# Future of Capitalism

Hong Kong was special, because trade to China flowed through it. After UK gave it back to China, all that was lost. Hong Kong is a declining city. But this isn't about running a few million people in a special privileged location. It's about running nations populated by several hundred million, geographically spanning thousands of miles, having ethnic colorfulness, strong economical diversity and a strong political divide, which they get from their breast milk.
Declining since Britain gave Hong Kong to China?!?!?!?!?!??!?!? Hong Kong's economy has been doing well since it adopted a non-interventionist policy where the government is not allowed to interfere with commerce and industry , but will build highways, roads and schools. I don't the government should not be involved absolutely in the economy, I just think the Government should have a small role in the economy in comparison to the role of the free market in the economy.

mheslep, thanks for the link on Friedman and Kuttner.

OK, thinking this through, I think that "corporate welfare" doesn't paint a completely accurate picture of what's going on. I would say our system is "special interest driven." Government unions for instance, I believe, have a much more toxic effect on our economy than do big banks and finance companies sucking off the government.

http://blogs.law.harvard.edu/philg/2009/03/16/how-rich-countries-die/

I apologize if this is getting a bit heated. I don't have all the answers. I'm still looking for them. Thanks for everybody's insight.

Ivan Seeking
Staff Emeritus
Gold Member
Nor is carrying that kind of hand waving over outside of PWA acceptable, to my mind.
You are the only declaring low standards for P&WA. Please read the posting guidelines.

Ivan Seeking
Staff Emeritus
Gold Member
A lot of broad swipes about how Bush and the neocons were destroying the economy, or how the little guy was falling behind, or claiming crisis and catastrophe again and again without a coherent argument - none of that equates to an identification of the current credit problems and recession set off by flawed risk analysis of mortgage backed securities, $5 trillion of them held by government sponsored agencies. There were some informed observers that pointed out in detail some parts of this problem: the WSJ editorial pages for years attacked massive portfolios of Fannie/Freddie, Greenspan and Bernanke also warned about them; Nouriel Rubini and Nassim Taleb warned in general about leveraging and debt risk; notably Peter Schiffer warned about housing and MBSs. None of these people saw the extent of the linkage between these problems (nor do they claim to now). No one saw it because the regulations were insufficient. That is why the Republicans are blamed for this. Their economic philosophy has nearly destroyed the global economy. The markets cannot be trusted. They do not act in their own best interest. Markets are driven by short-term gains and chaos. misgfool >>>The link between private/public money and politicians has to be severed, so that they can make independent decisions.<<< I think there are ways of doing this. We need to start demanding that politicians are accessible to their constituents, not lobbyists. We need to start asking political candidates to take accessibility pledges where they agree to interact with public message board sites and attend public meetings in their districts at least once a month. We should absolutely demand this of elected officials. If they don't agree, vote them out. They should be meeting openly with the public, not privately in their offices with lobbyists. I have a suggestion. All donations to candidates should be randomly given to any one in the group. This would discourage large donations, since their money could end up to the hard line communist (if there are any left) instead of the conservative republican. It would, however, encourage small donations to democracy. Then the airtime would not make such a significant contribution to the results. Staff Emeritus Science Advisor I'd like to look forward - as in the 'Future of Capitalism'. Well I think we should have an economy where there aren't that many regulations and not many papers to fill out and it would be easy to open up a business. What regulations would be abolished, or what regulations are appropriate. Certainly a case can be made, as Reagan did, of simplying the body of regulations, removing unnecessary ones, simplying the paper work, removing conflicts, removing overlapping or conflicting jurisdictions, . . . . But what regulations, in general, are appropriate or inappropriate. For example, do we simply remove clean water, clean air and let power plants discharge effluents into the environment? We have a river contaminated with PCBs from two manufacturing facilities up river. It would have been nice if the chemicals had been destroyed properly 30 or 40 years ago instead of simply dumped in corrosion-susceptible barrels, which were simply buried unprotected underground, or simply poured into the plant discharge, which then ultimately emptied into the river. I guess the feeling was that the toxic materials would be diluted, so no nevermind. No one apparently thought about the fact that the PCBs were refractory, i.e. didn't break down chemically. There was Love Canal, where houses were built on a chemical waste dump. Moving to recent history, the derivatives products were not regulated at all, but they have become a huge liability. Not only did AIG overexpose itself, i.e. promised to insure against losses way beyond their capability, but the banks and financial institutions did not perform due diligence to ensure AIG was in a position to cover their losses/liabilities. We have the FASB rules and regulations, which the financial industry is supposed to follow. But it looks like they didn't. What about product liability. Should consumers be protected against harm or industry if a company is negligent in producing a product or misrepresenting a product that ultimately harms consumers? If so, what should be the penalty? Comparing the Hong Kong economy to the US or EU economy seems inappropriate given the difference in magnitude. Hong Kong (and Taiwan) work because the are set between other much larger economies. HK is an intermediary, and they benefit from low cost inputs and high revenue (compared with input) from exports. russ_watters Mentor Maybe, but not all banks are getting it. Only the chosen few. Not sure what your point is with that, but yes, that's true.... Are they really the complete opposites? Yes: It is generally accepted that there is a bipolar economic spectrum, and it is up to any economy where on this spectrum they wish to fall. At one end of this scale there is the concept of socialism - largely based on the 19th Century views of Karl Marx. Socialism/Marxism decrees that all resources and welfare are owned and distributed by the state to the basis of who needs them receives them. Socialist economies can also be known as command economies. The other end of the scale is the economics of British economist Adam Smith (1723 - 1790), that of the free market economy, where the allocation of resources is determined by the 'invisible hand' of the price mechanism. Free market economics is now commonly termed as capitalism, although its true theory is rarely appreciated by those who talk of it. http://www.bbc.co.uk/dna/h2g2/A4541041 [Broken] Last edited by a moderator: russ_watters Mentor Already dealt with by someone else, but... Russ, any below market transaction by the government with private parties is a subsidy according to basic finance theory. That's corporate welfare, and that's what these bailouts are. By "below market transaction", you mean buying a security for a fraction of its book value? Could you cite where you got that definition, because that's not what the word "subsidy" means: dictionary said: subsidy: 1. a direct pecuniary aid furnished by a government to a private industrial undertaking, a charity organization, or the like. http://dictionary.reference.com/browse/subsidy That's cash money. There are plenty of other corporate welfare policies in our government, for instance subsidizing medicare drug purchases instead of letting them trade at market rates. I'm not clear on what you mean there - are you talking about the price fixing the government does? That's not a subsidy, that's just a bad decision caused by lobbyist power. Military spending in its present state is a form of corporate welfare as well. The list is actually quite large. You seem to be defining a "subsidy" as any time the government gives money to any corporation for any reason. That's excessively broad - that isn't what the definition means. A subsidy is free money. Money spent for nothing (direct) in return. When the government buys an airplane (or the stapler on Obama's desk), they pay money for a product. That's not a subsidy. [separate post:] I would say our system is "special interest driven." Yes, things like price fixing and well-targeted tax cuts are special interest favors, but they are not subsidies. russ_watters Mentor If you will go the the beginning of the "what is wrong with the US economy" thread and start reading posts, you will see that some people (including Astronuc and myself) could see what was coming (or already underway) in terms of recession, over-valued assets, etc, in our country's economic house of cards. Of course, we were routinely ridiculed and nay-sayed by people who believed that the "free market" was working just fine. Turbo-1, we're nowhere near the doom-and-gloom predicted by you and Astronuc and since recessions happen about once every 8 years or so, you can predict a recession for several years and eventually call yourself right when it happens. Of course, when we climb out of it in 6 months or a year and there are no major changes to the structure of the economy, you'll conveniently forget that you were predicting essentially the end of the US economy as we know it. russ_watters Mentor I'd like to look forward - as in the 'Future of Capitalism'. Fair enough... The immediate future for the US includes fixing the relatively small structural problem with the banking system that contributed (note: I did not say "caused") the current recession and it's depth. Then sly investors will go back to looking for ways to game the system, finding loopholes to push the next bubble. That's just the nature of the game and the pattern of the last 100 years. Other than that, it'll largely be business as usual. Now business as usual is not exactly a static situation. Because of the nature of socialist promises, they are easy to sell to the public* and as a result, just about every western economy has been creeping toward the socialist side of the spectrum since the industrial revolution finished. This slow creep sometimes has fits and starts and with Obama, we're going to get a pretty big bump. "Tax and spend" is the typical democrat mantra, but right now he only proposes spending - at a deficit rate of$1 Trillion a year for the next 10 years. That's unlikely to be feasible, so assuming his social programs pass (and they may not due to the cost), taxes are going to have to go up by something like 30% to compensate.

*No politician in my lifetime has exemplified the ease of selling socialist policies more than Obama. In his campaign he simultaneously trumpeted fiscal responsibility and massive new social programs. And people believed him! Why did people believe him? Because free money is a happy fantasy. Over the next year or so, we'll discover his true character as he either modifies his stance or drives our economy into the ground and permanently ends the American dream (as you and turbo-1 have basically predicted for the past few years). The US national debt is currently as high as is feasible, perhaps even too high. Doubling it in a short time would be disastrous. And I don't mean 'the-recession-we're-in-is-disastrous' disastrous, I mean for real disastrous. A return to a great depression type economy with no way to recover.

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russ_watters
Mentor
The way I see the functioning of the economic spectrum is this:

An industrialized nation with a relatively low intervention government resulting in a relatively free economic system has a certain inherrent GDP growth rate. Lets say it's an average of 5% for a certain country (it depends on the country and, among other things, their mineral wealth). Along with that is a steady increase in income inequality - lets say 5% a year. Socialist policies are designed to decrease income inequality by slicing off part of that 5% growth rate, giving cash to people who produce nothing, therefore getting nothing in return - no production into the economy (that's welfare or a subsidy). Move a little to the left and you end up with 4% GDP growth and 4% income inequality growth. 3% and 3%, etc., etc.

The further to the left you go on the spectrum, the lower the inherrent GDP growth rate and the lower the associated income inequality. At some point on that graph, you pass the break-even point and enter the socialist death spiral where the productive people in society are incapable of producing enough to support the unproductive people, leading to runaway debt and eventual total collapse.

The test case for this is, of course, the Soviet Union. Now the USSR had one thing going for it: extreme mineral wealth. Due to its extreme mineral wealth, it could handle a welfare state much better than countries that can't literally dig money out of the ground. But eventually, the spiral took it down (with a little help from Ronnie to speed things up).

No western countries, afaik, have crossed the line yet, but one that is close is Sweden. The expansion of socialism there has put a severe strain on the economy.

What Obama proposes will place us squarely on the wrong side of the equilibrium point.

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turbo
Gold Member
Turbo-1, we're nowhere near the doom-and-gloom predicted by you and Astronuc and since recessions happen about once every 8 years or so, you can predict a recession for several years and eventually call yourself right when it happens. Of course, when we climb out of it in 6 months or a year and there are no major changes to the structure of the economy, you'll conveniently forget that you were predicting essentially the end of the US economy as we know it.
I think blowing trillions to buy up toxic assets and prop up failed banks is pretty bad, especially since all the spending entails debt. If you will look at that thread, you will see some very specific observations that "somehow" just managed to be true.

BTW, my wife and I not only saw systemic economic problems coming - we got prepared for them. A year and a half before the "What is wrong with the US economy" thread was started my wife and I were watching real-estate soar to ridiculous levels, and experienced how taxation on home-owners at local levels was starting to follow that trend. We found ourselves a small log house in the woods on about 10 acres with a spot for a large vegetable garden and bought a couple of pretty good-sized chest freezers. We put our old house on the market and it sold to a couple with 3 kids who didn't look like they could qualify for a regular bank-loan based on his salary alone. I wouldn't be at all surprised if they are out of there and the mortgage holding-company owns the place (at an inflated price that they'll never be able to recover). My real-estate agent is a close friend, and he and I had some long talks about over-valued properties, etc. Shortly after he sold our house, he and his wife put their big place on the market and bought a small place (easy to heat with wood) similar to ours, with a big garden spot. When the real-estate market collapsed, he found himself out of work and went back to operating heavy equipment. We voted with our wallets and took stances as conservative as possible. Is it just a fluke that we happened to be right, and that the timing of our moves was right? I don't think so.

We're not dancing in the streets because we made the right moves, but I'm really glad that my friend and I are comfortably under the age when we could be forced to start withdrawing from our retirement funds, essentially locking in market losses before our portfolios have a chance to regain some value. I pity anybody who turned 70 recently and is forced to start withdrawing from their IRA, if it is heavily invested in mutual funds. They have no choice though, and there are IRS penalties for not withdrawing the minimum amount, based on life-expectancy tables.

I'd like to look forward - as in the 'Future of Capitalism'.

What regulations would be abolished, or what regulations are appropriate. Certainly a case can be made, as Reagan did, of simplying the body of regulations, removing unnecessary ones, simplying the paper work, removing conflicts, removing overlapping or conflicting jurisdictions, . . . .

But what regulations, in general, are appropriate or inappropriate.
I don't think its the job of the government to set minimum wages laws or how long a person should work . Those kinds of decisions should be made exclusively between the employee and the employer. An incompetent worker and compotent work should not be paid the same wage simply because they might been working at an entry level job or some fast food joint. I also believe that the federal government has been mainly responsibly for the high surge in food prices lately since many food products are corn based and the government has diverted all the ethanol from food production and has mainly invested the ethanol into financing the production of biofuels , which isn't really good investment since many economists are saying biofuel will cost more than gasoline since it the energy for ethanol based corn is expensive. I don't think we should be handing out loans, grants and subsidies to businesses and businesses that are failing. I think we should let the businesses fail, because they will continue to used the same business models that initially cost there business to fail in the first place. There should also be absolutely no protectionist policies. No government body should prevent a trader within the US not to trade with a trader outside the US , nor should they replace restrictions on certain goods mainly to supposedly " protect" the companies in the united states. That act would be immoral.

There was Love Canal, where houses were built on a chemical waste dump.

Moving to recent history, the derivatives products were not regulated at all, but they have become a huge liability. Not only did AIG overexpose itself, i.e. promised to insure against losses way beyond their capability, but the banks and financial institutions did not perform due diligence to ensure AIG was in a position to cover their losses/liabilities.

We have the FASB rules and regulations, which the financial industry is supposed to follow. But it looks like they didn't.

What about product liability. Should consumers be protected against harm or industry if a company is negligent in producing a product or misrepresenting a product that ultimately harms consumers? If so, what should be the penalty?
The public would stop buying the product if it causes harm to its consumers or sue the company if they brought a deadly product. There is no need for the government to intervene.

Comparing the Hong Kong economy to the US or EU economy seems inappropriate given the difference in magnitude. Hong Kong (and Taiwan) work because the are set between other much larger economies. HK is an intermediary, and they benefit from low cost inputs and high revenue (compared with input) from exports.
What do you mean Hong kong is set between large economies? Do you mean they heavily depend on international trade? Every country's economy relies heavily on international trade. New Zealand economy's is similar to hong Kong's economy and between the years 1900 and 1970, New Zealand economy was highly regulated and its economic status was either stagnate or on the decline. But in the 1980's and 1990's , a group of economic reformers in New Zealand wanted a freer economy than they previously had. They the government role in the economy to be drastically reduced. They did not want the government to provid subsidies for farmers, the reformers wanted controls on prices, wages, and interest rates . Since the reform, its economy has been very prosperous. News World bank rated New Zealand's economy as 99.9 % free. The unemployment rate in New Zealand in 3.3 %.

Countries where there is a considerable amount of government intervention in the economy, like South Africa , India , and Ethiopia have populations that are in poverty.

Staff Emeritus
Countries where there is a considerable amount of government intervention in the economy, like South Africa , India , and Ethiopia have populations that are in poverty.
The poverty was there in those countries before government intervention. SA and India used to be colonies, and Ethiopia has limited resources.

The public would stop buying the product if it causes harm to its consumers or sue the company if they brought a deadly product.
After the fact doesn't help the injured. If one causes injury to someone via negligence, shouldn't one expect to be penalized?

The poverty was there in those countries before government intervention. SA and India used to be colonies, and Ethiopia has limited resources.
Poverty was very widespread in Hong Kong , especially in the 1950's ; it used to be a refugee center , and hong kong used to be a colony of Britain, and now that China applied a hands of non-interventionist policy towards Hong Kong's economy in the seventies , and its economy is vibrant. I don't think colonization is the sole explanation why some former countries that were colonies arestriken with poverty . Many African countries have loads of natural resources in its vessel, yet why is it not home to the most prosperous economies on the planet? Because the dictators of the countries don't let there people practice capitalism freely without their approval first. Was not the united states, canada, and Singapore former colonies? Go to this website www.nationmaster.com and select economy and select economic freedom and they will lis t all countries with the greatest economic freedom to the countries with the least economic freedom, and you will find for the most part, countries where there isn't much economic freedom have will have a population where most people are in poverty or at least a significant portion of there population lives in poverty.

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misgfool
The immediate future for the US includes fixing the relatively small structural problem with the banking system that contributed (note: I did not say "caused") the current recession and it's depth. Then sly investors will go back to looking for ways to game the system, finding loopholes to push the next bubble. That's just the nature of the game and the pattern of the last 100 years. Other than that, it'll largely be business as usual.
Current recession is significantly deepened by the banking system. That is because they are not lending anymore. But if that was not the case, what did cause the current recession on all sectors and why did it coincide with the collapse of the financial sector?

I mean for real disastrous. A return to a great depression type economy with no way to recover.
Great depression ended because of socialist policies.

Along with that is a steady increase in income inequality - lets say 5% a year. Socialist policies are designed to decrease income inequality by slicing off part of that 5% growth rate, giving cash to people who produce nothing, therefore getting nothing in return
What they get is stability.

No western countries, afaik, have crossed the line yet, but one that is close is Sweden. The expansion of socialism there has put a severe strain on the economy.
Is Sweden a common debate topic in the US conservative circles?

Wiki said:
In 2006, Sweden had the world's ninth highest GDP per capita in nominal terms and was in 14th place in PPP terms (2005 figures)[3].

World Economic Forum 2008 competitiveness index ranks Sweden 4th most competitive, behind Denmark.[12] The Index of Economic Freedom 2008 ranks Sweden the 27th most free out of 162 countries, or 14th out of 41 European countries.

misgfool
Not sure what your point is with that, but yes, that's true....
Corporatism.

Why do socialist countries have a private sector?

Well, don't forget Adam Smith lobbied the Crown to ban the publication of association directories. He believed his theories only worked when people were anonymous and did not know each other. Maybe if economists start with more realistic assumptions based on observations of real economic behavior, we would not always end up wondering why they are wrong. It seems to me that they are like the Egyptian high priests, making predictions about the weather and harvest, but when they are wrong, people don't question the model, they assume the Gods -- the invisible hand, in this case -- reacted in an unexpected way. A better approach would be to observe how crops grow, make experiments about what would make them grow better, etc. than relying on some mystical invisible hand to clear the supposedly "free" market. [I say supposedly because "free" markets are based on ideas of perfect competition that are chimerical at best. It's ironic because that assumption is one of "all firms are equal," which is very similar to the long-awaited and never-forthcoming communist outcome of "all men shall be equal."]

I've been meaning to dig up Adam Smith's "Wealth of Nations" and read it so that I know what he wrote, as opposed to what people these days claim he wrote or meant.

I'm waiting for the 'impressive' leadership in the US and various nations and/or markets.

There has definitely been a blow to some peoples' perceptions of 'free market' ideology, or perhaps it's just more awareness that a 'free market' simply does not exist. What has happened in US and global economies during the last 6 months was expected.

Economies of the western or industrialized nations may drift somewhat toward the left politically, but I waiting to see.

I've been making notes on "Rethinking the Wealth of Nations", but that's taking time. I plan to attend a lecture by MIT Professor and Economist Daron Acemoglu on the subject next month when he visits a local university.

I'd like to look forward - as in the 'Future of Capitalism'.
I don't understand your motive, here. Me, you, and the rest have no power in this game.

The players: The financial institutions around the globe are in rapid evolution. The perception of monitary assets, in form such as paper notes and digital deposits is evolving. You and I will continue trading bank account entries and paper currency as we have no other recourse. I think the big boys should be losing faith in unbacked currency as they see helicpopter money flying from the US treasury.

As so often happens, the cause of the problem is patched with those who created the problem in first place. We should not see a a return to the gold standard, but a world digital currency. They won't patch it with gold; they no longer have it.

Staff Emeritus
Digital version of Wealth of Nations
http://www.econlib.org/library/Smith/smWN.html

I don't understand your motive, here. Me, you, and the rest have no power in this game.
We have power of our decisions - even if it is not extraordinary power.

At the moment, I'm reading about the social history of Lancashire and the impact of industrialization during the 1600's and 1700's. I think up in Glasgow and tucked away in academia, Adam Smith did not observe a lot of the fine details - particularly the politics involved in socioeconomic system.

turbo
Gold Member
We have power of our decisions - even if it is not extraordinary power.
That is about all we can expect. We live in an Oligarchy, like it or not, in which the wealthy make the rules and are heavily insulated from the consequences of their decisions. About all we can do is try to conduct ourselves as conservatively as possible and hang on for the ride.

russ_watters
Mentor
I know it's late but just saw these and would like to clarify what I said:
Current recession is significantly deepened by the banking system. That is because they are not lending anymore. But if that was not the case, what did cause the current recession on all sectors and why did it coincide with the collapse of the financial sector?
The current recession does not coincide with the collapse of the financial sector, it is said to have started in late 2007, almost a year before the financial sector collapsed. What caused it was the normal boom-bust cycle in housing prices being worse than normal due to prices that were inflated worse than normal. This is the last remnant of the 1990s "irrational exhuberance". It was a bad housing crash, but the stock market crash of 2000 was big too, but led to only a mild recession. If the mortgage regulations hadn't been too lax and packaging of the bad mortgages into bad investments hadn't happened, instead of a big recession, we'd have a small one.
Great depression ended because of socialist policies.
I suppose that's meant to imply that that can be done again? FDR had a lot of room to raise taxes that doesn't exist today. And besides which, his particular scam (social security) was a pyramid scheme that took a long time to be exposed as such. Now everyone is aware of how big the problem is.
Is Sweden a common debate topic in the US conservative circles?
It is, because Sweden is one of the more socialist countries in the west and as such is often incorrectly trumpeted as a socialist success by liberals.

And along the lines of the first part:
tubo-1 said:
BTW, my wife and I not only saw systemic economic problems coming - we got prepared for them. A year and a half before the "What is wrong with the US economy" thread was started my wife and I were watching real-estate soar to ridiculous levels...

Is it just a fluke that we happened to be right, and that the timing of our moves was right? I don't think so.
That thread started in Sept of 2006, so you're saying you saw the bubble in the beginning of 2005. That's great that you did, congrats. Back in 1999 I bought AMD at 17.5 and sold at 85 in the beginning of 2000. People can see bubbles because the economy is an endless cycle of bubbles and busts. This last one was more pronounced than most. Yes, the housing bubble was a housing bubble. No, it wasn't a fluke that you saw it - lots of people saw it (and who better to see it than an experienced real estate agent?).

But just to be clear, seeing the bubble doesn't mean you saw the current recession as what it is. If the real estate bubble had been everything, then the recession we had a year ago would have been it - 6.5% unemployment and a couple of nonconsecutive quarters of negative GDP growth. That's not what got us where we are today:

-The housing bubble caused the recession.
-The economic regulations on mortgages and mortgage backed securities caused it to get a lot worse.

In other words, if the mortgages and mortgage backed securities hadn't been an issue, there still would have been a housing bubble bursting and there still would have been a recession.

What I'm saying is very few people - and certainly no one on this forum - saw the crisis in the financial system coming. I'll give you an example of what I mean: My sister saw this coming. She works for a major bank, managing fixed-priced securities. In other words, she buys and sells things like mortgages and manages pension plans. A few years ago when the sub-prime mortgage based credit swapping thing started, she was instrumental in advising her company to not partake in it - because she didn't understand it (no one really did - that's the point) and didn't trust it. In October of 2007, she saw that the financial system was going to follow the housing bubble and pulled all of her savings out of the stock market.

Of course, she didn't share any of this information with her family at the time...

turbo
Gold Member
No, Russ, I did not foresee the enormity of the financial collapse, but I did see an irrational inflation in housing prices with no concommitant increase in wages, productivity, etc. From my rural Maine perspective, the recession was inevitable and in fact was in progress when lots of cheerleaders were saying that we were not yet in a recession and had to wait for an "official" pronouncement. Had I known of the huge exposures Wall Street had taken on in subprime bundles, I would have been even more pro-active in preparing for the downturn.

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Around and before 2000, Nick Guarino published a monthly news letter, The Wall Street Underground. In this, about late 2000. he predicted a housing market crash.

About, and around 2000, Nick Guarino published a mothly newsletter, The Wall Street Underground in which he predicted a housing market crash.

In other words, if the mortgages and mortgage backed securities hadn't been an issue, there still would have been a housing bubble bursting and there still would have been a recession.
What, in your understanding, was the mechanism.