The market direction is...

[Sibling Zono (anon1mat0)]

The idea that you can spread away risk only works if you really are spreading it wider and wider and not recirculating it amongst the same partners.

A pyramid scheme for bankers! Now it makes perfect sense.

[Griffin NoName]

............ people won't buy at any price, whatever the nice model says they should be doing.

Size Zero does not fit everyone

Actually I predicted it back in the 80's too, but no one took any notice 

[Sibling Chatty]

Actually I predicted it back in the 80's too, but no one took any notice 

So did I, but someone DID take note enough for it to be in my FBI file...

Quoting me to a guy in a bar that wanted to talk politics:
Reagan and trickle-down are f'in nuts. Bush was right, it's voodoo economics, AND HE SOLD OUT TO IT. IT'LL BE THE EVENTUAL DOWNFALL OF OUR ECONOMY, UNLESS SOMEBODY PULLS THEIR DAMN HEAD OUTTA THEIR ASS! (Guy didn't say I had to yell the last part because the damn band started.)

[Scriblerus the Philosophe]

I heard something about it, but do you have a link on that? Today he is changing his tune but yestarday in the morning...

Pulled that from the Times today. The gist:

Speaking in Florida, he said that the economy's underlying fundamentals remained strong but were being threatened "because of the greed by some based in Wall Street and we have got to fix it."

But his record on the issue, and the views of those he has always cited as his most influential advisers, suggest that he has never departed in any major way from his party's embrace of deregulation and relying more on market forces than on the government to exert discipline.

While Mr. McCain has cited the need for additional oversight when it comes to specific situations, like the mortgage problems behind the current shocks on Wall Street, he has consistently characterized himself as fundamentally a deregulator and he has no history prior to the presidential campaign of advocating steps to tighten standards on investment firms.

He has often taken his lead on financial issues from two outspoken advocates of free market approaches, former Senator Phil Gramm and Alan Greenspan, the former Federal Reserve chairman. Individuals associated with Merrill Lynch, which sold itself to Bank of America in the market upheaval of the past weekend, have given his presidential campaign nearly $300,000, making them Mr. McCain's largest contributor, collectively.
...
Mr. McCain was quick on Monday to issue a statement calling for "major reform" to "replace the outdated and ineffective patchwork quilt of regulatory oversight in Washington and bring transparency and accountability to Wall Street." Later his campaign unveiled a television advertisement called "Crisis," that began: "Our economy in crisis. Only proven reformers John McCain and Sarah Palin can fix it. Tougher rules on Wall Street to protect your life savings."
....In early 1995, after Republicans had taken control of Congress, Mr. McCain promoted a moratorium on federal regulations of all kinds. He was quoted as saying that excessive regulations were "destroying the American family, the American dream" and voters "want these regulations stopped." The moratorium measure was unsuccessful.

"I'm always for less regulation," he told The Wall Street Journal last March, "but I am aware of the view that there is a need for government oversight" in situations like the subprime lending crisis, the problem that has cascaded through Wall Street this year. He concluded, "but I am fundamentally a deregulator."

Later that month, he gave a speech on the housing crisis in which he called for less regulation, saying, "Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital."
...
A prominent McCain supporter, Gov. Tim Pawlenty of Minnesota, signaled how Mr. McCain would try to make his antiregulation record fit the proregulation times that the next president will inherit. Mr. Pawlenty suggested in an interview on Fox News that, given the danger that "any future administration" would go too far, Mr. McCain would be the safer bet to protect against "excessive government intervention or excessive government regulation."

_{edited because my linkage was effed up}

[pieces o nine]

[Scriblerus the Philosophe]

A predictable shift in policy.

Now, as the Bush administration scrambles to prevent the collapse of the American International Group (AIG), the nation's largest insurance company, and stabilize a tumultuous Wall Street, the Republican presidential nominee is scrambling to recast himself as a champion of regulation to end "reckless conduct, corruption and unbridled greed" on Wall Street.

"Government has a clear responsibility to act in defense of the public interest, and that's exactly what I intend to do," a fiery McCain said at a rally in Tampa yesterday. "In my administration, we're going to hold people on Wall Street responsible. And we're going to enact and enforce reforms to make sure that these outrages never happen in the first place."

McCain hopes to tap into anger among voters who are looking for someone to blame for the economic meltdown that threatens their home values, bank accounts and 401(k) plans. But his past support of congressional deregulation efforts and his arguments against "government interference" in the free market by federal, state and local officials have given Sen. Barack Obama an opening to press the advantage Democrats traditionally have in times of economic trouble.

In 2002, McCain introduced a bill to deregulate the broadband Internet market, warning that "the potential for government interference with market forces is not limited to federal regulation." Three years earlier, McCain had joined with other Republicans to push through landmark legislation sponsored by then-Sen. Phil Gramm (Tex.), who is now an economic adviser to his campaign. The Gramm-Leach-Bliley Act aimed to make the country's financial institutions competitive by removing the Depression-era walls between banking, investment and insurance companies.

That bill allowed AIG to participate in the gold rush of a rapidly expanding global banking and investment market. But the legislation also helped pave the way for companies such as AIG and Lehman Brothers to become behemoths laden with bad loans and investments.

McCain now condemns the executives at those companies for pursuing the ambitions that the Gramm-Leach-Bliley Act made possible, saying that "in an endless quest for easy money, they dreamed up investment schemes that they themselves don't even understand."

Hopefully, his record will punch a great big, gaping hole in this tactic.
Regardless, the original question still stands: would regulation be good in this case? Or perhaps limited regulation? (sorry Goat, still mostly a free-market proponent)

[Sibling Zono (anon1mat0)]

Pros: sets of rules are usually placed when a particular action (or lack of thereof) is recognized as a root cause in a bad situation. Classical examples are seatbelts, smoke alarms, exit signs, etc.

Cons: the law of unintended consequences, a rule may be intended to prevent one thing in particular, and do it badly or prevent things that you want.

In reality it's a balancing act that requires constant tweaking to verify that the intended objective is reasonably reached without causing more problems than the ones it solves.

The obvious problem with this is that those affected by the rule will try to demonize it in order to remove it and go back to the previous state regardless of the consequences. Personally I am skeptic of so-called 'de-regulators' for that same reason, they are usually paid by the sectors that were profiting from the lack of regulation.

Note that I'm not saying that overregulation is a good thing, on the contrary it makes things unnecessary harder and expensive, but it is very different to adjust and simplify regulations and another altogether to remove them. In the end we get to the problem of how laws are a strict set of rules to be applied to the large gray area of life, and how many times the spirit of the law is lost in the letter of the law. That requires common sense from legislators and as you well know, they rarely have one. 

In this case specifically IMO strict rules should be in place even if those slow down economic growth. Greed will always be present and bankers happen to be the epitome of greed, therefore claiming that some greedy persons caused this is not only redundant but idiotic, because you know they will try it sooner or later, hence the regulations. Note also that if some of the rules setup by Roosevelt in the 30s were still in place most of these problems (and the ones of the 87 crash) would likely been avoided. Nope, the so-called "creativity" on banking products is what got us here and safeguards are needed, but 10 or 20 years from now everybody will forget what happened and the same suspects will cry for de-regulation, and the cycle will come around again.

[Sibling Zono (anon1mat0)]

Sorry for the double post but this is completely different: the FED bailed out AIG.

Now yesterday makes sense, today gold and silver are going up in day trading, and even oil has picked up a bit. Logic is back 

[Griffin NoName]

The loan, which has terms and conditions designed to protect the interests of the government and U.S. taxpayers, according to the Fed statement, will give AIG the ability to sell certain businesses in an orderly manner, "with the least possible disruption to the overall economy."

In an orderly manner.....  oh, good. Reassuring. NOT.

[beagle]

In an orderly manner.....  oh, good. Reassuring. NOT.

I'm not too reassured. As a Lloyds shareholder (conservative bank with little U.S. or bad housing exposure) I was happily sitting out the problems and waiting for the inevitable upwards revaluation. By tomorrow I could be part owner of a joke bank bang in the middle of the problems, and Lloyds will have an excellent excuse to slash the dividend.  Stay or bail?  What was that about bad debt contagion?

[Scriblerus the Philosophe]

The loan, which has terms and conditions designed to protect the interests of the government and U.S. taxpayers, according to the Fed statement, will give AIG the ability to sell certain businesses in an orderly manner, "with the least possible disruption to the overall economy."

In an orderly manner.....  oh, good. Reassuring. NOT.

Seriously. You know when people say that that something really bad has just happened.

[Griffin NoName]

In an orderly manner.....  oh, good. Reassuring. NOT.

I'm not too reassured. As a Lloyds shareholder (conservative bank with little U.S. or bad housing exposure) I was happily sitting out the problems and waiting for the inevitable upwards revaluation. By tomorrow I could be part owner of a joke bank bang in the middle of the problems, and Lloyds will have an excellent excuse to slash the dividend.  Stay or bail?  What was that about bad debt contagion?

Remember that TV programme "No Hiding Place" ?

The Lloyds-Halifax merger, whatever one's own position there, is seriously scary - with the waving of competition stuff.  It's the react now and pay later aspect that has a nasty smell. "The FSA will just have to watch out for it" <quote but can't remember who >  oh yeh - like they did last time?

We should really move this thread to Games and Jokes. Who/what next?

The loan, which has terms and conditions designed to protect the interests of the government and U.S. taxpayers, according to the Fed statement, will give AIG the ability to sell certain businesses in an orderly manner, "with the least possible disruption to the overall economy."

In an orderly manner.....  oh, good. Reassuring. NOT.

Seriously. You know when people say that that something really bad has just happened.

Yes!  "File out in an orderly manner" is what they used to say to us in primary school when the fire bell rang !

FIRE!!!!!!

[Sibling Zono (anon1mat0)]

"Remain calm and we'll get alive of this one. Yes, you too Mr. Smith at the end of the line." 
---
On the day trading news, gold and silver keep going up. Time to buy apparently.

[Black Bart]

Gold and Silver ye says matey...aaarrrgh!

[beagle]

The Lloyds-Halifax merger, whatever one's own position there, is seriously scary - with the waving of competition stuff. 

Hmm. Lloyds down 17%. Has Lloyds saved HBOS, or HBOS sunk Lloyds?  I bailed at 08:15 and 1 second this morning. Maybe they had to do it, but their reputation for conservative management is shot.