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Thread: In The USA: the Next Revolution

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    Quote Originally Posted by Dayuhan View Post
    Only to a very minor degree. The regulations didn't do much and their removel did little to contribute to the crisis. the actual causes are far deeper and a good deal harder to address. Probably the worst thing to do right now would be to pass a bunch of regulations and call it done... like blaming everything ion the banks, that's an easy way to avoid looking at actual causes and trying to develop systemic solutions.
    Okay. Well, here's the list of arguments to keep Glass-Steagal, as written in 1987:
    Conflicts of interest characterize the granting of credit (that is to say, lending) and the use of credit (that is to say, investing) by the same entity, which led to abuses that originally produced the Act.

    Depository institutions possess enormous financial power, by virtue of their control of other people's money; its extent must be limited to ensure soundness and competition in the market for funds, whether loans or investments.

    Securities activities can be risky, leading to enormous losses. Such losses could threaten the integrity of deposits. In turn, the Government insures deposits and could be required to pay large sums if depository institutions were to collapse as the result of securities losses.

    Depository institutions are supposed to be managed to limit risk. Their managers thus may not be conditioned to operate prudently in more speculative securities businesses. An example is the crash of real estate investment trusts sponsored by bank holding companies (in the 1970s and 1980s).
    I don't know about you, but to me that reads like a laundry list of the problems we're facing now. The one possible exception is that the government paid large sums to prevent collapse, rather than as a response to collapse.

    Quote Originally Posted by Dayuhan View Post
    I don't think view has a place on the political spectrum... it's just true. Anyone trying to blame this exclusively on banks isn't paying attention, and is pointing all of the blame at 1/3 of the problem, which is not a way to solve anything.
    I don't think the banks were exclusively to blame. I doubt many in OWS think that, either. But I think, and I believe many of them think, that banks share a huge portion of the blame. A lot of that blame can be shared by the government--both major parties--for allowing the banks the latitude to fail the country so spectacularly.

    Besides, that's a ridiculous thing to say. Where does the statement that Obama was born in Hawaii fall on the political spectrum?

    Quote Originally Posted by Dayuhan View Post
    I'm not even talking about "what most of the country wants". I'm talking about setting ideology aside and trying to actually look at what's wrong and how to fix it. That will probably not be what most of the country wants, because what most of the country seems to want is to blame somebody, hang somebody, and pretend nothing more needs to be done.
    That strikes me as a fair characterization of the Tea Party. It doesn't strike me as a fair characterization of OWS. It seems pretty clear that the largest problem the country faces lies in how the major financial institutions are operating. Whether you want to blame that on the government or the banks or even those who accepted the liar loans, financial operations is where the problem is occurring. Fixing those problems is going to involve fixing how financial institutions operate. So pretty much no matter what, OWS's anger is at least aimed in something approximating the right direction. As opposed to blaming immigrants.
    Last edited by motorfirebox; 11-10-2011 at 06:28 AM.

  2. #462
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    I don't think keeping Glass-Steagal would have made an iota of difference. The mechanisms might have been a bit different, but things would have played out much the same way.

    Quote Originally Posted by motorfirebox View Post
    Besides, that's a ridiculous thing to say. Where does the statement that Obama was born in Hawaii fall on the political spectrum?
    The statement itself falls nowhere on the political spectrum: it's either true or false. People at varying points on the political spectrum may use true or false statements as they see fit, but the statements themselves don't fall anywhere.

    Quote Originally Posted by motorfirebox View Post
    That strikes me as a fair characterization of the Tea Party. It doesn't strike me as a fair characterization of OWS.
    Possibly because you'd rather blame bankers than immigrants? Last I looked the tea party was more about blaming government, but I confess I don't look much in that direction.

    Quote Originally Posted by motorfirebox View Post
    It seems pretty clear that the largest problem the country faces lies in how the major financial institutions are operating.
    That's a symptom, not a cause.
    “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

  3. #463
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    Quote Originally Posted by Dayuhan View Post
    I don't think keeping Glass-Steagal would have made an iota of difference. The mechanisms might have been a bit different, but things would have played out much the same way.
    Possibly, but only because of the pattern of behavior that repealing Glass-Steagal was a part of.

    Quote Originally Posted by Dayuhan View Post
    The statement itself falls nowhere on the political spectrum: it's either true or false. People at varying points on the political spectrum may use true or false statements as they see fit, but the statements themselves don't fall anywhere.
    I don't think there's any important difference in that distinction.

    Quote Originally Posted by Dayuhan View Post
    Possibly because you'd rather blame bankers than immigrants? Last I looked the tea party was more about blaming government, but I confess I don't look much in that direction.
    That's an extreme oversimplification of my argument. There are a lot of facets to the problem. In my view, though, banks--financial institutions--are at the center of it. If you seriously place banks on the same level as immigrants in terms of who's responsible for the current mess, I don't think there's any point in continuing.

    Quote Originally Posted by Dayuhan View Post
    That's a symptom, not a cause.
    If it's a symptom, it's one on the order of leukopenia in an AIDS patient: something serious enough to require treatment on its own, regardless of the underlying cause.

  4. #464
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    Quote Originally Posted by motorfirebox View Post
    Possibly, but only because of the pattern of behavior that repealing Glass-Steagal was a part of.
    That's the assumption you're making, yes.

    Quote Originally Posted by motorfirebox View Post
    That's an extreme oversimplification of my argument. There are a lot of facets to the problem. In my view, though, banks--financial institutions--are at the center of it. If you seriously place banks on the same level as immigrants in terms of who's responsible for the current mess, I don't think there's any point in continuing.
    I don't see immigrants as a problem at all, but having read the OWS manifesto posted upthread, I don't think it gets anyone any closer to a solution than anything coming out of the tea party.

    Quote Originally Posted by motorfirebox View Post
    If it's a symptom, it's one on the order of leukopenia in an AIDS patient: something serious enough to require treatment on its own, regardless of the underlying cause.
    Except that we haven't got a treatment that's likely to accomplish anything, and that any proposed symptomatic treatment is likely to be used as an excuse to avoid confronting the actual problems. In fact, of course, the most likely outcome will be to slap on a few regulatory band-aids aimed at solving yesterday's problems and proceed to repeat... it is our way.
    “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

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    Council Member Dayuhan's Avatar
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    Quote Originally Posted by Fuchs View Post
    The status quo wages and salaries are not justified by market principles as 'right' wages and salaries simply because market distortions (power asymmetry, principal agent problem) are in effect.

    They just happen to be wages, there's no reason to see them as best or 'right' and resist influences on the market for reason of market efficiency, for market efficiency is not given in status quo.
    If the absence of unions is perceived as a market distortion, what would you call the presence of unions that are capable of shutting down an employer who doesn't give them what they want... perhaps looking at Britain in the late 70s as an example? Is that not an equally distorted market?

    Would a the power of labor in a non-distorted market be the ability to leave and seek work elsewhere, not the ability to not only stop working, but to apply coercive force to prevent anyone else from taking over the job? That seems like a fairly severe distortion in its own right.

    Nobody complains about the impotence of American unions when unemployment is low and jobs are plentiful: if you don't like your job, you don't need to strike, you quit and go work somewhere else. In those conditions unions seem largely irrelevant and the dues start to seem like an imposition, especially since American unions have not always handled their money responsibly, to put it mildly. Of course when unemployment is high, all that changes.

    Similarly, when we go into bubble mode neither the populace nor the government has anything bad to say about the financial industry: they cheer the business on, tap into the bubble as much as they can, tell themselves how smart they are to be "winning". When the bubble pops and nobody seems quite so smart, all the fingers point to Wall Street. It's a bit like passengers in a car screaming "faster, faster" and handing the driver drinks, then filing lawsuits for negligence when there's a crash.
    “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

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    Quote Originally Posted by Dayuhan View Post
    If the absence of unions is perceived as a market distortion, what would you call the presence of unions that are capable of shutting down an employer who doesn't give them what they want... perhaps looking at Britain in the late 70s as an example? Is that not an equally distorted market?
    You can't really call either a market "distortion"--the term Fuchs is actually grasping for is "inefficiency"--without additional context. We would first need some measure over a nest of transactions to determine how far they deviate from some maximally efficient allocation of goods and services. Given your particular example, we'd have to:

    1) determine some wage that is optimal for both employer and employee, and

    2) examine how far we stray from the optimum incident to some regime of collective bargaining.

    The first step is hard, because calculating maximally efficient allocation of goods and services is an exercise in highly conditional, subjective teeth pulling. The second step is comparatively elegant (provided the math holds up, which is what the folks in Stockholm apparently believe).
    PH Cannady
    Correlate Systems

  7. #467
    Council Member Fuchs's Avatar
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    Quote Originally Posted by Dayuhan View Post
    If the absence of unions is perceived as a market distortion, what would you call the presence of unions that are capable of shutting down an employer who doesn't give them what they want... perhaps looking at Britain in the late 70s as an example? Is that not an equally distorted market?
    It is. Power asymmetry can go both ways.
    Countries can balance the powers or employers and labour unions through legislation, jurisdiction and culture, though. I think that's what all developed countries should strive for - and it's an everlasting challenge.

    Btw, slightly related to topic (UK, not U.S.):
    Last edited by davidbfpo; 11-16-2011 at 12:27 PM. Reason: Removed unpleasant text

  8. #468
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    Default Enough!

    Quote Originally Posted by motorfirebox View Post
    That's largely because you're too much of an ass to bother with. I honestly don't know why Fuchs continues to engage with you. You seem to utterly lack the ability to present facts in any context, choosing instead to simply respond with insults to anything anyone says. You're an idiot and a troll, and the sooner you get bored and wander off to perform your idiot troll antics for some other audience, the faster this thread will return to being something worth reading.
    I agree this has gone beyond anything I ever intended this thread to be. I am trying to get a Mod to lock it for good. Thanks to all who contibuted some serious food for thought. Later Slap
    Last edited by davidbfpo; 11-16-2011 at 12:33 PM. Reason: Retained to illustrate the steep drop in tone here, unpleasant I say and why as a Moderator action taken.

  9. #469
    Council Member davidbfpo's Avatar
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    Unhappy Thread locked

    I have locked this thread after Slap's request and the tone has slipped somewhat into sniping and more. If I had more time tonight I'd prefer to remove many of the latest posts.

    Meantime the USA will move towards a revolution without SWC.

    Updated 27th November 2011

    The thread was unlocked after extensive pruning of posts and some editing. This came about after an exchange of unpleasantness that was ancillary to the discussion.

    If repeated the thread will be locked again and closed.
    Last edited by davidbfpo; 11-27-2011 at 09:52 PM. Reason: Add update
    davidbfpo

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    Quote Originally Posted by Surferbeetle View Post
    You're off by at least half, probably because the speaker was talking about either the listed credit or OTC markets. The notional value of the total derivative markets exceeds 1.2e15 USD, but the key word here is "notional." Consider it to be a line of credit upon which obligations are calculated.
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    Quote Originally Posted by Presley Cannady View Post
    You're off by at least half, probably because the speaker was talking about either the listed credit or OTC markets. The notional value of the total derivative markets exceeds 1.2e15 USD, but the key word here is "notional." Consider it to be a line of credit upon which obligations are calculated.
    True.

    Presently working on some books in this arena to include:

    Extreme Money by Satyajit Das, ISBN 10:0132790076

    The Euro by David Marsh, ISBN 9780300127300

    Reading recommendations are always welcome
    Sapere Aude

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    Well all I can say is that I am now ecstatic that I can download my retirement planning stocks & funds, etc., and then upload into Morningstar and the portfolio manager (all in Excel format .csv). It sure makes tracking and analyses a lot easier

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    Quote Originally Posted by Misifus View Post
    Well all I can say is that I am now ecstatic that I can download my retirement planning stocks & funds, etc., and then upload into Morningstar and the portfolio manager (all in Excel format .csv). It sure makes tracking and analyses a lot easier
    .csv files can also be opened and then pasted into excel workbooks. Excel is a fun and addictive modeling tool with which you can see what is happening under the hood. It leads to harder tools such as mathcad, maple, and mathematica.

    I will post some titles from my excel financial tools library later.

    Not meant to be a knock but Google has free historical data for funds, etfs, and stocks which can be downloaded as .csv files for analysis. I am looking for historical options data and welcome leads.
    Sapere Aude

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    Council Member Misifus's Avatar
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    Quote Originally Posted by Surferbeetle View Post
    .csv files can also be opened and then pasted into excel workbooks. Excel is a fun and addictive modeling tool with which you can see what is happening under the hood. It leads to harder tools such as mathcad, maple, and mathematica.

    I will post some titles from my excel financial tools library later.

    Not meant to be a knock but Google has free historical data for funds, etfs, and stocks which can be downloaded as .csv files for analysis. I am looking for historical options data and welcome leads.
    Yes, of course on the .csv files for Excel. I generally open them in Excel first. I like being a Morningstar subscriber because of the "x-ray" service they offer. You are correct that one can do the research on one's own via Google and such, but often I am time constrained, and have my other hobbies Part of the Morningstar service includes cross-checking fund contents. In other words fund x and fund y might have equal proportions of company A's stock. So the cross-check helps me understand the risk better if I know what each fund is holding. Lots of other cool stuff too.

    Not based on fact, but I have a feeling that a lot of corporate employees don't really manage their 401k funds with interest. Many will just pick the default fund and go for the ride. Dunno.

    My "small war" on Wall Street is for the most part trying to find winners while keeping the expense ratio down

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    Posted by Ken,

    They always have, that also varies and swings like the ol' pendulum. It waxes and wanes with the economic tides but a shadow economy has always been present and almost certainly will always be...
    This is true, always has been, but it is not always desirable. The system is simply too large to effectively regulate.

    I think Dayuhan's point about the market determining a fair price for services and goods is the ideal state, but in many cases is no longer true. Computer based trading frequently has nothing to do with the true value of company, but rather is driven by an equation that tells the computer when to buy and sell resulting in billions of dollars moving rapidly from stock to stock driving prices up and down in an irrational manner. Statistically I don't know if this impacts long term value investors over time or not, but I think an argument can be made that the price of a stock is still driven my the market, but not by the value of the service or goods provided in many cases.

    The other issue is the too big to fail issue, and that has artifically determined value in many cases, not the value of the service or goods. If the market determined the value then these companies would have gone out of business.

    Additionally large companies that consolidate competiters by buying them out gain a pricing advantage that prevents effective competition, and without effective competition for some products (food being one of them) you can't rely on the market to determine fair prices.

    We're in a period of transition, the voices from occupy wall street are only one voice informing what the future economic system will look like. I agree with Dayuhan, at least if you rely on the mass media to stay informed about OWS they're mostly young punks with no message, but that shouldn't distract political leaders from the fact that there is a great deal of discontent with the current system throughout America (and apparently globally).

    I used to make a lot of money in stock market at one time, even when the overall market wasn't doing so well. I can't make sense of it now. Could be I just lost my magic touch, but I think there are forces influencing it now that have made the old rules obsolete.

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    Quote Originally Posted by Surferbeetle View Post
    True.

    Presently working on some books in this arena to include:

    Extreme Money by Satyajit Das, ISBN 10:0132790076

    The Euro by David Marsh, ISBN 9780300127300

    Reading recommendations are always welcome
    None of those. You'll learn nothing more than a few confusing metaphors from folks with some working knowledge of financial math, a tenuous grasp on economics, and a self-serving sense of history.

    Better to start with this. Once you're done, you'll have a better feel for navigating through the literature. Also, feel free to browse this. Feel free to follow through on the prereqs where needed. Also, don't forget to try your hand out with the problem sets. No one ever learned anything of value without practical exercise.
    PH Cannady
    Correlate Systems

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    Quote Originally Posted by Presley Cannady View Post
    ...Also, feel free to browse this. Feel free to follow through on the prereqs where needed. Also, don't forget to try your hand out with the problem sets. No one ever learned anything of value without practical exercise.
    The later set looks very interesting. I would like to see how those write-ups and examples compare to what we do in oil companies when looking at investment economics.

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    Quote Originally Posted by Presley Cannady View Post
    None of those.

    Better to start with this. Once you're done, you'll have a better feel for navigating through the literature. Also, feel free to browse this. Feel free to follow through on the prereqs where needed. Also, don't forget to try your hand out with the problem sets. No one ever learned anything of value without practical exercise.
    Thank you for these.

    Homework/problem sets are indeed where real learning takes place.

    Free historical options data sets? I have a cboe app and am aware of the google daily rollups but am interested in time series data to check my understanding...just a retail guy, nothing heavy duty. My low cost broker does not seem to offer those time series.
    Sapere Aude

  19. #479
    Council Member Surferbeetle's Avatar
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    Default Strike Price Data Sets

    For any other searchers, from the CBOE website:

    Q: Where can I find historical options prices?

    A: Currently, the Chicago Board Options Exchange and the International Securities Exchange make historical options pricing available on a subscription basis. Information on these offerings are available at the following links:

    http://www.marketdataexpress.com
    http://www.ise.com

    Additionally, you may also contact market data vendors, i.e., Thompson Reuters, for historical options data. For more information, visit http://quant.thomsonreuters.com/.
    Sapere Aude

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    Woman Gets Jail For Food-Stamp Fraud; Wall Street Fraudsters Get Bailouts, by Matt Taibbi. RollingStone-TaibbiBlog, 17 November 2011.
    Here’s another thing that boggles my mind: You get busted for drugs in this country, and it turns out you can make yourself ineligible to receive food stamps.

    But you can be a serial fraud offender like Citigroup, which has repeatedly been dragged into court for the same offenses and has repeatedly ignored court injunctions to abstain from fraud, and this does not make you ineligible to receive $45 billion in bailouts and other forms of federal assistance.

    This is the reason why all of these settlements allowing banks to walk away without "admissions of wrongdoing" are particularly insidious. A normal person, once he gets a felony conviction, immediately begins to lose his rights as a citizen.

    But white-collar criminals of the type we’ve seen in recent years on Wall Street – both the individuals and the corporate "citizens" – do not suffer these ramifications. They commit crimes without real consequence, allowing them to retain access to the full smorgasbord of subsidies and financial welfare programs that, let’s face it, are the source of most of their profits.

    Why, I wonder, does a bank that has committed fraud multiple times get to retain access to the Federal Reserve discount window? Why should Citigroup and Goldman Sachs get to keep their status as Primary Dealers of U.S. government debt? Are there not enough banks without extensive histories of fraud and malfeasance that can be awarded these de facto subsidies?
    “[S]omething in his tone now reminded her of his explanations of asymmetric warfare, a topic in which he had a keen and abiding interest. She remembered him telling her how terrorism was almost exclusively about branding, but only slightly less so about the psychology of lotteries…” - Zero History, William Gibson

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