Hijexx wrote:

This is the root of the problems in our economy. It is the root cause of the credit bubble. It is the root cause of the housing bubble and the ridiculously-pumped pulled-forward demand curve that is now inexorably collapsing, despite the protests of The Fed, Treasury and The Administration.

I dunno if you can classify this as the root, but certainly a systemic problem is that the engineers of these policies, instruments, and tactics are using Other People's Money. When all the major brokerages and investment banks (Goldman, Merril, Lehman, etc) went public, that meant that risk became externalized. It wasn't the partner's money they were playing with anymore. It was the publics. And after that happened, they learned that they could privatize gains and publicize losses. That's what's been going on for the last 10+ years and that's what's caused most of this pain.

The American Consumer(tm) is at fault for wanting what normal individuals in the west typically want. A lot of stuff without a lot of work to get it. But feeding that desire is a machine that effectively can't lose if you are pushing the button.

It is quite simply, the hacking of capitalism and it will crash in glorious fashion.

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