Comments on: Classic Doom 10/2 2006: Moral Hazard & MBS http://housingdoom.com/2008/10/09/classic-doom-102-2006-moral-hazard-mbs/ Sat, 11 Feb 2012 07:12:54 +0000 hourly 1 http://wordpress.org/?v= By: Hutch http://housingdoom.com/2008/10/09/classic-doom-102-2006-moral-hazard-mbs/#comment-14421 Hutch Thu, 09 Oct 2008 15:11:46 +0000 http://housingdoom.com/?p=1697#comment-14421 The last time Keynesian Theory failed they coined the term "stagflation" I wonder what they will come up with for this. Since no one else will be penalized, I expect those who hoard (save) and refuse (pay in full) to help stabilize the system (debt growth ponzi scheme) will be pilloried. Remember to bring an air freshener or nose plugs when you go to the polls. The last time Keynesian Theory failed they coined the term “stagflation” I wonder what they will come up with for this. Since no one else will be penalized, I expect those who hoard (save) and refuse (pay in full) to help stabilize the system (debt growth ponzi scheme) will be pilloried. Remember to bring an air freshener or nose plugs when you go to the polls.

]]> By: twist http://housingdoom.com/2008/10/09/classic-doom-102-2006-moral-hazard-mbs/#comment-14420 twist Thu, 09 Oct 2008 12:46:11 +0000 http://housingdoom.com/?p=1697#comment-14420 John- Unfortunately, we have had a situation where morality has been punished, and market participants have been rewarded for taking large risks, often with other people's money. Mr. Twist was telling me that he was watching an analyst on CNBC who was saying that there was not enough discussion on the possibility that the bailout will in fact make things worse. Ongoing "mark-to-fantasy", lack of transparency and a prevalent belief that Uncle Sam will save everyone only increases the moral hazard and makes things worse. John-

Unfortunately, we have had a situation where morality has been punished, and market participants have been rewarded for taking large risks, often with other people’s money.

Mr. Twist was telling me that he was watching an analyst on CNBC who was saying that there was not enough discussion on the possibility that the bailout will in fact make things worse.

Ongoing “mark-to-fantasy”, lack of transparency and a prevalent belief that Uncle Sam will save everyone only increases the moral hazard and makes things worse.

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