Timmy Elsewhere

At the ASI. The current subprime mess means that people are calling for more regulation. But the current subprime mess itself shows why more regulation isn\’t needed.

3 thoughts on “Timmy Elsewhere”

  1. Exactly.

    If the facts that NR’s share of mortgage lending increased from zero to 20% of new lending in the space of a few years, and that its share price had been sliding steadily since the start of 2007 didn’t alert the regulators to the fact that something was amiss, well, fuck it, a regulator that blind or stupid would be incapable of enforcing regulations anyway.

  2. “But the current subprime mess itself shows why more regulation isn’t needed.”

    C’mon. Remember the Savings and Loan Association debacle of the early 1980s during the Reagan administration?

    “The Savings and Loan crisis of the 1980s was a wave of savings and loan association failures in the United States in which over 1,000 savings and loan institutions failed in the largest and costliest venture in public misfeasance, malfeasance and larceny of all time.’ The ultimate cost of the crisis is estimated to have totaled around USD$150 billion, about $125 billion of which was consequently and directly subsidized by the U.S. government, which contributed to the large budget deficits of the early 1990s.”

    We were not talking small losses then and it’s looking like the present Subprime Mortgage fiasco is going to generate another bout of c. $150 billion losses. The only rational conclusion on the documented evidence is that Republican administrations are inherently incapable of competently regulating the American economy. If there is a credible alternative explanation which fits the facts, I’d like to know of it.

  3. America very cleverly convinced the rest of the world that real assets were risky and effectively got the rest of the world to buy expensive but “safe” debt which it then recycled by investing in global equities. The appetite for high yielding but “officially safe” debt brought forth more and more supply almost entirely outside the official banking system. Regulation would not have helped, almost by definition

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