[Touch 'n' Go]

Has the business world learnt its lessons from the financial crisis? Will there be a repeat?

[blueray]

No it wont end fully. Stupid governments fail to realise you can't "borrow" your way out of debt.

Once people start anew then everything will be ok, but that will never happen. Hey i'm a realist here.

If you keep on borrowing and not reducing your debt, you will end up like Greece begging for money every year and your entire country will end up rioting.

*End of truthful story with historical backing.*

Edit go learn some economics before you neg me. If you actually disagree with the above, you might as well live in a cave far away from humanity. How can you disagree with that. Go on prove me wrong.

[Touch 'n' Go]

(Original post by blueray)
No it wont. Stupid governments fail to realise you can't "borrow" your way out of debt.

I totally agree, America being in 14 trillion dollars in debt.. this isn't looking good!

[dslc]

I'd argue though we're past the worst, we're still very much in the midst of it all.

[blueray]

(Original post by Touch 'n' Go)
I totally agree, America being in 14 trillion dollars in debt.. this isn't looking good!

That's just the "official" debt not counting many other factors. It's a lot more.

[dslc]

(Original post by Touch 'n' Go)
I totally agree, America being in 14 trillion dollars in debt.. this isn't looking good!

Consider that as a percentage of US GDP and compare it with household percentage debt and that statistic becomes arguable less scary..

[Bill_Gates]

Nope.

1) Financial systems are still a required evil for capitalism to thrive.
2) In terms of risk - the agency problem will remain unless the structure of business is changed
3) I personally believe the risks will increase thanks to globalisation and the increased dependency meaning a crisis in one part of the world can soon trickle to other parts.
4) Regulation such as the FSA is inadequate largely due to the pay scale
5) Rating agencies are a joke!

[Classical Liberal]

The problem is the monetary framework. Full reserve banking is the solution for the time being.

http://en.wikipedia.org/wiki/A_Progr...onetary_Reform

[TGH1]

(Original post by blueray)
Stupid governments fail to realise you can't "borrow" your way out of debt.

*End of truthful story with historical backing.*

http://www.youtube.com/watch?feature...&v=94lW6Y4tBXs

"You can not spend your way out of recession"

A recession is defined as two consecutive quarters of declining economic growth. Economic growth is determined by spending and investment. So as much as I might disapprove of what Brown did, by definition, you can spend your way out of a recession. Although of course increasing borrowing to increase spending and investment should be a short term project, because you'll eventually have to service and pay off that debt, which I believe is fundamentally your point.

[blueray]

(Original post by TGH1)
http://www.youtube.com/watch?feature...&v=94lW6Y4tBXs

"You can not spend your way out of recession"

A recession is defined as two consecutive quarters of declining economic growth. Economic growth is determined by spending and investment. So as much as I might disapprove of what Brown did, by definition, you can spend your way out of a recession. Although of course increasing borrowing to increase spending and investment should be a short term project, because you'll eventually have to service and pay off that debt, which I believe is fundamentally your point.

Well done.

[Touch 'n' Go]

(Original post by Bill_Gates)
Nope.

1) Financial systems are still a required evil for capitalism to thrive.
2) In terms of risk - the agency problem will remain unless the structure of business is changed
3) I personally believe the risks will increase thanks to globalisation and the increased dependency meaning a crisis in one part of the world can soon trickle to other parts.
4) Regulation such as the FSA is inadequate largely due to the pay scale
5) Rating agencies are a joke!

thanks! do you wanna write my essay for me? :P
I would be grateful if you could elaborate on any of these points!

[Classical Liberal]

(Original post by blueray)
Well done.

If we pay off the debt. We destroy the money supply.

Talk of paying of the national debt just puts a big neon light on your head saying

'I don't know what I am talking about'

[blueray]

(Original post by Classical Liberal)
If we pay off the debt. We destroy the money supply.

Talk of paying of the national debt just puts a big neon light on your head saying

'I don't know what I am talking about'

Although on the other hand, if we don't pay it off we end up like Greece. Which is worse? It's a rhetorical question.

[Classical Liberal]

(Original post by blueray)
Although on the other hand, if we don't pay it off we end up like Greece. Which is worse? It's a rhetorical question.

No - Because we are a currency issuing nation. Unlike Greece who cannot get the central bank to print money to buy their bonds.

The risk for us is inflation, not default.

[blueray]

(Original post by Classical Liberal)
No - Because we are a currency issuing nation. Unlike Greece who cannot get the central bank to print money to buy their bonds.

The risk for us is inflation, not default.

I meant in the sense of unemployment and riots.

[Bill_Gates]

(Original post by Touch 'n' Go)
thanks! do you wanna write my essay for me? :P
I would be grateful if you could elaborate on any of these points!

i knew it was for an essay haha!

[Genius7]

The business world has learnt little to nothing from the financial crisis and yes there will be a repeat of the crisis but probably in a different form.

Financial Markets have seen almost no true reform it is quite shocking. Considering that it is accepted that financial markets caused the financial crisis I have been almost depressed at looking at the pathetic pretence of regulation governments have put up to alter the situation.

Big business still has far too much influence in government and free market economists still rule the agenda in many governments economic policy. One of the most important factors in protecting the world from another crisis is regulation until that is put into place a financial crisis is likely to occur again.

[Touch 'n' Go]

(Original post by Genius7)
The business world has learnt little to nothing from the financial crisis and yes there will be a repeat of the crisis but probably in a different form.

Financial Markets have seen almost no true reform it is quite shocking. Considering that it is accepted that financial markets caused the financial crisis I have been almost depressed at looking at the pathetic pretence of regulation governments have put up to alter the situation.

Big business still has far too much influence in government and free market economists still rule the agenda in many governments economic policy. One of the most important factors in protecting the world from another crisis is regulation until that is put into place a financial crisis is likely to occur again.

what do you mean by regulation?

[cl_steele]

of course it hasnt, if it had its money making ability would be hampered and they couldnt have that now could they?
some argue the worst has yet to come with the derivatives time bomb still yet to detonate and if that happens itll make the credit crunch look like peanuts

[Genius7]

(Original post by Touch 'n' Go)
what do you mean by regulation?

Regulation such as a tobin tax to slow down financial transactions or regulation as to what exactly banks and pension funds can buy.

Also regulation of complex financial products markets. Complex financial products which financial firms themselves do not understand are bought and sold and insured without any true understanding of what exactly is being bought or sold with rating agencies just slapping a triple A rating on them for a fake seal of approval.

These types of financial products need to be phased out of markets as people need at the very least a basic understanding of what they are buying and this does not occur in many financial markets. eg CDS markets where it can reach the level where you do not actually know what you are basically insuring.