richardhutnik said:
Kasz216 said:
Mr Khan said:
Kasz216 said:
The committee doesn't see that as what caused it would be my guess.
Which, it really wasn't. What caused the crisis was that housing was down all over the country at once.
Which generally was seen as an impossibility and only happened because of widespread government intervention in the housing market.
The housing market caused the derivitives to crash.
There was nothing wrong with the risk prevention methods set up in the derivities, outside of not considering the fact the government was going to fuck it all up.
It's like if you stored a bunch of propane in your backyard with more then enough protection and saftey measures... and it all exploded because your neighbor decided to break in smoking a cigarette.
How is that your fault?
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If credit-default-swap and other wizardry that probably shouldn't have existed, didn't exist, then the housing bust wouldn't have done the catastrophic damage across the financial sector then exploding across the global sector. There would have been damage to be certain, from raw materials and construction sector, but the financial sector's enron-esque tactics caused it to ripple across the globe
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Why shouldn't it exist... there is a very small chance of huge failure (which unfortunitly happened) and it's been a HUGE driver of growth.
There wouldn't of been such huge damage because there wouldn't been as much to damage.
If you think this is a problem... watch as the virtual markets pick up in steam. Some are already valuable then poorer nations GDPs.
Who knows how valuable World of Warcraft is GDP wise.
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There are large risks happening if the amount of economic growth is based on virtual assets, which are based on confidence of people in systems they are involved in, inflating prices and so on. Once the confidence is shaken, then the bottom can fall out. Unlike tangible assets, they evaporate in a puff of smoke. This evaporation could happen, besides from a lack of confidence, an impact of things happening in real life, that deny people sufficient funds to prop up the virtual assets. Have contraction, with job losses, and the entire thing could snowball. What happens, for example, to all those World of Warcraft assets if people suddenly stop playing the game?
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All those people who are paid to play WOW lose their jobs, as do the people who play it soley to sell stuff.
There is big buisness and real life jobs in that world.
