My point was to reply to the original summary:

And to point out that bitcoin was entirely based on chance and provided no contractual obligation. Financial instruments do derive their value, at least in part (non-zero part unlike bitcoin), from legal contractual obligations. Thefore, treating of trading of bitcoins the same way that the financial instrument exchanges are treated would be less straight-forward than the summary implied.

Right and that has nothing to do with it. The driving was not an analogy. It was an example that demonstrated clearly the distinction between points of fact and points of law. Financial instruments, even if one buys your drool about them, maybe similar to bitcoin in fact, but they are still different in law. You want to ignore the legal distinction, but you can't. It's just there. You can't ignore their being contracts which the courts can enforce as opposed to bitcoins which are not contracts which the courts can enforce. You can argue the similarity in fact until you are blue in the face, but the distinct element that bitcoin is not legally enforceable will remain. You may want to argue that it is irrelevant for all practical purposes, but that doesn't matter. For legal purposes that distinction remains. If you take anyone to court for a non-performance of a contract, you may lose, but you will not get a blank stare that you would if you tried it with bitcoin. Again, it doesn't matter if it's almost the same, in your opinion. It wouldn't matter if it were the same in fact (and not only in your fantasy). Because, in law, the distinction would still exist.

Don't need to require it. It's enough to create a market place in which banks that don't do that can't stay competitive. Not everything government-created situation is do-or-die. It's not an order every time. If the government makes all banks in Column A play by one set of rules and all the banks in Column B play by a much more beneficial set of rules, it's not forcing the banks in column A into anything harsh. But bank in column B simply push banks in A out of the market place. And in that situation it is the result of the policy that all the banks (at least all the ones who stayed around to be in business) played by the "preferred" rules. So the policy 100% at fault. Even if on the surface of it, nothing was ever required. Of course, if you don't see that the policy was actually more coercive than that, you really just don't understand what you reading. The phrase "I see nothing there" is not a statement about what is there. It's a statement about you.

There are point of fact, and there are points of law. Consider a situation A: a car runs over a pedestrian because the pedestrian ran in front of it and the driver couldn't possibly stop. Now consider a situation B: a drunk driver runs over a pedestrian crossing on a green light. In fact, from the perspective of the pedestrian, they suffered the same fate. But from the point of view of the law, they didn't. Your argument amounts to saying that because two situations are similar in fact, they are identical. But they are not identical because even if they were similar in fact, they would still be different in law because exchanges trade legally-binding contracts and bitcoins are not legally binding.

http://en.wikipedia.org/wiki/Community_Reinvestment_Act#Legislative_changes_1989

Here's an excerpt:

"...According to Ben Bernanke, this law greatly increased the ability of advocacy groups, researchers, and other analysts to "perform more-sophisticated, quantitative analyses of banks' records", thereby influencing the lending policies of banks. Over time, community groups and nonprofit organizations established "more-formalized and more-productive partnerships with banks..."

Arbitrarily enforced regulations do tend to cause panics from inability to understand what is acceptable behavior. Panics tend to cause overreactions. Forcing banks to prioritize 3rd party relationships over creditworthiness is, in effect, forcing them to (on occasion) lend to those who would not be able to pay. No one said that all mortgages were bad. But I am sure you understand that increasing demand on the lower end of the price scale pushes up scarcity up the price scale and creates increased demand at all positions on the scale as well. Eventually this misalignment of priorities lead to this:

"...In a 2002 study exploring the relationship between the CRA and lending looked at as predatory, Kathleen C. Engel and Patricia A. McCoy noted that banks could receive CRA credit by lending or brokering loans in lower-income areas that would be considered a risk for ordinary lending practices...."

But it was already a panicked reaction on behalf of the banks to inability to operate within the narrow parameters of due diligence. They now had to consider other priorities. And due diligence did suffer as a result.

Like I mentioned, this happened after the crises in a rush to resolve a huge foreclosure backlog. Yes, computer programs written in a hurry have bugs. Edge-cases get missed and not accounted for in checking for validity of ownership. This has nothing to do with what happened in the run-up to the crises.

Yes, I am also a witch. Because you know, if I agree with you, I am right, if I know of facts which make you wrong, I am a witch. Must be really easy to live such a world. HInt: you are hyped up on adrenaline and are not able to see reason. That's what causes the one-sided of mind and makes it enjoyable to hate. You just happened to have picked a target that is politically correct to hate. It's not because your decision is based on facts, it's because you enjoy it. But that is not enough to make it right.

And "they" didn't assign the ratings. The ratings agencies happily assigned the ratings because it meant more revenues for them. The banks sold the paper. Were they happy to get it out the door at a higher price because the ratings agencies gave them AAA? Sure. Every salesman will happily charge higher price if they can. But you have to tell a lie before you can be guilty of fraud. Accurately reporting ratings assigned ratings agencies is not lying. Governments mandated use of rating agencies' ratings as a legal requirement for many pension funds. Did the banks commit fraud when the government made this requirement? Did the banks commit fraud when the ratings agencies inflated the ratings? Did the banks commit fraud when the pension funds had to, by law, use the ratings agencies' ratings instead of other qualified opinions? You wanna scream with the screamers because it makes you feel good? Don't accuse others of drinking the kool aid, then. I am really, really sick of people who are obviously visceral and who think that they have a right to claim being on the side of reason just because others have told them that they are.

As for this:

it's an outright lie. That's I am 100% certain that you say this even though you know it's not true. And that makes it a lie.

Not sure if you are trying to change the subject, but just in case you are, I'll reiterate the point. All financial papers sold by exchanges are legal contracts and, therefore, are backed by law. Bitcoin is not. Bitcoin is a gentlemens' agreement on a principle, which is not the same thing as a legally-binding contract.

It was bad policy, not fraud. If it were fraud it would be easy to prosecute. No one has been prosecuted because not only were there very few instances of laws being broken, but because most of the excessive lending was actually government-mandated (which is why otherwise-prudent people made so many imprudent decisions -- it's nearly impossible to oppose a government policy even if it is a bad policy). Regardless of "who started it" or why they did it, the papers which were traded did have legally-binding obligations behind them. They are all forms of contracts. And bitcoin is not. The whole foreclosure business had nothing to do with it. That was just rush to resolve the steaming pile of garbage after the collapse. It happened from trying to do things faster than they could be done in a responsible manner. I don't want relitigate the whole banking crisis. The frame of mind of the participants who traded the contracts is irrelevant. The fact that they traded legally-binding papers vs the lack of any kind of legally-binding support for the bitcoins remains a fact.

And I was debunking your commentary by pointing out that all that paper was legally-binding contracts. The fact that some of it became worthless because the promisors became insolvent doesn't change the nature of the paper. Bitcoins do not have legal contracts behind them. So the difference there is quite fundamental.

all agree!!! Unfortunately they all speak with the voice of the same one person. But this IPCC gang has managed to publish the same claims under the letterheads of all the otherwise-credibly organizations. IPCC are not more scientists than Paul Krugman is an economist. They are all nothing but political shills who needs to be derided and dismissed much more often than they are.

What? Casinos? How they offer from tangible exchanges? Any paper you buy on an exchange comes with some legal rights. Even stock gives you the legal right to vote in company board elections. Commodity contracts give obvious legal rights. Bonds give you a right to demand payment from a creditor, etc. Buying a bitcoin does not give you any legal right, so I still don't think it is appropriate to deem it to be a property. I suppose if you had a system for reselling casino winnings, then bitcoins would be identical (rather than similar) to it. But casinos do run different (sometime odd) games. This is just another gambling game.

They same is true of any casino which lets you deposit money with them while providing you with a dealer to arbiter your poker games. You can use the deposited money to buy chips in the casino. And then you can sit at a table and have a casino-regulated gambling session with other players. It's not quite the same, but the fact that mining of bitcoins is largely a game of luck, means that the whole system is based on a very sophisticated gambling scenario. Bitcoins have not inherent value other than to indicate who won and who lost in the gamble. That proceeds of the gamble can be exchanged for real-world tangibles, but the same is true of casino chips. It's not exactly like poker. But poker is not the only game casinos offer. They offer many, sometimes newly introduced, games. This seems to operate like one of them.

Technically speaking, bitcoins are not financial instruments. Producing a bitcoin is effectively a gamble. So entirely bitcoin system is a gambling institution. And exchanges act as token brokers. In gambling terms, they are the house. I don't think casinos are treated as financial institutions though. And for anyone actually looking to regulate bitcoins, casinos are probably a better model. People can exchange chips among themselves anonymously. But if they want to exchange them at an "established" location, then they have to do it through a cashier acting as a broker. This is what exchanges are.

Presumably... The NATO alliance has never been tested because the resolve of the United States to fight a war of principle has never been in question. It is now. We abandoned our ally Poland by backing out on the missile shield agreement we had with them simply because Russia asked. It is not at all clear that Russia would not (in 2-3 years time) manufacture a conflict in one of the Baltic states simply to see if it can get away with it. I would say it will largely depend on whether US elects another Communist or will change the course.

No, Germany was not technologically superior at the time. In fact, the only reason Hitler started rearming Germany was that he saw that Europe would not resist him regardless of what he did. Russian military industry has now started producing again. It's been able to finance itself with large arms sales in recent years (like 1.5-2 MILLION machine guns to Venezuela).

my local bakery shop went bankrupt because of employee fraud. Is it time to rethink the institution of purchasing bread?