lol mass delusional idiocy

I don't care how financially illiterate you are. This:

is not something any reasonable person should agree to. If you do, it's because you're greedy.

Amp,

I will certainly say that I don't think that (the money printing) is the answer.

I will also say that my personal philosophy (that people should not be regulated (beyond not crapping on other peoples rights) but businesses should to a fair degree is getting a lot of support from recent action. I guess I am about 75% libertarian: I don't think things like tariffs are good (outside of the two well known, mutually exclusive exceptions), but I do think that businesses need some policing and I think that some things are beyond the market driven realm.

A great quote, from Ambrose Bierce:
"Corporation: An ingenious device for obtaining profit without individual responsibility. "

Man, the books they have in school libraries. Number one daughter brought one home the other day called "The Coffee Party" that was about a merchant in the revolutionary war who was price gauging and hoarding (in this case 40 barrels of coffee) until demand rose. The women (all the men were off fighting) got together and took all his coffee. Apparently this was based on a true story.

Contrarianism FTW. But it's easy to be wise after the event, and much harder to see the delusional idiocy at the time. Truely contrarian investing is tough and uncomfortable. If it weren't, everyone would do it.

i agree with you entirely. Unfortunately a lot of people, not all incredibly stoopid, hear my FYP when you say what you wrote. And I said there's often no excuse.

fnord: I respect your views.

I am for whatever increases personal freedom and reduces government interference. I accept responsibility for the results.

A free society triumph!

people do things based on incentives...they had incentives to overspend on the house and companies had incentives to make the bad loans and CEOs have incentives to think about short-term more than long-term and so on and so forth

as long as incentives are aligned the same way as they are today, not much will change

Obviously, I didn't think twice about this stuff before the event. I don't know **** about investing and what-not. I just don't understand how a bunch of professional investors, who rely on math and stuff suddenly decided they could ignore math in this one case, and when they didn't ignore it, build ridiciulously flawed models based on data from completely different situations. (ie, foreclosure rates in their models were based on the old "good mortgages" data, and nobody thought the foreclosure rate would increase more than 1 or 2%.)

There is a very famous article called "The folly of hoping for A while rewarding B" or something like that. Good stuff.

pretty good...found it here: http://www.geocities.com/Athens/Foru...ewardinga.html

the same reason that they did the same in the internet bubble - a mix of short memories, hubris, inexperience, nich's flawed incentives point and (related) the fact that it is much safer (from a personal job security pov) usually to be consensual and wrong than contrarian and wrong.

I actually don't think that the flawed models were THAT responsible for the whole mess. The ratings agencies are very responsible, otoh.

If I didn't work in sports, I'd probably resign from the newspaper and find some other line of work. My profession is embarassing the hell out of me.

dan,

This is your moment! Take the forum offered you for coverage of intramural sporting events and use it to Speak Truth to Power. Your box scores can look like this:

Stevens 12
Fortuna 5
The Fed must be destroyed.

Rancho Martina 4
Gumbytown 17
Stop voting buy a shotgun **** the police.

Yellowburg 14
Weathervane 6
Both parties represent the same Plutocracy.

The funny thing is, I probably could sneak in something like that and not get caught.

one of my wife's old colleagues was a horse racing writer. He fell out with his editor and used to slip oblique references to her in some of the race details - 'irritating bat, ridden by G. Horne, fell at the first fence' kind of thing.

ROFLMAO.

I've seen a couple classic intentional screwups. I should try to find them online.

You lost me there. Just because someone else exists doesn't mean I'll share my wealth with him. 5 new people don't just get handed 10$ each. And money is not the only wealth that exists in an economy. So once the 5 people get born they own exactly 0$ and 0 everything else. Now let's say one of them hunts some game and produces meat that he does not want to use himself.

Let's say he wants to trade with a $ holder. If the $ holder wants the meat, he'll give him $ for it.
Let's say he wants to trade with one of the other newcomers who unfortunately doesn't have any $.
The other newcomer needs to find a $ holder and trade something that the $ holder desires (or revert to direct barter).
In either case if anything the worth of the gold goes up due to a higher demand for it.
The faulty assumption you seem to make is thinking that for some reason the money will just get auto-redistributed while in reality once a state where everyone holds 10$ is reached, the people that initially held 20$ will now also hold 10$ (or more) worth of products in addition to their 10$.

Once again, why would the average wealth decrease?
And how do I have less incentive to use my money to buy something once it's worth more?
If the price of gold rises due to higher demand for it (because someone "hoards" and thus the available stock of money goes down or because new customers for gold get created), the prices of goods I can buy with the rest gold will also fall.

Funny I'd say that governments did let it get that far if there are historic examples, DUCY?

Yes but you still haven't explained to me how hoarding gold is bad for an economy.
Some gold temporarely gets removed from the market, the gold that is being traded gains in worth. Once the hoarder pumps the gold back into the markets, the price for gold will adjust.

First of all using the current situation to point out that a gold standard in a free market is fauly is a little odd. I advocate a free market and the current financial market is about the most socialized industry there is (ultimately government controlled directly or indirectly everywhere).
Second of all why on earth is banks going out of business a bad thing? In a purely free market, the good banks will survive and the situation will be stable pretty quickly. It's also going to be somewhat harder to defraud someone if you have to be able to show them their gold at any given time.
In a socialist system bankrupt banks will be kept running artificially untill the **** hits the fan big time because there are no checks in place at all except for the "good word" of a corrupt body that has all the incentive in the world to lie to you.

Nah I'll invest all in property/real estate. Maybe keep some gold.
I'll rent out the apartment(s) on as short a lease as I can though.

lol @ the market today

the bailout is dead- at least for now. If it were to somehow pass now I'd be shocked but i suppose anything is possible

who has been paying attention to the media today?

Clown, htf did I lose you on "Average". By average I mean mean. You know, total money divided by total people. I have to believe at this point you are just trolling me. Where did I ever talk about redistribution of wealth? In fact, I was suggesting that currency would not be distributed because as you note, it appreciates on its own (until it is completely devalued and your system degenerates into barter, which does have historical precedent.)

Oh, and in historic examples, both governments and lack of governments let it get so far depending on the example, but I don't think current governments will because they are too focused on self preservation and gratification.

(For an example of lack of government causing it: The Roman Garrison pulling out of Britain. For government causing it: The precursors to the french revolution. For myriad more examples, just grab a good history book.)

I am still boggling at most of your responses. You don't see how hording is bad for an economy? You know the purpose of capitalism, the underlying theory behind it, is that resources (which money is tantamount to) are supposed to get exploited more efficiently? If resources are being horded, they are not getting exploited efficiently. Also, money flow is extremely good for economies: Entities buy things which require the entities they are buying from to buy things to make the things they are selling and so on. Basically, good money circulation creates and environment where one can be productive and get rewarded for it. Hoarding results in an environment where people do not spend nearly as many resources, so the markets for produced good are much smaller.

Also, I think you completely missed the point about market forces (i.e. consumer patronage) being lagging.

I have a little bit. The bail out failed because the general population did not want it. Of the 38 congressional members who are in tight races, 30 voted no, 8 voted yes. The rest split about down the middle (177 to 178 I think).

Personally, I would much rather any action of that magnitude was actually thought through through rather than just rushed through.

Oh, one more thing for clown:
I was opposed greatly to the airline bail out and most bail outs. I have no opinion on the bank bail outs yet, because I haven't really studied the situation. I totally agree that if a company ****s up so bad that they would otherwise collapse, you should let them. But I also think that you need some consumer protections in place, especially in something like the finance industry where the average person has no clue, yet has their life pretty inextricably wound up in.
Edit: By protections I mean on the way they operate, not a bail out if they fail. If you buy a hedge fund or a bond fund that blows up, oh well, so long as it was being operated according to the rules. (If not, I am all for some penetration of the corporate veil).

Its the derivatives bubble, stupid

Derivatives are the new ticking time bomb

you might be like, lol what?!?! 516 trillion is more than the GDPs of all nations on Earth. Yeah

And thats according the BIS which is the Bank of International Settlements, on par with the IMF and World Bank as one of the 5 Bretton Woods institutions


A Dangerous Bubble of Derivatives Trading


http://www.webofdebt.com/articles/it...erivatives.php

honestly, that figure is probably meaningless.

You write derivatives on a notional figure (e.g. a credit default swap of $10m) but the actual cash flows are much less (e.g. 10bps, or 0.1% or the notional, or $10k). And the actual market value of it will be a fraction of that say 1bps. So what is the value of that derivative? $10m is not a very revealing value to put on it.

so all the people preaching doom and gloom about derivatives are misguided?

As I understand it, people have been allowed bet on derivatives with money that they don't have, creating this bubble, and now that certain banks are going down its going to create a domino effect.

You're saying that 516 trillion in the derivatives market represents only a few million in actual value?

No, i'm saying that figure is pulled out of someone's arse, and no one really knows. A lot of the exposure will be offsetting, it's probably double counting both sides of the derivatives, etc. etc. Plus a large proportion of them are zero sum, so what someone loses, someone else makes

Derivatives DO allow you to generate extra leverage, that's probably their key problem. And they do create massively complex connections between the banks. so the danger of a domino effect is extreme, that's true.

But the real money is being lost on badly issued mortgages. That's problem number one, and the fact that the derivatives have diced those loses in ways we can but imagine is a secondary concern.