Saturday, April 10, 2010

Financial Industry Reform

Seattle Times
"Era of low interest rates may be coming to an end"
Originally published April 10, 2010 at 8:35 PM

This is a first article I have seen that starts out like this since the start of the "Great Recession of 2007"
"As prospects for the U.S. economy brighten,...
Now, granted it is the Seattle Times.

I am not going to talk about anythng in the article. It was pretty dry. Interest rates are going up.

What I wanted to point out is that the economy is getting better.

Now, will it go back to the way it was?

No. the US economy has some new rules and regulations been put in place, but the economy will still be a dynamic as it always was. Just not, so hyper dynamic.

Is this a bad thing...Regulation?

No. The unregulated crap that was out there is what caused this recession. The information as to the cause is irrefutable.

We know what went wrong.
1. No real oversight on rogue financial insistutions and/or thier employees.
2. The corruption transcended different sectors of the Financial Industry:
Credit Rating, Auditing and Securities.
The very ones that preformed the critical background checks and certifications as to financial health and outlook.
3. The credit card companies could change the rates at will. No safe guards against these financial companies abusing the consumer by changing rates and how it is paid and penalitized.
4. The stock markets themselves where artifically inflated due to market manipulation in individual sectors.
Oh the list can go on, but what made it the "perfect storm"
All this and more was going on at the same time. It was wild. Financial instruments became so wreaklessly creative. The Stated Income loan was nicknamed the "Liar's Loan".
Think of regulation like our road system. It just gives the vehicles using the system a way to make thier way across safely by providing lights to better see where you are going, speed limits to ensure safe journey and established roadways to get you where you want to go and everyone else.

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