Ravi
Diamond Member
I did advocate the bailout, reluctantly, because I honestly think without it the world's economy would collapse. You may see that as a good thing, but I don't.Without owning the risk?? If I recall, you advocated the bailout.
Rav, the point of setting rates that low is to spur as much lending as possible. When you restrict banks from making certain loans, that pretty much defeats the purpose of lowering the rates. They go hand in hand.
And since we can probably all agree that this type of housing mess won't happen again, at least in our lifetimes, what do we do about the fact that the Fed can still create new money at will?
I mean, there won't be another housing bubble, but when the next bubble happens because of the excess money, do we argue for more regulation in whatever sector is affected and continue to ignore the Fed's policies?
Sooner or later Rav, you have to face the music on this. Cheap credit is a perpetual economic downfall. Everytime we enter an economic mess, the answer is lower rates, print money, and spur borrowing and spending. This of course leads to more boom and busts.
How long are you willing to endure the same game being played by the same men, merely wearing a different uniform each time?
But what I meant by owning the risk was forbidding banks from lending in the morning shaky NINAs and then selling them off in the afternoon. IF they hadn't been allowed to do this, we wouldn't be in this mess. The only banks in danger of failing would be the ones that gave the loans...and I doubt they would have given them if they couldn't sell them.
But I'll accept there are probably more ways than one to fix this type of problem, I just think this is the easiest and least expensive way (not the bailout, the regulation).