The blame game

JimBob

George Bush suits most leaders just fine

Colin

I think Dennis Sewell was spot on.

Useless politicians, in dysfunctional governments, mainly in the UK and the US, thinking that an easy way to help alleviate complex social problems was to make people think they felt better by creating the conditions that enabled them to acquire "assets" like houses and commodities like plasma tv's, holidays and fake tits.

At various stages over the past 10 years or so, when the momentum started to slow and it looked like the game was up (2001, 2005), the architects of this irresponsibility just changed the goalposts and the rules, and poured fuel on the flames of the inevitable future fiscal holocaust.

One if the biggest economic issues facing the UK is the sheer scale of personal indebtedness. Unless there is some form of mass debt amnesty, underwritten by the government, I can't see a happy ending. When this 800lb chicken comes home to roost, brown and his credit bubble creating cronies will soon find out who the people think the principle villain is.

Bob

I thought everyone new that it was Clinton's changes to the Community Reinvestment Act that were the root cause of the Sub Prime disaster.

Our own version being the useless regulatory regime and such wonders as 125% self certified liar loans ans wholesale fraud by mortgage brokers.

wonderfulforhisage

This whole scenario is so confusing.

I try to simplify things in my own mind by starting with the fact that the potential WDP (world domestic product) is not much different from what it was 12 or even 24 months ago. In other words, if we, (that is the world) could organise ourselves properly, all would be well and all manner of things would be well.

The complexity of the necessary organisation is such that it's probably beyond all the Queen's computers (and certainly all the Queen's ministers) to sort out.

There is another route to organisation and that's called market forces. BUT, when the biggest industrial player in the market won't allow their currency to float, then it seems to me that chaos is inevitable.

I then ask myself, 'Why won't China let its currency float'?

Could it be part of a fifty or even one hundred year long term strategic plan?

I do so love conspiracy theories.

THX1138

Another great book to read on Wall St greed and hubris is:

When Genius Failed: The Rise and Fall of Long Term Capital Management

The best current article attempting to explain what went wrong is Niall Ferguson's essay in Dec's Vanity Fair

http://www.vanityfair.com/politics/features/2008/12/banks200812

You can also click to pictures of Kate Winslet looking particularly delicious but of course I only buy it for the articles.

KM

If you think this crisis is about sub-prime then you don't understand the crisis.

If you think this crisis is the fault of politicians in America who forced banks to lend to the poor. Then you end up having to exempt bankers and Gordon Brown from the blame. This talking point does not stand up to close scrutiny:

http://bigpicture.typepad.com/comments/2008/10/misunderstandin.html#more

Everything Fraser Nelson writes suggests he doesn't believe this line. It would be nice if he would confirm this.

There will be no such

Bruce Robertson

How did you get that shade of blue in the

TomTom

Alan Greenspan's senility

RobertD

re wonderfulforhisage. You are right that broadly world output has not shrunk and there has been no massive destruction of physical assets necessary to maintain output. What has happened over the last 10 years is the ownership of the assets and output has changed. Much less is owned by the western countries and much more is owned by the major countries of asia and the countries controlling natural resources like Saudi and Russia. Western governments have hidden this basic fact that their people have become relatively poorer from their electors by borrowing back the surpluses generated in asia and the petro- world and used it to finance a massive credit bubble which gave the illusion of continuing growth. Now the Chineese and Quatari have decided to stop playing that game and want their money back. Ouch!!!!

wonderfulforhisage

Thank you RobertD 8:57. Do you think this situation would have arisen had the yuan been free to find a market level these past ten or fifteen years?

Ian C

The crisis was born of massive inbalances at home and abroad in most of the major economies, worse in some (US and UK for example) than others who were dead on their feet for other reasons (e.g. France,Germany, Italy), over a decade and a half, in which many actors played a part, not least of which was the rise of China, the peace dividend and the cosy 'we're doing great' of the Clinton era.

The man who was employed to see through all that was Alan Greenspan. And he was dreaming while teaching his pupils, who included one G Brown.

"The Greenpsan Depression" will be the title of the book.