Politics
Out of context: Reply #12058
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- mathinc0
^^ Not necessarily.
By engaging in oversight, regulators would have seen that Magnetar was helping create extremely risky CDO's for the very purpose of their collapse. Betting against the CDO's they were helping create, they made billions. The CDO industry was slowing down on it's own until Magnetar came into the picture and actually allowed the CDO market to explode.. read here:
http://www.propublica.org/featur…
All of this was completely legal as far as regulations go. Definitely not moral, but legal nonetheless. At the beginning even market insiders had no clue why Magnetar was buying up the riskiest parts of the CDO's.. but soon they too figured out why they were doing it and they started doing it too.
So tell me, what's a better system. Rigid regulations that don't bend or flex when bankers exploit legal loopholes, only after the damage is done do they create policy. Or, a body that flexes with the bankers, acting on information they learn by studying the moves they make and attempt to curb unsavory behavior before damage is done?
You can't tell me that what Magnetar was doing, if evaluated at the time, wouldn't have raised giant red flags. Instead we rely on rigid regulations to keep creative and greedy entities from exploiting the system.
regulation = rigid set of rules
oversight = creatively examining
bankers = creatively exploitingWhich is a better system to keep bankers from getting us all in trouble? I think you need a little of both. But in this new world of exotic banking, you can not expect a rigid set of rules that take years to enact to keep the loopholes from being exploited.
- The luckyorphan obligatory self-comment™mathinc
- :Pmathinc
- Heh. Well done, sir! It's my branding, tho. That'll cost ya next time. ;)luckyorphan
- haha how much does that cost??mathinc