When regular people lose their retirement money, it is sad.
When wall street insiders lose money from speculating, its ARMAGEDDON!! OMG!! I SEE THE HORSEMEN! GAAAHHH!!!
I dont know if we are seeing the great Unwinding but this video is rather hilarious.
Greenspan and the piles of cheap money he helped create after the dotcom crash is a big reason we are in these problems today. When insiders are making gob of money, they want the government to stay out of things; When insiders' excess has created major instability in the markets and things start to topple, suddenly they look for someone in government who "gets it".
I sure hope Bernanke is different. If a few people lose their summer homes and their Ferrari money, it would be a good thing. Let the market clear itself and unwind a bit.
This article today is a great read for a recap of the "unintended consequences" of super-cheap capital.
How Credit Got So Easy And Why It's Tightening
Wall Street Journal
August 7, 2007
An extraordinary credit boom that created many first-time homeowners and financed a wave of corporate takeovers seems to be waning. Home buyers with poor credit are having trouble borrowing. Institutional investors from Milwaukee to Düsseldorf to Sydney are reporting losses. Banks are stuck with corporate debt that investors won't buy. Stocks are on a roller coaster, with financial powerhouses like Bear Stearns Cos. and Blackstone Group coming under intense pressure.
The origins of the boom and this unfolding reversal predate last year's mistakes. They trace to changes in the banking system provoked by the collapse of the savings-and-loan industry in the 1980s, the reaction of governments to the Asian financial crisis of the late 1990s, and the Federal Reserve's response to the 2000-01 bursting of the tech-stock bubble.
When the Fed cut interest rates to the lowest level in a generation to avoid a severe downturn, then-Chairman Alan Greenspan anticipated that making short-term credit so cheap would have unintended consequences. "I don't know what it is, but we're doing some damage because this is not the way credit markets should operate," he and a colleague recall him saying at the time.
Now the consequences of moves the Fed and others made are becoming clearer.
