“The Government Is Contributing to the Panic: It’s time to let markets do their messy work,” Jonathan Macey, Wall Street Journal, October 11, 2008
Jonathan Macey on the Financial Crisis
3 Responses to “Jonathan Macey on the Financial Crisis”
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This was the most important part:
“The Bear Stearns bailout, the restrictions on short-selling and the government’s new $700 billion commitment to buy toxic mortgage-based assets all share the same fundamental flaw: They prevent the market from imposing discipline on banks guilty of massive over-leveraging and excessive risk-taking. Moreover, they punish prudent managers who invested conservatively, kept their companies’ debt at reasonable levels and worked hard to raise new capital when necessary. The SEC’s attack on short-selling punishes savvy traders who invested resources and effort in identifying companies with too much debt and unrealistically valued assets.”
This is important, but does it address the root causes of the crisis? It says that government intervention will prolong and deepen the crisis, but what caused it? There is no mention of the role of the Federal Reserve in pumping out credit after 9/11, for example. What is the root of the crisis?
At the time of financial crises we need to come together united and try to solve the problems which are responsible for such a hazard. We need to overcome it. It is meant to bring calm to the population and markets and display government strength and stability. As a large number of people spend their money in movies, making films, sports, nowadays even on internet many sites offer internet keno casino for the people interested in gambling but there people lose a large sum of money there in such stuffs which should be minimized as the world is going through a phase where a little wastage of money could be matter of remorse.