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On October 01 2008 13:36 ahrara_ wrote:Your only fucking response to my post is politics? Centralized power? Seriously man? All you're doing is speculating. You wanna tell me exactly what will happen that is so bad? You have nothing to say about the economics of the bailout? People making rash judgments based on moral and political principles is EXACTLY why I made this post, and yet you seem to ignore the economics entirely. You're completely unresponsive to my argument that the limited credit has pushed the housing market below equilibrium levels, or my assertion that investors, lenders, and buyers have imperfect information. Show nested quote +The fix you mention is a little less than obvious. It may seem intuitive, but all you're doing is propping up a problematic system that is then destined to fail *again* at a later date. Non-unique argument. If we DON'T bail out, the system is still going to have busts and booms. What we can do is limit the extent of this particular bust.
I think I fairly clearly stated that I don't think they government should intervene in the market, and if creating $700 billion in new credit to give to specific companies isn't intervening, I don't know what is.
I don't ignore economics, I just recognize that you can't have economic freedom without political freedom and vice versa. Politics and economics are heavily entwined, and not seperate entities as you would seem to imply. If limited credit has pushed the housing market below equilibrium levels, then they will rise in the future because its an equilibrium. Lowered prices causes increased demand which causes a rise in prices. Imperfect information is factored into the risks you take when entering a transaction, and thus factored into the costs of you entering said transaction. If a company blatantly lies, they have committed fraud, and can be sued, so no further laws or regulation is needed on that front.
Lastly, you hold that a free market means booms and busts. I contend that the booms and busts are caused by governmental interference in the market (and I think you can easily see the interference when you look at fannie mae and freddie mac in this case). If I am correct, then the proper course of action would be to limit government interference in the market in the future, not to increase it.
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But you're not.
An argument consists of assertion and warrant. You can't just say "booms and busts are caused by government intervention". Why the hell are they? I'm not going to even entertain the next poster who thinks they've successfully rebutted 5000 words of reasoning by posting ONE assertion.
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This is fantastic. I wish I had time to join in on this discussion, but I'll just throw in a blog post that I made a while back on the fundamentals of money. Needless to say, regardless of the details of what we do today, tomorrow, or a year from now, it will eventually end very badly.
Maybe more people will read it this time, hehe.
http://www.teamliquid.net/blogs/viewblog.php?topic_id=69306
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The entire premise of Money = Debt philosophy is that the fed prints money to pay debt. IT DOESN'T. END OF STORY.
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On October 01 2008 15:50 ahrara_ wrote:
The entire premise of Money = Debt philosophy is that the fed prints money to pay debt. IT DOESN'T. END OF STORY.
Money is created by banks not the fed, as the video describes in the first couple minutes. The reason money = debt is because our money is always someone else's liability. The dollar in your pocket represents money that somebody else OWES to someone. If everyone paid off their debt and loans, all the money would disappear out of existence.
That is why we are having the problems we are having now. Our financial system (banks) collect interest on money that doesn't exist. This is because that when someone deposits $1 in a bank, the bank can effectively loan out $10, and charge interest on all $10. Well, obviously to pay off the interest, more money has to be created. Who creates the money? The bank of course. More people must go into debt to sustain it.
We are at the point now where the american people are maxed out on debt. No one can borrow any more. The system can't sustain itself.
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Money is created by banks not the fed, as the video describes in the first couple minutes.
No. It's not. Like I don't know how else to explain to you except: No. It's not. Like, you are as factually wrong as if I said that purple was pink and blue was red. You are incorrect. Informationally mistaken. Erroneous. Factually derelict. Devoid of truth. Fallacious in your beliefs. You. Are. WRONG.
Banks. Don't. Create. Money. If they do, we have a word for it: COUNTERFEITING.
+ Show Spoiler +If I deposit $1 in the bank, that does not allow the bank to loan out $10, it allows him to loan out $1. The editor is confusing the capital reserve rule which says you have to keep 6% or so of your capital in reserve just in case something goes wrong. That is, if I get $100 in deposits, I can loan out $94 and keep $6 of it. If the video were correct, then you would get to loan out $1000, which ISN'T BLOODY TRUE. IT IS JUST PLAIN INCORRECT AND WRONG.
If banks had the ability to print 10x more money than they had in deposits, don't you think that would lead to unbelievably rapid inflation to the point that money would be worthless, not this 4%, 5%, 6% shit we have today? I mean seriously?
This video is about as wrong about the way banks work as you can get.
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banks dont create money 
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You are correct with what you wrote. Lets say I deposit $100 in a bank. The bank loans out $90 lets say, the maximum amount allowed. Then, whoever gets that $90 puts it back in the bank. It can then loan out $81. Then that person puts their money in the bank, and the bank then loans out again $72.9, and so on and so forth.
The way that the fed controls the money supply is by changing the interest rate. The interest rate directly controls how banks make loans, which directly controls the money supply. Thats how it works. "So simple the mind is repelled."
edit: here you go
http://www.google.com/search?hl=en&q=how banks create money site:edu&btnG=Search
I commend you for your research
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On October 01 2008 16:15 fight_or_flight wrote:
You are correct with what you wrote. Lets say I deposit $100 in a bank. The bank loans out $90 lets say, the maximum amount allowed. Then, whoever gets that $90 puts it back in the bank. It can then loan out $81. Then that person puts their money in the bank, and the bank then loans out again $72.9, and so on and so forth.
The way that the fed controls the money supply is by changing the interest rate. The interest rate directly controls how banks make loans, which directly controls the money supply. Thats how it works. "So simple the mind is repelled."
I want to hit you.
If I get a $90 loan, and put it back into the bank, don't you think that kinda fuckign defeats the purpose I mean are you deliberately stupid were you dropped on the head as a baby??!?!?!
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On October 01 2008 16:19 ahrara_ wrote:Show nested quote +On October 01 2008 16:15 fight_or_flight wrote:
You are correct with what you wrote. Lets say I deposit $100 in a bank. The bank loans out $90 lets say, the maximum amount allowed. Then, whoever gets that $90 puts it back in the bank. It can then loan out $81. Then that person puts their money in the bank, and the bank then loans out again $72.9, and so on and so forth.
The way that the fed controls the money supply is by changing the interest rate. The interest rate directly controls how banks make loans, which directly controls the money supply. Thats how it works. "So simple the mind is repelled." I want to hit you. If I get a $90 loan, and put it back into the bank, don't you think that kinda fuckign defeats the purpose I mean are you deliberately stupid were you dropped on the head as a baby??!?!?!
http://www.google.com/search?hl=en&q=how banks create money site:edu&btnG=Search
edit: btw, unless you take the 10k or whatever you borrowed in cash under your bed, its probably in the banking system. You may write checks (which just transfer it to another bank), use a debit card, or whatever. Cash is a very scarce commodity, and a very small percentage of money today is in actual cash and not in the bank.
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Go to the bank and tell them you want a $100 loan so that you can make a $100 deposit at their bank.
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On October 01 2008 16:26 Number41 wrote:
Go to the bank and tell them you want a $100 loan so that you can make a $100 deposit at their bank.
kiting checks is illegal for us, but not for banks! When they do it its "inter-bank loans" or "overnight loans".
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On October 01 2008 16:20 fight_or_flight wrote:Show nested quote +On October 01 2008 16:19 ahrara_ wrote:On October 01 2008 16:15 fight_or_flight wrote:
You are correct with what you wrote. Lets say I deposit $100 in a bank. The bank loans out $90 lets say, the maximum amount allowed. Then, whoever gets that $90 puts it back in the bank. It can then loan out $81. Then that person puts their money in the bank, and the bank then loans out again $72.9, and so on and so forth.
The way that the fed controls the money supply is by changing the interest rate. The interest rate directly controls how banks make loans, which directly controls the money supply. Thats how it works. "So simple the mind is repelled." I want to hit you. If I get a $90 loan, and put it back into the bank, don't you think that kinda fuckign defeats the purpose I mean are you deliberately stupid were you dropped on the head as a baby??!?!?! http://www.google.com/search?hl=en&q=how banks create money site:edu&btnG=Searchedit: btw, unless you take the 10k or whatever you borrowed in cash under your bed, its probably in the banking system. You may write checks (which just transfer it to another bank), use a debit card, or whatever. Cash is a very scarce commodity, and a very small percentage of money today is in actual cash and not in the bank.
INCREASING MONEY SUPPLY IS NOT PRINTING MONEY HOLY SHIT PLEASE STOP POSTING YOU ARE WRONG DEAL WITH IT
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On October 01 2008 16:19 ahrara_ wrote:Show nested quote +On October 01 2008 16:15 fight_or_flight wrote:
You are correct with what you wrote. Lets say I deposit $100 in a bank. The bank loans out $90 lets say, the maximum amount allowed. Then, whoever gets that $90 puts it back in the bank. It can then loan out $81. Then that person puts their money in the bank, and the bank then loans out again $72.9, and so on and so forth.
The way that the fed controls the money supply is by changing the interest rate. The interest rate directly controls how banks make loans, which directly controls the money supply. Thats how it works. "So simple the mind is repelled." I want to hit you. If I get a $90 loan, and put it back into the bank, don't you think that kinda fuckign defeats the purpose I mean are you deliberately stupid were you dropped on the head as a baby??!?!?!
hahahahaahaha
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IN ORDER FOR A BANK TO MAKE A LOAN IT HAS TO DEDUCT FROM ITS TOTAL ASSETS. THUS THERE IS A REALISTIC LIMIT TO HOW MUCH A BANK COULD LOAN. THIS KEEPS THE MONEY SUPPLY IN CHECK. THE ONLY CIRCUMSTANCE UNDER WHICH YOUR LOGIC WOULD WORK IS IF IT COULD MAGICALLY MAKE THE VALUE OF THE LOAN APPEAR AT NO COST TO ITSELF. I READ YOUR GODDAMN GOOGLE SEARCH. NEXT TIME MAKE YOUR OWN ARGUMENTS FUCK.
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I'm just saying money = debt.
edit: don't understand your other arguments so not replying
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I'M JUST SAYING YOUR MOMMA = DEBT.
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On October 01 2008 16:39 ahrara_ wrote:
I'M JUST SAYING YOUR MOMMA = DEBT.
Technically, that is true. Every american is born with a large amount of debt that our government has preemptively spent for us.
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Sorry if I'm harsh but fuck what you're saying is like me coming into a TvT strategy thread and start posting about how effective fuckign MnM is in late game I MEAN YOU'RE JUST THAT WRONG GODDAMN. Take a class on macroeconomics and study monetary theory very closely just... dude, you are WRONG. I don't know how else to put it.
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The problem is not due to liquidity. (only if a bank is targeted by malicious speculation)
The problem is not due to relegation.
The problem is due to people who don't understand the difference between fair value and market value and odd accounting standards that doesn't work in a volatile changing market (apart from a steady growing one), and a fast paced trading market driven largely by psychological factors and ironically perhaps with too much transparancy in some cases today, and thus we have a self-fulfilling prophecy.
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EPT![[image loading]](http://tinypic.com/6i8nih.jpg)
