. If the seller's judgment on the likely profit tells them it's okay to sell, then that's all they need to worry about. Borrowers depending on the lender's judgment about their ability to manage the loan is stupid. The job of the lenders is to lend and manage their statistical risks so that they maximize their profits. Blaming suppliers is absurd. Mqurice

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