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Thread: Economists: Another Financial Crisis on the Way

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    Economists: Another Financial Crisis on the Way

    “Risk-taking at banks will soon be larger than ever.”¹

    Excerpted from “Economists: Another Financial Crisis on the Way; Nonpartisan Group Led by Nobel Winner Calls for Stronger Financial Reforms” By MATTHEW JAFFE, ABC News, March 2, 2010
    Even as many Americans still struggle to recover from the country's worst economic downturn since the Great Depression, another crisis – one that will be even worse than the current one – is looming, according to a new report from a group of leading economists, financiers, and former federal regulators.

    In the report, the panel, which includes Rob Johnson of the United Nations Commission of Experts on Finance and bailout watchdog Elizabeth Warren, warns that financial regulatory reform measures proposed by the Obama administration and Congress must be beefed up to prevent banks from continuing to engage in high-risk investing that precipitated the near-collapse of the U.S. economy in 2008.

    The report warns that the country is now immersed in a "doomsday cycle" wherein banks use borrowed money to take massive risks in an attempt to pay big dividends to shareholders and big bonuses to management – and when the risks go wrong, the banks receive taxpayer bailouts from the government. …
    Excerpted from “Fresh Ideas From Leading Thinkers For True Financial Reform” By Shahien Nasiripour, The Huffington Post, First Posted: 03- 2-10 06:00 PM | Updated: 03- 2-10 09:31 PM
    What will it take to fix the nation's broken financial system? If anyone really knows for sure, it's the great minds gathering in New York for a conference tomorrow morning. …
    See: Roosevelt Institute: Make Markets be Markets | Time Warner Center, 3/3/10
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    Re: Economists: Another Financial Crisis on the Way

    I believe the worst is yet to come and there ain't a darn thing we can do about it. Unemployment benefits, government aid and credit cards have delayed us from falling into a another Great Depression, but I still believe it is coming. The government can not afford to keep bailing us out and more and more banks are on the verge of collapse..
    "This Administration will constantly strive to promote an ownership society in America. We want more people owning their own home. It is in our national interest that more people own their own home. After all, if you own your own home, you have a vital stake in the future of our country."" GWB

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    Re: Economists: Another Financial Crisis on the Way

    I am wary everytime someone says that banks are continuing high risk investing. Its not like they want to loose money. Many of these terrible derivatives everyone talks about are actually designed to mitigate risk and act as a way for banks to free up short term capital. Really, when you see the entire financial system collapse like in 08 it is more or less a systemic failure. Greater transparency in the repo markets would do a lot to help this in my opinion.

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    Re: Economists: Another Financial Crisis on the Way

    In the report, the panel, which includes Rob Johnson of the United Nations Commission of Experts on Finance and bailout watchdog Elizabeth Warren, warns that financial regulatory reform measures proposed by the Obama administration and Congress must be beefed up to prevent banks from continuing to engage in high-risk investing that precipitated the near-collapse of the U.S. economy in 2008.
    Oh, so they don't actually know why the housing and financial sectors collapsed? That probably means we shouldn't listen to them...

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