Market Performance and Volatility There is a strong relationship between volatility and market performance. Volatility tends to decline as the stock market rises and increase as the stock market falls. When volatility increases, risk increases and returns decrease. Risk is represented by the dispersion of returns around the mean. The greater the dispersion of returns around the mean, the larger the drop in the compound return.
In a 2011 report, Crestmont Research examined the historical relationship between stock market performance and the volatility of the market. For this analysis, Crestmont used the average range for each day to measure the volatility of the Standard & Poor's 500 Index (S&P 500) index. Their research tells us that higher volatility corresponds to a higher probability of a declining market. Lower volatility corresponds to a higher probability of a rising market.
This is talking about buy-and-hold portfolios?
I GET **THAT**.
I was commenting that OVER SEVENTY PERCENT OF TRADING is done through High Frequency Trading machines\algorithms that could give a flying flunk about "portfolios" or end of the year totals of any sort.
They are gaming the system day in day out, hour after hour, minute after minute, second after second.
An investment position is held only for very brief periods of time - from seconds to hours - and rapidly trades into and out of those positions, sometimes thousands or tens of thousands of times a day
At the end of a trading day there is no net investment position;
Again, ASSUMING that their algorithms are worth a salt, larger moves in a shorter time period would = larger profits. Just sayin'.
If I was to smile and I held out my hand
If I opened it now would you not understand?
This is talking about buy-and-hold portfolios?
I GET **THAT**.
I was commenting that OVER SEVENTY PERCENT OF TRADING is done through High Frequency Trading machines\algorithms that could give a flying flunk about "portfolios" or end of the year totals of any sort.
They are gaming the system day in day out, hour after hour, minute after minute, second after second.
An investment position is held only for very brief periods of time - from seconds to hours - and rapidly trades into and out of those positions, sometimes thousands or tens of thousands of times a day
At the end of a trading day there is no net investment position;
Again, ASSUMING that their algorithms are worth a salt, larger moves in a shorter time period would = larger profits. Just sayin'.
No offense, but this high-frequency trading aspect has absolutely nothing to do with what I was talking about. My original point was volatility is bad for the stock market. Because... it is.
For some reason you went into high-frequency trading and said that it's not necessarily bad for them. Well, no shit. But, I'm not talking about potential profits for high-frequency traders. I'm talking about the DOW or the NASDAQ or the S&P500, which matter much much more for every day Americans. I mean, one could even argue that declines in the stock market could be good for "traders" if they shorted or something else... but, that has absolutely nothing to do with my underlying point.
So, to rehash my original point... volatility is bad for the stock market.
I would even extend this to say... when the stock market declines significantly, it normally leads to a decline in the economy several months later. So, one could argue that increased volatility within the stock market is a negative sign for economic growth.
The bottom line is that those who brought the economy to its knees, and those who got bailed out, are sitting pretty. Corporate profits are solid, CEO pay is astronomical, Wall St. is doing just fine; as for the rest of us: we're fucked because nobody gives a shit about us. But hey, as long as Jamie Dimon is still raking in 40 million dollars a year, all is well.
I guess we just sit and wait for this trickle-down. In the meantime, let's keep laying off public school teachers.
The system is a joke.
No offense, but this high-frequency trading aspect has absolutely nothing to do with what I was talking about. My original point was volatility is bad for the stock market. Because... it is.
Sorry. I guess i was making a kinda snarky face-palm like point, which was that, yeh it sucks for stock holders in a broad sense, it's kinda humorous because those that rigged the system in the first place are probably making a killing in this volatile market. The ones with the HFT machines are the large investment banks etc. The ones that got us in to this mess are the ones that are getting richer off of their own problem.
Isn't it true that a stock market that fluctuates wildly is a sign of an ailing economy? Can't remember where I heard that.
Its a sign that the market is doing some serious "price discovery". Which either means "fundamentals" are changing so rapidly that discovery (if assumed to be efficient) is "naturally" moving rapidly ...
... or it could be a sign that there is so much manipulation\interference in "the market" that discovery is functioning very inefficiently and thus swings widely attempting to "feel its way" in the dark with poor street markers (or signs that have maliciously been changed\altered).
It could be both at the same time (it is).
I would still argue that stock market valuations are fluctuating more wildly RIGHT NOW (last week or two) due to TECHNICALS, since I (and a lot of other folks) believe fundamentals have been sort of out the window (in an acute fashion) since the crash of 08.
There really was no reason for the markets to make such a "quick" move back out of the dumps in the first place -- no reason except large wads of free money handed to the big investment banks to play with.
go below the chart to the slider, and slide the left hand of it over back down to 1990.
LOOK AT THE TWO PEAKS AT 2007 and CURRENT.
***WHAT BUSINESS HAVE WE UP THERE AT THE TOP*** ???
That is what the market is going through right now.
Some serious soul searching for answers based on technicals.
(ie. the CHART says we should NOT be here)
That and most of the news is still mixed (for US) or
outright SHIT (europe)
or scary (iran\israel, n. korea, china?)
If I was to smile and I held out my hand
If I opened it now would you not understand?
The bottom line is that those who brought the economy to its knees, and those who got bailed out, are sitting pretty. Corporate profits are solid, CEO pay is astronomical, Wall St. is doing just fine; as for the rest of us: we're fucked because nobody gives a shit about us. But hey, as long as Jamie Dimon is still raking in 40 million dollars a year, all is well.
I guess we just sit and wait for this trickle-down. In the meantime, let's keep laying off public school teachers.
The system is a joke.
See, I'd say...
...government, mostly the Fed, is what brought the economy to its knees. Further, the bailout was done by government. If government was logical, there would have been no bailout. Those companies would have declared bankruptcy or been dismantled. That's capitalism and free-market competition. What we witnessed was anything but...
I agree that corporate profits are solid and CEO's are still paid a lot. But, I don't think we should dictate who gets paid what and I think corporate profits are high, they're just not using the capital. In other words, they are acting like the US savers... not spending as much or reinvesting as much. They don't see a long term gain in doing so. Companies are hoarding more cash just like consumers... this gives proof of that: http://www.smartmoney.com/plan/banking/ ... 333683624/
Government can keep on repressing rates and think they can control business and consumers... but, not if... they know the whole thing's a charade. So, I don't really agree that Wall Street is doing just fine and I don't think consumers are doing just fine either. What I see is the Fed inflating stocks and all asset prices, so some (like yourself) think everything is fine. But, underneathe there's skepticism. I do agree that profits are high because they cut costs, but I also think they aren't putting money down (hiring in mass, for example) because they know this could blow up any day now. They are waiting.... that's why profits are so high... costs are low because companies aren't re-investing in capital (be it human capital or expansion) like they once did. They are scared.
I just take issue with the "whoa is me... and f the rich guy" attitude. People have a right to be pissed. I think that's completely understandable, but directing ALL anger completely at Wall Street and not seeing that government is pushing the buttons is misguided.
Just like private business is laying off workers, government has to too... I don't want any layoffs whatsoever... but, I get why they are happening... and as much as you are upset about public school teachers... how about the private school teachers being laid off? Do they not count as much? Or how about mass layoffs in private industry, are public workers somehow superior? This comes back to the deflection away from government and the focus on private areas... wall street is full of scum, but it always has been... government is also full of scum and always has been. Certainly, wall street has added to problems, but they do so because of moral hazard the government's creating. Because you focus away from government completely... in my humble opinion, you're being duped.
This basically summarizes the issue in a nutshell. Frustration is necessary and understandable. The blame is often misplaced. Government is most 'to blame' and everything they are doing to help is making that more and more apparent.
...government, mostly the Fed, is what brought the economy to its knees. Further, the bailout was done by government. If government was logical, there would have been no bailout. Those companies would have declared bankruptcy or been dismantled. That's capitalism and free-market competition. What we witnessed was anything but...
But the end result would have been the same: Cannibal Capitalism, and strengthening monopolies. In this environment, I simply do not think the "planned forest fire approach"--let everything burn to the ground and new life springs from the ashes-- would have had the effect that you think it would have had. Larger companies would still have gobbled up the smaller ones, effectively narrowing the markets through decreased access for the smaller ones to be competitive. Mafia Capitalism may be a good phrase here.
As I am sure you would agree, monopolies are not capitalism. But, with or without a bailout, this is what happened/would have happened.
Also, as I assume you know, Wall Street and the banks were living and thriving in the shadows for decades. The derivatives market was as clandestine as market could be, and the creation and implementation and manipulation of everything from CDOs to credit-default swaps were solely done with the banks/trader's profits in mind with no regard to the overall economy and the customers. Add to that the predatory lending industry, and we have a problem caused by the banks and financial institutions.
It's not about the American people anymore, it's not about the strength of the economy anymore, it's not about Main Street anymore, it's about how much money can I fit into my pockets. Blame government all you want, but to say that government was the main culprit when you have a dishonest, unethical "cesspool" (as my commodities trader friend describes it) in lower Manhattan running the country, and doing so legally, then therein lies the problem.
I agree that corporate profits are solid and CEO's are still paid a lot. But, I don't think we should dictate who gets paid what and I think corporate profits are high, they're just not using the capital. In other words, they are acting like the US savers... not spending as much or reinvesting as much. They don't see a long term gain in doing so. Companies are hoarding more cash just like consumers... this gives proof of that: http://www.smartmoney.com/plan/banking/ ... 333683624/
And? Should I feel sympathetic to millionaires and billion dollar corporations for hoarding trillions that can be invested in small businesses and infrastructure?
The private sector job growth under the previous administration was -600,000. A negative. Isn't this the point where government has to pick up the slack? Isn't this what was done when the middle-class and government programs built this country in the 1950s? Why can't there be a relationship like that? what is so wrong with that?
We can't dictate, but when people are making $30 million a year and crying about "uncertainty" and "regulations" (most of which were already in place before 1/20/09), it's difficult for me to take them seriously. Look what happened with regulations in place.
Government can keep on repressing rates and think they can control business and consumers... but, not if... they know the whole thing's a charade. So, I don't really agree that Wall Street is doing just fine and I don't think consumers are doing just fine either. What I see is the Fed inflating stocks and all asset prices, so some (like yourself) think everything is fine. But, underneathe there's skepticism. I do agree that profits are high because they cut costs, but I also think they aren't putting money down (hiring in mass, for example) because they know this could blow up any day now. They are waiting.... that's why profits are so high... costs are low because companies aren't re-investing in capital (be it human capital or expansion) like they once did. They are scared.
Why would government want to "control business and consumers?
Wall St. is fine. When people cry about their bonuses, not salaries, but bonuses, being cut in half, that is a sign that they are doing fine. And, compared to Main Street, they are doing just fine. "What I see is the Fed inflating stocks and all asset prices, so some (like yourself) think everything is fine." I've stated multiple times that I do not think the picture is so rosy.
Waiting for what? Waiting for the economy and the citizenry to drown before throwing out a life vest?
I just take issue with the "whoa is me... and f the rich guy" attitude. People have a right to be pissed. I think that's completely understandable, but directing ALL anger completely at Wall Street and not seeing that government is pushing the buttons is misguided.
Nobody here is "woe is me?" I am more "Woe is the middle-class." I have serious concerns that families like mine, and families that built this country are being shit on by those with all the wealth, those that make more in a year than everyone in this thread will see in a lifetime.
And, this has nothing to do with a "fuck the rich guy" attitude.
My friends and family members who are on Wall St. and in the financial and banking industries see the anger directed toward Wall St. as completely legitimate. They love OWS. Not what one expects, but this is how my people feel.
Just like private business is laying off workers, government has to too... I don't want any layoffs whatsoever... but, I get why they are happening... and as much as you are upset about public school teachers... how about the private school teachers being laid off? Do they not count as much? Or how about mass layoffs in private industry, are public workers somehow superior? This comes back to the deflection away from government and the focus on private areas... wall street is full of scum, but it always has been... government is also full of scum and always has been. Certainly, wall street has added to problems, but they do so because of moral hazard the government's creating. Because you focus away from government completely... in my humble opinion, you're being duped.
Kind of putting words in my mouth here. So I only focused on public school workers...this doesn't mean I ignore all the others who are being laid off.
And, in no way am I being duped, nor am I suffering form a period of deflection. Especially not when I have the reliable sources that I have. You don't become a millionaire in your early 30s for being stupid and misinformed. You don't buy 900K and million dollar homes by lacking some serious knowledge.
I have no problem with laying blame on the government; I just feel more blame lies with the inherent greed and dishonesty of those who have the economic power in this country.
This basically summarizes the issue in a nutshell. Frustration is necessary and understandable. The blame is often misplaced. Government is most 'to blame' and everything they are doing to help is making that more and more apparent.
How do I break out of this nutshell? Read more Peter Schiff? Friedman? Kudlow? Santelli?
I will keep my blame focused where it is.
How do I break out of this nutshell? Read more Peter Schiff? Friedman? Kudlow? Santelli?
I will keep my blame focused where it is.
I think you two are just hitting opposite heads of the same paraDIME.
Some focus more on the government manipulated markets side.
Some on the market manipulated governments side.
Its all just parts of the self-same system.
The "evil" isn't stemming inherently more from one side or the other (government or private sector) the "evil" is inerently manipulating, behind, and running BOTH.
It is "evil" only because it is hopeless, misguided, and itself prisoner to socio-political inertia.
These problems have approached the point of being too large to functionally address. They are systemic. The whole system is wrecked. Inflated beyond repair with no sensible hope of redress. Trying to "balance" the current system is only going to cause more REAL pain to REAL people than saving it is even worth. Why save a system for the sake of the SYSTEM? The system is intended to benefit the people, is it not?
I dunno. Thats just where i feel we are at.
Trying to go through the process of "clearing books", striking out all this bad debt, dealing with all the entangled parties, watching so many suffer in the process seems totally fruitless. Its only going to get worse in the next few years, either. The wave of bad GOVERNMENT debt that is coming is going to make 2008 look like a freaking picnic.
That government debt failure will wash over the markets, wash out the markets, and cause ridiculous pain for the masses. Large banks will even tumble over this. Especially large banks. Why try to sort all this shit out? We should just MOVE ON, press RESET globally, and let countries regain a foothold across the world at some sort of parity based on economic output. But that might entail a change of leadership around the world, and would certainly entail allowing currently woefully undeveloped nations and their people an approximately equal shot at global resources as the "fortunate few" currently have.
Instead the status-quo politicians seem hell bent on keeping the most debt-burdened nearest their deathbed than we to ours, and yet this process is pushing the rest\west of the world closer and closer to their own demise.
Is it not time for global cooperation and a new paradigm?
If I was to smile and I held out my hand
If I opened it now would you not understand?
But the end result would have been the same: Cannibal Capitalism, and strengthening monopolies. In this environment, I simply do not think the "planned forest fire approach"--let everything burn to the ground and new life springs from the ashes-- would have had the effect that you think it would have had. Larger companies would still have gobbled up the smaller ones, effectively narrowing the markets through decreased access for the smaller ones to be competitive. Mafia Capitalism may be a good phrase here.
As I am sure you would agree, monopolies are not capitalism. But, with or without a bailout, this is what happened/would have happened.
First, the term cannibal capitalism doesn't make any logical sense. Competition is cannibalistic by it's very nature.
Second, and as for monopolies, I'd ask... where are they? What sector exactly? Think about your answer, before you answer. I hope your answer wouldn't have anything to do with banking (which could be related back to the Fed).
Third, your whole paragraph here is some sort of grand conspiracy. It's as if you allow unregulated markets they end in monopoly. I think most would argue that's completely untrue, in fact the opposite is true... take Citizens FL homeowners insurance for example... they regulate rates (government) then set up public "competition" which keeps rates unnaturally low thereby forcing private insurers to literally leave the state. That's a public entity creating a monopoly. And of course, there there's natural monopolies.
Fourth, I don't agree that we would have ended up in a state of constant monopolies if we didn't bail everyone out. In fact, I'd argue that makes not sense whatsoever. Look at who got bailed out, and where these "monopolies" would have come from:
1) AIG. (Insurance) - Nope!
2) Fannie and Freddie (GSE) - ha ha,.. try to explain monopoly on that one.
3) GM (auto) - in my opinion, they would have declared bankruptcy and restructured. Even if they failed I don't buy monopoly here. There's lots of other car makers.
4) Bank of America (bank)... If you look at the list of banks below that got bailed out, and really try to say they would have ended up in monopoly... i'd have a hard time believing it... countless banks were bailed out..
...instead, I'd argue they would have been penalized for engaging in horrible credit decisions. Under the current function, we decided to reward them for their awful decisions.
Also, as I assume you know, Wall Street and the banks were living and thriving in the shadows for decades. The derivatives market was as clandestine as market could be, and the creation and implementation and manipulation of everything from CDOs to credit-default swaps were solely done with the banks/trader's profits in mind with no regard to the overall economy and the customers. Add to that the predatory lending industry, and we have a problem caused by the banks and financial institutions.
I love your word choice "living and thriving". ha ha.
Everything in a capitalistic society is done with profits in mind. This is such an awful point. I mean, the iPhone was created with PROFITS in mind. The computer was created with PROFITs in mind. Evil, evil iPhone and Computer! ha ha.
As for your other point on predatory lending... fair enough if this occurred, why not penalize those who provided loans to those who couldn't afford them. That's their job to figure that out! Why reward them with bailouts. It's completely counterintuitive. This "cannibal capitalism" you are so scared of would have penalized them. Instead, they got a nod of approval by the government.... and money to boot.
It's not about the American people anymore, it's not about the strength of the economy anymore, it's not about Main Street anymore, it's about how much money can I fit into my pockets. Blame government all you want, but to say that government was the main culprit when you have a dishonest, unethical "cesspool" (as my commodities trader friend describes it) in lower Manhattan running the country, and doing so legally, then therein lies the problem.
It's always been about how much money people can fit into their pockets. I'm not saying people aren't a bit more greedy now, but I mean, you're lying to yourself if you think people wouldn't have produced new conceptual ideas for profit in the 50s if they could have.
The government was the main culprit. Let me explain... First, Fannie and Freddie are the government run. Second, the Fed built the housing bubble by constraining interest rates. People were buying houses in mass because rates were low! When you have these lenders lending at low rates using exotic mortgages - they were betting on the Fed not hiking rates in the way they did. When the Fed hiked them, the whole house of cards collapsed. Third, that's not even getting into federal programs to encourage home ownership. The whole thing started with housing... government built it up... provided a breeding ground for shit capitalistic behavior to take advantage of the environment set up by GOVERNMENT.
And? Should I feel sympathetic to millionaires and billion dollar corporations for hoarding trillions that can be invested in small businesses and infrastructure?
The private sector job growth under the previous administration was -600,000. A negative. Isn't this the point where government has to pick up the slack? Isn't this what was done when the middle-class and government programs built this country in the 1950s? Why can't there be a relationship like that? what is so wrong with that?
No, you don't need to feel sympathetic at all. But, I think you could try to wrap your head around why they aren't spending. Because, if you want to, you could also blame the American consumer. I mean... they aren't spending. Ask yourself... Why? Because deep down, everyone really does know we're buried in shit... and it's about to get worse.
I'm not sure if you're trying to blame Bush or Obama, but personally, I think they are both dolts. I blame both administrations. I mean both were involved in bailouts. Both were involved in overspending, etc.
As for government picking up the slack... No. There's absolutely no point whatsoever where the government needs to pick up the slack for private job loss. In fact, I'd argue that approach is whole-heartedly ignorant, particularly when the government has limited financial resources to do such. We're broke. And moreover, it's not the governments job to toss rock's through windows to pretend like they are creating jobs: http://www.youtube.com/watch?v=erJEaFpS9ls
We can't dictate, but when people are making $30 million a year and crying about "uncertainty" and "regulations" (most of which were already in place before 1/20/09), it's difficult for me to take them seriously. Look what happened with regulations in place.
You're crying to them asking them to "spend". I don't want to defend them. I want them to spend too. But, I'm saying here's why their not. The government is broke. The government goes down, our system goes down. They live in our system. That means they go down. They are saving money because they don't have "faith". As I mentioned earlier, they aren't alone... the American consumer doesn't either.
Why would government want to "control business and consumers?
Because they believe they are genius and can save the world from the mess that they just created, which was put in place by the mess that they created before, which was put in place by the mess government made before that, etc.
Wall St. is fine. When people cry about their bonuses, not salaries, but bonuses, being cut in half, that is a sign that they are doing fine. And, compared to Main Street, they are doing just fine. "What I see is the Fed inflating stocks and all asset prices, so some (like yourself) think everything is fine." I've stated multiple times that I do not think the picture is so rosy.
Waiting for what? Waiting for the economy and the citizenry to drown before throwing out a life vest?
People will cry. I, for one, agree companies should not be giving out bonuses when they are asking for bailouts. But, I differ from you in saying they shouldn't be getting bailouts to begin with, that would kill this issue dead. The companies are like spoiled little kids, with a Mom (US govenment) that has deep pockets. I'm saying.... Mom stop giving them your credit card... afterall, we're paying for it.
We're going to drown anyway. Just wait, if you really think what they've done has worked... might not be a year, might be 5... but, this will get worse.
Nobody here is "woe is me?" I am more "Woe is the middle-class." I have serious concerns that families like mine, and families that built this country are being shit on by those with all the wealth, those that make more in a year than everyone in this thread will see in a lifetime.
And, this has nothing to do with a "fuck the rich guy" attitude.
My friends and family members who are on Wall St. and in the financial and banking industries see the anger directed toward Wall St. as completely legitimate. They love OWS. Not what one expects, but this is how my people feel.
They are being shit on by the government. The government is inflating prices across the board, or risking doing so. The government is bailing out companies (with their tax money) that would have failed.
Kind of putting words in my mouth here. So I only focused on public school workers...this doesn't mean I ignore all the others who are being laid off.
And, in no way am I being duped, nor am I suffering form a period of deflection. Especially not when I have the reliable sources that I have. You don't become a millionaire in your early 30s for being stupid and misinformed. You don't buy 900K and million dollar homes by lacking some serious knowledge.
I have no problem with laying blame on the government; I just feel more blame lies with the inherent greed and dishonesty of those who have the economic power in this country.
No offense, but I don't care if you know a rich guy who says OWS is great. I think OWS is showing frustration. I understand why their frustrated, but I also believe just like some in the Tea Party were showing frustration.... it's just a political movement now. It's being coerced by political parties.
At the end of the day, I think dishonesty is a problem. But, I think it's more of a problem via the government. They set the stage for corporations to do business. Corporations, in a lot of cases, made huge risks. But, to me, they did so with knowledge that the government (or Mommy... or the US tax payer) would have to bail them out if they failed.
My point is how EXACTLY have we fixed this? We haven't. Government needs to fix it. Moral Hazard is running rampant.
How do I break out of this nutshell? Read more Peter Schiff? Friedman? Kudlow? Santelli?
I will keep my blame focused where it is.
You're entitled to read everyone and anyone. I just don't have to agree with it.
But, if you're serious... I'd recommend a basic microeconomics text - to start. Then a managerial econ text. This would probably get you to at least understand why I don't believe the corporations (although slimey and profit seekers) are the "cause" of this issue. It's the framework that's to blame... therefore, it's government.
But the end result would have been the same: Cannibal Capitalism, and strengthening monopolies. In this environment, I simply do not think the "planned forest fire approach"--let everything burn to the ground and new life springs from the ashes-- would have had the effect that you think it would have had. Larger companies would still have gobbled up the smaller ones, effectively narrowing the markets through decreased access for the smaller ones to be competitive. Mafia Capitalism may be a good phrase here.
As I am sure you would agree, monopolies are not capitalism. But, with or without a bailout, this is what happened/would have happened.
First, the term cannibal capitalism doesn't make any logical sense. Competition is cannibalistic by it's very nature.
Second, and as for monopolies, I'd ask... where are they? What sector exactly? Think about your answer, before you answer. I hope your answer wouldn't have anything to do with banking (which could be related back to the Fed).
Third, your whole paragraph here is some sort of grand conspiracy. It's as if you allow unregulated markets they end in monopoly. I think most would argue that's completely untrue, in fact the opposite is true... take Citizens FL homeowners insurance for example... they regulate rates (government) then set up public "competition" which keeps rates unnaturally low thereby forcing private insurers to literally leave the state. That's a public entity creating a monopoly. And of course, there there's natural monopolies.
Fourth, I don't agree that we would have ended up in a state of constant monopolies if we didn't bail everyone out. In fact, I'd argue that makes not sense whatsoever. Look at who got bailed out, and where these "monopolies" would have come from:
1) AIG. (Insurance) - Nope!
2) Fannie and Freddie (GSE) - ha ha,.. try to explain monopoly on that one.
3) GM (auto) - in my opinion, they would have declared bankruptcy and restructured. Even if they failed I don't buy monopoly here. There's lots of other car makers.
4) Bank of America (bank)... If you look at the list of banks below that got bailed out, and really try to say they would have ended up in monopoly... i'd have a hard time believing it... countless banks were bailed out..
...instead, I'd argue they would have been penalized for engaging in horrible credit decisions. Under the current function, we decided to reward them for their awful decisions.
Also, as I assume you know, Wall Street and the banks were living and thriving in the shadows for decades. The derivatives market was as clandestine as market could be, and the creation and implementation and manipulation of everything from CDOs to credit-default swaps were solely done with the banks/trader's profits in mind with no regard to the overall economy and the customers. Add to that the predatory lending industry, and we have a problem caused by the banks and financial institutions.
I love your word choice "living and thriving". ha ha.
Everything in a capitalistic society is done with profits in mind. This is such an awful point. I mean, the iPhone was created with PROFITS in mind. The computer was created with PROFITs in mind. Evil, evil iPhone and Computer! ha ha.
As for your other point on predatory lending... fair enough if this occurred, why not penalize those who provided loans to those who couldn't afford them. That's their job to figure that out! Why reward them with bailouts. It's completely counterintuitive. This "cannibal capitalism" you are so scared of would have penalized them. Instead, they got a nod of approval by the government.... and money to boot.
It's not about the American people anymore, it's not about the strength of the economy anymore, it's not about Main Street anymore, it's about how much money can I fit into my pockets. Blame government all you want, but to say that government was the main culprit when you have a dishonest, unethical "cesspool" (as my commodities trader friend describes it) in lower Manhattan running the country, and doing so legally, then therein lies the problem.
It's always been about how much money people can fit into their pockets. I'm not saying people aren't a bit more greedy now, but I mean, you're lying to yourself if you think people wouldn't have produced new conceptual ideas for profit in the 50s if they could have.
The government was the main culprit. Let me explain... First, Fannie and Freddie are the government run. Second, the Fed built the housing bubble by constraining interest rates. People were buying houses in mass because rates were low! When you have these lenders lending at low rates using exotic mortgages - they were betting on the Fed not hiking rates in the way they did. When the Fed hiked them, the whole house of cards collapsed. Third, that's not even getting into federal programs to encourage home ownership. The whole thing started with housing... government built it up... provided a breeding ground for shit capitalistic behavior to take advantage of the environment set up by GOVERNMENT.
And? Should I feel sympathetic to millionaires and billion dollar corporations for hoarding trillions that can be invested in small businesses and infrastructure?
The private sector job growth under the previous administration was -600,000. A negative. Isn't this the point where government has to pick up the slack? Isn't this what was done when the middle-class and government programs built this country in the 1950s? Why can't there be a relationship like that? what is so wrong with that?
No, you don't need to feel sympathetic at all. But, I think you could try to wrap your head around why they aren't spending. Because, if you want to, you could also blame the American consumer. I mean... they aren't spending. Ask yourself... Why? Because deep down, everyone really does know we're buried in shit... and it's about to get worse.
I'm not sure if you're trying to blame Bush or Obama, but personally, I think they are both dolts. I blame both administrations. I mean both were involved in bailouts. Both were involved in overspending, etc.
As for government picking up the slack... No. There's absolutely no point whatsoever where the government needs to pick up the slack for private job loss. In fact, I'd argue that approach is whole-heartedly ignorant, particularly when the government has limited financial resources to do such. We're broke. And moreover, it's not the governments job to toss rock's through windows to pretend like they are creating jobs: http://www.youtube.com/watch?v=erJEaFpS9ls
We can't dictate, but when people are making $30 million a year and crying about "uncertainty" and "regulations" (most of which were already in place before 1/20/09), it's difficult for me to take them seriously. Look what happened with regulations in place.
You're crying to them asking them to "spend". I don't want to defend them. I want them to spend too. But, I'm saying here's why their not. The government is broke. The government goes down, our system goes down. They live in our system. That means they go down. They are saving money because they don't have "faith". As I mentioned earlier, they aren't alone... the American consumer doesn't either.
Why would government want to "control business and consumers?
Because they believe they are genius and can save the world from the mess that they just created, which was put in place by the mess that they created before, which was put in place by the mess government made before that, etc.
Wall St. is fine. When people cry about their bonuses, not salaries, but bonuses, being cut in half, that is a sign that they are doing fine. And, compared to Main Street, they are doing just fine. "What I see is the Fed inflating stocks and all asset prices, so some (like yourself) think everything is fine." I've stated multiple times that I do not think the picture is so rosy.
Waiting for what? Waiting for the economy and the citizenry to drown before throwing out a life vest?
People will cry. I, for one, agree companies should not be giving out bonuses when they are asking for bailouts. But, I differ from you in saying they shouldn't be getting bailouts to begin with, that would kill this issue dead. The companies are like spoiled little kids, with a Mom (US govenment) that has deep pockets. I'm saying.... Mom stop giving them your credit card... afterall, we're paying for it.
We're going to drown anyway. Just wait, if you really think what they've done has worked... might not be a year, might be 5... but, this will get worse.
Nobody here is "woe is me?" I am more "Woe is the middle-class." I have serious concerns that families like mine, and families that built this country are being shit on by those with all the wealth, those that make more in a year than everyone in this thread will see in a lifetime.
And, this has nothing to do with a "fuck the rich guy" attitude.
My friends and family members who are on Wall St. and in the financial and banking industries see the anger directed toward Wall St. as completely legitimate. They love OWS. Not what one expects, but this is how my people feel.
They are being shit on by the government. The government is inflating prices across the board, or risking doing so. The government is bailing out companies (with their tax money) that would have failed.
Kind of putting words in my mouth here. So I only focused on public school workers...this doesn't mean I ignore all the others who are being laid off.
And, in no way am I being duped, nor am I suffering form a period of deflection. Especially not when I have the reliable sources that I have. You don't become a millionaire in your early 30s for being stupid and misinformed. You don't buy 900K and million dollar homes by lacking some serious knowledge.
I have no problem with laying blame on the government; I just feel more blame lies with the inherent greed and dishonesty of those who have the economic power in this country.
No offense, but I don't care if you know a rich guy who says OWS is great. I think OWS is showing frustration. I understand why their frustrated, but I also believe just like some in the Tea Party were showing frustration.... it's just a political movement now. It's being coerced by political parties.
At the end of the day, I think dishonesty is a problem. But, I think it's more of a problem via the government. They set the stage for corporations to do business. Corporations, in a lot of cases, made huge risks. But, to me, they did so with knowledge that the government (or Mommy... or the US tax payer) would have to bail them out if they failed.
My point is how EXACTLY have we fixed this? We haven't. Government needs to fix it. Moral Hazard is running rampant.
How do I break out of this nutshell? Read more Peter Schiff? Friedman? Kudlow? Santelli?
I will keep my blame focused where it is.
You're entitled to read everyone and anyone. I just don't have to agree with it.
But, if you're serious... I'd recommend a basic microeconomics text - to start. Then a managerial econ text. This would probably get you to at least understand why I don't believe the corporations (although slimey and profit seekers) are the "cause" of this issue. It's the framework that's to blame... therefore, it's government.
Agree to disagree to agree to disagree. I'll leave it at that; if I don't, we'll go around in circles.
I would have to disagree on the assessment of Krugman. At the suggestion of my friend, I started reading Krugman on a daily basis, and even when I was scratching my head on some of the things he said/proposed, later I saw that he was right on the money.
Just my take on it. Aren't Greenspan and Paulson free-market libertarians? it seems they had a difficult time watching their vision crumble, and they obviously had no serious remedy for turning the debris back into some type of foundation for a stable economy.
Everyone's entitled to a take, that's for sure. But, I completely disagree on Krugman. I'm not going to say he's not smart; I'm sure he is. In fact, I'd bet he's so smart that he knows the policies he's advocating are complete BS. Yet, what we were discussing is his disposition when delivering his policy perscriptions. Reading Krugman doesn't get at that. You need to watch him or hear him speak. Then you'll see him squirm like a little rat... or atleast that's what I see.
On your other points, Greenspan caused the housing bubble (in my opinion) by keeping interest rates too low for too long. In other words, he used government to manipulate and manage markets. Does that sound like a free-market libertarian to you? Meanwhile, Paulson advocated the bailouts... umm... seriously? Undoubtedly Keynesian. And.. yeh I know Greenspan claimed to be a libertarian, but he was far far from it when actually put in place to "act" on it. He was, in fact, the opposite. He was a Keynesian. So, I would 100% totally disagree with your assertion that they were free-market libertarians. They were the complete and total opposite when it actually meant something.
Indeed, I found it very unsettling to read some of Greenspan's earlier essays (contributions to Ayn Rand's pseudo-philosophical work on Capitalism) after seeing what he did in practice, many years later.
Dow is now down roughly 1000 points since this thread was originally posted in early May.
Philly Fed Index has more than just the stock markets nervous.
April reading, 8.5. Analysts expecting yesterdays release to come back at a 10.
Positive numbers mean more companies growing.
Negative numbers mean more companies contracting.
New number comes back, not at 10, not at 7.
At -5.8
Yeah, minus.
Hell, makes me a little nauseous.
I'm not trying to make more of this number than there is,
but this is just another in a line of confirmations that this alleged economic "rebound" out of the "recession" is more of a dead-bounce ...
I don't think i'm telling Inlet anything he doesn't know ...
I guess to nail down that queasy feeling I have,
it has to do with expectations.
Personally I had *expected* our "expert" "leaders" to "control" this economy on in to the election.
Instead we seem steered towards controlled deflationary demolition.
Between this recent glaring divergence of analyst expectations from apparent realities, and the super-oddly timed announcement of JP Morgan's "$2 billion" (do we really know? and wasn't this loss announced while those losing positions were still open, and didn't the market move against them twice as bad after announcement?) it almost seems like they are TRYING to throw the markets out of control.
Not that they would have to try too hard.
BTW,
Found this in a blog comment.
How does this even *work*?
JPM = Leveraged 39:1 derivatives to assets?
70 $trillion$ in derivatives? yeesh.
God help us.
Too big to fail,
too stupid to survive,
or worse, too sly to discern?
Second Side Note:
I find it odd JP Morgan is getting investigated by the FBI over this loss, when their coming forward, Mid-Quarter, while these trades were apparently\seemingly-assumed open against them pending being able to even trade out of such a large position in a relatively thin market (that particular credit risk index implicated in news stories) ...
so the story is that JPMorgan came out with this announcement, when it would otherwise have been quite financially foolish, only to fulfill a perceived legal obligation to disclose loses under "new" "disclosure rules". This was the assumption put forth by the media. And yet, now they stand under investigation by the FBI.
That's a fucking riot. lol?
Third Side Note:
The hilarity of sliding scale \ "floating rate" currencies astounds me as of recent, as a never-ending stream of global (and now oddly, even domestic economic woes) have the US Dolllar charting higher and higher. Back in to the $.80s ... oh boy??? It's like as everyone liquidates out of their positions, back in to cash, but yet not spending (increasing velocity of money), the dollar starts to rocket, even as global equities and commodities start to plunge down?
Are we truly starting a deflationary wave in earnest ???
There is a LOT of potential "de-leveraging" in "70 trillion dollars" (jp morgan derivatives alone, around $250trillion in major US banking) .. not to mention the rest of the world.
I imagine a substantial portion of those positions closing out to cash (US Dollars), at a loss being totally irrelavant in this case, would send the dollar through the roof, even if it sends markets (even metals) to the floor.
THAT would be bizzare.
Post edited by DriftingByTheStorm on
If I was to smile and I held out my hand
If I opened it now would you not understand?
Philly Fed Index has more than just the stock markets nervous.
April reading, 8.5. Analysts expecting yesterdays release to come back at a 10.
Positive numbers mean more companies growing.
Negative numbers mean more companies contracting.
New number comes back, not at 10, not at 7.
At -5.8
Yeah, minus.
Hell, makes me a little nauseous.
Yeh, the odd thing is how these are diverging from other regional indicators,... like NY. But, I buy the Philly Fed more than NY.
I'm not trying to make more of this number than there is,
but this is just another in a line of confirmations that this alleged economic "rebound" out of the "recession" is more of a dead-bounce ...
I don't think i'm telling Inlet anything he doesn't know ...
Yeh, I think a lot of what's going on in the market right now has to do with Europe, obviously. That said, I've said repeatedly in these parts that I do think a recession is coming. More folks are jumping on board with this outlook. But, the question is when and I'm left scratching my head there. My guess is by end of the year we'll be in recession in the US. My rational is the Fed won't do anything in an election year. If they tried to put forth a QE, just imagine the Republican response.
I guess to nail down that queasy feeling I have,
it has to do with expectations.
Personally I had *expected* our "expert" "leaders" to "control" this economy on in to the election.
Instead we seem steered towards controlled deflationary demolition.
Ha... I think we'd both agree... we should never "expect our leaders to do anything right"... particularly when other forces are at play. I think the leaders tried to control it, but they can't because the largest economy in the world (Europe) is swinging on a thread.
Between this recent glaring divergence of analyst expectations from apparent realities, and the super-oddly timed announcement of JP Morgan's "$2 billion" (do we really know? and wasn't this loss announced while those losing positions were still open, and didn't the market move against them twice as bad after announcement?) it almost seems like they are TRYING to throw the markets out of control.
Not that they would have to try too hard.
BTW,
Found this in a blog comment.
How does this even *work*?
JPM = Leveraged 39:1 derivatives to assets?
70 $trillion$ in derivatives? yeesh.
God help us.
Too big to fail,
too stupid to survive,
or worse, too sly to discern?
Second Side Note:
I find it odd JP Morgan is getting investigated by the FBI over this loss
I just find it odd that the government actually thinks the FBI can handle this sort of thing. They don't have the personnel, to my knowledge, to understand the financials here.
Comments
This is talking about buy-and-hold portfolios?
I GET **THAT**.
I was commenting that OVER SEVENTY PERCENT OF TRADING is done through High Frequency Trading machines\algorithms that could give a flying flunk about "portfolios" or end of the year totals of any sort.
They are gaming the system day in day out, hour after hour, minute after minute, second after second.
Again, ASSUMING that their algorithms are worth a salt, larger moves in a shorter time period would = larger profits. Just sayin'.
If I opened it now would you not understand?
No offense, but this high-frequency trading aspect has absolutely nothing to do with what I was talking about. My original point was volatility is bad for the stock market. Because... it is.
For some reason you went into high-frequency trading and said that it's not necessarily bad for them. Well, no shit. But, I'm not talking about potential profits for high-frequency traders. I'm talking about the DOW or the NASDAQ or the S&P500, which matter much much more for every day Americans. I mean, one could even argue that declines in the stock market could be good for "traders" if they shorted or something else... but, that has absolutely nothing to do with my underlying point.
So, to rehash my original point... volatility is bad for the stock market.
I would even extend this to say... when the stock market declines significantly, it normally leads to a decline in the economy several months later. So, one could argue that increased volatility within the stock market is a negative sign for economic growth.
<object height="81" width="100%"> <param name="movie" value="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869"></param> <param name="allowscriptaccess" value="always"></param> <embed allowscriptaccess="always" height="81" src="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869" type="application/x-shockwave-flash" width="100%"></embed> </object> <span><a href=" - In the Fire (demo)</a> by <a href="
-Eddie Vedder, "Smile"
DOW is down 1.29% (171.88 points).... we could conceivably fall below 13000 today.
Ugh.
<object height="81" width="100%"> <param name="movie" value="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869"></param> <param name="allowscriptaccess" value="always"></param> <embed allowscriptaccess="always" height="81" src="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869" type="application/x-shockwave-flash" width="100%"></embed> </object> <span><a href=" - In the Fire (demo)</a> by <a href="
Yes.
<object height="81" width="100%"> <param name="movie" value="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869"></param> <param name="allowscriptaccess" value="always"></param> <embed allowscriptaccess="always" height="81" src="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869" type="application/x-shockwave-flash" width="100%"></embed> </object> <span><a href=" - In the Fire (demo)</a> by <a href="
I guess we just sit and wait for this trickle-down. In the meantime, let's keep laying off public school teachers.
The system is a joke.
Sorry. I guess i was making a kinda snarky face-palm like point, which was that, yeh it sucks for stock holders in a broad sense, it's kinda humorous because those that rigged the system in the first place are probably making a killing in this volatile market. The ones with the HFT machines are the large investment banks etc. The ones that got us in to this mess are the ones that are getting richer off of their own problem.
Its a sign that the market is doing some serious "price discovery". Which either means "fundamentals" are changing so rapidly that discovery (if assumed to be efficient) is "naturally" moving rapidly ...
... or it could be a sign that there is so much manipulation\interference in "the market" that discovery is functioning very inefficiently and thus swings widely attempting to "feel its way" in the dark with poor street markers (or signs that have maliciously been changed\altered).
It could be both at the same time (it is).
I would still argue that stock market valuations are fluctuating more wildly RIGHT NOW (last week or two) due to TECHNICALS, since I (and a lot of other folks) believe fundamentals have been sort of out the window (in an acute fashion) since the crash of 08.
There really was no reason for the markets to make such a "quick" move back out of the dumps in the first place -- no reason except large wads of free money handed to the big investment banks to play with.
The fact stands that here we sit with the DOW almost where it was at the end of 07.
HERE. TRY THIS
https://www.google.com/finance?client=ob&q=INDEXDJX:DJI
go below the chart to the slider, and slide the left hand of it over back down to 1990.
LOOK AT THE TWO PEAKS AT 2007 and CURRENT.
***WHAT BUSINESS HAVE WE UP THERE AT THE TOP*** ???
That is what the market is going through right now.
Some serious soul searching for answers based on technicals.
(ie. the CHART says we should NOT be here)
That and most of the news is still mixed (for US) or
outright SHIT (europe)
or scary (iran\israel, n. korea, china?)
If I opened it now would you not understand?
See, I'd say...
...government, mostly the Fed, is what brought the economy to its knees. Further, the bailout was done by government. If government was logical, there would have been no bailout. Those companies would have declared bankruptcy or been dismantled. That's capitalism and free-market competition. What we witnessed was anything but...
I agree that corporate profits are solid and CEO's are still paid a lot. But, I don't think we should dictate who gets paid what and I think corporate profits are high, they're just not using the capital. In other words, they are acting like the US savers... not spending as much or reinvesting as much. They don't see a long term gain in doing so. Companies are hoarding more cash just like consumers... this gives proof of that:
http://www.smartmoney.com/plan/banking/ ... 333683624/
Government can keep on repressing rates and think they can control business and consumers... but, not if... they know the whole thing's a charade. So, I don't really agree that Wall Street is doing just fine and I don't think consumers are doing just fine either. What I see is the Fed inflating stocks and all asset prices, so some (like yourself) think everything is fine. But, underneathe there's skepticism. I do agree that profits are high because they cut costs, but I also think they aren't putting money down (hiring in mass, for example) because they know this could blow up any day now. They are waiting.... that's why profits are so high... costs are low because companies aren't re-investing in capital (be it human capital or expansion) like they once did. They are scared.
I just take issue with the "whoa is me... and f the rich guy" attitude. People have a right to be pissed. I think that's completely understandable, but directing ALL anger completely at Wall Street and not seeing that government is pushing the buttons is misguided.
Just like private business is laying off workers, government has to too... I don't want any layoffs whatsoever... but, I get why they are happening... and as much as you are upset about public school teachers... how about the private school teachers being laid off? Do they not count as much? Or how about mass layoffs in private industry, are public workers somehow superior? This comes back to the deflection away from government and the focus on private areas... wall street is full of scum, but it always has been... government is also full of scum and always has been. Certainly, wall street has added to problems, but they do so because of moral hazard the government's creating. Because you focus away from government completely... in my humble opinion, you're being duped.
This basically summarizes the issue in a nutshell. Frustration is necessary and understandable. The blame is often misplaced. Government is most 'to blame' and everything they are doing to help is making that more and more apparent.
<object height="81" width="100%"> <param name="movie" value="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869"></param> <param name="allowscriptaccess" value="always"></param> <embed allowscriptaccess="always" height="81" src="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869" type="application/x-shockwave-flash" width="100%"></embed> </object> <span><a href=" - In the Fire (demo)</a> by <a href="
But the end result would have been the same: Cannibal Capitalism, and strengthening monopolies. In this environment, I simply do not think the "planned forest fire approach"--let everything burn to the ground and new life springs from the ashes-- would have had the effect that you think it would have had. Larger companies would still have gobbled up the smaller ones, effectively narrowing the markets through decreased access for the smaller ones to be competitive. Mafia Capitalism may be a good phrase here.
As I am sure you would agree, monopolies are not capitalism. But, with or without a bailout, this is what happened/would have happened.
Also, as I assume you know, Wall Street and the banks were living and thriving in the shadows for decades. The derivatives market was as clandestine as market could be, and the creation and implementation and manipulation of everything from CDOs to credit-default swaps were solely done with the banks/trader's profits in mind with no regard to the overall economy and the customers. Add to that the predatory lending industry, and we have a problem caused by the banks and financial institutions.
It's not about the American people anymore, it's not about the strength of the economy anymore, it's not about Main Street anymore, it's about how much money can I fit into my pockets. Blame government all you want, but to say that government was the main culprit when you have a dishonest, unethical "cesspool" (as my commodities trader friend describes it) in lower Manhattan running the country, and doing so legally, then therein lies the problem.
And? Should I feel sympathetic to millionaires and billion dollar corporations for hoarding trillions that can be invested in small businesses and infrastructure?
The private sector job growth under the previous administration was -600,000. A negative. Isn't this the point where government has to pick up the slack? Isn't this what was done when the middle-class and government programs built this country in the 1950s? Why can't there be a relationship like that? what is so wrong with that?
We can't dictate, but when people are making $30 million a year and crying about "uncertainty" and "regulations" (most of which were already in place before 1/20/09), it's difficult for me to take them seriously. Look what happened with regulations in place.
Why would government want to "control business and consumers?
Wall St. is fine. When people cry about their bonuses, not salaries, but bonuses, being cut in half, that is a sign that they are doing fine. And, compared to Main Street, they are doing just fine.
"What I see is the Fed inflating stocks and all asset prices, so some (like yourself) think everything is fine." I've stated multiple times that I do not think the picture is so rosy.
Waiting for what? Waiting for the economy and the citizenry to drown before throwing out a life vest?
Nobody here is "woe is me?" I am more "Woe is the middle-class." I have serious concerns that families like mine, and families that built this country are being shit on by those with all the wealth, those that make more in a year than everyone in this thread will see in a lifetime.
And, this has nothing to do with a "fuck the rich guy" attitude.
My friends and family members who are on Wall St. and in the financial and banking industries see the anger directed toward Wall St. as completely legitimate. They love OWS. Not what one expects, but this is how my people feel.
Kind of putting words in my mouth here. So I only focused on public school workers...this doesn't mean I ignore all the others who are being laid off.
And, in no way am I being duped, nor am I suffering form a period of deflection. Especially not when I have the reliable sources that I have. You don't become a millionaire in your early 30s for being stupid and misinformed. You don't buy 900K and million dollar homes by lacking some serious knowledge.
I have no problem with laying blame on the government; I just feel more blame lies with the inherent greed and dishonesty of those who have the economic power in this country.
How do I break out of this nutshell? Read more Peter Schiff? Friedman? Kudlow? Santelli?
I will keep my blame focused where it is.
I think you two are just hitting opposite heads of the same paraDIME.
Some focus more on the government manipulated markets side.
Some on the market manipulated governments side.
Its all just parts of the self-same system.
The "evil" isn't stemming inherently more from one side or the other (government or private sector) the "evil" is inerently manipulating, behind, and running BOTH.
It is "evil" only because it is hopeless, misguided, and itself prisoner to socio-political inertia.
These problems have approached the point of being too large to functionally address. They are systemic. The whole system is wrecked. Inflated beyond repair with no sensible hope of redress. Trying to "balance" the current system is only going to cause more REAL pain to REAL people than saving it is even worth. Why save a system for the sake of the SYSTEM? The system is intended to benefit the people, is it not?
I dunno. Thats just where i feel we are at.
Trying to go through the process of "clearing books", striking out all this bad debt, dealing with all the entangled parties, watching so many suffer in the process seems totally fruitless. Its only going to get worse in the next few years, either. The wave of bad GOVERNMENT debt that is coming is going to make 2008 look like a freaking picnic.
That government debt failure will wash over the markets, wash out the markets, and cause ridiculous pain for the masses. Large banks will even tumble over this. Especially large banks. Why try to sort all this shit out? We should just MOVE ON, press RESET globally, and let countries regain a foothold across the world at some sort of parity based on economic output. But that might entail a change of leadership around the world, and would certainly entail allowing currently woefully undeveloped nations and their people an approximately equal shot at global resources as the "fortunate few" currently have.
Instead the status-quo politicians seem hell bent on keeping the most debt-burdened nearest their deathbed than we to ours, and yet this process is pushing the rest\west of the world closer and closer to their own demise.
Is it not time for global cooperation and a new paradigm?
If I opened it now would you not understand?
First, the term cannibal capitalism doesn't make any logical sense. Competition is cannibalistic by it's very nature.
Second, and as for monopolies, I'd ask... where are they? What sector exactly? Think about your answer, before you answer. I hope your answer wouldn't have anything to do with banking (which could be related back to the Fed).
Third, your whole paragraph here is some sort of grand conspiracy. It's as if you allow unregulated markets they end in monopoly. I think most would argue that's completely untrue, in fact the opposite is true... take Citizens FL homeowners insurance for example... they regulate rates (government) then set up public "competition" which keeps rates unnaturally low thereby forcing private insurers to literally leave the state. That's a public entity creating a monopoly. And of course, there there's natural monopolies.
Fourth, I don't agree that we would have ended up in a state of constant monopolies if we didn't bail everyone out. In fact, I'd argue that makes not sense whatsoever. Look at who got bailed out, and where these "monopolies" would have come from:
1) AIG. (Insurance) - Nope!
2) Fannie and Freddie (GSE) - ha ha,.. try to explain monopoly on that one.
3) GM (auto) - in my opinion, they would have declared bankruptcy and restructured. Even if they failed I don't buy monopoly here. There's lots of other car makers.
4) Bank of America (bank)... If you look at the list of banks below that got bailed out, and really try to say they would have ended up in monopoly... i'd have a hard time believing it... countless banks were bailed out..
For more who got bailed out: http://projects.propublica.org/bailout/list
...instead, I'd argue they would have been penalized for engaging in horrible credit decisions. Under the current function, we decided to reward them for their awful decisions.
I love your word choice "living and thriving". ha ha.
Everything in a capitalistic society is done with profits in mind. This is such an awful point. I mean, the iPhone was created with PROFITS in mind. The computer was created with PROFITs in mind. Evil, evil iPhone and Computer! ha ha.
As for your other point on predatory lending... fair enough if this occurred, why not penalize those who provided loans to those who couldn't afford them. That's their job to figure that out! Why reward them with bailouts. It's completely counterintuitive. This "cannibal capitalism" you are so scared of would have penalized them. Instead, they got a nod of approval by the government.... and money to boot.
It's always been about how much money people can fit into their pockets. I'm not saying people aren't a bit more greedy now, but I mean, you're lying to yourself if you think people wouldn't have produced new conceptual ideas for profit in the 50s if they could have.
The government was the main culprit. Let me explain... First, Fannie and Freddie are the government run. Second, the Fed built the housing bubble by constraining interest rates. People were buying houses in mass because rates were low! When you have these lenders lending at low rates using exotic mortgages - they were betting on the Fed not hiking rates in the way they did. When the Fed hiked them, the whole house of cards collapsed. Third, that's not even getting into federal programs to encourage home ownership. The whole thing started with housing... government built it up... provided a breeding ground for shit capitalistic behavior to take advantage of the environment set up by GOVERNMENT.
No, you don't need to feel sympathetic at all. But, I think you could try to wrap your head around why they aren't spending. Because, if you want to, you could also blame the American consumer. I mean... they aren't spending. Ask yourself... Why? Because deep down, everyone really does know we're buried in shit... and it's about to get worse.
I'm not sure if you're trying to blame Bush or Obama, but personally, I think they are both dolts. I blame both administrations. I mean both were involved in bailouts. Both were involved in overspending, etc.
As for government picking up the slack... No. There's absolutely no point whatsoever where the government needs to pick up the slack for private job loss. In fact, I'd argue that approach is whole-heartedly ignorant, particularly when the government has limited financial resources to do such. We're broke. And moreover, it's not the governments job to toss rock's through windows to pretend like they are creating jobs:
http://www.youtube.com/watch?v=erJEaFpS9ls
You're crying to them asking them to "spend". I don't want to defend them. I want them to spend too. But, I'm saying here's why their not. The government is broke. The government goes down, our system goes down. They live in our system. That means they go down. They are saving money because they don't have "faith". As I mentioned earlier, they aren't alone... the American consumer doesn't either.
Because they believe they are genius and can save the world from the mess that they just created, which was put in place by the mess that they created before, which was put in place by the mess government made before that, etc.
People will cry. I, for one, agree companies should not be giving out bonuses when they are asking for bailouts. But, I differ from you in saying they shouldn't be getting bailouts to begin with, that would kill this issue dead. The companies are like spoiled little kids, with a Mom (US govenment) that has deep pockets. I'm saying.... Mom stop giving them your credit card... afterall, we're paying for it.
We're going to drown anyway. Just wait, if you really think what they've done has worked... might not be a year, might be 5... but, this will get worse.
They are being shit on by the government. The government is inflating prices across the board, or risking doing so. The government is bailing out companies (with their tax money) that would have failed.
No offense, but I don't care if you know a rich guy who says OWS is great. I think OWS is showing frustration. I understand why their frustrated, but I also believe just like some in the Tea Party were showing frustration.... it's just a political movement now. It's being coerced by political parties.
At the end of the day, I think dishonesty is a problem. But, I think it's more of a problem via the government. They set the stage for corporations to do business. Corporations, in a lot of cases, made huge risks. But, to me, they did so with knowledge that the government (or Mommy... or the US tax payer) would have to bail them out if they failed.
My point is how EXACTLY have we fixed this? We haven't. Government needs to fix it. Moral Hazard is running rampant.
You're entitled to read everyone and anyone. I just don't have to agree with it.
But, if you're serious... I'd recommend a basic microeconomics text - to start. Then a managerial econ text. This would probably get you to at least understand why I don't believe the corporations (although slimey and profit seekers) are the "cause" of this issue. It's the framework that's to blame... therefore, it's government.
<object height="81" width="100%"> <param name="movie" value="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869"></param> <param name="allowscriptaccess" value="always"></param> <embed allowscriptaccess="always" height="81" src="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869" type="application/x-shockwave-flash" width="100%"></embed> </object> <span><a href=" - In the Fire (demo)</a> by <a href="
http://finance.yahoo.com/news/stock-futures-fall-greece-political-113038760.html;_ylt=ArVTsE3kGFe0IRwcKp2UhjaiuYdG;_ylu=X3oDMTQzOGlhdHA5BG1pdANGaW5hbmNlIEZQIEp1bWJvdHJvbiBMaXRlBHBrZwM5ZjZlODIwYi1lZTEyLTMzY2YtODQwMi0wODIxZWExMzcxZDAEcG9zAzEEc2VjA2p1bWJvdHJvbgR2ZXIDNmMxZDQ1ZDAtOTkxYi0xMWUxLWJmYmYtNWQ2YmVmNzU1YjQx;_ylg=X3oDMTJncTl0Mm90BGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25zBHRlc3QDTWFya2V0X1VwZGF0ZV9BYm92ZV9MUkVD;_ylv=3
Dow is down almost 200 points right now, sitting at 12800. Almost 500 point below where it was when this post was originally put up last week.
<object height="81" width="100%"> <param name="movie" value="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869"></param> <param name="allowscriptaccess" value="always"></param> <embed allowscriptaccess="always" height="81" src="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869" type="application/x-shockwave-flash" width="100%"></embed> </object> <span><a href=" - In the Fire (demo)</a> by <a href="
Agree to disagree to agree to disagree. I'll leave it at that; if I don't, we'll go around in circles.
<object height="81" width="100%"> <param name="movie" value="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869"></param> <param name="allowscriptaccess" value="always"></param> <embed allowscriptaccess="always" height="81" src="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869" type="application/x-shockwave-flash" width="100%"></embed> </object> <span><a href=" - In the Fire (demo)</a> by <a href="
Philly Fed Index has more than just the stock markets nervous.
April reading, 8.5. Analysts expecting yesterdays release to come back at a 10.
Positive numbers mean more companies growing.
Negative numbers mean more companies contracting.
New number comes back, not at 10, not at 7.
At -5.8
Yeah, minus.
Hell, makes me a little nauseous.
I'm not trying to make more of this number than there is,
but this is just another in a line of confirmations that this alleged economic "rebound" out of the "recession" is more of a dead-bounce ...
I don't think i'm telling Inlet anything he doesn't know ...
I guess to nail down that queasy feeling I have,
it has to do with expectations.
Personally I had *expected* our "expert" "leaders" to "control" this economy on in to the election.
Instead we seem steered towards controlled deflationary demolition.
Between this recent glaring divergence of analyst expectations from apparent realities, and the super-oddly timed announcement of JP Morgan's "$2 billion" (do we really know? and wasn't this loss announced while those losing positions were still open, and didn't the market move against them twice as bad after announcement?) it almost seems like they are TRYING to throw the markets out of control.
Not that they would have to try too hard.
BTW,
Found this in a blog comment.
How does this even *work*?
JPM = Leveraged 39:1 derivatives to assets?
70 $trillion$ in derivatives? yeesh.
God help us.
Too big to fail,
too stupid to survive,
or worse, too sly to discern?
Second Side Note:
I find it odd JP Morgan is getting investigated by the FBI over this loss, when their coming forward, Mid-Quarter, while these trades were apparently\seemingly-assumed open against them pending being able to even trade out of such a large position in a relatively thin market (that particular credit risk index implicated in news stories) ...
so the story is that JPMorgan came out with this announcement, when it would otherwise have been quite financially foolish, only to fulfill a perceived legal obligation to disclose loses under "new" "disclosure rules". This was the assumption put forth by the media. And yet, now they stand under investigation by the FBI.
That's a fucking riot. lol?
Third Side Note:
The hilarity of sliding scale \ "floating rate" currencies astounds me as of recent, as a never-ending stream of global (and now oddly, even domestic economic woes) have the US Dolllar charting higher and higher. Back in to the $.80s ... oh boy??? It's like as everyone liquidates out of their positions, back in to cash, but yet not spending (increasing velocity of money), the dollar starts to rocket, even as global equities and commodities start to plunge down?
Are we truly starting a deflationary wave in earnest ???
There is a LOT of potential "de-leveraging" in "70 trillion dollars" (jp morgan derivatives alone, around $250trillion in major US banking) .. not to mention the rest of the world.
I imagine a substantial portion of those positions closing out to cash (US Dollars), at a loss being totally irrelavant in this case, would send the dollar through the roof, even if it sends markets (even metals) to the floor.
THAT would be bizzare.
If I opened it now would you not understand?
Yeh, the odd thing is how these are diverging from other regional indicators,... like NY. But, I buy the Philly Fed more than NY.
Yeh, I think a lot of what's going on in the market right now has to do with Europe, obviously. That said, I've said repeatedly in these parts that I do think a recession is coming. More folks are jumping on board with this outlook. But, the question is when and I'm left scratching my head there. My guess is by end of the year we'll be in recession in the US. My rational is the Fed won't do anything in an election year. If they tried to put forth a QE, just imagine the Republican response.
Ha... I think we'd both agree... we should never "expect our leaders to do anything right"... particularly when other forces are at play. I think the leaders tried to control it, but they can't because the largest economy in the world (Europe) is swinging on a thread.
I just find it odd that the government actually thinks the FBI can handle this sort of thing. They don't have the personnel, to my knowledge, to understand the financials here.
<object height="81" width="100%"> <param name="movie" value="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869"></param> <param name="allowscriptaccess" value="always"></param> <embed allowscriptaccess="always" height="81" src="https://player.soundcloud.com/player.swf?url=http://api.soundcloud.com/tracks/28998869" type="application/x-shockwave-flash" width="100%"></embed> </object> <span><a href=" - In the Fire (demo)</a> by <a href="
Well at least i was wrong about this, sometimes up is still up:
-the greenback immediately slipped 50 pips from 80.2 to 79.7 within 10 minutes
If I opened it now would you not understand?