I wanted to stick around last night to discuss the movie, but I had to leave.
Not sure what was discussed or where the conversation lead to in regards to the financial collapse and the lack of regulation, but I wanted to share an article from April 2007 in the Monthly Review:
The financialization of Capitalism is something that is inherent in the Capitalist system as it develops, as was originally argued by Rudolf Hilferding and hinted at by Karl Marx and Frederich Engels as early as the late 19 century.
As John Bellamy Foster pointed out in this article a full year before the financial crisis:
Today the pricking of the housing bubble has become a major source of instability in the U.S. economy. Consumer debt service ratios have been rising, while the soaring house values on which consumers have depended to service their debts have disappeared at present. The prices of single-family homes fell in more than half of the country’s 149 largest metropolitan areas in the last quarter of 2006 (New York Times, February 16, 2007).
So crucial has the housing bubble been as a counter to stagnation and a basis for financialization, and so closely related is it to the basic well-being of U.S. households, that the current weakness in the housing market could precipitate both a sharp economic downturn and widespread financial disarray. Further rises in interest rates have the potential to generate a vicious circle of stagnant or even falling home values and burgeoning consumer debt service ratios leading to a flood of defaults. ''The fact that U.S. consumption is the core source of demand for the world economy raises the possibility that this could contribute to a more globalized crisis''.
Anyways, got to run, but I'm of the opinion that Financial bubbles are a result to productive capital's natural tendency toward stagnation as production becomes more efficient and Capital's requirement for constant expansion and profit. They created a commodity, financial commodities such as derivatives, to keep the economy "expanding" and "profitable".