>>>>>And the cause of the housing bubble (and its subsequnt burst) was because the government if effect nationalized housing with Fannie and Freddie. But now we are calling on the government to get us out of the mess that they caused? This is analogous to calling upon the arsonist who set fire to your house to come over and help you put the fire out.
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>>>>>LOL. So AIG writing up trillions of dollars of CDS positions they didn't have the means to cover, and bankers buying into this deceptive behavior because it allowed them to make shonky loans and inflate them to investment grade, isn't their fault. Presumably the devil/government made them do it. LOL again.
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>>>>CDSs were used to insure securitized bad loans. Thanks to the repeal of glass-steagall and the rule changes applied to Freddie/Fannie those securities grew exponentially, hence the CDSs grew exponentially. Yes, the actions of our elected representatives led directly to the financial mess we are currently in. There were lots of other players involved down the line, however, without the legislative and regulatory changes implemented by the US Congress the housing market would never have bubbled and the disaster we're in now would not have happened.
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>>>So you're in favour of more legislation to control banking and the financial sectore ?
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>>Yes - restore Glass-Steagall and the uptick rule.
>>and No - remove mark-to-market, repeal Sarbanes-Oxley & the Community Reinvestment Act and fully breakup and sell Fannie and Freddie.
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>>In other words go back to where the rules were before Congress got involved and farked it all up.
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>OTOH maybe have no banking regulation at all. Let the buyer beware. If a deal looks to good it probably is.

I think Jake was saying the opposite. In this case I agree with him. The banking and securities industries have amply demonstrated the dangers of going unregulated.