:) Huh!

Re (5) I don't have time to read that article fully until later Bernard, but skimming, and as an opening shot, quote:

Alan Greenspan's erstwhile faith in the invisible hand notwithstanding ...

What a farce. This is Greenspan who was head of the Fed for what, 18 years, the very visible hand of the State's distortion of the cost of credit. Greenspan no more believes in the invisible hand, or more importantly practiced it, than I am likely to ask Helen Clark out for a date.

Whoever wrote the article wouldn't know what a free market was, seemingly, and that we don't have free markets, thus, what caused the meltdown was lack of free markets - true, laissez faire markets. I've said it before, if there's a central bank, it ain't no laissez faire, at best, and worst, its crony capitalism and monopoly rent seeking that rules, and a completely centrally distorted market with all the ill effects of same.

Later.

Oh one point Bernard. Do I take this to mean you categorically do not believe in free markets as the most efficient pricing and allocating mechanism?

Do you understand the philosophic implications of your stance on this, vis a vis, the freedom of the individual and their pursuit of happiness?

@Mark 'perfect' markets do not exist, there are always distortions/inefficiencies, therefore blind pursuit of said markets does not necessarily result in greater individual 'freedom' etc

waymad,
Great NNT logic as usual. Probably above their heads though.
I bought "The Black Swan" as soon as it was published. A very engaging read and should be 'de rigeur" for anyone attempting to handle money, even their own, let alone that of others.

The Crafer article will give more fodder for the interest.co.nz blog comments mob to question the family's genetic disposition. For all the Crafer's failings, you can always rely on the good old mean-spirited tall-poppy shooter to give them an extra kick in the guts while they're down. Perhaps like Matt Nippert, I can see another side to the Crafers as a hard-grafting family whose business naivety isn't reflected in an ostentatious lifestyle (compared to many other less ambitious Kiwis).

JC

Hold your judgment. We know some stuff that will come out on this site in the next week or two that may change your mind.
I have no problem with ambition. But their mad debt-fueled land grab was the worst and biggest kind of bad business decision making we've seen in New Zealand in recent years.

cheers
Bernard

@Mark

For the lack of a better term, I'm Libertarian, but some may label me a Whig. I see nothing wrong with regulation. "Laissez Faire" can not work as long as you have several markets and barriers to entry that precluded enough actors to create an efferent system. Deregulation, in all its various forms, was a failure. The markets were so corrupt and inefficient that they we almost set to fail. Deregulation was simply the match that allowed it to happen faster. Many Libertarians are now having a crisis of faith based on the failure of deregulation. But I do agree. I think regulation, when properly implemented, is not only sufficient but absolutely necessary for competition. I view regulation the same way I view standards. We need standards so that we are all speaking the same language. I might speak inches and you might speak centimeters and we run the risk miscommunication. The markets could set these standards, and often do, but history has shown that only government intervention will sort this out and help set and more importantly maintain the standard. Governments are extremely good at standardizing things that do not change often: time, temperature, length, etc. The entire world relies on governments to keep accurate time, location, etc. Nobody complains about the government's time keeping or their ability to maintain the GPS system. I welcome government intervention on the long view. Governments are great at building long-term infrastructure that adds value to the markets and creates real wealth. High tide lifts all boats.

So the first thing is to acknowledge that governments can do things more effectively then the private sector. The idea is to figure out what those are. One form of regulation and/or standardization I champion is to regulation the markets much like a referee regulates a rugby game. We all hate referees, but we can all agree they are a necessary evil to make a game more competitive. It's not perfect, but its close enough for government work. So as long as regulation helps level the playing field I see nothing wrong with it. In fact, I welcome it and it doesn't cause a crisis of faith in my political beliefs as both a Libertarian and Whig!

Are the Crafer's any different from Air NZ or from Telecom , who also blundered badly in expanding , for the sake of being bigger , or to massage the director's egos . They screwed up . Take a leaf from Michael Hill's business model . He has grown his empire at a measured pace . Hallenstein Glassons too . The common thread ? Be greedy shrewdly and slowly . Tortoise 1 : Rabbit 0

CRA the 'main cause', what a joke! Poor little banks, big nasty government.

Bernard. In point 5 you quote from Frank's NYT article where he said ".. It was never reasonable to have expected market forces to protect society from the consequences of this risky behavior."

Bernard and Frank: You have dropped the context here.The risky behaviour occured because the government via Fannie and Freddie was underwriting risky mortgages, mortgages which would not usually be undertaken by commercially minded companies. You cannot then blame market forces for failing to prevent the risky behaviour which would necessarily result since the normal incentives which markets rely on have been completely undermined by government intervention.

What makes you think that such intervention is consistent with a free market?

Julian

Wrong Bill. Fannie Mae and Freddy Mac where the physical trigger of the credit crunch, and under their GSE status, they were not banks, they were welfare agencies, doling out cheap credit to those who, if market conditions had been applied, were unbankable. As was the case with CRA regulated banks.

Read the relevant articles in the Mises Bailout reader:

http://mises.org/story/3128

Especially the two articles under that heading, and the links to Fannie Mae and Freddie Mac analysis.

But that's it for today, I'm way behind where I'm supposed to be in the 'real world'.

[Oh, a repeat, sorry - yes, what Julian said.]

Okay, fair enough the 'main cause' was not bad investment decisions and lending practices of private companies, it was the CRA. Damn government if only they hadn't interfered.

Falafulu Fisi,
please explain why the CRA was the cause.

Still with the CrapFarms debacle. They had the distinction of applying to pipe their effluent over the boundary into the adjacent Regional Council, which just happened to have fewer controls.

I just cannot believe that no-one has used the phrase 'bet the farm' as yet.

Oh, wait..

Oh, the pains of hand-fettled HTML. And trying to bee clevver.

Piping goo over t'hill

I wonder if the IRD has noticed the point about the Crafar's lack of business systems.

In my opinion this quote tells you all you need to know about the man:

"I've ended up in the greatest job in New Zealand - I've 20,000 girlfriends, I get to play with tits all my life, and my wife doesn't get jealous."

For the grammar nazi: http://www.wikihow.com/Use-Apostrophes

@Bill: Some of us thought he would really or could really change things....he is actually roving he cant or wont....His administration is a flex pointfor the US. He needed to be one of the best Presidents / Leaders the US has / will produce....it is critical for the USA and indeed the rest of the world that Obama makes and takes the hard decisions and sorts America out. He clearly is reneging on just about everything he said before he got elected....hence I think the comments are justified....I expected this from McCain and even Clinton...I had hoped Obama wouldnt be this bad, he clearly is.

regards

@Bernard: A cracking 10 at 10.

"Was "˜double or quits' a business plan the bankers accepted?"

Sure was, remember the bankers saying that they will support thier farming clients through the tough times.

The banks have known its double or quits for a while now, they and the farmers have simlply run out of time.....

Now the banks will be looking to go from "double or quits" to "damage control", this is where the funding gets contorled and equity gets damaged. (munted).

"For all you guys criticising the Crafers based on a couple of "crazy" quotes in the media and the fact he didn't have a computer "” if your conclusions are correct this makes our banking industry look like much bigger plonkers , huge bonuses and all . They lent them the money."

Probably a much more interesting side of the story in my opinion. And it still bothers me that anonymous people sneer at the Crafers as uncouth peasants with little understanding of how the farming business should work. Like I said earlier, it stinks of the pettiness of NZers when someone gets too big for their boots. There's no reason why the Crafers couldn't have succeeded with the help of professional business managers who understood the wider risks involved.

@Ross - you are quite right, the bankers were crazy and gambled as much as the Crafars.

The criticism here is justified however. They showed no respect for environmental law and appear to have run their business in a careless and negligent manner. The quotes just confirm how sorry the whole debacle is.

@Ross: A computer, not so much that as he doesn't appear to have had "books" at all or any short term, medium term plan(ning)....his own review of how he was doing? for $200million you just have to have some sort of records and a way to crunch numbers. Either that or he has a photographic memory and is a brilliant statistician (so why the wall calender?)....all the while he plays with thousands of tits....where's the tui add anyone....

Do I think the bankers are bonkers/plonkers? yes....anyone who lends $200million without seeing a business plan and some cashflow numbers wants sacking right now.

regards

"There's no reason why the Crafers couldn't have succeeded with the help of professional business managers who understood the wider risks involved."

That would be thier rural managers then JC. You are dead right, the Crafers are just hard working people.

Allen relied on phyical hard work to make his money, he left the fiscal stuff up to his bankers, advisors, and accountants. They were no help at all (in the end).

Bernard, another little blog gem from David Goldman (Spengler). And there's a new Spengler post too!

"Over time, China will attempt to trade $2 trillion worth of Treasury securities for $2 trillion of production inputs. In this order, China's priorities are food, food, food, energy, food, iron ore, food, copper, food, and food again."

If we play our cards right - I mean gamble wisely, heck, enough with the metaphors - see the light, NZInc should do all right from this selection. Especially if we can find some more iron ore under that Schedule 4 land....

@ Bill "˜liar', "˜fool', 'stupidity', "˜cowardice', bit strong methinks. Some of us have a (slightly) better opinion of Mr Obama.

Obviously some of you dont know or follow obamas promises, that is why he is very fast becoming the most unpopular president in history, he tells a good story just dosnt follow through, bernard description is pretty spot on

@jamman: No and yes....

No I am not.

But I admire anarchy's purity, that does not mean I think it would work. What I see it as is a theoretical opportunity to start again thing. These Libertanz nuts seem to think its OK to live within an existing society not paying for all the hidden advantages. Anarchy gets around that, it allows a group(s) of people to start again from scratch....again in theory. So if we had say FTL travel, the few thousand Libertanzis could collectively go live on their own planet and everyone would be happy. We'd be happy to be rid of them and they'd be happy to be free........indeed that could be said for just about any fringe group.

For me, t\e society we have today is based on evolution/iteration...its had 10,000 years to put together a method/system that supports people....I dont think I for one could design something so robust from scratch myself in one generation....

regards

@Julian: Well corrected, the CRA only had a small effect. This disaster was caused by the private banks and lenders, the real mayhem was the fraudulent private lending and the multiplier effects of the CDS's...

It takes a real hard nosed GOP supporter to believe the CRA was the prime cause....but then logic isnt their strong point...

regards

Thanks dic

Trev and Steven -- my comments were a little "tongue in cheek". But as Stevenl says the real story is how the banks allowed lending to this level to occur if there were no good financial records , planning etc around. All it says is that the banks have potentially even worse systems in place. There has to be much more to this story yet.
Most of it will revolve around alot of bankers running around trying cover their rear ends.
Trev -- I read the other day the Crafers had employed a "Compliance " Officer to look after their environmental issue so they weren't entirely negligent.

Mark and Steven, get a room ;-)

TO JC.
You want to see down??? go to the Crafters' farm in Taupo and see the condition of the cows. Then we'll see if you still think they are great guys. These guys are very poor farmers and now apparently very bad businessmen.
They borrowed and they lost. there is an old saying in farming to be successful - feed the cows before yourself and they will feed you. Alan Crafer does not follow this lead.
The reason people attack him is because he keeps saying foolish things to go with foolish actions.

@ Stephen "This disaster was caused by the private banks and lenders, the real mayhem was the fraudulent private lending and the multiplier effects of the CDS's"¦"

The Federal Reserve is a private bank and is the cause of the crisis through its manipulation of the most importance price in the an economy - the price of money, aka the interest rate. However, do not forget that the US government permits the Fed to operate as a protected monopoly so to directly blame the private sector or private banks for this mess is not necessarily fair.The government's protection of the Fed and giving it monopoly control of the money supply is the root of the problem. Remove this interference in the market, and usual market incentives will arise to minimise the probability of such a crisis. Note that CDSs (which are perfectly good financial instruments when subject to normal market regulation ie market incentives) etc were not the cause of the problem, their use (and abuse) was a result of the environment whereby losses were socialised and profits privatised.

Bernard: I ask again, why do you blame the free market for what happened?

Julian

I reckon those are going to be eight well informed kids, mum ;) And we probably won't see any of them throwing bottles in Dunedin.

I love that first bit of your post.

@waymad: hence I wonder about the longer term view of our FTA with China....Theoretically it allows China to come here with "worthless" USD and buy food from under NZers noses.....

@mark: I dont think Libertanz do either....they seem to be a tiny fraction of the population (1000 voters from 2million?), and indeed seem to be fragmented even further within....

Capitalism the best? sort of....If you continue to not take the future into account. For the last few hundred years capitalism has enjoyed its supremacy because it has proven the most successful system to exploit cheap resources, so in effect we have refined a terrible beast we now have to control. This is because right now things are changing, in fact its probably in-arguable that capitalism cannot survive when it no longer enjoys cheap unlimited resources as its inputs. What we have really developed is a system that is highly efficient for living today and not for tomorrow or for future generations. Capitalism/consumerism is like the locusts, we have scoured the earth and indeed left so little behind that the natural recovery or re-production rate of the eco-system is damaged....and the longer we leave fixing the nightmare the worse that damage becomes and the tougher for those fewer in the next generations are going to find it...

This is why I object to so called "Libertanz" and "Freedom nuts" so much, in effect its abdicating responsibility for ones impact on the planet and its future just to satisfy yourself, now today no matter what the cost and expense on anyone else, the passive smoking of politics in effect.

regards

Dear oh dear Steven. You've got the Green belly ache real bad.

If you continue to not take the future into account. For the last few hundred years capitalism has enjoyed its supremacy because it has proven the most successful system to exploit cheap resources,

You have overlooked the solution to your perceived ills of capitalism, a solution that capitalism has at its very heart, and is the only system that promotes it so successfully: innovation and entrepreneurship.

New technologies, better ways to use resources, to 'make' resources - the ingenuity of man's mind.

It's not coincidence the biggest real polluters of the planet, and those that have exhausted short term supplies of resources, namely food, have always been the controlled, command economies.

Put you back 100 years and what, you'd be saying those dreadful capitalists, look at those evil Penny Farthings, using up all that iron and leather. It's the end of the world ... ;)

The limited forms of capitalism we have had have been successful for the reasons I have given: freedom, well being, higher standards of living, and oh, unlike planned economies, capitalist countries have never been able to embark on the wholesale slaughter of its citizens.

"We started off trying to set up a small anarchist community, but people wouldn't obey the rules."

:-D :-D :-D

Bill

Nobody talks about Fight Club!

SHHHhhhhhhh

Getting back to task.
http://www.telegraph.co.uk/finance/financetopics/recession/6190818/US-cr...

Professor Tim Congdon from International Monetary Research said US bank loans have fallen at an annual pace of almost 14pc in the three months to August (from $7,147bn to $6,886bn).

"There has been nothing like this in the USA since the 1930s," he said. "The rapid destruction of money balances is madness."

The M3 "broad" money supply, watched as an early warning signal for the economy a year or so later, has been falling at a 5pc annual rate.

Similar concerns have been raised by David Rosenberg, chief strategist at Gluskin Sheff, who said that over the four weeks up to August 24, bank credit shrank at an "epic" 9pc annual pace, the M2 money supply shrank at 12.2pc and M1 shrank at 6.5pc.

"For the first time in the post-WW2 [Second World War] era, we have deflation in credit, wages and rents and, from our lens, this is a toxic brew," he said.

It is unclear why the US Federal Reserve has allowed this to occur.

Chairman Ben Bernanke is an expert on the "credit channel" causes of depressions and has given eloquent speeches about the risks of deflation in the past.

Just for the record, Libertarianzs are not anarchists.

Next red herring, please.

@mark: You rely on scientists and engineers to dig you out of the poo....yet when those same scientists and engineers tell you about AGW you deny it....

"New technologies, better ways to use resources, to "˜make' resources - the ingenuity of man's mind."

I'm an engineer....I also have a theoretical background in thermodynamics ...ie the maths of a perfect machine(s) is well understood...and pretty much has been for 100 years...

Or if you will energy in == energy out.....When the sun puts so many watts per square KM per year then that is a fundamental max any process can extract...so if it is say 4Kw, that's 100% efficiency that is the best you can ever do, 4kw per year per sq Km.

Oil on the other hand is the result of that 4kw per year for thousands indeed 100,000's or years...all squashed, concentrated and cracked ready for you to pull out of the ground and refine a bit.....

It is a whole different ball game.

The best way to describe it is, a cartoon I saw with a buffalo hunter on it saying, (paraphrase) "No more buffalo!? extinct?! dont worry give me more hunters and more trackers and I'll find more buffalo!"

Yes I agree that the totalitarian systems have been worse, and yes considerably and indeed capitalism has been and is more efficient...but that does not matter....what I am saying is capitalism will die, there is too little left for it to be efficient on....

"capitalist countries have never been able to embark on the wholesale slaughter of its citizens." Indeed they have instead embarked on wholesale slaughter of other countries citizens.

Also I am a father....I want the very best for my children and eventually grand-children....from my perspective as an engineer I see that we are leaving them little, potentially very little and indeed not just resources but little freedom and a very tough and shortened life as well.

ie the biggest problem I have with you and your ilk Mark is that you steadfastly defend your freedoms today at the risk of a considerable loss of your or future generations freedoms tomorrow, that I see as illogical to be frank nutty extremism.

@andrewJ"It is unclear why the US Federal Reserve has allowed this to occur." probably because he cant fix it....I agree with Peter Schiff/Jim Rogers, the banks should have been allowed to fail....not because I agree with that ie its the best way....but because I dont think they can stop it happening...ie its the only way and I think now its un-avoidable. If they had been cleaned up in a controlled manner maybe, but that didnt happen, so the only option left is implosion from their own hand ....

regards

LOL.

When all else fails Mark can be relied upon to tell you that you are a leftist treehugger.

I feel myself siding with Steven on this one.. and I'm not even a leftist greenie.. I must be having a mid-life crisis !!!

But I can't agree with the unqualified statement of "wholesale slaughter of other countries citizens"...

The pacifist arguement about even the 'worst' or the Allies war actions (in ending it) about the N-Bomb is based on hype. The numbers added up... more Civillians were expected to die in an invasion than with the bomb...

Might pay to qualify any of the harshest statements with some fact Steven... other than that I can't think you're too unreasonable... except that one other thing... which is of couse of utmost importance but... they won't let me write it!

I'd have to wholeheartedly agree with Peak Oil for starters .. and the war for the extraction, supply, delivery and consumption of oil, dressed up as the "War on Terror" (..wholesale slaughter of other countries citizens) etc.

Can't argue with that !!

Edit: Oh, and and not to mention NZ sending our SAS to Afghanistan, doing our part (to secure the supply of oil to the West).

Hard facts , Mark ? We are joining the global throng to embrace an emissions trading scheme . Which is going to actually achieve what ? I have outgrown sitting in a circle , holding hands , and singing Kumbaya ........ . When the heck is the world going to grow up . .............. ....Fairy tales , Hans Christian Anderson , is for pre-schoolers . Geez Louise !

Mouse... was @ Stevens/Matts diatribe on AntiCapitalism.

Hey there's a point though... perhaps he was?

Mark, Peak Oil (production) is not the same think as oil "depletion", although they are related the two terms are often confused. If you head on over to http://www.theoildrum.com there is plenty of information there.

Roger Thompson - Agreed the National/Maori party scheme is not going well... the Purpose is to help people understand the true costs of their purchase decisions/Lifestyle choises... rather than externalising those costs on to others.

As a Libertarian who seeks to live sustainably... I deplore picking up the tab for those who will not even accept there is a Climate Change/Peak Oil Issue on the Radar.

What " tab " , mouse . Facts ! Where is the tab , quantify it . And tell me how the ETF fixes anything . What is to be fixed ? The National/Maori scheme is only less deplorable than the Labour one , because it is less taxing . Labour love taxes . What the bloody hell is this " sustainibility " that Libertarians keep whittering on about ? It reminds me so much of Helen Clark ; fine sounding , meaningless dribble . And we're all meant to agree . Why ?

Steven said...
I'm an engineer"¦.I also have a theoretical background in thermodynamics "¦ie the maths of a perfect machine(s) is well understood"¦and pretty much has been for 100 years"¦

That means you would understand of how to solve the solution to a boundary heat-flow (heat-diffusion) problem using the partial differential heat equation ?

Umm! Not many engineers know how to do that (including you) but physicists do know how to solve such thermo-dynamic diffusion problem. The Black-Scholes model for pricing of options (financial derivative) was derived and solved using the heat-equation shown in the link above, which lead to Dr. Scholes and DR. Merton winning the economic Nobel Prize of 1997 for their effort in developing that model. Black-Scholes pricing model has some shortcomings, but it is still better than using guess work to price European options.

Now, natural resources is only useful if it has value, ie, someone somewhere want to use them. If they don't have value, then they're useless and are not resources. Oil was not a resources, until man found a use for it. If we run out of oil at some stage in the future then I am sure that the power of the market force will invent some material that are currently useless to us at the moment (ie, no use) to be used as a substitute for oil.

@Mark

Any response to the following?

http://www.interest.co.nz/ratesblog/index.php/2009/09/15/top-10-at-10-al...

Re Crafars. Where does this leave PGG Wrightsons. Who would have thought they would have exposed themselves to a debt of 25 million to one business. It raises so many questions. The obvious one is what other substantial loans do they have to dairy corporates. Also what is their security situation, and considering this is bad news on top of bad news, why have they not commented.

Falafulu Fisi

which lead to Dr. Scholes and DR. Merton winning the economic Nobel Prize of 1997

Nobel offers prizes in science, but not in economics. Dig a little.

Farmer Will:

Where does this leave PGG Wrightsons.

I would think a little worse off than where they were as of their last accounts:

Total Current Assets: $902,208,000
Total Current Liabilities: $954,443,000

I am sure there is an accounting/legal term to describe that situation.

So Peter would you have full confidence in chucking a heap of stock in one of their sales? The accounting term brought to mind suddenly makes me nervous.

"Says everything about where you're coming from. I know of no capitalist country that has embarked on war other than to defend its freedoms."

lol. Thats just too funny. You can only say that by ignoring the history of the last 250 years. Does the word COLONIALISM mean anything to you? Both you and I are the beneficiaries of a period where a capitalist country (Great Britain) embarked on a series of wars (Maori Land Wars) to steal others lands and resources. (Maori).

Perhaps this quote by the most decorated officers of the United States Marines at the time could prove to be a useful antidote for your delusions.

"I spent thirty- three years and four months in active military service as a member of this country's most agile military force, the Marine Corps. I served in all commissioned ranks from Second Lieutenant to Major-General. And during that period, I spent most of my time being a high class muscle- man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism."

http://www.brasschecktv.com/page/624.html

"Some guys tried to persuade me years ago that European engineers had developed a method to make a nuclear reactor small enough and safe enough to power individual cars."

lol. Ford Motor Company had developed a automobile concept that was to be powered by a fission turbine within a decade of building the bomb, but like the U.S. DoE funded nuclear powered plane had failed to take into account the sheer weight necessited by the lead shield need to prevent drivers and passengers from dying in excruciating pain from radiation poisoning.

The Nucleon's silent, sleek, and efficient design was poised to secure its place in the American lifestyle of the future. It seemed inevitable that the internal combustion engine would fade into obscurity, becoming a quaint relic of a pre-atomic past. But the Nucleon's design hinged on the assumption that smaller nuclear reactors would soon be developed, as well as lighter shielding materials. When those innovations failed to appear, the project was scrapped due to conspicuous impracticality; the bulky apparatus and heavy lead shielding didn't allow for a safe and efficient car-sized package. Moreover, as the general public became increasingly aware of the dangers of atomic energy and the problem of nuclear waste, the thought of radioactive atomobiles zipping around town lost much of its appeal. Atoms had broken their promise; the honeymoon was over.
http://www.damninteresting.com/the-atomic-automobile

Hard facts, not the touchy feelys.

Um how about detailed analysis and projections from the vast majority of the world's experts on the issue including the International Energy Agency, (a branch of the OECD).

Quite so Jamesy - I thought Mark's comment was so hilariously one eyed it wasn't worthy of comment. However in the interests of illumination here are a selection of other wars we might consider (with casualty figures in brackets). In each case I rather hope that I dont have to identify which of the protagonists is a capitalist society which of course was only fighting to protect its freedoms..........

1886-1908: Belgium-Congo Free State (8 million)
1899-02: British-Boer war (100,000)
1899-02: Philippines vs USA (20,000)
1900-01: Boxer rebels against Russia, Britain, France, Japan, USA against rebels (35,000)
1904: Germany vs Namibia (65,000)
1946-54: France-Vietnam war (600,000)
1954-62: French-Algerian war (368,000)
1964-73: USA-Vietnam war (3 million)

What comes next?

Alison Paterson Warren Larsen
Chairman Deputy Chairman
31 July 2006

Hon. Jim Sutton CNZM Warren Larsen CNZM
Chairman Deputy Chairman
27 August 2007

Jim Sutton M arise James
Chairman Chairman of Audit and Due Diligence Committee
1 September 2008

C&P from http://www.landcorp.co.nz/business/annualreports.aspx

LANDCORP 2009?

Jamesey, yes, perfectly true what you say about colonialism. But:

That was 250 years ago, as you say. That was a less enlightened time, obviously, thankfully, humanity has progressed, and that progress has always been quicker, the closer the society is toward free societies, and freer markets.

It was for King and Country. Another anachronism we have progressed beyond, and note that such imperialism is anathema to Libertarianism, founded on the non-initiation of force, and a repugnance for all forms of tribalism and collectivism, including patriotism for the sake of the 'tribe'. The only thing a Libertarian society has an allegiance to, is the philosophy of individual freedom (which cannot exist without the non initiation of force principle).

Re the marines, yes, but you're talking about crony capitalism, not laissez faire; again, this is precisely the problem.

So, none of that changes any argument I have made. Laissz faire capitalism is the only system that is founded on, and protects, the freedom of the individual; to the extent our capitalist systems are removed from laissez faire, and toward central control of the State, they move toward coercion, as we have in our modern democracies, all of which are founded in the final instance on State coercion of the individual, and the sacrifice of the individual's freedom on the bloodied altar of the common good. That's not a debating point, it is the truth.

More importantly, for all of you arguing against laissez faire, what, exactly are you recommending in place of it? What are the philosophic implications, vis a vis the freedom of the individual to lead their own life, unfettered by the petty rule of bureaucrats, of your recommended systems?

If you are recommending in any form a command economy, given the weight of the history against you- where central planning has been disastrous - what are you citing as concrete evidence that central planners can make a better job of price and resource allocation than the market can? And how do you weigh the trade off such central planning with the loss of an individual's freedom from the State?

Is your mortgage/insurance broker required to disclose they are currently facing charges in relation to a multi-million dollar fraud...

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1059...

Sure I believe innocent until proven guilty, but when the SFO is opposed to continued name suppression...

PeterR/AndrewJ,

" technically insolvent" - I would use the term "illquid", current assets are a subset of total assets... When Total Liabilities exceed Total Assets, they would be insolvent.

Options for them are:-
a) Sell some Non current Assets...to convert them to current [sell owned vehicles/buildings and lease back... that kind a thing].
b) Issue new Equity
c) borrow more Money...

But hey, none of these options scream Profitable Growing Business.

@Mark Hubbard and AndrewJ: I too note the Oakridge story as an observer. Having quite a few elderly rellies down here who have trusted the likes of the PGGW firms and SCF with their retirement cash, I am keeping watch on these evolving stories. Add in Silver Fern Farms, the big dairy players and their debts mentioned above, then the emerging web of cross-ownerships, and my old hack's nose begins to twitch. I hope all is well because these companies were seen as old-school in their operations by the elderly investors who are relying on them.

@andy hamilton:

In terms of oil as a % of GDP causing a recession, Professor Kenneth S. Deffeyes

http://www.princeton.edu/hubbert/

Came up with a similar comment, his lecture is on youtube...

if you search for "Ken Deffeyes" its the first piece,

Peak Oil - GDP vs Oil - Dr. Ken Deffeyes

http://www.youtube.com/results?search_query=Ken+Deffeyes&search_type=&aq=f

@PeterR, "Nobel offers prizes in science, but not in economics." you are being unkind if 100% correct...there is an award of sorts that is pretty much similar in what it tries to achieve, ie ack someone or someones who have reached the highest levels in their speciality and have contributed meaningfully to society with their work...Personally, I can live with it being the same thing....the men and women who got the "award" are the very best and deserve that distinction.

@mark: "No, what you "˜and your ilk' are advocating is slavery now, and well done, basically we have it." No I am not....what I am saying is accepting that there is some compromise on freedom in exchange for something else....eg security of food, energy, well being is acceptable....only a fanatic can take "freedom" to such a degree that everything else is of no merit. As someone said there is no humanity in extremism...

@julian: ".....Fed to operate as a protected monopoly so to directly blame the private sector or private banks for this mess is not necessarily fair." Actually yes I believe it is pretty fair, ie blaming the excesses of the Private sector. However, yes, the Fed pretty much sets the overall framework of how the economy and financial system will work....Greenspan definitely has a lot to answer for he sent interest rates to low for too long, failed to utilise the regulations he had (I use "he" in the broadest terms, this includes Govn regulators) to check up on and control excesses. CDSs should never have been allowed....or certainly not at their AAA credit ratings....given out at a nod and a wink.

@Peter C: "Just for the record, Libertarians are not anarchists." if you are implying me, no that is correct, strictky speeaking I dont believe they are...and never have...however I see Libertarians as close to anarchists, a group of people who have taken anarchy and added to it just enough of socialism to suit their wants.

"unfettered capitalism" Bernard?

I'd be very keen to know? Certainly not in my lifetime, or yours.

In-correct, we just had a great example of our current recession of as close as many ppl will want to get to "unfettered capitalism" ever....but round 2 is coming.....

@jamman: "the technology is there already to produce more energy than the earth will need for the next 100,000 years"¦" do tell....no such thing....

@Jamesey "Um how about detailed analysis and projections from the vast majority of the world's experts on the issue including the International Energy Agency, (a branch of the OECD)."

I dont think this is the right place for that...takes too much space, but three excellent sites that discuss just about everything on energy are,

http://www.energybulletin.net/
http://www.peakoil.com/
http://www.theoildrum.com/

There is enough info and links off those three sites to keep you reading for 2~3 years. That's about how long I have been reading up on it...

regards

Mark "“ you constantly blame government intervention for our demise but whom do you think government represents?

Isn't it the fact that government aren't working in the public interest the problem - and not government itself?

And wouldn't reducing government merely be officially handing over control to these corporate interests currently pulling the strings?

Wealth is being consolidated through the help of government policy but it isn't being consolidated by the state.

Here is something you should consider: http://www.salon.com/opinion/greenwald/2009/09/14/resentment/index.html

It will be interesting to hear your view on the piece.

@andy hamilton: So SCF has ring-fenced funds gone in since August 20? Is this standard practice? Do we know who the US investors are?

Mark et al

Apologies for my delay in responding. Had to get out today's Top 10 at 10.

Hard not to respond too when accused of being a 'state worshipper' . Yikes. Not me.

But....I have no illusions about the fairness and success of utterly unregulated markets with no government involvement. Markets are virtually never free and transparent. Ever tried comparing quotes in insurance? Tried unravelling what a Telco is actually charging for?

The tendency towards mega-corporates and the evolution of the pension fund as shareholder culture means these corporates will naturally try to be bigger and generate more income for their managers. Markets are almost always not free. Participants are not rational. They are often greedy bullies with HR and corporate social responsibility departments.

Standard Oil, Microsoft, Google....Need I say more. Some industries lend themselves to becoming monopolies, while others are just made that way by brute force. Most pretend to be nice to staff, customers, suppliers and society. Some genuinely try not to evil. Most eventually end up that way.

I am sympathetic to the idea of letting banks go bust and the monstrous moral hazard we have now. But those banks did the bad things and grew too big to fail even though they knew there was at least a chance they would be allowed to fail. Ask Bear Stearns and Lehmans Bros about how they feel?

My point is that even with all the shareholders checks and balances and with the threat of failure they still did mad things. That's because they were greedy and stupid and reckless. It's human nature. It's why we also have laws against murder, theft and rape.

I'm afraid completely unfettered (as opposed to truly free) markets create monstrous monopolies, greedy corporate managers, short termist shareholders and massive growth in inequality.

Left unfettered, societies with these companies would eventually dissolve into revolution, war and poverty, as much as we might wish otherwise. On that happy note...

cheers
Bernard

Bernard, thanks for answering, though that's a depressing view you hold, and one I don't agree with. We've never had a laissez faire economy to test your 'big evil monopoly' theory - can you cite me such examples? - whereas our mixed economies do definitely produce such monsters, most often via monopoly rent seeking in collusion with the State.

But, it's opportune that the Austrian Economists blog has a pertinent post today, and, given your apparent preference for a mixed economy (if not straight State Worshipping :) ), a further set of questions you would have to answer.

Quote:

'But everybody today calls for the "mixed economy," the so-called third system that draws the best institutional features of capitalism and socialism. They are the ones, then, stuck with the theoretical burden of demonstrating that we do not live within a fundamentally self-organizing system and that legislation geared toward particular ends doesn't unleash systemic unintended consequences and a destruction of freedom. '

Per, discussion of Hayek's Law, Legislation & Liberty .

http://austrianeconomists.typepad.com/weblog/2009/09/its-all-about-spont...

Mark,

I'm not saying ALL areas need regulation. But I can think of a few:

- regulation of debenture offers, disclosure requirements etc
- regulation of REAs (some progress has been made here)
- regulation of foreigners owning NZ land
- regulation of corporate debt levels

Mark,

There is regulation regardless, I think people just like some regulation and dont like others. eg, is it fascist for a govt to legislate that we cant kill our children??

And no, it does not overly frighten me. What would frighten me is if they began to legislate away our ability to vote them out. That is the real hallmark of fascism. If we dont like their regulations, we can vote them out.

What would frighten me is if they began to legislate away our ability to vote them out.

Well, we have no written constitution: what's actually to stop them? (Answer, seriously: nothing, not legally anyway).

Mark, why does regulation of corporate debt levels scare you so?

Seems reasonably logical to most I think... sure shouldn't be over regulated but if they are expected to stay within the confines of extreme common sense and a little bit of leeway...
Like perhaps not borrow any more than 10 times the asset value???

Civil liberties are great until someone else exercises their own, next door... " But i like my parties loud and long", "I like to use my chainsaw at 2am", "My manufacture of chlorine gas is strictly for personal use!"

Your faith in human nature seems poorly founded. Hand over some FACTS eh!

The problem with democracy is that the govt has the unenviable job of trying to keep most of the people happy all the time, popularity is more important than to their survival than long term sustainability (not a bad word, just badly used). Theoretically, if you had good men and women in govt they would make less promises and do what is needed NOT what is wanted. This is the weakness of democracy, the iron mingled with clay.

Mark, please don't put words in my mouth...

These additional items may seem logical progression to you, but I don't agree.

I suggested that is could be neccesary to put limitations on excessively bad financial practive, not legislating common sense (which obviously isn't very common!)

Bernard said...
Standard Oil, Microsoft, Google"¦.

Do/Did these companies ever violated anyone's rights (via force)?

Bernard said...
Need I say more. Some industries lend themselves to becoming monopolies, while others are just made that way by brute force.

Monopolies via the approval of the state is not earned, while monopolies via brute market force is earned. Do you see the difference? Does the owner of "interest.co.nz" want to become monopoly via brute market force ? I bet he does. Is it a good thing? Why not. Here is a well reasoned argument for you to read:

Drop the Antitrust Case Against Microsoft

Bernard said...
Most pretend to be nice to staff, customers, suppliers and society. Some genuinely try not to evil. Most eventually end up that way.

Irrelevant. No force being used. If an employer of Microsoft, doesn't feel that he/she is being treated nicely, then there is an option. Just find another employer who treats its staff nicely. Free to leave and free to come. No force being used or a gun being held to one's head.

Bernard said...
I am sympathetic to the idea of letting banks go bust and the monstrous moral hazard we have now. But those banks did the bad things and grew too big to fail even though they knew there was at least a chance they would be allowed to fail. Ask Bear Stearns and Lehmans Bros about how they feel?

The bank (privately owned) never came to take your money Bernard (via force). You went to them voluntarily.

Bernard said...
My point is that even with all the shareholders checks and balances and with the threat of failure they still did mad things. That's because they were greedy and stupid and reckless. It's human nature.

Rights have not being violated here.

Bernard said...
It's why we also have laws against murder, theft and rape.

Irrelevant. This is the legitimate role of the government, since being murdered by someone is violating the rights of the murdered person.

Bernard said...
I'm afraid completely unfettered (as opposed to truly free) markets create monstrous monopolies, greedy corporate managers, short termist shareholders and massive growth in inequality.

Irrelevant. You have to make profits. The bigger the better. When the profits get bigger and bigger, anti-free market just crybaby, oh, no, you exploit us. But the question here, is if anyone thinks this way, then don't use the services or buy the products of that company. Simple. If I think that Telecom is ripping me off, then I go somewhere else or at best just don't use telephone or mobile communication at all. About half of the population of Tonga don't have any form of electronic communication at all. They don't moan about it, since the local Telecom there exist for the purpose of making profits. If the locals can't afford to subscribe or buy those services, tough luck, but the local Telecom is not there to be Santa Claus to the locals who can't afford those services. The question is, do those locals have a God given right to be provided with such services if no private enterprise is willing to set up a business there? Nope. There is no such thing. The locals are in fact exposed themselves to the pricing of the local Telco company there if they voluntarily want to buy those services, if they can afford. If they can't, then the other option (again no force being used) is to completely live without a phone. Is that simple enough Bernard? I hope so.

Bernard said...
Left unfettered, societies with these companies would eventually dissolve into revolution, war and poverty, as much as we might wish otherwise. On that happy note"¦

Can you give an Example? How about if I suggest. Somalia is a poor country and so all of the Pacific Island countries, therefore, the fact that they're poor must have been the result of big monopolies that were left unchecked, correct?

"Laissz faire capitalism is the only system that is founded on, and protects, the freedom of the individual; to the extent our capitalist systems are removed from laissez faire, and toward central control of the State, they move toward coercion, as we have in our modern democracies, all of which are founded in the final instance on State coercion of the individual, and the sacrifice of the individual's freedom on the bloodied altar of the common good. That's not a debating point, it is the truth."

But it wasn't. It was founded on the expropriation of the economic base of the vast majority of the European population, most particularly with the Enclosure of the village commons in England during the Tudor period.

I think the the primary error that libertarians as opposed to anarchists like myself make is that you equate an economic system that has a basis in accumulation (capitalism) with one in exchange (market economy). One is based on the historic criminal theft of the economic base of the vast majority of the world's population and promotes inequality and poverty and extreme societal stresses throughout the majority of the world's population whilst the other is based on and promotes the free and unfettered exchange of goods and services that one desires with the goal of ensuring that both parties benefit from the exchange.

When the capitalist economy has its basis in the expropriation of the peasant's land who were then forced to wander the land as vagrants until forced upon the "tender mercies" of the State controlled by the very same people who had committed the crime against them and then used the newly constituted "property" as security to finance capital improvements on their lands and then eventually the construction of the "dark satanic mills" of the Industrial Revolution, you can hardly expect such a system to guarantee freedom and liberty to anyone let alone the newly constituted working class.

It was the first avowed anarchist Pierre Joseph Proudhon who developed the first social contract that convincingly refutes both Thomas Hobbes and Rousseau's conceptions that explicitly protects the notion of individual sovereignty with its basis in the activity of exchange and commerce.

What really is the Social Contract? An agreement of the citizen with the government? No, that would mean but the continuation of [Rousseau's] idea. The social contract is an agreement of man with man; an agreement from which must result what we call society. In this, the notion of commutative justice[5], first brought forward by the primitive fact of exchange, "¦is substituted for that of distributive justice "¦ Translating these words, contract, commutative justice, which are the language of the law, into the language of business, and you have commerce, that is to say, in its highest significance, the act by which man and man declare themselves essentially producers, and abdicate all pretension to govern each other.

Just a follow up to an earlier post of mine with a link to the following blog post:

Econophysics - a model that explains the crash

Research in this area is still in its infancy, so it doesn't mean that it will guarantee to work all the time.

So, what's this has anything to do with (government) central control ? Well, the econophysics model involved in the quoted link is in fact work best when there is no central control at all (not many rules embedded into the model), like a colony of ants, where no one is a supervisory boss (ie, boss of everyone). Each is a boss of its own. Everything is dynamic and self-0rganised (society of course) that leads to emergent behavior, that regulates itself from being unstable. When the self-emergent dynamic is restricted/constrained it leads to crash or in other words, the system become unstable. If the market is left alone, then the forces of emergent & self-organized dynamics will regulate itself (self-corrected). This doesn't mean that the system is stable forever, but occasionally there will be blips.

Human brain doesn't have a central control region and still we (as humans) manage not to suffer self-crash (going mental except a few members of the society) and that's the beauty of emergent & self-organized dynamics. Left alone and it will function perfectly.

Here's what happens in the absence of an equitable legal system and a welfare backstop.
http://www.smh.com.au/world/desperate-farmers-sell-wives-daughters-20090...
This type of human (or should I say sub-human) behaviour is not limited to India and it wasn't that long ago that NZ men could treat their wives and children as chattels. Human greed, lust, envy and all the other deadly sins know no bounds in a society void of any regulation.

The main problem with laissez faire capitalism is it reduces all human interaction to an economic context and is unable to put a price on human relationships and social goods like the environment or unpaid work.

Thanks farmer Will

http://www.rotoruadailypost.co.nz/local/news/farm-fined-35000-for-dirty-...

... oh, and Jamman

I wasn't putting words into your mouth. I was simply taking your suggested regulation to the logical end point politicians have already taken it.

As outlined above the main focus of govt regulation should be to align personal and collective self interest eg

a law against property theft - its beneficial for the the individual to follow it lest they end up in jail. Its beneficial for the wider community who can be relatively free from theft.

the insidious thing about corruption, is that you reach a point where it is better for the individual to line their own pockets because there is little or no chance of being held to account. You can see this in most African govts - some idealistic politicians exist, but civilisation needs more than this to prosper. It needs checks and balances to provide some alignment of personal and collective behviour cause many people care only for themselves.

In a free market, to a large degree individual self interest does benefit the collective (bright new ideas give us great technology, comfort and a profit to the inventor - few people would want to stop this happy relationship). It is a COMPLETE MYTH however to think this will always be the case and that the free market will always correct itself in the end to benefit the collective. Monopolies are a clear example of this. A small player can easily be squashed via uncompetitive practises and we all lose. ditto tax loopholes and corporate greed from CEOs who incur unhealthy debt levels to inflate short term profits. Ditto unhealty collusion between REAs, insurance companies etc to keep fees high. We need to be conscious that the end goal for our society should be what benefits the collective - this will always require a trade off between "freedom to do anything" and laws designed to temper unhealthy practises.

Stevenk said...
This type of human (or should I say sub-human) behaviour is not limited to India and it wasn't that long ago that NZ men could treat their wives and children as chattels.

Irrelevant. That's not what Mark, Cresswell and Julain are arguing here. The libz are supportive of law that protects or prevents rights violation. Treatingr wives and children as chattels is rights violation. Don't you see that? It bears no resemblance to Telecom overcharging its customers or banks refusing a loan to someone which they are not the same thing. In fact Telecom or the bank doesn't violate anyone's right one single iota if they overcharge or refuse a loan. It's their property and they can do what they like and the government has no right to dictate to those private enterprise whatsoever. But I hear you and Bernard say, that you have a right to bank with someone . Nope. Just put your savings under your mattress. See, the problem starts when you voluntarily take your money to the bank in the first place and then demand lawmakers to do something about certain operations that your bank does that you're not happy with. As my example above. Half of the population of Tonga don't have a bank account. Whatever money they earn weekly, they put them under their mats for their weekly use. Don't use a bank if you won't like the way they run their OWN business. The bank is a private property of the rightful owners (shareholders, etc,...) and not the state. Very easy concept to grasp really.

The problem with you is that you make your life so dependent on someone else's products (labor of their own hands) that you frequently demand lawmakers to muzzle those producers via legislations. How about this, if you think that producers are evil of this world, then make yourself free of those products. Don't buy/use Microsoft products. Don't buy a computer since they contain Intel chip in there (an evil monopoly/company). Don't use a cell phone or a telephone, since Telecom is exploiting you. See, the poor lot in the Pacific Islands don't make themselves hostage to those products (product of someone else's labor). So, free yourself from buying these products/services and you won't need a government to dictate to private businesses, exactly as how people live in my village (no bank account, no phone, no internet, etc,...) and hey, they still breath and at the same time, they're not party to coercing someone else's property via lobbying politicians.

Jimmy said...
Whether Telecom likes this or not is irrellevant, exercise of power is the way ALL human govt works.

So, you do like what Mugabe is doing, don't you? What that thug is doing is exactly what you're supporting, ie, no respect for private properties.

The most compassionless entity, stevek, is the State. And because the welfare state is a factory that makes the class it was supposed to be 'raising up', it is actively cruel, dooming generation after generation now, to poverty and violence. And enslaving us all to do so.

It's sick, and insane.

Oh I can only imagine the ranting involved in 167 and counting rants! Goodluck waiding through the mess Bernard... US$1010/ouce... I can see my house from up here... crap its burning

I'm glad, stevek, that you equate democracy with theocracy, monarchy, and dictatorship, in terms of compassion(less).

I don't want to live in any of these types of governance.

The irony is that when the state legislates compassion, it is reliant on coercion to enforce it, and the unintended consequences are always compassionless.

I've an idea Mark...

You are always telling us in the ideal society you don't have to shop anywhere, buy anything, support anyone else... etc, etc...

How about "if you don't like democracy, go somewhere else?"

Nobody MAKES you live in NZ!

Perhaps you are stuck for options? Try Pitcairn Is, history says theirs not too many laws their... or maybe set up your own and populate it...oh, sorry, forgot the smartie car...

Sheesh, over 170... Popular topic Bernard! Everyones bile file seems to be well opened!

Mark Hubbard Says:
"Steps
I would love to answer your post properly, but this takes up too much of my time. But to paraphrase, the Crafars are not an example of how capitalism doesn't work. It is the example of capitalism working. How it corrects a bubble. And if the State gets involved anywhere in that process, then it just extends the bad effects of the bubble's burst, and makes the peaks and troughs of the economic cycle much deeper."

So capitalism works on the basis that it allows idiots and greed to happen, create havoc in the market place and rectifies regardless of collateral damage....thats a system that is unstable.

"And Regulations are there to keep stability and keep business within good fundamental practises "¦ "

"Remember our central bank system, (that is State), was supposed to be about price stability! Wow, that really worked, didn't it. Don't think so."

Yeah and back in the late 80s early 90s when the current philosophy was a free, Free market capitalist system, they took near all the tools to create stability off the RB...hence we have the current crisis basically caused by not requiring min deposits, ability to repay ...basic good practise regulations that had been around for many decades in 1 form or another...since the last depression...

"Every 70 odd yrs theres a big crisis, about every 40yrs a smaller crisis and in between these another crisis, and between these normal cyclic ups and downs in the market.

Regulation is not about restricting the free market capitalist system, it is a bout maintaining sensible practises within that system"

Steps, if we had laissez faire, and sound money, not fiat money, with the market delivering the lessons of failure, do you think a financier would have exposed themselves to the risk the Crafars became? With no budgets, and a wall calender for planning?

What caused the bubble in farm land prices?

I put it to you its the distortions of our mixed economy that allowed this.

But, on another tack, yes, failure in free markets is a correcting mechanism, and far more efficient that what we've seen with the bailouts.

And what you state above, was not the cause of the current crisis. But I'm not going through all that again. Google the Mises Bailout Reader.

Jamman: as in toes?

"If we had a laissez faire free market, and sound money, not fiat money, with the market delivering the lessons of failure, do you think a financier would have exposed themselves to the risk the Crafars became? With no budgets, and a wall calender for planning?"

Indeed they would, Mark.

Your theory fails to address excessive greed and the mismatch between the interest of those issuing the bad loans and the shareholders that own the bank.

Chairman: you would loan $200 million without a budget?

You wouldn't get a job at my laissez faire bank.

... well, then they weren't working for their shareholders, they would lose their jobs and not get a reference: the market would correct the excess.

mARK,

"then they weren't working for their shareholders, they would lose their jobs and not get a reference: the market would correct the excess."

How can you possibly say this when NONE of the bankers who drove their companies into the ground were required to pay back their bonuses from the good times. For the most part, these bankers are still employed and heaven forbid bonuses are still rising courtesy of govtal largesse.

Jimmy

How can you possibly say this when NONE of the bankers who drove their companies into the ground were required to pay back their bonuses from the good times. For the most part, these bankers are still employed and heaven forbid bonuses are still rising courtesy of govtal largesse.

You're exactly reiterating my point Jimmy. So I don't understand the point you're actually making.

Under laissez faire no bank manager would have been getting paid a bonus courtesy of a government bailout, after he had stuffed up - only the public sector writes employment contracts that inept. The system that does make these continuing bonuses is a mixed - read command - economy: the State distortions in this type of market caused the crisis, will cause the next crisis whenever we get out of this one, which bailout programs and over-regulation are extending - while also keeping the same bank managers who made the bad decisions in the same jobs - just as Roosevelt's New Deal extended the Great Depression by perhaps up to a decade, and as Hoover's meddling was a big contributing cause of it.

I put it to you a free market, because it would not have been overloaded with fiat money supply/cheap credit, would not have seen a crisis to the extent of this, as asset bubbles would have been corrected earlier, by market forces, instead of 'grown' by Greenspan - the traitorous sod. Bank managers would have not been able to make such reckless decisions into the vacuum created by the bubble/s, and those that did would have lost their jobs as punishment by the market.

With Bernard, you seem to think we had laissez faire economies going into this crisis: we had anything but.