2 Party System Vs. 3+ Party System

[Anomaly]

I didn't know three letter that start with WT trips the fiddler.

[abercius24]

[quote name='Anomaly' timestamp='1349309029' post='2489752']
you disagree? [i][color=#FF0000]Acronyms are cusses too![/color][/i]. That's based on my thirty years in an industry working in management in both multi billion corporations and small outfits.
You are basing that on????
[/quote]

I've seen it, too, in my experience in politics and corporate America. You can't tell me that the Banks were able to convince Congress to repeal the Glass Steagall Act, but they aren't able to repeal other lesser regulations?? The Glass Steagall Act was the largest of them all! And it was the main reason this last financial crisis hit the economy so hard. But yes, in my experience I've seen corporations lobby in very strange ways that can only be explained by their efforts to limit the entrance of competition into the market.

And keep in mind that just because a corporation is a multi-billion dollar corporation, that doesn't mean it has political influence. The two do not necessarily go together. And I don't apply the principle across all industries, just those that are obviously under a biased control. But even those industries exert political influence over other industries. After all, that's really what the financial market intends to do -- exert influence over all other markets. And what's more stable than an investment that has no competitors?

Edited October 4, 2012 by abercius24

[Winchester]

[quote name='abercius24' timestamp='1349369619' post='2489951']

The Glass Steagall Act was the largest of them all! And it was the main reason this last financial crisis hit the economy so hard.
[/quote]

What portion of Glass-Steagall prevented housing bubbles from forming?

[abercius24]

[quote name='Winchester' timestamp='1349369990' post='2489953']

What portion of Glass-Steagall prevented housing bubbles from forming?
[/quote]

It limited the amount of cash available for finance-based loans. It's repeal also opened the door for mortgage-based securities being used as a basis for meeting reserve requirements, which is really why most banks failed thereafter (because all their reserves were worthless after the crash). Furthermore, it's repeal allowed the repurcussions of the crash to not just be felt in the financial side, but also on the commercial side. That was the whole point of the Glass Steagall Act, to keep the two sectors separate and protect commercial banking from the volatility that existed in financial banking.

[Winchester]

[quote name='abercius24' timestamp='1349370574' post='2489956']
It limited the amount of cash available for finance-based loans. It's repeal also opened the door for mortgage-based securities being used as a basis for meeting reserve requirements, which is really why most banks failed thereafter (because all their reserves were worthless after the crash). Furthermore, it's repeal allowed the repurcussions of the crash to not just be felt in the financial side, but also on the commercial side. That was the whole point of the Glass Steagall Act, to keep the two sectors separate and protect commercial banking from the volatility that existed in financial banking.
[/quote]
Why would a bank take such risks, in the first place?

Where did the extra money come from? Credit expansion isn't a post-G-S repeal phenomenon. Nor is the business cycle.

Edited October 4, 2012 by Winchester

[abercius24]

[quote name='Winchester' timestamp='1349371077' post='2489958']
Why would a bank take such risks, in the first place?

Where did the extra money come from? Credit expansion isn't a post-G-S repeal phenomenon. Nor is the business cycle.
[/quote]
The extra money that went INTO the commercial sector came FROM the financial sector. When Glass Steagall was in effect, your 401k deposits could never be used for anything but financial sector loans. After Glass Steagall was repealed, your 401k deposits were used for providing loans to all those CRA defunk home buyers.

And yeah, you're right. The housing bubble could have happened anyways, but it would have happened slower and it would not have had such a ripple effect throughout the economy!

And why did they take such risks? Because they were ordered to by Congress via CRA guidelines (Consumer Reinvestment Act). Why were they willing to throw themselves head-first into it? Because it was Freddie Mac and Fannie Mae's problem in the end, not theirs. As long as the secondary market was purchasing those loans, they didn't care what condition they were in! But, as well, they likely knew the Federal Government would bail them out in the end anyways! And guess what? The government did bail them out!

Edited October 4, 2012 by abercius24

[abercius24]

Now if you're asking why did the banks expose themselves to the risk of using securities to meet their reserve requirements, that's simple. Securities are easier to liquidate than actual mortgage assets. But that only holds true as long as the market is stable.

[Winchester]

[quote name='abercius24' timestamp='1349382961' post='2490028']
The extra money that went INTO the commercial sector came FROM the financial sector. When Glass Steagall was in effect, your 401k deposits could never be used for anything but financial sector loans. After Glass Steagall was repealed, your 401k deposits were used for providing loans to all those CRA defunk home buyers.

And yeah, you're right. The housing bubble could have happened anyways, but it would have happened slower and it would not have had such a ripple effect throughout the economy!

And why did they take such risks? Because they were ordered to by Congress via CRA guidelines (Consumer Reinvestment Act). Why were they willing to throw themselves head-first into it? Because it was Freddie Mac and Fannie Mae's problem in the end, not theirs. As long as the secondary market was purchasing those loans, they didn't care what condition they were in! But, as well, they likely knew the Federal Government would bail them out in the end anyways! And guess what? The government did bail them out!
[/quote]
So you think the majority of the funds came from 401k's?

How much did the money supply increase due to other reasons?

[abercius24]

[quote name='Winchester' timestamp='1349391852' post='2490073']
So you think the majority of the funds came from 401k's?

How much did the money supply increase due to other reasons?
[/quote]

401ks are not the only source of deposits in the Financial Sector. And we know that there is more money in the Financial Sector than in the Commercial Sector. Investment has always been a greater source of lending funds than savings. I agree the Fed's interest rates played a part, too, but for some reason you think that is the only factor to blame. That just doesn't make sense. Inflation happens because of the speed at which money moves. BOTH factors are reasonably suspect.

I don't know where this is going, but it is certainly reaching the point of absurdity. If you have a point, please state it. Otherwise, I think I'm done here.

[Winchester]

[quote name='abercius24' timestamp='1349452062' post='2490339']

401ks are not the only source of deposits in the Financial Sector. And we know that there is more money in the Financial Sector than in the Commercial Sector. Investment has always been a greater source of lending funds than savings. I agree the Fed's interest rates played a part, too, but for some reason you think that is the only factor to blame. That just doesn't make sense. Inflation happens because of the speed at which money moves. BOTH factors are reasonably suspect.

I don't know where this is going, but it is certainly reaching the point of absurdity. If you have a point, please state it. Otherwise, I think I'm done here.
[/quote]
Then be done. The questions were straightforward and went with your Glass-Steagall theory. Enjoy your ball.

[abercius24]

[quote name='Winchester' timestamp='1349452112' post='2490341']
Then be done. The questions were straightforward and went with your Glass-Steagall theory. Enjoy your ball.
[/quote]

Why is there condescension here? We're both Church Militant members. I don't get the disrespect. I don't understand why I'm being trolled on Phatmass of all places.

[Winchester]

[quote name='abercius24' timestamp='1349452392' post='2490345']

Why is there condescension here? We're both Church Militant members. I don't get the disrespect. I don't understand why I'm being trolled on Phatmass of all places.
[/quote]
Here. Let me show you:
[quote]401ks are not the only source of deposits in the Financial Sector. And we know that there is more money in the Financial Sector than in the Commercial Sector. Investment has always been a greater source of lending funds than savings. I agree the Fed's interest rates played a part, too, but for some reason you think that is the only factor to blame. That just doesn't make sense. Inflation happens because of the speed at which money moves. BOTH factors are reasonably suspect.

I don't know where this is going, but it is certainly reaching the point of absurdity. If you have a point, please state it. Otherwise, I think I'm done here.[/quote]

I am asking legitimate questions about your theory. You respond with the above.

Don't start croutons and then whine when you don't get a meek response. I don't intend on inheriting the Earth.

[Aloysius]

[quote name='abercius24' timestamp='1349452392' post='2490345']
We're both Church Militant members... I don't understand why I'm being trolled on Phatmass of all places.
[/quote]
you must be new here, not sure how you could get to Church Militant status being so new, but I'd like to introduce you to someone. neigh, not so much a someone, as a somewhat. a legendary institution of phatmass. so loved and so hated by so many that it boggles the mind of all who encounter him.

his name is Winchester.

and this is what he does.

[abercius24]

[quote name='Aloysius' timestamp='1349453896' post='2490354']
you must be new here, not sure how you could get to Church Militant status being so new, but I'd like to introduce you to someone. neigh, not so much a someone, as a somewhat. a legendary institution of phatmass. so loved and so hated by so many that it boggles the mind of all who encounter him.

his name is Winchester.

and this is what he does.


[/quote]

Okay. I think I remember him from some of our discussions on Islam. I've been warned. I appreciate that. :-)

Yeah, I'm "renewed", basically. I'm an older member. Took a couple years off.

[abercius24]

[quote name='Winchester' timestamp='1349453097' post='2490350']
Here. Let me show you:


I am asking legitimate questions about your theory. You respond with the above.

Don't start croutons and then whine when you don't get a meek response. I don't intend on inheriting the Earth.
[/quote]


Legitimate questions I can handle. Playing along with your Socratic method of questioning is another story. If you have something to teach me, then teach me. I will not play the part of the student otherwise.