This in itself its own issue in that capitalism isn't doing what it should be when everything is subsidized by the gov.
Thus $500k 800 sq ft bungalows. You show me a chronic bubble and I'll show you a 'market' riven with subsidies, tax incentives, government secured debt and pencil whipping regulators. Healthcare, education, housing.... Yet when the bubble pops and the too-big-to-fails have to be 'recapitalized' all we get from the ruling class is more hating on markets.
Your last sentence is interesting:
the fact that too many economies rely on them to fall
I believe you meant that banks can't be permitted to fail. But it could also be read to mean that what we've self inflicted is a system whereby the greater fools are those found holding worthless CDOs (and all of their various derivatives) when the bubble pops; the market is ultimately expressing itself through the failure of financial institutions.
This may sound cynical but that is one of the fair markets that likely will not fall. These are luxery that are likely only to be bought and sold to people looking for vacation spots or a crashpad. Much more likely to be paid off than a 4 bedroom in the midwest bought by a hardworking train engineer and his wife working part time in a restaurant.
"We've self influcted a system wherevy the greater fools are those found holding worthless CDOs"
I really appreciate the hot potato analogy! Exactly what I was thinking.
>Yet when the bubble pops and the too-big-to-fails have to be 'recapitalized' all we get from the ruling class is more hating on markets.
The reason this happens is that during the boom phase, the conservatives and libertarians, the defenders of the market, tell everyone things are going just fine. And then when it all blows up, they suddenly change their line and say it was all due to government subsidies and regulations. That is what happened last time, remember?
Thus $500k 800 sq ft bungalows. You show me a chronic bubble and I'll show you a 'market' riven with subsidies, tax incentives, government secured debt and pencil whipping regulators. Healthcare, education, housing.... Yet when the bubble pops and the too-big-to-fails have to be 'recapitalized' all we get from the ruling class is more hating on markets.
Your last sentence is interesting:
the fact that too many economies rely on them to fall
I believe you meant that banks can't be permitted to fail. But it could also be read to mean that what we've self inflicted is a system whereby the greater fools are those found holding worthless CDOs (and all of their various derivatives) when the bubble pops; the market is ultimately expressing itself through the failure of financial institutions.