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Thread: Good Layman's guide to the financial crisis

  1. #421
    Council Member Ken White's Avatar
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    Default Corporations will not work to get out the vote,

    Unions will. I won't even start on the pernicious influence and abilities of the NEA and AFT...

    The big hurt on this will be on incumbents -- as it should be. The McCain-Feingold incumbent protection bill was a bad bill and a poor scam on the unwary. The Court should have knocked it down long ago.

    This is whole deal hilarious IMO not least because the Congress will go berserk to craft a new law to restore their protection and the hypocritical NYT slams the decision -- but doesn't mention that they, a corporaton had no muzzle at all...

    This is a long way from the Thread topic, "Financial Crisis."

  2. #422
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    There's a clear linkage to the financial crises, Ken. We're talking about multi-billion dollar corporations here and now they have additional powers to influence the political process even more than they have been.

    I have a gut feeling that a number of second and third order effects that no one anticipated are going to arise from this decision. Some will be beneficial, some will not.

    In one sense, I guess this good because it does introduce an additional amount of transparency to the donation process. But on the other hand, there was enough concern over this kind of donation policy a century ago that the Supreme Court had to get involved and make it illegal.
    "Speak English! said the Eaglet. "I don't know the meaning of half those long words, and what's more, I don't believe you do either!"

    The Eaglet from Lewis Carroll's Alice in Wonderland

  3. #423
    Council Member tequila's Avatar
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    Newt Gingrich is a twit IMO and doesn't need to be elected to any office but he's right in that elections are grossly underfunded -- that deliberately by Congress in an effort to protect incumbents. They'll be the losers -- and should be. The Republicans think that the Corporations will outspend the Unions and thus the Democrats will be discomfited. They're right but the Unions will work harder and offset that advantage.
    Well, Ken, you are probably the only person I know who has ever said that the problem with our elections is that there isn't nearly enough money in it.

    I'd like to hear exactly how unlimited donations from both foreign and domestic private interests is going to help our democracy or our institutions.

    I agree with Ski that the result decision has an enormous amount to do with financial crises. One of the largest problems revealed by the current crisis was the degree of institutional and regulatory capture by private interests. This decision will only further accelerate the process.

  4. #424
    Council Member slapout9's Avatar
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    Didn't Marx say you can't separate politics from economics? He was a lousy politician but he was actually a pretty good economist.

  5. #425
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    I'm guessing that if Goldman Sachs were not permitted to donate to campaigns that they still would have found a way to get the money that they had tied up in CDS's through AIG (even though they shorted AIG stock as a hedge to protect themselves from that loss). There's more to our broken system of cronyism than just campaign contributions. Griping about campaign contributions is like griping about executive pay. It's just one cockroach in an infested house.

  6. #426
    Council Member Ken White's Avatar
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    Default I think Schmedlap has it right

    "Griping about campaign contributions is like griping about executive pay. It's just one cockroach in an infested house."
    The financial crisis owes much more to simple human greed, political connivance and venality than it does to regulatory or statutory failure induced by campaign financing irregularities. The laws overturned for example long pre-date the crisis and yet it occurred...

    “The problem isn’t too little money in political campaigns, but not enough.” Newt Gingrich on campaign reform. (LINK, 12th item). As I said, Newt's a twit but he did say that among a few (very few) other smart things and I agree with him. So do a lot of other folks but I'm not going to waste time Googling them. Tequila, Ski and probably Slap do not agree. This guy (LINK) does not agrees; he advocate public financing, yet another way to enhance State control and protect incumbents. Sounds like a trip to European style 'Social Democracy' to me. Sorry, to that I'm strongly opposed -- but then I'm a Dinosaur. I grew up before the US government got as big as it now is -- or as abysmally stupid as it now is. I can even rmember when the Senate was respected.

    The bad news for those that would like such a social democratic nation is that while it will probably happen eventually, there are enough folks in the US who agree with me that it is not a good thing to deter it for a good many years. Slap and I'll probably both be gone and the rest of you will be old and gray -- if you're still around when that bottom is reached.

    Yes, there is a tenuous relationship between this and the financial crisis but check this LINK and you'll see that the 'limitations' in place prior to the decision were (a) miniscule and (b) hypocritical as the media had carte blanch and the corporations could fund said media though 'grants.' As Ski said:
    I have a gut feeling that a number of second and third order effects that no one anticipated are going to arise from this decision. Some will be beneficial, some will not.

    In one sense, I guess this good because it does introduce an additional amount of transparency to the donation process. But on the other hand, there was enough concern over this kind of donation policy a century ago that the Supreme Court had to get involved and make it illegal.
    The issue is really one of freedom of speech. Many politicians believe that that freedom is vastly over rated, particularly those of a leftist persuasion and mostly when it attacks them or the State. I happen to disagree. So did the folks who wrote the Constitution.

    What that earlier Supreme Court did was rein in excessive and rampant capitalistic overkill by (in typical US fashion) by overreacting and swinging the pendulum too far in the opposite direction. We cannot enact sensible laws because the two year term means that Congroids MUST be seen to do something... No matter how wrong or dumb it might be. So we overreact in each direction and only rarely hit equilibrium.

    What this Supreme Court did was overturn an excessively restrictive and poorly written law that was designed to protect incumbents and a poor earlier decision designed to enhance State power. IOW, they whittled away some of a competing branch's capability to enhance their own power, possibly at the Judicial branch's expense. Little natural tension there. Congress will almost certainly respond with a narrower and hopefully better law that restores the equilibrium.

    That's the way the system is supposed to work.

  7. #427
    Council Member slapout9's Avatar
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    Quote Originally Posted by Ken White View Post
    Slap and I'll probably both be gone and the rest of you will be old and gray -- if you're still around when that bottom is reached.
    The Young un's will have to figure it out

  8. #428
    Council Member Ken White's Avatar
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    Talking I reckon...

    and good luck to 'em, I say.

    Saw this earlier (LINK). I'm not much of a believer in polls, the public is pretty fickle on some things but I think this one has some interesting figures, particularly where it's broken down by party or ideological leaning...

    I think that probably means that most agree it's free speech but many also agree on some limits for 'groups' The issue will be the type of limits which likely means Congress will have to back off their stupid incumbent protection scams -- that is a really good thing...

    Like I said, the body politic collectively generally gets it right and aren't nearly as dumb as many really wish to believe...

  9. #429
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    The lost decade - job growth during the last decade was stagnant.

    http://www.washingtonpost.com/wp-dyn...l?hpid=topnews
    "Speak English! said the Eaglet. "I don't know the meaning of half those long words, and what's more, I don't believe you do either!"

    The Eaglet from Lewis Carroll's Alice in Wonderland

  10. #430
    Council Member slapout9's Avatar
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    Default No Audit-No Bernanke

    Is Ben Bernanke the greatest Financial Criminal of All Time? Lets find out.
    Link to No Audit-No Bernanke. Transparency is critical for Democracies to survive and we have had very little of it recently. It is our money.......who got it and what did they do with it? The answer will be ugly but we need to know.



    http://themoneymasters.wordpress.com/

  11. #431
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    Couple of bad news stories, unfortunately:

    Social Security is running out of cash:
    http://finance.yahoo.com/focus-retir...-readytoretire

    Unemployment insurance is skyrocketing and businesses are getting hard:
    http://money.cnn.com/2010/02/09/news...ntent=My+Yahoo
    "Speak English! said the Eaglet. "I don't know the meaning of half those long words, and what's more, I don't believe you do either!"

    The Eaglet from Lewis Carroll's Alice in Wonderland

  12. #432
    Council Member bourbon's Avatar
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    Quote Originally Posted by bourbon View Post
    Michael Milken, 60,000 Deaths, and the Story of Dendreon, by Mark Mitchell. Deep Capture.

    What follows is part 1 of a 15-part series. The remaining installments will appear on Deep Capture over the next several weeks, after which point the story will be published in its entirety. It is a story about the travails of just one small company, but it describes market machinations that have affected hundreds of other companies, and it contains a larger message for anyone concerned about the “deep capture” of our nation’s media and regulatory bodies.
    Dendreon stock mauling probed by regulators. Reuters, March 9, 2010.
    (Reuters) - A lightening fast sell-off of shares of biotech company Dendreon (DNDN.O) last April is drawing scrutiny from U.S. securities regulators and the independent monitor assigned to keep tabs on those regulators, said people familiar with the matter.

    They said an investigation by the Securities and Exchange Commission into the still unexplained trading event, during which shares of Dendreon plunged more than 69 percent in 70 seconds, is ongoing.

  13. #433
    Council Member bourbon's Avatar
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    Video: Harry Markopolos, The Daily Show - Comedy Central, March 8, 2010.

  14. #434
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    Quote Originally Posted by Ski View Post
    Couple of bad news stories, unfortunately:

    Social Security is running out of cash...
    That's news??

  15. #435
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    Latest and one of the most important articles by James K. Galbraith on why Public Debt is good and how it is impossible for a Government to run out of money Exposes a lot of myths about money and how it drives economic benefit.


    http://www.thenation.com/doc/20100322/galbraith

  16. #436
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    The rate of depletion is far faster than expected.

    There have been a number of very interesting stories in the economic world over the last few months...I've been ass deep in schoolwork at SAMS and have only been able to screw around on the Net late in the evening for brief periods.

    The EU is having major problems - specifically with the PIGS - that's Portugal, Ireland, Greece and Spain..which will ripple effects across the world.

    The unemployment numbers are still going up in the US, the rate is slowing down.

    The DJIA is way higher than it should be...where is the money coming from?

    Quote Originally Posted by Schmedlap View Post
    That's news??
    "Speak English! said the Eaglet. "I don't know the meaning of half those long words, and what's more, I don't believe you do either!"

    The Eaglet from Lewis Carroll's Alice in Wonderland

  17. #437
    Council Member slapout9's Avatar
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    Quote Originally Posted by Ski View Post
    The DJIA is way higher than it should be...where is the money coming from?
    The Bailout money. Lending is down to it's lowest level since the Depression because Big Banks (Brokerage Houses) can make more money swapping stocks than investing in the Real Economy, part of the original reason the Glass-Stegall act was created during the Depression.

  18. #438
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    Quote Originally Posted by Ski View Post
    The DJIA is way higher than it should be...where is the money coming from?
    If that is what you think, then you should be shorting the market (I wrote a bunch of covered calls yesterday ). But, as for where the money is coming from - it's coming from those areas of the economy that are perceived to be greater risks than the stock market. People fear inflation and interest-rate risk, so they're running to equities.

  19. #439
    Council Member slapout9's Avatar
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    Schemd, it is to soon for inflation, the immediate threat is still deflation, after that will come the inflation and I agree with you it will come. The immediate goal of the Kleptocracy is to consolidate Banking power. The latest FDIC report shows more banks are in the red zone than ever before and since they cant face the public rage of another bailout......Big Banks will buy small and medium banks again concentrating power more than ever. It is already starting to happen. Pay attention to SunTrust......I grew up with and went to school with alot of those folks. What you are seeing happen was being talked about all the way back in the Reagan years. Just took them a little longer than planned.

    http://www.marketwatch.com/story/ban...ion-2010-03-10

  20. #440
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    I think that's a poor explanation.

    Who regulates derivatives? Who regulates futures? Okay, now who regulates securities that are derivatives and futures (futures options, for example)? There's a turf war there. Why? One Congressional committee oversees the CFTC. Another committee oversees the SEC. The former committee gets campaign contributions from agricultural firms and other commodities traders. The latter committee gets campaign contributions from bankers. Arguably, the CFTC and SEC two could perform better oversight if they merged or broke off portions of their bodies and formed a separate commission that focused on hybrid securities. But if the first course is pursued then then one committee loses some large donors. If the other course is pursued the both committees will fight for oversight of the new commission. As Barney Frank put it, in a surprisingly candid moment, "it is not politically feasible." And there it is.

    Then there are insurance companies that are regulated at the state level. They like being regulated at the state level because they have developed patronage networks and relationships with state legislators. They don't want those long-cultivated relationships severed to be regulated at the federal level (there are also legitimate reasons to oppose it, but those are secondary).

    Never attribute to a grand conspiracy what can be explained by politicians commandeering the legislative process to entrench themselves in power.

    I agree that the banking "industry" strongly desires fewer rules and less responsibility so that it can continue to receive what is, in effect, a free government insurance policy for the downsides to its trading. But, again, this is a relatively simple fix on paper that will not be fixed because the legislators can't get past their own self-interests.
    Last edited by Schmedlap; 03-11-2010 at 06:37 PM.

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