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The Real Cost of the 2008 Financial Crisis

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Re: The Real Cost of the 2008 Financial Crisis

#241

Post by slg »

paulddraper wrote: post #210
slg wrote: post #193

Earlier quoted context omitted.

You see a similar thing with student loans. You can't make any reasonable system work when you set the requirements to be that everyone should be able to afford to go to college and free market lenders are the ones responsible for making that happen. I imagine that the first condition is one that most people agree one. So instead of making college cheaper for those people who can't afford it, we decided that we need…

What is the easier, little-bit socialist solution to home ownership?

Taxes and tax incentives.

Re: The Real Cost of the 2008 Financial Crisis

#242

Post by School-Cotton »

teekert wrote: post #53
tonyedgecombe wrote: post #29

Earlier quoted context omitted.

The trouble with revolutions is you end up with a new set of leaders, who may well be worse than what you have now.

It served the US quite well the last time they did it around 1776.

How so? What evidence do you have that the US is better off than it would have been by continuing along the lines of e.g. Canada?

Re: The Real Cost of the 2008 Financial Crisis

#243

Post by lotsofpulp »

cirgue wrote: post #153
lotsofpulp wrote: post #77

Earlier quoted context omitted.

I can point to all the underwriters that approved loans with no income verification, fraudulent paperwork, officially stating they did checks for a physically impossible number of mortgages.

A global financial system should absolutely not be able to be taken down by fraudulent behavior like writing shitty loans. You can point all the fingers you want at them, but ultimately that's like saying that the intern who was able to push changes directly to production is the reason your site now shows nothing but cat pictures: they had a hand in it, but the fact that it happened points to much larger and more per…

Well, usually if a lender encourages its underwriters to commit fraud and lend money to people who are not as likely to pay it back, the lender would go out of business.

Unless that lender happens to be a home mortgage issuer in the US, where you don't have to worry about that and the government bails you out.

So the structural problem is the continuous system of bailing out lenders, which means lenders don't need to spend money to do due diligence, and hence you end up with a "broken" system. But that doesn't absolve the individual people who are committing fraud and enabling it.

Re: The Real Cost of the 2008 Financial Crisis

#244

Post by School-Cotton »

sidstling wrote: post #19

I don't think I agree with the article. Not from a European perspective. I'm Danish and we've had anti-establishment parties all my life on both the left and right side of the political spectrum. The populist rightwingers most similar to Trump and the teaparty saw their dawn in 1998 where they got elected with 7.4% of the votes. In 2001, three months after 9/11, they recived 12%. In 2005 it was 13.3%. In 2007, before…

Anti-vax and especially flat earth are very, very fringe movements in the United States. Most Americans probably do not know anyone who believes the earth is flat. This is anecdotal but I know a decent amount of people in Europe (especially France) and the anti-vax movement seems a LOT more mainstream there.

What makes you attribute it to US influence?

Re: The Real Cost of the 2008 Financial Crisis

#245

Post by freddie_mercury »

RickJWagner wrote: post #87

As long as there have been economies there have been periodic upheavals. I don't think that can be changed. What can be changed is how the next meltdown/booming economy will affect our own personal finances. It's a life skill, one that should be given more attention in school.

Australia has gone 27 years without a recession.

There's a big difference between "sure, we'll never totally get rid of them" and "do you want them every 5 years or every 50 years?" or "do you want 25% unemployment or 10% unemployment?"

It is overly fatalistic to pretend they can't be changed in any way whatsoever and there's no difference between different periodicities and scale of upheavals.

Re: The Real Cost of the 2008 Financial Crisis

#246

Post by ThomPete »

Gys wrote: post #108
ThomPete wrote: post #70

The best explanation I have heard of the financial crisis was in the book "The End of Alchemy: Money, Banking and the Future of the Global Economy" by the former head of Bank of England. It makes the convincing case that there is no real single place to point fingers and that the crash was the logical consequence of people all doing the "right thing" I can highly recommend it as it also takes a historical view of mon…

> the crash was the logical consequence of people all doing the "right thing" I did not read the book, but I highly suspect 'right thing' is misused in this context and that the writer actually means 'within the boundaries of the law'. To me that is a very different thing. Very interesting to see how a former head of Bank of England thinks those 'things' are the same. It also makes me pessimistic about the future of…

I would highly recommend you read the book. It's not that simple.

Keep in mind this is not just a question of greedy banks this is a question of politicians allowing for people to buy houses because they know for many that's the only way they will ever be able to save up for retirement. It's also a question of how Central Banks are run and used and attemps to keep the economy stable.

In other words many many many factors are involved in this giant system.

That there are people who were doing fraudulent things is obvious but those things do not explain the crash in itself.

The mistake many do is put the moral analysis in front of the system analysis and yes then you will end up with moral solutions without addressing the underlying systemic problems with keeping a world economy going.

The book dives deep into this and shows how it can be structured differently because it's more concerned with solving the systemic problem which one could argue is a more ethical position than pointing fingers at human nature.

The point of the book is that the crash was not the result of some mastermind but rather a consequence of a lot of good intended decisions which simply had unintented conequences.

Re: The Real Cost of the 2008 Financial Crisis

#247

Post by paulddraper »

slg wrote: post #241
paulddraper wrote: post #210

Earlier quoted context omitted.

What is the easier, little-bit socialist solution to home ownership?

Taxes and tax incentives.

The U.S. does that. Loan interest and capital gains are treated much differently by the U.S. tax system if they are on a primary residence rather than on other assets.

(More often than not, I see criticism of this on HN.)

Re: The Real Cost of the 2008 Financial Crisis

#248

Post by ThomPete »

Marazan wrote: post #89
ThomPete wrote: post #70

The best explanation I have heard of the financial crisis was in the book "The End of Alchemy: Money, Banking and the Future of the Global Economy" by the former head of Bank of England. It makes the convincing case that there is no real single place to point fingers and that the crash was the logical consequence of people all doing the "right thing" I can highly recommend it as it also takes a historical view of mon…

The rating agencies absolutely did not do the right thing. There were contemporary pre-crash criticisms of their rating of mortgage backed securities so this is not Monday morning quarter backing

I agree they didn't do the right thing but even if they had would most likely still have had a crash as the problems aren't just isolated to people buying houses.

There were many bad actors in this the point is that it was the system in itself that's at fault not the fact that it was missused as that should be assumed (we are humans after all)

Personally at least I think that's a much more fruitful position.

That does not mean I think no one is at blame, there were obviously people doing wrong things and they should be punished but it's not necessarily the people we think that are guilty.

Again just my personal opinion.

Re: The Real Cost of the 2008 Financial Crisis

#250

Post by ThomPete »

rwmj wrote: post #142
ThomPete wrote: post #70

The best explanation I have heard of the financial crisis was in the book "The End of Alchemy: Money, Banking and the Future of the Global Economy" by the former head of Bank of England. It makes the convincing case that there is no real single place to point fingers and that the crash was the logical consequence of people all doing the "right thing" I can highly recommend it as it also takes a historical view of mon…

Unlike the other replies, I did read this book based on an HN recommendation, and it's pretty terrible. If you know anything at all about economics you'll find it very dull, like a secondary-school level introduction to the subject. I found his analysis was either simplistic and obvious, or in a few places I recall it being obviously wrong. Also (and I didn't know this while reading the book) the author is a nutty Br…

Wrong in economics is a weird concept. Economics isn't a science in some right or wrong way. It's interpretation.

You don't have to like his solution, but his ability to not point fingers was at least to me quite refreshing and seemed like a much more fruitful than ex. the "occupy Wallstreet" or the "current system works perfectly" extremes.

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