I blame David X. Li

[eunhye]

and everyone else who followed his model

Recipe for Disaster: The Formula That Killed Wall Street

The CDS and CDO markets grew together, feeding on each other. At the end of 2001, there was $920 billion in credit default swaps outstanding. By the end of 2007, that number had skyrocketed to more than $62 trillion. The CDO market, which stood at $275 billion in 2000, grew to $4.7 trillion by 2006.

I take back my statement that it is the people who should have known better before buying a home are the ones responsible primarily. Ultimately it is greed, but greed is good and bad.

[0ni0n]

I take back my statement that it is the people who should have known better before buying a home are the ones responsible primarily. Ultimately it is greed, but greed is good and bad.

I have been saying that since day one, but A lot of people still think government regulation is the main cause and refuse to recognize greed can produce such disastrous results.

A few Wachovia middle managers who underwrote home mortgages were recently interviewed, quoted "Everyone in the business knew the loans were bad (in the sense that they should not have been approved), but we were told that we had to sell them."

[Blubbartron]

Greed? In my capitalism? It's more likely than you think.

[Acturus]

I have been saying that since day one, but A lot of people still think government regulation is the main cause and refuse to recognize greed can produce such disastrous results.

Truthfully, a lot of people just want one single target to blame for what something that was the fault of a lot of people over a pretty prolonged period of time.

[0ni0n]

Greed? In my capitalism? It's more likely than you think.

Moderate greed (quasi-oxymoron) is motivational and productive, unchecked, excessive greed is destructive and suicidal.

[Araelus]

Moderate greed (quasi-oxymoron) is motivational and productive, unchecked, excessive greed is destructive and suicidal.

This is what most people fail to grasp when they look at Adam Smith.
(Or, better, P. J. O'Rourke's cliff notes version of Adam Smith because he skips all that nonsense about the price of silver in Albania.)

Matthew Continetti's argued that once widespread corruption and lack of responsibility appeared in the private sector, the malaise people feel towards politicians compounded and now everyone is entrenched in "the age of irresponsibility".

The notion that if you work hard you get ahead isn't always correct but at least it kept an undercurrent of populism from turning back into widespread resentment and the drive for creating some kind of "super better world" just by borrowing and spending. (Didn't that get us into this mess?)

[Dimmauk]

Moderate greed (quasi-oxymoron) is motivational and productive, unchecked, excessive greed is destructive and suicidal.

Greed is the American way. Why punish those that made money legally? If you punish those people, then you are nothing but a socialist.

Did I sound like Rush Limbaugh?

Why have speed limits too? Why have Blood alcohol limits?

You need some regulation or people will fucking kill themselves and/or kill you.

[MrW]

I blame the Copula. Blaming one person is irresponsible. But blaming the term is much more convenient. This coupled with the fact that financial institutions blindly followed this formula (or theory) because of all the $$$ signs to be had. Who cares who's to blame but I enjoyed reading the article.

[Correction]

Ah, it's been a while. Let's bring folks new to the discussion up to speed in the hopes of minimizing the retarded shit that tends to crop up.

tl;dr versions of what happened:

subprime works - Google Docs

Slightly more comprehensive: The Crisis of Credit Visualized

Marketplace has the best definitions of terms: Cramdowns | Marketplace Whiteboard | Marketplace from American Public Media

Also lol@AIG: Former CEO "Hank" Greenberg sues AIG - Mar. 2, 2009

I highly recommend the 'changing tone of AIG' video in the sidebar there.

[Araelus]

Greed is the American way. Why punish those that made money legally? If you punish those people, then you are nothing but a socialist.

Did I sound like Rush Limbaugh?

Someone get this man a radio channel! /sarc off/

Why have speed limits too? Why have Blood alcohol limits?

You need some regulation or people will fucking kill themselves and/or kill you.

But seriously, while I hope people who right now aren't killing me are acting in that manner because they don't want to kill me (they think it's wrong in some internal way) I'm still glad there's a rule written down that says "don't murder".

The internal point of view towards law is required, though, otherwise people break the law. (IPV = someone thinks what a law prohibits should be prohibited even if the law were to be erased) I don't expect the rule as an abstract entity will protect me or stabilize society, I think people's reaction to the rule will.

So in that regard what I'd translate 0ni0n's post to is something along the lines of:

The desire to increase in wealth and property in a fashion proportionate to effort expended but not excluding some windfalls along the way results in people being motivated to work hard and results in a productive society. Unchecked, excessive greed, which is what all levels of greed become, eventually, unless they are rooted out and destroyed, because the nice thing the first part of this paragraph was talking about isn't greed, is destructive and suicidal.

Is that OK? I think I agree with you, Dimmauk, I just want to make sure.

[Purrrfect]

I just want to know what the check mark gif in Dimmauk's sig is all about...

[Kaylia]

Moderate greed (quasi-oxymoron) is motivational and productive, unchecked, excessive greed is destructive and suicidal.

Is it even possible to limit greed though? The moment you limit it, they are simply going to move their priorities somewhere else. You can slow it down I supose, but it's going to be a game of cat and mouse that never end.

[miokomioko]

You can slow it down I supose, but it's going to be a game of cat and mouse that never end.

This would be the term "keeping it in check." Not limiting it, not stopping it, just getting in its way any time it finds itself on a straight-away with no obstacles.

[0ni0n]

Is it even possible to limit greed though? The moment you limit it, they are simply going to move their priorities somewhere else. You can slow it down I supose, but it's going to be a game of cat and mouse that never end.

Yea sure, greedy is good because it produces the desire and incentives to make things better. But it becomes excessive the moment one disregards any consequences or knowingly runs afoul of the law to make a buck. Approving mortgage loans for more commission when they shouldn't be approved in the first place is an instance.

[guartz]

yes, these people suddenly got excessively greedy and everything collapsed.


fuck's sake, people. Think about what you are saying here.

[Araelus]

Yea sure, greedy is good because it produces the desire and incentives to make things better. But it becomes excessive the moment one disregards any consequences or knowingly runs afoul of the law to make a buck. Approving mortgage loans for more commission when they shouldn't be approved in the first place is an instance.

It's semantics, but I think of "ambition" when you say "greed" and "greed" when you say "excessive greed". That terminology is going to cheese some people off. They hear "greed" and think "hmm, 'greed' is 100% bad, bad bad bad, this guy is mistaken" instead of listening to your salient points.

It's the same problem with... wait, should I even use a FFXI metaphor in this forum?

[0ni0n]

Let me rephrase it then, greedy is ok as long as you're making a honest living, greedy and ruthless with no regard for the law and ethics to extent that it led to the economy's collapse? bad.

[Dimmauk]

I just want to know what the check mark gif in Dimmauk's sig is all about...

They are my instruments of pain.
YouTube - Murmaider

[Araelus]

They are my instruments of pain.
YouTube - Murmaider

Oh, it is Dethklok! Explains a lot.

Let me rephrase it then, greedy is ok as long as you're making a honest living, greedy and ruthless with no regard for the law and ethics to extent that it led to the economy's collapse? bad.

What we need is some way to punish the latter group, instead of their bigwig friends bailing them out (or whatever is going on, it's so inane at this point I'm just waiting for the market to bottom at 3,000 so I can put money back into it).

[Kuya]

Perhaps we should use a different word. I hear greed is good and i can't help but flinch.