How the Financial Bubble Burst

The Article.

kk
Malaysia

first, the presumption that they are self- regulating is wrong, many investment banks are driven by greed for bigger profit, they operate beyond their company objectives, instead of the normal fees- based income, they leverage their shareholding equity to dabble into high risk-high return collaterized mortgaged papers. It's like 'musical chair game', the ones caught with the last rotten apple lost the game and when the number reach critical mass, it become crisis

Michael
United States

Privatize profits, socialize risk
This is the formula which the Republicans think means "free market." They strip out the regulatory safeguards designed to keep the investment banks from gobbling up regular banks allowing the creation of financial entities so big that when they fail, they can pull the entire economy down with them. Then on the other hand they drop interest rates and pass bills forcing banks to make loans to low income (high risk) families. Not unsurprisingly, the dominos fall down, and now we pay for it!

Alfred E. Neuman
United States

There are two facts not mentioned here. First, if a central bank has total control of the money supply, problems like this are inevitable. If the US Govt needs tons of cash, they can turn on the inflationary economy to get it. It happens every war: VietNam and Iraq are worse than previous because there is no longer gold backing to help deflect problems. The other fact is that inflation encourages people to live beyond their means. I bought much less than I could "afford" and I am doing fine.

Giles Wynne
Thailand

Who created the bubble? The capitalists,gambling on the rich mans betting shop, the stock market. Don't blame the people for wanting a better life style,when offered cheap loans and credit to by commodities they need most. Housing,education for children, health care,transport, all things that government should provide,but government don't own the state, the capitalists do. Banks and investment institutions should be made to pay by taking them into public ownership with education,health etc...