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Old 03-18-2019, 03:17 PM   #11926
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Re: UK Politics Thread

Yep. This line of reasoning alone should be enough to disqualify someone from standing for Parliament.
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Old 03-19-2019, 11:44 PM   #11927
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Re: UK Politics Thread

Quote:
Originally Posted by davmcg View Post
Short selling is something else and theoretically the sellers own the share at the time of the selling.

Derivatives are errr derived from other instruments eg options in shares. They have a place in managing risk for people who have an interest in the instrument in question, but are simply gambling otherwise.
Derivatives are always gambling, by definition it is a gamble on something performing well or not. There is some hedge value if you wanted to calc out a balanced portfolio, I'll give you, but their hedge value is easily replaceable.

The further finance gets from pure long term buy and hold of shares the less value it holds to wider society.

Where the line exists when things become negative value is hard to judge for anyone who isn't a literal expert/career criminal in these vehicles. Shorting for the most part is fine, its vulture capitalism in its purest form and the people who do it well should be looked down on as the scum investors they are, but that is the market that exists if we are going to over inflate with **** oversight and fraud we may as well reward those who spot that first.

But derivatives are pure dog **** that destroyed the world economy and should have been banned outright in all western countries off the back of it.

When these idiots can trade multiple trillions on the performance of assets worth a fraction something, all based on the promises of people proven to never beat the market and ratings agencies who were literally in on the scam while the regulators are instructed to be as blind and hands off as possible something is very very broken in finance.

(coming soon, why audits are complete dog **** and worthless and need a complete top to bottom rethink, something I have even more knowledge and experience in)
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Old 03-20-2019, 04:12 AM   #11928
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Re: UK Politics Thread

To big to fail is more damaging than any speculation (though obviously related if speculation causes failure), as is tools of monetary policy being channelled through the financial sector such as quantitative easing.

Often in speculation there is no real negative outcome as their are two sides in a trade, if one party ****s the bed, the other cleans up. Problems only arise when one party cant pay up.

Last edited by O.A.F.K.1.1; 03-20-2019 at 04:21 AM.
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Old 03-20-2019, 04:16 AM   #11929
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Re: UK Politics Thread

Also as regards Lib Dems.

If they had not stained themselves for half a generation with the coalition, they would be cleaning up right now as there is massive demand for a moderate slightly left of centre centrist pipe and slippers political party given how Lab and Con are both becoming more partisan.
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Old 03-20-2019, 04:20 AM   #11930
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Re: UK Politics Thread

Also property speculation/BTL is an unremarked cancer on our economic and social system.
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Old 03-20-2019, 05:49 AM   #11931
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Re: UK Politics Thread

Caused by lack of regulation and the Thatcher buy-yer-council-house scam of the 80s.
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Old 03-20-2019, 06:05 AM   #11932
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Re: UK Politics Thread

Quote:
Originally Posted by O.A.F.K.1.1 View Post
To big to fail is more damaging than any speculation (though obviously related if speculation causes failure), as is tools of monetary policy being channelled through the financial sector such as quantitative easing.

Often in speculation there is no real negative outcome as their are two sides in a trade, if one party ****s the bed, the other cleans up. Problems only arise when one party cant pay up.
Too big to fail is one of the big problems but the biggest problems of all is risk which no-one understood the size or ownership of. Risk is extraordinarily complicated.

The trouble with relying on preventing 'too big to fail' as the solution is that the biggest problems occur when players tend to have correlated risk.

The two sides of the trade risk sounds fine but one side is frequently us (often explicitly or implicitly insured by the government which, again, is us).
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Old 03-20-2019, 06:10 AM   #11933
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Re: UK Politics Thread

Quote:
Originally Posted by O.A.F.K.1.1 View Post
Also property speculation/BTL is an unremarked cancer on our economic and social system.
It's a symptom though. The scandal is lack of decent housing (very much including social housing) in places with decent access to the job market.

The failure to invest in housing and infrastructure has been going on for decades and underpins many of our problems.
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Old 03-20-2019, 06:31 AM   #11934
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Re: UK Politics Thread

Quote:
Originally Posted by chezlaw View Post
Too big to fail is one of the big problems but the biggest problems of all is risk which no-one understood the size or ownership of. Risk is extraordinarily complicated.

The trouble with relying on preventing 'too big to fail' as the solution is that the biggest problems occur when players tend to have correlated risk.

The two sides of the trade risk sounds fine but one side is frequently us (often explicitly or implicitly insured by the government which, again, is us).
This is naive imo, counter parties understand risk, but also understand that they can socialise losses, so take those risks.

Remove TBTF and there would be much less risk taking.
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Old 03-20-2019, 06:38 AM   #11935
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Re: UK Politics Thread

I work in an associated area (on the gamekeeper side) and to some degree you're both right.

Financial instruments grew so complex that few were capable of understanding the maths behind them and took it at face value that it was impossible for them to blow up because the Holy Grail of lending had been found, plus they were basically freerolling anyway because with few exceptions the banks were TBTF.
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Old 03-20-2019, 06:58 AM   #11936
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Re: UK Politics Thread

Quote:
Originally Posted by O.A.F.K.1.1 View Post
This is naive imo, counter parties understand risk, but also understand that they can socialise losses, so take those risks.

Remove TBTF and there would be much less risk taking.
There is no way they understood the risks. Not a chance in hell.

You sound like you have no idea how incredibly complicated 'risk' is.
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Old 03-20-2019, 07:02 AM   #11937
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Re: UK Politics Thread

Quote:
Originally Posted by jalfrezi View Post
I work in an associated area (on the gamekeeper side) and to some degree you're both right.

Financial instruments grew so complex that few were capable of understanding the maths behind them and took it at face value that it was impossible for them to blow up because the Holy Grail of lending had been found, plus they were basically freerolling anyway because with few exceptions the banks were TBTF.
The gamekeepers had even less chance of understanding the risks. That was a huge part of the problem.
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Old 03-20-2019, 07:29 AM   #11938
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Re: UK Politics Thread

They had less chance in the sense that the gatekeeper institutions were switched off to the idea of a banking collapse because they'd also bought wholesale into the idea of risk-free lending that eminent economists had sold everyone.
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Old 03-20-2019, 07:33 AM   #11939
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Re: UK Politics Thread

Quote:
Originally Posted by O.A.F.K.1.1 View Post
To big to fail is more damaging than any speculation (though obviously related if speculation causes failure), as is tools of monetary policy being channelled through the financial sector such as quantitative easing.

Often in speculation there is no real negative outcome as their are two sides in a trade, if one party ****s the bed, the other cleans up. Problems only arise when one party cant pay up.
What you are missing about speculation is that it isn't zero sum between two parties. It's negative sum for the buyer and seller, positive sum for the middle men doing the trades and giving advice, and often either, sometimes both, the buyer and seller capital is arms length investment.

Sure there is a fiduciary responsibility, but all that really means is you can't obviously work in your own interests. Recommending trades and making commission doesn't fall under this.
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Old 03-20-2019, 08:03 AM   #11940
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Re: UK Politics Thread

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There is no way they understood the risks. Not a chance in hell.

You sound like you have no idea how incredibly complicated 'risk' is.
Risk is complicated, and yes there would have been someone in the organisations who totally understood the risk that is entirely uncontroversial,

I assume you are referring to the housing crises, but that is just one instance, derivatives continue to be sold.

If Banks could not freeroll, they would listen to that person a lot more instead of just buying into the groupthink of this is fine. Being to big to fail means you can ignore risk and that ignoring will take many forms.
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Old 03-20-2019, 08:05 AM   #11941
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Re: UK Politics Thread

Quote:
Originally Posted by [Phill] View Post
What you are missing about speculation is that it isn't zero sum between two parties. It's negative sum for the buyer and seller, positive sum for the middle men doing the trades and giving advice, and often either, sometimes both, the buyer and seller capital is arms length investment.

Sure there is a fiduciary responsibility, but all that really means is you can't obviously work in your own interests. Recommending trades and making commission doesn't fall under this.
The banking system did not nearly collapse due to commissions.

Sure in total there is some negative sum due to transaction frictions, but that in no way constitutes systemic risk in the way one party being unable to meet their exposure does.
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Old 03-20-2019, 02:49 PM   #11942
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Re: UK Politics Thread

Quote:
Originally Posted by O.A.F.K.1.1 View Post
This is naive imo, counter parties understand risk, but also understand that they can socialise losses, so take those risks.
read something a while back from some lehmann quant bigwig who said their models suggested that what happened was a 9 sigma event, ie something which happens approx once every 10 trillion years

is possible he was lying to try to cover his own arse. but if not then some very smart people made some very large ****ups in this area

or possibly we just got super unlucky
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Old 03-20-2019, 03:34 PM   #11943
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Re: UK Politics Thread

They were told it was a 9 sigma event by the same economists who devised the instruments in the first place.

Who could have thought that trying to mathematically model human behaviour could go horribly wrong?
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Old 03-20-2019, 03:40 PM   #11944
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Re: UK Politics Thread

Corbyn seems to have walked out of the meeting with opposition parties because Umunna was there. This from the man who doesn't seem to have an issue sitting with terrorists of various nationalities etc.
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Old 03-20-2019, 03:42 PM   #11945
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Re: UK Politics Thread

Genuinely don't understand how many of you have warm feelings towards this racist, Stalinist clown who in addition to being incompetent is by his actions a vindictive, unpleasant man.

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Old 03-20-2019, 03:45 PM   #11946
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Re: UK Politics Thread

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Originally Posted by Husker View Post
Corbyn seems to have walked out of the meeting with opposition parties because Umunna was there. This from the man who doesn't seem to have an issue sitting with terrorists of various nationalities etc.
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Old 03-20-2019, 03:55 PM   #11947
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Re: UK Politics Thread

Well, there is a clue in the name
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Old 03-20-2019, 04:01 PM   #11948
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Re: UK Politics Thread

Quote:
Originally Posted by O.A.F.K.1.1 View Post
Risk is complicated, and yes there would have been someone in the organisations who totally understood the risk that is entirely uncontroversial,
You may think it's uncontroversial but I've no idea why because it isn't true.

There would often be a real expert who will try to point out that the risks aren't known. They will also be try to point out that the valuation of the risks claimed by others is deeply flawed. These people are not generally welcome when some huge bubble is growing and profits are being made hand over foot for years on end.
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Old 03-20-2019, 04:23 PM   #11949
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Re: UK Politics Thread

Quote:
Originally Posted by BOIDS View Post
read something a while back from some lehmann quant bigwig who said their models suggested that what happened was a 9 sigma event, ie something which happens approx once every 10 trillion years

is possible he was lying to try to cover his own arse. but if not then some very smart people made some very large ****ups in this area

or possibly we just got super unlucky
Or they know the model risk is not the same as the real risk.

Which every expert knows of course.
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Old 03-20-2019, 06:20 PM   #11950
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Re: UK Politics Thread

Maybe Corbyn has more important matters to attend to?

Ahmed’s BBQ won Kebab Van of the Year at the British Kebab Awards last night, with the prize presented by none other than the Labour Party leader Jeremy Corbyn, who gave a speech at the event.

https://www.oxfordstudent.com/2019/0...jeremy-corbyn/
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