
The financial crisis shattered investors' trust in markets - prostoalex
https://blogs.wsj.com/moneybeat/2018/03/16/how-the-bear-stearns-meltdown-wrecked-something-more-valuable-than-money/
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maxxxxx
The trust issue is something I can confirm. Until 2008 I believed that the
market was fair overall and you gain if you do something right and lose if you
do something wrong. Then I had to learn that there is a whole group of people
that can't lose. We have to admire them and listen to them while they make
profits and when they screw up we have to bail them out and still listen to
their "wisdom". This definitely made me very cynical.

~~~
mjevans
What made me cynical was that the government didn't step in and handle it the
same way that a private citizen having untenable obligations would be handled.

I expected the failed institutions to literally be seized, and an orderly re-
distribution of assets processed. I also expected, as a result, a correction
in the price of housing to actually realistic levels.

I was extremely naive about the housing issue; I had not realized how
artificially constrained the markets were and how (at least in the US if not
elsewhere) government regulations continue to distort the market towards
artificial shortage.

It all needs to be repaired and re-worked, but regulatory capture and conflict
of voter interest by those who've made it in to the 'I have mine' status is
far too systemic.

~~~
PoachedSausage
You are correct, it is for the time being politically untenable to allow
housing (really land) to reduce in value. The situation might change when the
millenials and younger generations start becoming more politically active.

~~~
maxxxxx
As soon as they start inheriting houses they will also be against lower
housing prices.

~~~
PoachedSausage
I probably just about count as a millenial, my parents could live another 20 -
30 years and that house might have to be sold to pay their hospice care should
they get dementia. So the house likely isn't going to be much use to me.

~~~
noonespecial
>that house might have to be sold to pay their hospice care

I suspect this is the great Faustian bargain of the boomer generation. All the
wealth that they helped themselves to in lieu of fixing the big systemic
problems in economy and government will be traded away in the end for the
modicum of comfort in their twilight years that a better functioning system
would have provided anyway.

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netsharc
Here's a good read about the "just world" fallacy:
[https://youarenotsosmart.com/2010/06/07/the-just-world-
falla...](https://youarenotsosmart.com/2010/06/07/the-just-world-fallacy/)

And indeed "credit" comes from the latin word for trust.

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raverbashing
Sorry to hear that. Sorry not sorry.

Maybe people realized ratings agencies are basically financial horoscope. Or
that the system is deeply rigged. Or that real growth opportunities seem to
become rare in the last years.

~~~
notfromhere
ratings agencies were literally rigged

~~~
freejulian
Fun fact: Warren Buffet owned a large stake in Moody's (largely responsible
for fraudulent ratings). Additionally, much of Warren's wealth was built on an
"insurance float". Had the stock market not recovered (only possible because
of the Fed), Warren would have lost everything. Hilariously, Warren is also a
large owner of Wells Fargo -- yet another corrupt institution. But shucks,
Warren is just a nice guy who got lucky picking a few stocks! You can do it
too! He sure wishes his secretary paid as little tax as he does!

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neonate
[http://archive.is/Q0tia](http://archive.is/Q0tia) works for me.

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RickJWag
You can learn a lot from old TV.

I saw a Miami Vice episode a while back, the Bad Guy noted that the Dow Jones
was about to break 1400.

It's a constant upward trail, with peaks and valleys along the way. Don't bet
against it.

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freejulian
Bitcoin is the real occupy wallstreet movement. Anyone not happy with the
outcome of the financial crisis should be looking to leave a monetary system
which has enabled our corrupt institutions to thrive.

~~~
pyjammas
Bitcoin, or rather the bitcoin ecosystem, strikes me as the existing system on
steroids. Let's cut out the few checks and balances we have and see the
resulting clusterfuck.

~~~
freejulian
> strikes me as the existing system on steroids.

I don't understand this at all. Can you explain?

The monetary system we have today enables politicians to tax us without our
consent -- they have the ability to print money.

In the past, if a government wanted a war (such as Vietnam), they'd need to
find a way to pay for it (usually taxes). Unpopular policy was frequently met
with protests because the policy was explicit. Now they can just tax us via
inflation. We all know inflation is there, but we don't realize what it's
doing to our savings and wages (especially because no one can agree on how to
measure inflation).

In 2008, the government was able to bail out financial institutions and prop
up an unjust housing market by printing enormous sums of money. Had they not
had the ability to print, politicians would have needed to seek the public's
consent to accomplish their policy proposals.

~~~
michaelt

      I don't understand this at all. Can you explain?
    

Some people believe the 2008 financial crisis was caused because of de-
regulation, rather than regulation; and that the bad guys were mostly
untrustworthy/incompetent/greedy types in financial institutions.

Cryptocurrencies, famous for helping people evade regulations (e.g.
ransomware) and untrustworthy/incompetent/greedy institutions (e.g. exchanges
"accidentally" losing deposits), seem worse on these rather than better.

~~~
freejulian
Bitcoin is about money and it’s properties. It has nothing to do with income
verification, loan standards, or rating falsification.

