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View Diary: Morning Feature: Conspiracy Theory 103 - Conspiracies of Convenience (Plus Kossascopes) (178 comments)

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  •  But that charge is such a reach (3+ / 0-)
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    elmo, NCrissieB, kktlaw

    as to be a strawman.   They didn't need to cause a crash, they were happy making money while the ponzi scheme was going, knowing that they bore no risk. To claim they intentionally triggered the collapse is extreme, and I have not only not seen evidence of that, I haven't even seen that charge made.
    We have seen evidence that a bear attack on Bear Stearns and then Lehman brought them down intentionally, but even the perps had no idea they could topple their whole house of cards. As for triggering a housing market crash, that is pretty much impossible to do intentionally, other than by following the course the fed and bankers took and their motivation is sufficiently explained by their earnings from the bubble, and doesn't require that they did anything with the hope of causing a crash.

    •  I've read it here on DKos. (2+ / 0-)
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      winterbanyan, kktlaw

      I don't remember whether it was in a diary or a comment, but the specific charge was that bankers engineered the failure of the financial system in order to transfer their speculative paper assets into hard cash via the inevitable government bailouts.  It was first proposed back in the autumn during the TARP mess, and I have seen it again since.

      And yes, it's a reach.  To get there you need more than "they favored deregulation; deregulation allowed huge piles of speculative assets; the banking system began to collapse; those speculative assets will now be bought out by government."  The sequence of events did happen, but its mere happening doesn't prove they intended it to happen that way.

      •  I think that's a possibility. (2+ / 0-)
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        Skex, NCrissieB

        Although not to make money, but to protect and increase marketshare.

        Although, I've not stated it as fact, I have made a similar argument.

        The thing is that there is a flip side of 'conspiracy of convenience' and that is the incompetence argument.

        They just made mistakes.

        Well, why do the mistakes always wind up hurting everyone but those who cause them?

        "But it does hurt them! Bill Gates lost ten billion dollars!"

        Sure he lost money, but he gained marketshare.

        I realized that economic collapse was a given about 1998, and I'm just a silly little dog trainer.

        You can bet that people with tons of money that were driving the market saw that too.

        And yet what happened? Did we pull back from the brink? Nope, we threw gas on the fire and crafted all kinds of legislation to insulate the mega rich from harm in a collapse. We also crafted legislation that gave creditors the title to anything that people have that is valuable - homes (credit card bill).

        So what harm to the uber wealthy was there in breaking the system? What benefits could they reap?

        I don't think it's at all out of line to think that there could have been a conspiracy to bring down the economy quickly in order to capture marketshare.

        Given the freetrade movement's disdain of national sovereignty, some choice quotes from the Rockefeller's of the world historically, the naked short selling last September and the current path to redemption, it looks even more compelling.

        Is it the truth, I'm not going to say that. Is it the only answer? I'm not going to say that.

        Is it a possibility? Absolutely.

        Is it a better explanation than, "it was just a mistake?" I think so, but that's just me.

        Lose money gain marketshare is how I see it.

        Democracy - 1 person 1 vote. Free Markets - More dollars more power.

        by k9disc on Fri Apr 03, 2009 at 07:22:33 AM PDT

        [ Parent ]

      •  hard cash (1+ / 0-)
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        What is that, exactly? The government has had to borrow to bail out these financial institutions. In an economic sense, aren't you just replacing one kind of debt with another?

        •  One was purely theoretical money (1+ / 0-)
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          The appreciated assets in these speculative markets only existed in theory. They don't represent hard asset in the real world. You know like land and food and work hours.

          The financial economy is for the most part fantasy football overlayed upon the real economy where goods and services and produced and traded.

          Those assets were long ago detatched from the real economy after the innitial offering was placed save for the rare case of dividend paying stocks.

          These assets have as much real absolute value as that top payout listed on a slot machine in Vegas until triples 7s come up it doesn't really exist.

          This is what people are saying when they say that the bailout is turning these fictional assets into hard assets because the revenue that the government is borrowing to make good on those bets will come from tax revenue on real actually goods and services rather than the financial economy which gets preferential tax treatment already. don't you wish you only had to pay taxes on your gains after expenses?

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