On Oct 27, 2008, at 9:24 AM, John Williams wrote: >> the Fed can't really even estimate or predict how >> far the repercussions of that market collapse are going to extend >> even >> years into the future.) > > The Fed can't predict the housing market, the stock market, the CDS > market, or pretty much any market. Only God can do that.
Sorry, you're right, "predict" was a poor choice of words. Nobody can predict future market behavior, and on that you're right. They can, however, forecast based on mandatory reporting of transactions in most markets, and make reasonably accurate assessments of the impact of changes in those markets based on that forecasting. Not even that is possible with the credit-default swap market, because there is no oversight, auditing, or reporting at all, so it's not possible to even guess at the long term impact of the collapse of that market or assess how risky the speculation in it was, or its long term effects on the brokerage firms that were trading in it. And I wouldn't be quite as emotional about that if it weren't a clear cut example of precisely how the corporate interests have been telling us all along, since before Reagan, that the market *should* be run -- no oversight, no auditing, no accountability, no reporting, none of that government "interference" in the market. I agree that if everyone trading in a given market is responsible about the risks they take and the funds they have on hand to back those risks if they turn sour, then oversight and accountability do make the market somewhat less "efficient" than it can be otherwise .. but that, in turn is a *huge* "if" that, in all the times we've experimented with laissez- faire market capitalism, has never been borne out in reality. Do we really need to do this one more time expecting different results, or can we agree that there is a need to have *some* government involvement in this kind of trading to prevent exactly this sort of irresponsibly risky behavior? "I don't know what kind of salad it is. I'm eating a salad, okay? I'm doing it. Do I have to know the names? There's no difference between them. It's a bowl of weeds. Some of 'em have cheese. This isn't the kind with cheese. Does that answer your question?" -- Toby Ziegler _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
