tag:blogger.com,1999:blog-3098264341625381422.post7568980840379960523..comments2024-03-18T17:01:07.165-07:00Comments on The Provocateur: Krugman's One Man Reagan Assault Continuesmike volpehttp://www.blogger.com/profile/02999118519606254362noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-3098264341625381422.post-20988048172700394022009-08-26T06:57:00.670-07:002009-08-26T06:57:00.670-07:00Yes, but if they were all buying a set of loans th...Yes, but if they were all buying a set of loans that were solid we wouldn't have gone off the cliff. <br /><br />Why were banks so insistent on extending leverage? It's because they all wanted to get in on the speculative market. The leverage didn't create the speculative market. The leverage was in response to the speculative market. <br /><br />The fraud wasn' in the ratings agencies but in the loans themselves. The ratings agencies were incompetent not fraudulent.<br /><br />Again, what started the fire was the speculative market. That was started, in my opinion, by loose monetary policy.mike volpehttps://www.blogger.com/profile/02999118519606254362noreply@blogger.comtag:blogger.com,1999:blog-3098264341625381422.post-77952171421238516562009-08-26T06:18:58.569-07:002009-08-26T06:18:58.569-07:0080:1 leverage ratios are not fine. Its a high-wire...80:1 leverage ratios are not fine. Its a high-wire act and when something goes wrong, and it always does, then that highly-leveraged firm takes many other companies down with it. <br /><br />The leverage ratios are what took a fire that would've just taken out a block or two into burning down the whole city. That and the fraud committed by the ratings agencies are probably the two biggest culprits.Kingfishhttps://www.blogger.com/profile/06184990110961727404noreply@blogger.comtag:blogger.com,1999:blog-3098264341625381422.post-45934442973216918072009-08-24T11:33:08.362-07:002009-08-24T11:33:08.362-07:00There's no question that was a major contribut...There's no question that was a major contributing factor however I said that Krugman couldn't point to one. That said, leverage would have been fine if there wasn't any fraud. In fact, no one would have wanted to deleverage if there wasn't any fraud because it was the fraud that created the crisis.mike volpehttps://www.blogger.com/profile/02999118519606254362noreply@blogger.comtag:blogger.com,1999:blog-3098264341625381422.post-19986554722856220662009-08-24T11:09:30.261-07:002009-08-24T11:09:30.261-07:00Can't point to a single piece of de-regulation...Can't point to a single piece of de-regulation? <br /><br />Try the 2004 SEC decision removing leverage limits. Fannie, Lehman, and others went from 10:1 to 20,30, and even 80 to 1. Responsible for alot of the meltdown when these companies crashed.Kingfishhttps://www.blogger.com/profile/06184990110961727404noreply@blogger.com