You’re free to go anywhere… but use my guides.
Sir in trying to place the “Credit crunch in a century context” August 8, you mention that the “financials flaws and perversions exposed by the credit crunch are on a par with 1920s” giving as an example “the moral hazard that allowed lax mortgage lending, because the risk would ultimately be sold to a third party via securitization”.
In doing so you keep on ignoring that what made it possible for the lax mortgage lending to make its way into securities for which there was a market, were the prime ratings awarded to these instruments by the credit rating agencies, the supreme risk surveyors appointed by the bank regulators.
You also conclude that “The free flow of international capital is not under threat”, but try to tell that to all those that were led over the subprime mortgage precipice by those traffic signs saying AAA No Risk. With the information on risks already concentrated in the few hands of the official guides and whose “opinions” are imposed on the markets forcefully by the regulators, it is hard to sustain the notion that freedom of flows and free markets still prevail.
In doing so you keep on ignoring that what made it possible for the lax mortgage lending to make its way into securities for which there was a market, were the prime ratings awarded to these instruments by the credit rating agencies, the supreme risk surveyors appointed by the bank regulators.
You also conclude that “The free flow of international capital is not under threat”, but try to tell that to all those that were led over the subprime mortgage precipice by those traffic signs saying AAA No Risk. With the information on risks already concentrated in the few hands of the official guides and whose “opinions” are imposed on the markets forcefully by the regulators, it is hard to sustain the notion that freedom of flows and free markets still prevail.
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