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

To: Don Earl who wrote (99619)	11/11/2008 1:42:55 PM
From: Hawkmoon	4 Recommendations Read Replies (2) \| Respond to of 110194

I also think you have capitalism and free markets confused with monopolies and price fixing. My friend, the usual end result of unrestrained capitalism is monopolization in the interest of decreasing duplication of management and manufacturing. The only thing that prevents monopolies are government regulations that directly prevent it. Capitalism makes the winners stronger than their competitors. That's healthy and part of the process, TO AN EXTENT. However, we all know that money equates to power and if you have it, you can buy corrupt public officials to give you an advantage over your competitors. Look what happened in the mortgage industry when it became flush with excess funds looking for a place to be invested (which I believe is directly linkable to foreigners preferring to invest it here rather than disrupt their currencies).. It open up a huge market opportunity for financing mortgages. Banks were literally handing out money for no-doc and interest only loans, knowing they could sell off their risk via securitization. And so long as the ratings agencies "blessed" their toxic offerings as AAA, they could originate to their heart's content. They could sell homes to illegal aliens, who were using false identification and purchased FICO credit histories, but knew no one could ever hold them accountable in a foreclosure; they just walk away and go home (or rent) if their bet failed. And were there no legal repercussions, and we just let the free markets work their "magic", the results would be even worse. No different than any other bubble, except more catastrophic in its economic impact. People saw the opportunity for huge profits and leaving someone else holding the bag. That's the bad side of unrestrained capitalism.. And I think we can all agree on that.. Hawk