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Like Madoff? The subprime lending/NINJA loans? In my opinion both of those things would have been harder if everyone was doing more due diligence. Moral hazard
by triangleman 6y ago
Like Madoff? The subprime lending/NINJA loans? In my opinion both of those things would have been harder if everyone was doing more due diligence. Moral hazard took away some of the incentive to do that.
- simonh 6y agoRight, even if all the wrongdoing had all happened together, but the rest of the economic and financial system had been sound, we’d have been ok.
- watwut 6y ago"everyone was doing due diligence" is not really realistic expectation. It amounts to blaming everyone for small bad thing while excusing massive big bad thing going on.
- triangleman 6y agoI found a decent analogy for what I'm talking about: https://www.history.com/news/beanie-babies-value-criminal-activity https://www.history.com/news/beanie-babies-value-criminal-ac... With a bubble in Beanie Babies there was accompanying fraud and other criminal activity, with most consumers not wittingly participating, but they were affected by it. So with the asset bubble of the 2000's, this kind of behavior affected everyone, as everyone needs a house. In another thread I have said I don't blame the masses who may have made bad decisions in hindsight, as they did not have access to all the relevant information. So I do blame the fraudsters, but in the end I really only blame the Fed for keeping interest rates too low, and of course that can circle back around to society as well if you like. https://youtu.be/d0nERTFo-Sk https://youtu.be/d0nERTFo-Sk