Maybe with a little more government regulation on lending to subprime borrowers and securitization of mortgages and other exotic financial devices, the housing bubble wouldn’t have happened, irresponsible borrowers wouldn’t be facing so many foreclosures, Wall Street firms wouldn’t be screwed on their bonds they can’t sell because of the subprime-fiasco-caused credit squeeze, and hedge funds wouldn’t screwed due to investing in subprime mortgaged backed securities.
Maybe with a little more government regulation both in China and the U.S. we wouldn’t be getting lead-paint covered toys, fake and poisonous counterfeit pharmaceuticals, and wouldn’t be facing pig viruses, etc.
Bloody and Bloodier
“The subprime-lending crisis is worse than you think, and could crush financial and real-estate markets for years”
“No economic expansion has relied more on credit and leverage than the one we have been experiencing since 2001. But it was always a matter of when, not if, this liquidity-driven bull market would run out of steam.
And run out of steam it has. The stresses to the system that started with the subprime mortgage upheaval have expanded not just into junk but also to high-grade corporate debt, to the prime mortgage sector and beyond the US border to hedge funds in Europe and Australia.”
Wall Street Journal commentary lauding the benefits of effective government regulation!
“A powerful argument for Sarbox can be made simply by examining the performance of financial markets since the landmark act was passed. Though Sarbox certainly can’t take full credit, the U.S. stock market (as measured by the S&P 500) has increased 67%, or about $4.2 trillion in market value, between July 30, 2002 and June 30, 2007. Even John Thain, CEO of the New York Stock Exchange (NYSE) and no great fan of Sarbox, concedes “There is no question that, broadly speaking, Sarbanes-Oxley was necessary.”
“If hedge funds were a country, it would be the eighth-biggest on the planet. They can sink whole economies, and have the potential to crash the entire global financial system. Yet they are beyond regulation. We should be very afraid”
picture by Heikenwaelder