David B. Shemano wrote:
... Please, somebody, give me a serious argument of how the repeal had anything to do with the present crisis.
How about: it speeded up the perverse relationships between the real and the financial sectors. The banks on both interstate banking and commercial/investment banking interrelationships reflected how distorted pre1930s banking was, when NY bankers both lent to the firms they had share equity in, and lent a long way away. Together these problems were manifest in a lessening correlation between what a genuine investment could return, and what the paper value of its shares/loans represented. So like today, with financial bubbling, securitisation, and real estate portfolios (plus other assets) way out of proportion to their underlying values, the banks moved into Ponzi mode to keep the repayment game in play.
Is that a fair linkage between the two periods? _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
