Quote:
Originally Posted by Ugly Bastard
Paul's idealogical stance sounds great on paper, but in practice, it would be disasterous if the government didn't intervene here. Paul basically thinks that the government should never intervene in issues relating to the free market. While he's right in suggesting that the government is involved too much, he takes it too far. In this case, two wrongs will make a right; the government will make money by purchasing these undervalued mortgages. Paul is right, government needs to control spending and reduce taxes to keep capital in the open market, but there is something to be said for having them regulate trade (ie: the uptick rule needs to be brought back... it would have limited much of this mess in the first place by not giving hedge funds a green light to crash a sector by shorting it to death).
|
I completely disagree.
1) The short selling rules are
disasterous for the markets. The markets today are much more than the cash markets. More trading actually takes place in derivatives- futres, options, swaps, swaptions, etc. And often times a short sale of stock is a
hedge against a derivative position. This shouldn't be disalowed. As much as the media loves to damn derivative instruments just because they don't understand all of them, they provide value for investers, hedgers, and stability to the economy. We need to keep the ability to short sell.
2) The government of the USA is going to run America into the ground on this one. They need to act, because voters want them to act. The dollar was at 1.78/1£ last week. Today it's above 1.85. All the debt issued by the US government will inflate the supply of dollars SO FUCKING MUCH. I expect that it will continue to fall and wouldn't be surprized to see it at 2.10/1£.
3) They say that Sarbanes-Oxley was the greatest thing the US ever did for the city of London. All the extra regulation that will come out of this will make Sarbanes-Oxley look minor. Business will leave the USA. Markets will start to trade in the Euro. The world is fucked and the US government is paying for it, which means the taxpayers are paying for it. I honestly believe this is the beginning of the end of America's end of it's era of dominance.