05-11-2011, 01:29 AM
btfc wrote:
"Nice work, rankandfile"
I agree!
:thumbsup: Nice analysis. To the bit about the shenanigans of under-regulated finance guys, I'd also mention the role of allowing those guys way too much leverage. Leverage is just made up money as multiples of actual money held. They can take $1 million in investments/savings and give out $10 million of credit - skimming a small percent for themselves for doing the deal (but since the total is so large, even that small percent amounts to a pretty good sized sum.) A few multiples of leverage in the right circumstances has a beneficial affect on society, but as leverage grows, it becomes more risky and has a detrimental affect on society - but the finance guys can make out like bandits. Leverage almost always has a big role in the formation of a bubble - particularly in the later and most damaging stages of the bubble.