Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: philv who wrote (91834)	12/20/2008 12:34:14 PM
From: Sunny Jim	2 Recommendations Respond to of 116555

<<Madoff won't be sharing a bunk with Sir Greenspan, because one's scheme was legal, the other was not>> That's the distinction, but the ramifications are wildly different. The negative impact of Madoff's ponzi scheme is estimated at $50 billion. The negative impact of Greenspan's ponzi scheme is potentially in the trillions and impacts far far more people.

To: philv who wrote (91834)	12/20/2008 5:25:53 PM
From: Little Joe	Respond to of 116555

Not according to Pols and economic pundits. Little joe

To: philv who wrote (91834)	12/26/2008 9:08:39 AM
From: Dan3	2 Recommendations Respond to of 116555

Re: The entire Greenspan era was a giant ponzi scheme, where prosperity depended on ever increasing debt. Let's not lose sight of what really happened. Legitimate buyers taking on debt at low rates can be a very good strategy. But that's not what happened - swindlers, on a massive scale, sold bad debt to marks at high rates (despite the nominal FED rates). This wasn't a matter of rates being too low, it was a matter of crooks skimming billions off the top of a massive fraud scheme. One thing that needs to be done is to cap rates at something like 5% over the FED discount rate - and limit loans made at even that rate to some fraction of all loans made. The last couple of years have conclusively proven that once projected loss rates get beyond a couple percent, it is far beyond wall street's capability to accurately estimate risk. If the loan originators actually expected to see the loan paid back (if they think that they're making legitimate loans rather than scams), they should not need to make more than prime plus a few percent - after all, they've done their due diligence on the loan and don't expect it to go bad, right?