February 15, 2014

If you only read one thing this weekend, read about the Vampire Squid

If you read only one thing this weekend, read this.

This is why the 2007 crisis was not resolved. This is why we now socialize their losses, but leave them their profits. This is why it is impossible to fix, and the only game in town is predicting which economy is toast, this weekend, and which investment bank is making monopoly profits while being technically bankrupt.

It is likely impossible to roll back the USA's lifting of the Glass-Steagall barrier, which is in other places known as sound banking. How one deals with a world in which banking is morphing into industrial combines with infinite and free capital is beyond my small brain; we need something like bitcoin, but much stronger.

Hack on, your code may save society as we know it.

Posted by iang at February 15, 2014 06:56 AM | TrackBack

Ecuador's banking system was brought down in 1999/2000, in part, by something like this. Industry owners *became* bankers in order to lend money to their own badly run companies and self-leverage buying up more. Legitimate businesses had to figure out which bank was their competitor before they could begin to ask for a loan.

They also faced the question, "How can you win against a competitor who can create money out of thin air?"

I'm curious that Taibbi doesn't ask that question. Could it be he hasn't seen that far through the game?

Posted by: Hasan at February 15, 2014 04:28 PM
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