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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (5910)	4/5/2008 9:07:36 PM
From: RockyBalboa	Respond to of 71406

Because of the massive dimension of the financial disaster and considering the time until repair work is completed... I thought about comparing it with other human disasters in contemporary history. Once you do that you will recognise striking similarities. Before I start it is necessary to emphasise that the bankers and mortgage brokers actions ("predatory lending") didn´t directly kill someone..., yet I leave it to others to judge what financial damage beyond repair (credit standing, loss of savings) will do to individuals lives, their quality, their communities. I bet 90% of the boyz and girlz at Bear had no clue what was happening until that Sunday evening. After Nazi Germany was destroyed the leaders went to trial most of them receiving capital or life sentences. The 90% of so called "marginally incriminated" soldiers and party members were generally acquitted. Those people didn´t bother either when they robbed or executed jews or russian POWs. Nearly zero of them had any qualms, nobody could see anything wrong in his deeds. In the former Yugoslavia during the civil war, serbian nationalist leaders induced the army to conduct "ethnic cleansing" in the occupied zones. There was less killing involved but more looting and evicting other nationalities. Ask anyone of those soldiers and all believe up to today that they acted correctly. In reality, they have destroyed communities and peoples lives beyond repair. Fast forward to 2003 and you see: Like those soldiers, legions of investment bankers, mortgage bankers, loan officers of lower ranks have simply followed their orders: Do business and make money, whatever it takes. Sell a loan, ask questions later (or better: don´t ask). He could have raised margin requirements in 1996, not bail out LTCM in 1998, not create a housing bubble in 2002 by keeping rates at 1%, etc. He also presided and pushed for changing how we count the CPI, from honest to completely dishonest. Based on orders from above, from the liquidity provided by the feds, the banks production and bonus targets etc., they did sell Alt A loans, Option ARMs w/ teaser rates, piggyback loans, zero down IO, NIN(J)A loans to people who could never afford and perhaps could not recognise their fate. Or they aided fraudulent borrowers. Quants and structurers at the investment bank also simply had to conduct derivatives business to keep the huge mortgage machine grinding. Salesmen simply had to push the structured paper to endowment funds so that the circuit was closed. To conclude: I think that there are more layers of responsibility between the monetary policymakers and the "marginally responsible" bank clerks. I believe that the banking "system" (which is made up of well paid and well connected bankers) contributed a lot to the current sorry state of affairs. The fed did not force them to do business at all risks and costs and in full size. And we already know that the regulatory framework was weak: Much of the damage has been made possible because regulation was reduced and loan business standards relaxed to an reckless level all for the sake of new business... After all it appears that the well paid leaders of the banks fell for their own greed: They altogether failed in self regulation, avoiding bad business practises and limitaton of business risks.