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People getting into bitcoin now are buying it because of it's decentralized unregulated nature. This whole p2p economy thing is very new, so you can't compare i

by smokeyj 15y ago

People getting into bitcoin now are buying it because of it's decentralized unregulated nature. This whole p2p economy thing is very new, so you can't compare it to an established market like the US economy. It could easily be argued that market regulation doesn't add much value considering the constant and systematic recurrence of financial crisis in the US.

hysterix 15y ago
This is absurd seeing as how we are purposefully led into these many "market crisis" by the federal reserve and the people who run it. Your argument is ridiculous because you are making an assumption that the federal reserve and the like are acting in the best interest for the united states and the crises, "just keeps on happening" which is absolutely wrong.
- hugh3 15y ago
  http://en.wikipedia.org/wiki/Hanlon%27s_razor http://en.wikipedia.org/wiki/Hanlon%27s_razor
rauljara 15y ago
That is not so easy an argument to make as you seem to think it is. Several of the major sources of the recent financial crisis (the derivatives market, the rating of junk financial products as AAA, and the over leveraging of major financial firms) all suffered from lack of regulation (derivatives, rating agencies), or relatively recent deregulation (the over-leveraging).
- byrneseyeview 15y ago
  Actually, the whole point of rating that stuff AAA was a regulatory arbitrage. Buying AAA-rated CDOs and buying credit default swaps against them was a capital-efficient way to lever up. And that level of leverage was only possible due to central banking backstops. If deregulation caused the crisis, why weren't hedge funds (the least regulated entities out there) a big part of it? I seem to remember a bunch of the major investment banks (much more regulated) losing money because of their positions in mortgages (a very strongly-regulated investment). It's really hard to describe the financial crisis without talking about decisions that only make sense in the context of gaming regulations.
  - TheCowboy 15y ago
    Hedge funds may not have been a big part of this crisis. But the next to last major financial crisis is a case study in this: http://en.wikipedia.org/wiki/Long-Term_Capital_Management http://en.wikipedia.org/wiki/Long-Term_Capital_Management Hedge funds were also more a result of a lack of regulation, or side-stepping current regulations by being defined differently, not so much a matter of deregulation. See it as regulators not stepping up or not allowed to step up and adapt. It's not like regulation serves to make any financial crisis avoidable. But smarter, more adaptable regulation can limit the depth of the rot, help shore up the integrity and health of the financial system, and possibly allow for a softer landing.
- OstiaAntica 15y ago
  The whole stupid AAA ratings regime is a government regulatory scheme-- only a handful of ratings agencies (they've opened it up a little since the crisis) were permitted by the government to rate bonds. Contrast that with equities, where there is no rigid "AAA" rating system and where thousands of analysts compete to provide the best research on stocks. Over-regulation is at the heart of the financial crisis, from the broken ratings system to the role played by Fannie and Freddie.

by smokeyj 15y ago

hysterix 15y ago

This is absurd seeing as how we are purposefully led into these many "market crisis" by the federal reserve and the people who run it. Your argument is ridiculous because you are making an assumption that the federal reserve and the like are acting in the best interest for the united states and the crises, "just keeps on happening" which is absolutely wrong.

hugh3 15y ago
http://en.wikipedia.org/wiki/Hanlon%27s_razor http://en.wikipedia.org/wiki/Hanlon%27s_razor

rauljara 15y ago

That is not so easy an argument to make as you seem to think it is. Several of the major sources of the recent financial crisis (the derivatives market, the rating of junk financial products as AAA, and the over leveraging of major financial firms) all suffered from lack of regulation (derivatives, rating agencies), or relatively recent deregulation (the over-leveraging).

byrneseyeview 15y ago
Actually, the whole point of rating that stuff AAA was a regulatory arbitrage. Buying AAA-rated CDOs and buying credit default swaps against them was a capital-efficient way to lever up. And that level of leverage was only possible due to central banking backstops. If deregulation caused the crisis, why weren't hedge funds (the least regulated entities out there) a big part of it? I seem to remember a bunch of the major investment banks (much more regulated) losing money because of their positions in mortgages (a very strongly-regulated investment). It's really hard to describe the financial crisis without talking about decisions that only make sense in the context of gaming regulations.
- TheCowboy 15y ago
  Hedge funds may not have been a big part of this crisis. But the next to last major financial crisis is a case study in this: http://en.wikipedia.org/wiki/Long-Term_Capital_Management http://en.wikipedia.org/wiki/Long-Term_Capital_Management Hedge funds were also more a result of a lack of regulation, or side-stepping current regulations by being defined differently, not so much a matter of deregulation. See it as regulators not stepping up or not allowed to step up and adapt. It's not like regulation serves to make any financial crisis avoidable. But smarter, more adaptable regulation can limit the depth of the rot, help shore up the integrity and health of the financial system, and possibly allow for a softer landing.
OstiaAntica 15y ago
The whole stupid AAA ratings regime is a government regulatory scheme-- only a handful of ratings agencies (they've opened it up a little since the crisis) were permitted by the government to rate bonds. Contrast that with equities, where there is no rigid "AAA" rating system and where thousands of analysts compete to provide the best research on stocks. Over-regulation is at the heart of the financial crisis, from the broken ratings system to the role played by Fannie and Freddie.