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Issuers didn't want to maintain capital reserves, as insurance coverage companies do, and lots of the banks selling swaps also bought swaps, thus undercutting the rationale for getting the chance off their books. Different reformers suggest more efforts by the Fed to restrain speculative borrowing or to require banks to extend capital reserves when the financial system heats up. Numerous investment schemes had been concocted to draw this excess glut of world capital that saw more revenue in paper transactions than in manufacturing of real items and services. Their revenue was earned from a proportion of the enterprise' earnings. And we didn’t put you back in enterprise so you would pile money and lobbyists into Capitol Hill to combat the monetary reform we so desperately need-while we’re dropping jobs, shedding our houses, losing our retirement savings, losing it all-since you treated the money we worked so laborious to earn like Monopoly money. The flip side was that the lender SHARED The risk if the business grew more slowly or failed. The truth is, it is demand that's the driving drive there and as demand grew for the sale and resale a number of instances of house mortgages to investment corporations, for instance, so did the price of each subsequent transaction escalate. Rasmus makes the point that provide and demand restraints do not equally apply to speculative ventures. I might go on, however you get the point. However University of Missouri economist Randall Wray argues in a paper for Bard College’s Levy Institute that the success spawned two destructive consequences: financial players sought new methods to get round regulations, and they turned accustomed to the government preventing a new Depression.
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