Enablers And Regulators (Pricking Trouble in The Cosmic Toil)
ok, sorry about the title - wanted to include everyone.
As evidenced by the discussion, how can we fix what we don't see when its happening and don't really understand after it does?
[ouch] just pricked myself.
Since the housing bubble was "enabled" by the banking system, I was particularly struck by the bluntness of Bernanke in yesterday's speech about subprime. The Fed would be willing to fix subprime only after careful scrutiny (translation: do nothing).
So should we even entertain the thought that banking regulators will regulate away the next housing bubble? Please.
Bubbles are part of human nature. Picking through the bones of the aftermath and going forward is merely for survival.
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I don't agree with the phrase "housing bubble." By naming the bubble after the productive economic activity upon which certain financial geniuses gambled too much, it creates the illusion that all bubbles are different. It obscures the financiers' colossal screw-up. They overestimated how much money, in how many abstracted layers, they could float on the back of someone else's productive activity.
May 18, 2007 12:20 PM | Reply | Permalink