Originally I wanted to create a poll in order to tally the stances of TL members but it is rather impossible; it occurred to me terms like conservatism and liberalism are relative and using parties is exclusive.
So instead I'll start with this interesting video of Peter Schiff; a libertarian currently running for the U.S. Senate. He was apparently an outcast and comedic genius for his commentary on news stations before the collapse of the US economy.
Aren't these policies just common sense? The masses of people in Democratic (directly by the people) countries seem still too ignorant to foster these ideologies. For example; when a politician suggests the government shouldn't be in the business of giving student loans or grants (please watch video below before responding to this) then it is akin to political suicide. If you dig deeper into the question doesn't it really make sense though?
I really like the Libertarian party because they offer the most political and economic freedom as possible imo; with government only established to protect property. The idea of Libertarianism is also spreading to many other countries. It would seem the Libertarian Party isn't making much progress though. Reasons people seem not to vote for new parties is because of indoctrination (only vote parent's party/treat like religion) or say they don't want to waste their vote.
On January 09 2010 08:42 synapse wrote: Fox News, not even gonna bother.
Actually there are video clips of him being mocked from different shows not simply Fox News. You can see more of them on YouTube if you actually needed.
On January 09 2010 08:42 synapse wrote: Fox News, not even gonna bother.
Actually there are video clips of him being mocked from different shows not simply Fox News. You can see more of them on YouTube if you actually needed.
Oh, my bad. Knowing that Peter Schiff was involved in Ron Paul's 2008 party nomination run, I kind of just assumed... you know.
One thing I find funny is that Schiff talks about the collapse of the housing market brought about by free market capitalism, one of the main ideologies of Libertarianism.
Peter Schill laid down the fucking law. I don't know enough about him to say more than that. The other guy was a fucking moron though. That other guy is the exact reason I got out of finance. Paper wealth is such a disgusting concept, money multiplier, the entire method of market valuation, just fucking ugh. It makes me so mad to think about it again.
Yeah, the price of something should be whatever people are willing to pay at that point. That makes a LOT of sense. NOT.
AKA, during some kind of shortage panic, you see prices shoot through the roof without government intervention. People are willing to pay it because they're freaking out. It's fear based inflation. Is the product really worth that? No. Half the time, panics are induced by suppliers to drive prices through the roof, then they pocket the profit and calm things back down. ie Enron.
I feel bad for the guy. Those other scumbags on the show laughing at him are deep in the pockets of the private interests that built these bubbles in the first place. Morons who either don't understand what's going on, or DO understand and are complicit in the deceit.
The problem with it though, is that government intervention in market prices is absolutely critical. A capitalist market has never said that there should be zero government intervention. Look at all the requirements for a perfect capitalism. No society in the world meets those and it has nothing to do with government intervention. It has a lot more to do with the fact that consumers are NOT always well-informed and people are NOT always acting on perfect information. This is why the free-market principles can only take an economy so far. Government must intervene to put price ceilings and floors into the market at times to prevent damaging volatility.
On January 09 2010 08:42 synapse wrote: Fox News, not even gonna bother.
Actually there are video clips of him being mocked from different shows not simply Fox News. You can see more of them on YouTube if you actually needed.
Oh, my bad. Knowing that Peter Schiff was involved in Ron Paul's 2008 party nomination run, I kind of just assumed... you know.
One thing I find funny is that Schiff talks about the collapse of the housing market brought about by free market capitalism, one of the main ideologies of Libertarianism.
No actually, thats not what he says. Wow, your english must be horrible. And this one.
On January 09 2010 08:42 yhnmk wrote: I like peter SCHIFF. Quite a lot, I think peter SCHIFF is a good man, and I hope he is elected.
SHIFF.
On January 09 2010 08:42 synapse wrote: Fox News, not even gonna bother.
you're a dumbass, kthxbye.
Fixed it for you.
One thing I find funny is that Schiff talks about the collapse of the housing market brought about by free market capitalism, one of the main ideologies of Libertarianism.
Do I have to correct you? Which part was it that made you think this? The fact that he suggested the government shouldn't be bailing out corporations or...? How does a free market evolve when the government funds and saves failing companies?
On January 09 2010 08:42 yhnmk wrote: I like peter SCHIFF. Quite a lot, I think peter SCHIFF is a good man, and I hope he is elected.
SHIFF.
On January 09 2010 08:42 synapse wrote: Fox News, not even gonna bother.
you're a dumbass, kthxbye.
Fixed it for you.
One thing I find funny is that Schiff talks about the collapse of the housing market brought about by free market capitalism, one of the main ideologies of Libertarianism.
Do I have to correct you? Which part was it that made you think this? The fact that he suggested the government shouldn't be bailing out corporations or...? How does a free market evolve when the government funds and saves failing companies?
I'm saying he's predicting the collapse of the housing market, which we know was brought about by subprime lending (which he did state - subprime lending = capitalist market risk taking by banks), when Libertarianism revolves around free market capitalism. The fact that he suggested government shouldn't be bailing out corporations would make him Libertarian, but I'm saying that's exactly what saved our economy.
Essentially, Schiff supports free market yet the free market is what caused the housing market collapse, and without government intervention our nation would be even more fucked.
On January 09 2010 08:56 StorkHwaiting wrote: Peter Schill laid down the fucking law. I don't know enough about him to say more than that. The other guy was a fucking moron though. That other guy is the exact reason I got out of finance. Paper wealth is such a disgusting concept, money multiplier, the entire method of market valuation, just fucking ugh. It makes me so mad to think about it again.
Yeah, the price of something should be whatever people are willing to pay at that point. That makes a LOT of sense. NOT.
AKA, during some kind of shortage panic, you see prices shoot through the roof without government intervention. People are willing to pay it because they're freaking out. It's fear based inflation. Is the product really worth that? No. Half the time, panics are induced by suppliers to drive prices through the roof, then they pocket the profit and calm things back down. ie Enron.
I feel bad for the guy. Those other scumbags on the show laughing at him are deep in the pockets of the private interests that built these bubbles in the first place. Morons who either don't understand what's going on, or DO understand and are complicit in the deceit.
The problem with it though, is that government intervention in market prices is absolutely critical. A capitalist market has never said that there should be zero government intervention. Look at all the requirements for a perfect capitalism. No society in the world meets those and it has nothing to do with government intervention. It has a lot more to do with the fact that consumers are NOT always well-informed and people are NOT always acting on perfect information. This is why the free-market principles can only take an economy so far. Government must intervene to put price ceilings and floors into the market at times to prevent damaging volatility.
I do agree about paper currency and really wish to see the day of true digital currency. I think that then any organization or even third party can develop to hold currency offering a competitive aspect to its existence.
I don't really understand what you meant by price ceilings and floors. Why do you think those are necessary? (Some specific instances.)
He says that education and healthcare are the two most messed up areas of the economy because government is involved... hey, find me a significantly large area of the economy where government is not involved.
started following his youtube channel a few month ago and just have to say that this guy is awesome, all the videos where he proofed that he was right and no one believed him. also he always gives great examples why things in the current state are wrong or just not working.
i adore him, he's a smart guy and really hope he can make it in the senate and make an impact!
On January 09 2010 08:42 yhnmk wrote: I like peter SCHIFF. Quite a lot, I think peter SCHIFF is a good man, and I hope he is elected.
SHIFF.
On January 09 2010 08:42 synapse wrote: Fox News, not even gonna bother.
you're a dumbass, kthxbye.
Fixed it for you.
One thing I find funny is that Schiff talks about the collapse of the housing market brought about by free market capitalism, one of the main ideologies of Libertarianism.
Do I have to correct you? Which part was it that made you think this? The fact that he suggested the government shouldn't be bailing out corporations or...? How does a free market evolve when the government funds and saves failing companies?
I'm saying he's predicting the collapse of the housing market, which we know was brought about by subprime lending (which he did state - subprime lending = capitalist market risk taking by banks), when Libertarianism revolves around free market capitalism. The fact that he suggested government shouldn't be bailing out corporations would make him Libertarian, but I'm saying that's exactly what saved our economy.
Essentially, Schiff supports free market yet the free market is what caused the housing market collapse, and without government intervention our nation would be even more fucked.
I remember listening to the video but do not remember him saying the government should regulate who lenders should lend to. Would you kindly give me the quote to evaluate if it exists. If I out of stupidity lend you 1 million, and you do not pay me back, why would someone else care or be affected?
this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
I'd like to say that as an in-state NC student, my tuition + fees is about $5,500 a year. Now this is because I go to a public University that is subsidized by the government. I somewhat agree that the government shouldn't be giving students loans, however there are other forms of subsidies. Government scholarships are good, and the government could subsidize the professors. Tuition for in-state students of public schools is not that expensive because of government backing.
Didn't watch the first video, but his logic is faulty in the second video.
Schiff didn't prove that loans caused increased tuition, he simply stated that a correlation exists between the arrival of government loans and increases in tuition. Correlation does not mean causation.
Also, logic states that with all the new technology, education should be more expensive, not cheaper because more money would need to be spent to acquire the new technology. Technology did not change that fast back in the day, neither did progression in academics. Nowadays more knowledge is produced and at a faster rate, so universities need more resources to acquire newer, costlier ways of producing knowledge.
Of course, there are other reasons why tuition costs more today exclusive of the need to acquire more technology, but it still doesn't mean he's necessarily right.
On January 09 2010 08:42 yhnmk wrote: I like peter SCHIFF. Quite a lot, I think peter SCHIFF is a good man, and I hope he is elected.
SHIFF.
On January 09 2010 08:42 synapse wrote: Fox News, not even gonna bother.
you're a dumbass, kthxbye.
Fixed it for you.
On January 09 2010 08:52 7Strife wrote:
On January 09 2010 08:42 synapse wrote: Fox News, not even gonna bother.
Actually there are video clips of him being mocked from different shows not simply Fox News. You can see more of them on YouTube if you actually needed.
Oh, my bad. Knowing that Peter Schiff was involved in Ron Paul's 2008 party nomination run, I kind of just assumed... you know.
One thing I find funny is that Schiff talks about the collapse of the housing market brought about by free market capitalism, one of the main ideologies of Libertarianism.
No actually, thats not what he says. Wow, your english must be horrible.
On January 09 2010 09:56 Newbistic wrote: Didn't watch the first video, but his logic is faulty in the second video.
Schiff didn't prove that loans caused increased tuition, he simply stated that a correlation exists between the arrival of government loans and increases in tuition. Correlation does not mean causation.
Also, logic states that with all the new technology, education should be more expensive, not cheaper because more money would need to be spent to acquire the new technology. Technology did not change that fast back in the day, neither did progression in academics. Nowadays more knowledge is produced and at a faster rate, so universities need more resources to acquire newer, costlier ways of producing knowledge.
Of course, there are other reasons why tuition costs more today exclusive of the need to acquire more technology, but it still doesn't mean he's necessarily right.
First, technology makes everything cheaper, for example, cars used to cost more than houses in USA and then Ford came along and with some ingenuity and technology he cut the cost in half.(It was also a goverment monopoly before Ford, and suprise goverment sucks at business since it is politicians calling the shots and not businessmen) Second, we are not talking statistics, we are talking about the rules and the models we use to understand the economy so take your "correlation does not mean causation" bullshit somewhere else. It's too late for me to write a long, eloquent reply with many diagrams and links and shit so I just won't bother. I might return when I wake up to show you just how ignorant you are.
EDIT: And dont spout out that crap about healthcare becoming more expensive because of new technology because then I will hunt you down and pimp slap you
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
When Schiff was talking about federalism and marijuana/gay marriage laws in the video that was edited out of the OP, it made me think of this quote from Karl Hess.
The States' rights lapse is simply that conservatives who would deny to the Federal government certain controls over people, eagerly cede exactly the same controls to smaller administrative units. They say that the smaller units are more effective. This means that conservatives support the coercion of individuals at the most effective level. It certainly doesn't mean that they oppose coercion. In failing to resist state segregation and miscegenation laws, in failing to resist laws maintaining racially inequitable spending of tax money, simply because these laws were passed by states, conservatives have failed to fight the very bureaucracy that they supposedly hate — at the very level where they might have stopped it first.
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
Consider this, how is it morally justfiable to use taxpayers money to speculate in a failing firm? If you have bad cash flow, take a loan but is itsn't the goverments business at all.
Yeah I remember this guy. A few of his videos have been posted here before this. I believe it was a video of him giving a lecture on why the housing markert collapsed. It was a pretty entertaining and funny lectrue if i remember correctly. He seems like a really smart guy and i hope he wins his seat. Still if he has aspirations beyond the senate he should just bite the bullet and call himself a republican.
On January 09 2010 09:46 grechkay wrote: I'd like to say that as an in-state NC student, my tuition + fees is about $5,500 a year. Now this is because I go to a public University that is subsidized by the government. I somewhat agree that the government shouldn't be giving students loans, however there are other forms of subsidies. Government scholarships are good, and the government could subsidize the professors. Tuition for in-state students of public schools is not that expensive because of government backing.
I go to the university of colorado, also a public university that is subsidized by the government. My tuition is about $22,000 per year. If I was an out-of-state student, it would be about $40,000 per year. There are about 25,000 students that attend my university, so assuming that 90% of the kids pay in-state tuition, my university makes almost six hundred million dollars per year from student tuition. If that were divided up between all the 3,293 members of faculty and staff evenly, each person would be paid about $182,204 per year. I don't think that sounds like the kind of income professors make. Also, most of the staff are surely minimum wage janitors, chefs for the dorms, security, etc. I know I didn't take into consideration the expenses of my university, but that's only because I don't have accurate information in that regard. Either way I feel like I'm getting shafted for my education after watching that video.
On January 09 2010 09:56 Newbistic wrote: Didn't watch the first video, but his logic is faulty in the second video.
Schiff didn't prove that loans caused increased tuition, he simply stated that a correlation exists between the arrival of government loans and increases in tuition. Correlation does not mean causation.
Also, logic states that with all the new technology, education should be more expensive, not cheaper because more money would need to be spent to acquire the new technology. Technology did not change that fast back in the day, neither did progression in academics. Nowadays more knowledge is produced and at a faster rate, so universities need more resources to acquire newer, costlier ways of producing knowledge.
Of course, there are other reasons why tuition costs more today exclusive of the need to acquire more technology, but it still doesn't mean he's necessarily right.
I think given the situation he then gave his best possible proofs avaliable. He has imperfect information. You can't really give fact statistics on how a countries performance would improve under the same certain conditions (in a certain era) without doing simulations (which is impossible.) So instead he gave the outcome of doing the simulation in others eras when they were unregulated.
Ask yourself if these conditions are true...
1. When a politician implements more student loans he gets a big pat on the back and reelection, and those who want to cut them don't get elected. Thus, student loans/grants increase.
2. Does irresponsibly giving government money to students create more of a demand in its best colleges?
3. Does that demand force universities to compete (for instance over professors) with money generated with simply no restraint (except the will of politicians to offer more)?
The guy knows what he's talking about, I've actually been wathcing a lot of his stuff the past few weeks and we shoulda listened to him 3-4 years ago rofl......
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
Consider this, how is it morally justfiable to use taxpayers money to speculate in a failing firm? If you have bad cash flow, take a loan but is itsn't the goverments business at all.
i didn't say it was morally justifiable to use taxpayers money, i said it was extortion.
like i said, the problem with such a big fucking bank is that it tend to give tons of loans to many many companies. The collapse of such a large bank like Goldman Sachs would completely cripple monetary flow for a much larger area that just financial services-many companies would be forced to call in loans and sell assets, which begins a massive chain reaction that severely destabilizes our economy. In that sense, to protect the rest of America from the collapse of a bank, they had to bail them out.
Consider the following situation: a scientist accidentally releases a culture of a supervirus that could kill millions. The only ones that are able to deal with the virus are the very group that released it. The government would thus give them money and funding to contain the virus, even if it was their fault that they released it.
Like Ron Paul, this guy makes sense. i'm just surprised they actually put him and ron paul on major tv network at all, common sense in government and media? Blasphemy!
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
Consider this, how is it morally justfiable to use taxpayers money to speculate in a failing firm? If you have bad cash flow, take a loan but is itsn't the goverments business at all.
i didn't say it was morally justifiable to use taxpayers money, i said it was extortion.
like i said, the problem with such a big fucking bank is that it tend to give tons of loans to many many companies. The collapse of such a large bank like Goldman Sachs would completely cripple monetary flow for a much larger area that just financial services-many companies would be forced to call in loans and sell assets, which begins a massive chain reaction that severely destabilizes our economy. In that sense, to protect the rest of America from the collapse of a bank, they had to bail them out.
Consider the following situation: a scientist accidentally releases a culture of a supervirus that could kill millions. The only ones that are able to deal with the virus are the very group that released it. The government would thus give them money and funding to contain the virus, even if it was their fault that they released it.
ur example given is valid in justifying the government's action/intervention in ur example, but sadly u can't compare a viral outbreak with an economic bubble bursting, its like comparing a apple to an orange...
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
Consider this, how is it morally justfiable to use taxpayers money to speculate in a failing firm? If you have bad cash flow, take a loan but is itsn't the goverments business at all.
i didn't say it was morally justifiable to use taxpayers money, i said it was extortion.
like i said, the problem with such a big fucking bank is that it tend to give tons of loans to many many companies. The collapse of such a large bank like Goldman Sachs would completely cripple monetary flow for a much larger area that just financial services-many companies would be forced to call in loans and sell assets, which begins a massive chain reaction that severely destabilizes our economy. In that sense, to protect the rest of America from the collapse of a bank, they had to bail them out.
Consider the following situation: a scientist accidentally releases a culture of a supervirus that could kill millions. The only ones that are able to deal with the virus are the very group that released it. The government would thus give them money and funding to contain the virus, even if it was their fault that they released it.
ur example given is valid in justifying the government's action/intervention in ur example, but sadly u can't compare a viral outbreak with an economic bubble bursting, its like comparing a apple to an orange...
What the hell are you guys on, crack?
I used to think just like you guys in that the bailout is the stupidest thing ever.
I still think it's the stupidest thing ever. But it was also unfortunately necessary.
The economic damage done by both a viral outbreak and the massive collapse of the economic bubble would be roughly equivalent. Sure, some people may value human lives as being virtually infinite in value, but in terms of just sheer destruction the "collapse of the economic bubble" and a viral outbreak would be virtually similar. Millions, while they may still be alive, will lose everything they have, and will roam the streets preventing their kids from starving. I think people would be far more concerned about being unable to deal with something that they know they could rather than dealing with a virus that they have no control over.
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
Consider this, how is it morally justfiable to use taxpayers money to speculate in a failing firm? If you have bad cash flow, take a loan but is itsn't the goverments business at all.
i didn't say it was morally justifiable to use taxpayers money, i said it was extortion.
like i said, the problem with such a big fucking bank is that it tend to give tons of loans to many many companies. The collapse of such a large bank like Goldman Sachs would completely cripple monetary flow for a much larger area that just financial services-many companies would be forced to call in loans and sell assets, which begins a massive chain reaction that severely destabilizes our economy. In that sense, to protect the rest of America from the collapse of a bank, they had to bail them out.
Consider the following situation: a scientist accidentally releases a culture of a supervirus that could kill millions. The only ones that are able to deal with the virus are the very group that released it. The government would thus give them money and funding to contain the virus, even if it was their fault that they released it.
ur example given is valid in justifying the government's action/intervention in ur example, but sadly u can't compare a viral outbreak with an economic bubble bursting, its like comparing a apple to an orange...
What the hell are you guys on, crack?
I used to think just like you guys in that the bailout is the stupidest thing ever.
I still think it's the stupidest thing ever. But it was also unfortunately necessary.
The economic damage done by both a viral outbreak and the massive collapse of the economic bubble would be roughly equivalent. Sure, some people may value human lives as being virtually infinite in value, but in terms of just sheer destruction the "collapse of the economic bubble" and a viral outbreak would be virtually similar. Millions, while they may still be alive, will lose everything they have, and will roam the streets preventing their kids from starving. I think people would be far more concerned about being unable to deal with something that they know they could rather than dealing with a virus that they have no control over.
the largest issue i have w/ your analogy is that for it to be more accurate would be to acknowledge that you cannot ever be sure if the company that created it can really resolve it how they say that can, and also, you can never really be that sure that they are the only method for resolution...
EDIT: Especially if that company has been operating in the negative for all of it's recent history, and has given you no reason to believe them.
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
Consider this, how is it morally justfiable to use taxpayers money to speculate in a failing firm? If you have bad cash flow, take a loan but is itsn't the goverments business at all.
i didn't say it was morally justifiable to use taxpayers money, i said it was extortion.
like i said, the problem with such a big fucking bank is that it tend to give tons of loans to many many companies. The collapse of such a large bank like Goldman Sachs would completely cripple monetary flow for a much larger area that just financial services-many companies would be forced to call in loans and sell assets, which begins a massive chain reaction that severely destabilizes our economy. In that sense, to protect the rest of America from the collapse of a bank, they had to bail them out.
Consider the following situation: a scientist accidentally releases a culture of a supervirus that could kill millions. The only ones that are able to deal with the virus are the very group that released it. The government would thus give them money and funding to contain the virus, even if it was their fault that they released it.
ur example given is valid in justifying the government's action/intervention in ur example, but sadly u can't compare a viral outbreak with an economic bubble bursting, its like comparing a apple to an orange...
What the hell are you guys on, crack?
I used to think just like you guys in that the bailout is the stupidest thing ever.
I still think it's the stupidest thing ever. But it was also unfortunately necessary.
The economic damage done by both a viral outbreak and the massive collapse of the economic bubble would be roughly equivalent. Sure, some people may value human lives as being virtually infinite in value, but in terms of just sheer destruction the "collapse of the economic bubble" and a viral outbreak would be virtually similar. Millions, while they may still be alive, will lose everything they have, and will roam the streets preventing their kids from starving. I think people would be far more concerned about being unable to deal with something that they know they could rather than dealing with a virus that they have no control over.
the largest issue i have w/ your analogy is that for it to be more accurate would be to acknowledge that you cannot ever be sure if the company that created it can really resolve it how they say that can, and also, you can never really be that sure that they are the only method for resolution...
EDIT: Especially if that company has been operating in the negative for all of it's recent history, and has given you no reason to believe them.
valid argument but i was thinking of something off the top of my head. the very idea of a metaphor is that there will be some inherent flaws with it. Still you're nitpicking here.
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
Consider this, how is it morally justfiable to use taxpayers money to speculate in a failing firm? If you have bad cash flow, take a loan but is itsn't the goverments business at all.
i didn't say it was morally justifiable to use taxpayers money, i said it was extortion.
like i said, the problem with such a big fucking bank is that it tend to give tons of loans to many many companies. The collapse of such a large bank like Goldman Sachs would completely cripple monetary flow for a much larger area that just financial services-many companies would be forced to call in loans and sell assets, which begins a massive chain reaction that severely destabilizes our economy. In that sense, to protect the rest of America from the collapse of a bank, they had to bail them out.
Consider the following situation: a scientist accidentally releases a culture of a supervirus that could kill millions. The only ones that are able to deal with the virus are the very group that released it. The government would thus give them money and funding to contain the virus, even if it was their fault that they released it.
ur example given is valid in justifying the government's action/intervention in ur example, but sadly u can't compare a viral outbreak with an economic bubble bursting, its like comparing a apple to an orange...
What the hell are you guys on, crack?
I used to think just like you guys in that the bailout is the stupidest thing ever.
I still think it's the stupidest thing ever. But it was also unfortunately necessary.
The economic damage done by both a viral outbreak and the massive collapse of the economic bubble would be roughly equivalent. Sure, some people may value human lives as being virtually infinite in value, but in terms of just sheer destruction the "collapse of the economic bubble" and a viral outbreak would be virtually similar. Millions, while they may still be alive, will lose everything they have, and will roam the streets preventing their kids from starving. I think people would be far more concerned about being unable to deal with something that they know they could rather than dealing with a virus that they have no control over.
the largest issue i have w/ your analogy is that for it to be more accurate would be to acknowledge that you cannot ever be sure if the company that created it can really resolve it how they say that can, and also, you can never really be that sure that they are the only method for resolution...
EDIT: Especially if that company has been operating in the negative for all of it's recent history, and has given you no reason to believe them.
valid argument but i was thinking of something off the top of my head. the very idea of a metaphor is that there will be some inherent flaws with it. Still you're nitpicking here.
It wasn't my intention to nitpick, I was simply saying that while your analogy works for many things. The real issue here is that while the bailout is one possible solution. It's not the only one. Renationalizing the FED, and rebalancing the budget, and numerous other options are available.
What I'm saying is that, by bailing out companies we're just perpetuating a failing system. Bailing them out is great is we're also going to make big changes to policy (which isn't happening). If we don't change the system, we're just fueling an engine, and we're running out of gas.
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
Consider this, how is it morally justfiable to use taxpayers money to speculate in a failing firm? If you have bad cash flow, take a loan but is itsn't the goverments business at all.
i didn't say it was morally justifiable to use taxpayers money, i said it was extortion.
like i said, the problem with such a big fucking bank is that it tend to give tons of loans to many many companies. The collapse of such a large bank like Goldman Sachs would completely cripple monetary flow for a much larger area that just financial services-many companies would be forced to call in loans and sell assets, which begins a massive chain reaction that severely destabilizes our economy. In that sense, to protect the rest of America from the collapse of a bank, they had to bail them out.
Consider the following situation: a scientist accidentally releases a culture of a supervirus that could kill millions. The only ones that are able to deal with the virus are the very group that released it. The government would thus give them money and funding to contain the virus, even if it was their fault that they released it.
ur example given is valid in justifying the government's action/intervention in ur example, but sadly u can't compare a viral outbreak with an economic bubble bursting, its like comparing a apple to an orange...
What the hell are you guys on, crack?
I used to think just like you guys in that the bailout is the stupidest thing ever.
I still think it's the stupidest thing ever. But it was also unfortunately necessary.
The economic damage done by both a viral outbreak and the massive collapse of the economic bubble would be roughly equivalent. Sure, some people may value human lives as being virtually infinite in value, but in terms of just sheer destruction the "collapse of the economic bubble" and a viral outbreak would be virtually similar. Millions, while they may still be alive, will lose everything they have, and will roam the streets preventing their kids from starving. I think people would be far more concerned about being unable to deal with something that they know they could rather than dealing with a virus that they have no control over.
Caller I have one request and one question because I know your a ecomonics major . First Say "God of war" Second does a bailout really cure this collapse, or just delay it it in your oppinion? Because it seems like the bad practices that got us into this mess are just being renewed by the bailouts and delaying the inevitable "outbreak"
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
Consider this, how is it morally justfiable to use taxpayers money to speculate in a failing firm? If you have bad cash flow, take a loan but is itsn't the goverments business at all.
i didn't say it was morally justifiable to use taxpayers money, i said it was extortion.
like i said, the problem with such a big fucking bank is that it tend to give tons of loans to many many companies. The collapse of such a large bank like Goldman Sachs would completely cripple monetary flow for a much larger area that just financial services-many companies would be forced to call in loans and sell assets, which begins a massive chain reaction that severely destabilizes our economy. In that sense, to protect the rest of America from the collapse of a bank, they had to bail them out.
Consider the following situation: a scientist accidentally releases a culture of a supervirus that could kill millions. The only ones that are able to deal with the virus are the very group that released it. The government would thus give them money and funding to contain the virus, even if it was their fault that they released it.
ur example given is valid in justifying the government's action/intervention in ur example, but sadly u can't compare a viral outbreak with an economic bubble bursting, its like comparing a apple to an orange...
What the hell are you guys on, crack?
I used to think just like you guys in that the bailout is the stupidest thing ever.
I still think it's the stupidest thing ever. But it was also unfortunately necessary.
The economic damage done by both a viral outbreak and the massive collapse of the economic bubble would be roughly equivalent. Sure, some people may value human lives as being virtually infinite in value, but in terms of just sheer destruction the "collapse of the economic bubble" and a viral outbreak would be virtually similar. Millions, while they may still be alive, will lose everything they have, and will roam the streets preventing their kids from starving. I think people would be far more concerned about being unable to deal with something that they know they could rather than dealing with a virus that they have no control over.
please try to avoid using personal attacks to get ur arguements/points across, lets not go down the route of barbarous shouting at each other...
no doubt that the aftermath of a viral outbreak and an economic collapse causes suffering and chaos to countless individuals, but that is not my point, what u have to understand is that the economy doesn't function like a biological entity, my point is that u don't fix them both the same way because they both function of different set of laws... u don put an economist in a clinic and a doctor at a bank do u?
before we even get to debate whether if a government bailout would help the economy, u should at least know if the money of the bailout is going to be spent for the american people in the first place...
ur giving 787 Billion dollar to these incompetent fools and hope that they could fix the problem they first cause, do u realize how much of an astronomical amount of money that is? debt that will ultimately be shouldered by the american people to gamble their fate in the hands of these idiots that has proven their incompetence for over eight years? no point crying over spilt, if u are convince that these bailout is a necessary evil that people have to endure to get an economic recovery going...
can u prove that the bailout has actually benefitted the economy as a whole? where exactly have those gigantice amount of cash went? i think modern economist would very much like to see the implication of such a huge amount of cash flow does to the economy..
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
Consider this, how is it morally justfiable to use taxpayers money to speculate in a failing firm? If you have bad cash flow, take a loan but is itsn't the goverments business at all.
i didn't say it was morally justifiable to use taxpayers money, i said it was extortion.
like i said, the problem with such a big fucking bank is that it tend to give tons of loans to many many companies. The collapse of such a large bank like Goldman Sachs would completely cripple monetary flow for a much larger area that just financial services-many companies would be forced to call in loans and sell assets, which begins a massive chain reaction that severely destabilizes our economy. In that sense, to protect the rest of America from the collapse of a bank, they had to bail them out.
Consider the following situation: a scientist accidentally releases a culture of a supervirus that could kill millions. The only ones that are able to deal with the virus are the very group that released it. The government would thus give them money and funding to contain the virus, even if it was their fault that they released it.
ur example given is valid in justifying the government's action/intervention in ur example, but sadly u can't compare a viral outbreak with an economic bubble bursting, its like comparing a apple to an orange...
What the hell are you guys on, crack?
I used to think just like you guys in that the bailout is the stupidest thing ever.
I still think it's the stupidest thing ever. But it was also unfortunately necessary.
The economic damage done by both a viral outbreak and the massive collapse of the economic bubble would be roughly equivalent. Sure, some people may value human lives as being virtually infinite in value, but in terms of just sheer destruction the "collapse of the economic bubble" and a viral outbreak would be virtually similar. Millions, while they may still be alive, will lose everything they have, and will roam the streets preventing their kids from starving. I think people would be far more concerned about being unable to deal with something that they know they could rather than dealing with a virus that they have no control over.
Caller I have one request and one question because I know your a ecomonics major . First Say "God of war" Second does a bailout really cure this collapse, or just delay it it in your oppinion? Because it seems like the bad practices that got us into this mess are just being renewed by the bailouts and delaying the inevitable "outbreak"
The bailout did only delay it, but the whole idea was only marginally more stupid than giving each man, woman, and child, a few thousand dollars. (which, they could have done) At least in that situation, people could have made the individual choice to pay off some debt and stop supporting the corrupt companies, but we are unwilling investors at this point.
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
Consider this, how is it morally justfiable to use taxpayers money to speculate in a failing firm? If you have bad cash flow, take a loan but is itsn't the goverments business at all.
i didn't say it was morally justifiable to use taxpayers money, i said it was extortion.
like i said, the problem with such a big fucking bank is that it tend to give tons of loans to many many companies. The collapse of such a large bank like Goldman Sachs would completely cripple monetary flow for a much larger area that just financial services-many companies would be forced to call in loans and sell assets, which begins a massive chain reaction that severely destabilizes our economy. In that sense, to protect the rest of America from the collapse of a bank, they had to bail them out.
Consider the following situation: a scientist accidentally releases a culture of a supervirus that could kill millions. The only ones that are able to deal with the virus are the very group that released it. The government would thus give them money and funding to contain the virus, even if it was their fault that they released it.
ur example given is valid in justifying the government's action/intervention in ur example, but sadly u can't compare a viral outbreak with an economic bubble bursting, its like comparing a apple to an orange...
What the hell are you guys on, crack?
I used to think just like you guys in that the bailout is the stupidest thing ever.
I still think it's the stupidest thing ever. But it was also unfortunately necessary.
The economic damage done by both a viral outbreak and the massive collapse of the economic bubble would be roughly equivalent. Sure, some people may value human lives as being virtually infinite in value, but in terms of just sheer destruction the "collapse of the economic bubble" and a viral outbreak would be virtually similar. Millions, while they may still be alive, will lose everything they have, and will roam the streets preventing their kids from starving. I think people would be far more concerned about being unable to deal with something that they know they could rather than dealing with a virus that they have no control over.
the largest issue i have w/ your analogy is that for it to be more accurate would be to acknowledge that you cannot ever be sure if the company that created it can really resolve it how they say that can, and also, you can never really be that sure that they are the only method for resolution...
EDIT: Especially if that company has been operating in the negative for all of it's recent history, and has given you no reason to believe them.
valid argument but i was thinking of something off the top of my head. the very idea of a metaphor is that there will be some inherent flaws with it. Still you're nitpicking here.
Not quite though right? Because a viral outbreak and collapse of the economic bubble would have far worse short term effects on those heavily invested the bubble which is just about everyone. But it impacts people to a different degree. The worst part of the bailout isn't what it prevented in the short term but the precedent that it sets in the long term.
The bailout is essentially the socialisation of downside risks and sets a precedent that investors have a safety (at least politically connected investors) for engaging in idiotically risky investments. In the long run it is also rewarding Wall Street by giving them the booms and smoothing out the busts.
It's a bad way to motivate the market to make wise investment decisions.
On January 09 2010 08:56 StorkHwaiting wrote: Peter Schill laid down the fucking law. I don't know enough about him to say more than that. The other guy was a fucking moron though. That other guy is the exact reason I got out of finance. Paper wealth is such a disgusting concept, money multiplier, the entire method of market valuation, just fucking ugh. It makes me so mad to think about it again.
Yeah, the price of something should be whatever people are willing to pay at that point. That makes a LOT of sense. NOT.
AKA, during some kind of shortage panic, you see prices shoot through the roof without government intervention. People are willing to pay it because they're freaking out. It's fear based inflation. Is the product really worth that? No. Half the time, panics are induced by suppliers to drive prices through the roof, then they pocket the profit and calm things back down. ie Enron.
I feel bad for the guy. Those other scumbags on the show laughing at him are deep in the pockets of the private interests that built these bubbles in the first place. Morons who either don't understand what's going on, or DO understand and are complicit in the deceit.
The problem with it though, is that government intervention in market prices is absolutely critical. A capitalist market has never said that there should be zero government intervention. Look at all the requirements for a perfect capitalism. No society in the world meets those and it has nothing to do with government intervention. It has a lot more to do with the fact that consumers are NOT always well-informed and people are NOT always acting on perfect information. This is why the free-market principles can only take an economy so far. Government must intervene to put price ceilings and floors into the market at times to prevent damaging volatility.
I do agree about paper currency and really wish to see the day of true digital currency. I think that then any organization or even third party can develop to hold currency offering a competitive aspect to its existence.
I don't really understand what you meant by price ceilings and floors. Why do you think those are necessary? (Some specific instances.)
In times of panic, like during a hurricane or during a famine, the government needs to step in and regulate prices to avoid needless volatility and damage caused by wild swings in market prices.
Even in ancient times there were cases like this. The Chinese government in the Tang dynasty already had a system of large granaries. When there was a famine, they would sell grain to everyone at a lower price and mandate that all merchants meet their price. This way, the people stayed fed and there was no rioting or other kinds of damage/chaos that would only increase the economic loss caused by the original famine.
If you left these kinds of issues up to the market, what would happen is the suppliers doing a rampant amount of price gouging, leading to desperate measures by the consumers, and thereby costing everyone more money in the long run. I don't think it should be something like a constant floor or ceiling being put in place, but there are definitely times when a pure free market would be very dangerous.
And, personally, on the issue of currency I'm a strong believer in money backed by some real good. Be it gold, oil, whatever. There need to be reserves that the currency can be redeemed for. Fiat currency is artificial and that's why it can be manipulated so heavily. It has no basis in reality.
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
Consider this, how is it morally justfiable to use taxpayers money to speculate in a failing firm? If you have bad cash flow, take a loan but is itsn't the goverments business at all.
i didn't say it was morally justifiable to use taxpayers money, i said it was extortion.
like i said, the problem with such a big fucking bank is that it tend to give tons of loans to many many companies. The collapse of such a large bank like Goldman Sachs would completely cripple monetary flow for a much larger area that just financial services-many companies would be forced to call in loans and sell assets, which begins a massive chain reaction that severely destabilizes our economy. In that sense, to protect the rest of America from the collapse of a bank, they had to bail them out.
Consider the following situation: a scientist accidentally releases a culture of a supervirus that could kill millions. The only ones that are able to deal with the virus are the very group that released it. The government would thus give them money and funding to contain the virus, even if it was their fault that they released it.
ur example given is valid in justifying the government's action/intervention in ur example, but sadly u can't compare a viral outbreak with an economic bubble bursting, its like comparing a apple to an orange...
What the hell are you guys on, crack?
I used to think just like you guys in that the bailout is the stupidest thing ever.
I still think it's the stupidest thing ever. But it was also unfortunately necessary.
The economic damage done by both a viral outbreak and the massive collapse of the economic bubble would be roughly equivalent. Sure, some people may value human lives as being virtually infinite in value, but in terms of just sheer destruction the "collapse of the economic bubble" and a viral outbreak would be virtually similar. Millions, while they may still be alive, will lose everything they have, and will roam the streets preventing their kids from starving. I think people would be far more concerned about being unable to deal with something that they know they could rather than dealing with a virus that they have no control over.
Caller I have one request and one question because I know your a ecomonics major . First Say "God of war" Second does a bailout really cure this collapse, or just delay it it in your oppinion? Because it seems like the bad practices that got us into this mess are just being renewed by the bailouts and delaying the inevitable "outbreak"
The bailout did only delay it, but the whole idea was only marginally more stupid than giving each man, woman, and child, a few thousand dollars. (which, they could have done) At least in that situation, people could have made the individual choice to pay off some debt and stop supporting the corrupt companies, but we are unwilling investors at this point.
Absolutely, it simply delayed the inevitable. The problem is an individual gets a mortgage loan from a broker and then the broker sells the mortgage to a bank, which in its turn again sells the mortgage but this time to an investment firm on Wall Street. Those firms collect thousands of mortgages in one big pile. This in fact represents thousands of mortgage checks coming every month, a monthly income that was supposed to continue for the life of the mortgages. Then the firm in its turn sells shares of that income to investors who are willing to buy. The problem is the investors were making a wrong decision and making a bad investment. Agencies blessed most of the mortgage backed securities with AAA rating. When everything went ka-poot it simply is the free market system in the working. Now the market will evolve and the same mistake will not be made again, through pain and suffering. That is how capitalism works: trial and error.
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
Consider this, how is it morally justfiable to use taxpayers money to speculate in a failing firm? If you have bad cash flow, take a loan but is itsn't the goverments business at all.
i didn't say it was morally justifiable to use taxpayers money, i said it was extortion.
like i said, the problem with such a big fucking bank is that it tend to give tons of loans to many many companies. The collapse of such a large bank like Goldman Sachs would completely cripple monetary flow for a much larger area that just financial services-many companies would be forced to call in loans and sell assets, which begins a massive chain reaction that severely destabilizes our economy. In that sense, to protect the rest of America from the collapse of a bank, they had to bail them out.
Consider the following situation: a scientist accidentally releases a culture of a supervirus that could kill millions. The only ones that are able to deal with the virus are the very group that released it. The government would thus give them money and funding to contain the virus, even if it was their fault that they released it.
ur example given is valid in justifying the government's action/intervention in ur example, but sadly u can't compare a viral outbreak with an economic bubble bursting, its like comparing a apple to an orange...
What the hell are you guys on, crack?
I used to think just like you guys in that the bailout is the stupidest thing ever.
I still think it's the stupidest thing ever. But it was also unfortunately necessary.
The economic damage done by both a viral outbreak and the massive collapse of the economic bubble would be roughly equivalent. Sure, some people may value human lives as being virtually infinite in value, but in terms of just sheer destruction the "collapse of the economic bubble" and a viral outbreak would be virtually similar. Millions, while they may still be alive, will lose everything they have, and will roam the streets preventing their kids from starving. I think people would be far more concerned about being unable to deal with something that they know they could rather than dealing with a virus that they have no control over.
On behalf of the economic major inside of me, thank you for posting in these kind of threads Caller. It's nice to actually read some posts about economics that actually make sense.
On January 09 2010 09:13 synapse wrote: Essentially, Schiff supports free market yet the free market is what caused the housing market collapse, and without government intervention our nation would be even more fucked.
I would like to reiterate this. Though the reasons behind the recession are numerous, the free-market, turn-a-blind-eye to the ill-advised loaning system of the banks is one of the main causes. + Show Spoiler +
The funny thing with a lot of this debate is that the bailout is a tiny, tiny issue when it comes to US economics. It literally is nothing more than a political football, meant to divert the US populace from the true issues.
In fact, the true issues with the US economy and why it's fucked up are never even up for discussion (for quite obvious reasons). The US economy started to go fubar when the gold standard was dissolved and the banking system was centralized with the Fed. When you then gave an institution the power to create currency with ZERO actual requirement of backing that currency with anything, you automatically changed the USA to a debt based economy.
How many people realize that the greenback is nothing but a debt coupon? It's literally an IOU from the Fed. A promissory note. OK, when you have a promissory note, it needs to promise something right? What does the greenback promise? Nothing! There's nothing backing it! All you can trade your greenback for is another greenback or another fiat currency. The world is playing with monopoly money here.
When the USA is in debt, what do we do? We just print fucking money. I sure wish if I was starving I could just print out some PB&J sandwiches. But that's not how life works. And that's why the US economy and much of the world economy since the end of WW2 is so fubar. It is all running on a concept of debt-based currencies that have no value other than what they're being traded for.
The USA gets in debt, they print a ton of new money to pay for it, then to keep the value of their currency high, they just package government bonds and sell them to China. What this effectively does is increase the demand for the greenback. There was X amount of demand before the Fed printed Y amount of money. OK, now that they've printed money we have Y amount of inflation. But, if China buys Y amount of bonds then demand increases to meet supply. Therefore price is stabilized and inflation is averted.
The problem with this is it's wholly artificial. The dollars I have are actually worth much less than they were before. It's just that the US gets other countries to pretend to have a demand for US currency to keep this economic ball rolling. It's a fucked up process and there's no good way of stepping back from it. What are you going to do? Reduce fiscal spending to the point where you can start buying back bonds to reduce the money supply? The way the USA is going, that's not going to happen for another thirty years.
Do you guys really think the demand for US currency will remain high? Well, let's see. What are the factors for US bond demand? Petrodollars, AKA everyone needs to hold onto US currency just to buy oil. So we've got a built in threshold of demand from that. OK, since everyone's already holding a ton of US currency, we then have a dollar hegemony that makes US currency very stable. This means many countries will hold US reserves solely to anchor the value of their own currencies. (AKA they say their currency will redeem for X amount of US dollars if traded, and they can honor this promise with their reserve of US currency).
So again, we have a higher threshold of demand for US currency. On top of that, you have the general demand caused by needing to buy products from the USA. This should be the ONLY incentive for holding US currency. Yet it's probably the LEAST percentage of actual demand for US currency, as evidenced by our ridiculous trade deficit.
So, basically, the only fundamentally sound reason for why people should want US currency (which determines the dollar's value) is the least consequential in the actual operation of US currency valuation.
What we have here is the US profiting off their massive advantage gained by being the winners and primary investors in the reconstruction of WW2 and the Cold War. But even with this ridiculous advantage, we have managed to fuck things up badly enough that our currency needs MORE demand to maintain its value.
And the problem with that is the factors for demand are DECREASING as time goes by, not increasing. You see several countries trying to move away from the petrodollar. Russia has emerged as a major player in the energy industry. They tried to propose the ruble as an alternative currency to use for trading oil. It got shot down, for now, but who knows when Russia will make another bid. You have OPEC who would LOVE to move away from the dollar. You have China who used to hold only US currency but are gradually changing to a larger basket of currencies due to US blundering in diplomacy and the general volatility of the US market of late.
We are also losing a lot of our credibility as the world's most stable currency. Especially after this latest fiasco. It sure is good that the EU and Japan are fucking inept when it comes to finance because God forbid somebody else is actually able to step up to bat. The US would be royally fucked if another currency debuted on the international market that matches them in stability (an increasingly likely prospect with how shit we're managing our monetary policy with constant bubbling and ridiculously low interest rates. LOL yeah I'm sure people would love to buy bonds with a what 4% return? I'm too lazy to look at the T-bills right now but they have to look hideous.
Yo, there's a reason gold is holding value. It's REAL. When everything else is BS, Gold stays real. That's why you see gold's value keep climbing when shit goes south. Gold never really loses except when it's coming down off a speculated high. The DOW? fucking flatline over the last 10 years.
I don't know. Maybe I've talked to much and this isn't a finance forum so doubt a lot of people are interested. But fuck, I get pissed off hearing all this dumbass shit about education and health and the bailout. All of this shit is paid for with monopoly money. Stop acting like any of it has a gain/loss. It's all ephemeral. The big game is being played with fiat currency and the centralized banking structure which embodies modern finance.
I think a lot of you are misunderstanding what I'm saying here.
In nowhere am I saying that this is a good thing. I am not saying that it is good to bail out failing companies that made bad decisions and misjudged risks. I am not saying that it is good to bailout companies that will possibly be unable to fix their problems and become a giant money sink. I am not saying it is good to make the American taxpayer pay for someone else's mistake.
What I am saying is that the bailout was absolutely necessary to prevent the collapse of credit. It was extortion. In these situations, it's best to give in than to fight it out. It's perfectly natural and fine for those who make bad decisions to fail. However, if we let Atlas (holding up the world) get sick and die, the rest of us will pay for their failure. It's better to get him better than to fall down.
However, it is entirely possible that all the bailout will do is create bad incentives and delay the collapse for a bit longer. But that's exactly what will be helpful-time. With time, people will be able to pay off the loans and make plans for debt consolidation ahead of time than immediately on the spot. They will be able to make the right moves without having to take huge losses by liquidizing as much of their assets as possible.
I believe the free-market is the greatest thing to revolutionize society. I take economics at one of the most die-hard free-market bastions in the entire world, and I love it. I think that the federal government (not local) is just an organization devoted to turning energy into solid waste and we would be better off without one.
I also know that the free-market isn't here right now, because we have asymmetric information. And when we have things like that, which cause market failure, there needs to be external intervention to correct it. Once we fix all of the sources of market failure, then we may see the rise of a true free-market, instead of the mixed economy we have today.
This entire thing is the result of asymmetric information. There was a massive disconnect between the loaners to the local bankers, the local bankers to the securities people, the securities people to the quants, the quants to upper management in the banks, and everybody to the government, and the government to Fannie and Freddie, and Fannie and Freddie to the banks. All of those people fucked up, not because they're bad at what they do, nor because they are corrupt, but simply because nobody knew what the fuck was going on because there was just so much shit there.
And for those of you that blame the crisis on "laissez-faire" policies, I would just like to point out that the problems really began when Fannie Mae and Freddie Mac (government organizations) were buying up as much of the trash securities as they could. So figure how this bit of government intervention turned out.
On January 09 2010 09:31 iamho wrote: this guy was in the times or the economist a few months ago. but honestly, it doesnt take a genius to spout government is evil libertarian doomsday crap
Actually it is pretty difficult and he clearly demonstrates why with the resistance he receives from people like you. It would be nice if you mentioned a view of Libertarianism that is "doomsday bull crap." It would help! Since you wish me to evoke telekinesis may I start by asking you why it is a good idea for a government to give peoples money to save nonperforming failing companies? Is it so perhaps its CEOs and directors can buy a plane or their children a Ferrari (what deep thinkers like you call stimulating the economy)? That would seem like a really stupid idea. It would seem like it is a better idea to let performing companies survive and prosper to take their place. Isn't that the whole damn point to a free market; a certain evolution of the economy. I might have to agree with you that this stuff is easy after all!
you guys clearly do not understand the idea of cash flow im not saying that we should be bailing out companies but at this point we really had no choice.
consider this: I have 1 brillion dollars in assets. Most of these assets are in the form of money that I have loaned or invested into many different things. For instance, I may have 500 million in the form of a CD, or certificate of deposit, or something with a similar policy (i.e. I can't touch the money without penalties before the due date) Let's say I borrowed some money to make an investment (which is necessary in this day and age for tax reasons) and I thought that it was good and would be a safe investment. Say... 300 million dollars. I use leverage, which means that I can invest 100 million to make an investment worth 1 brillion. Therefore, a gain of 10% in the investment will profit me 100 million dollars. Similarly, a loss of 10% would make me lose 100 million dollars, or would wipe out the initial investment. Now let's say this investment was flawed, because people were lying about the actual securities and nobody (especially Fannie and Freddie) knew what was going on. So I take a 40% loss on my investment. Now I'm out 400 million. I don't have enough in liquid money to pay back the 400 million, so I'm forced to call in my assets (such as the loans from other companies) at a steep discount rate to pay it back. By discount rate, I mean since I'm calling back loans before they are due, I forfeit interest on my loan, etc. so I may sell 500 billion in assets and end up with 350 million instead. So not only do I lose money from the initial investment, but I lose money in selling assets to pay it back. So in the end, I'm actually down 550 million from a 10% loss.
The second thing it does is it causes money to be taken from other people who are using the money. If I am a company that borrowed 100 million from the bank above, and they call back their loan, sure, I may save money by not paying interest. But I don't have 100 million in cash on me. Therefore, I need to sell off my assets to get this 100 million, which in turn means that I either have to take a loss or call in outstanding loans/credit, which continues the chain of recognized losses.
Without the bailout, we would have taken at least a 40% hit immediately.
I'm not saying it was a good thing, however-it was basically extortion.
Consider this, how is it morally justfiable to use taxpayers money to speculate in a failing firm? If you have bad cash flow, take a loan but is itsn't the goverments business at all.
i didn't say it was morally justifiable to use taxpayers money, i said it was extortion.
like i said, the problem with such a big fucking bank is that it tend to give tons of loans to many many companies. The collapse of such a large bank like Goldman Sachs would completely cripple monetary flow for a much larger area that just financial services-many companies would be forced to call in loans and sell assets, which begins a massive chain reaction that severely destabilizes our economy. In that sense, to protect the rest of America from the collapse of a bank, they had to bail them out.
Consider the following situation: a scientist accidentally releases a culture of a supervirus that could kill millions. The only ones that are able to deal with the virus are the very group that released it. The government would thus give them money and funding to contain the virus, even if it was their fault that they released it.
ur example given is valid in justifying the government's action/intervention in ur example, but sadly u can't compare a viral outbreak with an economic bubble bursting, its like comparing a apple to an orange...
What the hell are you guys on, crack?
I used to think just like you guys in that the bailout is the stupidest thing ever.
I still think it's the stupidest thing ever. But it was also unfortunately necessary.
The economic damage done by both a viral outbreak and the massive collapse of the economic bubble would be roughly equivalent. Sure, some people may value human lives as being virtually infinite in value, but in terms of just sheer destruction the "collapse of the economic bubble" and a viral outbreak would be virtually similar. Millions, while they may still be alive, will lose everything they have, and will roam the streets preventing their kids from starving. I think people would be far more concerned about being unable to deal with something that they know they could rather than dealing with a virus that they have no control over.
On behalf of the economic major inside of me, thank you for posting in these kind of threads Caller. It's nice to actually read some posts about economics that actually make sense.
On January 09 2010 09:13 synapse wrote: Essentially, Schiff supports free market yet the free market is what caused the housing market collapse, and without government intervention our nation would be even more fucked.
I would like to reiterate this. Though the reasons behind the recession are numerous, the free-market, turn-a-blind-eye to the ill-advised loaning system of the banks is one of the main causes. + Show Spoiler +
Man, winter break sure does put my brain on hold.
The free market is not what caused the housing market collapse. What caused the housing market collapse was Greenspan's bullshit low interest rate driving economic growth monetary policy. Sure, there was economic growth, and it was fueled by the massive liquidity allowed by the Fed's unjustifiably low rates, that were held there for YEARS. When you put free money on someone's doorstep, they might be suspicious for a day or two. But they're gonna start using that shit when you leave it out there for years.
Basically, what we saw were people purchasing outside of their means and doing so through a variety of exotic loans developed solely to offer people low monthly rates. Except, when the Fed turned off the spigot, those ARMs started to crank the fuck up because ARMs are basically rubber hoses connected to the spigot which is the Fed lending rate. With the easy flow of capital shut off, you started seeing a shit ton of people default.
When people started to default, they did so in a fucking daisy chain because all this shit is connected to the same spigot. Then you saw the financial firms panic because suddenly all those derivatives they had on the balance sheet turned into a pile of dog shit. When the balance sheets went ass up, suddenly you saw liquidity vanish. Why? Because it was never there in the first place. Even with how ridiculously loose the Fed had been playing it, every fucking cent of it had been leveraged for maximum gain by the financial firms. Why did they do that? Because they HAD to. If they weren't going to leverage to the max, the guy next door sure as hell would. In the finance game, the guy with a billion dollars ALWAYS beats the guy with a million.
So basically everyone had to join in this system, because if they didn't, they'd have to shut their doors. So you have maximum exposure of literally the entire finance industry. Greenspan pushed shit up quarter after quarter because he was scared of inflation and boom, you end up with what we have now. Which is a giant bubble burst.
Every company was leveraging on the understanding that liquidity was at a certain level. But what happened was none of these companies calculated the fact that everyone else was leveraging balls deep. Therefore, a whole ton of these companies got caught with their dicks hanging out. The government's response was to cherry pick which companies they wanted to save and started throwing money at them. Like I said before, in the finance game, the guy with more money wins. The government PICKED the winners, and they consolidated. Which is the semi-salvaged market you're seeing today.
TL:DR version: It is the fault of government AND free market.
It is the government's fault for pushing a horribly irresponsible monetary policy.
It is the free market's fault because of the nature of free markets. If you don't take advantage of something right away, the next guy will. Therefore you are forced to take this short term advantage, which leads your competitors to do the same, which causes rampant overexposure for the market as a whole.
This is a classic example of perfect responsiveness in the market leading to long term ownage for all. It is not always best to be a 100% efficient reactionary market. And in this case, the Fed's ridiculously long period of interest rates passed the buffer system in the free market that accounts for short term fluctuations.
On January 09 2010 13:08 Caller wrote: I think a lot of you are misunderstanding what I'm saying here.
In nowhere am I saying that this is a good thing. I am not saying that it is good to bail out failing companies that made bad decisions and misjudged risks. I am not saying that it is good to bailout companies that will possibly be unable to fix their problems and become a giant money sink. I am not saying it is good to make the American taxpayer pay for someone else's mistake.
What I am saying is that the bailout was absolutely necessary to prevent the collapse of credit. It was extortion. In these situations, it's best to give in than to fight it out. It's perfectly natural and fine for those who make bad decisions to fail. However, if we let Atlas (holding up the world) get sick and die, the rest of us will pay for their failure. It's better to get him better than to fall down.
However, it is entirely possible that all the bailout will do is create bad incentives and delay the collapse for a bit longer. But that's exactly what will be helpful-time. With time, people will be able to pay off the loans and make plans for debt consolidation ahead of time than immediately on the spot. They will be able to make the right moves without having to take huge losses by liquidizing as much of their assets as possible.
I believe the free-market is the greatest thing to revolutionize society. I take economics at one of the most die-hard free-market bastions in the entire world, and I love it. I think that the federal government (not local) is just an organization devoted to turning energy into solid waste and we would be better off without one.
I also know that the free-market isn't here right now, because we have asymmetric information. And when we have things like that, which cause market failure, there needs to be external intervention to correct it. Once we fix all of the sources of market failure, then we may see the rise of a true free-market, instead of the mixed economy we have today.
This entire thing is the result of asymmetric information. There was a massive disconnect between the loaners to the local bankers, the local bankers to the securities people, the securities people to the quants, the quants to upper management in the banks, and everybody to the government, and the government to Fannie and Freddie, and Fannie and Freddie to the banks. All of those people fucked up, not because they're bad at what they do, nor because they are corrupt, but simply because nobody knew what the fuck was going on because there was just so much shit there.
And for those of you that blame the crisis on "laissez-faire" policies, I would just like to point out that the problems really began when Fannie Mae and Freddie Mac (government organizations) were buying up as much of the trash securities as they could. So figure how this bit of government intervention turned out.
Fannie and Freddie were buying them up because doing so made money at the time. Hooray for bundling white paper and selling it to foreign countries that have a glut in capital from trade surpluses and don't have the domestic infrastructure to absorb the liquidity. AKA The Middle East and China.
That's not Fannie and Freddie acting as an arm of the gov't. That was them acting like the private sector while being gov't entities. There's a distinction there that I don't think should be forgotten.
I still don't think a free market is possible until we abolish fiat currencies as a system, AND abolish the centralized banking system.
How can you possibly have a free market when you have a system of valuation that's flawed and a supply/demand relationship that is in the hands of a few entities?
On January 09 2010 13:05 Mindcrime wrote: oh, so fiat currency is killing the economy
thanks for explaining that
lol if you're too dumb to understand how fiat currency is related to the Fed's monetary policy then you are beyond all help. And the Fed's monetary policy was the #1 factor in the cause of this bubble. Without them lowering interest rates, none of this speculation would be possible. GL creating ARMs and selling them to the lower-middle class at 15% interest rates.
On January 09 2010 13:08 Caller wrote: I think a lot of you are misunderstanding what I'm saying here.
In nowhere am I saying that this is a good thing. I am not saying that it is good to bail out failing companies that made bad decisions and misjudged risks. I am not saying that it is good to bailout companies that will possibly be unable to fix their problems and become a giant money sink. I am not saying it is good to make the American taxpayer pay for someone else's mistake.
What I am saying is that the bailout was absolutely necessary to prevent the collapse of credit. It was extortion. In these situations, it's best to give in than to fight it out. It's perfectly natural and fine for those who make bad decisions to fail. However, if we let Atlas (holding up the world) get sick and die, the rest of us will pay for their failure. It's better to get him better than to fall down.
However, it is entirely possible that all the bailout will do is create bad incentives and delay the collapse for a bit longer. But that's exactly what will be helpful-time. With time, people will be able to pay off the loans and make plans for debt consolidation ahead of time than immediately on the spot. They will be able to make the right moves without having to take huge losses by liquidizing as much of their assets as possible.
I believe the free-market is the greatest thing to revolutionize society. I take economics at one of the most die-hard free-market bastions in the entire world, and I love it. I think that the federal government (not local) is just an organization devoted to turning energy into solid waste and we would be better off without one.
I also know that the free-market isn't here right now, because we have asymmetric information. And when we have things like that, which cause market failure, there needs to be external intervention to correct it. Once we fix all of the sources of market failure, then we may see the rise of a true free-market, instead of the mixed economy we have today.
This entire thing is the result of asymmetric information. There was a massive disconnect between the loaners to the local bankers, the local bankers to the securities people, the securities people to the quants, the quants to upper management in the banks, and everybody to the government, and the government to Fannie and Freddie, and Fannie and Freddie to the banks. All of those people fucked up, not because they're bad at what they do, nor because they are corrupt, but simply because nobody knew what the fuck was going on because there was just so much shit there.
And for those of you that blame the crisis on "laissez-faire" policies, I would just like to point out that the problems really began when Fannie Mae and Freddie Mac (government organizations) were buying up as much of the trash securities as they could. So figure how this bit of government intervention turned out.
I largely agree with you. Didn't really mean to make it seem otherwise.
This is going to sound silly, but the one thing about everything that you've said that really leaves me confused is the idea that. "The collapse of credit" is a bad thing?
America has been importing far more than it's been exporting for longer than I've been alive. I'm certainly no expert on this, and I certainly have some bias, as I have no assets to really lose in a collapse, but essentially, to me, it just sounds like a collapse is what we need. We need to wake the fuck up and stop trying nonsense bullshit and fix our system. Just curious what your thoughts on that are.
On January 09 2010 13:08 Caller wrote: I think a lot of you are misunderstanding what I'm saying here.
In nowhere am I saying that this is a good thing. I am not saying that it is good to bail out failing companies that made bad decisions and misjudged risks. I am not saying that it is good to bailout companies that will possibly be unable to fix their problems and become a giant money sink. I am not saying it is good to make the American taxpayer pay for someone else's mistake.
What I am saying is that the bailout was absolutely necessary to prevent the collapse of credit. It was extortion. In these situations, it's best to give in than to fight it out. It's perfectly natural and fine for those who make bad decisions to fail. However, if we let Atlas (holding up the world) get sick and die, the rest of us will pay for their failure. It's better to get him better than to fall down.
However, it is entirely possible that all the bailout will do is create bad incentives and delay the collapse for a bit longer. But that's exactly what will be helpful-time. With time, people will be able to pay off the loans and make plans for debt consolidation ahead of time than immediately on the spot. They will be able to make the right moves without having to take huge losses by liquidizing as much of their assets as possible.
I believe the free-market is the greatest thing to revolutionize society. I take economics at one of the most die-hard free-market bastions in the entire world, and I love it. I think that the federal government (not local) is just an organization devoted to turning energy into solid waste and we would be better off without one.
I also know that the free-market isn't here right now, because we have asymmetric information. And when we have things like that, which cause market failure, there needs to be external intervention to correct it. Once we fix all of the sources of market failure, then we may see the rise of a true free-market, instead of the mixed economy we have today.
This entire thing is the result of asymmetric information. There was a massive disconnect between the loaners to the local bankers, the local bankers to the securities people, the securities people to the quants, the quants to upper management in the banks, and everybody to the government, and the government to Fannie and Freddie, and Fannie and Freddie to the banks. All of those people fucked up, not because they're bad at what they do, nor because they are corrupt, but simply because nobody knew what the fuck was going on because there was just so much shit there.
And for those of you that blame the crisis on "laissez-faire" policies, I would just like to point out that the problems really began when Fannie Mae and Freddie Mac (government organizations) were buying up as much of the trash securities as they could. So figure how this bit of government intervention turned out.
So in this case, the TaxPayers get to be Atlas and shoulder a world of credit. I don't see how the bailout was in anyway equitable to the tax paper. This wasn't just giving into the banker's extortion. This was being shit on by the bankers and then wiping their ass crack for them.
Seriously, how does not knowing stuff about mortgages justify their continued existence? If NOBODY knew what the fuck was going on, that's a failed BUSINESS MODEL. NOBODY should even be in the market place. So why do these companies continue to exist with their old business models??? Isn't that just asking for more pain?
On January 09 2010 13:08 Caller wrote: I think a lot of you are misunderstanding what I'm saying here.
In nowhere am I saying that this is a good thing. I am not saying that it is good to bail out failing companies that made bad decisions and misjudged risks. I am not saying that it is good to bailout companies that will possibly be unable to fix their problems and become a giant money sink. I am not saying it is good to make the American taxpayer pay for someone else's mistake.
What I am saying is that the bailout was absolutely necessary to prevent the collapse of credit. It was extortion. In these situations, it's best to give in than to fight it out. It's perfectly natural and fine for those who make bad decisions to fail. However, if we let Atlas (holding up the world) get sick and die, the rest of us will pay for their failure. It's better to get him better than to fall down.
However, it is entirely possible that all the bailout will do is create bad incentives and delay the collapse for a bit longer. But that's exactly what will be helpful-time. With time, people will be able to pay off the loans and make plans for debt consolidation ahead of time than immediately on the spot. They will be able to make the right moves without having to take huge losses by liquidizing as much of their assets as possible.
I believe the free-market is the greatest thing to revolutionize society. I take economics at one of the most die-hard free-market bastions in the entire world, and I love it. I think that the federal government (not local) is just an organization devoted to turning energy into solid waste and we would be better off without one.
I also know that the free-market isn't here right now, because we have asymmetric information. And when we have things like that, which cause market failure, there needs to be external intervention to correct it. Once we fix all of the sources of market failure, then we may see the rise of a true free-market, instead of the mixed economy we have today.
This entire thing is the result of asymmetric information. There was a massive disconnect between the loaners to the local bankers, the local bankers to the securities people, the securities people to the quants, the quants to upper management in the banks, and everybody to the government, and the government to Fannie and Freddie, and Fannie and Freddie to the banks. All of those people fucked up, not because they're bad at what they do, nor because they are corrupt, but simply because nobody knew what the fuck was going on because there was just so much shit there.
And for those of you that blame the crisis on "laissez-faire" policies, I would just like to point out that the problems really began when Fannie Mae and Freddie Mac (government organizations) were buying up as much of the trash securities as they could. So figure how this bit of government intervention turned out.
I largely agree with you. Didn't really mean to make it seem otherwise.
This is going to sound silly, but the one thing about everything that you've said that really leaves me confused is the idea that. "The collapse of credit" is a bad thing?
America has been importing far more than it's been exporting for longer than I've been alive. I'm certainly no expert on this, and I certainly have some bias, as I have no assets to really lose in a collapse, but essentially, to me, it just sounds like a collapse is what we need. We need to wake the fuck up and stop trying nonsense bullshit and fix our system. Just curious what your thoughts on that are.
There's a difference between borrowing beyond your means and the loss of credit. Without credit, it will be impossible for people to start a business or buy a home or anything. If you had to front the costs for a house by yourself, you would likely not be living in one. Similarly, if it is impossible to start new investment, people will not have new jobs, and there will also be no incentive to save money. Consider how people like to keep money saved because of interest and investments. Without credit, nobody would be willing to pay interest, so people would spend a lot more because it's better to have something useful than something not (i.e. money that doesn't increase in value). While we are definitely importing far more than we are exporting, and are in huge amounts of debt, this isn't related to the collapse of credit in our economy. In fact, a credit collapse would only exasperate the issue as China would attempt to liquidate its Treasury bills as a result, which would probably (after many, many events) lead to the end of American civilization as we know it.
On January 09 2010 13:08 Caller wrote: I think a lot of you are misunderstanding what I'm saying here.
In nowhere am I saying that this is a good thing. I am not saying that it is good to bail out failing companies that made bad decisions and misjudged risks. I am not saying that it is good to bailout companies that will possibly be unable to fix their problems and become a giant money sink. I am not saying it is good to make the American taxpayer pay for someone else's mistake.
What I am saying is that the bailout was absolutely necessary to prevent the collapse of credit. It was extortion. In these situations, it's best to give in than to fight it out. It's perfectly natural and fine for those who make bad decisions to fail. However, if we let Atlas (holding up the world) get sick and die, the rest of us will pay for their failure. It's better to get him better than to fall down.
However, it is entirely possible that all the bailout will do is create bad incentives and delay the collapse for a bit longer. But that's exactly what will be helpful-time. With time, people will be able to pay off the loans and make plans for debt consolidation ahead of time than immediately on the spot. They will be able to make the right moves without having to take huge losses by liquidizing as much of their assets as possible.
I believe the free-market is the greatest thing to revolutionize society. I take economics at one of the most die-hard free-market bastions in the entire world, and I love it. I think that the federal government (not local) is just an organization devoted to turning energy into solid waste and we would be better off without one.
I also know that the free-market isn't here right now, because we have asymmetric information. And when we have things like that, which cause market failure, there needs to be external intervention to correct it. Once we fix all of the sources of market failure, then we may see the rise of a true free-market, instead of the mixed economy we have today.
This entire thing is the result of asymmetric information. There was a massive disconnect between the loaners to the local bankers, the local bankers to the securities people, the securities people to the quants, the quants to upper management in the banks, and everybody to the government, and the government to Fannie and Freddie, and Fannie and Freddie to the banks. All of those people fucked up, not because they're bad at what they do, nor because they are corrupt, but simply because nobody knew what the fuck was going on because there was just so much shit there.
And for those of you that blame the crisis on "laissez-faire" policies, I would just like to point out that the problems really began when Fannie Mae and Freddie Mac (government organizations) were buying up as much of the trash securities as they could. So figure how this bit of government intervention turned out.
So in this case, the TaxPayers get to be Atlas and shoulder a world of credit. I don't see how the bailout was in anyway equitable to the tax paper. This wasn't just giving into the banker's extortion. This was being shit on by the bankers and then wiping their ass crack for them.
Seriously, how does not knowing stuff about mortgages justify their continued existence? If NOBODY knew what the fuck was going on, that's a failed BUSINESS MODEL. NOBODY should even be in the market place. So why do these companies continue to exist with their old business models??? Isn't that just asking for more pain?
it is asking for more pain. But we don't have a choice, the fact of the matter is, until these companies are able to liquidate their shit and other companies can acquire credit from other, more reliable sources. I don't disagree its a failed business model. But we don't have a choice, because if they fall, they will take the rest of America down with them. It's better to take a smaller hit now than a much larger hit down the road. But I'm not condoning the bailout-it was, one may suppose, the lesser of two evils.
Caller why are you even trying to argue the bailout? If someone doesn't understand why the bailout was necessary, they don't belong in any debate on economics. It's kind of sad for me to see a thread on why the economy is fubar devolve into a debate on whether TARP was necessary. It's such an elementary concept that it doesn't deserve to even be discussed.
Pretty simple situation: Problem: The markets have no liquidity Solution: Inject liquidity.
It's like saying someone's dehydrated and the solution is to not give them any water, so they die, and then later on a baby can be born that will one day take this dehydrated person's place and then we won't have a problem with dehydration anymore. Does anyone here think that sounds like a sensible solution?
Stop trying to explain to people in economic terms. They're not going to get it. A guy screaming in all caps that the financial market is a failed business model is a person who doesn't have a clue what economics is.
Now, get off the kiddy shit and debate some real economics.
On January 09 2010 13:08 Caller wrote: I think a lot of you are misunderstanding what I'm saying here.
In nowhere am I saying that this is a good thing. I am not saying that it is good to bail out failing companies that made bad decisions and misjudged risks. I am not saying that it is good to bailout companies that will possibly be unable to fix their problems and become a giant money sink. I am not saying it is good to make the American taxpayer pay for someone else's mistake.
What I am saying is that the bailout was absolutely necessary to prevent the collapse of credit. It was extortion. In these situations, it's best to give in than to fight it out. It's perfectly natural and fine for those who make bad decisions to fail. However, if we let Atlas (holding up the world) get sick and die, the rest of us will pay for their failure. It's better to get him better than to fall down.
However, it is entirely possible that all the bailout will do is create bad incentives and delay the collapse for a bit longer. But that's exactly what will be helpful-time. With time, people will be able to pay off the loans and make plans for debt consolidation ahead of time than immediately on the spot. They will be able to make the right moves without having to take huge losses by liquidizing as much of their assets as possible.
I believe the free-market is the greatest thing to revolutionize society. I take economics at one of the most die-hard free-market bastions in the entire world, and I love it. I think that the federal government (not local) is just an organization devoted to turning energy into solid waste and we would be better off without one.
I also know that the free-market isn't here right now, because we have asymmetric information. And when we have things like that, which cause market failure, there needs to be external intervention to correct it. Once we fix all of the sources of market failure, then we may see the rise of a true free-market, instead of the mixed economy we have today.
This entire thing is the result of asymmetric information. There was a massive disconnect between the loaners to the local bankers, the local bankers to the securities people, the securities people to the quants, the quants to upper management in the banks, and everybody to the government, and the government to Fannie and Freddie, and Fannie and Freddie to the banks. All of those people fucked up, not because they're bad at what they do, nor because they are corrupt, but simply because nobody knew what the fuck was going on because there was just so much shit there.
And for those of you that blame the crisis on "laissez-faire" policies, I would just like to point out that the problems really began when Fannie Mae and Freddie Mac (government organizations) were buying up as much of the trash securities as they could. So figure how this bit of government intervention turned out.
I largely agree with you. Didn't really mean to make it seem otherwise.
This is going to sound silly, but the one thing about everything that you've said that really leaves me confused is the idea that. "The collapse of credit" is a bad thing?
America has been importing far more than it's been exporting for longer than I've been alive. I'm certainly no expert on this, and I certainly have some bias, as I have no assets to really lose in a collapse, but essentially, to me, it just sounds like a collapse is what we need. We need to wake the fuck up and stop trying nonsense bullshit and fix our system. Just curious what your thoughts on that are.
There's a difference between borrowing beyond your means and the loss of credit. Without credit, it will be impossible for people to start a business or buy a home or anything. If you had to front the costs for a house by yourself, you would likely not be living in one. Similarly, if it is impossible to start new investment, people will not have new jobs, and there will also be no incentive to save money. Consider how people like to keep money saved because of interest and investments. Without credit, nobody would be willing to pay interest, so people would spend a lot more because it's better to have something useful than something not (i.e. money that doesn't increase in value). While we are definitely importing far more than we are exporting, and are in huge amounts of debt, this isn't related to the collapse of credit in our economy. In fact, a credit collapse would only exasperate the issue as China would attempt to liquidate its Treasury bills as a result, which would probably (after many, many events) lead to the end of American civilization as we know it.
That makes sense.
Either way, aren't we still looking at a collapse of some sort eventually if we don't either start producing more goods to export, stop importing so much, or at the least generate some sort of sustaining income as a nation from foreign interests? I'm also not so sure that the end of American Civilization "as we know it" is necessarily so bad as long as the states can maintain their sovereignty... I'm sure that's pretty radical, and I can certainly understand the bailout in the situation your describing, but it's anything but a solution. What is the solution? We certainly don't have many of those good ol' 1950's factories laying around anymore.
On January 09 2010 15:04 StorkHwaiting wrote: Caller why are you even trying to argue the bailout? If someone doesn't understand why the bailout was necessary, they don't belong in any debate on economics. It's kind of sad for me to see a thread on why the economy is fubar devolve into a debate on whether TARP was necessary. It's such an elementary concept that it doesn't deserve to even be discussed.
Pretty simple situation: Problem: The markets have no liquidity Solution: Inject liquidity.
It's like saying someone's dehydrated and the solution is to not give them any water, so they die, and then later on a baby can be born that will one day take this dehydrated person's place and then we won't have a problem with dehydration anymore. Does anyone here think that sounds like a sensible solution?
Stop trying to explain to people in economic terms. They're not going to get it. A guy screaming in all caps that the financial market is a failed business model is a person who doesn't have a clue what economics is.
Now, get off the kiddy shit and debate some real economics.
Uh, Caller's posts are very productive, Your other posts are quite nice as well. You're above post is no better than the person screaming in all caps however. Someone with an open mind, and intelligent understanding of logic, is fully capable of not understanding why TARP was necessary. You're just being arrogant by thinking that people who aren't educated on the subject aren't interested in the subject.
It's not really any different than me telling you to get the fuck off of a video game forum if you want to discuss politics at all.
It's just foolish. Please be more reasonable.
EDIT: Furthermore, and more on topic, pertaining to your "Solution: Inject Liquidity" I'm left wanting to ask, so if we can just create liquity out of thin air as your solution implies, why didn't we do that a long time ago? Obviously I'm not serious, and the real question is, How do you create Liquidity to inject when the markets are dry? And if the markets are dry, what happened to the liquidity that was in the markets? Why didn't we prevent that? ectectect. But whatever, I didn't bring the bailout up, and really isn't what I was interested in w/ this thread. But Since it was being discussed.....
On January 09 2010 13:08 Caller wrote: I think a lot of you are misunderstanding what I'm saying here.
In nowhere am I saying that this is a good thing. I am not saying that it is good to bail out failing companies that made bad decisions and misjudged risks. I am not saying that it is good to bailout companies that will possibly be unable to fix their problems and become a giant money sink. I am not saying it is good to make the American taxpayer pay for someone else's mistake.
What I am saying is that the bailout was absolutely necessary to prevent the collapse of credit. It was extortion. In these situations, it's best to give in than to fight it out. It's perfectly natural and fine for those who make bad decisions to fail. However, if we let Atlas (holding up the world) get sick and die, the rest of us will pay for their failure. It's better to get him better than to fall down.
However, it is entirely possible that all the bailout will do is create bad incentives and delay the collapse for a bit longer. But that's exactly what will be helpful-time. With time, people will be able to pay off the loans and make plans for debt consolidation ahead of time than immediately on the spot. They will be able to make the right moves without having to take huge losses by liquidizing as much of their assets as possible.
I believe the free-market is the greatest thing to revolutionize society. I take economics at one of the most die-hard free-market bastions in the entire world, and I love it. I think that the federal government (not local) is just an organization devoted to turning energy into solid waste and we would be better off without one.
I also know that the free-market isn't here right now, because we have asymmetric information. And when we have things like that, which cause market failure, there needs to be external intervention to correct it. Once we fix all of the sources of market failure, then we may see the rise of a true free-market, instead of the mixed economy we have today.
This entire thing is the result of asymmetric information. There was a massive disconnect between the loaners to the local bankers, the local bankers to the securities people, the securities people to the quants, the quants to upper management in the banks, and everybody to the government, and the government to Fannie and Freddie, and Fannie and Freddie to the banks. All of those people fucked up, not because they're bad at what they do, nor because they are corrupt, but simply because nobody knew what the fuck was going on because there was just so much shit there.
And for those of you that blame the crisis on "laissez-faire" policies, I would just like to point out that the problems really began when Fannie Mae and Freddie Mac (government organizations) were buying up as much of the trash securities as they could. So figure how this bit of government intervention turned out.
I largely agree with you. Didn't really mean to make it seem otherwise.
This is going to sound silly, but the one thing about everything that you've said that really leaves me confused is the idea that. "The collapse of credit" is a bad thing?
America has been importing far more than it's been exporting for longer than I've been alive. I'm certainly no expert on this, and I certainly have some bias, as I have no assets to really lose in a collapse, but essentially, to me, it just sounds like a collapse is what we need. We need to wake the fuck up and stop trying nonsense bullshit and fix our system. Just curious what your thoughts on that are.
Totally agree with this. All the attempts to stop the collapse have been finger band-aids for axe wounds. Sooner or later, we're going to run out of blood.
On January 09 2010 15:04 StorkHwaiting wrote: Caller why are you even trying to argue the bailout? If someone doesn't understand why the bailout was necessary, they don't belong in any debate on economics. It's kind of sad for me to see a thread on why the economy is fubar devolve into a debate on whether TARP was necessary. It's such an elementary concept that it doesn't deserve to even be discussed.
Pretty simple situation: Problem: The markets have no liquidity Solution: Inject liquidity.
It's like saying someone's dehydrated and the solution is to not give them any water, so they die, and then later on a baby can be born that will one day take this dehydrated person's place and then we won't have a problem with dehydration anymore. Does anyone here think that sounds like a sensible solution?
Stop trying to explain to people in economic terms. They're not going to get it. A guy screaming in all caps that the financial market is a failed business model is a person who doesn't have a clue what economics is.
Now, get off the kiddy shit and debate some real economics.
Uh, Caller's posts are very productive, Your other posts are quite nice as well. You're above post is no better than the person screaming in all caps however. Someone with an open mind, and intelligent understanding of logic, is fully capable of not understanding why TARP was necessary. You're just being arrogant by thinking that people who aren't educated on the subject aren't interested in the subject.
It's not really any different than me telling you to get the fuck off of a video game forum if you want to discuss politics at all.
On January 09 2010 15:04 StorkHwaiting wrote: Caller why are you even trying to argue the bailout? If someone doesn't understand why the bailout was necessary, they don't belong in any debate on economics. It's kind of sad for me to see a thread on why the economy is fubar devolve into a debate on whether TARP was necessary. It's such an elementary concept that it doesn't deserve to even be discussed.
Pretty simple situation: Problem: The markets have no liquidity Solution: Inject liquidity.
It's like saying someone's dehydrated and the solution is to not give them any water, so they die, and then later on a baby can be born that will one day take this dehydrated person's place and then we won't have a problem with dehydration anymore. Does anyone here think that sounds like a sensible solution?
Stop trying to explain to people in economic terms. They're not going to get it. A guy screaming in all caps that the financial market is a failed business model is a person who doesn't have a clue what economics is.
Now, get off the kiddy shit and debate some real economics.
Uh, Caller's posts are very productive, Your other posts are quite nice as well. You're above post is no better than the person screaming in all caps however. Someone with an open mind, and intelligent understanding of logic, is fully capable of not understanding why TARP was necessary. You're just being arrogant by thinking that people who aren't educated on the subject aren't interested in the subject.
It's not really any different than me telling you to get the fuck off of a video game forum if you want to discuss politics at all.
It's just foolish. Please be more reasonable.
Did you honestly read what TanGeng wrote?
No actually, I had not however, your general statements applied a lot to me, A person with no background or understand on a more-than basic level. sure I passed economics in high school, like 7 years ago, and i hated politics then... I suppose, my Edit on that post is a more meatier description of my point, and after reading TanGeng's post, your post makes a lot more sense.
I can understand your frustration certainly, but these topics are sometimes pretty ambiguous and different "experts" will tell you different things. ^ ^
On January 09 2010 15:04 StorkHwaiting wrote: Caller why are you even trying to argue the bailout? If someone doesn't understand why the bailout was necessary, they don't belong in any debate on economics. It's kind of sad for me to see a thread on why the economy is fubar devolve into a debate on whether TARP was necessary. It's such an elementary concept that it doesn't deserve to even be discussed.
Pretty simple situation: Problem: The markets have no liquidity Solution: Inject liquidity.
It's like saying someone's dehydrated and the solution is to not give them any water, so they die, and then later on a baby can be born that will one day take this dehydrated person's place and then we won't have a problem with dehydration anymore. Does anyone here think that sounds like a sensible solution?
Stop trying to explain to people in economic terms. They're not going to get it. A guy screaming in all caps that the financial market is a failed business model is a person who doesn't have a clue what economics is.
Now, get off the kiddy shit and debate some real economics.
Uh, Caller's posts are very productive, Your other posts are quite nice as well. You're above post is no better than the person screaming in all caps however. Someone with an open mind, and intelligent understanding of logic, is fully capable of not understanding why TARP was necessary. You're just being arrogant by thinking that people who aren't educated on the subject aren't interested in the subject.
It's not really any different than me telling you to get the fuck off of a video game forum if you want to discuss politics at all.
It's just foolish. Please be more reasonable.
EDIT: Furthermore, and more on topic, pertaining to your "Solution: Inject Liquidity" I'm left wanting to ask, so if we can just create liquity out of thin air as your solution implies, why didn't we do that a long time ago? Obviously I'm not serious, and the real question is, How do you create Liquidity to inject when the markets are dry? And if the markets are dry, what happened to the liquidity that was in the markets? Why didn't we prevent that? ectectect. But whatever, I didn't bring the bailout up, and really isn't what I was interested in w/ this thread. But Since it was being discussed.....
You create liquidity literally by just printing more money, which is exactly what the Fed did in this situation. Then the Fed tries to keep inflation under control through monetary tools like T-bill auctions. You often see inflation following lock in step with how well bond auctions go. They're a barometer of demand/confidence in a currency. The Fed literally can create liquidity out of thin air, at least in the short-term. Which is one of the many reasons I think the Fed is a terrible institution.
The liquidity that WAS in the markets got destroyed long ago. If you look up at my earlier post where I explained the factors involved in the collapse it explains a great deal of it but a short version would be:
We had high liquidity due to low interest rates. This is because the Fed's interest rate roughly equals the cost of money for banks. The lower the cost of money, the more banks will lend to people. The amount banks are willing to lend to people are what is termed liquidity.
Once the liquidity was out there, the banks went to town. It's like throwing a meaty bone in front of starving dogs. Then basically all the financial groups were FORCED to take advantage of this free money.
Why were they forced?
Because if they didn't use it up, their competitor down the street was going to use it. And for the first few years it netted them HUGE profits. Any bank/investment group that didn't get in on the action would basically have been bankrupted due to being unable to compete. If you and another guy both know a stock is good but you only have $10 to buy with and he he as $10 mil, guess who's going to be making more money? Finance is that kind of game. The guy with more money usually wins because a lot of the good investments are clear to see. Yes, there are a lot of risky flips too but those aren't the bread and butter of financial groups.
So basically, you have banks and investment groups grabbing up every scrap of liquidity and then repackaging it to sell to other people over and over again until you have a single dollar strung out and lent out to seven different people.
Then what happens is five of those people come back and say "Yo, I can't pay you back that dollar. I spent it on a TV that my wife broke when she found out I cheated on her."
The money is gone. The liquidity is gone. The PAPER wealth that the company had recorded ended up being bullshit. All those "accounts receivable" turned into write offs as losses.
And that's why the bubble popped.
We didn't prevent it because well, most of our politicians either don't understand finance or are paid off by the investment groups. The people who did warn of impending failure were treated as laughingstocks and loonies. (I switched my major FROM finance because of this crisis. I saw it coming in 2006.) Most people in the industry were busy trying to grab shit while it was hot and talking about cashing out when they made their fortune. A lot of people thought they could ride the gravy train another year. And you know the rest.
Far better of a response than I would have expected
Very education post for me. It's pretty plain and easy to see that the bailout was pretty important for the short term.
The bailout doesn't seem like any sort of solution, and from what I'm gathering, isn't intended to be.
After reading most of this thread, watching a few Peter Schiff speeches, and acknowledging thing like the US Wars, Budget, National Debt, That a large percentage of tax payers get their money back, The whole import/export deficit...
What are we doing to ensure that the bailout wasn't just flipping the hourglass over and saying go go go go win this time boys!
and more so, even if the market turns around and stabilizes with our trade deficit, national debt, ect (all of our problems) aren't we still going to be facing a serious issue again in the future if we don't turn our system around. A lot of these issues have been around since the creation of the FED or post-WW2...
To me this reminds of someone who owns a Beach House, but instead of getting flood insurance, they just make the stilts holding their house off the ground taller, but failed to realize that wood rots, or that water can still get that high. Meh horrible analogy, my apolagies, but hopefully i'm being clear.
This is a peter Schiff thread so:
same thing as the first vid in OP, but better imo.
"Wealth is only going up in terms of the depreciating dollar." YES. Thank you Peter Schiff. He's basically saying exactly what I was talking about in terms of printing money and leveraging the value of the US currency as a way to generate wealth. That is the guiding principle of a debt-based economy.
See, all I can really say about Peter Schiff is that I admire him and at the same time feel sorry as fuck for him. Here is a guy who understands what is wrong with the system, and actually has the fortitude to stay in it. Hell, I couldn't make it out of college stomaching the shit they tried to feed me. Finance really isn't a difficult field when you put the time and effort into understanding it (history and politics help a ton too), the problem is that once you understand it it's so morally repugnant that you don't want to go near it with a ten foot pole. Yet, it's one of the most influential factors in our lives. (Which was the original reason I wanted to study finance). A quandary to be sure.
Now, the reason why Peter Schiff looks like a fool pessimist is because year to year, they always trot the man out and ask him on his predictions. And the thing is, he's wrong for 5 years and then right for 2 years.
Why is that? It's because Peter's sitting here and looking at the fundamentals of the markets and he's like this shit doesn't make sense. It's got to come crashing down soon. And it does come crashing down. The problem is that the government, due to political pressure, is constantly hemming and hawing and trying to find new monetary tricks to avoid a recession. You can basically call everything since Reagan came to power by this name. It's not Republicans bad. It's both parties. Clinton and Obama are engaging in the same shenanigans.
So, we've basically had a recession that's 20+ years overdue. We've had some hits and such in the late eighties and late nineties and now in the late 00's. You seeing the trend here?
Now what each generation has done is build a bubble based on leveraging US currency, making their fortune, and then passing the buck on to the next generation. The problem is that the well is running dry. By the time it's gotten to us, there is not much left in that well. And yet, we're the generation weaned on the tit of consumerism for the longest time. It's a shitty position to be in.
But Peter Schiff is right. The solution is to return to an economy based on savings NOT debt. People need to live within their means and save money for the sake of investing or starting a business of their own. Money is supposed to be spent to IMPROVE a person's capacity to generate wealth.
Think of it this way. Imagine if I was playing a game of SC and I was 3 gas protoss. 3 gas protoss is pretty fucking cool. That's a lot of eco. OK, but after I went 3 gas protoss I proceeded to build 100 gateways. By then, that 3 gas eco is not looking so hot. Would the solution at this point be to build probes and expand or build MORE gateways? Should be a pretty easy answer. The sad thing is the USA continues to build more gateways.
And they call it wealth because they're like look dude, we've built 20 gateways in these last ten years. How can you not call that progress? Peter Schiff says well uh great, but when you don't have the eco to support those gateways it don't really mean shit. And the other analysts are like fuck you talking about man? Look at this shit we're pumping zeals and DTs and everythang. And Peter looks over at the depleted vespene geyser and just shakes his head.
On January 09 2010 09:56 Newbistic wrote: Didn't watch the first video, but his logic is faulty in the second video.
Schiff didn't prove that loans caused increased tuition, he simply stated that a correlation exists between the arrival of government loans and increases in tuition. Correlation does not mean causation.
Also, logic states that with all the new technology, education should be more expensive, not cheaper because more money would need to be spent to acquire the new technology. Technology did not change that fast back in the day, neither did progression in academics. Nowadays more knowledge is produced and at a faster rate, so universities need more resources to acquire newer, costlier ways of producing knowledge.
Of course, there are other reasons why tuition costs more today exclusive of the need to acquire more technology, but it still doesn't mean he's necessarily right.
Wrong, you don't understand how business's work.
Colleges can charge anything they want, because the government is guaranteeing that they will be paid that amount. Students don't care because they don't have to rate the loan, and pay it off in the future. If you have a monopoly on a necessary service, you can charge anything you want, and that's what colleges are doing.
Given inflation, the price of college should be proportional to the amount earned, which is why he gave prices back in 1810-1852, and 1874-1918. College costs fifty times as much when adjusting for inflation, when it should cost exactly the same. If students had to actually pay their way through college on a 40 hour work week and couldn't get any student loans, all major colleges would bring down costs to community college levels, or they would have no students, and would have to massively slash spending. But they don't have to, because if you want to go to college, you have to get a massive student loan to pay for it, and you are guaranteed to get the loan.
On January 09 2010 09:56 Newbistic wrote: Didn't watch the first video, but his logic is faulty in the second video.
Schiff didn't prove that loans caused increased tuition, he simply stated that a correlation exists between the arrival of government loans and increases in tuition. Correlation does not mean causation.
Also, logic states that with all the new technology, education should be more expensive, not cheaper because more money would need to be spent to acquire the new technology. Technology did not change that fast back in the day, neither did progression in academics. Nowadays more knowledge is produced and at a faster rate, so universities need more resources to acquire newer, costlier ways of producing knowledge.
Of course, there are other reasons why tuition costs more today exclusive of the need to acquire more technology, but it still doesn't mean he's necessarily right.
Wrong, you don't understand how business's work.
Colleges can charge anything they want, because the government is guaranteeing that they will be paid that amount. Students don't care because they don't have to rate the loan, and pay it off in the future. If you have a monopoly on a necessary service, you can charge anything you want, and that's what colleges are doing.
Given inflation, the price of college should be proportional to the amount earned, which is why he gave prices back in 1810-1852, and 1874-1918. College costs fifty times as much when adjusting for inflation, when it should cost exactly the same. If students had to actually pay their way through college on a 40 hour work week and couldn't get any student loans, all major colleges would bring down costs to community college levels, or they would have no students, and would have to massively slash spending. But they don't have to, because if you want to go to college, you have to get a massive student loan to pay for it, and you are guaranteed to get the loan.
Everything he said is completely accurate.
This is something I disagree with Peter on. Universities are incubators for talent. Yes, I know, it sounds funny because there are tons of slacker kids that get through uni, but it's true. Universities are research centers and pretty much THE driving force of intellectualism in the USA.
Most public universities are constantly forced to pinch pennies. This is with the tuition and all that at current levels AND subsidization by the government. It's one of the few places that money should be invested by the gov't.
You can't have a university run itself like a business. It doesn't work that way in academia. Someone may have a really great thesis on the differences in Roman and Greek naval warfare. That's not going to make money in the marketplace. A business-like university is not going to take on this student and support his masters/PhD. But his material is really valuable from an intellectual standpoint. You don't know what effects his intellectual research/material is going to have down the road. This kind of intangible benefit would be lost if you switched universities over to a business operation.
Many other types of intellectual arts would also be lost this way. Performing arts would not be able to get funding. etc etc. Most universities do not waste their money on crappy stuff. Most of them try to amass library collections, or fund research on nanotechnology, or buy a new MRI for their med students, etc etc. It's one of the few places where the money is generally well spent.
Football stadiums and things of that nature MAKE money for a university. They don't get funding for that shit, college football probably funds all the sports and a department on its own. I don't know, I've been through large state universities and for the most part, they are short on money, and they spend what they have in the right places.
Just wanted to say this has been a very educational read so far, especially Storkhwaiting's post on fiat money. Very interesting and told in a way I could actually follow. It doesn't help that economics/finance is one of the most confusing topics but I felt a sense of purpose to that post. Props.
I'd just like to thank many of the educators on TL for giving us less knowledgeable people a chance to experience topics we would otherwise not have touched with a ten foot pole.
However, I'm not sure whether its the videos of ignorant TV hosts or whether its the doomsayers, but I'm seriously scared for my future and the future of the U.S.
I've known for a while now about the rampant consumerism and the raging debt and how "fortunate" we've been for the past couple of decades, but I will be graduating this summer and will hopefully enter the white collar labor market soon after, and my actual life will begin, so to speak. I would like to fatten my savings and raise a family in fashion similar to how I was raised when my parents moved here, but I suspect that won't be the case. It all seems like everything I will do in the future will not save me in the slightest from the ill-management of the Fed, and thus from an imminent collapse of society as we know it. Should I be scared?
There are far more ways of restoring the availability of credit than the bailout as it happened. I don't see why everybody is assuming that this was the only solution.
On January 09 2010 16:51 StorkHwaiting wrote: This is something I disagree with Peter on. Universities are incubators for talent. Yes, I know, it sounds funny because there are tons of slacker kids that get through uni, but it's true. Universities are research centers and pretty much THE driving force of intellectualism in the USA.
Most public universities are constantly forced to pinch pennies. This is with the tuition and all that at current levels AND subsidization by the government. It's one of the few places that money should be invested by the gov't.
I have a question then, Universities used to be able to provide eduction to students at the worth of a months labor (using Peter's Yale numbers), why can they not, or are they not, able to do the same thing today (adjusting for inflation)?
You can't have a university run itself like a business. It doesn't work that way in academia. Someone may have a really great thesis on the differences in Roman and Greek naval warfare. That's not going to make money in the marketplace. A business-like university is not going to take on this student and support his masters/PhD. But his material is really valuable from an intellectual standpoint. You don't know what effects his intellectual research/material is going to have down the road. This kind of intangible benefit would be lost if you switched universities over to a business operation.
Many other types of intellectual arts would also be lost this way. Performing arts would not be able to get funding. etc etc. Most universities do not waste their money on crappy stuff. Most of them try to amass library collections, or fund research on nanotechnology, or buy a new MRI for their med students, etc etc. It's one of the few places where the money is generally well spent.
Football stadiums and things of that nature MAKE money for a university. They don't get funding for that shit, college football probably funds all the sports and a department on its own. I don't know, I've been through large state universities and for the most part, they are short on money, and they spend what they have in the right places.
All universities are businesses. If you don't think so, you're wrong. They have management, the president, managers, the dean of a specific area, and employees, teachers. They sell services, a degree that meets the standards set by the government that specifies that anyone who has earned the degree is of a certain intellectual and factual knowledge. Intellectual property is property, just like food or a house is. Do you think colleges are just educating people out of the goodness of their hearts? That teachers work to exactly pay for their needs? Entirely false.
What you are stating is that colleges are very poorly run businesses. What happens if you can't afford to supply a product, at a profit, that consumers are willing to purchase? You go out of business. What you are also talking about is investments. A company that makes fine fur coats could invest in PETA if they wanted. The only thing that matters is if they make a profit, so where a company invests money is irrelevant. Colleges are not teaching students for free, you may be confusing their profit margin in terms of gross money made. I could make 50% on a dollar or 10% on 10 dollars, the asset turnover ratio depends on industry and location along other factors.
On January 09 2010 15:40 StorkHwaiting wrote: You create liquidity literally by just printing more money, which is exactly what the Fed did in this situation. Then the Fed tries to keep inflation under control through monetary tools like T-bill auctions. You often see inflation following lock in step with how well bond auctions go. They're a barometer of demand/confidence in a currency. The Fed literally can create liquidity out of thin air, at least in the short-term. Which is one of the many reasons I think the Fed is a terrible institution.
The liquidity that WAS in the markets got destroyed long ago. If you look up at my earlier post where I explained the factors involved in the collapse it explains a great deal of it but a short version would be:
We had high liquidity due to low interest rates. This is because the Fed's interest rate roughly equals the cost of money for banks. The lower the cost of money, the more banks will lend to people. The amount banks are willing to lend to people are what is termed liquidity.
Once the liquidity was out there, the banks went to town. It's like throwing a meaty bone in front of starving dogs. Then basically all the financial groups were FORCED to take advantage of this free money.
Why were they forced?
Because if they didn't use it up, their competitor down the street was going to use it. And for the first few years it netted them HUGE profits. Any bank/investment group that didn't get in on the action would basically have been bankrupted due to being unable to compete. If you and another guy both know a stock is good but you only have $10 to buy with and he he as $10 mil, guess who's going to be making more money? Finance is that kind of game. The guy with more money usually wins because a lot of the good investments are clear to see. Yes, there are a lot of risky flips too but those aren't the bread and butter of financial groups.
So basically, you have banks and investment groups grabbing up every scrap of liquidity and then repackaging it to sell to other people over and over again until you have a single dollar strung out and lent out to seven different people.
Then what happens is five of those people come back and say "Yo, I can't pay you back that dollar. I spent it on a TV that my wife broke when she found out I cheated on her."
The money is gone. The liquidity is gone. The PAPER wealth that the company had recorded ended up being bullshit. All those "accounts receivable" turned into write offs as losses.
And that's why the bubble popped.
We didn't prevent it because well, most of our politicians either don't understand finance or are paid off by the investment groups. The people who did warn of impending failure were treated as laughingstocks and loonies. (I switched my major FROM finance because of this crisis. I saw it coming in 2006.) Most people in the industry were busy trying to grab shit while it was hot and talking about cashing out when they made their fortune. A lot of people thought they could ride the gravy train another year. And you know the rest.
I highly doubt you know what you're talking about, because every time you used the term liquidity, you use it as if liquidity is something you can touch, or feel, or that liquidity actually has a value. It doesn't. Liquidity is how you value, it doesn't have a value, and it can't add value to anything.
Liquidity: the ability or ease with which assets can be converted into cash.
LOL ECONOMICS ADVISOR TO REAGAN reagonomics does not work.
The problem with many economists is that they consider economics to be a science, like chemistry or physics, and that the models and the theories they have created are all correct. Unregulated free markets don't work, except to make a tiny minority rich and to push everyone else into poverty. This happened around the world in countries like China, Russia, Brazil, Chile, Argentina, South Africa, etc.
Peter Schiff sounds like a very knowledgeable man. I can't believe that douchebag was laughing at him when he was talking about house prices falling. Although we can see in hindsight that he was correct, his ideas were sound. How could people have been so ridiculously short-sighted? Was it not obvious that we were overextending ourselves? Home prices were ridiculously inflated. "Sub-prime is a tiny blip" LOL
Although it may have been necessary, the bailout just increases moral hazard. We basically allowed for companies to be "too big to fail". The economy would have been damaged by their collapse, but it's what capitalism is all about. I can't believe that the bankers took all those risks and the taxpayers had to shoulder the burden. Certainly some of the big banks paid back, but there should be more regulation and the breaking up of these giants to prevent this kind of thing from happening again. Glass-Steagall should be re-implemented and there should be at least some kind of punitive measure taken. They're back to their old ways already and not lending out money to small business owners and entrepreneurs, despite the fact that that's what the money was supposed to be for.
On January 09 2010 21:59 ghostWriter wrote: LOL ECONOMICS ADVISOR TO REAGAN reagonomics does not work.
The problem with many economists is that they consider economics to be a science, like chemistry or physics, and that the models and the theories they have created are all correct. Unregulated free markets don't work, except to make a tiny minority rich and to push everyone else into poverty. This happened around the world in countries like China, Russia, Brazil, Chile, Argentina, South Africa, etc.
Peter Schiff sounds like a very knowledgeable man. I can't believe that douchebag was laughing at him when he was talking about house prices falling. Although we can see in hindsight that he was correct, his ideas were sound. How could people have been so ridiculously short-sighted? Was it not obvious that we were overextending ourselves? Home prices were ridiculously inflated. "Sub-prime is a tiny blip" LOL
Although it may have been necessary, the bailout just increases moral hazard. We basically allowed for companies to be "too big to fail". The economy would have been damaged by their collapse, but it's what capitalism is all about. I can't believe that the bankers took all those risks and the taxpayers had to shoulder the burden. Certainly some of the big banks paid back, but there should be more regulation and the breaking up of these giants to prevent this kind of thing from happening again. Glass-Steagall should be re-implemented and there should be at least some kind of punitive measure taken. They're back to their old ways already and not lending out money to small business owners and entrepreneurs, despite the fact that that's what the money was supposed to be for.
While I respect your many other contributions, your first paragraph reveals a precocious complete misunderstanding of economics. Economics IS a science. It's even far more of a science than psychology because economics doesn't routinely suffer from inherent statistical biases in its practice. It uses the scientific method, and I will assure you, very rigorous when it comes to math. To most people (i.e. non-econ majors) economics seems to be abstract and a load of crap, which is true if you look at it without understanding the mathematical background that supports it. Basically, if you accept that the following assumptions are true:
Firstly, that somebody wants to buy stuff and somebody wants to sell stuff Secondly, that the amount of stuff people buy and sell depends on the price Thirdly, we can collectivize everybody's demand at a certain price (i.e. aggregating it)
You have no choice but to conclude that there is an optimal point where as many people can buy and sell (or participate in the market).
Of course, models don't work all the time. That's why economics is still here, otherwise we wouldn't need it. The purpose is to ask the question, why are people not responding to incentives properly? The answer, of course, is that almost all of the time, there is a certain factor (government interventions, asymmetric information, monopoly/monopsony, externalities) that is preventing the market from exerting its natural pressures.
Your entire argument for economics sounds like one of the crackpots' arguments for why evolution doesn't exist (i.e. it's too complex to be true)
I'm an economics minor, but I haven't progressed that far with the math, I admit. I am familiar with the basic precepts though. But, I misspoke. I didn't mean "not a science". I meant "not a hard science" like Chemistry or Physics. Psychology also fails in this regard. Chemists and Physicists use empirical data to create hypothesis and use experiments and observations to try to disprove a theory. It's a fact that a hydrogen atom has 1 proton and that water has 2 hydrogen atoms and 1 oxygen atom. It can be observed and it can be proven. In economics or psychology, research depends on observations that necessarily rely on conjecture and the analysis of the data. Two researchers with different backgrounds, for example, a Keynesian or a Friedmanian (not sure if this is the right description. Friendmanist? I suppose I will just go with the Chicago School) can look at the same data and one may say that we need more government regulation and the other will claim that we need less.
Also, in economics, you cannot have a perfect experimental setting, therefore, the models must be based on real-life situations which are inherently flawed. Nothing can be proved or claimed to be absolute fact. It's impossible to have a perfect free-market economy, especially in a democratic country since democracy and free market economies are intrinsically opposed to one another. It's been shown time and time again that a perfectly free economy does not work without a huge amount of repression and vast inequalities between the poor and the rich. Just take a look at China, Russia, Brazil, Argentina, Chile, etc.
I´ll contribute with the scariest movie I´ve ever seen. It´s in 22 parts and explains how the FED got in control and how FED came to rule the economy of the US. Bottom line in all this - FED is a private bank, with private stockholders and run purely for their private profit.
"The powers of financial capitalism had a far-reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole...Their secret is that they have annexed from governments, monarchies, and republics the power to create the world's money..." THE MONEY MASTERS is a 3 1/2 hour non-fiction, historical documentary that traces the origins of the political power structure that rules our nation and the world today. The modern political power structure has its roots in the hidden manipulation and accumulation of gold and other forms of money. The development of fractional reserve banking practices in the 17th century brought to a cunning sophistication the secret techniques initially used by goldsmiths fraudulently to accumulate wealth. With the formation of the privately-owned Bank of England in 1694, the yoke of economic slavery to a privately-owned "central" bank was first forced upon the backs of an entire nation, not removed but only made heavier with the passing of the three centuries to our day. Nation after nation, including America, has fallen prey to this cabal of international central bankers."
On January 09 2010 23:30 ghostWriter wrote: I'm an economics minor, but I haven't progressed that far with the math, I admit. I am familiar with the basic precepts though. But, I misspoke. I didn't mean "not a science". I meant "not a hard science" like Chemistry or Physics. Psychology also fails in this regard. Chemists and Physicists use empirical data to create hypothesis and use experiments and observations to try to disprove a theory. It's a fact that a hydrogen atom has 1 proton and that water has 2 hydrogen atoms and 1 oxygen atom. It can be observed and it can be proven. In economics or psychology, research depends on observations that necessarily rely on conjecture and the analysis of the data. Two researchers with different backgrounds, for example, a Keynesian or a Friedmanian (not sure if this is the right description. Friendmanist? I suppose I will just go with the Chicago School) can look at the same data and one may say that we need more government regulation and the other will claim that we need less.
Also, in economics, you cannot have a perfect experimental setting, therefore, the models must be based on real-life situations which are inherently flawed. Nothing can be proved or claimed to be absolute fact. It's impossible to have a perfect free-market economy, especially in a democratic country since democracy and free market economies are intrinsically opposed to one another. It's been shown time and time again that a perfectly free economy does not work without a huge amount of repression and vast inequalities between the poor and the rich. Just take a look at China, Russia, Brazil, Argentina, Chile, etc.
While you're right in some of what you're saying, the countries you used as examples of free market are rather hilarious. Most of them have state-owned energy industries, ie Russia/Argentina. While China heavily subsidizes and continues to subsidize major export corporations. They also manipulate their currency to keep their goods at lower prices to squeeze out the competition. They're some of the furthest things from a free market economy.
On January 09 2010 23:30 ghostWriter wrote: I'm an economics minor, but I haven't progressed that far with the math, I admit. I am familiar with the basic precepts though. But, I misspoke. I didn't mean "not a science". I meant "not a hard science" like Chemistry or Physics. Psychology also fails in this regard. Chemists and Physicists use empirical data to create hypothesis and use experiments and observations to try to disprove a theory. It's a fact that a hydrogen atom has 1 proton and that water has 2 hydrogen atoms and 1 oxygen atom. It can be observed and it can be proven. In economics or psychology, research depends on observations that necessarily rely on conjecture and the analysis of the data. Two researchers with different backgrounds, for example, a Keynesian or a Friedmanian (not sure if this is the right description. Friendmanist? I suppose I will just go with the Chicago School) can look at the same data and one may say that we need more government regulation and the other will claim that we need less.
Also, in economics, you cannot have a perfect experimental setting, therefore, the models must be based on real-life situations which are inherently flawed. Nothing can be proved or claimed to be absolute fact. It's impossible to have a perfect free-market economy, especially in a democratic country since democracy and free market economies are intrinsically opposed to one another. It's been shown time and time again that a perfectly free economy does not work without a huge amount of repression and vast inequalities between the poor and the rich. Just take a look at China, Russia, Brazil, Argentina, Chile, etc.
While you're right in some of what you're saying, the countries you used as examples of free market are rather hilarious. Most of them have state-owned energy industries, ie Russia/Argentina. While China heavily subsidizes and continues to subsidize major export corporations. They also manipulate their currency to keep their goods at lower prices to squeeze out the competition. They're some of the furthest things from a free market economy.
When I said perfectly free economy, I meant theoretically. Obviously, there's no such thing as a perfectly free economy, but back in the late 20th century, all of the countries I named have experimented with radical free-market policies, such as the privatization of many state-controlled organizations, through the influence of neoliberal economists. Where do you think the Russian Oligarchs or the Chinese Princelings came from? And when I said Russia, I meant the former Soviet Union.
On January 09 2010 16:51 StorkHwaiting wrote: This is something I disagree with Peter on. Universities are incubators for talent. Yes, I know, it sounds funny because there are tons of slacker kids that get through uni, but it's true. Universities are research centers and pretty much THE driving force of intellectualism in the USA.
Most public universities are constantly forced to pinch pennies. This is with the tuition and all that at current levels AND subsidization by the government. It's one of the few places that money should be invested by the gov't.
I have a question then, Universities used to be able to provide eduction to students at the worth of a months labor (using Peter's Yale numbers), why can they not, or are they not, able to do the same thing today (adjusting for inflation)?
You can't have a university run itself like a business. It doesn't work that way in academia. Someone may have a really great thesis on the differences in Roman and Greek naval warfare. That's not going to make money in the marketplace. A business-like university is not going to take on this student and support his masters/PhD. But his material is really valuable from an intellectual standpoint. You don't know what effects his intellectual research/material is going to have down the road. This kind of intangible benefit would be lost if you switched universities over to a business operation.
Many other types of intellectual arts would also be lost this way. Performing arts would not be able to get funding. etc etc. Most universities do not waste their money on crappy stuff. Most of them try to amass library collections, or fund research on nanotechnology, or buy a new MRI for their med students, etc etc. It's one of the few places where the money is generally well spent.
Football stadiums and things of that nature MAKE money for a university. They don't get funding for that shit, college football probably funds all the sports and a department on its own. I don't know, I've been through large state universities and for the most part, they are short on money, and they spend what they have in the right places.
All universities are businesses. If you don't think so, you're wrong. They have management, the president, managers, the dean of a specific area, and employees, teachers. They sell services, a degree that meets the standards set by the government that specifies that anyone who has earned the degree is of a certain intellectual and factual knowledge. Intellectual property is property, just like food or a house is. Do you think colleges are just educating people out of the goodness of their hearts? That teachers work to exactly pay for their needs? Entirely false.
What you are stating is that colleges are very poorly run businesses. What happens if you can't afford to supply a product, at a profit, that consumers are willing to purchase? You go out of business. What you are also talking about is investments. A company that makes fine fur coats could invest in PETA if they wanted. The only thing that matters is if they make a profit, so where a company invests money is irrelevant. Colleges are not teaching students for free, you may be confusing their profit margin in terms of gross money made. I could make 50% on a dollar or 10% on 10 dollars, the asset turnover ratio depends on industry and location along other factors.
On January 09 2010 15:40 StorkHwaiting wrote: You create liquidity literally by just printing more money, which is exactly what the Fed did in this situation. Then the Fed tries to keep inflation under control through monetary tools like T-bill auctions. You often see inflation following lock in step with how well bond auctions go. They're a barometer of demand/confidence in a currency. The Fed literally can create liquidity out of thin air, at least in the short-term. Which is one of the many reasons I think the Fed is a terrible institution.
The liquidity that WAS in the markets got destroyed long ago. If you look up at my earlier post where I explained the factors involved in the collapse it explains a great deal of it but a short version would be:
We had high liquidity due to low interest rates. This is because the Fed's interest rate roughly equals the cost of money for banks. The lower the cost of money, the more banks will lend to people. The amount banks are willing to lend to people are what is termed liquidity.
Once the liquidity was out there, the banks went to town. It's like throwing a meaty bone in front of starving dogs. Then basically all the financial groups were FORCED to take advantage of this free money.
Why were they forced?
Because if they didn't use it up, their competitor down the street was going to use it. And for the first few years it netted them HUGE profits. Any bank/investment group that didn't get in on the action would basically have been bankrupted due to being unable to compete. If you and another guy both know a stock is good but you only have $10 to buy with and he he as $10 mil, guess who's going to be making more money? Finance is that kind of game. The guy with more money usually wins because a lot of the good investments are clear to see. Yes, there are a lot of risky flips too but those aren't the bread and butter of financial groups.
So basically, you have banks and investment groups grabbing up every scrap of liquidity and then repackaging it to sell to other people over and over again until you have a single dollar strung out and lent out to seven different people.
Then what happens is five of those people come back and say "Yo, I can't pay you back that dollar. I spent it on a TV that my wife broke when she found out I cheated on her."
The money is gone. The liquidity is gone. The PAPER wealth that the company had recorded ended up being bullshit. All those "accounts receivable" turned into write offs as losses.
And that's why the bubble popped.
We didn't prevent it because well, most of our politicians either don't understand finance or are paid off by the investment groups. The people who did warn of impending failure were treated as laughingstocks and loonies. (I switched my major FROM finance because of this crisis. I saw it coming in 2006.) Most people in the industry were busy trying to grab shit while it was hot and talking about cashing out when they made their fortune. A lot of people thought they could ride the gravy train another year. And you know the rest.
I highly doubt you know what you're talking about, because every time you used the term liquidity, you use it as if liquidity is something you can touch, or feel, or that liquidity actually has a value. It doesn't. Liquidity is how you value, it doesn't have a value, and it can't add value to anything.
Liquidity: the ability or ease with which assets can be converted into cash.
I highly doubt you understand how liquidity actually operates in an economy. Otherwise, you probably wouldn't be here quoting basic definitions and expecting them to prove anything.
Liquidity is a measurement of how accessible cash is in the market. The entire point of liquidity is that if there's no freaking cash available, it's going to be pretty hard to trade your assets in for cash. Get it?
It's sort of like me saying a sword is a weapon and then you disagree with me because you think it's only a sharp object.
On January 09 2010 23:30 ghostWriter wrote: I'm an economics minor, but I haven't progressed that far with the math, I admit. I am familiar with the basic precepts though. But, I misspoke. I didn't mean "not a science". I meant "not a hard science" like Chemistry or Physics. Psychology also fails in this regard. Chemists and Physicists use empirical data to create hypothesis and use experiments and observations to try to disprove a theory. It's a fact that a hydrogen atom has 1 proton and that water has 2 hydrogen atoms and 1 oxygen atom. It can be observed and it can be proven. In economics or psychology, research depends on observations that necessarily rely on conjecture and the analysis of the data. Two researchers with different backgrounds, for example, a Keynesian or a Friedmanian (not sure if this is the right description. Friendmanist? I suppose I will just go with the Chicago School) can look at the same data and one may say that we need more government regulation and the other will claim that we need less.
Also, in economics, you cannot have a perfect experimental setting, therefore, the models must be based on real-life situations which are inherently flawed. Nothing can be proved or claimed to be absolute fact. It's impossible to have a perfect free-market economy, especially in a democratic country since democracy and free market economies are intrinsically opposed to one another. It's been shown time and time again that a perfectly free economy does not work without a huge amount of repression and vast inequalities between the poor and the rich. Just take a look at China, Russia, Brazil, Argentina, Chile, etc.
While you're right in some of what you're saying, the countries you used as examples of free market are rather hilarious. Most of them have state-owned energy industries, ie Russia/Argentina. While China heavily subsidizes and continues to subsidize major export corporations. They also manipulate their currency to keep their goods at lower prices to squeeze out the competition. They're some of the furthest things from a free market economy.
When I said perfectly free economy, I meant theoretically. Obviously, there's no such thing as a perfectly free economy, but back in the late 20th century, all of the countries I named have experimented with radical free-market policies, such as the privatization of many state-controlled organizations, through the influence of neoliberal economists. Where do you think the Russian Oligarchs or the Chinese Princelings came from? And when I said Russia, I meant the former Soviet Union.
They experimented with some liberalization of their markets. It is Nowhere near an actual free market. Not even close to halfway free. From everything I know about how heavily manipulated both of these economies are, I find it very difficult to agree with someone claiming China/Russia have more liberalized markets than the USA.
Russian oligarchs and Chinese princelings don't come from a free market. They're just people getting rich from economic growth. Where do you think Middle Eastern oil sheikhs came from? I don't quite get your point. Some people got rich so that means they have a free market economy?
I didn't say that they had a free market economy. I said they experimented with free-market policies. It's completely different, I don't know where you get off trying to equate the two. I even said "It's impossible to have a perfect free-market economy, especially in a democratic country since democracy and free market economies are intrinsically opposed to one another." These people got rich from the privatization of some state-owned organizations and their political ties that allowed them to exploit it. Oil sheikhs came from their discovery of oil. It's a different situation.
On January 09 2010 17:50 TOloseGT wrote: I'd just like to thank many of the educators on TL for giving us less knowledgeable people a chance to experience topics we would otherwise not have touched with a ten foot pole.
However, I'm not sure whether its the videos of ignorant TV hosts or whether its the doomsayers, but I'm seriously scared for my future and the future of the U.S.
I've known for a while now about the rampant consumerism and the raging debt and how "fortunate" we've been for the past couple of decades, but I will be graduating this summer and will hopefully enter the white collar labor market soon after, and my actual life will begin, so to speak. I would like to fatten my savings and raise a family in fashion similar to how I was raised when my parents moved here, but I suspect that won't be the case. It all seems like everything I will do in the future will not save me in the slightest from the ill-management of the Fed, and thus from an imminent collapse of society as we know it. Should I be scared?
Hey GT, It's hard to say at this point which way the US will swing. Things could get real ugly or things could cruise along with this broken system for another 30 years.
Then there's another group who believe that we're just riding the gravy train long enough to hit the next technological revolution. Remember, the only thing that truly expands the economic pie in a meaningful way is technological or organizational progress. AKA either a massive leap in productivity, or a massive leap in efficiency. Computers were a leap in both productivity and efficiency, which has fueled much of the boom in the 80's. We've kind of tapped that out now along with all the leveraging of US currency, but hey, maybe we can keep doing this dirty game until they come up with a new, just as revolutionary technology.
If you are interested in diversifying and lowering your exposure to the US economy, I'd suggest investing in some foreign things when you start making a real salary. Do some research, purchase some currencies of other nations that have a good record and do not rely on huge reserves of US currency. I'm a huge fan of commodities as well. Gold and silver are big winners in my book. If you put money in those, it'll hold most of its value and will insulate you in case the US dollar does have a massive drop in value.
Platinum's good too, but I think it's a bit more volatile because there's a smaller amount of it in the world (hence the higher price than gold) and it's used in certain industries, which could find a different material to use, thus lowering platinum's price. Gold's still the bread and butter.
There's oil, which is too overspeculated in my opinion. All kinds of commodities really. But I'd say gold/silver are the two best for just safety purposes. US treasury bonds used to be the safest investment for people trying to insulate themselves from risk, but it's sad how badly that's deteriorated nowadays.
On January 10 2010 03:33 ghostWriter wrote: I didn't say that they had a free market economy. I said they experimented with free-market policies. It's completely different, I don't know where you get off trying to equate the two. These people got rich from the privatization of some state-owned organizations and their political ties that allowed them to exploit it. Oil sheikhs came from their discovery of oil. It's a different situation.
There is nothing remotely "free" about what Russia and China did. They created markets where there were none before. Anyone would get rich doing that. Liberalization of markets is not FREE market. The vast majority of Chinese companies that developed "privately" aren't private at all. They're consistently run by government officials, or under the guidance of the government, and with a massive amount of subsidies, along with the manipulation of Chinese currency which eliminates any possibility of free market whatsoever.
How much do you actually know about how China developed under Deng Xiaoping? Are you just reading about "McDonaldization of China" in a textbook and then going "oh yeah, free market baby."
P.S. Oil sheikhs got rich because they had political ties that allowed them to exploit the oil in their country. Much like how a lot of Russians got rich because they had political ties that allowed them to exploit oil and natural gas in their country...It's kind of the same situation.
You got a warped sense of moral imperative. There is no way to compare the business institutions to a sick dehydrating individual because there is no moral imperative to save defunct organizations of men. So what if a few business go out of business?? Is the survival of these organizations sine qua non? Rather not, it's the jobs that that get displaced.
Once we focus on jobs, then the question is whether or not the jobs being done are worthwhile, profitable, good contributions to society, etc. When there is a failed business model in play, the answer is unequivocally no. Those jobs should not have been kept. People don't have jobs just for the sake of having jobs. They work in order to create wealth.
As for the series of bailouts you have to look at it this way. Wall Street has basically built a huge house on top of a really flawed foundation. The foundation is starting to crumble. The dilemma is do we the Taxpayers pour tons and tons of monies and materials to fix their foundation or do we tell Wall Street to take apart their house, salvage what they can, and build on more solid foundations?
Now in the end, taxpapers would have bailed out the banks in one way or another, but many more firms should have been railroaded through bankruptcy rather than bailout. So there would be more of a moment of panic where everyone thinks the sky is failing, but there will be a good panic, too, a mad dash to figure out which businesses are good which businesses are bad, what went wrong, and never do it again.
On January 10 2010 03:56 TanGeng wrote: StorkHwaiting,
You got a warped sense of moral imperative. There is no way to compare the business institutions to a sick dehydrating individual because there is no moral imperative to save defunct organizations of men. So what if a few business go out of business?? Is the survival of these organizations sine qua non? Rather not, it's the jobs that that get displaced.
Once we focus on jobs, then the question is whether or not the jobs being done are worthwhile, profitable, good contributions to society, etc. When there is a failed business model in play, the answer is unequivocally no. Those jobs should not have been kept. People don't have jobs just for the sake of having jobs. They work in order to create wealth.
As for the series of bailouts you have to look at it this way. Wall Street has basically built a huge house on top of a really flawed foundation. The foundation is starting to crumble. The dilemma is do we the Taxpayers pour tons and tons of monies and materials to fix their foundation or do we tell Wall Street to take apart their house, salvage what they can, and build on more solid foundations?
Now in the end, taxpapers would have bailed out the banks in one way or another, but many more firms should have been railroaded through bankruptcy rather than bailout. So there would be more of a moment of panic where everyone thinks the sky is failing, but there will be a good panic, too, a mad dash to figure out which businesses are good which businesses are bad, what went wrong, and never do it again.
You don't seem to realize it wasn't a few banks. It was the entire banking industry AND the government all leveraged to the hilt. It'd be really nice if every major bank went out of business right?
Do you realize that if all those banks went out of business, the government would have ended up paying even MORE money? It's called FDIC insured dude. The bailout would have been all the deposits on paper at all the banks rather than the $400 billion it has costed.
The bailout was a cheap band aid. The alternatives were even more costly. The "flaws" are the very foundations of the banking system and valuation system. Saying, lets just have all this crap sort itself out in the free market is not a solution. That's like saying my body's immune system will take care of cancer, no worries. The best fix would be getting rid of Fed and fiat currency IMO, but that's a drastic change and we're in the middle of recession/war.
On January 10 2010 03:33 ghostWriter wrote: I didn't say that they had a free market economy. I said they experimented with free-market policies. It's completely different, I don't know where you get off trying to equate the two. These people got rich from the privatization of some state-owned organizations and their political ties that allowed them to exploit it. Oil sheikhs came from their discovery of oil. It's a different situation.
There is nothing remotely "free" about what Russia and China did. They created markets where there were none before. Anyone would get rich doing that. Liberalization of markets is not FREE market. The vast majority of Chinese companies that developed "privately" aren't private at all. They're consistently run by government officials, or under the guidance of the government, and with a massive amount of subsidies, along with the manipulation of Chinese currency which eliminates any possibility of free market whatsoever.
How much do you actually know about how China developed under Deng Xiaoping? Are you just reading about "McDonaldization of China" in a textbook and then going "oh yeah, free market baby."
P.S. Oil sheikhs got rich because they had political ties that allowed them to exploit the oil in their country. Much like how a lot of Russians got rich because they had political ties that allowed them to exploit oil and natural gas in their country...It's kind of the same situation.
Actually quite to the contrary, there is plenty of free market in China. It's just not evident in the big companies. Most Chinese transactions are away from the eye of the Communist government in cash payments. The best examples of Chinese capitalism are the rural farming communities, street vendors, open air markets, and services oriented businesses being run out of people's homes.
The point of control by the Communist government was primarily through banks and their lending practices. This largely limits the Party control of the economy to the large glamorous capital intensive ventures like large scale factories, construction, and high tech investment. The Chinese economy isn't a perfect free economy, but the majority of its transactions are, and that's more than can be said for nearly any other country in the world.
On January 10 2010 03:56 TanGeng wrote: StorkHwaiting,
You got a warped sense of moral imperative. There is no way to compare the business institutions to a sick dehydrating individual because there is no moral imperative to save defunct organizations of men. So what if a few business go out of business?? Is the survival of these organizations sine qua non? Rather not, it's the jobs that that get displaced.
Once we focus on jobs, then the question is whether or not the jobs being done are worthwhile, profitable, good contributions to society, etc. When there is a failed business model in play, the answer is unequivocally no. Those jobs should not have been kept. People don't have jobs just for the sake of having jobs. They work in order to create wealth.
As for the series of bailouts you have to look at it this way. Wall Street has basically built a huge house on top of a really flawed foundation. The foundation is starting to crumble. The dilemma is do we the Taxpayers pour tons and tons of monies and materials to fix their foundation or do we tell Wall Street to take apart their house, salvage what they can, and build on more solid foundations?
Now in the end, taxpapers would have bailed out the banks in one way or another, but many more firms should have been railroaded through bankruptcy rather than bailout. So there would be more of a moment of panic where everyone thinks the sky is failing, but there will be a good panic, too, a mad dash to figure out which businesses are good which businesses are bad, what went wrong, and never do it again.
You don't seem to realize it wasn't a few banks. It was the entire banking industry AND the government all leveraged to the hilt. It'd be really nice if every major bank went out of business right?
Do you realize that if all those banks went out of business, the government would have ended up paying even MORE money? It's called FDIC insured dude. The bailout would have been all the deposits on paper at all the banks rather than the $400 billion it has costed.
The bailout was a cheap band aid. The alternatives were even more costly. The "flaws" are the very foundations of the banking system and valuation system. Saying, lets just have all this crap sort itself out in the free market is not a solution. That's like saying my body's immune system will take care of cancer, no worries. The best fix would be getting rid of Fed and fiat currency IMO, but that's a drastic change and we're in the middle of recession/war.
Not all banks were terrible, and many of the larger banks would have just been split up and sold, and as far as total bailout costs, you still have no clue what it will cost in the end.
$400 billion? Where are you getting your numbers from kiddo. There's TARP, Stimulus, and Federal Reserve activities. You won't find out the true cost of the bailout until the Fed opens up its balance sheet. I'm betting that it's over 3 trillion.
On January 10 2010 03:33 ghostWriter wrote: I didn't say that they had a free market economy. I said they experimented with free-market policies. It's completely different, I don't know where you get off trying to equate the two. These people got rich from the privatization of some state-owned organizations and their political ties that allowed them to exploit it. Oil sheikhs came from their discovery of oil. It's a different situation.
There is nothing remotely "free" about what Russia and China did. They created markets where there were none before. Anyone would get rich doing that. Liberalization of markets is not FREE market. The vast majority of Chinese companies that developed "privately" aren't private at all. They're consistently run by government officials, or under the guidance of the government, and with a massive amount of subsidies, along with the manipulation of Chinese currency which eliminates any possibility of free market whatsoever.
How much do you actually know about how China developed under Deng Xiaoping? Are you just reading about "McDonaldization of China" in a textbook and then going "oh yeah, free market baby."
P.S. Oil sheikhs got rich because they had political ties that allowed them to exploit the oil in their country. Much like how a lot of Russians got rich because they had political ties that allowed them to exploit oil and natural gas in their country...It's kind of the same situation.
Actually quite to the contrary, there is plenty of free market in China. It's just not evident in the big companies. Most Chinese transactions are away from the eye of the Communist government in cash payments. The best examples of Chinese capitalism are the rural farming communities, street vendors, open air markets, and services oriented businesses being run out of people's homes.
The point of control by the Communist government was primarily through banks and their lending practices. This largely limits the Party control of the economy to the large glamorous capital intensive ventures like large scale factories, construction, and high tech investment. The Chinese economy isn't a perfect free economy, but the majority of its transactions are, and that's more than can be said for nearly any other country in the world.
While what you say is true, it's not at all what ghostwriter was talking about. He is talking about them in terms of national economies and specifically focusing on the large industries you're mentioning are state-run.
Also, when you say "majority of Chinese transactions," you may mean in volume, but in dollar value it's far from the majority. I can't give you a specific number for obvious reasons, but just because there are a lot of people doing it doesn't mean it constitutes a large percentage of China's GDP.
On January 10 2010 03:33 ghostWriter wrote: I didn't say that they had a free market economy. I said they experimented with free-market policies. It's completely different, I don't know where you get off trying to equate the two. These people got rich from the privatization of some state-owned organizations and their political ties that allowed them to exploit it. Oil sheikhs came from their discovery of oil. It's a different situation.
There is nothing remotely "free" about what Russia and China did. They created markets where there were none before. Anyone would get rich doing that. Liberalization of markets is not FREE market. The vast majority of Chinese companies that developed "privately" aren't private at all. They're consistently run by government officials, or under the guidance of the government, and with a massive amount of subsidies, along with the manipulation of Chinese currency which eliminates any possibility of free market whatsoever.
How much do you actually know about how China developed under Deng Xiaoping? Are you just reading about "McDonaldization of China" in a textbook and then going "oh yeah, free market baby."
P.S. Oil sheikhs got rich because they had political ties that allowed them to exploit the oil in their country. Much like how a lot of Russians got rich because they had political ties that allowed them to exploit oil and natural gas in their country...It's kind of the same situation.
You're repeating everything I'm said and trying to make it sound like I said something else. I never said they had a free market and this is the second time I'm repeating this statement. Hopefully, you'll read it this time. For someone who claims that he's a writer, you're pretty bad at reading. Also, family ties and political ties aren't the same thing, but yeah I guess it is the same situation.
On January 10 2010 03:56 TanGeng wrote: StorkHwaiting,
You got a warped sense of moral imperative. There is no way to compare the business institutions to a sick dehydrating individual because there is no moral imperative to save defunct organizations of men. So what if a few business go out of business?? Is the survival of these organizations sine qua non? Rather not, it's the jobs that that get displaced.
Once we focus on jobs, then the question is whether or not the jobs being done are worthwhile, profitable, good contributions to society, etc. When there is a failed business model in play, the answer is unequivocally no. Those jobs should not have been kept. People don't have jobs just for the sake of having jobs. They work in order to create wealth.
As for the series of bailouts you have to look at it this way. Wall Street has basically built a huge house on top of a really flawed foundation. The foundation is starting to crumble. The dilemma is do we the Taxpayers pour tons and tons of monies and materials to fix their foundation or do we tell Wall Street to take apart their house, salvage what they can, and build on more solid foundations?
Now in the end, taxpapers would have bailed out the banks in one way or another, but many more firms should have been railroaded through bankruptcy rather than bailout. So there would be more of a moment of panic where everyone thinks the sky is failing, but there will be a good panic, too, a mad dash to figure out which businesses are good which businesses are bad, what went wrong, and never do it again.
You don't seem to realize it wasn't a few banks. It was the entire banking industry AND the government all leveraged to the hilt. It'd be really nice if every major bank went out of business right?
Do you realize that if all those banks went out of business, the government would have ended up paying even MORE money? It's called FDIC insured dude. The bailout would have been all the deposits on paper at all the banks rather than the $400 billion it has costed.
The bailout was a cheap band aid. The alternatives were even more costly. The "flaws" are the very foundations of the banking system and valuation system. Saying, lets just have all this crap sort itself out in the free market is not a solution. That's like saying my body's immune system will take care of cancer, no worries. The best fix would be getting rid of Fed and fiat currency IMO, but that's a drastic change and we're in the middle of recession/war.
Not all banks were terrible, and many of the larger banks would have just been split up and sold, and as far as total bailout costs, you still have no clue what it will cost in the end.
$400 billion? Where are you getting your numbers from kiddo. There's TARP, Stimulus, and Federal Reserve activities. You won't find out the true cost of the bailout until the Fed opens up its balance sheet. I'm betting that it's over 3 trillion.
You know what the true cost is, kiddo? Nothing. Coz it's all funny money. How's that?
Further, you're starting to just lump shit together. Define "Stimulus." Define "Federal Reserve activities."
You're listing these things as if all of them are directly related to the bailout. They're not. The bailout is what it is. Don't try to fudge things by bringing in all kinds of unrelated factors. You think if they didn't bail out the banks, they wouldn't have put together a stimulus package? And the Fed would have altogether ceased its activities?
It's impossible for you to put a dollar amount on every major move that was directly related to the banking crisis. And much of what goes on at the Fed are normal, routine activities that they would do to finance the war or control monetary policy. Trying to put a "cost" on the Fed's activities is nonsensical. The only way to tell the cost is by looking at inflation/CPI. And I can guarantee you inflation would have risen dramatically if the world financial markets watched Citigroup, Goldman Sachs, Chase, and BofA go in the shitter.
On January 10 2010 03:56 TanGeng wrote: StorkHwaiting,
You got a warped sense of moral imperative. There is no way to compare the business institutions to a sick dehydrating individual because there is no moral imperative to save defunct organizations of men. So what if a few business go out of business?? Is the survival of these organizations sine qua non? Rather not, it's the jobs that that get displaced.
Once we focus on jobs, then the question is whether or not the jobs being done are worthwhile, profitable, good contributions to society, etc. When there is a failed business model in play, the answer is unequivocally no. Those jobs should not have been kept. People don't have jobs just for the sake of having jobs. They work in order to create wealth.
As for the series of bailouts you have to look at it this way. Wall Street has basically built a huge house on top of a really flawed foundation. The foundation is starting to crumble. The dilemma is do we the Taxpayers pour tons and tons of monies and materials to fix their foundation or do we tell Wall Street to take apart their house, salvage what they can, and build on more solid foundations?
Now in the end, taxpapers would have bailed out the banks in one way or another, but many more firms should have been railroaded through bankruptcy rather than bailout. So there would be more of a moment of panic where everyone thinks the sky is failing, but there will be a good panic, too, a mad dash to figure out which businesses are good which businesses are bad, what went wrong, and never do it again.
You don't seem to realize it wasn't a few banks. It was the entire banking industry AND the government all leveraged to the hilt. It'd be really nice if every major bank went out of business right?
Do you realize that if all those banks went out of business, the government would have ended up paying even MORE money? It's called FDIC insured dude. The bailout would have been all the deposits on paper at all the banks rather than the $400 billion it has costed.
The bailout was a cheap band aid. The alternatives were even more costly. The "flaws" are the very foundations of the banking system and valuation system. Saying, lets just have all this crap sort itself out in the free market is not a solution. That's like saying my body's immune system will take care of cancer, no worries. The best fix would be getting rid of Fed and fiat currency IMO, but that's a drastic change and we're in the middle of recession/war.
Not all banks were terrible, and many of the larger banks would have just been split up and sold, and as far as total bailout costs, you still have no clue what it will cost in the end.
$400 billion? Where are you getting your numbers from kiddo. There's TARP, Stimulus, and Federal Reserve activities. You won't find out the true cost of the bailout until the Fed opens up its balance sheet. I'm betting that it's over 3 trillion.
You know what the true cost is, kiddo? Nothing. Coz it's all funny money. How's that?
Further, you're starting to just lump shit together. Define "Stimulus." Define "Federal Reserve activities."
You're listing these things as if all of them are directly related to the bailout. They're not. The bailout is what it is. Don't try to fudge things by bringing in all kinds of unrelated factors. You think if they didn't bail out the banks, they wouldn't have put together a stimulus package? And the Fed would have altogether ceased its activities?
It's impossible for you to put a dollar amount on every major move that was directly related to the banking crisis. And much of what goes on at the Fed are normal, routine activities that they would do to finance the war or control monetary policy. Trying to put a "cost" on the Fed's activities is nonsensical. The only way to tell the cost is by looking at inflation/CPI. And I can guarantee you inflation would have risen dramatically if the world financial markets watched Citigroup, Goldman Sachs, Chase, and BofA go in the shitter.
The primary point is that considering the magnitude of the specific "Bailout" of $400 billion. It couldn't have stopped the domino of bankruptcies that you think would have happened on its own right. Since that's the case, your $400 billion dollars has done nothing at all.
Or are you trying to argue that the measly $400 billion stopped all of that from happening. HAHAHAHAHAHA
It's been shown time and time again that a perfectly free economy does not work without a huge amount of repression and vast inequalities between the poor and the rich.
This is your original statement. Don't say I lack reading comprehension when you can't even keep track of your own words.
This statement does not equal "China dabbled in free market policies."
On January 10 2010 03:56 TanGeng wrote: StorkHwaiting,
You got a warped sense of moral imperative. There is no way to compare the business institutions to a sick dehydrating individual because there is no moral imperative to save defunct organizations of men. So what if a few business go out of business?? Is the survival of these organizations sine qua non? Rather not, it's the jobs that that get displaced.
Once we focus on jobs, then the question is whether or not the jobs being done are worthwhile, profitable, good contributions to society, etc. When there is a failed business model in play, the answer is unequivocally no. Those jobs should not have been kept. People don't have jobs just for the sake of having jobs. They work in order to create wealth.
As for the series of bailouts you have to look at it this way. Wall Street has basically built a huge house on top of a really flawed foundation. The foundation is starting to crumble. The dilemma is do we the Taxpayers pour tons and tons of monies and materials to fix their foundation or do we tell Wall Street to take apart their house, salvage what they can, and build on more solid foundations?
Now in the end, taxpapers would have bailed out the banks in one way or another, but many more firms should have been railroaded through bankruptcy rather than bailout. So there would be more of a moment of panic where everyone thinks the sky is failing, but there will be a good panic, too, a mad dash to figure out which businesses are good which businesses are bad, what went wrong, and never do it again.
You don't seem to realize it wasn't a few banks. It was the entire banking industry AND the government all leveraged to the hilt. It'd be really nice if every major bank went out of business right?
Do you realize that if all those banks went out of business, the government would have ended up paying even MORE money? It's called FDIC insured dude. The bailout would have been all the deposits on paper at all the banks rather than the $400 billion it has costed.
The bailout was a cheap band aid. The alternatives were even more costly. The "flaws" are the very foundations of the banking system and valuation system. Saying, lets just have all this crap sort itself out in the free market is not a solution. That's like saying my body's immune system will take care of cancer, no worries. The best fix would be getting rid of Fed and fiat currency IMO, but that's a drastic change and we're in the middle of recession/war.
Not all banks were terrible, and many of the larger banks would have just been split up and sold, and as far as total bailout costs, you still have no clue what it will cost in the end.
$400 billion? Where are you getting your numbers from kiddo. There's TARP, Stimulus, and Federal Reserve activities. You won't find out the true cost of the bailout until the Fed opens up its balance sheet. I'm betting that it's over 3 trillion.
You know what the true cost is, kiddo? Nothing. Coz it's all funny money. How's that?
Further, you're starting to just lump shit together. Define "Stimulus." Define "Federal Reserve activities."
You're listing these things as if all of them are directly related to the bailout. They're not. The bailout is what it is. Don't try to fudge things by bringing in all kinds of unrelated factors. You think if they didn't bail out the banks, they wouldn't have put together a stimulus package? And the Fed would have altogether ceased its activities?
It's impossible for you to put a dollar amount on every major move that was directly related to the banking crisis. And much of what goes on at the Fed are normal, routine activities that they would do to finance the war or control monetary policy. Trying to put a "cost" on the Fed's activities is nonsensical. The only way to tell the cost is by looking at inflation/CPI. And I can guarantee you inflation would have risen dramatically if the world financial markets watched Citigroup, Goldman Sachs, Chase, and BofA go in the shitter.
The primary point is that considering the magnitude of the specific "Bailout" of $400 billion. It couldn't have stopped the domino of bankruptcies that you think would have happened on its own right. Since that's the case, your $400 billion dollars has done nothing at all.
Or are you trying to argue that the measly $400 billion stopped all of that from happening. HAHAHAHAHAHA
It did stop a collapse. Why are you laughing? These banks weren't horribly insolvent, they just got caught without any cash on hand. You do realize that banks need cash to make money right? The bailout gave them the little bit they needed to get things rolling again, then they were back to making money, doing mergers etc and stretching things out so they didn't get hit by all of the losses at once.
What the Fed did was keep interest rates low and issue bonds to pay for the bailout. Yeah, I'm sure that's going to cost 3 trillion dollars. Especially considering half the TARP funds aren't even used and a great deal of it is being paid back.
This is probably my last post to you because you've shown very little understand of economics and you've acted immature with your all caps screaming and HAHHAHAs. Don't be a monkey if you want people to respect what you say.
It's been shown time and time again that a perfectly free economy does not work without a huge amount of repression and vast inequalities between the poor and the rich.
This is your original statement. Don't say I lack reading comprehension when you can't even keep track of your own words.
This statement does not equal "China dabbled in free market policies."
I said a perfectly free economy doesn't work. I said they tried some free market tactics. I also said that a perfectly free economy is impossible. Keep track of my words if you're able to look up and read what I wrote.
No, you said what I quoted above. Which implies that a perfectly free economy works WITH a huge amount of repression and vast inequalities between the poor and rich. All your subsequent comments are an attempt to bend over backwards to not admit you were wrong.
You even listed a bunch of countries as if they're examples of free markets. Afterwords, you appended that to "they tried free market tactics." Kind of weak, tbh.
Right. Any person with any background in economics could tell you that they aren't examples of free markets and any person with half a brain would be able to tell that that couldn't have been my intention.
On January 09 2010 12:38 StorkHwaiting wrote: And, personally, on the issue of currency I'm a strong believer in money backed by some real good. Be it gold, oil, whatever. There need to be reserves that the currency can be redeemed for. Fiat currency is artificial and that's why it can be manipulated so heavily. It has no basis in reality.
I agree with you, there needs to be innovation in currency. It is illegal in the US and most of the world to use different types of currency. There should be no restriction on the government deciding what has value and what doesn't. We need to rethink the idea of currency for the digital age, where you can have competing trusted organizations that can virtually represent rarity. We once used gold, silver, or sea shells because they were finite scalable substances in demand that we gave value, but data in the form of base ten digits on protected servers could do the same thing. PayPal already does this but that is further backed by the dollar, or whatever it might be in that country. There has to be a lot of competition within the market and proper safeguards (that we all can understand) enacted but it will work. Then you won't have governments or organizations flooding and inflating their currencies out of greed.
On January 10 2010 03:20 StorkHwaiting wrote: I highly doubt you understand how liquidity actually operates in an economy. Otherwise, you probably wouldn't be here quoting basic definitions and expecting them to prove anything.
Liquidity is a measurement of how accessible cash is in the market. The entire point of liquidity is that if there's no freaking cash available, it's going to be pretty hard to trade your assets in for cash. Get it?
It's sort of like me saying a sword is a weapon and then you disagree with me because you think it's only a sharp object.
Liquidity isn't how accessible cash is in a market, read it's definition. Liquidity: the ability or ease with which assets can be converted into cash. There is no other definition of liquidity, unless you're reading someone making it up (read: You).
Cash and cash substitutes are considered equal in liquidity. What you are saying is cash is the only way to measure liquidity, which is entirely false. It's like you saying a sword is the only weapon in the world because nothing else is as sharp.
A house can be as liquid as cash, depending on the discount you are willing to sell it at. There could be an unlimited amount of cash, but if all my AR are bad debt, they will have no liquidity.
On January 10 2010 03:20 StorkHwaiting wrote: I highly doubt you understand how liquidity actually operates in an economy. Otherwise, you probably wouldn't be here quoting basic definitions and expecting them to prove anything.
Liquidity is a measurement of how accessible cash is in the market. The entire point of liquidity is that if there's no freaking cash available, it's going to be pretty hard to trade your assets in for cash. Get it?
It's sort of like me saying a sword is a weapon and then you disagree with me because you think it's only a sharp object.
Liquidity isn't how accessible cash is in a market, read it's definition. Liquidity: the ability or ease with which assets can be converted into cash. There is no other definition of liquidity, unless you're reading someone making it up (read: You).
Cash and cash substitutes are considered equal in liquidity. What you are saying is cash is the only way to measure liquidity, which is entirely false. It's like you saying a sword is the only weapon in the world because nothing else is as sharp.
A house can be as liquid as cash, depending on the discount you are willing to sell it at. There could be an unlimited amount of cash, but if all my AR are bad debt, they will have no liquidity.
Thanks, Econ 101. When you get to Econ 401, maybe you can come back and have this conversation over again.
On January 10 2010 07:37 StorkHwaiting wrote: Thanks, Econ 101. When you get to Econ 401, maybe you can come back and have this conversation over again.
Cool, no argument, just an insult. Thanks for showing that I'm right.
On January 10 2010 07:37 StorkHwaiting wrote: Thanks, Econ 101. When you get to Econ 401, maybe you can come back and have this conversation over again.
Cool, no argument, just an insult. Thanks for showing that I'm right.
You can't even differentiate between liquidity of an asset and liquidity of the financial market lol.
On January 09 2010 12:38 StorkHwaiting wrote: And, personally, on the issue of currency I'm a strong believer in money backed by some real good. Be it gold, oil, whatever. There need to be reserves that the currency can be redeemed for. Fiat currency is artificial and that's why it can be manipulated so heavily. It has no basis in reality.
I agree with you, there needs to be innovation in currency. It is illegal in the US and most of the world to use different types of currency. There should be no restriction on the government deciding what has value and what doesn't. We need to rethink the idea of currency for the digital age, where you can have competing trusted organizations that can virtually represent rarity. We once used gold, silver, or sea shells because they were finite scalable substances in demand that we gave value, but data in the form of base ten digits on protected servers could do the same thing. PayPal already does this but that is further backed by the dollar, or whatever it might be in that country. There has to be a lot of competition within the market and proper safeguards (that we all can understand) enacted but it will work. Then you won't have governments or organizations flooding and inflating their currencies out of greed.
That's a pretty interesting concept and it does bring a greater amount of competitiveness than we currently have.
My issue with it is that it's still another form of fiat currency. As long as currency is fiat, then its value can be manipulated arbitrarily.
Then again, that's kind of the reason they invented fiat currency in the first place. So governments could manipulate their currencies for economic gain. It can be argued that it helps modulate volatility, but it's a tool that the American gov't (and many other gov'ts with fiat currency) have chosen to abuse in unethical fashion.
On January 10 2010 07:58 StorkHwaiting wrote: You can't even differentiate between liquidity of an asset and liquidity of the financial market lol.
Liquidity isn't how accessible cash is in a market, read it's definition. Liquidity: the ability or ease with which assets can be converted into cash. There is no other definition of liquidity, unless you're reading someone making it up (read: You).
On January 10 2010 07:56 SnK-Arcbound wrote: Cool, no argument, just an insult. Thanks for showing that I'm right.
SnK-Arcbound please browse some financial dictionaries on what liquidity means in reference to the market. Further contention over the term when your position is downright incorrect wastes your own time.
Liquidity isn't how accessible cash is in a market, read it's definition. Liquidity: the ability or ease with which assets can be converted into cash. There is no other definition of liquidity, unless you're reading someone making it up (read: You).
On January 10 2010 07:56 SnK-Arcbound wrote: Cool, no argument, just an insult. Thanks for showing that I'm right.
Jesus Christ.
How much simpler can I make this for you?
Liquidity = ease with which assets can be converted into cash.
If there's NO cash in the market, how liquid does an asset become?
You're sitting here looking at the asset end and totally failing to understand the concept that you could lower the price of a house to $1 and you still won't sell it when nobody has $1 to spend. There are two sides to liquidity. BUYERS and SELLERS.
Therefore, when someone talks about market liquidity, they're talking about how many buyers/sellers are available in the market. When nobody has money, guess how many buyers there are in the market?
You, unfortunately, can't seem to grasp this extremely simple concept. And somehow, you think the entire financial industry, which quite often refers to market liquidity, must be wrong as well. Since, apparently, you can quote definitions of liquidity.
Its good to see there are still some intelligent people running in the US, I just wish the general public would stop being ignorant so that we can get people like this into high level government positions.
Oh crap a politics thread. Question: If the government is a failed business, shouldn't it be dissolved as well? Anarcho-capitalist detected. Boooom! ...just some food for thought.
this guy keeps claiming hyperinflation will take over and send us into an apocalypse... but it's just not going to happen. hyperinflation = an inflation rate over at least 50 percent.
On January 10 2010 10:24 d_so wrote: this guy keeps claiming hyperinflation will take over and send us into an apocalypse... but it's just not going to happen. hyperinflation = an inflation rate over at least 50 percent.
Hyperinflation will occur when the Fed runs out of other nations willing to buy our bonds and continues to print money to pay for government deficit spending. A prospect that's increasingly likely with the way both parties are running the country.
On January 10 2010 10:24 d_so wrote: this guy keeps claiming hyperinflation will take over and send us into an apocalypse... but it's just not going to happen. hyperinflation = an inflation rate over at least 50 percent.
Hyperinflation is 10% edit: a year.
On January 10 2010 09:12 StorkHwaiting wrote: Jesus Christ.
How much simpler can I make this for you?
Liquidity = ease with which assets can be converted into cash.
If there's NO cash in the market, how liquid does an asset become?
You're sitting here looking at the asset end and totally failing to understand the concept that you could lower the price of a house to $1 and you still won't sell it when nobody has $1 to spend. There are two sides to liquidity. BUYERS and SELLERS.
Therefore, when someone talks about market liquidity, they're talking about how many buyers/sellers are available in the market. When nobody has money, guess how many buyers there are in the market?
You, unfortunately, can't seem to grasp this extremely simple concept. And somehow, you think the entire financial industry, which quite often refers to market liquidity, must be wrong as well. Since, apparently, you can quote definitions of liquidity.
How many people own dogs if no dogs exist. None, wow amazing! That's a nice strawman you built there.
Money always exists in a market. The only thing you are creating by printing money is inflation. There are always buyers, and there are always sellers. We are at a fake, impossible, nonexistant high for houses. If you try and slow down the fall, you are merely keeping houses up with another bubble. Sure, print money if you want another bubble, what a brilliant idea, put easy money into the market to solve the problem that easy money created.
You aren't solving the problem, you are feeding it. Inflation as a solution for a recession, great idea. Inflation as the solution for debt, great idea. You mix your own personal feelings in with minimal historical evidence to try and reach your predetermined conclusion that you solve the problem the same way you created it.
You think that the bailouts were good. Peter Schiff doesn't. Peter Schiff has been right for the past 20 years. Now should we believe you mister economy student, or someone who has accurately predicted the economy for 20 years?
On January 10 2010 10:24 d_so wrote: this guy keeps claiming hyperinflation will take over and send us into an apocalypse... but it's just not going to happen. hyperinflation = an inflation rate over at least 50 percent.
On January 10 2010 09:12 StorkHwaiting wrote: Jesus Christ.
How much simpler can I make this for you?
Liquidity = ease with which assets can be converted into cash.
If there's NO cash in the market, how liquid does an asset become?
You're sitting here looking at the asset end and totally failing to understand the concept that you could lower the price of a house to $1 and you still won't sell it when nobody has $1 to spend. There are two sides to liquidity. BUYERS and SELLERS.
Therefore, when someone talks about market liquidity, they're talking about how many buyers/sellers are available in the market. When nobody has money, guess how many buyers there are in the market?
You, unfortunately, can't seem to grasp this extremely simple concept. And somehow, you think the entire financial industry, which quite often refers to market liquidity, must be wrong as well. Since, apparently, you can quote definitions of liquidity.
How many people own dogs if no dogs exist. None, wow amazing! That's a nice strawman you built there.
Money always exists in a market. The only thing you are creating by printing money is inflation. There are always buyers, and there are always sellers. We are at a fake, impossible, nonexistant high for houses. If you try and slow down the fall, you are merely keeping houses up with another bubble. Sure, print money if you want another bubble, what a brilliant idea, put easy money into the market to solve the problem that easy money created.
You aren't solving the problem, you are feeding it. Inflation as a solution for a recession, great idea. Inflation as the solution for debt, great idea. You mix your own personal feelings in with minimal historical evidence to try and reach your predetermined conclusion that you solve the problem the same way you created it.
You think that the bailouts were good. Peter Schiff doesn't. Peter Schiff has been right for the past 20 years. Now should we believe you mister economy student, or someone who has accurately predicted the economy for 20 years?
I'm not an economy student. I majored in creative writing lol. I don't think the bailout was good at all. I think it was a band-aid for a failing system. What I did say was that it brought liquidity to a system that needed it. If you actually read anything I wrote you'd see that I think the entire system should be abolished.
Edit: P.S. Money doesn't always exist. Peep the Great Depression.
I just want to point out how funny it is that many of the same people who absolutely fear government power when it comes to military issues are suddenly willing to trust the government all the way when it comes down to economic issues.
When I went to get my M.Ed. I took a course in adult education, which was basically best practices for teaching people high-school age and up. It turned out that half of the class was about actual teaching practices, and the other half was about trends in colleges and universities business plans, and the pressures that colleges and universities business models are increasingly placing on professors.
Sorry, but colleges/universities ARE businesses. They fit a unique role within our society and so disguise themselves as irreplaceable social institutions, but they shouldn't be exalted beyond what they actually are.
On January 10 2010 15:07 monolith94 wrote: When I went to get my M.Ed. I took a course in adult education, which was basically best practices for teaching people high-school age and up. It turned out that half of the class was about actual teaching practices, and the other half was about trends in colleges and universities business plans, and the pressures that colleges and universities business models are increasingly placing on professors.
Sorry, but colleges/universities ARE businesses. They fit a unique role within our society and so disguise themselves as irreplaceable social institutions, but they shouldn't be exalted beyond what they actually are.
OK, I'll state that I was wrong and should have worded what I meant differently. What I should say is that I don't think universities should be run as businesses because they fail as such. Instead, I think universities should be FURTHER subsidized so that the focus can be on education/research and not money-making.
Universities are one of the biggest drivers of research in the United States. They're also one of the most important social institutions for training and directing our labor force. To NOT provide subsidization and government funding to such an important facet of our society would be a net loss for our country in my opinion.
Now, I'm nowhere near as adamant on this subject as I am on some of the other economic issues brought up in this thread. I'll be the first to admit that I don't know anywhere near enough about the education system to comment in any meaningful way. So I probably shouldn't have started that debate and I apologize for saying dumb things.
I personally think that we have developed a culture of collegiate and university level exuberant excess. So many of the buildings at these colleges and universities are inflated in price so as to increase the aesthetic appeal and thus the prestige of the college. Colleges and universities DO have additional funding needs if they're heavy into science and math, but most humanities departments shouldn't be driving up the cost of college excessively.
Alternatively, we could just sit around and wait for the singularity to solve this whole messy problem…
On January 10 2010 15:07 monolith94 wrote: When I went to get my M.Ed. I took a course in adult education, which was basically best practices for teaching people high-school age and up. It turned out that half of the class was about actual teaching practices, and the other half was about trends in colleges and universities business plans, and the pressures that colleges and universities business models are increasingly placing on professors.
Sorry, but colleges/universities ARE businesses. They fit a unique role within our society and so disguise themselves as irreplaceable social institutions, but they shouldn't be exalted beyond what they actually are.
OK, I'll state that I was wrong and should have worded what I meant differently. What I should say is that I don't think universities should be run as businesses because they fail as such. Instead, I think universities should be FURTHER subsidized so that the focus can be on education/research and not money-making.
Universities are one of the biggest drivers of research in the United States. They're also one of the most important social institutions for training and directing our labor force. To NOT provide subsidization and government funding to such an important facet of our society would be a net loss for our country in my opinion.
Now, I'm nowhere near as adamant on this subject as I am on some of the other economic issues brought up in this thread. I'll be the first to admit that I don't know anywhere near enough about the education system to comment in any meaningful way. So I probably shouldn't have started that debate and I apologize for saying dumb things.
The agricultural sector is the biggest supplier of food in the United States. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. The supermarkets is the biggest business model that sells food in the United States. It is vital to provide food for people. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. The construction sector is the biggest supplier of houses. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. Blablabla into ad nauseum... The same argument could be used for essentially everything sooooooooooooooooooooooooooooooooooo glhf
On January 10 2010 15:07 monolith94 wrote: When I went to get my M.Ed. I took a course in adult education, which was basically best practices for teaching people high-school age and up. It turned out that half of the class was about actual teaching practices, and the other half was about trends in colleges and universities business plans, and the pressures that colleges and universities business models are increasingly placing on professors.
Sorry, but colleges/universities ARE businesses. They fit a unique role within our society and so disguise themselves as irreplaceable social institutions, but they shouldn't be exalted beyond what they actually are.
OK, I'll state that I was wrong and should have worded what I meant differently. What I should say is that I don't think universities should be run as businesses because they fail as such. Instead, I think universities should be FURTHER subsidized so that the focus can be on education/research and not money-making.
Universities are one of the biggest drivers of research in the United States. They're also one of the most important social institutions for training and directing our labor force. To NOT provide subsidization and government funding to such an important facet of our society would be a net loss for our country in my opinion.
Now, I'm nowhere near as adamant on this subject as I am on some of the other economic issues brought up in this thread. I'll be the first to admit that I don't know anywhere near enough about the education system to comment in any meaningful way. So I probably shouldn't have started that debate and I apologize for saying dumb things.
The agricultural sector is the biggest supplier of food in the United States. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. The supermarkets is the biggest business model that sells food in the United States. It is vital to provide food for people. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. The construction sector is the biggest supplier of houses. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. Blablabla into ad nauseum... The same argument could be used for essentially everything sooooooooooooooooooooooooooooooooooo glhf
Good points. But was the sooooooo really necessary?
On January 10 2010 15:07 monolith94 wrote: When I went to get my M.Ed. I took a course in adult education, which was basically best practices for teaching people high-school age and up. It turned out that half of the class was about actual teaching practices, and the other half was about trends in colleges and universities business plans, and the pressures that colleges and universities business models are increasingly placing on professors.
Sorry, but colleges/universities ARE businesses. They fit a unique role within our society and so disguise themselves as irreplaceable social institutions, but they shouldn't be exalted beyond what they actually are.
OK, I'll state that I was wrong and should have worded what I meant differently. What I should say is that I don't think universities should be run as businesses because they fail as such. Instead, I think universities should be FURTHER subsidized so that the focus can be on education/research and not money-making.
Universities are one of the biggest drivers of research in the United States. They're also one of the most important social institutions for training and directing our labor force. To NOT provide subsidization and government funding to such an important facet of our society would be a net loss for our country in my opinion.
Now, I'm nowhere near as adamant on this subject as I am on some of the other economic issues brought up in this thread. I'll be the first to admit that I don't know anywhere near enough about the education system to comment in any meaningful way. So I probably shouldn't have started that debate and I apologize for saying dumb things.
The agricultural sector is the biggest supplier of food in the United States. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. The supermarkets is the biggest business model that sells food in the United States. It is vital to provide food for people. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. The construction sector is the biggest supplier of houses. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. Blablabla into ad nauseum... The same argument could be used for essentially everything sooooooooooooooooooooooooooooooooooo glhf
Good points. But was the sooooooo really necessary?
On January 10 2010 15:07 monolith94 wrote: When I went to get my M.Ed. I took a course in adult education, which was basically best practices for teaching people high-school age and up. It turned out that half of the class was about actual teaching practices, and the other half was about trends in colleges and universities business plans, and the pressures that colleges and universities business models are increasingly placing on professors.
Sorry, but colleges/universities ARE businesses. They fit a unique role within our society and so disguise themselves as irreplaceable social institutions, but they shouldn't be exalted beyond what they actually are.
OK, I'll state that I was wrong and should have worded what I meant differently. What I should say is that I don't think universities should be run as businesses because they fail as such. Instead, I think universities should be FURTHER subsidized so that the focus can be on education/research and not money-making.
Universities are one of the biggest drivers of research in the United States. They're also one of the most important social institutions for training and directing our labor force. To NOT provide subsidization and government funding to such an important facet of our society would be a net loss for our country in my opinion.
Now, I'm nowhere near as adamant on this subject as I am on some of the other economic issues brought up in this thread. I'll be the first to admit that I don't know anywhere near enough about the education system to comment in any meaningful way. So I probably shouldn't have started that debate and I apologize for saying dumb things.
The agricultural sector is the biggest supplier of food in the United States. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. The supermarkets is the biggest business model that sells food in the United States. It is vital to provide food for people. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. The construction sector is the biggest supplier of houses. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. Blablabla into ad nauseum... The same argument could be used for essentially everything sooooooooooooooooooooooooooooooooooo glhf
For the sake of discussion, and education, I have a few questions:
If the supermarket and agriculture are the largest domestic markets for producing/selling food, and construction for housing, if you need to subsidize them doesn't that immediately imply that they're not operating properly? Isn't the entire idea of -successful- business to provide a net gain or at the least diversify and break-even? If these models aren't working to the degree that they require funding to be sustainable, isn't that in essence already operating at a net loss, in addition to acquiring debt? Especially for this particular instance?
If a country that doesn't export nearly as much it imports can't even sustain a profit in the most critical of markets to the survival of the population doesn't this mean that your going to be operating at a net loss anyway?
Also, if I am correct and these models aren't "performing properly" then wouldn't it be absolutely batshit insane to sustain them as such? Particularly when bust isn't the only option?
EDIT: Also, Wouldn't a reduction in the standard of living be exactly what we need in debtor nation that is already living above the means it can afford?
On January 11 2010 16:47 dogabutila wrote: What I learned from this thread is that it is best to invest in real things. Like guns and ammo. You know, for when the economy REALLY goes to shit.
Just a quick "thank you" to all the worthy contributors to this very educational thread. I have never studied economics at school, and regret it now. I have tried to learn a few things on my own, reading magasines etc, but I really learned a lot here. Best not-starcraft-related thread on TL in a very long while.
Ps : amazed (and glad) that there have been so few insults and trolls so far!
On January 10 2010 10:15 Yurebis wrote: Oh crap a politics thread. Question: If the government is a failed business, shouldn't it be dissolved as well? Anarcho-capitalist detected. Boooom! ...just some food for thought.
"People are irrational!! So it follows that we have people put in charge to stop the irrationality!!" Makes me laugh every time!!
On January 10 2010 15:07 monolith94 wrote: When I went to get my M.Ed. I took a course in adult education, which was basically best practices for teaching people high-school age and up. It turned out that half of the class was about actual teaching practices, and the other half was about trends in colleges and universities business plans, and the pressures that colleges and universities business models are increasingly placing on professors.
Sorry, but colleges/universities ARE businesses. They fit a unique role within our society and so disguise themselves as irreplaceable social institutions, but they shouldn't be exalted beyond what they actually are.
OK, I'll state that I was wrong and should have worded what I meant differently. What I should say is that I don't think universities should be run as businesses because they fail as such. Instead, I think universities should be FURTHER subsidized so that the focus can be on education/research and not money-making.
Universities are one of the biggest drivers of research in the United States. They're also one of the most important social institutions for training and directing our labor force. To NOT provide subsidization and government funding to such an important facet of our society would be a net loss for our country in my opinion.
Now, I'm nowhere near as adamant on this subject as I am on some of the other economic issues brought up in this thread. I'll be the first to admit that I don't know anywhere near enough about the education system to comment in any meaningful way. So I probably shouldn't have started that debate and I apologize for saying dumb things.
The agricultural sector is the biggest supplier of food in the United States. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. The supermarkets is the biggest business model that sells food in the United States. It is vital to provide food for people. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. The construction sector is the biggest supplier of houses. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. Blablabla into ad nauseum... The same argument could be used for essentially everything sooooooooooooooooooooooooooooooooooo glhf
For the sake of discussion, and education, I have a few questions:
If the supermarket and agriculture are the largest domestic markets for producing/selling food, and construction for housing, if you need to subsidize them doesn't that immediately imply that they're not operating properly? Isn't the entire idea of -successful- business to provide a net gain or at the least diversify and break-even? If these models aren't working to the degree that they require funding to be sustainable, isn't that in essence already operating at a net loss, in addition to acquiring debt? Especially for this particular instance?
If a country that doesn't export nearly as much it imports can't even sustain a profit in the most critical of markets to the survival of the population doesn't this mean that your going to be operating at a net loss anyway?
Also, if I am correct and these models aren't "performing properly" then wouldn't it be absolutely batshit insane to sustain them as such? Particularly when bust isn't the only option?
EDIT: Also, Wouldn't a reduction in the standard of living be exactly what we need in debtor nation that is already living above the means it can afford?
Yeah, I was just calling him out on his shitty argument but no when things are working you shouldn't subsidize and when things fail you shouldn't subsidize because the basis of out economy is to let shitty companies fail. Colleges and universities haven't had a chance to fail due to goverment funding and shit and people say that it is an incubator but it isn't any different from any other business. The university sells a service to those who are willing to pay, simple as that.
As for your question about imports/exports, I am not that knowledgeable about fiat currency to answer why USA's economy didn't crash sooner because of the ridiculous amount of imports but I have a hunch that it got soething to do with goverment bonds. I will ask around to get a better answer.
As for the last question, politics is not doing what is best for the country, it is about pleasing the masses. Therefore there will be alot of shitty things that influence the economy like central banks, fiat currency and so on. Might come back with a longer reply, might not, I just have so much things to do T.T
On January 10 2010 15:07 monolith94 wrote: When I went to get my M.Ed. I took a course in adult education, which was basically best practices for teaching people high-school age and up. It turned out that half of the class was about actual teaching practices, and the other half was about trends in colleges and universities business plans, and the pressures that colleges and universities business models are increasingly placing on professors.
Sorry, but colleges/universities ARE businesses. They fit a unique role within our society and so disguise themselves as irreplaceable social institutions, but they shouldn't be exalted beyond what they actually are.
OK, I'll state that I was wrong and should have worded what I meant differently. What I should say is that I don't think universities should be run as businesses because they fail as such. Instead, I think universities should be FURTHER subsidized so that the focus can be on education/research and not money-making.
Universities are one of the biggest drivers of research in the United States. They're also one of the most important social institutions for training and directing our labor force. To NOT provide subsidization and government funding to such an important facet of our society would be a net loss for our country in my opinion.
Now, I'm nowhere near as adamant on this subject as I am on some of the other economic issues brought up in this thread. I'll be the first to admit that I don't know anywhere near enough about the education system to comment in any meaningful way. So I probably shouldn't have started that debate and I apologize for saying dumb things.
The agricultural sector is the biggest supplier of food in the United States. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. The supermarkets is the biggest business model that sells food in the United States. It is vital to provide food for people. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. The construction sector is the biggest supplier of houses. To NOT provide subsidization and goverment funding to such an important facet of our society would be a net loss for out country. Blablabla into ad nauseum... The same argument could be used for essentially everything sooooooooooooooooooooooooooooooooooo glhf
For the sake of discussion, and education, I have a few questions:
If the supermarket and agriculture are the largest domestic markets for producing/selling food, and construction for housing, if you need to subsidize them doesn't that immediately imply that they're not operating properly? Isn't the entire idea of -successful- business to provide a net gain or at the least diversify and break-even? If these models aren't working to the degree that they require funding to be sustainable, isn't that in essence already operating at a net loss, in addition to acquiring debt? Especially for this particular instance?
If a country that doesn't export nearly as much it imports can't even sustain a profit in the most critical of markets to the survival of the population doesn't this mean that your going to be operating at a net loss anyway?
Also, if I am correct and these models aren't "performing properly" then wouldn't it be absolutely batshit insane to sustain them as such? Particularly when bust isn't the only option?
EDIT: Also, Wouldn't a reduction in the standard of living be exactly what we need in debtor nation that is already living above the means it can afford?
Yeah, I was just calling him out on his shitty argument but no when things are working you shouldn't subsidize and when things fail you shouldn't subsidize because the basis of out economy is to let shitty companies fail. Colleges and universities haven't had a chance to fail due to goverment funding and shit and people say that it is an incubator but it isn't any different from any other business. The university sells a service to those who are willing to pay, simple as that.
As for your question about imports/exports, I am not that knowledgeable about fiat currency to answer why USA's economy didn't crash sooner because of the ridiculous amount of imports but I have a hunch that it got soething to do with goverment bonds. I will ask around to get a better answer.
As for the last question, politics is not doing what is best for the country, it is about pleasing the masses. Therefore there will be alot of shitty things that influence the economy like central banks, fiat currency and so on. Might come back with a longer reply, might not, I just have so much things to do T.T
It's not a shitty argument. You don't believe in any subsidization of markets. That's an opinion, not fact. Just because I disagree with you doesn't automatically make my opinion shitty. Further, all you did to justify it was spew cliche free market propaganda.
I find it ridiculous you'd try to make any comment about the US economy when you don't understand how fiat currency works. But you think you're ready to start being rude because you don't think colleges should be subsidized. If you don't know how fiat currency works, try reading the thread.
It's even more hilarious that you say something like "central banks, fiat currency, and so on" were done to please the masses. This is the point where I lose any interest in hearing what you have to say anymore.
All you've really done is live up to your namesake while pretending to know something about economics, solely because you have a differing opinion from me. You think education should be completely free market. I disagree. It's a difference of opinion. What isn't an opinion is you don't really know jack about American economics but have already started acting like a child in the thread.
I meet person after person here in the US that go to college/university and come out working at StarBucks, or some job they could have done without spending/consuming $20,000 - $150,000 to learn things they'll quickly forget like Mythology (gotta satisfy that those electives!) The system is completely ridiculous. They are hiring Professor Miscellaneous to give the same lecture over and over to different students about Economics, when you could buy every student an overpriced 17" MacBook Pro with a year subscription of high speed internet and be playing a 1080p recording of the best teacher of Economics (or whatever) in the world for 1/1000th of the cost, and from the students home (faster) and they could rewind or replay the lecture if they do not understand it the first time with easier and more effective note taking (they wouldn't even have to write those damn "notes"; they would be attached to the video) If the student has a specific question he could easily have a video conference with a professor on hand.
No, they aren't taking advantage of new technologies.
On January 12 2010 03:55 7Strife wrote: I meet person after person here in the US that go to college/university and come out working at StarBucks, or some job they could have done without spending/consuming $20,000 - $150,000 to learn things they'll quickly forget like Mythology (gotta satisfy that those electives!) The system is completely ridiculous. They are hiring Professor Miscellaneous to give the same lecture over and over to different students about Economics, when you could buy every student an overpriced 17" MacBook Pro with a year subscription of high speed internet and be playing a 1080p recording of the best teacher of Economics (or whatever) in the world for 1/1000th of the cost, and from the students home (faster) and they could rewind or replay the lecture if they do not understand it the first time with easier and more effective note taking (they wouldn't even have to write those damn "notes"; they would be attached to the video) If the student has a specific question he could easily have a video conference with a professor on hand.
No, they aren't taking advantage of new technologies.
Lol, surprise, you just discovered that universities are just public research corporations and degree granting corporations, not higher institutes of learning!
You don't even need a macbook; Just get recordings of the lectures, or match the lecture recording to slides. The majority of classes could be taught on an MP3 player during transit, let alone on a laptop.
Well, I've found that professors to be good source of extra help, especially when clarification of something from the lecture is necessary for understanding. It's difficult to get that from a lecture. Obviously, not all professors are good at teaching, it seems that some of them are researchers that are just in the classroom to fulfill a teaching requirement.
But you're totally right, there are a lot of free online resources that are much more cost-effective.
I kinda feel that the scientific background I gain in university will be worth it when I get to medical school though.
On January 12 2010 09:45 ghostWriter wrote: Well, I've found that professors to be good source of extra help, especially when clarification of something from the lecture is necessary for understanding. It's difficult to get that from a lecture. Obviously, not all professors are good at teaching, it seems that some of them are researchers that are just in the classroom to fulfill a teaching requirement.
But you're totally right, there are a lot of free online resources that are much more cost-effective.
I kinda feel that the scientific background I gain in university will be worth it when I get to medical school though.
I think a big part of it is the social aspect too. Yeah, there's a lot of idiocy in college but there's a lot of maturing too. Getting out of the house and into dorms for the first time is a huge step for some people and goes a long way toward maturation.
I guess it's wrong to subsidize an individual's maturation and I agree that there is a lot of bullshit going on at universities with tons of hours of Gen Ed classes and getting diplomas that didn't teach much, but I also think that you can't teach any student who doesn't want to learn.
I learned a ton of cool and useful things in my Gen Ed courses while I'm sure a lot of other kids just wasted their time because they saw it as "not useful" to their career. The point is that all knowledge is useful and an open mind learns to see that. A cynic can say that Gen Eds are just there to soak up our time and money. An optimist would see it as a college board trying to find what is the most well-rounded education that will put their students in good stead for their future. I don't think there's anything wrong with learning some anthropology, biology, economics, history, world religions, etc while becoming a civil engineer. Life is not a straight line, nor is it just someone's career.
I think the world would be a poorer place if universities were run as online institutions with video stream and ultra-directed educations. That leads to a lot of specialization but not a very strong foundation.
On January 12 2010 09:45 ghostWriter wrote: Well, I've found that professors to be good source of extra help, especially when clarification of something from the lecture is necessary for understanding. It's difficult to get that from a lecture. Obviously, not all professors are good at teaching, it seems that some of them are researchers that are just in the classroom to fulfill a teaching requirement.
But you're totally right, there are a lot of free online resources that are much more cost-effective.
I kinda feel that the scientific background I gain in university will be worth it when I get to medical school though.
You missed the part where I said "If the student has a specific question he could easily have a video conference with a professor on hand." Yes, if you watch a lecture or just have a specific question you can video conference with a professor, and if they choose, they could just be at home reading a book and get a call on their "iPhone" for instance and you can ask your question. There will be time the professor is available also if you wish to see face to face.
Also, Stork if you want to gain social experience then it can be achieved elsewhere. It's not worth tens of thousands of dollars when you and your buddies can get together and play beer pong with all that cash you saved.
On January 12 2010 09:45 ghostWriter wrote: Well, I've found that professors to be good source of extra help, especially when clarification of something from the lecture is necessary for understanding. It's difficult to get that from a lecture. Obviously, not all professors are good at teaching, it seems that some of them are researchers that are just in the classroom to fulfill a teaching requirement.
But you're totally right, there are a lot of free online resources that are much more cost-effective.
I kinda feel that the scientific background I gain in university will be worth it when I get to medical school though.
You missed the part where I said "If the student has a specific question he could easily have a video conference with a professor on hand." Yes, if you watch a lecture or just have a specific question you can video conference with a professor, and if they choose, they could just be at home reading a book and get a call on their "iPhone" for instance and you can ask your question. There will be time the professor is available also if you wish to see face to face.
Also, Stork if you want to gain social experience then it can be achieved elsewhere. It's not worth tens of thousands of dollars when you and your buddies can get together and play beer pong with all that cash you saved.
If people could do it all online, I doubt they'd ever move into a dorm. But you're right in the sense that it is prohibitively expensive right now. And that a majority of students in college aren't taking advantage of the resources, they're just screwing around with taxpayer money.
Mostly, I think universities are used to create artificial competitiveness within the labor market. To keep wages high for white-collar jobs, they make colleges hard to afford and constantly try to tier jobs by degree. Like MUST have master's to do this job, must have PhD for this job etc.
This way they can keep the numbers down so wages don't get pushed down. Not saying this is a good thing, I think that's just the name of the game going on in education right now.
On January 12 2010 09:45 ghostWriter wrote: Well, I've found that professors to be good source of extra help, especially when clarification of something from the lecture is necessary for understanding. It's difficult to get that from a lecture. Obviously, not all professors are good at teaching, it seems that some of them are researchers that are just in the classroom to fulfill a teaching requirement.
But you're totally right, there are a lot of free online resources that are much more cost-effective.
I kinda feel that the scientific background I gain in university will be worth it when I get to medical school though.
You missed the part where I said "If the student has a specific question he could easily have a video conference with a professor on hand." Yes, if you watch a lecture or just have a specific question you can video conference with a professor, and if they choose, they could just be at home reading a book and get a call on their "iPhone" for instance and you can ask your question. There will be time the professor is available also if you wish to see face to face.
Also, Stork if you want to gain social experience then it can be achieved elsewhere. It's not worth tens of thousands of dollars when you and your buddies can get together and play beer pong with all that cash you saved.
Really? I didn't know that you could just video conference any professor like that -_- It seems somewhat rude though, especially if you aren't a student at that university.
And for some jobs, a higher level degree is necessary sometimes. A person who goes to graduate school for chemistry will be much more prepared for research than a person who just receives a bachelor's degree before entering the job market.
On January 12 2010 09:45 ghostWriter wrote: Well, I've found that professors to be good source of extra help, especially when clarification of something from the lecture is necessary for understanding. It's difficult to get that from a lecture. Obviously, not all professors are good at teaching, it seems that some of them are researchers that are just in the classroom to fulfill a teaching requirement.
But you're totally right, there are a lot of free online resources that are much more cost-effective.
I kinda feel that the scientific background I gain in university will be worth it when I get to medical school though.
You missed the part where I said "If the student has a specific question he could easily have a video conference with a professor on hand." Yes, if you watch a lecture or just have a specific question you can video conference with a professor, and if they choose, they could just be at home reading a book and get a call on their "iPhone" for instance and you can ask your question. There will be time the professor is available also if you wish to see face to face.
Also, Stork if you want to gain social experience then it can be achieved elsewhere. It's not worth tens of thousands of dollars when you and your buddies can get together and play beer pong with all that cash you saved.
Really? I didn't know that you could just video conference any professor like that -_- It seems somewhat rude though, especially if you aren't a student at that university.
And for some jobs, a higher level degree is necessary sometimes. A person who goes to graduate school for chemistry will be much more prepared for research than a person who just receives a bachelor's degree before entering the job market.
You can't video conference a professor right now, this is hypothetical. I'm saying they could be on call instead of giving all them damn lectures (which the recordings would cover.)
For education, I think that lower-tier universities like the CSU system should be free but only offer practical degrees, not liberal arts. That way they still turn a net profit for society but also increase social mobility due to people who couldn't afford college otherwise being able to go.
And, of course, lots of night and online (with video conferencing, that sounds cool) classes for people who have full time jobs, which there will be a lot of if you make those lower-tier schools free.
EPT
Second does a bailout really cure this collapse, or just delay it it in your oppinion? Because it seems like the bad practices that got us into this mess are just being renewed by the bailouts and delaying the inevitable "outbreak"
