"Remember what happened. Through a series of events in the mid-1990s, Congress increased the supply of credit for home mortgages, through the institutions Fannie Mae and Freddie Mac. They were essentially given too much money for political reasons.
"And then that was followed in New York by the repeal of Glass-Steagall which then allowed banks to use investment equity vehicles to create liquidity which creates very large amounts of money. So the banks are busy creating money and making a lot of money on that creation of money and the regulators were either, depending on your point of view, asleep at the wheel or did not have the tools to understand what was going on."
"Remember, many of these institutions privatised the gains and socialised the losses. [You could say] that the banking industry should not be regulated but it should also be able to fail — that’s called capitalism.
What the hell?! I can't believe that big bankers would take advantage of things!
Now this makes intuitive sense to me, that you can't have a sustainable economy based on debt. Let's say you want to buy a car, and an individual has one he'd like to sell. If it cost's too much for you to afford, the fact that you can finance it (making it cost more) doesn't help. Note that few car commercials tell you how much the vehicle actually costs (except in fine print). Nope ...... this much down and this much a month and we can put you in this brand new Escalade!
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