[ExI] A world drowning in excess savings

Dylan Distasio interzone at gmail.com
Wed Feb 19 16:32:20 UTC 2020

I agree with your wonderful outlook overall, but have a nit to pick.
 Plenty of people lost money in 2008-2009, especially ones who were
planning on accessing a nest egg for retirement in that time frame that had
quickly dropped in value by 50+%.   Some of them also sold (or had to sell)
for various reasons including overwhelming fear and attempting to preserve
what was left of desperately needed capital at the worst possible prices.

Many people also lost their homes.   Anyone working in the most heavily
impacted industries in some cases had heavy losses in company stock
including that held in 401ks.

Not a single person of those most responsible for the financial crisis has
been held responsible in the criminal justice system.

With the exception of Lehman Brothers, markets were not allowed to clear,
and tons of those involved were made whole (i.e. bailed out) when they
shouldn't have been.   We're still dealing with the results of that now
with central banks continuing to goose financial markets across the globe.

Fannie Mae/Freddy Mac were also a lesson in why the US government shouldn't
be in the mortgage business.  When risk is removed from banks, they do what
is expected.  Take as much of it as possible on someone else's dime.

The federal backstop on student loans is why college costs continue to
skyrocket.  There is no risk to banks in providing as much money as
students would like to borrow.  It's all on OUR backs as taxpayers (at
least in the US).

Markets need to clear and not be distorted or they are not really markets
that properly transmit a true price.

This isn't sour grapes on my part.  I came through it fine, but many
didn't.  I'm also happy to see the stock market continue to climb and my
accounts grow, but this interest rate environment is already having serious
impacts on pensions/insurers and others whose assumptions on real returns
no longer hold true.  If it continues, it will ultimately not end well.

On Wed, Feb 19, 2020 at 11:05 AM spike jones via extropy-chat <
extropy-chat at lists.extropy.org> wrote:

> Yet we still focus on the big negative things, like the bank failures of
> 2008.  Who here lost money in that?  Neither did I.
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