Charles Ferguson INSIDE JOB
Out of context: Reply #20
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- JSK0
Richard Wolff = Marxist.
He believes that every aspect of the economy should be controlled. In turn, there is no free enterprise. The market is controlled by the labour and by it self hence reducing market forces ability to maintain balance.
What Iceland's bankers did was based on what the consumers demanded: municipal governments wants more money using tax dollars, rising housing price cause people to get more mortgages, government needing money for structural improvements, etc etc. The money does not come from thin air. When there is demand, the banks provide. No banks lends money. They simply package it sell it off and make money off fees.
Bankers take leveraged loan based on what is needed. This is common aspect of using derivative as a financial instrument. Farmers use this to off set the cost of production through futures options hence making a derivative product. Forecast of price in future which predetermined.
No body in Iceland including government, mortgage holders, banks did not bother to look at that when investing in these to make money or get money to loan, that you could lose 10x if the market went sour. They believe that good times will last forever. Bank is a facilitator and complicit in the market down turn but hardly the sole blame.