Is the global financial system more stable now than in 2008?

[Dr_Paprika]

What has also seems to have exploded are the use of creative definitions and changes in accounting principles for the sake of reducing apparent debt.

Canada hides its debt by downloading important services to the provinces, which then shift responsibilities to municipalities. It works for a while, but it doesn’t change the numbers.

[septimus]

@GreenWyvern

It’s a mirage because it’s based on a bubble of inflated stock prices and massive debt.

Another reason apparent growth can be called ‘mirage’ is if it’s concentrated in sectors of dubious value, especially “financialization,” although employment in insurance and other non-personal service sectors (e.g. law, advertising) may also provide low human value per dollar.

In particular note that giants like Google and Facebook are heavily dependent on advertising (and worse) for revenue. The dollars paid for ads, and for fake news, are real, but any social or humanitarian value is minimal and thus “illusory.”

[Damuri_Ajashi]

@septimus

Darwin’s Law about Survival of the Fittest means that craps players who bet the Field or Big Six are now in short supply. They’ve been driven out by their own loss of capital. Failing business models fail. This is applauded by fans of the free market. Lessons are learned.

But what lessons were learned by bankers in the wake of the 2008 Crisis? They learned that they’ll get their $100 million dollar bonuses even if the paper they created goes bad, that Uncle Sam will step forth, injecting enough cash to pay those huge bonuses. Stockholders have learned their lesson: Heads we win, Tails the taxpayer picks up the losses. As long as they’re betting on banks that are “in with the in crowd.” (What exactly did the managers of Bear Stearns do that made the insiders happy to turn them into a scapegoat?)

No, I am NOT proposing that the banks should have been forced into bankruptcy as a result of the 2008 Crisis. I am simply proposing that they should have been forced to expand their capital base to achieve clear solvency. This is what the duty of bank regulators has always been … until the U.S. bank regulators were in the pockets of the bankers. Either way, the U.S. taxpayer would have ended up owning a lot of bank paper. But why not let the taxpayer make a big profit on bank stock while bankers learn a lesson? Instead the banks gleefully unloaded their worthless debt paper onto the hapless taxpayer, and added to their collections of Lamborghinis and yachts.

Excess profits during the booms; then profit again with government help during the crashes. I’d say the banks have found a good business model for themselves and hope to repeat their success.

We could also execute corrupt bankers and corporate executives. I don’t know if the death penalty is a deterrent for crimes of passion but it is a pretty good deterrent to prevent multi-millionaires from trying to become billionaires by risking the global economy.