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mises
Joined: 05 Nov 2007
Location: retired
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 Posted: Tue Feb 17, 2009 2:27 pm Post subject: |
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| asylum seeker wrote: |
| Methinks someone's trying to bump the price of gold up. |
The Russian central bank is doing that for him. |
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ubermenzch
Joined: 09 Jun 2008
Location: bundang, south korea
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| Posted: Tue Feb 17, 2009 4:05 pm Post subject: |
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| trying to understand the mess that the financial sector and economy is in is, at least for me, like trying to navigate a maze blindfolded. i keep trying to find something solid to grasp, and with work and patience i am able to feel my way into an understanding of where im meant to be headed, but by the next turn, i have to start understanding all over again and everything that was learned before is of no relevance. everybody seems to have something different to say, all of it quite convincing until i read the next person's analysis. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Tue Feb 17, 2009 4:20 pm Post subject: |
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| everybody seems to have something different to say, all of it quite convincing until i read the next person's analysis. |
Which is why Truman famously said something like, "Give me a one-handed economist."
I think all economists should be required to have their 'ideals' tattooed to their forehead and be forced to start all articles they write with the same list. Then we'd know where they are coming from in their analysis. As it is, we've got the people ontheway reads taking up valuable space and crowding out Paul Krugman.  |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Feb 17, 2009 5:47 pm Post subject: |
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| Ya-ta Boy wrote: |
| As it is, we've got the people ontheway reads taking up valuable space and crowding out Paul Krugman. |
How do you know if Ontheway is wrong and Krugman is right?
Anyways, the economists are pushing into areas they are not useful in. Why do we ask an economist about Bear Sterns, Lehman Bros or Fanny/Freddie? I have a graduate education in economics, and reading a balance sheet wasn't a meaningful part of the program. PhD economists do not typically learn how to value a company etc. That is for accountants.
A very basic problem we have here is that individuals with a highly specialized knowledge in balance sheets are not included in the discussion. We have a lawyer with a poli-sci undergrad (Obama) asking economists who have a PhD in mathematical modeling (Summers) about how to fix a banking system. This is absurd. Send in the accountants and restructuring specialists (like Mitt Romney, who brought Bain & Co back from the brink).
And now Summers and Tim Geithner (undergrad in "government" and masters in economics) are in charge of fixing up the automakers.. What in the world do they know about turning around a massive manufacturing company.
http://www.bloomberg.com/apps/news?pid=20601103&sid=aNpLdwT2Frs4&refer=news
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| Feb. 16 (Bloomberg) -- President Barack Obama opted against naming a �car czar,� instead asking Treasury Secretary Timothy Geithner and White House economic adviser Lawrence Summers to head a task force on revamping the U.S. auto industry. |
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Pluto
Joined: 19 Dec 2006
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| Posted: Tue Feb 17, 2009 6:50 pm Post subject: |
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| Rusty Shackleford wrote: |
You can't really blame capitalism or say it is dying as we have never really had true free markets in any of our life times. There is literally not one single transaction that takes place today where the govt didn't have it's hand in therre somewhere along the way. Most people are woefully ignorant of what capitalism and free markets really means.
http://miltonfriedman.blogspot.com/
I highly reccomend checking out this doco from the 80s that was made by Milton Freeman. It will give you some idea of what economists really mean when they say capitalism or free markets. It's completely different from what most people imagine. |
Yeah, well there are those who wish to redefine the legacy of the late Mr. Friedman. A certain senator from the backwoods of Vermont went apoplectic when private individuals (that is, outside of government) raised $200m for a new Milton Friedman Institute at the UofC.
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In today�s political and social reality, the University of Chicago�s establishment of a $200 million Milton Friedman Institute (in the building that has long housed the renowned Chicago Theological Seminary) will not be perceived as simply a sign of appreciation for a prominent former faculty member. Instead, by founding such an institution,the university signals that it is aligning itself with a reactionary political program supported by the wealthiest, greediest and most powerful people and institutions in this country. Friedman�s ideology caused enormous damage to the American middle class and to working families here and around the world. It is not an ideology that a great institution like the University of Chicago should be seeking to advance.
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With all due respect to the late Milton Friedman, his economic program is nothing more than a wish list for the greediest, the most monied interests in our society. At the same time that this ideology is supported by the rich and powerful�except when they�re lining up in Washington for their welfare checks�this same ideology is almost unanimously opposed by working families and middle-class people across this country.
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What would some of the items on Friedman�s wish list be? First of all, the Friedmanites would be supportive of the concept of a culture of greed. They want people making billions of dollars on the covers of Time and Newsweek because these people are supposed to be our national heroes. |
The Failed Profit...?
Friedman talking free market capitalism with Phil Donahue in all of his Bouffant Glory |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Tue Feb 17, 2009 8:03 pm Post subject: |
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I have a graduate education in economics, and reading a balance sheet wasn't a meaningful part of the program. PhD economists do not typically learn how to value a company etc. That is for accountants.
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So if you know this, why wouldn't Geithner and Summers know it?
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How do you know if Ontheway is wrong and Krugman is right?
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(It wasn't really Ontheway himself I mentioned, but the guys he reads.) That aside, I'm willing to bet the country on it. It's all a gamble anyway since no one seems to really know for a certainty. Obama was quite open about the direction he would go before the election, so that is what we're going to do. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Feb 17, 2009 8:14 pm Post subject: |
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| Ya-ta Boy wrote: |
| Quote: |
I have a graduate education in economics, and reading a balance sheet wasn't a meaningful part of the program. PhD economists do not typically learn how to value a company etc. That is for accountants.
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So if you know this, why wouldn't Geithner and Summers know it?
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Geithner, I don't know. I think he's in over his head. Summers is representing his friends on Wall Street. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Tue Feb 17, 2009 8:46 pm Post subject: |
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| Ya-ta Boy wrote: |
| I'm willing to bet the country on it. It's all a gamble anyway since no one seems to really know for a certainty. Obama was quite open about the direction he would go before the election, so that is what we're going to do. |
1. Yes, we all knew what Obama would do. He is following the Ponzi economics as he said he would.
2. It's too bad that you would bet the country, or in this case, the world, when you admit you don't know or understand the issue.
3. There are people who know. We do understand economics. We have explained what is happening. We saw it coming. We predicted it. We warned about it.
You are in love with the idea of socialism, so you are unwilling to face the truth.
Truth:
In a free market there is no inflation.
In a free market there is no business cycle.
In a free market there is no unemployment, except those who choose not to work.
In a free market there is no organized, legal system of pollution. Only pollution that comes from accidents and criminals. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Tue Feb 17, 2009 8:49 pm Post subject: |
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| Ya-ta Boy wrote: |
| I'm willing to bet the country on it. It's all a gamble anyway since no one seems to really know for a certainty. Obama was quite open about the direction he would go before the election, so that is what we're going to do. |
1. Yes, we all knew what Obama would do. He is following the Ponzi economics as he said he would.
2. It's too bad that you would bet the country, or in this case, the world, when you admit you don't know or understand the issue.
3. There are people who know. We do understand economics. We have explained what is happening. We saw it coming. We predicted it. We warned about it.
You are in love with the idea of socialism, so you are unwilling to face the truth.
Truth:
In a free market there is no inflation.
In a free market there is no business cycle.
In a free market there is no unemployment, except those who choose not to work.
In a free market there is no organized, legal system of pollution. Only pollution that comes from accidents and criminals. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Tue Feb 17, 2009 8:50 pm Post subject: |
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| Ya-ta Boy wrote: |
| I'm willing to bet the country on it. It's all a gamble anyway since no one seems to really know for a certainty. Obama was quite open about the direction he would go before the election, so that is what we're going to do. |
1. Yes, we all knew what Obama would do. He is following the Ponzi economics as he said he would.
2. It's too bad that you would bet the country, or in this case, the world, when you admit you don't know or understand the issue.
3. There are people who know. We do understand economics. We have explained what is happening. We saw it coming. We predicted it. We warned about it.
You are in love with the idea of socialism, so you are unwilling to face the truth.
Truth:
In a free market there is no inflation.
In a free market there is no business cycle.
In a free market there is no unemployment, except those who choose not to work.
In a free market there is no organized, legal system of pollution. Only pollution that comes from accidents and criminals. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Tue Feb 17, 2009 8:51 pm Post subject: |
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| Ya-ta Boy wrote: |
| I'm willing to bet the country on it. It's all a gamble anyway since no one seems to really know for a certainty. Obama was quite open about the direction he would go before the election, so that is what we're going to do. |
1. Yes, we all knew what Obama would do. He is following the Ponzi economics as he said he would.
2. It's too bad that you would bet the country, or in this case, the world, when you admit you don't know or understand the issue.
3. There are people who know. We do understand economics. We have explained what is happening. We saw it coming. We predicted it. We warned about it.
You are in love with the idea of socialism, so you are unwilling to face the truth.
Truth:
In a free market there is no inflation.
In a free market there is no business cycle.
In a free market there is no unemployment, except those who choose not to work.
In a free market there is no organized, legal system of pollution. Only pollution that comes from accidents and criminals. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Fri Feb 20, 2009 4:17 am Post subject: |
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Laissez-Faire Capitalism Has Failed
It is now clear that this is the worst financial crisis since the Great Depression and the worst economic crisis in the last 60 years. While we are already in a severe and protracted U-shaped recession (the deluded hope of a short and shallow V-shaped contraction has evaporated), there is now a rising risk that this crisis will turn into an uglier, multiyear, L-shaped, Japanese-style stag-deflation (a deadly combination of stagnation, recession and deflation)...
To avoid this L-shaped near-depression, a strong, aggressive, coherent and credible combination of monetary easing (traditional and unorthodox), fiscal stimulus, proper cleanup of the financial system and reduction of the debt burden of insolvent private agents (households and nonfinancial companies) is necessary in the U.S. and other economies...
Thus the L-shaped, near-depression scenario is still quite possible (I assign it a 30% probability), unless appropriate and aggressive policy action is undertaken by the U.S. and other economies.
This severe economic and financial crisis is now also leading to a severe backlash against financial globalization, free trade and the free-market economic model.
To paraphrase Churchill, capitalist market economies open to trade and financial flows may be the worst economic regime--apart from the alternatives. However, while this crisis does not imply the end of market-economy capitalism, it has shown the failure of a particular model of capitalism. Namely, the laissez-faire, unregulated (or aggressively deregulated), Wild West model of free market capitalism with lack of prudential regulation, supervision of financial markets and proper provision of public goods by governments.
http://www.forbes.com/2009/02/18/depression-financial-crisis-capitalism-opinions-columnists_recession_stimulus.html |
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rusty1983
Joined: 30 Jan 2007
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| Posted: Sat Feb 21, 2009 12:10 pm Post subject: |
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I couldnt be arsed to read that article, but Im sceptical we've seen the end of capitalism. This crash is unprecedented but I just dont see it changing that much. It ll be moderated in the future but itll still be capitalism.
I think there is a lot of hullabalaoo about it all. A time to 'bury bad news' if you like. The press especially tend to exaggerate matters. Well, I dont trust them anyway. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sat Feb 21, 2009 5:54 pm Post subject: |
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This isn't capitalism.
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The Obama administration hopes to jump-start this crucial machinery by effectively subsidizing the profits of big private investment firms in the bond markets. The Treasury Department and the Federal Reserve plan to spend as much as $1 trillion to provide low-cost loans and guarantees to hedge funds and private equity firms that buy securities backed by consumer and business loans.
The Fed is expected to start the first phase of the program, which will provide $200 billion in loans to investors, in early March.
But analysts question whether this approach will be enough to unlock the credit that the economy needs to pull out of a deepening recession. Some worry it may benefit only select investors at taxpayer expense.
The program also does not try to change securitization practices that, many investors say, spread risks throughout the world and destroyed financial institutions. Policy makers acknowledge that for now, fixing credit ratings, reducing conflicts of interest and improving disclosure can wait.
Under the program, the Fed will lend to investors who acquire new securities backed by auto loans, credit card balances, student loans and small-business loans at rates ranging from roughly 1.5 percent to 3 percent.
http://farm4.static.flickr.com/3081/3131600832_d6e63ea387_o.png
Depending on the type of security they are borrowing against, investors will be able to borrow 84 percent to 95 percent of the face value of the bonds. Investors would not be liable for any losses beyond the 5 percent to 16 percent equity that they retain in the investment.
http://farm4.static.flickr.com/3081/3131600832_d6e63ea387_o.png
In the initial phase, the Treasury will provide $20 billion and the Fed will provide $180 billion. Treasury Secretary Timothy F. Geithner said last week that the Treasury could increase its commitment to $100 billion to allow the Fed to lend up to $1 trillion. |
http://www.nytimes.com/2009/02/20/business/20lend.html?partner=rss&emc=rss
What a horrible idea. Government backed/leveraged speculation on toxic assets up to 95% of the value. I honestly can't think of a dumber thing to do. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Sat Feb 21, 2009 6:19 pm Post subject: |
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| To say that the regime we've had is or was lazzes faire is very laughable. The size of govt and the role it takes in the economy has been growing year on year. We are about to witness the alternative with Obama's socialist scheme. The results will not be pretty. |
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