Skuldfrågan Finanskrisen Who is responsible for the Financial Crisis?

Innan ett kreditinstitut beslutar att bevilja en kredit skall det pröva risken
för att de förpliktelser som följer av kreditavtalet inte kan fullgöras.
Institutet får bevilja en kredit bara om förpliktelserna på goda grunder kan förväntas bli fullgjorda.
Banklagen 8 kap. 1 §

Claremont Review of Books Spring 2010
Bubbles, Bubbles, Toils and Troubles
Robert J. Samuelson in the Spring 2010 issue of the Claremont Review

This Time Is Different: Eight Centuries of Financial Folly, by Carmen M. Reinhart and Kenneth S. Rogoff
Manias, Panics, and Crashes: A History of Financial Crises (5th Edition), by Charles P. Kindleberger and Robert Aliber
The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street, by Justin Fox
Slapped by the Invisible Hand: The Panic of 2007, by Gary B. Gorton
In Fed We Trust: Ben Bernanke's War on the Great Panic, How the Federal Reserve Became the Fourth Branch of Government, by David Wessel

In 1984, I bought my London house. I estimate that the land on which it sits was worth £100,000 in today’s prices. Today, the value is perhaps ten times as great.
The people of the US, UK, Spain and Ireland became feverish speculators in land.
Today, the toxic waste poisons the entire world economy.

Martin Wolf, FT July 8 2010

Conundrum
After numerous boom-bust cycles driven by domestic safe asset shortages,
emerging markets learned to export rational bubbles to economies with a comparative advantage in generating safe assets.
Mike Story (hm), FT July 14 2010
Highly recommended

Sverige, Estland och Luxemburg
Den ekonomiska krisen har slagit sönder många länders offentliga finanser.
3 av 27 länder som inte är föremål för EU:s underskottsförfarande
Anders Borg DN Debatt 2010-07-13

Det är en historiskt kraftig kris vi upplevt. Vi vet var den hade sina rötter. Den grodde i en jordmån av global makroekonomisk obalans, nya komplexa värdepapper, otillräckliga regleringar, bristande tillsyn av finansmarknaderna samt girighet och ansvarslöshet hos aktörer som ständigt gapade efter mer.

I återgången till hållbara offentliga finanser är implementeringen av stabilitets- och tillväxtpakten avgörande.

I dag kommer vi att fatta beslut om att inleda underskottsförfarande för Finland, Danmark, Bulgarien och Cypern. Därmed kommer det bara att vara 3 av 27 länder som inte är föremål för underskottsförfarande (Sverige, Estland och Luxemburg).

"Den ekonomiska krisen har slagit sönder många länders offentliga finanser"
Det skriver Anders Borg. Det var alltså krisen som orsakade underskotten, inte tvärtom.
För mer härom se Stabiliseringspolitik.

En vanlig uppfattning inom ekonomisk forskning är att bubblor är svåra, eller omöjliga, att peka ut innan de brister.
Egenskaperna hos bubblor brukar vara desamma oavsett om det handlar om tulpaner, bopriser eller aktier.
Edward Chancellor, DI 2010-06-04

Morgan Stanley’s former Asia chief Stephen Roach:
“Alan Greenspan kept the policy rate too low for too long, set us up for credit and property bubbles that led to an enormous crisis, [and] I think Ben Bernanke is just rerunning the Greenspan movie of seven or eight years ago.”
You’ll read much the same thing from Roach on this very first TMTGM post from about five-and-a-half years ago
July 9, 2010, by Tim Iacono

It was the banks and other financial institutions (e.g. pension funds, insurance companies) that facilitated the boom at the periphery of the eurozone by lending huge sums to Spain, Greece, Ireland and Portugal under virtually the same conditions as those applicable to Germany and the Netherlands.
In doing so they failed to charge a realistic risk margin. One of the consequences was that European leaders were lulled into a false sense of security. After all, if the financial markets didn’t envisage any problems, why would Europe’s leaders – themselves mere mortals – be troubled? Surely the markets are always right?
Heleen Mees, Eurointelligence 10 June 2010

Bra film av Johan Norberg om finanskrisen, men utan svar
"överdos - en film om nästa finanskris"
Rolf Englund blog 2010-05-04

Dagens globala finanskris har utlöst en kris för ämnet nationalekonomi.
Sökandet efter bättre ekonomisk analys pågår för fullt.
Lars Jonung kolumn DN 29/4 2010

Everyone has a theory about the financial crisis.
But what do we really know?
Paul Krugman March 7, 2010

Everyone has a theory about the financial crisis. These theories range from the absurd to the plausible — from claims that liberal Democrats somehow forced banks to lend to the undeserving poor (even though Republicans controlled Congress) to the belief that exotic financial instruments fostered confusion and fraud.

As a new research paper by the Irish economists Gregory Connor, Thomas Flavin and Brian O’Kelly points out, “Almost all the apparent causal factors of the U.S. crisis are missing in the Irish case,” and vice versa.

Yet the shape of Ireland’s crisis was very similar: a huge real estate bubble — prices rose more in Dublin than in Los Angeles or Miami — followed by a severe banking bust that was contained only via an expensive bailout.

Ireland had none of the American right’s favorite villains: there was no Community Reinvestment Act, no Fannie Mae or Freddie Mac. More surprising, perhaps, was the unimportance of exotic finance:

Ireland’s bust wasn’t a tale of collateralized debt obligations and credit default swaps; it was an old-fashioned, plain-vanilla case of excess, in which banks made big loans to questionable borrowers, and taxpayers ended up holding the bag.

In America’s case, much of the cheap money came from China; in Ireland’s case, it came mainly from the rest of the euro zone, where Germany became a gigantic capital exporter.

But the most striking similarity between Ireland and America was “regulatory imprudence”: the people charged with keeping banks safe didn’t do their jobs.

By all means, let’s limit both leverage and the use of securitization — which were part of what Canada did right. But such measures won’t matter unless they’re enforced by people who see it as their duty to say no to powerful bankers.

One fascinating idea now provoking a chorus of behind-the-scenes debate among regulators and central banks
to force creditors – not taxpayers – to swallow losses if disaster strikes
Gillian Tett, FT July 15 2010

a so-called “bail-in”.
This idea, mooted by Credit Suisse in an essay this year, argues that in essence the best way to handle a crisis at a large, systemically important bank is to force creditors – not taxpayers – to swallow losses if disaster strikes; and, more importantly, to do this while the bank is still operating as a going concern, so it does not collapse – and cause Lehman-style havoc.

In some respects, this echoes another set of ideas on the table around contingent capital, or “cocos”. This suggests banks should issue bonds that would automatically convert into equity when certain triggers were breached, a long time before the point of potential collapse.

But there is a crucial distinction: the “bail-in” scheme does not use automatic triggers, but instead lets regulators decide when to wipe out creditors, just before the moment of collapse (or “one minute to midnight”, as traders say).

How the market can control the banks
bondholders keep bank risk-taking under control - and bear the costs if they fail
James Mackintosh FT-blog January 24, 2010

Barack Obama has decided to side with a state solution, if not yet a well-thought-out one, to preventing bank failures bringing down the world economy. But there is a market alternative: fix the banks so the bondholders keep bank risk-taking under control - and bear the costs if they fail in that task.

This important debate is not being framed as a state vs market discussion, but it should be.

Remember state control has a dismal record in general, and in the finance sector in particular. Regulators entirely missed the bubble, missed the banks’ reliance on short-term financing and missed the fact that so much regulatory arbitrage was going on.

The problem is the banks (and potentially non-banks) being too big to fail, creating perverse incentives to take risks and leaving the taxpayer paying for mistakes.

This can be done, using contingently convertible bonds - “CoCos” - which turn into shares when capital falls below a specified level. The legal documents backing CoCos explicitly lay out these risks, but that would not be enough. What is needed is the regular use of CoCos. I would suggest that banks are forced - yes, I know, regulation - to raise all their debt through CoCos, and to have a ladder of capital ratios at which debt converts.

We need to learn from those countries that evidently did it right. And leading that list is our neighbor to the north. Right now,
Canada is a very important role model.
PAUL KRUGMAN January 31, 2010

The cause of our crises has not gone away
We should listen to /Iceland/ before the same message is conveyed in much more violent form, in another place and at another time.
John Kay FT January 5 2010

Let the finger-pointing begin.
This week the commission to investigate the causes of the financial crisis will hold its first public hearing.
First up to be accused of causing massive foreclosures, nearly bankrupting our financial system and robbing us all of our retirement savings: Wall Street CEOs.
TIME 11/1 2010

Some economists have even questioned whether there was a credit crunch. Economic professor René Stulz of Ohio State University, for one, has written papers trying to clear Wall Street pay and credit-default swaps of any blame. Despite recent apologies, Goldman Sachs executives, too, say that they are no more to blame than anyone else in the financial markets.

In simple terms, the prevailing consensus is to view the post-2007 crisis as the result of an external shock which could not have been anticipated.
In fact, the world’s problems did not come from an external shock but were created within the various economies
Derek Scott, economic adviser to Tony Blair from 1997 to 2003, FT December 22 2009

A series of monetary policy mistakes in the late 1990s meant that interest rates were too low, creating in several countries what Austrian economists such as Friedrich Hayek, called an “inter-temporal” problem. It is no coincidence that economists who did predict the crisis, notably in Britain the estimable Bernard Connolly, looked at economics in a similar way.

In essence what happens is that inappropriately low rates of interest bring forward investment spending by households and business (adding to demand when it takes place) from “tomorrow” to “today” so that when “tomorrow” arrives, budget constraints reduce spending at precisely the time when “yesterday’s” investment comes on stream, adding to supply.

The only way to keep things going is even lower interest rates, bringing forward even more spending, so establishing the international Ponzi game that eventually burst in 2007.

Monetary Policy and the Housing Bubble
Chairman Ben S. Bernanke
"Some observers have assigned monetary policy a central role in the crisis. Specifically, they claim that excessively easy monetary policy by the Federal Reserve in the first half of the decade helped cause a bubble in house prices"
January 3, 2010

In 2008, as the global financial crisis unfolded, the reputation of economics as a discipline and economists as useful policy practitioners seemed to be irredeemably sunk. Queen Elizabeth captured the mood when she asked pointedly why no one (in particular economists) had seen the crisis coming.
There was no doubt that, notwithstanding the few Cassandras who correctly prophesied gloom and doom, the profession had failed colossally.
The totemic symbols of this failure were, of course, the two most important policymakers, Alan Greenspan and his successor as chairman of the US Federal Reserve, Ben Bernanke. They, among many others, helped create a belief system that elevated markets beyond criticism.
Arvind Subramanian, FT December 27 2009

The writer is senior fellow at the Peterson Institute for International Economics and the Center for Global Development, and senior research professor at Johns Hopkins University

Most crises, notably the big ones, creep up on us from unsuspected quarters. As Keynes wisely observed: “The inevitable never happens. It is the unexpected always.” So, if the value of economics in preventing crises will always be limited (although hopefully not non-existent), perhaps a fairer and more realistic yardstick should be its value as a guide in responding to them. Here, one year on, we can say that economics stands vindicated.

Arvind Subramanian argues that economics has redeemed itself by rescuing the world economy from the crisis. I agree, but only up to a point.
These extraordinary interventions have not returned the patient to health. They have merely prevented him from dying.
We now must heal five chronic conditions, instead of survive last year’s brutal heart attack.
Martin Wolf, December 29 2009

Bernanke was as clueless as Greenspan about the coming storm. He dismissed warnings of a housing bubble. He insisted that economic fundamentals remained strong.
In March 2007, he assured Congress that "the problems in the subprime market seem likely to be contained."
Time Magazine december 2009

At Lehman, the top five executives received cash bonuses and proceeds from stock sales
totaling $1 billion between 2000 and 2008,
and at Bear, the top five received more than $1.4 billion,
according to Harvard Law School.
CNBC 23 Nov 2009

About Richard A. Posner, A Failure of Capitalism: The Crisis of '08 and the Descent into Depression
Were a lot of people reckless and stupid? Of course! But that cannot explain why the whole system crashed, since a lot of people are always reckless and stupid.
The problem, fundamentally, is that markets cannot, and rationally should not, anticipate their own collapse
Jonathan Rauch, NYT, May 14, 2009

The headline /Mishkin in FT/ sort of says it all:
"Not all bubbles present a risk to the economy."
That is completely false.
Any genuine bubble poses great risk, which is why they should be avoided, as I have warned repeatedly since at least 1997.
Bill Fleckenstein, MSN Money, 13/11 2009

“Why did no one see the crisis coming?” Queen Elizabeth asked last year.
If the economics profession could not warn the public about the credit crunch and the recession,
what is the profession’s raison d’etre? FT writers and outside experts will set out their views in the posts below.
July 28, 2009 by FT

Did this reflect, as some claim, that economics has gone astray with models that no longer help understand economic reality but rather distort it? Did such models even contribute to the crisis?

A blogger who left Britain 20 years ago for rural bliss in Spain has become an unlikely economic sage whose advice has been sought by the International Monetary Fund.
Edward Hugh counts Nobel Prize winner and American economist Paul Krugman among his avid followers.
CNN June 10, 2010

Hugh attended the London School of Economics in the late 1960s but says he "wasn't learning a lot" and his interest in the subject waned until Japan's economic woes captured his attention, decades later.

By May, Hugh was speaking at the Círculo de Economía, a respected annual meeting of business minds in Barcelona. And just this week a profile in the New York Times pushed his Facebook page to the limit of 5,000 friends. Around 1,000 people tried to "add him" as a friend in one day.

I put forward this idea is that maybe the simplest and quickest solution is for Germany to go back to the mark," he said.
Germany abandoned the Deutschemark in 2002 when it joined the single currency.
The theory is that Germany's exit would prompt a steep fall in the euro, which would go some way to restoring the competitiveness of Germany's debt-strapped neighbors including Spain, Portugal, Greece and Ireland. Exports would rise, allowing them to put money aside to pay their debts and to service the future needs of their ageing populations.

About Krugmans NYT article “How Did Economists Get It All So Wrong”
The Spanish economist Luis Garicano made himself famous for a day because he was asked by the Queen of England the very question
Paul Krugman: I think that what happened was a combination of two things.
Edward Hugh, Fistfulofeuros, January 3, 2010

First, the academic side of economics fell too much in love with beautiful mathematical models, which created a bias toward assuming perfect markets.
(Perfect markets lead to nice math; imperfect markets are a lot messier).

Second, the same forces that lead to financial bubbles – prolonged good news tends to silence the skeptics – also applied to economists. Those who rationalized the way things were going gained credibility until the day things fell apart.

How Did Economists Get It So Wrong?
“central problem of depression-prevention has been solved,” declared Robert Lucas of the University of Chicago
in his 2003 presidential address to the American Economic Association
Paul Kruman, New York Times Magazine, 2/9 2009

Boom, Bust and Blame
The Inside Story about America's Economic Crisis
CNBC, September 2009

Låga räntor och räddningsaktioner för banker och storföretag
uppmuntrar till samma huvudlösa risktagande som ledde till den värsta finanskrisen sedan 1930-talet
Johan Norberg, DN Debatt 2009-07-25

Most people wonder how the financial crisis will end. For some, the story of how it began is just as important.
Control of that tale will help determine how we respond to the past two years of market mayhem.
At stake is the financial industry’s business model and billions of dollars in annual profits.
Bloomberg July 8 2009

No wonder Wall Street executives are spinning the causes of the crisis, downplaying their roles in inflating the housing and credit bubbles while presenting themselves as integral to any solution.

Forty years ago, the psychiatrist Elizabeth Kübler-Ross identified the five stages of grief following a traumatic event:
denial, anger, bargaining, depression and acceptance.
In my own struggle to come to terms with last year's banking crisis – a personal trauma for every taxpayer – I have so far experienced only anger and depression.
This week, however, I have regressed to anger, and I sense I am not alone.
Tracy Corrigan, 16 July 2009

Nothing can redress the damage wrought by banks' bad behaviour: their greed and poor judgement severely damaged the economy, and among the mostly blameless victims are those who are living on reduced pensions or have lost their jobs, not to mention future taxpayers who will bear the cost of this folly for years to come.

we, the public, need to feel that banks have been kicked into line and that at least for a period they will be chastened and humble. So far, neither of these conditions has been fulfilled.

Despite their still shaky balance sheets and strained capital, things are going rather well for many banks, considering. This is no surprise: they are always good at rebuilding profitability because, unlike most businesses, they have phenomenal pricing power: we need their services.
But they are currently making lots of money not only because the taxpayer bailed them out in the first place but because they are now borrowing at very low rates, subsidised by the government, while lending at relatively high rates.

Riksbanken har inklusive dagens SEK-auktion med fast ränta lånat ut 303 miljarder kronor
och 17,8 miljarder dollar.
Omräknat till dagens valutakurs har Riksbanken totalt lånat ut 500 miljarder kronor
Riksbanken 2009-07-13

The efficient-markets hypothesis
Of all the economic bubbles that have been pricked, few have burst more spectacularly than the reputation of economics itself.
Paul Krugman argued that much of the past 30 years of macroeconomics was
“spectacularly useless at best, and positively harmful at worst.”
The Economist print July 16th 2009

The Fed did not see the crisis coming
The list of dogs that did not bark is a long and distinguished one.
Maverecon: Willem Buiter, FT, July 17, 2009

This criticism is clearly correct. The Fed’s failure to foresee the storm, even when it was imminent, represents an indictment of its competence at one of its key tasks: discerning developments likely to lead to systemic financial instability before the instability manifests itself, and taking preventive measures.

The Fed failed utterly in this task, but so did every other regulator, supervisor and government agency or official with even an indirect responsibility for financial stability. Alan Greenspan did not see it coming during the almost 20 years (1987 till 2006) he spent at the Fed; neither did Ben Bernanke, a member of the Board of Governors of the Federal Reserve Systemfrom 2002 to 2005, Chairman of the President’s Council of Economic Advisers from June 2005 to January 2006 and Chairman of the Fed since February 1, 2006. Hank Paulson did not discern any financial crisis clouds on the horizon, either during his many years with Goldman Sachs (1974-2006), or during the first year of his tenure as Treasury Secretary (July 2006 - January 2009). Likewise, Tim Geithner failed to foresee the crisis when he was Under Secretary of the Treasury for International Affairs(1998–2001) under Treasury Secretaries Bob Rubin and Larry Summers or as President of the New York Fed (2003 - 2009). Larry Summers was similarly blinded by the light during his years at the US Treasury (1993 -2001), including his years as Deputy Secretary under Bob Rubin (1995-1999) and his tenure as Treasury Secretary (1999-2001). There was not a Dicky Bird either from Don Kohn or Bill Dudley.

In fairness I should add that no academic scribbler, least of all I, foresaw the full force of what was about to descend upon us. Academics are joined in the ranks of these who failed to foresee the financial cataclysm by gurus, pundits, economic and financial journalists, futurologists, urologists and other practitioners of cleromancy.

Det finns anledning att sammanfatta hur finanskrisen i USA började mera konkret.
Jag grundar den huvudsakligen på boken En perfekt storm (2009) av idéhistorikern Johan Norberg.
I mycket kort framställning berodde finanskrisens upprinnelse på en samverkan mellan följande fem faktorer:

Att huspriserna fördubblades på 10 år sågs också som en trygghet eftersom säkerheten för lånen ökade.
På marginalen blev det däremot en riskökning som till slut utlöste krisen i bostadssektorn.

Genom att nya värderingsregler infördes för företagens tillgångar, som nu skulle värderas till marknadsvärde, tillkom en procyklisk effekt.
även kraven på kapitaltäckning verkade procykliskt eftersom de vid förluster ledde till stopp för nyutlåning och uppsägning av gamla lån.

Socialismen har genom finanskrisen och klimathotet fått två gratischanser att visa att den lever och att dess praktik borde vara adekvat att tillämpa mot båda. Men ingenting hörs.
Inte ens Göran Greider har längre något konstruktivt att säga om socialismen. Den måste vara död.
Danne Nordling 15/6 2009

I Dagens Nyheters kulturdel igår 14/6 skriver poeten Göran Greider, chefredaktör för Dala-Demokraten (S), en Essä-artikel om klimatpolitiken utifrån ett radikalt vänsterperspektiv.
Han recenserar en ny bok av vänstermannen Anthony Giddens med titeln The Politics of Climate Change.

”När musiken tystnar – en rapport om den globala finanskrisen”.
beskriver krisens förlopp och orsaker, men anger också vilka principer som bör gälla för en ny regleringsmodell.
Ola Pettersson, LO-ekonom 2009-06-10

It is only halfway through November but I think we can already declare the winner of the 2007 Quote of the Year competition.
It is Chuck Prince, the former chairman and chief executive of Citigroup.
As Mr Prince departs, however, it should be noted that his statement was not, as history will record it, idiotic.
His offence was not that he misunderstood or misstated how banks have operated over the past few years but that he blurted out the truth rather too openly.
Note that he did not say “if” the music stops but “when”.
He recognised then – as did others – that the period of extraordinarily easy money that had prevailed since 2002 was bound to end.
John Gapper, FT November 14 2007

It seems that hedge funds have been designated for ritual sacrifice, even though they played no more than a cameo role in the genesis of this crisis.
It was not they who took on extreme debt leverage: it was the banks – up to 30 times in the US and nearer 60 times for some in Europe that used off-books "conduits" to increase their bets.
The market process itself is sorting this out in any case – brutally – forcing banks to wind down their leverage.
The problem right now is that this is happening too fast.
Ambrose Evans-Pritchard, Daily Telegraph April 2009

But to the extent that this G20 accord makes it impossible for the "shadow banking" to resurrect itself in the next inevitable cycle of risk appetite, it may prevent another disaster of this kind.

The key phrase is "new rules aimed at avoiding excessive leverage and forcing banks to put more money aside during good times." This is more or less what the authorities agreed after the Depression. Complacency chipped away at the rules as the decades passed. It is the human condition, and we can't change that.

Samtal med Johan Norberg
Varför blev det finanskris?
Var det girigheten som löpte amok?
Den osunda kulturen före finanskrisen hade aldrig uppstått
om det inte varit för alla politiska misslyckanden.
PJ Anders Linder, SvD 29 mars 2009

Ekonomiläroböckerna och finanskrisen
I min egen lärobok, som har kommit i elva upplagor, finns visserligen en del avsnitt
om bubblor och om irrationaliteten och kasten på t.ex valutamarknaderna.
Men de avsnitten måste byggas ut till nästa upplaga.

Likaså måste Keynes få en grundligare behandling - inte minst begreppet “likviditetsfälla” och
hur den påverkar penningpolitiken.
Klas Eklund blog 2/3 2009

As a shell-shocked world tries to fathom how its economic collapse happened,
commentators are busily outbidding each other with claims about the exceptional nature of this crisis.
But the most astounding fact is how familiar it look compared to past financial crashes.
The story of the modern capitalist economy is a rhythmic repetition of cycles, syncopated by eerily similar crises.
Financial Times March 9 2009

As a shell-shocked world tries to fathom how its economic collapse happened, commentators are busily outbidding each other with claims about the exceptional nature of this crisis. But the most astounding fact is how familiar its physiognomy and physiology look compared to past financial crashes.

No one can read the chronicles of those earlier crashes without sensing – with a chill – that history is repeating itself. The story of the modern capitalist economy is a rhythmic repetition of cycles, syncopated by eerily similar crises. These crises, while their details differ, are but variations on the same theme.

Easy money, geared up by leverage, floods the financial system through innovative products.
This simultaneously pumps up asset prices and obscures their speculative nature, with euphoria usurping the place of analysis.

Until, one day, something triggers a loss of confidence in the continued rise of prices, and the whole leveraged edifice crumbles.

Today’s collapse has followed the same pattern – as outlined on Tuesday in the FT’s series on the future of capitalism.

Easy money came from global macroeconomic imbalances that generated enormous capital inflows into deficit countries.

Those flows helped drive interest rates down and increase access to credit, fuelling a leveraged asset bubble.

Many leaders in the affected countries – in particular the US – knew this:
Alan Greenspan himself spoke of “irrational exuberance”.

And yet they did not understand how they had to act to prevent a replay of the past.

Sweden's status as a small, open economy enabled it to undertake the reflationary, sharp, and sudden currency depreciation that helped to return the country to growth.
Sweden was able aggressively to reflate and stimulate demand for its output by allowing its currency to float.
It is important to understand that that option is not available today to the large economies engulfed in a global crisis.
John H. Makin, American Enterprise Institute (Timbros storasyster) March 2, 2009

It would be misleading to claim that Sweden's program for dealing with its banks constituted, by itself, a solution to Sweden's economic and financial crisis.
As a relatively small, open economy, Sweden was able aggressively to reflate and stimulate demand for its output by allowing its currency to float.
The resulting rapid depreciation of the krona against the deutsche mark by 30 percent,
paired with the establishment of a viable Swedish banking system, formed a policy combination sufficient to reignite Swedish growth and move most of its banks into private hands.

Shares of Swedish banks rose, on average, by a factor of seven during 1993 as the banking system recovered and Swedish growth turned positive by the third quarter that year.

Rather, the current behavior of currencies relative to each other and relative to gold is being determined by an intensifying search for a safe haven store of value.

I internationella media finns nu mer eller mindre beundrande beskrivningar av den svenska modellen.
Carl Bildt noterade häromdagen på sin wordpress-blog att hanteringen av finanskrisen omfattades av denna beundran.
- För oss som var mitt uppe i turbulensen då såg allt inte så enkelt ut - men att det nu internationellt ses som en stor framgång finns ju anledning att notera, noterade Carl Bildt förtjust.

Greenspan: The Fed Didn't Cause the Housing Bubble
Lower rates on long-term, fixed-rate mortgages and
not the Federal Reserve's policies are to blame for the U.S. housing bubble.
CNBC 11 Mar 2009

"Between 2002 and 2005, home mortgage rates led U.S. home price change by 11 months.
This correlation between home prices and mortgage rates was highly significant,
and a far better indicator of rising home prices than the fed-funds rate,"
Greenspan wrote in the Wall Street Journal.

US Federal Reserve chief Ben Bernanke says the world is suffering
from the worst financial crisis since the 1930s.
Mr Bernanke argues that the roots of the current global economic downturn stem from
global imbalances in trade and flows of capital in the late 1990s.
BBC 10/3 2009

Implicitly, the UK government is guaranteeing the liabilities of the swollen UK banks.
Explicitly, it seems likely to guarantee at least £600bn of toxic assets of RBS and Lloyds under its “asset protection scheme”.

I am no populist.
Yet when I think of the sums earned by those responsible for dumping this mess on to the UK taxpayer, even my blood boils.
Martin Wolf, Financial Times March 5 2009

"As president Ronald Reagan’s secretary of the Treasury, I abhor the idea of government ownership. Unfortunately, we may have no choice.
US may be repeating Japan’s mistake by viewing our current banking crisis as one of liquidity and not solvency.
Most proposals advanced thus far assume that, once confidence in financial markets is restored, banks will recover.
James Baker, Financial Times March 1 2009

Det är Kontantinsatsen, Stupid!
Det var en gång för länge sedan vanligt med gammalmodiga bankkamrerare som sade åt
hugade fastighetsspekulanter att det nog gick att låna till villaköpet men att man skulle ha en egen kontantinsats på 25 procent.
Rolf Englund blog 18/2 2009

The statement that systemic breakdowns are surprisingly rare
in the free-wheeling Anglo-Saxon model is false.
Martin Wolf February 9, 2009

Anders Borg, du har fel
Staten skall inte reglera bonusen
Det krävs mod för att lita på att styelserna och cheferna
kan ta eget ansvar
Cecilia Aronsson, Veckans Affärer, 5/2 2009

Styrelseordförandena i Davos, inklusive Investors Jacob Wallenberg, inser att de måste bättra sig

Starka incitament och bra bonus är nödvändigt för att anställda ska orka lyfta sina företag ur krisen.

As far as I can see, many bankers still don't get it.
They created, more or less single-handedly, a boom and bust of staggering proportions,
then held out their hats for taxpayers' contributions to bail them out.
Tracy Corrigan, Daily Telegraph, 6 Feb 2009

Yet quite a number of them still aren't saying, as the rest of us are, "Golly, I hope I won't lose my job" – or even "Lucky me, I can always sell my house in the Cotswolds, if things get tough."

Many bankers still don't seem to grasp that they earned multi-million pound packages as a result of a bizarre twist in the way their industry works, rather than because this is an accurate reflection of their economic productivity. It also turns out that bonuses were paid on the basis of artificially inflated returns.

SEB:s vd Annika Falkengren avstår från sin bonus för 2008.
För 2007 fick SEB-chefen 4 miljoner i bonus och därmed
totalt 12,1 miljoner kronor i ersättning.
DI 2009-02-05

Kommentar av Rolf Englund:
Det betyder att hon får försöka hanka sig fram på sin lön på åtta miljoner kronor.

En bonusdriven finansbransch har sålt stora mängder obskyra värdepapper
– samtidigt som man i Washington har sänkt skatter och fattat beslut om nya jätteprojekt utan att våga be folket om pengar.
PJ Anders Linder, SvD 25/1 2009

The crisis triggered by September's bankruptcy of Lehman Brothers appears to have discredited
many of the assumptions on which American prosperity and democracy was founded.
Anatole Kaletsky, The Times, 22/1 2009

It's the end of an era. We know that 2008, much like 1932 or 1980, marks a dividing line for the American economy and society. But what lies on the other side is hazy at best.
The great lesson of the past year is how little we understand and can control the economy.
Robert J. Samuelson, December 29, 2008

Secular gods visibly fail: in 1989, communism collapsed;
in 2008, came the turn of financial capitalism.
As panic spread, governments ended up nationalising the financial systems of the west.
This is no longer capitalism as we knew it. But it is not the end of market economies either.
Financial Times editorial, December 26 2008

Good question, Ma'am
"If these things were so large, how come everyone missed them?"
Alan Beattie, Financial Times, November 14 2008

As Daniel Defoe observed after the first British stock market crash of 1696:
Anyone might have foreseen that . . . the raising of stock, of all sorts to a value above the Intrinsick, must have some fatal issue,
and would fall somewhere at last so heavy as to be felt by the whole body of Trade.
Edward Chancellor, author of "Devil Take the Hindmost: A History of Financial Speculation"
Wall Street Journal, August 18, 1999

So angry is Main Street, you could club an investment banker like a seal pup
and stand a reasonable chance of being cheered by judge and jury.
Jeff Randall, Daily Telegraph, 7 Nov 2008

"I'm a market-oriented guy, but not when I'm faced with the prospect of a global meltdown,"
President George W. Bush, 14 Nov 2008
Full text

The End of the Financial World as We Know It
Good God, the world seems to be saying, if they don’t know what they are doing with money, who does?
Michael Lewis and David Einhorn, New York Times January 3, 2009

Michael Lewis, a contributing editor at Vanity Fair and the author of “Liar’s Poker,” is writing a book about the collapse of Wall Street.
David Einhorn is the president of Greenlight Capital, a hedge fund, and the author of “Fooling Some of the People All of the Time.”

Incredibly, intelligent people the world over remain willing to lend us /US/ money and even listen to our advice;
they appear not to have realized the full extent of our madness.

We have at least a brief chance to cure ourselves. But first we need to ask: of what?

What’s interesting about the Madoff scandal, in retrospect, is how little interest anyone inside the financial system had in exposing it. It wasn’t just Harry Markopolos who smelled a rat. As Mr. Markopolos explained in his letter, Goldman Sachs was refusing to do business with Mr. Madoff

Richard Fuld, the former chief executive of Lehman Brothers, E. Stanley O’Neal, the former chief executive of Merrill Lynch, and Charles O. Prince III, Citigroup’s chief executive, may have paid themselves humongous sums of money at the end of each year, as a result of the bond market bonanza. But if any one of them had set himself up as a whistleblower — had stood up and said “this business is irresponsible and we are not going to participate in it” — he would probably have been fired. Not immediately, perhaps. But a few quarters of earnings that lagged behind those of every other Wall Street firm would invite outrage from subordinates, who would flee for other, less responsible firms, and from shareholders, who would call for his resignation. Eventually he’d be replaced by someone willing to make money from the credit bubble.

OUR financial catastrophe, like Bernard Madoff’s pyramid scheme, required all sorts of important, plugged-in people to sacrifice our collective long-term interests for short-term gain. The pressure to do this in today’s financial markets is immense. Obviously the greater the market pressure to excel in the short term, the greater the need for pressure from outside the market to consider the longer term. But that’s the problem: there is no longer any serious pressure from outside the market. The tyranny of the short term has extended itself with frightening ease into the entities that were meant to, one way or another, discipline Wall Street, and force it to consider its enlightened self-interest.
The credit-rating agencies, for instance.

Over the last 20 years American financial institutions have taken on more and more risk, with the blessing of regulators, with hardly a word from the rating agencies, which, incidentally, are paid by the issuers of the bonds they rate. Seldom if ever did Moody’s or Standard & Poor’s say, “If you put one more risky asset on your balance sheet, you will face a serious downgrade.”

Vad var det då som bröt den goda utvecklingen och ledde till den finansiella krisen?
Något förenklat kan man säga att god tillgång på kapital på de finansiella marknaderna resulterade i en kombination av mycket låga räntor, stigande tillgångspriser och kreditexpansion världen över.
Samtidigt fanns svagheter i regleringarna av de finansiella marknaderna.
Globala obalanser byggdes upp och det som till slut bröt utvecklingen var
nedgången på bostadsmarknaden och bolånemarknaden i USA.
Stefan Ingves, DN Debatt 31/12 2008

Efter Lehman Brothers konkursansökan i mitten av september ströps kreditflödena. Ingen hade väntat sig att en så betydande bank kunde fallera och oron steg för att fler aktörer skulle hamna i en liknande situation. Utlåningen mellan världens banker upphörde nästan helt.

När bankerna inte kunde låna mer än på mycket korta löptider, ofta bara någon vecka, ställde Riksbanken upp och lånade ut på längre löptider. Utlåningen har skett både i kronor och dollar. Riksbanken har även inrättat en tillfällig kreditfacilitet för att förbättra de svenska företagens möjligheter att låna pengar av bankerna. För att säkerställa den finansiella stabiliteten har Riksbanken också gett individuellt likviditetsstöd till Kaupthing Sverige AB och Carnegie Investment Bank AB.

En del av arbetet har också rört utlåning till Island och Lettland.
Det är hjälp till självhjälp i vårt närområde, något som vi alla har nytta av.

En särskild osäkerhetsfaktor för den svenska finansiella marknaden är utvecklingen i Baltikum där svenska banker har betydande verksamhet och en omfattande utlåning.
Vår bedömning är att bankerna är tillräckligt starka för att kunna hantera ökade kreditförluster från det hållet.

Svenska banker står väl rustade med en i utgångsläget god intjäningskapacitet och låga kreditförluster.

How to prevent the Great Depression of 2009
The global financial system is undergoing a meltdown that has not been seen since the 1930s and
nobody seems to know what to do about it.
How did we get to this point and how can we move forward?
Roger E.A Farmer, Financial Times December 30, 2008

Classical economists argue that falling wages will restore equilibrium; but this is based on the belief that the labour market works like an auction in which employment is determined by demand and supply. It ignores the very real frictions involved in searching for a job by both households and firms that can lead to many possible equilibrium employment levels just as Keynes argued in the General Theory.

Although the free market is very good at deciding how many left and right shoes to produce, it cannot prevent systemic risk that arises from the psychology of herd behaviour.

One might not expect much from economists, but one would surely expect them to warn us of a crisis on this scale.
Speech given by Martin Wolf, chief economics commentator, at the FT’s annual economists’ drinks party in London
Financial Times, 27/11 2008

On March 14, 2008, Robert Rubin spoke at a session at the Brookings Institution in Washington, stating that "few, if any people anticipated the sort of meltdown that we are seeing in the credit markets at present”. Rubin is a former US Treasury Secretary, member of the top management team at Citigroup bank and one of the top Democratic Party policy advisers.
“No One Saw This Coming” Understanding Financial Crisis Through Accounting Models
Dirk J Bezemer, University of Groningen, 16 June 2009

This has been a common view from the very beginning of the credit crisis, shared from the upper echelons of the global financial and policy hierarchy and in academia to the general public.
It continues to be publicised, as documented in more detail in the next section. And yet it would be premature to ask “Why did nobody notice?", as Queen Elizabeth did as she inaugurated a new building at the London School of Economics in November 2008

It is not difficult to find predictions of a credit or debt crisis in the months and years leading up to it, and of the grave impact on the economy this would have - not only by pundits and bloggers, but by serious analysts from the world of academia, policy institutes, think tanks and finance.

Watching Chuck Prince and Robert Rubin, the former Citigroup chairmen, giving evidence today on the bank’s losses in “super-senior” sub-prime mortgage securities, was not reassuring for anyone seeking lessons from the 2008 financial crisis.
In summary, they told the Financial Crisis Inquiry Commission in Washington that the risk management and management structures at Citigroup were state-of-the-art, that regulators were keeping a close eye on the business, and that the board was functioning correctly.
John Gapper FT blog April 8, 2010

Apart from this, the most notable aspect of the hearing so far has been how Mr Rubin has stuck to his view (criticised by me in this earlier column) that he wasn’t an executive at Citi and was not directly responsible for what happened.

Robert Rubin, a senior adviser to Citigroup at the time of its deep losses from subprime mortgages,
said he learned belatedly that Citi had $43 billion in high-risk securities on its books.
CNBC 8 Apr 2010

Rubin said: "I do not recall knowing before September 2007" that the bank had held onto the investments composed of repackaged mortgage bonds. In November 2007, Citigroup publicly estimated it would lose $8 billion to $11 billion in the fourth quarter that year from those securities.

Rubin, a former Treasury secretary, made the statements in testimony to a panel investigating the roots of the financial crisis. He and other former Citigroup executives have been sharply criticized for allowing heavy investments in high-risk securities. Citi was a major subprime lender.

Critics have said Rubin, with his vast experience on Wall Street and as Treasury chief in the Clinton administration, should have picked up on the warning signs of the crisis and taken a more active role in preventing Citigroup's debacle.

I told the President that the Mexican government faced an imminent threat of default. Then I asked Larry to explain the situation in more detail... RE: Larry is, of course, Lawrence Summers
Robert Rubin and Mexico's 1994 Financial Crisis

“Why didn’t we see this coming?”
“What do you mean ‘we,’ white man?”
Paul Krugman, årets nobelpristagare, New York Times, 27/11

Why did so many observers dismiss the obvious signs of a housing bubble, even though the 1990s dot-com bubble was fresh in our memories?

Why did so many people insist that our financial system was “resilient,” as Alan Greenspan put it, when in 1998 the collapse of a single hedge fund, Long-Term Capital Management, temporarily paralyzed credit markets around the world?

Why did almost everyone believe in the omnipotence of the Federal Reserve when its counterpart, the Bank of Japan, spent a decade trying and failing to jump-start a stalled economy?

The crises of the 1990s and the early years of this decade should have been seen as dire omens, as intimations of still worse troubles to come. But everyone was too busy celebrating our success in getting through those crises to notice.

Consider, in particular, what happened after the crisis of 1997-98. This crisis showed that the modern financial system, with its deregulated markets, highly leveraged players and global capital flows, was becoming dangerously fragile. But when the crisis abated, the order of the day was triumphalism, not soul-searching.

Time magazine famously named Mr. Greenspan, Robert Rubin and Lawrence Summers “The Committee to Save the World” — the “Three Marketeers” who “prevented a global meltdown.” In effect, everyone declared a victory party over our pullback from the brink, while forgetting to ask how we got so close to the brink in the first place.

The vision thing
Her Majesty’s question ("If these things were so large, how come everyone missed them?")
Chris Giles, FT, November 25 2008

Her Majesty’s question ("If these things were so large, how come everyone missed them?") has sparked a series of ludicrous claims about the prescience of individual forecasters.

Charlie Bean, the Bank of England’s deputy governor, noted that elements of the global economy had troubled lots of economists and policymakers for a long time.
“We knew they were unsustainable and worried that the unwinding might be disorderly, though I don’t think anyone could have guessed the course that events would actually take,” he said.

In his Senate nomination hearing of 2005, Ben Bernanke, the Federal Reserve chairman, said the US financial system had already benefited from a series of crises that had reinforced its ability to cope with difficult times. “The depths, the liquidity, the flexibility of the financial markets has increased greatly,” he said.

Jean-Claude Trichet, European Central Bank president, told four newspapers in mid-July: “Our baseline scenario is that we will have a trough in the profile of growth in the euro area in the second and third quarters of this year and, following this, a progressive return to ongoing moderate growth.” Instead, Europe is staring at the biggest recession since the early 1990s.

Even permanent bears did not see the full bursting of the credit bubble linked with the commodity boom. Nouriel Roubini, the global “Dr Doom” who got much of the crisis right, has also persistently revised his forecasts lower as the credit crunch has bitten harder.

Though there is great entertainment in looking back at the silly things economists have said, more is to be gained by examining the particular failings that contributed to forecasters’ general inability to warn of the current mess.

Stephen King, chief economist of HSBC, says: “Almost all economic models assume that the financial system ‘works’.” Economists in general did not foresee how the looser monetary policy of the early part of the decade could lead to an unprecedented credit expansion.

The natural tendency to seek rationales for events as they unfold, rather than question whether they are sustainable. Kenneth Rogoff, a Harvard professor who is also a former IMF chief economist, thinks the tendency to look on the bright side is particularly prevalent on Wall Street, where “it is difficult to make a living as a mega-bear”, he says.

William White, the former chief economist of the Bank for International Settlements, the central bankers’ bank in Basel, Switzerland, was a persistent critic of lax monetary policy and the failure to stem credit expansion.

Prof Rogoff also spotted the dangers of unsustainable global economic expansion in a 2004 paper with Maurice Obstfeld.
In more recent work with Carmen Reinhart he has highlighted how policymakers fell into the “this time it’s different” trap that dates back to England’s 14th-century default.

Mention must also be given to the notable voices of doom, who got important bits of the puzzle correct even if the timing or other details eluded them.

Prof Roubini, who now runs the consultancy RGE Monitor, wrote a paper with Brad Setser in August 2004 predicting that the world’s trade imbalances were unsustainable and likely to “crack the system in the next three to four years”.

He has been prescient in understanding the links between financial markets and the real economy.

Good question, Ma'am
"If these things were so large, how come everyone missed them?"
Alan Beattie, Financial Times, November 14 2008

House buyers took the view that as long as someone was prepared to lend them money, things would be OK.

The mortgage lenders reckoned that as long as they could package up the mortgages as newfangled financial derivatives (it's a long story, Ma'am) and sell them on, that would be fine.

The financial institutions surmised that as long as the credit ratings agencies were giving the derivatives their seal of approval, everything would be dandy.

The credit ratings agencies thought – actually, it is pretty hard to work out what in God's name the credit ratings agencies were thinking, except that as long as their rivals were giving these assets the thumbs-up, they had better do so as well.

As for the regulators, Ma'am, the point is that they didn't really know and too many didn't want to.

Warren Buffett, a somewhat well-known investor from one of your revolted colonies, called these exotic derivatives "weapons of mass destruction".

The comparison is apter than even Mr Buffett might have thought. The main thing about these derivatives is no one knew how big the stockpiles were, who had them, or what exact form they took.

The smarter economists treated this as a known unknown. They knew that they didn’t know, and they knew that they wanted to know. But the politicians and regulators whose job it was to know, it appears, didn’t want to know, or didn’t want to know badly enough.
They are now pretending it was an unknown unknown.
Don’t believe them.

How did they get away with it? Partly because there were always some tame economists on hand to say that everything was fine.

These are historic times.
Given the origins of the crisis in the collapse of an asset price bubble and consequent disintegration of the credit mechanism, the way the recession will evolve remains obscure.
The authorities must now focus all their attention on reducing its likely scale.
But then they must ask themselves how such a gigantic mess occurred.
Martin Wolf, Financial Times 30/10 2008

Det behövs bättre regleringar av finansmarknaderna,
men absolut inte någon överreglering som kan hindra marknaderna från att fungera effektivt.
DN-ledare 7/11 2008
Kommentar av Rolf Englund
Jaha, jaha

Experterna på kreditvärderingsföretag som Moodys, Standard & Poor's och Fitch bidrog till att förvärra finanskrisen.
Det säger den svenske Harvardforskaren Bo Becker
Dagens Industri 7/11 2008
Kommentar av Rolf Englund
Det behöver man väl inte vara Harvardforskare för att förstå

I debatten sägs det nu vara mer ädelt att söka förklaringar än att peka ut syndabockar, men varför det?
Krisen är inte någon naturkatastrof
Anders Isaksson, kolumn DN 31/10 2008

Greenspan: It's a 'credit tsunami'
but congressmen say he dodged responsibility and didn't foresee crisis.
CNNMoney.com October 23, 2008

I debatten sägs det nu vara mer ädelt att söka förklaringar än att peka ut syndabockar, men varför det?
Inte heller krisen 1992 var någon naturkatastrof
Det hänger naturligtvis ihop. Frågan om vilka felaktiga beslut som ledde till krisen leder ofrånkomligen och med rätta
till frågan om vilka personer som fattade dessa felaktiga beslut.
Rolf Englund, 31/10 2008

Vi menade då /i Ekonomikommissionens rapport (SOU 1993:16)/, liksom nu, att de ekonomiska problemen inte endast, eller ens i första hand, härrör från ekonomisk-politiska missgrepp, som hade kunnat undvikas med skickligare politiker, experter och ämbetsmän.
Problemens rötter sitter i institutioner och regelsystem i den svenska varianten av representativ demokrati och parlamentarism.
Assar Lindbeck m fl Ekonomirådets Rapport 2000, Politisk makt med oklart ansvar, SNS, sid. 15.

The best recipe for avoiding a global recession
Before our political leaders get too fancy remaking capitalism
they should co-ordinate macroeconomic policies to stop a steep global downturn
Jeffrey Sachs, Financial Times, October 27 2008

Alan Greenspan's tragic mistake
negative real interest rates from 2002 into 2005
It was a painful spectacle to watch.
Wall Street Journal, editorial, October 24, 2008

The original bubble was in housing prices and mortgage-related assets,
which the Federal Reserve helped to create with its negative real interest rates from 2002 into 2005.
This was Alan Greenspan's tragic mistake, not that the former Fed chief will acknowledge it.

Testifying before Congress yesterday, Mr. Greenspan pinned the crisis on mortgage securitizers, risk modelers and lending institutions, thus contributing to the Washington narrative that government had little to do with it. The Fed's monetary policy apparently gets a pass.

The media and Members of Congress will use Mr. Greenspan's testimony to impugn /oppose or attack as false or lacking integrity/
the very free market principles that the former Ayn Rand protégé has spent his life promoting.

It was a painful spectacle to watch.

Konjunkturcykeln är en del av marknadsekonomin, ungefär som förkylningar är en del av livet
Skillnaden mellan 2008 och 1914, 1929 eller 1939 är betryggande.
Niklas Ekdal, Signerat DN 19/10 2008

DETTA äR INTE SLUTET. Det är inte ens början på slutet, men möjligen slutet på början.
Winston Churchills finurliga ordvändning från 1942 kan alltid dammas av när det krisar.
Varje sammanbrott har ett förspel, en avslutning på inledningen och en inledning på avslutningen
Ju förr man accepterar sin tråkiga belägenhet, desto snabbare kan man röra sig åt höger på skalan.

PIMCO’s Investment Committee to a man (no women yet) believes that capitalism is the best and most effective economic system ever devised,
but it has a flaw: it is inherently unstable.
Bill Gross, October 2008

Expect a lengthy recession but not depression, accelerating government deficits approaching a trillion dollars as forecast here in this Outlook several months ago, and
the eventual rise of inflation and longer dated bond yields.

For those of us who believe in free markets, these interventions are unpleasant.
These drastic steps might have been avoided had Treasury and the FDIC acted sooner,
yet now they are necessary given the panic that threatens the larger economy.
Wall Street Journal editorial OCTOBER 15, 2008

The government has taken ownership stakes in the largest banks in the land. This extraordinary intervention is perilous -- not least to the banks themselves -- unless it is limited in scope and time. Mr. Paulson called the capital injection "distasteful" but unavoidable, and we can't disagree. The trick is to ensure that neither he nor his successors develop a taste for politically directed credit.
Despite the risks, directly recapitalizing the banks is likely to prove a better tool than buying up "troubled assets," though the Treasury seems on course to do some of that too.

The current crisis reminds us that, in a free economy, the price of the greatly improved long-term performance that only free economies can provide is an ineradicable economic cycle.
As John Maynard Keynes pointed out in the 1930s, the cause of the cycle is alternating moods of optimism and pessimism, and
its motor is credit, which enables optimism to determine economic activity.
Nigel Lawson. Time Magazine, October. 01, 2008

A Capitalist Manifesto
Markets remain our best hope for a better future.
Judy Shelton Wall Street Journal 13/10 2008

Ms. Shelton, an economist, is author of "Money Meltdown: Restoring Order to the Global Currency System" (Free Press, 1994).

"Le laisser-faire, c'est fini."
It was French president Nicolas Sarkozy who actually uttered the words, but you could draw the same message from watching the televised debates in the United States at both the vice-presidential and presidential level. You know that America's founding economic philosophy is in deep trouble when candidates for our nation's highest office refer easily to "Wall Street greed" and "predatory lenders" to explain the global financial crisis. And those are the Republicans.

These days, it seems difficult to defend the efficacy, let alone the morality, of an economic approach to human interaction that is now blamed for having put the entire global economy at risk. But that is exactly what we need -- most importantly, from America's next leader.

Deep within the condemning speeches delivered by Mr. Sarkozy, both in New York and Toulon, are the grains of a new approach to capitalism that should give Americans reason to hope, not only for economic salvation but for a sense of redemption on a deeper level. France's president held out the possibility that all is not lost, that we can fix what is broken.

"The financial crisis is not the crisis of capitalism," according to Mr. Sarkozy. "It is the crisis of a system that has distanced itself from the most fundamental values of capitalism, which betrayed the spirit of capitalism."

Who would have guessed that it would take a Frenchman to remind us that hope is the limitless source of power that drives the human spirit to create, to improve, to achieve its dreams; it is the greatest civilizing influence in our culture.
Yet it was Mr. Sarkozy, speaking before Congress last November, who offered the most profound assessment of our nation's gift to the world. "What made America great was her ability to transform her own dream into hope for all mankind," he said.

Nyliberalerna tysta så det dånar
Det intellektuella civilkuraget hos den stora kader nyliberala ekonomer, som under årtionden hyllat USA:s ansvarslösa marknadsekonomi, imponerar inte.
Bo Rothstein, SvD Brännpunkt, 27 september 2008

Jag kan mycket väl tänka mig att finanskrisen till dels är betingad av bristfällig tillsyn, illa hopkomna regelverk och dåliga belöningssystem i finanssektorn.
Det är inte omöjligt att krisen motiverar förändringar av de lagar och regler som styr finansmarknaden
De fria finansmarknaderna är en viktig delförklaring till världens enastående tilläxt unde de senaste årtiondena
Men, som bloggen Insikt.se konstaterar:
Hur stämmer Rothsteins modell med vad som hände i Sverige 1992. Var inte heller Sverige en välfärdsstat?
PJ Anders Linder SvD blog 2008-09-27 14:21

This is a difficult time to defend free markets. Nevertheless they must be defended,
It is hard to defend a system where top banking executives walk away with millions in compensation when their businesses are, in retrospect, fundamentally flawed. This looks like a reward for failure. We have witnessed two financial crises – the dotcom crash and the current banking disaster – in the first decade of this century. That is hardly a record which inspires confidence in the current efficiency of capital markets or their transparency.
Market freedom is not a “fundamentalist religion”. It is a mechanism, not an ideology.
The Financial Times is proud to defend it – even today.
Financial Times editorial September 25 2008 19:02

Bara för att lista några av de mer betydelsefulla regleringarna som snedvridit den amerikanska marknaden så har vi:

Jimmy Carters CRA (1977) som "requires banks and savings and loan associations to offer credit throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services".
Lagen "förstärktes" 1993 "requiring strictly numerical assessments to get a satisfactory CRA rating; using federal home-loan data broken down by neighborhood, income group, and race; encouraging community groups to complain when banks were not loaning enough to specified neighborhood, income group, and race; allowing community groups that marketed loans to target to groups to collect a fee from the banks."
Trots ett flertal varningar om de problem som CRA medförde och riskerna för en bostadskrasch av bl a WSJ, Alan Greenspan och lagförsörslag som bl a skulle medföra en kraftigare reglering av Fanny Mae och Freddie Mac (bl a Elizabeth Dole och John McCain) så röstade demokraterna ner de flesta förslagen (även som minoritet hade de goda möjligheter att stoppa lagföslag).
Sedan har vi ENRON-affären som ledde till "mark-to-markets" bokföring; ett annat politiskt beslut som naturligtvis ökar instabiliteten i systemet (och ökar frestelsen för mindre nogräknade affärsmän!).

The Community Reinvestment Act (CRA), enacted by Congress in 1977 (12 U.S.C. 2901) and implemented by Regulations 12 CFR parts 25, 228, 345, and 563e, is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate
http://www.ffiec.gov/cra/

Over the past five years, stock buy-backs have increased at a remarkable rate.
Combined, the 500 companies in the S&P 500 index in January 2008 repurchased $120bn in 2003 and $597bn in 2007;
in 2007 repurchases represented 90 per cent of their net income, while dividends were another 39 per cent.
William Lazonick, Financial Times September 25 2008

New figures coming out of the US economy confirms that in almost every respect it is doing significantly better than expected. It is impressive.
Carl Bildt blog 6/12 2005

Det räcker inte med att ha rätt, man ska helst ha det vid rätt tidpunkt också.
Rätt tidpunkt är den då någon bryr sig om vad som sägs
SvD-ledare 30/9 2004

Felet med Mosesteorin SvD-ledare 2000-03-02, utdragSom SvD:s EU-expert Mats Hallgren kunde rapportera i onsdagens Näringsliv har EU-kommissionen under Romano Prodis ledning förstått att studera vilka lärdomar Europas beslutsfattare bör dra av den amerikanska modellen och dess väldiga framgångar.Det var på tiden. Efter decennier av skleros och Delorium har EU mycket att lära av den ekonomiska förnyelsen i USA, som tog sin början under Reagan-åren.
Klicka här

Bo Lundgren i Torsdagsbrev nr 21/2001, 11 oktober 2001Vad gäller ekonomin lade Reagans marknadsliberala politik grunden för en uppgångsfas utan motsvarighet i amerikansk historia. Fram till idag har USA, med undantag för två kvartal under krisåret 1991, fått uppleva 17 år av oavbruten mycket stark tillväxt.

President Sarkozy rasade i veckan i Toulon mot förställningen om att marknaden alltid har rätt och att det skulle vara rena galenskapen att politikerna lägger sig i: tiden för laissez-faire är förbi. Och här hemma väntar vänsterseminarier på temat: Finanskrisen – Dödskyss för nyliberalismen?
Men hallå: visa mig var det råder laissez-faire? Man kritiserar ett spöke som inte finns.
Finanskrisen är ett marknadsmisslyckande. Det är helt klart att banker och andra finansinstitut inte har hållit koll på sina risker, och att ett antal direktörer har fått bra betalt för att inte sköta jobbet.
Men det är minst lika mycket ett politikmisslyckande.
Claes Arvidsson 2008-09-27 16:35

Skuldfrågan/ Who is responsible?