How do sentence fragments from emails support anything?Originally Posted by Bill Moore
Posted by JarodParker
Some are losing perspective and have resorted to personal attacks instead of challenging the opposing view, but then on the other hand this is obviously an emotionally charged topic. I suspect if Presley and I were having this conversation face to face we would be trading punches by now and then after we were both too tired to continue get a cold beer afterwards. At least when we used to trade punches over issue there was something honorable about that, unlike our current system.In one e-mail message, an S&P employee explains that a meeting is necessary to "discuss adjusting criteria" for assessing housing-backed securities "because of the ongoing threat of losing deals." Another message complains of having to use resources "to massage the sub-prime and alt-A numbers to preserve market share." Clearly, the rating agencies skewed their assessments to please their clients.
Getting to your quote, this supports the basis of my main argument, and while none of this may truly cross the line of being corrupt (although I would be surprised if it didn't), it is dishonest. I'm getting old so my memory is failing me, but there was a famous quote by a French man who was touring the U.S. a century or so ago, and he said America will continue to be great as long as its people continue to be great. The character of our people made a strong impression on him. While I can't mathematically prove that base line character of our people, or at least many of those leading major corporations, has declined, it seems to be the case (that also includes the character of those who expect hand outs, so it is not limited to one end of the spectrum). There are numerous examples throughout history of corrupt, self-centered, shortsighted business leaders, but now due to the consolidation of the financial sector it is easier to be the norm, because the market no longer controls their behavior. They can collaborate to protect common interests and act together instead of truly competing. That is only a suspicion, but some business analysts believe it is happening.
I think an argument could be made that this same type of dishonesty is also prevalent in the U.S. Government, especially in the Departments of Defense and State, where they shamefully change evaluation criteria and manipulate data to demonstrate success where it doesn’t exist (so much for EBO). The take away is that our current cultural norm of white washing problems away with lies prevents us from solving them. In response, and rightfully so, the people have rose up to challenge the madness, whether they belong to the Tea Party, the 99%, or just individually are feed up. Getting back to the topic of this thread the next American Revolution is unfolding. The current ways will have to evolve considerably, the people are demanding it. It would be a lot easier if we could put the political philosophies aside and honestly evaluate the problems.
How do sentence fragments from emails support anything?
PH Cannady
Correlate Systems
?Posted by Presley, How do sentence fragments from emails support anything
So you admit all your counter arguments on this thread are lame. Good we're in agreement for once.
Presley, you not understanding doesn't mean that I'm wrong.
There's a difference in economic discussions between people who have studied macroeconomics and microeconomics full-time for almost five years and those who didn't.
So you admit you can't even point to a single improperly rated MBS. Good, we're in agreement for once.
PH Cannady
Correlate Systems
No, it means you've presented very little that's meaningful.
Yes. The ability to draw on detailed, specific evidence to validate their claims.There's a difference in economic discussions between people who have studied macroeconomics and microeconomics full-time for almost five years and those who didn't.
PH Cannady
Correlate Systems
Presley, I am with Bill, Fuchs, and Jared.
Poor playground behavior as exemplified by the propaganda cable 'news' channels Russia Today/Fox/MSNBC is not a cogent argument.
You can do better, walk us through your points and display your mastery or understanding of the subject and positions you are advocating for.
Sapere Aude
I won't put four semester microeconomics into a forum format, forget about that. I'd be a millionnaire and push Mankiw from the textbook market if I could do that.
I'm not out of my territory on this subject, and unlike much else that I discuss on this forum I'm not resting my opinion on informal studies this time.
Last edited by Fuchs; 11-05-2011 at 09:07 PM.
And why would you do that? All you have to do is show evidence that people who don't pay federal taxes are on the hook for federal expenditures. You have the dollar amount for TARP, so if your so-called "theory" is even worth the pixels I'm reading you be able to quantify the attendant risk and the affected population.
Otherwise, it's just another snowjob.
PH Cannady
Correlate Systems
Simple.You can do better, walk us through your points and display your mastery or understanding of the subject and positions you are advocating for.
1. TARP presented little to no risk to federal taxpayers (assuming it makes sense to talk about risk where it concerns taxes), either before or after the fact. The authorized expenditure for the entire program is less than the tax receipts returned by the top 1 percent, of which only $388 billion was dispersed. TARP certainly presented no risk at all to any person who didn't pay federal taxes, as they are not contributors to any account drawn on by the federal government. Finally, what sense does it make to talk about "risks" to taxpayers? A tax doesn't have a return. A bond, however, does, and the federal government can run deficits.
2. There is no evidence whatsoever that credit agencies improperly rated any MBS derived from subprime origination. Bill and Jarod confuse MBS rating with CDO rating.
Last edited by Presley Cannady; 11-05-2011 at 08:37 PM.
PH Cannady
Correlate Systems
The quantification is up to legislation, I can't help you a bit if you don't understand that.
Give it a shot anyway. Draw up a scenario. Trust me, it'll be more impressive than your credential pumping.
PH Cannady
Correlate Systems
Maybe you want to explain your interesting math for a change?
What's there to explain? Short-term capital gains are taxed as ordinary income.
PH Cannady
Correlate Systems
That.
Who decides what's "appropriate"? Another subjective term to mark down with "fair" and "deserved".
Somehow I can't convince myself that the economic problems in the US come down to insufficient regulation. Possibly this comes a bit from my 3rd world perspective, but the American populace at large seems to me less exploited than soft, pampered, overprotected, overentitled. Individually and institutionally, Americans seem to have forgotten that they need to compete. Reducing executive salaries or regulating deal-making isn't going to change that.
As an investor, if you're holding shares in a company you don't think is managed well, you have two options. One is to go to a shareholder's meeting and make your opinion known, which is realistically pretty pointless. Another is to pull your money out and put it somewhere you think is better... no shortage of options. Demanding that the government do something about it... why bother, really?
Again, this is admittedly from a 3rd world perspective, but the idea of a nurse or a cop making 100k+ a year makes the rage seem a bit superfluous. Have you any idea what people in most of the world think of that? Or of the idea of a country where people statistically classified as "poor" own cars, refrigerators, TV sets, etc...
They also aren't hurting because executives are overpaid, or even because of "Wall Street", or "the bankers". Not that part of the responsibility doesn't lie there, but it's only part, and you don't get a clear handle of the problem without looking at the other parts.
“The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”
H.L. Mencken
I feel compelled to respond since I was named in your post.
The senate investigations clearly states that both were improperly rated. Here's a link to a press release summary. And the actual 600+pg report.
1) Inaccurate Rating Models. From 2004 to 2007, Moody’s and Standard & Poor’s used credit rating models with data that was inadequate to predict how high risk residential mortgages, such as subprime, interest only, and option adjustable rate mortgages, would perform.
2) Competitive Pressures. Competitive pressures, including the drive for market share and need to accommodate investment bankers bringing in business, affected the credit ratings issued by Moody’s and Standard & Poor’s.
3) Failure to Re-evaluate. By 2006, Moody’s and Standard & Poor’s knew their ratings of residential mortgage backed securities (RMBS) and collateralized debt obligations (CDOs) were inaccurate, revised their rating models to produce more accurate ratings, but then failed to use the revised model to re-evaluate existing RMBS and CDO securities, delaying thousands of rating downgrades and allowing those securities to carry inflated ratings that could mislead investors.
4) Failure to Factor In Fraud, Laxity, or Housing Bubble. From 2004 to 2007, Moody’s and Standard & Poor’s knew of increased credit risks due to mortgage fraud, lax underwriting standards, and unsustainable housing price appreciation, but failed adequately to incorporate those factors into their credit rating models.
5) Inadequate Resources. Despite record profits from 2004 to 2007, Moody’s and Standard & Poor’s failed to assign sufficient resources to adequately rate new products and test the accuracy of existing ratings.Inaccurate AAA credit ratings introduced risk into the U.S. financial system and constituted a key cause of the financial crisis.
When asked about the corruption in his country, an Afghan once commented that their politicians were no more crooked than US politicians. The difference was that US politicians had found ways to legalize their corruption.
The American people get exploited enough even with all the regulation and protection. That's not to say that there aren't over regulated areas where the legislative fat need to be trimmed.
Reducing executive salaries will definitely go a long way in making the country more competitive. More money for share holders to re-invest, R&D, operations, etc. I also believe re-balancing the pay gap between employees and executives will make employees more productive. Now I'm not sure how this all would be done or even if the government should be involved but it needs to happen.
I agree with you in that there's a strong sense of entitlement in the US (from students, employees, executives and politicians) but hopefully that will be one of the things that gets adjusted as a result of the crisis.
For a long time I was frustrated by the futility of option1 especially for retail investors. Even the big mutual funds are impotent. That's why I took option2 and voted with my feet. But even then the stock market as well as the overall national and global economies can still be taken hostage by these institution. And that's why stricter regulation is necessary.As an investor, if you're holding shares in a company you don't think is managed well, you have two options. One is to go to a shareholder's meeting and make your opinion known, which is realistically pretty pointless. Another is to pull your money out and put it somewhere you think is better... no shortage of options. Demanding that the government do something about it... why bother, really?
Yea, most people would like to have a piece of it whether through immigration or by developing their nation.Again, this is admittedly from a 3rd world perspective, but the idea of a nurse or a cop making 100k+ a year makes the rage seem a bit superfluous. Have you any idea what people in most of the world think of that? Or of the idea of a country where people statistically classified as "poor" own cars, refrigerators, TV sets, etc...
But you also have to keep in mind things like cost of living. Just a couple of years ago, the starting salary of a rookie cop in SF was $70,000 but you need like a gajillion dollars to rent a tiny apartment there. Somebody making $10,000/year which is well below the US poverty line can live like a king in most places around the world. In fact that person is in the top 13% globally (Calculator). But that stat is meaningless when you have to live in the US.
And usually when you pay your cops well they tend to not do things like take bribes. When armies are paid reasonable wages, they have one less reason to mutiny, etc. At one time, FBI agents in NY used to qualify for food stamps and a return to those days would probably be a bad idea in terms of national security.
I agree with you in that "wall street" and "bankers" are only part of the problem. And not everyone on "wall street" and not all "bankers" are part of the problem. But the system needs an overhaul and that's what I think the protestors are asking for.They also aren't hurting because executives are overpaid, or even because of "Wall Street", or "the bankers". Not that part of the responsibility doesn't lie there, but it's only part, and you don't get a clear handle of the problem without looking at the other parts.
Bill Moore expressed my sentiments in better ways than I can ever hope to...
Posts by Dayuhan,
That is the great myth we tend to perpetuate. First you can't accurately classify the American populace at large, but there is a large segment of our population that is far from soft. Both adults work to make ends meet (the reality is they choose a lifestyle that requires this). Many adults have two or more jobs and work well over 60 hours a week. That isn't the norm in most parts of the world. In many parts of the world people have a culture that still values quality of life as defined by time spent with family and friends, not how many toys one has. Is there a soft and over entitled element of our society? Obviously the answer is yes, but they don't define our society. Forgetting the need to compete? I think our inability to compete in some areas is due to government regulations and in some cases lack of government incentatives (some will decry this as socialism, but we're competing in a world where other countries enable their businesses to be competitive globally, if we don't we'll continue to lose jobs), and of course it is a fact that our public schools have failed at least three generations (again government policies driven by political corrrectness).Somehow I can't convince myself that the economic problems in the US come down to insufficient regulation. Possibly this comes a bit from my 3rd world perspective, but the American populace at large seems to me less exploited than soft, pampered, overprotected, overentitled. Individually and institutionally, Americans seem to have forgotten that they need to compete. Reducing executive salaries or regulating deal-making isn't going to change that.
So you're making an argument that only the big boys with automated investing tools that move money from one stock to another based on algorithyms (which sure as hell isn't investing, its gambling) is O.K.? The individual investor should quit whinning and accept a 1-2% return on his savings to prepare for retirement? There is also a considerable lack of transparency due to the lack of oversight, which frankly I don't think can be fixed without forming a large government bureaucracy that will only make things worse. It can only be fixed by corporations and the financial sectors embracing business ethics as the norm, versus the exception.As an investor, if you're holding shares in a company you don't think is managed well, you have two options. One is to go to a shareholder's meeting and make your opinion known, which is realistically pretty pointless. Another is to pull your money out and put it somewhere you think is better... no shortage of options. Demanding that the government do something about it... why bother, really?
Having been to the Philippines many times over the past 30 years, we both know a $100,000.00 goes a lot further in there than in the U.S., so even comparing our situation to the Philippines is an exercise in futility. I sure as heck hope we don't think it is O.K. to allow our society to get reduced to that level. Of course poverty in Africa, South Asia, Latin America and Southeast Asia is much more extreme than it is in the U.S., so what? We built a better system that is now in danger of collapsing due to some structural issues, ethical issues, and a failure to adapt to modern realities. We have thousands of American families who are homeless now, and while you may not see that from your seat, I see them camping under highways, crammed into cheap hotel rooms, or just parked on the street living out of their car. Their kids will be trapped in the poverty cycle if we don't fix our schools, and then soon enough we'll be able to draw parallels between the Philippines and the U.S. which will be pretty darn sad if we let this happen.Again, this is admittedly from a 3rd world perspective, but the idea of a nurse or a cop making 100k+ a year makes the rage seem a bit superfluous. Have you any idea what people in most of the world think of that? Or of the idea of a country where people statistically classified as "poor" own cars, refrigerators, TV sets, etc...
You're wrong about this, it goes back to the culture of corruption where CEOs are rewarding for non-performance and those who had value to the company are punished with salary reductions or layoffs to increase the bottom line. I have listened to numerous interviews with CEOs, and some of them are quite frank about this. One example was a furniture company in NC that is doing well, but due to the challenging times everyone including the CEO agreed to pay reductions. The CEO is loyal to his employees and shares the profits and losses. They interviewed another CEO about how he is doing business, and he said if he could run the company he would lay off up to 30% of the work force so he could increase the profit margin and drive up the stock price, making money is the name of game. There was at least one study that stated these CEOs who get hired to reduce costs (reduce the workforce) to increase the bottom line were effective in the short term, but over the long term (and they never stayed for more than 3 years) the Company actually produced less value because the work force was decimated. Technology also plays a role, but it isn't just technology that is leading to these layoffs. It is about the big dogs who own 51% or more of company's stock that are driving these decisions. Does this system really serve America's best interests?They also aren't hurting because executives are overpaid, or even because of "Wall Street", or "the bankers". Not that part of the responsibility doesn't lie there, but it's only part, and you don't get a clear handle of the problem without looking at the other parts.
What about that? It's just the law. You dispose of capital gains in the year of acquiring the asset, you pay taxes on the take as ordinary income. You defer for a year, you pay at 15 percent.
PH Cannady
Correlate Systems
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