I knew you were a republican lolOriginally Posted by noobium
I knew you were a republican lol
love that thick mahogany back with no belly carve or anything...pure thick wood ! The thing ROCK is made of !
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Weed bowls
http://www.bing.com/videos/search?q=...+say&FORM=VDRE
But honestly it's got to be a balance. I mean who came up with fully realized ideals as a means of government? Greedy bastards. Besides, I'm pretty sure in a short analogy, capitalism is a few branches not the roots. I could name off every problem in America and trace the evidence of blame to any extreme. At the end of the day we are a dying culture because embracing money above all destroys all other ties. It's ok to enjoy some money, but to use what amounts to a false god to navigate a nation is genocide. Just a matter of time.
love that thick mahogany back with no belly carve or anything...pure thick wood ! The thing ROCK is made of !
________
Weed bowls
http://www.bing.com/videos/search?q=...+say&FORM=VDRE
I don't think this is a useful or even true perspective. Give more money to the working class as they are more likely to spend the majority of it to improve their lifestyle, which keeps the money in the system and pays for other people's jobs.
Give more money to the .1% ultra rich people and even if they donate and buy houses and yachts etc. it's not going to be a significant percentage of their total wealth.
Most of it will end up being invested to make them even more money, which has lead to financial investment corporations like BlackRock being in control of thousands of billions of dollars. And that is a problem. That much money in basically one hand, being used with the single purpose to make more money can do a lot of damage. Other than their high-profile customers, a financial investor doesn't have to care about ethics, all the image they need is that they know how to turn cash into more cash. Not to mention that these guys probably have connections and favors to collect in so many places that no one in their right mind would even try to take a piss on them.
I don't want to go into more detail, I'm not an expert on this stuff. But as a final statement, it's not only about being a 'lowly' or average guy on one side and being 'excellent' on the other side. It's also a lot about being completely ruthless and having no problem to do a billion dollars worth of damage to someone, as long as you can make 50 million bucks out of it for yourself.
No, keeping money in the system is not the point. When you give money to people and let them spend, they bid up the cost of capital (equipment, office, labour, etc). That is why you don't give politicians so much money, even though the money ultimately 'circulates' in the system. But again, that's not the point. The point is that these people will compete with other people for scarce resources like office space, equipment, labour, etc like i've mentioned.
I don't advocate giving money to the rich through bailouts or money-printing. But there are rich people who get rich legitimately. They provide something useful for the market and the market rewards them.
When investors have tons of money, those money are not 'wasted' as one will imagine. Those money are invested, or saved in banks, which are then loaned out.
You do not have to fear individual investors or corporations. They cannot do anything to you. What you do have to fear are government policies that block these rich people from competitors (money-printing, bailouts, favourable regulations, etc).
+1 (mostly, if you don't include collusion)
That they won't target me individually doesn't make me immune to the results of their actions. Do you really think for example that practices like taking over struggling companies and then have them take huge loans to be paid out as dividends to their new owners, knowing full well the company will collapse under that debt eventually, will not impact individuals?
http://online.wsj.com/news/articles/...584438488.html
It's really just one random example, I mean these guys have legions of people and probably some of the most sophisticated computer systems in the world working on finding new loopholes everyday.
I know you Americans hate government like nothing else in the world, but that doesn't mean everyone else is innocent. If you want to find the real culprit you'll have to look where the real power is. Who do you think would win in a power struggle between Barrack Obama and Larry Fink?
Last edited by TommyB; 24-03-2014 at 22:21. Reason: link
Yes, they have financial muscles. But you should be concerned about what governments ought to and ought not to do. Ultimately, they are the ones who write the laws. The American constitution was written to protect people from its government...not from other individuals or corporations. The founding fathers knew where the head of the snake is. In the example you showed, where will all these firms be had the government not get involved in the economy? Had the government not done any bailout, or given the Federal Reserve so much power to print money at will and make interest rates so low and result in more and more debt.
A minority of rich people will always try to influence politics. That's inevitable. The only way is to be vigilant and watch what the government is doing. If you write laws against these rich people, you will affect scores of other legitimate, rich people and affect the market adversely in the end. The masses have to be informed... Unfortunately, it is impossible to educate everyone on the issue of economics and property rights. Even if it is possible, it is unsustainable. Once prosperity comes, people get complacent and go on a decline relative to other nations.
I am not american btw... I'm asian
Last edited by JinXy; 25-03-2014 at 07:19.
A bankrupt company is bankrupt. The individuals in said company will lose their jobs anyway. When the buyout firms take over this company, they are merely fleecing the lenders who know none the better to lend to this company.
But like i said, if those in power had not printed money like crazy, and the government had not done bailouts or guarantee bank deposits, lenders will be way more careful with depositors' money. Depositors will be way more careful with their money too. Nowadays, people spend more time researching about the phone they want to buy rather than the banks they want to deposit money in. The government had their backs anyway (not!)
They were also living in a different world. Nowadays I'm not so sure about this.
As you said it's impossible to have everyone be an expert in financial economics. What exactly is a synthetic collateralized debt obligation? The problem is those who really understand what's going on are not very motivated to share their knowledge. The uneducated masses are an essential part of the system.
Ok, I apologize.
I find it hard to believe that the lenders are unaware of what's going on. If they didn't know they'd get their share they wouldn't do it, at least not to the tune of 47 billion dollars per annum or whatever number was mentioned in that article I linked. I'd agree with you that not every company deserves to be saved, if their business model fails there is no reason to waste money trying to keep it alive a little longer. On the other hand, I kinda feel that there are too many ways to put pressure on solid and desirable companies and drive them to the point where they need to either accept the buyout or crash. It can probably be argued that the company made some mistake along the way to end in this situation but it's hard to make zero mistakes when you're up against a much more powerful opponent.
I don't agree with the excessive money printing and bailouts either. However, when you talk about guaranteed deposits then we're talking about the deposits of private persons and those guarantees would have an upper limit, right? 50k? 100k?
Let's assume a big bank is bankrupt because one of their traders found a way around the system to move much more money than he should have and lost it all. Probably more than one but anyways, some extreme BS was going on in the investment department and now it's too late. Sadly, about 3 million customers lose all of their deposits. How would that be a better scenario?
If this would happen, I doubt people would entrust their money to *any* bank anymore for a long time. Which would basically destroy banking and make it impossible for small/medium companies to get any kind of loans in the future, except maybe from their local mob boss.
Well, the capitalism has 2 parts to it: greed vs fear. But what the governments and central banks have removed from the system is fear. Hence, lending standards have dropped.
Some companies make mistakes and they got gobbled up... it's a dog-eat-dog world unfortunately.
I'm not sure what the upper limit of the deposits are.
If a bank fails because of the rogue trader, then it didn't have proper internal controls. It should be allowed to go bankrupt for 2 reasons:
1. This will tell consumers that just because a bank has been around the corner for a few decades does not mean that it is 100% safe. This will send a great signal to the entire industry to be extra vigilant and not to be reckless, something that is sorely lacking in the industry today. Just 40 years ago, there were no leverage at all in the industry. Today, the amount of leverage is crazy.
2. More importantly, prudent banks will be able to buy up the assets of the failed bank (including their customers' accounts). This is how capitalism is supposed to work. Successful people should be gaining market shares, not denied. The entire system will become sounder.
Well, banking has worked very well in the past without government guarantees. Besides, government guarantee is a myth and gives a false sense of security... the government cannot insure all deposits. Think about it. Let's say wealth is apple. Let's say there are 10 ordinary citizens and 1 politician in the economy. If the 10 people produces an apple each per day, the wealth of the nation increases by 10 apples each day. How does that 1 politician insure this? Can he produce 10 apples per day himself? Or even half of it? A quarter? The truth is, governments don't create wealth. They can only transfer wealth from one part of the economy to another part (by taxation or money printing). But in doing so, they create further distortions in the economy... which must ultimately be corrected in the form of a recession.
quite the opposite. i'm so red they call me gorbachev.
hmm, I just realized the irony that the color for the republican party is red...lol
Yes obviously it's true that the government couldn't insure the entire economy if it all failed at once, but generally it doesn't fail all at once which is why the system typically works.
As I've said in our previous debate I disagree with you and I think that the bailouts were a correct decision because it ultimately protects the "little guy" who otherwise takes most of the risk while getting none of the returns and none of the controls.
Because with the current system there is a huge risk disparity which is why these failures happened, that is to say that in the end the people who decides to take risks and who collects the benefits when they succeed aren't the ones who takes the risk and who takes the fall when things go bad. The Bhopal disaster is an excellent example of why it's a bad thing when the decision makers are separate from the actual risk takers.
However I can understand your objection to them but if there shouldn't be bailouts then companies shouldn't be able to get bankruptcy protection from the government either and shareholders and/or senior officers of a corporation shouldn't be protected from the company failing either, if the company fails than any debt the company has should be transferable to the shareholders at the request of the debt owner.
I understand why these protections exist, because it encourages risk taking in a way that typically benefits the economy in general.
But if one side of the coin gets protection from the government then the other should as well.
If the company fails and the government doesn't reimburse the debts then why should the government prevent people from collecting their debts from the owners and leaders of said corporation?
Build a man a fire and he'll be warm for a day, Set a man on fire and he'll be warm for the rest of his life.
Doesn't fail at once? What happened in 2008?
Check out the FDIC's balance sheet too. They don't have much to insure everyone. That's why the Fed resorted to printing money too.
And it is this kind of policy which makes depositors care less about what the banks are doing with their deposits, and which makes the banks care less about what they do with depositors' money.
Just 2 decades ago, people went to jail for corruption and wrongdoings. Nowadays they just pay a token fine. This is a failure of the courts and law enforcers.
Yes, in capitalism, there should not be bailouts by the government. Otherwise it becomes privatised profits, and socialised losses.
In 2008 it started as a localized failure of the realestate market that escalated, however it never were even close to a complete failure. If a complete failure ever happened the pension payouts would stop, the government would go bankrupt as would banks and peoples entire life savings would be worth naught, food prices would skyrocket and in general everything would quickly become very bad and very nasty.
No it is not because while small depositors as a group might carry a significant part of the banks total deposits they each represent a very small part, it is risk capitalists, corporations and business in general that carry the large deposits and they go wherever the returns are best because they know that in case of a failure they would be the ones to get their deposits paid back first. The small depositors thus carries little of the say and almost all the risk, hence it would solve nothing to not bail them out, the fundamental flaw still exists.
Yes I wish there would have been a mandatory 10+ year jail sentence and fines that would ruin their life savings no matter how large they were.
Plus I think that in order to combat people hiding their earnings in financial paradises they shouldn't be let out of jail until their fines are either paid off, or they prove evidence beyond reasonable doubt that they don't have a single dollar stashed away anywhere. Draconian? yes it is but I'm tired of bigwigs getting away scot free without even as much as a slap on the wrists.
And while I support bailouts I think that whenever the government is forced to bail out any corporations it should be mandatory that they seize a portion of the shares equal to the percentage worth of the bailout relative to the stock value of the corporation at the time of the bailout. This would prove incitement for investors and corporations not to ever get bailed out by the government as it would be a direct blow to themselves.
Well bankrupcy protection and at least limited shareholder immunity has an overall positive impact on the economy. The first because it insures that a company that is generally viable but come on hard times gets a chance to become profitable again and thus saving jobs and investments, the second because it incentives people to invest their money rather than hoarding it(where it does no good) So I think they're generally have a justification for existing but therefore I also think that bailouts have a justification for existing as it's the other side of the coin of the first two.
The financial market is a very complex system and I don't claim to have more than a passing familiarity with it so I might very well be wrong about things because there are deeper issues or things hidden below the surface.
Last edited by Elldallan; 28-03-2014 at 04:35. Reason: typos
Build a man a fire and he'll be warm for a day, Set a man on fire and he'll be warm for the rest of his life.
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