This crisis can be analysed from a Hegelian perspective. The capitalist economy thrives by taking risks. One draws credit to invest it and earn more than the credit costs. One literally makes money. Now this money making carries risks, what if your investments go wrong? This is risk taking which should be assessed. The same risk is carried by the banks which supply the money for investors to make money. So they also need to assess risks vis a vis benefits. In last instance these banks take risks by lending money to people who take risks and the government is compelled to take risks to guarantee the individual savings which are put in banks which takes risks. The risks are spread everywhere, but the name of the game continues to be risk taking, a continuous risk taking, one is creditor to A, but debtor to B. If these streams of risk are still profitable, everyone profits. But inherent to risk is that there is uncertainty and if one plays the game of risk long enough, risks will realise themselves. So the game of ever more risk taking has an inherent inconsistency which makes its downfall inevitable. Risk is the core principle and can't be regulated, so the inherent contradiction makes this paradigm fall.

Caldwell wrote:

I've been hearing some analysts say the word "fraud", which certainly is against the free market economy principles. Fraud is what took place before the collapse in the housing market, when, the bad loans (knowing they're bad loans because of lack of qualifying income and/or job) were re-packaged into bundles of securities, and re-sold to investors, hiding the true nature of these products.

But this is exactly what I mean. A. capitalism's focal point is the fully free market. But since there is never such a market interventions will be ecessary. The foundation of capitalism is inherently contradictory, A. one should not interfere with the market and B. There should be a fully free market, but the two tken together are inconsistent and than a Hegelian analysis would have it that this contradiction will at some point prove the dowfall of the system.

Than the risk business. Also that can be analysed in a similar vein. In order to contain risks one bundles more and more investments. This goes well if these investments are uncorrellated. However since more investments get bundled with each other, investments get correlated and tangled up in ways that will not be foreseeable anymore. And so an intrinsically sound judgement, spreading risk, will lead to a risky situation because by spreading all investments eventually get infected and when the risk finally comes to realise itself there is no safe haven anymore.

As with the example of intervention, a certain "nothingness" lies at the core of the capitalist economy, the fiction of the free market, which drives the system, but it never realised and the nihilating concept of risk. Risk introduces uncertainty, a certain lack, a negation, to curb it one negates the negation by spreading and diffusing it, only to create a further negation, namely the instability of the whole system instead of one private investment.

I am sorry, I phrased it wrong. There should be a fully free market, with perfect information, fully free entry etc. That is teh capitalist focal point. But such markets never realise themselves. Market parties block access to markets, engage in kartels etc. In the name of realising a fully free market the state intervenes. But a fully free market is a market without state intervention there the paradox lies.

If capitalism makes money taking risks, than it is a good idea to spread the risk, but the more you spread it, the more all investments become interconnected and the graver the consequence of an investment going wrong are. Perhaps a bad investment is allowed to 'rot' more easily with intervention, I can't judge that, but the logic is the same. One doesn't want one investment to go belly up, so one will spread the risk around and if one makes a loss one will try to compensate for this with other investments which also involve risks and so on.