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"suffice it to say, the complex manoeuvring of some extremely bright and learned people unwittingly triggered the financial crisis." So it wasnt the bad loans t

"suffice it to say, the complex manoeuvring of some extremely bright and learned people unwittingly triggered the financial crisis." So it wasnt the bad loans that were given to people who couldnt repay at variable interest rates prone for increases in the future? If everyone involved was truly educated, they likely would nothavs taken those loans in the first place... Dont confuse free market behavior (all people involved in the market) with that of a highly learned population

otakucode 8y ago
The financial crisis also wasn't very "unwitting." The banks knew that placing first large benefits to selling more loans, and then making it a requirement to remain employed would lead their employees to issue bad loans. They knew that loaning out 30x their capital was dangerous. They knew that when they reclassified garbage-class debt as AAA that they were lying through their teeth and were essentially guaranteeing a crash. But they also knew that they wouldn't bear the consequences for it. And they were right. The system in place makes it ideal optimal behavior to provoke such crashes for those involved in the financial services industry. It resulted in them receiving $1+ trillion, with nearly no change in regulation. When they want another trillion, they know they can count on getting it.