Comments on: Frank den Butter – Misconceptions about the credit crisis http://www.liberatethemind.com/2009/06/23/denbuttercrisis_471/ Current Affairs with a twist! Tue, 06 Oct 2009 19:04:42 -0700 http://wordpress.org/?v=2.8 hourly 1 By: Mark Prins http://www.liberatethemind.com/2009/06/23/denbuttercrisis_471/comment-page-1/#comment-169 Mark Prins Fri, 26 Jun 2009 11:35:47 +0000 http://www.liberatethemind.com/?p=471#comment-169 @Jose: I think that you confuse economists with the people in the financial sector. Most banks do not even have economic departments, and a lot of people in the financial sector do not have any economic background. Still you are right that economists should have recognized the problems in the financial sector beforehand. On the other hand it is difficult to sell your arguments about a too low interest rates when on the other end financial institutions are making dreams come true with large credits, low interest rates. And who exactly cares about the real economy in half a decade when you can earn millions and billions of dollars now and will be saved by the government when things go wrong. The incentives are totally wrong, and in the end, the people that did save will pay the bill of the borrowers.. Incentives should really be reorganized in the financial sector, and although credit insurance may be a good thing in preventing bank-runs, I really dislike the idea that the surviving (usually more conservative) institutions pay the costs of the deposit-insurance of the 'bad' banks.. The whole incentive system is one great example of moral hazard. @Jose:
I think that you confuse economists with the people in the financial sector. Most banks do not even have economic departments, and a lot of people in the financial sector do not have any economic background. Still you are right that economists should have recognized the problems in the financial sector beforehand. On the other hand it is difficult to sell your arguments about a too low interest rates when on the other end financial institutions are making dreams come true with large credits, low interest rates.

And who exactly cares about the real economy in half a decade when you can earn millions and billions of dollars now and will be saved by the government when things go wrong. The incentives are totally wrong, and in the end, the people that did save will pay the bill of the borrowers..

Incentives should really be reorganized in the financial sector, and although credit insurance may be a good thing in preventing bank-runs, I really dislike the idea that the surviving (usually more conservative) institutions pay the costs of the deposit-insurance of the ‘bad’ banks.. The whole incentive system is one great example of moral hazard.

]]> By: Jose Luis Leal http://www.liberatethemind.com/2009/06/23/denbuttercrisis_471/comment-page-1/#comment-165 Jose Luis Leal Wed, 24 Jun 2009 19:56:46 +0000 http://www.liberatethemind.com/?p=471#comment-165 I liked the article, very insightful. My only comment is to the last sentence "Economists may be fallen angels, but they will not make the same mistake twice." Well yes, but he have to pay twice, first we had them in their jobs, and the crisis ocurred, now we must pay them again to hel us get out of this turmoil, plus we have to pay them while we´re in crisis because they have "insight and advices" for the mortal and uneducated minds. I absolutley agree with the role that the government shoudl play in minimizng risks and developoing coping mechanisms for individuals belonging to the working class whose lives have been dramatically changed becuase of this current economic crash. Thanks to the author, this is a wonderful article!! and thanks to Liberate the Mind! :) I liked the article, very insightful.
My only comment is to the last sentence “Economists may be fallen angels, but they will not make the same mistake twice.” Well yes, but he have to pay twice, first we had them in their jobs, and the crisis ocurred, now we must pay them again to hel us get out of this turmoil, plus we have to pay them while we´re in crisis because they have “insight and advices” for the mortal and uneducated minds.

I absolutley agree with the role that the government shoudl play in minimizng risks and developoing coping mechanisms for individuals belonging to the working class whose lives have been dramatically changed becuase of this current economic crash.

Thanks to the author, this is a wonderful article!! and thanks to Liberate the Mind! :)

]]> By: Frank den Butter - Misconceptions about the credit crisis ... | Get-Finance.co.uk http://www.liberatethemind.com/2009/06/23/denbuttercrisis_471/comment-page-1/#comment-162 Frank den Butter - Misconceptions about the credit crisis ... | Get-Finance.co.uk Tue, 23 Jun 2009 11:44:22 +0000 http://www.liberatethemind.com/?p=471#comment-162 [...] Read more: Frank den Butter - Misconceptions about the credit crisis … [...] [...] Read more: Frank den Butter – Misconceptions about the credit crisis … [...]

]]> By: Admin http://www.liberatethemind.com/2009/06/23/denbuttercrisis_471/comment-page-1/#comment-160 Admin Tue, 23 Jun 2009 08:53:10 +0000 http://www.liberatethemind.com/?p=471#comment-160 Thank you for the very insightful article! Thank you for the very insightful article!

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