So let's stand back from the Goldman Sachs episode of today and look over what various representative said...like Mr Levin.
First, hedge funds, options and futures....are all legalized gambling. If you think otherwise....consider the implications. You are simply betting on something to occur, and if so, you profit. If you guess wrong, you lose. It is that simple.
Second, who wrote the rules for hedge funds, options and futures? Well....guys like Mr Levin and dozens of other congressmen and senators. They spent years crafting the wording and the profit margin. Don't worry....they don't anything about this business...so they asked the experts to help them write the rules.
Third, as congressman after congressman offered up criticism over the collapse of the housing market....I kept wondering where they were in 2004 when this spiral was already obvious? Did they just want to skip a big mess or were they stupid enough not to grasp it?
If you lived in Florida, Arizona or California in 1997, and watched housing prices go upward...it was a simple deal. You bought a house for $200k, and six years later, it was worth $275k. Another two years, and it was $285k.
Gaze over at Tennessee for housing prices between 2000 and 2008....in most areas....house prices went from $150k to $160k in a eight year period. In some areas....it stayed at virtually the same level,and never moved.
What idiot would accept this trend to be logical?
If you wanted a house in 2008, and you went to the bank....it was a harsh reality if you had to buy a $410k house. So you went out on the limb and put down barely $40k and then hoped that the mortgage rates would eventually work out. They didn't. You came to lose the house easily.
The banks did their job....they used every tool that congress and the senate gave them....to help regular people buy houses. If folks couldn't buy a house....it would have upset congressmen terribly.
So tonight as the sun sets in DC....you've got a bunch of folks sitting in their upscale apartments and patting themselves on the back for some great comments against the Goldman Sachs guys. The truth is....it was all legal gambling that they authorized.