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On September 23 2013 02:45 sam!zdat wrote: the point is we can never have 100 percent foresight, never will, there will always be black swan, and so we need to make things that can collapse more gracefully. Too big to fail is an abomination, everything should be built with the expectation that it will someday fail
you can't blow out the design parameters like that in finance because the whole point of finance is to skate as close to the edge as you can without falling off, that's how you make money.
edit: when they were doing the 'stress testing' they used the 2008 crisis as a benchmark. But that crisis was bigger than the biggest crisis that had come before it. So the same stress test strategy would have been useless for predicting the 2008 crisis! Finance is about using benchmark from 10yr flood to tell everyone you are safe from 50yr flood, when all the while the raison d'etre of your system is making floods bigger.
edit: sam's first dogma: there is always tail risk. Fear the Real
On September 23 2013 03:33 sam!zdat wrote: you can't blow out the design parameters like that in finance because the whole point of finance is to skate as close to the edge as you can without falling off, that's how you make money.
edit: when they were doing the 'stress testing' they used the 2008 crisis as a benchmark. But that crisis was bigger than the biggest crisis that had come before it. So the same stress test strategy would have been useless for predicting the 2008 crisis! Finance is about using benchmark from 10yr flood to tell everyone you are safe from 50yr flood, when all the while the raison d'etre of your system is making floods bigger.
I don't think you need to get so close to the edge in order to turn a profit - provided that your competition isn't forcing you. So I see system wide efforts to reduce risk as viable. Ex. require and encourage less leverage.
Edit: Sam's first dogma sounds like a hedge fund strategy
you believe in an economic system which fetishizes competition and now you tell me that everything will be fine as long as competition doesn't force people to do things?
On September 23 2013 03:55 sam!zdat wrote: you believe in an economic system which fetishizes competition and now you tell me that everything will be fine as long as competition doesn't force people to do things?
the doublethink is strong with this one
What I mean is that there are incentives for banks and other firms to increase leverage. Overall it reduces taxes paid and for banks and other too big to fail institutions it creates an implicit subsidy. Any firm that takes advantage of those will have a competitive advantage over rivals that will force them to emulate the risky financing strategy.
By eliminating / reducing the incentive to over leverage, you also eliminate / reduce the competitive pressure to over leverage. You still have competition, it's just that the playing field has changed to put certain build orders (so to speak) out of practice.
Edit: The underlying premise is that equity liabilities have the ability to absorb losses, whereas debt liabilities do not outside of bankruptcy.
yeah I mean I think we should just outlaw a whole lot of financial instruments. Anything that makes financiers excited should be illegal. Only boring finance allowed.
On September 23 2013 04:09 sam!zdat wrote: yeah I mean I think we should just outlaw a whole lot of financial instruments. Anything that makes financiers excited should be illegal. Only boring finance allowed.
I don't think that would be as effective. You can do boring finance all day, but if you can't absorb the losses you still go bust.
Edit: that's not to say that some things shouldn't be done away with in some cases. Our opinions are not mutually exclusive, fortunately.
WASHINGTON -- Sen. Tom Coburn (R-Okla.) said his Republican colleagues who are pushing to defund Obamacare -- even if it means risking a government shutdown -- aren't facing the "political reality" that they're going to lose.
"Tactics and strategies ought to be based on what the real world is, and we do not have the political power to do this," Coburn said during an appearance on CBS's "Face the Nation." "We're not about to shut the government down over the fact that we cannot, only controlling one house of Congress, tell the president that we’re not going to fund any portion of this. Because we can’t do that.”
The Senate is preparing to vote next week on a House-passed bill that would both fund the government past Oct. 1 and strip funding for President Barack Obama's signature health care law. Despite Sen. Ted Cruz (R-Texas) and a handful of others vowing to do whatever it takes defund Obamacare, Democrats are expected to cut the Obamacare piece from the government funding bill and send it back to the House.
Coburn said he agrees that if Republicans controlled Congress they should be voting to take down Obamacare. But they don't, and he said he doesn't expect his party to force a government shutdown over the matter.
"I think the exercise is fine," said the Oklahoma senator, but "right now, with our economy where it is ... we actually have a crisis of confidence in our country right now. Both in Congress and with the president."
On September 23 2013 02:45 sam!zdat wrote: the point is we can never have 100 percent foresight, never will, there will always be black swan, and so we need to make things that can collapse more gracefully. Too big to fail is an abomination, everything should be built with the expectation that it will someday fail
Not to completely change the conversation, but this mindset is also important from a national security perspective. We should be spending less on deterring specific threats like the TSA and more on disaster recovery (which can mitigate damage against a variety of threats). It's more important that systems "fail well" than to try to prevent never failing at all. Because as you say, the expectation is that it will someday fail.
It's one of the reasons why Biometrics are not a great form of security. They don't fail well. If somebody gets your fingerprint or retina scan or whatever, they get it forever. Passwords can be changed.
On September 23 2013 04:09 sam!zdat wrote: yeah I mean I think we should just outlaw a whole lot of financial instruments. Anything that makes financiers excited should be illegal. Only boring finance allowed.
Hahaha, that's a hilarious way to say it and I absolutely agree.
WASHINGTON -- Sen. Tom Coburn (R-Okla.) said his Republican colleagues who are pushing to defund Obamacare -- even if it means risking a government shutdown -- aren't facing the "political reality" that they're going to lose.
"Tactics and strategies ought to be based on what the real world is, and we do not have the political power to do this," Coburn said during an appearance on CBS's "Face the Nation." "We're not about to shut the government down over the fact that we cannot, only controlling one house of Congress, tell the president that we’re not going to fund any portion of this. Because we can’t do that.”
The Senate is preparing to vote next week on a House-passed bill that would both fund the government past Oct. 1 and strip funding for President Barack Obama's signature health care law. Despite Sen. Ted Cruz (R-Texas) and a handful of others vowing to do whatever it takes defund Obamacare, Democrats are expected to cut the Obamacare piece from the government funding bill and send it back to the House.
Coburn said he agrees that if Republicans controlled Congress they should be voting to take down Obamacare. But they don't, and he said he doesn't expect his party to force a government shutdown over the matter.
"I think the exercise is fine," said the Oklahoma senator, but "right now, with our economy where it is ... we actually have a crisis of confidence in our country right now. Both in Congress and with the president."
It wasn't by cause of a passing fancy that the founders gave the House the power of the purse. They are the most immediate representatives of the people, vulnerable every two years to ouster for failing to represent the people's interests. There's enough of these representatives to pass a bill funding all of government, save for Obamacare. I'm hoping they continue to stand firm; I doubt the political ramifications will move the makeup of the House away from those that voted to defund. It's a very unpopular piece of legislation amongst those that voted a Republican majority in the House.
On September 23 2013 02:45 sam!zdat wrote: the point is we can never have 100 percent foresight, never will, there will always be black swan, and so we need to make things that can collapse more gracefully. Too big to fail is an abomination, everything should be built with the expectation that it will someday fail
Several of the House Republicans who voted Thursday for a bill that slashed billions of dollars from the food stamp program personally received large farm subsidies for family farms. The bill cutting the food stamp program narrowly passed on a mostly party line 217 to 210 vote.
During the food stamp debate, GOP Rep. Stephen Fincher, who received thousands in farm subsidies, responded to a Democratic Congressman during the debate over the cuts by quoting the bible, saying “the one who is unwilling to work shall not eat.”
Fincher himself has received his own large share of government money. From 1999 to 2012, Stephen & Lynn Fincher Farms received $3,483,824 in agriculture subsidies. Last year he took in $70,574 alone.
Another Republican congresswoman who voted to make cuts to the food stamp program was Rep. Vicky Hartzler of Missouri. Her farm received more than $800,000 in Department of Agriculture subsidies from 1995-2012. In 2001, her farm received $135,482 in subsidies.
Rep. Kristi Noem of South Dakota, who also voted to make cuts to the program, was a partner in Racota Valley Ranch, her family’s farm and previously had nearly a 17% stake through 2008. The farm received $3.4 million in subsidies from 1995-2012. The Environmental Working Group, which analyzes subsidy data, says the “estimated amount of subsidies attributed to Rep. Noem from 1995-2012 is $503,751.”
Rep. Marlin Stutzman, a Republican Rep. from Indiana also received his fair share of government subsidies. He personally took in nearly $200,000 for the farm he co-owns with his father.
Several of the House Republicans who voted Thursday for a bill that slashed billions of dollars from the food stamp program personally received large farm subsidies for family farms. The bill cutting the food stamp program narrowly passed on a mostly party line 217 to 210 vote.
During the food stamp debate, GOP Rep. Stephen Fincher, who received thousands in farm subsidies, responded to a Democratic Congressman during the debate over the cuts by quoting the bible, saying “the one who is unwilling to work shall not eat.”
Fincher himself has received his own large share of government money. From 1999 to 2012, Stephen & Lynn Fincher Farms received $3,483,824 in agriculture subsidies. Last year he took in $70,574 alone.
Another Republican congresswoman who voted to make cuts to the food stamp program was Rep. Vicky Hartzler of Missouri. Her farm received more than $800,000 in Department of Agriculture subsidies from 1995-2012. In 2001, her farm received $135,482 in subsidies.
Rep. Kristi Noem of South Dakota, who also voted to make cuts to the program, was a partner in Racota Valley Ranch, her family’s farm and previously had nearly a 17% stake through 2008. The farm received $3.4 million in subsidies from 1995-2012. The Environmental Working Group, which analyzes subsidy data, says the “estimated amount of subsidies attributed to Rep. Noem from 1995-2012 is $503,751.”
Rep. Marlin Stutzman, a Republican Rep. from Indiana also received his fair share of government subsidies. He personally took in nearly $200,000 for the farm he co-owns with his father.
Ted Cruz's plan doesn't make much sense on its face. He says he wants to filibuster the House-passed government spending bill that defunds Obamacare. Why would he want to block a bill that accomplishes his dream?
The apparent contradiction underlines the politically difficult position that Cruz has put his caucus in. How do you explain to your constituents that you voted to block a bill that would have defunded the health care law that they so deeply revile? Explaining the arcane rules of the Senate isn't the easiest political message, though Cruz has earned the backing of big conservative groups to fortify his position.
But the fact that he's in this position at all probably isn't a good sign. "Rule No. 1 in communications is if you are explaining, you are losing," a senior Senate GOP aide told TPM. Some of Cruz's Senate colleagues have been publicly calling him out on his convoluted tactics.
"I can't imagine any Republican senator not voting to invoke cloture on a bill they support," Sen. Bob Corker (R-TN) told Politico.
"I can't imagine filibustering the bill that I like from the House," Sen. Lindsey Graham (R-SC) said Monday on Fox News.
Cruz has good reason for opposing "cloture", the 60-vote threshold that opens and closes debate on bills on the Senate floor. Once the debate is closed, Senate Majority Leader Harry Reid (D-NV) can use a standing Senate rule to strike the defund Obamacare language from the House spending bill with a simple majority vote. Final passage of the bill also requires only 51 votes.
Ted Cruz's plan doesn't make much sense on its face. He says he wants to filibuster the House-passed government spending bill that defunds Obamacare. Why would he want to block a bill that accomplishes his dream?
The apparent contradiction underlines the politically difficult position that Cruz has put his caucus in. How do you explain to your constituents that you voted to block a bill that would have defunded the health care law that they so deeply revile? Explaining the arcane rules of the Senate isn't the easiest political message, though Cruz has earned the backing of big conservative groups to fortify his position.
But the fact that he's in this position at all probably isn't a good sign. "Rule No. 1 in communications is if you are explaining, you are losing," a senior Senate GOP aide told TPM. Some of Cruz's Senate colleagues have been publicly calling him out on his convoluted tactics.
"I can't imagine any Republican senator not voting to invoke cloture on a bill they support," Sen. Bob Corker (R-TN) told Politico.
"I can't imagine filibustering the bill that I like from the House," Sen. Lindsey Graham (R-SC) said Monday on Fox News.
Cruz has good reason for opposing "cloture", the 60-vote threshold that opens and closes debate on bills on the Senate floor. Once the debate is closed, Senate Majority Leader Harry Reid (D-NV) can use a standing Senate rule to strike the defund Obamacare language from the House spending bill with a simple majority vote. Final passage of the bill also requires only 51 votes.
Why do all politicians think their constituents are too stupid to understand what's going on?
It's not as though anyone who will be tricked by the opposition saying Ted Cruz filibustered his own bill is the type of person to actually vote during a mid-term...
On September 24 2013 05:34 {CC}StealthBlue wrote: This is about Ted Cruz trying to gauge his chances for President, damn whether he burns his own party or not. Listen to Chris Wallace:
It's not "burning his own party" if he's right. Yeah, he's probably going to lose on this particular fight. However, so long as Obamacare turns into the turd in a punch bowl that it's expected to be, he'll have a very, very powerful weapon to use against republican and democratic opponents in 2016 if he runs.
On September 24 2013 05:34 {CC}StealthBlue wrote: This is about Ted Cruz trying to gauge his chances for President, damn whether he burns his own party or not. Listen to Chris Wallace:
It's not "burning his own party" if he's right. Yeah, he's probably going to lose on this particular fight. However, so long as Obamacare turns into the turd in a punch bowl that it's expected to be, he'll have a very, very powerful weapon to use against republican and democratic opponents in 2016 if he runs.
That's a pretty big "however". Obamacare certainly isn't UHC and it is probably just going to postpone the inevitable collapse of our healthcare economy, but in terms of what any given individual voter is going to see come about as a result of it (if anything), it will probably be a small positive.
On September 24 2013 05:34 {CC}StealthBlue wrote: This is about Ted Cruz trying to gauge his chances for President, damn whether he burns his own party or not. Listen to Chris Wallace:
It's not "burning his own party" if he's right. Yeah, he's probably going to lose on this particular fight. However, so long as Obamacare turns into the turd in a punch bowl that it's expected to be, he'll have a very, very powerful weapon to use against republican and democratic opponents in 2016 if he runs.
That's a pretty big "however". Obamacare certainly isn't UHC and it is probably just going to postpone the inevitable collapse of our healthcare economy, but in terms of what any given individual voter is going to see come about as a result of it (if anything), it will probably be a small positive.
To the contrary, all signs are pointing to Obamacare accelerating the collapse of private healthcare. Cost and savings projections have continuously worsened since Obamacare was passed. Given what we know today about how the program is evolving, I doubt that it would have passed in 2010.
EPT
