Soros: 'The 60-year boom is over'

[syberberg]

If you take the current mess with the credit crunch, it is an example of what happens, or is very likely to happen, in a pure capitalist system. There was no intervention by any government authority or regulatory structure in place.

Of course there is government intervention. The government has a monopoly on the printing of money. The member banks of the British Reserve bank (the bank of england) get first dibs on any money printed up and then lend it out or play with it or whatever takes their fancy.

This is MASSIVE interference and it is mandated by law.
Try to print your own money and see what happens to you.

Good point, but in this case, I don't think the government did increase the physical money supply (unless I missed something somewhere in the documentary) as all the wealth was basically redistribution of already existing money into the hands of a few.

[emordnilap]

I actually like and appreciate it when you're narky, fc. Don't stop. I mean it.

[SunnyJim]

That told me! Get out of bed the wrong side yesterday Fifth?

I have been a bit narky recently haven't I?

No offense meant.

None taken

I'd have to take issue with that and say that it was the banks who caused the mess in the first place. If you remember from the documentary the banks were all quite happy to take a commission on writing up the dodgy mortgages, fraudulently package them up as something better than they were and pass the buck on to some unsuspecting "low risk tolerant" investor aka "dumb money".

By my comment I mean to point out that the shortsightedness of the banks backfired on them. Or rather on their shareholders, depositor and investors. I think we agree really. You're right that the banks started the trouble. Or going back even further it was the deregulation of the industry, the ability to sell loans 'off balance sheet' that caused the trouble.

Also the point was made that the hedge fund companies paid so much commision (they were in a no loose situation) that the banks had to follow suit, and that put them in the position of having staff motivated only by greed.

All in all a very sorry state of affairs. And one that will no doubt will have destroyed the trust many of us had in the banking industry.

One thing I've always wondered is when the bad mortgages are packaged up and sold on, they are moved off a banks balance sheet. Do they move onto the new owners balance sheet?