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The Real Cause of the Financial Crisis

 
 
Cato cv
 
Reply Wed 17 Feb, 2010 04:28 pm
While there is much blame to go around for what happened most of it is misguided. In reality the crisis is an accounting scandal!

If the accounting had been good,i.e., if it had made all of the involved organizations transparent, the crisis would have been self-correcting!
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Type: Discussion • Score: 0 • Views: 1,086 • Replies: 7
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NEUROSPORT
 
  1  
Reply Wed 24 Feb, 2010 12:25 am
@Cato cv,
Cato;70436 wrote:
While there is much blame to go around for what happened most of it is misguided. In reality the crisis is an accounting scandal!

If the accounting had been good,i.e., if it had made all of the involved organizations transparent, the crisis would have been self-correcting!


If power was made transparent it wouldn't be power.

If presidents served the people nobody would want that job.

the people got raped by the government because that is what the government is for - to rape people.

its really THAT SIMPLE.
Cato cv
 
  1  
Reply Wed 24 Feb, 2010 12:30 pm
@NEUROSPORT,
Cato:
While there is much blame to go around for what happened most of it is misguided. In reality the crisis is an accounting scandal!

If the accounting had been good,i.e., if it had made all of the involved organizations transparent, the crisis would have been self-correcting!
********************
If power was made transparent it wouldn't be power.

If presidents served the people nobody would want that job.

the people got raped by the government because that is what the government is for - to rape people.

its really THAT SIMPLE.

Cato: the issue is whether accurate accounting caused the crisis, and whether it could avert the next crisis. Why not focus on the subject and learn something?
NEUROSPORT
 
  1  
Reply Wed 24 Feb, 2010 03:10 pm
@Cato cv,
Cato;70513 wrote:
Cato: the issue is whether accurate accounting caused the crisis, and whether it could avert the next crisis. Why not focus on the subject and learn something?


accounting didn't CAUSE the crisis but it did CONTRIBUTE to it. it has quite likely PRECIPITATED the crisis for which the conditions have been building for decades.
Cato cv
 
  1  
Reply Wed 24 Feb, 2010 03:35 pm
@NEUROSPORT,
Originally stated by Cato
Cato: the issue is whether accurate accounting caused the crisis, and whether it could avert the next crisis. Why not focus on the subject and learn something?

accounting didn't CAUSE the crisis but it did CONTRIBUTE to it.

CATO: contribute how much??

it has quite likely PRECIPITATED the crisis for which the conditions have been building for decades.

CATO: you mean accounting conditions??
NEUROSPORT
 
  1  
Reply Thu 25 Feb, 2010 12:22 am
@Cato cv,
Cato;70520 wrote:
contribute how much?? you mean accounting conditions??


No, by conditions i mean expansion of the money supply. When money is pumped into the system some of it goes into stocks creating a boom of unsustainable economic activity. The rest of the money goes directly into assets creating asset bubbles usually in the real estate sector.

The role of accounting has been merely to sustain the bubble through the period where it would have otherwise burst. The bubble can only grow as long as people don't realize that there is a bubble. Shadowy accounting and creative financing simply conceals the true size of the bubble and allows it to grow bigger, which results in a more devastating collapse in the long run.

Of course with ABSOLUTE transparency there would be no crisis. But this would have to be the kind of transparency where you can literally read inside of the mind of Bernanke.

Since that ain't happening the next best thing is to have a sound currency. This doesn't mean direct gold backed currency but something more sound than toilet paper never the less.
Cato cv
 
  1  
Reply Sun 28 Feb, 2010 05:14 pm
@NEUROSPORT,
Originally stated by Cato
contribute how much?? you mean accounting conditions??

Nuro: No, by conditions i mean expansion of the money supply. When money is pumped into the system some of it goes into stocks creating a boom of unsustainable economic activity. The rest of the money goes directly into assets creating asset bubbles usually in the real estate sector.

CATO: where it goes depends on the exact situation. The Fed has recently pumped in trillions but it only sits in banks which explains why there is no inflation!!


NUro: The role of accounting has been merely to sustain the bubble through the period where it would have otherwise burst.

CATO: no idea what you are talking about , and it did not occur to you to explain??

Nuro: The bubble can only grow as long as people don't realize that there is a bubble. Shadowy accounting and creative financing simply conceals the true size of the bubble and allows it to grow bigger, which results in a more devastating collapse in the long run.

CATO: so you agree with me that accurate accounting would expose financial weakness and this case would have prevented the entire crisis?

Nuro: Of course with ABSOLUTE transparency there would be no crisis.

CATO: exactly what accounting is supposed to accomplish!!

Nuro: But this would have to be the kind of transparency where you can literally read inside of the mind of Bernanke.

CATO: no idea what you mean andof course it do dnot occur to you to exaplin yourself????????

Since that ain't happening the next best thing is to have a sound currency. This doesn't mean direct gold backed currency but something more sound than toilet paper never the less.
NEUROSPORT
 
  1  
Reply Thu 4 Mar, 2010 01:18 am
@Cato cv,
Cato;70596 wrote:
so you agree with me that accurate accounting would expose financial weakness and this case would have prevented the entire crisis?


no it would have merely hastened the crisis resulting in premature birth - a mini-crisis

NEUROSPORT;70544 wrote:
But this would have to be the kind of transparency where you can literally read inside of the mind of Bernanke.


Cato;70596 wrote:
no idea what you mean andof course it do dnot occur to you to exaplin yourself????????


what i am saying is merely having all the numbers isn't enough to avoid investment mistakes. numbers or no numbers people are still stupid. just look at 9-11 - all the evidence of inside job is there but people still fail to see it.

people with brains didn't need evidence to know 9-11 was inside job and people with brains didn't need any special accounting to know the economy is about to implode. and people without brains are never gonna know **** anyway.

more accounting transparency is a good thing - but without realization that we need a sound currency, balanced budget and international trade balance accounting itself isn't going to accomplish much.

what good is it if banks must report some figures if an average person taking out a mortgage can't even understand his own contract.
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