Dangers of an Unregulated Financial System – Sony Kapoor
Complete video at: http://fora.tv/2009/09/08/CAPITAL_Sony_Kapoor_on_Changing_a_System_of_Our_Creation
Sony Kapoor, managing director of Re-Define, likens the an unregulated financial system to a dangerous road with over-sized trucks carrying toxic assets driven by drunk drivers with no barriers or signals through a thick fog.
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A former derivatives trader who switched sides, Sony Kapoor employs vivid metaphors to argue that finance needs to be reigned in to bring us back to prosperity, in this, modern society’s 90th such financial crisis.
Kapoor’s momentum: “Waking up knowing that I have the capacity to make a significant albeit small difference before I go to bed that day gives me momentum.” – Momentum Conference
Sony Kapoor is the Managing Director of Re-Define (Rethinking Development, Finance & Environment), an international Think Tank promoting financial system reform. A prominent expert on international finance and development, he started his career in investment banking and derivative trading. In 2003 he quit to work on reforming the financial system and promoting international development. Kapoor has been a leading advocate for debt cancellation, action against tax havens, and promoting innovative sources of financing. He is a key adviser to several governments, international agencies, political parties, unions, and NGOs on helping shape a more progressive society.
Kapoor has worked in a policy advisory and strategy consulting capacity for international organizations such as the World Bank, UN, and UNDP, international NGOs such as Oxfam, and Christian Aid, financial institutions such as the Industrial Credit and Investment Corporation of India, and Lehman Brothers, and governments including that of Norway. He has studied at the prestigious Indian Institute of Technology, University of Delhi and the London School of Economics.
Duration : 0:3:2
So, show me an …
So, show me an example of the “free market.” And please, post that documentation that you were flouting a week ago. Until then we’ll just assume that you are lying now, as you were then.
According to most …
According to most of your kin, there has never been a free market. So you have zero evidence for that assertion, and if you show me an example of a free market (e.g. USA during the late 1700s) I will show you how it was not and how intervention helped and/or how it was a failure and then you will just explain how’s there’s no true Scotsman. Absent FDIC, there were no government garuntees, you’ve contradicted yourself on regulation.
Nope, you’re …
Nope, you’re strawmanning me or you’re unable to understand my position and the fallaciousness of your reasoning. Just because we have rules, does not mean we have rules against everything. I really should not have to explain this to you. “..there is always a loophole..” So does that mean regulation does not matter and we have a free market? We’ve gone from “heavily regulated” to “always loopholes.” You can’t say regulation caused this crisis and say regulation does not matter at the same time.
So you’re admitting …
So you’re admitting that regulation was ineffective, not absent. Thank you. The reason that losses are so much bigger is because of course no regulation can actually make you tell the truth if you don’t want to. There is always a loophole no matter how hard guys like you try to close the last one. Real world evidence shows for the more free market something is the better it works. Government guarantees, volumes of regulations & government-controlled firms setting prices are not free market.
Do you really think …
Do you really think that a regulation’s length on paper has anything to do with its effectiveness? Fail. Disclosure? HAHAHAHA! Look up “mark-to-fantasy” If there is so much “disclosure” then why is the FDIC finding losses 20 times over the amount the banks were reporting when the FDIC takes over these institutions? High disclosure?- you’re a fool.
Again, the “free market” is floating, utopian abstraction. You have no real world evidence to show for its effectiveness.
Read the bit by …
Read the bit by Murray. Read “The ongoing Methodenstreit of the Austrian School” by Soto. Or, my personal favorite, “Scientism standing in the way of economic science” by Callahan. Oh god, that one is hilarious! Actually my school of economics has been more successful than yours at predicting the crisis and so have the Georgists and other heterodox schools.
So then since it’s …
So then since it’s highly deregulated you should be able to read the regulations and get back to me before the end of the year? What you can’t read that fast? You’re delusional if you think that an industry characterized by licensing, massive disclosure regulations and government having to approve everything you do is “free market”. The lack of leverage ceiling are far less relevant than the fact that the institutions are guaranteed and that the government can therefore tell them what to do.
Then why did they …
Then why did they predict the crisis when idiots like you didn’t? Saying “sorry it’s true” is not evidence.
The only things …
The only things that are true in Austrian economics are their simple axioms. Beyond these axioms, everything in Austrian economics is just an ad-hoc assumptiom. Sorry, but it’s true. Reread that article by Murray Rothbard. You do not even understand their methodology, or anything about Austrian economics beyond youtube videos. : )
Nope. It was highly …
Nope. It was highly deregulated. You are just making stuff up. Deregulation: CFMA, Greenspan’s introduction of sweep accounts, lack of leverage ceilings, GLBA, and the list just keeps going on. Regulation: SOX? Don’t make me laugh. Ponzi lending took place only in banks that were enabled to do it by deregulation.
The “free market” is a utopian, floating abstraction.
The current …
The current financial crisis is one of highly regulated entities, in fact the financial market is one of the most regulated in the economy, behaving badly. This is directly due to government encouragement of this bad behavior, and indirectly as well. Ponzi lending is not a big problem in the areas without such regulation. To claim that Ponzi lending is a significant feature of the free market compared to the regulated market is delusional.
I do, you just …
I do, you just deliberately misunderstand it. Things that are by definition true cannot be disproved by evidence. To claim they are is the as unscientific as possible.
Oh, butt hurt …
Oh, butt hurt little bitch. : )
I’m sorry you’re …
I’m sorry you’re such a retard that you can’t find documentation when I post it, but I did.
Never did once. …
Never did once. Liar. : ) Oh well. Unless you can start backing up what you posit, I guess our discussion is done. Any neutral observing Austrian would notice that you do not understand Austrian Economics, or economics at all for that matter. You have effectively demonstrated yourself to be a dimwit. Post that evidence, dumdum, until then, we can accept that you are lying about what you are saying. : )
Please quote the …
Please quote the posted evidence that showed the “well documented evidence” that the CRA was relevant in the 2007-09 recession. Until then we will assume you are lying. You have not posted anything so far. : ) Please explain how the OTC derivatives market was “very, very” regulated (you obviously cannot distinguish the difference between an OTC derivative and an exchange traded derivative.)
Let me ask you this: were those ratings agencies private, or public?
Did twice. And we …
Did twice. And we can assume you were lying when you claimed governments never forced banks to lend to people who could not pay back.
You made a negative …
You made a negative claim that was clearly untrue. There are multiple instances of governments forcing banks to lend to people who could not pay back. That you now claim it was not a claim makes you a liar. I posted evidence of the CRA being used to force banks to lend to uncreditworthy borrowers twice. The Commodity Futures Modernization Act left the market still very, very regulated, and in any case derivatives were only a problem because ratings agencies made them so.
Oh and one more …
Oh and one more time, please show the “well documented evidence” that banks were forced to lend to people that could not pay them back. Until then we will assume you are lying. Thanks! : )
to do with with …
to do with with futures derivatives. It did not.
BTW, six words, I was not going to include the “of 2000″ portion.
Nope it’s false. …
Nope it’s false. You have yet to show any evidence that the government has forced any institution to lend to people that could not pay them back from 2000-2008. I have no duty to defend a negative, something that you have mistook as a “claim.” I can destroy your second sentence with four words: The Commodity Futures Modernization Act of 2000. This was an act of DEREGULATION, you imbecile. Bush never regulated the derivatives market, dumdum. It seems you believe Sarbanes-Oxley had something…
It wasn’t funny …
It wasn’t funny moron it was true. I am aware that the status quo happened with MORE regulation that they had when futures markets operated for years without problems. I understand plenty, you on the other hand make claims like “governments have never forced banks to make loans that could not be repaid.”.
Gold coins? Which …
Gold coins? Which country uses gold coins as a common currency or as a unit of virtual exchange on a stock market? As you say, even criminal law is a form of regulation.
How can you run a modern day economy with international stock markets and consumer-facing products without regulation? It’s unworkable.
Yes, financial …
Yes, financial markets do not “need regulation” but sound financial markets do need regulation. Your quip about the Dutch King was gut wrenchingly funny, if you only knew anything about the status quo of OTC derivatives. Sadly for you, you do not even understand your school of economics. : )
was non sequitur …
was non sequitur anyways.
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