Not so FISH-E of an idea and YES, the repeal of da-Glass did play a role in out of control derivitive stuff, BUT, one takes a 40:1 leverage position for only two reasons, Stupid EGO and/or Desperation to recover ones losses, hence, one makes dare Bed and dare4 one has to Lie down and sleep in it as well, oh boy, sigh........
Btw... Margin Calls triggered the SELL-ing Panic and the infamous Ripple effect took it from there! As in "It's a Wonderful Life", it's Human nature to make a RUN on da-Bank when one thinks their CASH is at risk of being NOT available. And with-OUT a George at every bank to calm the depositors nerves one should NOT be surprised to see the masses showing up to get dare CASH!!
The Fed took drastic actions to thrwart the Panic and more importantly supported the banks requirements to meet the Demands of depositors.
In keeping with the True intent of the Fed's creation they did exactly what they we're supposed to do, Negate the inibility of Financial Institutions to meet the request for CASH and in turn stabilize cash velocity which in turn would help AVOID triggering a move to SELL ASSETS with reckless abandon!! People SELL-ing Assets to raise CASH with Zero regard to price erosion set the ball in motion to Depress prices beyond immediate repair, and Auhhhhhh, Depressional Waves take over, Not Good!!
As I digress, it was NOT my intent to get into all the goings on, nor the everyday mischief that drives economies of scale, but merely to point out the CORE issue that faced the Fed and our society head on during the Fall, pun intended, of 2008!
Good evening and Good Night fine Sir!
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