I view the Bear Sterns thing as a potential banking system/monetary market meltdown that was prevented by the Fed’s unusal move. Everything that I’ve read about it since (except here on this website of course) bears (sorry for the pun) that out. Well, “that problem” was also caused by the govt. and the former Fed chairman pushing ARMs very, very hard earlier in this decade…there is plenty of blame & responisiblity to go around on that issue, which these guys here at FW will never admit to.

“the answer is since the advent of government.”

Once again…baloney…you have ZERO facts to back this claim up, period.

Want less French abroad? Enact policies (like fiscial responsibility for one) that cause the Dollar’s value to rise.

I agree that there should be more transparency regarding derivatives.

I believe that markets are generally honest, believe it or not. And I’m someone who has made a living in markets for 20 years. There are definitely bad actors out there…everything from insider traders to accounting fraud. I believe that sort of crime should be punished more severely than it usually is.

The problem is that by going too far trying to prevent certain types of trading, we’re likely to stifle the positive dynamic aspects of the market which have made modern economies so much more successful than economies in prior eras.

I’m not saying there aren’t cheaters in the market. But a free market is more important than finding every possible way to prevent cheating. It’s sort of like saying I’ll never leave my house because I don’t want to take any risk. You may be able to survive like that, but not very well.

Mr. Guy,

Thanks for your usual aggressive tone. Very nice indeed.

As for travel, this is sort of a fun story:
http://www.time.com/time/world/article/0,8599,1820358,00.html?

What do you mean by “you guys” when you say “you guys always whine and complain about what the gov’t is doing about the economy”?

I only complain when there are taxes and regulations which damage the economy. When the government is not interfering, I never complain that they’re not doing enough to help. It would take a truly huge threat to the system, such as what was going on with Bear, Stearns, for me to even consider any government role to be legitimate. And even that problem was in part caused by government changing accounting rules.

And as for “since when” is “the government best that governs least”, the answer is since the advent of government.

Have a lovely day.

Of course, you don’t bother to mention that Americans are some of the worst world travelers in the entire world (with, until recently, only about 20% of Americans having a passport), so how *would* they know any better?

“which are generally (and should be) out of government’s control, such as a business cycle.”

Baloney. If govt. has so little to do with the way the economy works, then why do you guys always whine & complain about what the govt. is doing (or should be doing) about the economy??

“It is certainly true that the government is best which governs least”

Since when??

Indeed greed played a big part in the credit issues we’re having now. I believe that fraud was much much less common on any large scale, such as in securitization.

However, where I think you get close to some real negligence was the behavior of the rating agencies in assigning high credit ratings to sub-prime and alt-A mortgages.

Here’s the thing, though: What do you do about such things in advance which wouldn’t throttle the dynamic creativity of our economic system, a system which the vast majority of the time produces the best outcomes and the highest living standards in the world?

Every once in a while…and in anything that involves humans…the market will get frothy, create a bubble, suck the public into overvalued assets. It’s happened forever, from the South Seas Company to the Tulip Mania to the internet/nasdaq bubble to, most recently, real estate.

People take their lumps, regroup, and move on. The current situation has certainly had wider and deeper effects, or at least faster effects, than some of those others, but not massively so.

All we can do and all we should do is let the market work and let people learn the lessons to be learned.

To be clear, we also should prevent and prosecute outright fraud. But I am saying that in an honest market, the best medicine for a problem is to let the market sort it out.

Where there is true fraud and crime, it should be punished harshly, but crime should not be confused with honest profit-seeking.

I agree with you that “corporate greed” is a hackneyed term. Furthermore, and again within the context of honest behavior, a corporation’s purpose is to make money!

Thanks for the comment.
Ross