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Trickle down theory, did it work?
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<blockquote data-quote="variant" data-source="post: 49234278" data-attributes="member: 114463"><p>Most of what I suggest I would assume is already going to be done.</p><p> </p><p>Regulation on derivative markets, and openness/transparency between banks on things like credit default swaps.</p><p> </p><p>Reinstiution of leverage standards so that investment banks can't bet 40 times their assets on hand.</p><p> </p><p>Separation of morgage companies, insurance companies and investment companies so that they can not mesh it all together in a big ball of econmic goo.</p><p> </p><p>Superviosry government instiutions should do their jobs instead of acting like cheer leaders.</p><p> </p><p>Of course this was all already in place and it took years of deregulation to get us to this point. I am often for de-regulation, but if these instiutions are too big to fail, they are too big to be trusted.</p><p> </p><p>Here's what they won't do:</p><p> </p><p>I would also love to see the Fed take a less interventionist policy, as the money supply rate has been overly pro-active, where a smaller money supply would have allowed our economy to simply recess after the various booms of the 90's rather than cause an economic catastrophy.</p><p> </p><p>The fed funds rate dipped hugely after 2001, increasing the money supply.</p><p> </p><p><a href="http://en.wikipedia.org/wiki/Image:Federal_Funds_Rate_(effective).svg" target="_blank"><img src="http://upload.wikimedia.org/wikipedia/commons/thumb/7/7d/Federal_Funds_Rate_%28effective%29.svg/640px-Federal_Funds_Rate_%28effective%29.svg.png" alt="" class="fr-fic fr-dii fr-draggable " style="" /></a></p><p> </p><p><span style="color: black"><span style="font-family: 'Verdana'">The economy should have simply been allowed to recess after 2000, instead, the rate dropped almost nil flooding the banking system with money, and allowing this entire housing market boom to happen. If you compare the two graphs, the mean housing price passes the higher HUD recommended housing price in 2003 when the money supply was at it's highest. Then later when the money supply was ratcheted back down, the whole thing collapsed.</span></span></p><p> </p><p><span style="color: black"><span style="font-family: 'Verdana'">The events after 911 should have lead us into a recession, by flooding the market with money, the environment for all this easy credit was established, as the banks wanted to find as much use as possible for that money.</span></span></p></blockquote><p></p>
[QUOTE="variant, post: 49234278, member: 114463"] Most of what I suggest I would assume is already going to be done. Regulation on derivative markets, and openness/transparency between banks on things like credit default swaps. Reinstiution of leverage standards so that investment banks can't bet 40 times their assets on hand. Separation of morgage companies, insurance companies and investment companies so that they can not mesh it all together in a big ball of econmic goo. Superviosry government instiutions should do their jobs instead of acting like cheer leaders. Of course this was all already in place and it took years of deregulation to get us to this point. I am often for de-regulation, but if these instiutions are too big to fail, they are too big to be trusted. Here's what they won't do: I would also love to see the Fed take a less interventionist policy, as the money supply rate has been overly pro-active, where a smaller money supply would have allowed our economy to simply recess after the various booms of the 90's rather than cause an economic catastrophy. The fed funds rate dipped hugely after 2001, increasing the money supply. [URL="http://en.wikipedia.org/wiki/Image:Federal_Funds_Rate_(effective).svg"][IMG]http://upload.wikimedia.org/wikipedia/commons/thumb/7/7d/Federal_Funds_Rate_%28effective%29.svg/640px-Federal_Funds_Rate_%28effective%29.svg.png[/IMG][/URL] [COLOR=black][FONT=Verdana][/FONT][/COLOR] [COLOR=black][FONT=Verdana]The economy should have simply been allowed to recess after 2000, instead, the rate dropped almost nil flooding the banking system with money, and allowing this entire housing market boom to happen. If you compare the two graphs, the mean housing price passes the higher HUD recommended housing price in 2003 when the money supply was at it's highest. Then later when the money supply was ratcheted back down, the whole thing collapsed.[/FONT][/COLOR] [COLOR=black][FONT=Verdana] [/FONT][/COLOR] [COLOR=black][FONT=Verdana]The events after 911 should have lead us into a recession, by flooding the market with money, the environment for all this easy credit was established, as the banks wanted to find as much use as possible for that money.[/FONT][/COLOR] [/QUOTE]
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