Government Mucking It Up

A recent comment by Ed Seykota on speculation:

In the current rush to fix the US mortgage problem, the silent elephant in the room is government control justifying more government control. Government guarantees bias lenders to take on risky loans — and crowd out lenders that have to take responsibility for their loans. Invariably government gets around to assigning the blame for the imbalances to speculators. Speculators do not create imbalance; they discount it.  Speculators act naturally and opportunistically to exploit situations that government creates by acting naturally and opportunistically.

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4 thoughts on “Government Mucking It Up

  1. Another comment I found from Terry Coxon:

    “A speculator is a full-service decider. He appraises the future as well as he can. Then he profits if he is right and pays if he is wrong. He is responsible in a way that the US Senators never are. And by taking speculative positions, he provides more room for others to specialize in what they do best. The pipeline operator that wants to specialize in the purely industrial side of its business, for example, can offset the price risk of owning oil by selling futures contracts. The buyer of the futures contracts may be a speculator, who assumes the risk the pipeline operator wants to escape.”

  2. Will the government now praise the speculators that are shorting the crude oil market for bringing the price down?

  3. Our Congress keeps their heads buried in the sand for over 30 years and then discover that we have an oil problem. Then they decide that it’s too late to do anything about it.
    I wonder when they will pull their heads out of the sand for S.S. and Medicare. I don’t believe they have enough money to save Fannie Mae or Freddie Mack. This should be a very interesting and painful market ride.

  4. The biggest creator of bubbles (trends) wasn’t the goverment, but only the Godfather of WallStreet Alan Greenspan. With his interest rate cutting mania from 2001 till 2006 the Greenback declined still today about 50 % against the EURO. That’s the normal level for a LDC. And that’s also the normal level for all the real fools in the worldwide finance industry.
    The former communism worked on the principle of common irresponsibility. And the socialisation of Wall Street is like Communism 2.0. Fannie Mae & Freddie Mac give one of their biggest shares in their history to one senator’s campaign – Obama. What’s about sponsoring by Bear Stearns ?

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