Occupy Wall Street - Page 187

On November 26 2011 00:46 harlock78 wrote:

Well, you can pontificate like some professors in economy 101, it does not give you more credibility to discuss in this arena, especially when you are wrong (or at least, some people easily as smart as you disagree with you, which is common in economy)

http://www.momagri.org/UK/personal-accounts/The-first-economic-model-on-agricultural-volatility_619.html

Now you can explain to me how professor emeritus of economy at Harvard and 30 others don't understand crap about how the economy and speculation works.
Quoting the last paragraph of the article:

"Peter Timmer: I think there were three points of general agreement. First, everyone agreed that relative stability for staple grain prices, especially the avoidance of sharp price spikes, is extremely important to economic welfare. Second, there is no market mechanism that “supplies” this stability, so government intervention is necessary into formation of market prices. Third, this intervention must work through the market to be successful, not by displacing the market. The challenge remains for governments to find an effective and efficient way to do this"

You did yourself present a paper on the volatility of some commodity prices in Asia. Did speculation play a role in that process?
Peter Timmer: The answer to this question is still surprisingly controversial. I just attended a workshop on this very topic at FAO/Rome, and commodity exchange representatives and a number of academics deny the impact of speculation on the spike in food grain prices. My own paper shows clearly that speculative hoarding caused the price spike in the world rice market, but this was not primarily driven directly by financial speculation. My own belief is that financial speculation, in its broadest form, played a significant role in driving petroleum prices, and then staple food prices other than rice, to their peaks in late 2007 and early 2008.

On November 26 2011 01:26 TanGeng wrote:
Frankly, my arguments stand on its own, as does Biff's. Logical inconsistencies are plain for every reader. Anyone can read it, think about it, and probably come to the conclusion that Biff is full of shit. It still up to the individual reader, though.

The momagri interview has nothing of the sort and has the following voice of opinion in the midst of disagreement absent logic or proof:


Which brings us to trusting expert opinion, and that's where conflict of interests and robustness of methodology come into play. The first quote was also a voice of consensus, which again is a voice of opinion absent proof or logic.

On November 26 2011 01:37 TanGeng wrote:
was some one talking?

On November 26 2011 01:49 Boblion wrote:
TanGeng, i really don't understand why you seem so outraged, you are admiting that the whole Wall Street system is a giant casino which "has oversold their financial instruments and falsely advertised their expertise in the marketplace" and that there is a need for political and judicial intervention. How it is so different of Biff's opinion ?

Also please stop the holier-than-thou attitude because the economists are the least respectable scholars ( At least nobody takes seriously socio-psy so they aren't as annoying ).

On November 26 2011 01:49 Boblion wrote:
TanGeng, i really don't understand why you seem so outraged, you are admiting that the whole Wall Street system is a giant casino which "has oversold their financial instruments and falsely advertised their expertise in the marketplace" and that there is a need for political and judicial intervention. How it is so different of Biff's opinion ?

On November 26 2011 03:10 Pertinacious wrote:
Financial transaction taxes like the Tobin tax are certainly a way for governments to pull in some additional income, but they're not a solution to anything. The Tobin tax doesn't even propose to be such, its simply a way by which the UN would get its hands on more money to spend on its own programs.



Biff derides the act of speculation itself, rather than simply the criminal acts perpetrated by some investors, and our government's hand in enabling them and failing to punish the criminals.

Actually, not speculation itself, just speculation that "takes over investments." He claims its at 99% right now, and he may not be far off, since much of what most people refer to as "investment" is in fact "speculation."

The government also fears that a financial transactions tax – a Tobin or "Robin Hood" tax – would disproportionately penalise the City of London, with traders and banks probably just moving to New York or the far east. "We would lose jobs and revenue," said an official.

On November 26 2011 03:28 Biff The Understudy wrote:

Hum, for the first part of your post, I know it's the consensual opinion in the US, but it is much more controversial here in Europe. Germany and France are establishing the Tax Tobin because our governments (both right wing, so it's not even an anti-liberal stuff) believe it will help to slow down a financial machine that has gone mad.

http://www.guardian.co.uk/world/2011/jun/29/ec-proposes-tobin-style-taxes

Someone as distinguished as Stiglitz believes that Tobin Tax is necessary, because, I quote, "The financial sector polluted the global economy with toxic assets and now they ought to clean out.”

http://www.telegraph.co.uk/finance/financialcrisis/6262242/Joseph-Stiglitz-calls-for-Tobin-tax-on-all-financial-trading-transactions.html

The reason the UK is opposed to it is written black and white in the article:


About speculation, what I've said and repeated is that speculation has a positive role to play in the Capitalist system as long as it's under control. Right now financial movements represent 74 times more than the global gross product. That's just insane. The weight of finance into our economy is completely disproportionate. I do believe that neo-liberal policies and the deregulation of finance operated since the Reagan Tatcher era is directly responsible for it.

TanGeng behavior has nothing to do with the discussion. He gets into irrational rants, ridiculously aggressive attitude and systematic ad hominem every single time we "discuss", whatever the topic, and even when our positions are actually quite close. Which is why I asked him to find someone else to rant at numerous times.

On November 26 2011 02:34 TanGeng wrote:

On the less secondary stuff:
Economists aren't the most respectable scholars, which is why selling their expert opinion is very dangerous. Their arguments should stand up to inspection and counter arguments.
LOL. Your opinion of expert economists is really, really low. I like you.

On the primary issue of financial reform:
In problem solving, there is problem identification. It's a discipline that most people are somewhat decent at. That there is something wrong with Wall Street and the financial system is an easy conclusion to come to. However, problem solving requires deeper analysis and more nuanced interpretations than simply that there is something wrong. It requires identifying the root cause of the problem. Along the way, the analysis will identify the place where pressure can be applied to potentially fix the problem.

Where this comes into play is when tailoring corrective action. It doesn't mean do something/anything that somehow mostly negatively impacts the perceived perpetrators while mostly positively impacting others. It means taking the right action that will correct and/or mitigate the identified problem in a very targeted and specific manner. It also means knowing the limits of the corrective action that can be done and not throwing resources and effort knowingly into an impossible effort.

A dully ham-handed analysis the problem does a disservice to the world. Proscribing solution that don't target the problem is like the thrashings of drowning man in the water. It expends great effort, while doing little to nothing to solve the problem. Even worse, it can prevent the rescue and aid that would have solved the problem.

One of the negatives that I mentioned is that Wall Street acts as a glorified casino. That financial institutions is a glorified casino is not a problem with the financial institutions itself. The primary function of the financial institutions are still resource distribution and risk distribution. Society as whole needs to stop viewing the place as a get-rich-quick scheme that entices the gambling. This is only one of three possible developments.

One of the other possible developments is that the financial institutions have actually become better at forecasting the future, communicating risk, and in general communicating price signals. This would increase the size of the speculating market while contributing positively to the economy. If this was the entire reason for the expansion of speculation, it would be perfectly acceptable.

The last possible development concerns correct or misguided government involvement. Specifically, its own flawed regulatory mechanisms gave the financial companies an unwarranted aura of reliability and trustworthiness. Then when that proved false, the false aura of trust crumbled away into "systemic risk," which was then the primary argument for bailouts. This is a good example of thrashing, where government policies preserved the very financial institutions that overplayed their hands and did nothing to address the root cause. That the justice system no longer prosecutes the big and powerful is a related but confounding issue.

The idea is to prevent thrashing and really address the problem. Hope that answers the question.

On November 26 2011 05:56 radiatoren wrote:
Very long post. You are insisting that there is exactly one problem and that government can be the only culprit. I think you are countering your own points: If the government have that much power over the markets, why wouldn't it make more sense to correct the problems by increasing the legislative pressure rather than decreasing it?

Seeing increased speculation as anything, but a sign that more financial products have entered the market seems theoretical. Why so many new financial products have hit the market should be the question and that would not involve the government as the main reason. They are at best a secondary cause and most likely it was deregulation, that caused it and not increased government market-intervention.

On November 26 2011 08:22 Grumbels wrote:
Sorry for asking this: there was a write-up highlighted by some blogs months ago by some financial worker who asserted their superiority over, say, teachers and that if the financial industry would ever collapse, then the financial people would take over the rest of the industries using their superior work-ethic. Can anyone who knows a link to this tell me where it is?

The big crash is in part a systemic regulatory failure that inflated confidence in the new financial instruments. In a sense, it was "deregulation" because the regulatory regime relaxed the existing rules on financial organizations. More truthfully, the regulatory regime had no idea what was going on with the new financial instruments and could do nothing to regulate them given their limited know-how. Yet, the regulatory regime still saw fit to stamp them with their approval. In essence, the regulatory regime allowed financial companies to market effectively unregulated financial instruments as equivalent of effectively regulated traditional financial instruments. More regulation, less regulation aside, is there any circumstance where that is even remotely a smart idea?

Sorry for asking this: there was a write-up highlighted by some blogs months ago by some financial worker who asserted their superiority over, say, teachers and that if the financial industry would ever collapse, then the financial people would take over the rest of the industries using their superior work-ethic. Can anyone who knows a link to this tell me where it is?

On November 26 2011 05:56 radiatoren wrote:


Very long post. You are insisting that there is exactly one problem and that government can be the only culprit. I think you are countering your own points: If the government have that much power over the markets, why wouldn't it make more sense to correct the problems by increasing the legislative pressure rather than decreasing it?

Seeing increased speculation as anything, but a sign that more financial products have entered the market seems theoretical. Why so many new financial products have hit the market should be the question and that would not involve the government as the main reason. They are at best a secondary cause and most likely it was deregulation, that caused it and not increased government market-intervention.

US citizens of all political persuasions are still reeling from images of unparallelled police brutality in a coordinated crackdown against peaceful OWS protesters in cities across the nation this past week. An elderly woman was pepper-sprayed in the face; the scene of unresisting, supine students at UC Davis being pepper-sprayed by phalanxes of riot police went viral online; images proliferated of young women – targeted seemingly for their gender – screaming, dragged by the hair by police in riot gear; and the pictures of a young man, stunned and bleeding profusely from the head, emerged in the record of the middle-of-the-night clearing of Zuccotti Park...

...The mainstream media was declaring continually "OWS has no message". Frustrated, I simply asked them. I began soliciting online "What is it you want?" answers from Occupy. In the first 15 minutes, I received 100 answers. These were truly eye-opening.

On November 26 2011 08:05 TanGeng wrote:
There are multiple problems. The perception of Wall Street as a way to get rich is a problem.

The correct response to new, theoretical, and opaque financial instruments is to put them outside normal regulation, beyond the guarantees of the regulatory regime, and outside acceptable accounting practices until they are proven financial instruments. It would be to treat them as unproven investments instead of allowing classification as AAA secure debt that some of the CDOs tranches were reported as. That would be the regulatory regime withholding judgement.

Such a course might make the finance industry and its innovators chafe because its enforcement would in effect rule out a lot of new ideas. It also might mean relaxing the iron-fist and inflexible rules so that certain group of financial innovators and pioneer investors can operate outside the regulatory rules in an experimental arena. That arrangement at least doesn't not make false assurance of reliability and stability in financial instruments that have never been tested.

The big crash is in part a systemic regulatory failure that inflated confidence in the new financial instruments. In a sense, it was "deregulation" because the regulatory regime relaxed the existing rules on financial organizations. More truthfully, the regulatory regime had no idea what was going on with the new financial instruments and could do nothing to regulate them given their limited know-how. Yet, the regulatory regime still saw fit to stamp them with their approval. In essence, the regulatory regime allowed financial companies to market effectively unregulated financial instruments as equivalent of effectively regulated traditional financial instruments. More regulation, less regulation aside, is there any circumstance where that is even remotely a smart idea?