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View Diary: Bill Clinton: I Shouldn't Have Listened to Summers and Rubin [Substantive Update] (341 comments)

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  •  The repeal wasn't in a vaccum either (0+ / 0-)

    A case was made that the derivatives in an of themselves aren't so dangerous when used properly.

    One reason derivatives got their bad smell was the rating agencies pretending that they were playing with investment grade stuff, when it wasn't that at all. in fact, MDS were made up of poor stuff hidden in plain sight. Kind of like "salting the mine" in the old days...

    In Greenspan's mind, and perhaps in Rubin's too, he saw a "free" market operating with Randian market forces, but in fact the market, derivatives, Mortgages, default swaps and all were being seriously gamed, as we now see in the Goldman Sachs/Paulson hedge suit.

    Greenspan acknowledged as much in his mea culpa, that he was "shocked, shocked" that many people were cheating and distorting the market. I think a view was that derivatives (and short selling, etc) didn't need regulation in and of themselves, but many people, like maybe Rubin, "misunderestimated" the venality of players, and that players needed regulation so that they didn't do self-serving and system-destabilizing foolish things (as they inevitably did).

    Without geometry, life is pointless. And blues harmonica players suck.

    by blindcynic on Sun Apr 18, 2010 at 08:19:32 PM PDT

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