3 ms·
Very interesting argument. I understand the article to imply that we need more government regulation because the market cannot correct itself for pyramid schem
by larryfreeman 18y ago
Very interesting argument.
I understand the article to imply that we need more government regulation because the market cannot correct itself for pyramid schemes without severe devastation to the economy (the Albania example).
For me, this argues conclusively that Fannie Mae and Freddie Mac may have been the triggers for the current crisis but not the cause (in themselves, they were not sufficient to cause the crisis). From the article's analysis, the real cause of the current crisis was the lack of regulation of mortgage swaps. The trillion-dollar mortgage swaps is what amounted to the Martingale system.
- whacked_new 18y agoAre you familiar with the Albania example? I wish the author elaborated more on it.
- larryfreeman 18y agoHere's a Wikipedia article on the 1997 Albanian Crisis that was initiated by a ponzi scheme: http://en.wikipedia.org/wiki/1997_unrest_in_Albania http://en.wikipedia.org/wiki/1997_unrest_in_Albania
- whacked_new 18y agoThanks! If we are to believe globalsecurity.org, which is quoted verbatim as a "primary source" in the article, it seems like the UN played an important role in restoring Albania's order.