The villains are institutional gambling with excessive debt and the ideological insistence on nonregulation. And now officials who encouraged such irresponsibility, or looked the other way while it occurred, and never saw the possibility of a derivatives nuclear reaction are in charge of steering the nation out of the crisis.
“Were there not institutional and public demand for ever-increasing profits, the excesses would not have occurred,” says Lipper. “As has always been the case, leverage is dangerous, and without significant minimum capital requirements it typically ends in disaster.”
We may be at the edge of that disaster right now. The nationalizing moves over the weekend will only lead to more inflation down the road, says Lipper.