{"id":1099,"date":"2008-09-16T19:43:24","date_gmt":"2008-09-16T18:43:24","guid":{"rendered":"http:\/\/www.rogerdarlington.me.uk\/wordpress\/?p=1099"},"modified":"2008-09-16T19:43:24","modified_gmt":"2008-09-16T18:43:24","slug":"why-are-the-markets-in-a-such-a-mess-1","status":"publish","type":"post","link":"http:\/\/www.rogerdarlington.me.uk\/nighthawk\/?p=1099","title":{"rendered":"Why are the markets in a such a mess? (1)"},"content":{"rendered":"<blockquote><p>&#8220;The collapse of Lehman Brothers, the swallowing up of Merrill Lynch, the threat to the world&#8217;s biggest insurance company, AIG, and the nationalisation of Freddie Mac and Fannie Mae, together with Northern Rock, herald the end of the free-wheeling deregulatory era of finance capitalism that lasted from the early 1980s to 200.&#8221;<\/p><\/blockquote>\n<p>Quote from <a href=\"http:\/\/www.guardian.co.uk\/business\/2008\/sep\/16\/banking\">a letter<\/a> from Michael Meacher MP<\/p>\n<blockquote><p>&#8220;The way things stand, it is now a question of whether there is a complete meltdown of the financial system, with institutions crashing like ninepins, or whether a severe rationing of credit over a prolonged period leads to falling house prices, weaker consumer spending, lower investment and rising unemployment. This is without doubt the most serious financial shock since 1929, and while talk of a 1930s-style depression is still conjecture, so are the predictions that failing banks and a bankrupt financial system will have minimal impact on the &#8216;real economy'&#8221;. <\/p><\/blockquote>\n<p>Quote from <a href=\"http:\/\/www.guardian.co.uk\/commentisfree\/2008\/sep\/16\/economics.creditcrunch\">an article<\/a> by Larry Elliott<br \/>\nSo why have the markets gone mad? It&#8217;s obviously an over-simplification but two key factors are the two Ds:<\/p>\n<ol>\n<li>Derivatives &#8211; the bundling and onward sale of financial risks which investor Warren Buffett has called &#8220;financial weapons of mass destruction&#8221;\n<li>Deregulation &#8211; the belief that the markets can be trusted to be responsible and self-regulating<\/ol>\n<p>What we need now are:<\/p>\n<ul>\n<li>liabilities to be balanced by adequate assets\n<li>risks to be balanced by effective regulation\n<li>separation of retail banks and investment banks\n<li>curbing of irrational exuberance and excessive greed<\/ul>\n<p>In short, the markets need to get rational and responsible which a lot to ask of capitalism.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;The collapse of Lehman Brothers, the swallowing up of Merrill Lynch, the threat to the world&#8217;s biggest insurance company, AIG, and the nationalisation of Freddie Mac and Fannie Mae, together with Northern Rock, herald the end of the free-wheeling deregulatory era of finance capitalism that lasted from the early 1980s to 200.&#8221; Quote from a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-1099","post","type-post","status-publish","format-standard","hentry","category-world-current-affairs"],"_links":{"self":[{"href":"http:\/\/www.rogerdarlington.me.uk\/nighthawk\/index.php?rest_route=\/wp\/v2\/posts\/1099","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.rogerdarlington.me.uk\/nighthawk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.rogerdarlington.me.uk\/nighthawk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.rogerdarlington.me.uk\/nighthawk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.rogerdarlington.me.uk\/nighthawk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1099"}],"version-history":[{"count":0,"href":"http:\/\/www.rogerdarlington.me.uk\/nighthawk\/index.php?rest_route=\/wp\/v2\/posts\/1099\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.rogerdarlington.me.uk\/nighthawk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1099"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.rogerdarlington.me.uk\/nighthawk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1099"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.rogerdarlington.me.uk\/nighthawk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1099"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}