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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (28009)	3/7/2005 1:31:51 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

<Greenspan's actions since 1998 to be wholly inexplicable> He is the drink mixer/waiter par excellence for a corrupt system of crony capitalism/socialism controlled by Pig Men and various rent seeking ()and moral hazard ()crazed quasi-criminals. His job is to keep the party going. Think of him as John Clease in the classic Monty Python skit serving up "just one more wafer thin wafer, sir?" to Pig Man, Mr. Creosote. arago4.tn.utwente.nl And one more thin wafer is where we are in the process. Thank you, sir, and now, here's ze check.* () Rent seeking - obtaining profit by influencing government officials to use the power of the state to create artificial shortages. Examples of rent-seeking include (1) obtaining an exclusive government franchise to produce a good or services, (2) obtaining protection from international competition in the form of a tariff, or quota, (3) obtaining an exemption from antitrust legislation, and (4) obtaining an artificially high, guaranteed (supported) price for a good or service. (Note: rent-seeking entails both legal and illegal means of influencing government officials. Legal means include bonafide political contributions and other forms of legitimate political support. Illegal means include bribes and extortion.) Rent-seeking opportunities are most pronounced in economies where the state plays a key role in directing and regulating the economy. In such rent-seeking societies, the source of wealth-creation is not investment designed to enhance productivity and create product and process innovation but instead investment designed to influence government officials - the key to success is not what you know but who you know and how well you are connected politically. Rent-seeking endeavors, then, consume (waste) resources (capital and human ingenuity) which could have been used to create new products and more efficient production processes. (*) hazard - the propensity to engage in risky behavior when insurance or other guarantees protect the actor from the natural consequences of that risky behavior. Examples of moral hazard include (1) an individual fails to lock his car routinely after he buys insurance that will cover the loss of the car if stolen, (2) a bank loan officer loans out depositors' money to a high-risk project at a high interest rate knowing the bank's depositors are covered by a government-sponsored deposit insurance program, and (3) foreign investors, assuming the host government will "bail out" failing banks, loan money to a bank the financial condition of which is suspect due to a lack of transparency.