Comments on: Subprime US Banking Financial Crisis Explained Part 3

By: Public Insurance Adjuster

Public Insurance Adjuster — Wed, 07 Apr 2010 17:54:24 +0000

I think Greenspan is getting senile, today he said that you can stop asset bubbles by increasing capital requirements. That just increases the cost of credit. The next time you have a real estate bubble, you’ll have the same problem, assuming that banks are still in the business of loaning against real estate. If you want to stop this problem, then eliminate the federal subsidies for real estate development and investment, then require people in that industry to put their own money at risk instead of someone elses. If Greenspan really wants to change the banking system, though, then simply ban 95% and 90% LTV loans. Require a bigger equity cushion. BTW, the “too big to fail” argument is a fallacious one. During the Great Depression, Canada had no bank failures. The reason was that their banks were very large. The banks closed branches, etc., but none of them failed. By contrast, the US was dominated by thousands of very small banks, and we had more than 10,000 of them fail. So there is nothing inherently unsafe about a banking system dominated by large banks. The real problem with large banks is that during good times, they don’t provide enough competition for each other.

By: tflipnoy

tflipnoy — Sat, 20 Mar 2010 20:47:48 +0000

Dude, you’re the …
Dude, you’re the man! You helped me out with my college paper.

By: tre675

tre675 — Sat, 20 Mar 2010 20:47:47 +0000

Thanks for the …
Thanks for the videos. I learned alot.

By: Guedingen

Guedingen — Sat, 20 Mar 2010 20:47:46 +0000

Good man, many …
Good man, many thanks – any ideas as to what can be learned from this fiasco and what legal checks can be put in place to avoid such a thing happening again?

By: bleberlin

bleberlin — Sat, 20 Mar 2010 20:47:45 +0000

thank you very much …
thank you very much. i have a much better idea of whats going on .good job

By: InformedTrades

InformedTrades — Sat, 20 Mar 2010 20:47:45 +0000

my pleasure thanks …
my pleasure thanks for the comment. If you look on the homepage of my site I have recently posted an article “7 solutions to the financial ciris” which covers this. Best Regards, Dave

By: jxskillz82

jxskillz82 — Sat, 20 Mar 2010 20:47:44 +0000

So why did the …
So why did the Federal Reserve increase the interest rate in 2004?

By: elwalvador

elwalvador — Sat, 20 Mar 2010 20:47:43 +0000

I say we remove …
I say we remove Geithner and Mary Schapiro and appoint David Waring as the head of both the Treasury Department and the SEC.

By: RyanBachoo

RyanBachoo — Sat, 20 Mar 2010 20:47:43 +0000

Thanks mate … my …
Thanks mate … my ticket to my 7000 word report on the financial crisis.

By: LoneOarman

LoneOarman — Sat, 20 Mar 2010 20:47:42 +0000

He omitted the fact …
He omitted the fact that bad loans were insured in order to get a higher rating to make them look good; and insured again by speculators that did not even own the investment. Unregulated and perfectly legal insurance fraud (misrepresentation and casino gambing).