US Politics Mega-thread - Page 951

On March 23 2014 03:24 Sub40APM wrote:

Someone's debt is someone else's savings. So the increase in debt should be viewed not just as a one directional resource but instead as an interaction between two people and the interest rate is the price that two strangers agree on what the price of the borrowing/savings is.

Florida Gov. Rick Scott (R) has lost the billionaire who served as the governor's campaign finance co-chairman.

Billionaire Mike Fernandez, the chairman of MBF Healthcare Partners, is quitting the campaign because of "behind-the-scenes disagreements" according to The Miami Herald.

"I am proud of the team the Governor has put together, and I am confident that we are on course for victory," Fernandez wrote in a letter to Scott's campaign.

Fernandez, however, has reportedly been dissatisfied with the direction of the campaign for weeks now. Fernandez first started expressing his problems with the campaign roughly a month ago when he emailed top Scott supporters complaining about a pair of campaign aides who made jokes in a Mexican accent on the way to a Mexican restaurant in Coral Gables, where Fernandez lives. Fernandez is Cuban.

But Fernandez isn't completely done with the campaign. He plans to continue to support Scott and other Republicans and on Monday will host Republican Governors Association fundraiser for Scott featuring Mitt Romney.

On March 23 2014 03:53 GreenHorizons wrote:


So if the borrower can't or refuses to pay they destroy their wealth and the wealth of the saver correct?

Also does a Ponzi scheme not have the same mechanic. Where one persons investment is another's return? The 'difference' being that there is allegedly more of an intention on the part of banks to 'pay up' if people come for their money.

But just like a Ponzi scheme it only works if only a few people want their profits at a time. If lets say anything like 30%+ (possibly less) of savers want their money simultaneously (or in short order) the entire system collapses because the money simply isn't there.

It also only continues to work as long as people keep throwing money into the Ponzi pit. If people lose faith in (fundamentally untrustworthy) lending institutions who have a fraction of money much smaller than the 'reserve requirements' the whole thing collapses.

The reserves are actually much smaller than the roughly 10% requirement would lead one to believe. The reserve 'money' doesn't have to be money at all. The 'money' can be and often is a promise to pay. So the bank in case of a run or whatever doesn't even have 10% of the money they claim to have. A significant portion of that 'money' is actually just a pile of IOU's.

What good is an IOU from Tom to Mary going to do for a starving Jason? Not a thing. This doesn't stop at the personal banking level. The same system pervades all the way up to national governments and institutes like the Fed. For instance the requirement for the FDIC which 'insures' against bank runs is below even the 10% set for banks. So if there ever was a run on a significant amount of banks 15-20%+ the insurer wouldn't have the resources to cover it (think AIG but the rescuers are the ones on fire.)

Our entire global economic system is dependent on trusting people who are wholly untrustworthy and preventing panic en mass of a perpetually panicked population.

Essentially if average people actually understood how the monetary system works than it would likely collapse. The rational fear of such a system would lead to runs and collapse almost instantly.

Lawyers for two former underlings of Republican New Jersey Gov. Chris Christie said in separate court filings Friday that a legislative committee should be able to offer their clients immunity from prosecution in exchange for providing information for the committee's investigation of possible political payback.

The briefs on behalf of former Christie aide Bridget Kelly and ex-campaign manager Bill Stepien were highly critical of the court filings from the lawmakers early this week, questioning their motives for releasing emails involving their clients and their legal positions.

Kelly's lawyer, Michael Critchley, compared the committee's arguments to "Alice in Wonderland."

The issue before a state court judge in Trenton is whether the lawmakers can force Kelly and Stepien to comply with subpoenas in the investigation of politically motivated traffic jams created near the George Washington Bridge last year. The judge, Mary Jacobson, had asked both sides to write briefs on the issue of immunity.

Christie fired Kelly in January after revelations that she was involved in creating the traffic jams in Fort Lee possibly as retribution against its Democratic mayor, who didn't endorse Christie for re-election. The governor, a possible presidential contender in 2016, also cut ties with Stepien, citing the "callous indifference" he showed in emails about the traffic lane closures.

Christie has denied advance knowledge of the lane closures. No one has been charged with any crimes in the case.

Most others asked for documents in the case, including Christie's re-election campaign and his office, are complying. But Kelly and Stepien have invoked their right not to self-incriminate and say federal prosecutors have sought information from them in the case.

On March 23 2014 03:53 GreenHorizons wrote:


So if the borrower can't or refuses to pay they destroy their wealth and the wealth of the saver correct?

Also does a Ponzi scheme not have the same mechanic. Where one persons investment is another's return? The 'difference' being that there is allegedly more of an intention on the part of banks to 'pay up' if people come for their money.

But just like a Ponzi scheme it only works if only a few people want their profits at a time. If lets say anything like 30%+ (possibly less) of savers want their money simultaneously (or in short order) the entire system collapses because the money simply isn't there.

It also only continues to work as long as people keep throwing money into the Ponzi pit. If people lose faith in (fundamentally untrustworthy) lending institutions who have a fraction of money much smaller than the 'reserve requirements' the whole thing collapses.

The reserves are actually much smaller than the roughly 10% requirement would lead one to believe. The reserve 'money' doesn't have to be money at all. The 'money' can be and often is a promise to pay. So the bank in case of a run or whatever doesn't even have 10% of the money they claim to have. A significant portion of that 'money' is actually just a pile of IOU's.

What good is an IOU from Tom to Mary going to do for a starving Jason? Not a thing. This doesn't stop at the personal banking level. The same system pervades all the way up to national governments and institutes like the Fed. For instance the requirement for the FDIC which 'insures' against bank runs is below even the 10% set for banks. So if there ever was a run on a significant amount of banks 15-20%+ the insurer wouldn't have the resources to cover it (think AIG but the rescuers are the ones on fire.)

Our entire global economic system is dependent on trusting people who are wholly untrustworthy and preventing panic en mass of a perpetually panicked population.

Essentially if average people actually understood how the monetary system works than it would likely collapse. The rational fear of such a system would lead to runs and collapse almost instantly.

On March 23 2014 04:11 Sub40APM wrote:

part of it would be destroyed, another part of it would not since the creditor would take the debtor to court and sue either for some asset that is equivalent of value or slap a court order on the debtor to garnish some of his income/wage. But I suppose if he is a total bankrupt than yes, his wealth would be destroyed

If you want to ignore all the things that differentiate it from a Ponzi scheme: market sets the interset rate, the debtor usually provides extensive financials to the creditor so they can guestimate the relative riskiness of the investment, a court system that is ready to act to enforce the creditors rights then sure.

Nope. If the bank is being run well then what they do is go to other banks or the central bank and borrow money from them and hand the money over to the people who demanded for it. Since people generally dont just keep their money in the mattress, the money returns to the monetary system somewhere else.
If the bank has been run badly, then the FDIC is the person who makes whole the savers up to 250k and then takes over the assets of the bank to try and get back some of the money it lost (the rest of the money for the FDIC comes from a tax on all banks)

I guess if at some point in the future people lose complete trust in the system that might be possible, there have been bank runs in history, but in general the actual concept of banking makes a relatively quick come back because -- again -- people dont like to handle all that cash.

You are just wrong here. Runs rarely happen and only after great economic distress. Even when they do happen, whoever actually manages to pry their savings out of the system they dont turn around and bury them in their yard but put them in some other form of bank. In a well managed systems runs dont happen at all.

On March 23 2014 06:14 GreenHorizons wrote:


Well your analysis all lead right to my final parts which you didn't really address. The idea that most of the money isn't there, and most of the 'money' they say is there is actually IOU's, that fact is what I think should shake any rational persons confidence and encourage a run(however counterproductive as it may be).

I was suggesting the a major reason runs don't happen is because the masses of sheeple don't understand it.

A basic understanding that almost 90% of "money" are actually IOU's or even more so that even the notes themselves represent IOU's would lead to such events.

Presumably if the IOU's were all within close knit communities that might not be a problem. But when what were talking about is more like a situation of Lenny loans Jimmy $100 then Jimmy loans $90 to his Cousin John then John loans $81 to some guy he passed in the subway and so on.

Lenny needs his $100 back to pay a bill problem is Jimmy only has $10 Jimmy says "no worries I'll just call in my loan to John" but John only has $9. So he calls in his loan to the guy on the subway. Of course he lent out his money too and only has $7 and some change. But he says "no worries, Ill call in my loans". Surprise surprise but they don't have the money either only this time turns out they didn't even keep anything in reserves so the trail stops here.

So Lenny's $100 is now about $26 and judgments/IOU's Well Lenny can't pay his rent with IOU's and judgments but let's say for fun he could. Well what we have is a trickle up of IOU wealth.

So what you end up with is a few people with a shit ton of IOU's and a lot of people who owe. So long as the extraction is measured things roll on.

The problem is when those IOU's start to pile up exponentially. And the rate at which they are honored falls below what the ethereal reserves 'cover'

This is precisely where we are approaching now. The US (and many 1st world countries) hasn't actually mad a sincere effort to pay off it's debt since the 1700's.

If you were to be a creditor and your borrower had an ever increasing balance and an increasing mathematical certainty to the impossibility to ever have a reasonable plan to pay it off, how long would you keep taking their IOU's that they got from someone else as payment on their debt?

The stability of 1st world countries is rooted in the idea that their debt and the debt of others they have accumulated is essentially certain to be paid. The problem is that we have empirical evidence that they wont be (payments are at best kept current). In the most favorable conditions we get even for a year or few with debt to GDP but the debt itself practically never goes away.

So since our growth is dependent on borrowing more money year over year from the federal level on down, and the viability of the increase in lending is dependent on the reliability of the growth we end up in a game of musical chairs.

Sooner or later people are going to realize the perpetual global growth isn't sustainable and the music stops and people are left without a chair.

Essentially you have the same thing here on a longer time scale. Like an inter-generational Ponzi scheme. As long as you kick the can before the music stops it was all a happy ride for you.

Unfortunately we are rapidly approaching the event horizon of this scheme.

You can claim it's 'insured' or 'protected by the courts' but the when the curtain is pulled back the money just simply isn't there.

On March 23 2014 06:36 Sub40APM wrote:

What are you talking about when you mean money? The little green pieces of paper? There can be as many of them as there is a demand for them. If tomorrow everyone showed up and demanded their money the only issue would be finding enough green paper and ink.
And I guess the uptake in robberies.
Most people dont really have these vast savings anyway, most people's monthly income arrives in their bank account before exiting into either savings via their 401k, their homes/rents, food, and general spending.
So if tomorrow you and everyone else shows up and demands their cash back, the day after tomorrow a lot of that cash goes to whatever the service/good providers consumers use, and immediately is deposited back into the banks.

You seem to be fundamentally misattributing the role of what 'money' is, you still seem to think of it as a resource, like gold, instead of a piece of technology it really is

So people have become dumber over the years? Bank runs used to happen pretty frequetnly in the 19th century and it was primarily because what 'bills' used to be were bills of individual banks -- so not only was there a danger that a dollar you deposited at your local bank might not be there but there was also a reputation danger, the further you moved away from your home area the less value the bill from your bank was worth.

Have you emptied your bank account and moved to a full cash system?

Well, in your example you seem to be forgetting interest. Lenny's 100 is 26in cash and a bunch of extra cash generated by the interest the various borrows paid in and the rest still owed. People who are of higher risk for not paying back in your example, like John, end up paying much higher interest rates that take into account his own proclivity in not keeping enough cash on hand to satisfy any calls on him and another element that is there to generate profit.
Its true, you are right, something terrible might have happened to that community and none of them are able to pay of and then the money is gone except the portion that the FDIC will cover. But those kinds of mass crises are usually rare, and in the present case a central bank will see this destruction of money and probably inject money back into the system to ensure real growth doesnt grind down.

Well, first that is factually incorrect. Debt has been moving in and out of being paid off, as early as the 1990s Chairman Greenspan has been voicing the alarm that the US was on pace to pay of its debt and thus eliminate a valuable resource -- the US debt -- from the business community

Well, in Japan debt has reached 200% debt/GDP and it appears that lenders keep on lending while the demand for Yen is relatively stable

Yea, because debt is a resource that is in demand. Again, two sides of the coin. Some people want to spend, others want to save at different periods in time. Debt is a mechanism that allows for that.

No its not.

And yet the incredibly low price that creditors are willing to lend out their money to others suggests you are wrong. Or everyone else in the world is a 'sheeple' as you've described them.

I guess the people who survived through the massive debt build up of the 1940s felt really stupid when in the 1950 and 60s a lot of that debt was paid of huh?

Are we? What makes you say that, currently the debt levels have decreased from their 08 highs, as Danglers' chart clearly shows. In the future its project to go up, no doubt about it, but it seems clear that debt goes up and debt comes down too.


Okay well, since your money isnt there, just send me all your dollars, they are worthless anyway.

Confidential internal Google and Apple memos, buried within piles of court dockets and reviewed by PandoDaily, clearly show that what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP. All told, the combined workforces of the companies involved totals well over a million employees.

...

Beneath that list, a rather cryptic warning suggesting that all across industries, illegal non-solicitation agreements were common everywhere:

“Please be cautious when recruiting teams from any company to keep our candidates and potential employees safe from legal action. Most companies have non-solicit agreements which would limit or prohibit a candidate from asking a coworker to interview with us as well.”

On March 23 2014 07:51 GreenHorizons wrote:


Well, based on that response it's clear you missed pretty much every point. Your interpretations of the segments leaves little to continue on with as they were clearly not formed with consideration of what they were attempting to refute or their inter-dependency.

Thanks anyway for helping me see it more clearly in my mind though

PS: ROFLMAO @ 90's Greenspan.

On March 23 2014 08:01 nunez wrote:
followup on tech-octopus article i posted earlier:
src
gotta admire those free market ceo's, really earning their wages.

On March 23 2014 08:35 Sub40APM wrote:

When will people learn, when you are building a far ranging conspiracy to undermine workers' rights you dont put it in emails, especially in emails where you preface it with big bold letters about not distributing this.

On March 23 2014 08:42 Gorsameth wrote:

But but, how else do you communicate with them otherwise.

Its indeed weird sometimes how often this stuff actually happens.

On March 23 2014 08:35 Sub40APM wrote:

When will people learn, when you are building a far ranging conspiracy to undermine workers' rights you dont put it in emails, especially in emails where you preface it with big bold letters about not distributing this.

On March 23 2014 09:02 GreenHorizons wrote:


I actually try to convert as much of my cash into actual resources as possible. Not relatively worthless stuff like gold coins but real assets that have value in current and catastrophic economies. So when I have extra cash I try to pick up a new hobby/skill or restock various resources the next big one on the list is working on my metalworking skills and dabbling in learning about metallurgy if I really get ambitious. So no, you wont be getting any of the little 'mattress money' I have as long as these fools keep taking it in exchange for real assets

On March 23 2014 11:17 Sub40APM wrote:

I am actually curious about real assets you choose to save in, if you dont mind answering. So other than sort of your day-to-day necessities and also transferring money into education (a wise investment, for anyone!) what do you use for savings? Or do you buy canned foods/farm land?