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And selling bad credit default swaps wasn't a crime either. So, according to your theory, the perpetrators of the last downturn should have sold as many bogus

by bronson 12y ago

And selling bad credit default swaps wasn't a crime either. So, according to your theory, the perpetrators of the last downturn should have sold as many bogus CDS packages as possible, right? Regardless of the damage? I'm happy most people don't subscribe to the same law-defined morals that you seem to.

AndrewBissell 12y ago
If Soros's bet had gone against him, he would have lost all of his investors' money and been left penniless. There would have been no bailout waiting in the wings. The guys selling CDSs they couldn't pay out had none of their own skin in the game, and were profiting from the presence of then implicit (now very EXPLICIT) government backstops. When they lost money, the public was forced to pay through devices like the AIG bailout, TARP, ZIRP, etc. There's no legitimate comparison between the two.
- M2Ys4U 12y ago
  > If Soros's bet had gone against him, he would have lost all of his investors' money and been left penniless. There would have been no bailout waiting in the wings. Well, no. This is explained in the article: If Soros' assumption (that the exchange rate would plummet) hadn't been realised Sterling would've stayed at the lower bound of the ERM and Quantum wouldn't have lost much at all.
  - gabemart 12y ago
    We can have reasonable confidence in that assessment in hindsight. At the time, I would have been unwilling to gamble my net worth against the possibility of some unforeseen event causing a spike in the value of the pound. It was a non-zero risk.
    - VintageCool 12y ago
      Soros clearly had confidence in it. That's why he's the player that won the pot.
MaysonL 12y ago
There was a lot of fraud involved in the banks and mortgage brokers who made hundreds of thousands of liar's loans: the fact that nobody was prosecuted for that fraud is a failure of the justice and regulatory systems..
goodcanadian 12y ago
I have regularly argued that much of it was, in fact, illegal. At a minimum there was a lot of negligence with regard to fiduciary responsibility. I would also argue that there was a fair amount of fraud from borrowers, mortgage brokers, banks, and so on all the way up to the top financial levels.

by bronson 12y ago

AndrewBissell 12y ago

If Soros's bet had gone against him, he would have lost all of his investors' money and been left penniless. There would have been no bailout waiting in the wings. The guys selling CDSs they couldn't pay out had none of their own skin in the game, and were profiting from the presence of then implicit (now very EXPLICIT) government backstops. When they lost money, the public was forced to pay through devices like the AIG bailout, TARP, ZIRP, etc. There's no legitimate comparison between the two.

M2Ys4U 12y ago
> If Soros's bet had gone against him, he would have lost all of his investors' money and been left penniless. There would have been no bailout waiting in the wings. Well, no. This is explained in the article: If Soros' assumption (that the exchange rate would plummet) hadn't been realised Sterling would've stayed at the lower bound of the ERM and Quantum wouldn't have lost much at all.
- gabemart 12y ago
  We can have reasonable confidence in that assessment in hindsight. At the time, I would have been unwilling to gamble my net worth against the possibility of some unforeseen event causing a spike in the value of the pound. It was a non-zero risk.
  - VintageCool 12y ago
    Soros clearly had confidence in it. That's why he's the player that won the pot.

MaysonL 12y ago

There was a lot of fraud involved in the banks and mortgage brokers who made hundreds of thousands of liar's loans: the fact that nobody was prosecuted for that fraud is a failure of the justice and regulatory systems..

goodcanadian 12y ago

I have regularly argued that much of it was, in fact, illegal. At a minimum there was a lot of negligence with regard to fiduciary responsibility. I would also argue that there was a fair amount of fraud from borrowers, mortgage brokers, banks, and so on all the way up to the top financial levels.