Occupy Wall Street - Spreading. Check your town.

[Princess Marzipan]

https://occupywallst.org/

So this is going on. A bunch of people camping Wall Street to protest American protectionism of big business and don't-give-a-shit-ism of everyone else. No real mass media coverage. Tell your friends, hopefully you or someone you know can join.

[Izawwlgood]

That just makes me sad that people don't realize how much of their economic success is tied to the stock markets.

[Zamfir]

That just makes me sad that people don't realize how much of their economic success is tied to the stock markets.

That's an excellent reason to want a better Wall Street, right? Because it is important for their economic well being?

[Izawwlgood]

Totally, but that doesn't seem to be in the MO of this movement. Considering it was started by AdBusters, I sincerely doubt it is seeking 'a better Wallstreet' as much as a 'fight the like, you know, Greed and the System, man'.

[Zamfir]

Totally, but that doesn't seem to be in the MO of this movement. Considering it was started by AdBusters, I sincerely doubt it is seeking 'a better Wallstreet' as much as a 'fight the like, you know, Greed and the System, man'.

You have to admit, the greed and the system can do with bit more fighting against at the moment. This might not be the way, but if no one else is trying...

@ST: do you know more about the plans here? At the moment it does look rather unfocussed. Is the idea to generate plans, goals during the events? The Spanish protests earlier this year tried an approach like that, but it never seemed to turn into something more focussed. They just dragged on, went away, new protests came up, went away, and it's still extremely fuzzy what the movement is really about. Which might be better than nothing at all, but it's not really turning the generated sympathy and popularity into political effects.

[Dark567]

You have to admit, the greed and the system can do with bit more fighting against at the moment.

I do? For what its worth the corporate greed and US financial system has helped produce one of the highest standards of living in the world*, and I suspect other countries with near the same standard of living have similar corporate and financial systems.

*By some measures the highest.

[Dauric]

You have to admit, the greed and the system can do with bit more fighting against at the moment.

I do? For what its worth the corporate greed and US financial system has helped produce one of the highest standards of living in the world*, and I suspect other countries with near the same standard of living have similar corporate and financial systems.

*By some measures the highest.

While true in general, unless you've slept through the last three years you might have noticed where it went horribly wrong with Asset Backed Securities that weren't rated properly, or Credit Default Swaps that were a kind of "Not-Insurance" to get around insurance regulations and how they combined to create the smoking train-wreck of an economy with implications around the world we're still digging out of, and may even wreck harder if it goes 'Double Dip". And lest we forget that those banks paid out record bonuses to their employees while the economy was tanking.

The key words in Zamfir's statement may be "...at the moment" but I'd agree with the sentiment.

[Bubbles McCoy]

I do? For what its worth the corporate greed and US financial system has helped produce one of the highest standards of living in the world*, and I suspect other countries with near the same standard of living have similar corporate and financial systems.

Well, I think the tenure of income growth over the past twelve years have led some to question who exactly the banks have obtained said rising standards for.

[CorruptUser]

You have to admit, the greed and the system can do with bit more fighting against at the moment.

I do? For what its worth the corporate greed and US financial system has helped produce one of the highest standards of living in the world*, and I suspect other countries with near the same standard of living have similar corporate and financial systems.

*By some measures the highest.

While true in general, unless you've slept through the last three years you might have noticed where it went horribly wrong with Asset Backed Securities that weren't rated properly, or Credit Default Swaps that were a kind of "Not-Insurance" to get around insurance regulations and how they combined to create the smoking train-wreck of an economy with implications around the world we're still digging out of, and may even wreck harder if it goes 'Double Dip". And lest we forget that those banks paid out record bonuses to their employees while the economy was tanking.

The key words in Zamfir's statement may be "...at the moment" but I'd agree with the sentiment.

Quite sure the shit didn't hit the fan until the US started bailing out failing industries and then throwing a few trillion at the problem (in intermediate economics, we learned that a tax break does jack shit if people think it will be paid for with future taxes because they just save for future taxes; a corollary is that stimulus spending also does jack shit if people think it will be paid for by later taxes...) Plus, you know, speculators whose job it is is to pretty much undue every attempt to manipulate the market.

Keep in mind that the DOW fell ~400 points every time a new bailout was mentioned.

Not that nothing should have been done, just that the wrong thing was done. We had hundreds of thousands of construction workers out of work, and a large crumbling infrastructure that would take hundreds of thousands of workers to fix and provide long-term benefits, no solutions there.

For the record, I actually like the latest stimulus package Jobs Bill.

[Dauric]

Quite sure the shit didn't hit the fan until the US started bailing out failing industries and then throwing a few trillion at the problem (in intermediate economics, we learned that a tax break does jack shit if people think it will be paid for with future taxes because they just save for future taxes; a corollary is that stimulus spending also does jack shit if people think it will be paid for by later taxes...) Plus, you know, speculators whose job it is is to pretty much undue every attempt to manipulate the market.

Keep in mind that the DOW fell ~400 points every time a new bailout was mentioned.

The DOW fell every time a bailout was mentioned because it meant that another major financial or industrial player was on the verge of bankruptcy. If you had stock in AIG when they went under your stocks were worth less than the paper they were printed on, might as well use them to wipe your assets. The government was bailing out companies that were -Huge- in the financial industry circles, companies that were labeled "too big to fail" in part because they had so many interconnected business deals with a lot of other industry giants. If Washington was bailing out a few thousand rural family-owned groceries because of Wal Mart and Safeway moving in to the neighborhoods it wouldn't have been noticed, but Washington was bailing out major financial players who's fiscal health was tied in to a lot of other major fiscal players.

That's ultimately what killed AIG. They had issued "Credit Default Swaps" which were a "non-insurance" insurance policy that because it wasn't labeled as insurance and didn't work exactly like insurance wasn't under the FTC rules about disclosure and how much cash on hand AIG was supposed to have on hand for each policy. When Bear Sterns went down and Merryl Lynch was forced to sell itself to Goldman Sachs for pennies on the dollar because of badly-rated toxic assets, those Credit Default Swaps were cashed in and AIG didn't have the money to pay out, which caused a run on AIG assets as people and banks holding those swaps desperately tried to cash in before AIG was gone and they were left holding toxic asset-backed securities filled with foreclosed mortgages.

So every time Washington announced they had to bail out another major player, everyone wanted to get their assets out of those players fearing that the company was on the verge of bankruptcy. Bear Sterns, AIG, and Merryl Lynch were all bastions of Wall Street, at the time if those three were failing then -anyone- could be failing. Every bailout notice was a potential disaster for the people holding the companies that were being bailed out. What's worse is that since they avoided regulators through "innovative financial instruments" nobody knew how interconnected any company was to any other company through toxic assets or CDS, so to be safe investors had to pull out of almost everything.

[Jahoclave]

Totally, but that doesn't seem to be in the MO of this movement. Considering it was started by AdBusters, I sincerely doubt it is seeking 'a better Wallstreet' as much as a 'fight the like, you know, Greed and the System, man'.

I think you need more <a>s at the end there. And, I would have to agree with you in some bit. They're really missing that the problem isn't so much Wallstreet, but a bigger and more pervasive cultural hegemony on what the best way to move forward in society is.

And I'm still amused by all the people who advocate for big business protectionism in the name of small business and innovation, but make it really damn hard for people to consider starting small businesses.

[CorruptUser]

Quite sure the shit didn't hit the fan until the US started bailing out failing industries and then throwing a few trillion at the problem (in intermediate economics, we learned that a tax break does jack shit if people think it will be paid for with future taxes because they just save for future taxes; a corollary is that stimulus spending also does jack shit if people think it will be paid for by later taxes...) Plus, you know, speculators whose job it is is to pretty much undue every attempt to manipulate the market.

Keep in mind that the DOW fell ~400 points every time a new bailout was mentioned.

The DOW fell every time a bailout was mentioned because it meant that another major financial or industrial player was on the verge of bankruptcy. If you had stock in AIG when they went under your stocks were worth less than the paper they were printed on, might as well use them to wipe your assets.

Wouldn't the stocks have plummeted before the bailout, and then spiked after it was announced they would be bailed out? Unless the market expected a bailout, but a much larger one.

[Velict]

Reddit is awesome sometimes.

I stopped by Liberty Plaza today, and it was just depressing. A pair of bongos, a macbook with webcam, and ~200 hippies and patchwork anarcho-punks.
As far as I can tell, they're expressly opposed to "corporate greed."
Meanwhile, over 100+ years of judicial decisions have structured our society in such a way that a corporation is legally obligated to produce the maximum possible profit for its shareholders. Consider Dodge v. Ford Motor Company (Court to Henry Ford: you can't just give that money to customers/employees. Reinvest it for profit, or declare a dividend)
Eliminating "corporate greed" (or personhood, or any of that admittedly horrible stuff) would be like replacing all cars with bikes, or moving our entire society underground, or prohibiting English. Even if everyone was agreed and dedicated to doing it, it would still take generations of concerted effort before we'd see any results, however flawed.
You can't just "roll it back."
PS. "Impromptu dance party." Fuck my whole lazy generation.

I've read a bit about these guys, but it seems like it's just a bit of anti-corporate angst from a bunch of hippies that's very light on actual ideology. They're serious enough about what they believe in that they have "impromptu dance parties" during their protests.

[Jessica]

I support collective action, especially when it's non-violent. Good for them for doing something when they believe in it.

Corporations, wall street, and banks are not innocent in the current struggles people are experiencing. The US is experiencing higher and higher income inequality, which is something people do care about.

[Radical_Initiator]

Reddit is awesome sometimes.

I stopped by Liberty Plaza today, and it was just depressing. A pair of bongos, a macbook with webcam, and ~200 hippies and patchwork anarcho-punks.
As far as I can tell, they're expressly opposed to "corporate greed."
Meanwhile, over 100+ years of judicial decisions have structured our society in such a way that a corporation is legally obligated to produce the maximum possible profit for its shareholders. Consider Dodge v. Ford Motor Company (Court to Henry Ford: you can't just give that money to customers/employees. Reinvest it for profit, or declare a dividend)
Eliminating "corporate greed" (or personhood, or any of that admittedly horrible stuff) would be like replacing all cars with bikes, or moving our entire society underground, or prohibiting English. Even if everyone was agreed and dedicated to doing it, it would still take generations of concerted effort before we'd see any results, however flawed.
You can't just "roll it back."
PS. "Impromptu dance party." Fuck my whole lazy generation.

I've read a bit about these guys, but it seems like it's just a bit of anti-corporate angst from a bunch of hippies that's very light on actual ideology. They're serious enough about what they believe in that they have "impromptu dance parties" during their protests.

Dance, dance ... revolution?

[Dauric]

Not that nothing should have been done, just that the wrong thing was done. We had hundreds of thousands of construction workers out of work, and a large crumbling infrastructure that would take hundreds of thousands of workers to fix and provide long-term benefits, no solutions there.

For the record, I actually like the latest stimulus package Jobs Bill.

(to respond to your edit here)

There was an article on NPR recently about the "Shovel Ready" programs in the original stimulus bill and how they failed to make an impact on the infrastructure projects. The problem with "Shovel Ready" was that all the projects that were Shovel Ready already had their budget allocations. It takes a lot of time for a project to be approved through state and local governments, even interstate highways that are ostensibly under the jurisdiction of the federal Dept. of Transportation still have to determine how their construction projects will affect local traffic, which involves cooperation with local and state offices.

In order to bypass some quantity of bureaucracy the Shovel Ready money was granted with relatively few strings attached, after all the states had to spend that money "now", but what they actually did was put the money in to existing projects then pull state funds out of those projects to make up shortfalls elsewhere in the state budgets. It didn't result in increased spending on infrastructure, it went to shore up state budgets that were faltering from reduced tax revenues (after all property values across the nation had just taken a nosedive, and property taxes are based on property values). Arguably what the infrastructure program did do that was good was stop states from hemorrhaging jobs in the rest of the state, but it didn't help actual investment in infrastructure.

Wouldn't the stocks have plummeted before the bailout, and then spiked after it was announced they would be bailed out? Unless the market expected a bailout, but a much larger one.

The thing is a lot of those "bailouts" came after closed-door meetings between the Fed. reserve (Bernake), Treasury (Paulson), and the bank owners. Remember that this was a conservative administration that was giving strong messages that banks shouldn't be expecting bailouts. So when, after a closed door meeting regarding asset securities that no-one knows how toxic they were (because they'd dodged review of those assets in-part through the quasi-repeal of Glass Stegal), a conservative administration comes out and says they're using government money to bail out some of the largest players on wall street...

... it means shit's worse than the investors know. Now it's panic time on Wall Street as investors try to pull out of a system where the biggest, most stable players are failing.

[Zamfir]

You have to admit, the greed and the system can do with bit more fighting against at the moment.

I do? For what its worth the corporate greed and US financial system has helped produce one of the highest standards of living in the world*, and I suspect other countries with near the same standard of living have similar corporate and financial systems.

*By some measures the highest.

Depends on what you compare it to. There's surely a sense in which the current US system is the same as has been in place for decades in most rich countries. But if you go back 5 years, you find enough people who explain how this system is new, different from the old and different from other countries. Better, of course, and other countries should adopt more of it, as they were doing.

There's a set of differences, related but presumably also somewhat independent. Securitization in lots forms was clearly a big one, a move towards commodified, easiky tradeable assets instead of long-term relations between creditors and debtors. Derivatives as the oil that made such commodification possible. Far more international financial flows, a lot of them in some sense touching New York. A strong reliance on computers and data traffic to create active, at least seemingly liquid markets in aspects of finance that once seemed untradeable. To run all that, a far larger financial sector. I am sure you can make a better list than me of ways the current financial system is not quite the same as few decades ago, and in which New York and its surroundings and London often pushed those new things the most.

I am sure a lot of the changes were not intrinsically bad things, even good things. But new finance was massively oversold, claiming credit (and rewards) for gains that turned out to be no more than cleverly hiding the downsides, intentionally or not.

This easily becomes a game of bait and switch: in the good times those new revolutionary ideas of the smart people in finance are responsible for all the good things, so they should get money, freedom to run things their way, power to influence lots of other people's lives by changing numbers on a screen. Because that's efficient, better for everybody really, and no one else can do it as good as they can, because they are smart.

But when it turns out that they screwed up massively, just cashed out illusions, and left others with the bills, it's not their fault. It's just plain old capitalism, of the kind we always had and they have everywhere else too. Nothing special about us, why are you looking at us? And when the good times return, they will be back claiming how they are responsible for everything in the economy, and they should have more money and freedom to run things better. Can't hurt to keep the memory alive about when they screwed up massively, and how their next claims are presumably oversold hype as well.

[Arrian]

That just makes me sad that people don't realize how much of their economic success is tied to the stock markets.

I'm more sad that people think big business protectionism is a business problem, not a government problem.

[Velict]

Dance, dance ... revolution?

Yes.

That just makes me sad that people don't realize how much of their economic success is tied to the stock markets.

I'm more sad that people think big business protectionism is a business problem, not a government problem.

I agree that big business protectionism is bad, but I'd go so far as to say that all protectionism is bad. I get the feeling that you aren't talking about that sort of protectionism, though.

But when it turns out that they screwed up massively, just cashed out illusions, and left others with the bills, it's not their fault. It's just plain old capitalism, of the kind we always had and they have everywhere else too. Nothing special about us, why are you looking at us? And when the good times return, they will be back claiming how they are responsible for everything in the economy, and they should have more money and freedom to run things better. Can't hurt to keep the memory alive about when they screwed up massively, and how their next claims are presumably oversold hype as well.

There were clearly market failures - financial institutions of all sorts underestimated the risk of their exposure to MBS's among other things - but I think realistically we need to find a middle ground. The financial sector is inextricably linked to economies in general, as well as the American economy in specific (we're a global leader in that sector, after all). We can't implement policy that kills off one of our country's greatest advantages. On the other hand, we definitely need regulations that can address systemic issues like overexposure to a single asset class, or inaccurate risk assessments.

[Not A Raptor]

Dancing? At a protest? Are they even fucking serious? Are they even angry at all? If I were there, I'd be calling for the bastards to climb inside that garish brass bull statue and have a Perillos moment. They caused this mess. They should have been the ones to pay. (but, no.... subsidized risk for all.)

[Velict]

Dancing? At a protest? Are they even fucking serious? Are they even angry at all? If I were there, I'd be calling for the bastards to climb inside that garish brass bull statue and have a Perillos moment. They caused this mess. They should have been the ones to pay. (but, no.... subsidized risk for all.)

http://www.reddit.com/r/politics/commen ... t_day_two/

This is the second communiqué from the 99 percent. We are occupying Wall Street.
On September 18th, 2011, about 400 of us woke up in the Financial District amidst heavy police presence. After an impromptu dance party, we resumed our General Assembly in One Liberty Plaza around ten in the morning. We made our demands heard, which are many but revolve around a common point: our voice will no longer be ignored.
At noon a large group of us marched through the Financial District and Battery Park chanting “this is what democracy looks like.” During our march many onlookers joined our ranks, while many more expressed solidarity with our cause. By the time the detachment returned to One Liberty Plaza over 100 sympathizers had joined us. Our efforts were bolstered by generous donations of food and water from across the country and the world. As the day progressed our numbers continued to grow, and by three in the afternoon we were more than a thousand strong.
Before sunset 500 of us marched on the Financial District, where hundreds of onlookers joined us. After we reconvened the General Assembly the police demanded we remove our signs, but they did it for us instead. Later, they threatened to arrest us for using a bullhorn, so we spoke together in one voice, louder than any amplifier.
We speak as one. All of our decisions, from our choice to march on Wall Street to our decision to continue occupying One Liberty Plaza, were decided through a consensus process by the group, for the group.
EDIT: If you can't come down, here's how you can help

Also note their implacable work ethic - waking up on site and already protesting by 10 in the morning? Outstanding!

[Not A Raptor]

... Read and understood. Anger present. I suppose I jumped the gun on asking whether they were serious or not, and should have actually looked.

[Dark567]

Depends on what you compare it to. There's surely a sense in which the current US system is the same as has been in place for decades in most rich countries. But if you go back 5 years, you find enough people who explain how this system is new, different from the old and different from other countries. Better, of course, and other countries should adopt more of it, as they were doing.

There's a set of differences, related but presumably also somewhat independent. Securitization in lots forms was clearly a big one, a move towards commodified, easiky tradeable assets instead of long-term relations between creditors and debtors. Derivatives as the oil that made such commodification possible. Far more international financial flows, a lot of them in some sense touching New York. A strong reliance on computers and data traffic to create active, at least seemingly liquid markets in aspects of finance that once seemed untradeable. To run all that, a far larger financial sector. I am sure you can make a better list than me of ways the current financial system is not quite the same as few decades ago, and in which New York and its surroundings and London often pushed those new things the most.

I am sure a lot of the changes were not intrinsically bad things, even good things. But new finance was massively oversold, claiming credit (and rewards) for gains that turned out to be no more than cleverly hiding the downsides, intentionally or not.

Securitization isn't in and of itself bad. Its bad when its over used, over priced and perceived less risky then it actual is. A good parallel is the stock market in the 1920's. Companies in the US had about 20-30 years early started to become securitized as stocks(coincidentally a similar time frame between the securitization of real estate and the real estate bubble), and people pretty quickly began making money off of it. Other people of course saw it and began buying, and then buying with leverage etc. etc. Until the bubble burst and became a catalyst for the Great Depression. Now we have seen 70 years of stocks after the depression, and although they have had bubbles bursts and crashes, they have never threatened the global economic system again; people and Wall Street seemed to have more or less learned their lesson about the risk of stocks. It wasn't the securitization itself that was the problem, it was the irrational exuberance of this new product that threatened or even did, bring down the global economy. Its easy to see the parallels to the current crisis, new type of securities create exuberance and a bubble bursts leaving loads of debt... and here we are.

A good example of a commodification which should allow more economic efficiency is the use of oil futures by Southwest Airlines. SA decided they were and airline no a energy company and weren't going to be able to predict the future of oil prices, so they used oil futures to hedge out oil price risk. They decided to pay a small fee and let the oil price risk fall on someone who wanted it/could manage it better then they could. That's a good thing, being able to keep the people that are best at running airlines running airlines and the people best at managing commodities managing commodities and not forcing an airline to do something they are bad at.

This easily becomes a game of bait and switch: in the good times those new revolutionary ideas of the smart people in finance are responsible for all the good things, so they should get money, freedom to run things their way, power to influence lots of other people's lives by changing numbers on a screen. Because that's efficient, better for everybody really, and no one else can do it as good as they can, because they are smart.

But when it turns out that they screwed up massively, just cashed out illusions, and left others with the bills, it's not their fault. It's just plain old capitalism, of the kind we always had and they have everywhere else too. Nothing special about us, why are you looking at us? And when the good times return, they will be back claiming how they are responsible for everything in the economy, and they should have more money and freedom to run things better. Can't hurt to keep the memory alive about when they screwed up massively, and how their next claims are presumably oversold hype as well.

I will be first to criticize a incentive structure which can be gamed for short term benefit to an employee, at the long term expense of a company(and that is whats happening).

But that's certainly different then a generally anti-corporate attitude which these protests seem to be expressing.

That just makes me sad that people don't realize how much of their economic success is tied to the stock markets.

I'm more sad that people think big business protectionism is a business problem, not a government problem.

I agree that big business protectionism is bad, but I'd go so far as to say that all protectionism is bad. I get the feeling that you aren't talking about that sort of protectionism, though.

Protectionism is always a government problem and it is bad.

[Dauric]

Now we have seen 70 years of stocks after the depression, and although they have had bubbles bursts and crashes, they have never threatened the global economic system again; people and Wall Street seemed to have more or less learned their lesson about the risk of stocks.

HAHAHAHA.... No.

Just after the great depression the Glass Stegal Act was enacted to prevent many of the worst excesses that led to the Great Depression. in 1999 the Gramm–Leach–Bliley Act (AKA: Financial Services Modernization Act of 1999) repealed the Glass Stegal Act.

Wall Street hadn't learned any lesson, they were prevented from doing colossally stupid shit by law. As soon as the Financial Modernization act was passed they started doing colossally stupid shit again. It took a little less than a decade to manifest, but you don't interlock multiple gigantic financial firms with questionable assets and unregulated insurance policies overnight.

Problem today is the Dodd–Frank Wall Street Reform and Consumer Protection Act is a pale shadow of Glass Stegal and may not go far enough to prevent the conflicts of interest that encourage Wall Street to manufacture securities bubbles.

[Dark567]

Just after the great depression the Glass Stegal Act was enacted to prevent many of the worst excesses that led to the Great Depression. in 1999 the Gramm–Leach–Bliley Act (AKA: Financial Services Modernization Act of 1999) repealed the Glass Stegal Act.

Although the repeal of Glass Steagall certainly allowed some banks(Citi, BofA) to be involved in the crisis that wouldn't have otherwise.... I don't think you can lay the entirety of the prevention of previous crisis on its existence or the current crisis on its repeal. Most of the firms involved in the crisis weren't involved in a lot of consumer deposits which is what Glass-Steagall prevented. AIG, Lehman Brothers, Goldman Sachs, Merrill Lynch, Bear Sterns, Morgan Stanley didn't fall under provisions in Glass Steagall. The standalone investment banks still took just as big a hit, in some cases a bigger hit, then the conglomerates that were allowed to be created by Glass-Steagall. For that matter some independent lenders like Countrywide and IndyMac also took huge hits. Some of the conglomeration seems to have done little to exacerbate the crisis Citi's largest purchase was Traveler's Insurance, which was inconsequential to the crisis. Also, most of the Mortgage backed assets were rated at AAA or AA. Meaning that you don't need to be an investment bank to invest in them. A commercial bank without investment status still could have put their asset's into those securities.


For that matter the crisis wasn't caused by overinvestment in stock, like the depression. It was done in a new asset. You example hardly proves they didn't learn their lesson about the stock market. Only that that they haven't yet applied that lesson to derivatives.

[Garm]

Just after the great depression the Glass Stegal Act was enacted to prevent many of the worst excesses that led to the Great Depression. in 1999 the Gramm–Leach–Bliley Act (AKA: Financial Services Modernization Act of 1999) repealed the Glass Stegal Act.

Although the repeal of Glass Steagall certainly allowed some banks(Citi, BofA) to be involved in the crisis that wouldn't have otherwise.... I don't think you can lay the entirety of the prevention of previous crisis on its existence or the current crisis on its repeal. Most of the firms involved in the crisis weren't involved in a lot of consumer deposits which is what Glass-Steagall prevented. AIG, Lehman Brothers, Goldman Sachs, Merrill Lynch, Bear Sterns, Morgan Stanley didn't fall under provisions in Glass Steagall. The standalone investment banks still took just as big a hit, in some cases a bigger hit, then the conglomerates that were allowed to be created by Glass-Steagall. For that matter some independent lenders like Countrywide and IndyMac also took huge hits. Some of the conglomeration seems to have done little to exacerbate the crisis Citi's largest purchase was Traveler's Insurance, which was inconsequential to the crisis. Also, most of the Mortgage backed assets were rated at AAA or AA. Meaning that you don't need to be an investment bank to invest in them. A commercial bank without investment status still could have put their asset's into those securities.


For that matter the crisis wasn't caused by overinvestment in stock, like the depression. It was done in a new asset. You example hardly proves they didn't learn their lesson about the stock market. Only that that they haven't yet applied that lesson to derivatives.

But the unregulated derivatives market was more or less created (or at least opened up to a MUCH wider audience than before) by the G-L-B act. It wasn't JUST the repeal of Glass Steagall, it was mostly the creation of that giant new frontier of "innovative financial products."

[Dark567]

But the unregulated derivatives market was more or less created (or at least opened up to a MUCH wider audience than before) by the G-L-B act. It wasn't JUST the repeal of Glass Steagall, it was mostly the creation of that giant new frontier of "innovative financial products."

MBS's and CDS's both existed before GLB, and I am unaware of anything in the act that would have promoted them to larger audience. Care to enlighten me?

[Garm]

But the unregulated derivatives market was more or less created (or at least opened up to a MUCH wider audience than before) by the G-L-B act. It wasn't JUST the repeal of Glass Steagall, it was mostly the creation of that giant new frontier of "innovative financial products."

MBS's and CDS's both existed before GLB, and I am unaware of anything in the act that would have promoted them to larger audience. Care to enlighten me?

I'm pretty sure that there was some mechanism that allowed the CDS and MBSs bundling to get out of control. I'll look into and get back to you. Could be I'm wrong. Wouldn't be the first time.

[JBJ]

I'm pretty sure that there was some mechanism that allowed the CDS and MBSs bundling to get out of control. I'll look into and get back to you. Could be I'm wrong. Wouldn't be the first time.

That mechanism was the Gaussian copula formula.

[LaserGuy]

For that matter the crisis wasn't caused by overinvestment in stock, like the depression. It was done in a new asset. You example hardly proves they didn't learn their lesson about the stock market. Only that that they haven't yet applied that lesson to derivatives.

On the other hand, the dot-com bubble of the late 90s does suggest that they didn't learn their lesson about stocks...

[Velict]

For that matter the crisis wasn't caused by overinvestment in stock, like the depression. It was done in a new asset. You example hardly proves they didn't learn their lesson about the stock market. Only that that they haven't yet applied that lesson to derivatives.

On the other hand, the dot-com bubble of the late 90s does suggest that they didn't learn their lesson about stocks...

Even liberal economists - especially liberal economists, really - acknowledge market forces that cause occasional economic downturns. The difference is that a recession such as this one has much deeper roots than animal forces; market failures, regulatory failures, etc.

[Dark567]

I'm pretty sure that there was some mechanism that allowed the CDS and MBSs bundling to get out of control. I'll look into and get back to you. Could be I'm wrong. Wouldn't be the first time.

That mechanism was the Gaussian copula formula.

Right, that is what I have been getting at this whole time. The vast majority of this crisis has been caused by poor risk management, by nearly all parties involved. That doesn't mean there aren't other factors that exacerbated it (allowing lots of leverage).


@Laserguy: Maybe, but they tended to be smart enough to not over-leverage themselves and just over-invest, and banks didn't seem to be willing to give them leverage. The difference being that over-investing just screws yourself over, whereas over-leverage also screws your creditors(and their debtors etc.).


EDIT: I mean, what I will concede is that without Glass-Steagall, banks may have been less likely to be "too big to fail", that is huge conglomerations of different classes that the government can't allow to fail without contagion. But that's hardly the same as saying if it were still in place the crisis would have been avoided.

[Iulus Cofield]

It's hard for me to take these people seriously. Their ideology is vague, their rhetoric borderline violent, their desired goals unclear.

I first heard about them on the 17th, from their main site, which unhelpfully said nothing about their goals beyond having a bunch of people protesting in New York, seemingly without the proper permits. I watched their livestream for a while, but I stopped when this man, the one in the reflective vest was interviewed:

Cameraman: "Why are you here?"
Protester: "Why wouldn't we be here? This is a public space!" Jumps. "Yeah!" Dances away from the camera. "People join the conga line please! People join the conga line please! People join the conga line please! People join the conga line please! People join the conga line please!"

[Meandrgonzo]

Can anyone verify that people with Anon masks are being arrested under some vague law from the 1800's? I read that somewhere.

If true, I find it super depressing that such a weak protest could cause NYC cops to invoke archaic laws to keep Wall Street from getting to noisy.

[Dark567]

Hey, I found what they actually want:
http://www.adbusters.org/blogs/adbuster ... emand.html

Shall we demand that President Obama reinstate the Glass-Steagall Act; outlaw flash trading; impose a 1% tax on all financial transactions?

These are good ideas but not very energizing.

How about we demand the revocation of corporate personhood?

They go on to basically say they haven't decided what they want, and will come up with and idea later....

[folkhero]

Step 1: Protest before you actually know what you are protesting about
Step 2: ????
Step 3: End all corruption in American business and government.

No, I totally take these jackwagons seriously.

[Jahoclave]

Can anyone verify that people with Anon masks are being arrested under some vague law from the 1800's? I read that somewhere.

If true, I find it super depressing that such a weak protest could cause NYC cops to invoke archaic laws to keep Wall Street from getting to noisy.

Maybe they just assumed they were pedophiles.

[Sheikh al-Majaneen]

Cameraman: "Why are you here?"
Protester: "Why wouldn't we be here? This is a public space!" Jumps. "Yeah!" Dances away from the camera. "People join the conga line please! People join the conga line please! People join the conga line please! People join the conga line please! People join the conga line please!"

Be the change you wish to see, and all that.

He joined the conga line, right?

[Iulus Cofield]

For the record, no one joined the conga line.

[Garm]

For the record, no one joined the conga line.

Well they're missing out.