_w_

I thought Friedman and monetarism had been thoroughly discretited after they caused the 90s recession! And here's this guy putting him on a pedestal??? Thanks for the post.

IIRC the main reason people (middle class) went mental with banks was that they had a lot of their savings in US dollars accounts. When the crisis erupted the government simply took those savings to beef up its dwindling dollar reserves. People attacked the banks to get their money back.

I don't think so.

Genuine question: how do you see that when the stock market is still 70% off its highs 18 years later? I'm missing something here.

Stop Working : no, why? Curtail Spending : In the advent of a recession yes, absolutely. And I think this could well apply to a majority of people on this forum.

And saves on the electricity bills as you soon start to glow in the dark.

I think you were too quick to react this way. I've read in the FT just this week end that Factoring companies are reporting increased cash pressures in the SMB area. And you forget private equity deals that have forced target companies to borrow to the hilt. These are facing serious pressures. Have you heard about BAA recently? They can't raise cash hence the 20% increase of landing fees (which _you_ will pay for BTW). I've read somewhere that a surprisingly large proportion of UK companies have gone into private equity. If true then the UK economy could be very weak indeed.

I pray you are right but I didn't see any of that in the 90s. Council tax skyrocketed and I didn't see any council executive losing any sleep over it.

I wonder what the Fed is going to do with all these used cards.

I've followed the advice of lots of people on this forum and suggest you do the same: Northern Rock. I don't see what can beat it as a place to deposit cash.

The only way would be to have a global regulatory regime. Without it banks just carry out arbitrage between countries and keep escaping regulations. That should get the NWO conspiracy crowds in quite a state.

I should have learned by now but it always amazes me when one of these come out in the open. This is such institutionalised you would have thought someone would have enacted a law to prevent it.

One of my neighbours had an offer pulled by HSBC because the property he wanted to buy did not provide enough collateral in their view. Happened in August. I fear they probably all have generic get-out clauses but I don't know for sure.

Thanks for this. I'm always on the lookout for more info on this period. This particular document is not that reliable from what I can see. It is very light on hard economic data and the non-anecdotal data provided is used to prove an ideology rather than to inform (for example, pointing that credit as a percentage of booming 'share prices' didn't grow seems a bit disingenuous IMO). It fails to address key issues such as the simultaneous impact of an explosion of consumer credit at the time (instalment purchases), mortgages (IIRC) and corporate debt (apparently used to a great extent to buy shares in the stock market). Credit expansion was so important at the time that it required vasts amounts of capital from all over the world. It's more a political pamphlet than an economic history document, its aim seems to be to discredit the concept of government intervention. You'll find the authors, Mackinac, are lobbyists whose job it is to promote free market policies. Although a number of academics write that mistakes were made at the time after the depression started (and few blame them considering what they were facing), I've yet to find one who would have blamed the US government for triggering it. As far as the Fed is concerned most criticism I've read is that the Fed should have raised rates much earlier (a bit like now). Anyway, since I think you are more after some hindsight rather than a political argument I thought I'd point out the lack of objectivity of this document. I'm very sorry I can't be more positive but please keep looking, proper records and analyses are hard to come by. All the information I have is in harcopy and I've got too many to find and then scan the relevant pages but I've come across some interesting stuff on the net recently, I'll try to find it over the w/e and post it on this topic.

Your argument is not strong but you keep bringing back again and again. I wish you'd give an answer to the counter argument that bankers are not risking their money but that of their shareholders or buyers of the securitised rubbish they create. And you fail to see the evidence against you such as "Lenders to Enron did not know that Enron’s accounts were a lie" is contradicted by subsequent legal documents that showed Citigroup for example knew they were helping Enron cook the books. This topic is interesting and I for one am keen to read it and learn something but you are making it very one sided by pushing forward your point of view to a very respectful audience, but without really answering counter views.

I agree with you that regulation is dangerous but in this latest crisis, left to its own device, the banks would have gone into complete meltdown and taken the rest of the economy with it. And you forget the 80s, 90s and 2000. Left to their own devices they keep repeating the same errors because they have no incentive to prevent them.

Passing criticism of a reckless profit motive as a conspiracy theory is just beyond me. I wish your claims of evidence were backed up by something that makes sense to me but this is clearly not happening; I must be very dumb indeed. As you write we are done.

And that is the crux of it. Far from being asleep at the wheel these people were franctically pressing on the credit pump to create more money. More money = more deals = more fees = more profits = more bonuses. The more the merrier and the world may fall tomorrow but tomorrow is another day. And in the meantime I'll have my 2 million dollar bonus now thank you. The problem is that since the 70s banks have found so many ways to avoid regulations that the authorities have given up trying. Nothing 'diferent this time', more like 'business as usual'.

Corrections in blue. Didn't mean to insult you by saying you were biased. It is either that or you've been sleeping for the last 30 years.

Indeed no insult meant but yes, I have to assume bias. Your try to absolve bankers of their responsibility on the grounds of stupidity but you do fail to provide any evidence to support. As a matter of fact I find the claim inconsistent with the evidence that surrounds us. To reply to a specific point you make, the inflating (feedback) effect a credit bubble has on collateral is very well known to finance professionals, and didn't surprise anyone in the city (“As long as the music is playing, you’ve got to get up and dance. We’re still dancing.”). Bubbles are studied left right and center. No ignorance, no stupidity, no getting carried away or what have you there, the fact is bubbles are very profitable to some and this is why we keep having them. The evidence is strongly against your defence of these people I'm afraid.

It depends on the discount rate. In a defaltionary environment, with a shaky financial system? Anytime!

Apologies, barking up the wrong tree I now realise (need to go easy on those pills). I agree. It goes a bit paranoid towards the end which is a shame but if you can discount that then the clarity of the presentation makes it worthwile.

Thanks but you still don't explain why the presentation should be laughable or why it should not be required viewing for anyone keen for some insight as to where money comes from. And I genuinely believe it is more informative and complete than what you just wrote. Money as a unit of value is just one component of the definition of money. Anyway, time for me to get off my high horses, but please don't deride something that should be useful for many.

Perhaps instead of expressing those kind of gratuitous expressions of amusement you might care to explain where this video is wrong? I find it to be surprisingly well presented and good enough to answer the question 'where does all this money come from'. It certainly beats all the economics books I've read on the subject. I've read enough people in this forum who wonder how money is created, I haven't seen you volunteering to explain. Perhaps you have something better to offer? If so please share.

Very optimistic view IMO. The web site and this (single) anecdote could well be the beginning of a run on the bank or more likely the bank itself pre-empting a run. We've heard so much news about the financial system collapse I wouldn;t be surprised if people (and banks) are very skittish at the mo.