RSS available
| MarketTicker Forums Read Message in Ticker |
User: Not logged on
|
| Top | Forum Top | Login | Control Panel | FAQ | Register | Logout |
| User Info | On Speculation, Wall Street And Hedge Funds in forum [Ticker] | |||
|
Genesis Posts: 71435 Incept: 2007-06-26 
KD^2 
|
http://market-ticker.org/archives/885-On....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-03-20 08:08:47
Permalink | |||
|
Abn0rmal Posts: 2320 Incept: 2009-01-10 
DFW
|
As a person who deals with manufacturing equipment I like your lubrication analogy. We are surrounded by wealth, but the machine is failing because all the oil(liquidity) has been contaminated by too much by water(debt) and dirt(fraud) Last modified:
2009-03-20 08:25:50 by jbyer
| |||
|
Goforbroke Posts: 980 Incept: 2007-11-30
Ohio
|
Plus, how desirable is it to play the game when it is becoming standard practice to throw what we thought were inviolable laws and regulations out the window so that the rules change every day, thereby negating the underlying assumptions behind the initial investment?
---------- Time to feed the chickens.
2009-03-20 08:34:18
Permalink | |||
|
Baldy Posts: 6555 Incept: 2008-05-16
Pittsburgh
|
I would say that educating people to your experiences as a speculator can help can create wealth in that some other people may use that info (such as me) to preserve or create what wealth they have. Considering that people go into politics and often become rich WHILE railing about others who chose non-gov jobs is funny.
---------- FY2011 Budget - Hist'l Tables (PDF 2.0 MB) http://www.whitehouse.gov/omb/budget/fy2011/assets/hist.pdf 1996-2011 budgets: http://www.gpoaccess.gov/usbudget/browse.html Last modified:
2009-03-20 08:47:21 by baldy
| |||
|
Genesis Posts: 71435 Incept: 2007-06-26
KD^2
|
You're not CREATING wealth as a speculator any more than a poker player who wins is. Playing poker is a zero-sum game (before the rake) just as speculation is (before commissions, fees and taxes) ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-03-20 08:48:04
Permalink | |||
|
Bear Posts: 6649 Incept: 2007-07-10
SoCal, and my avatar is so ****ing small you cant see it
|
Summed up well Gen
---------- Cause GS got all the beef.....Mliu
2009-03-20 08:50:58
Permalink | |||
|
Redfigures Posts: 705 Incept: 2008-02-24
State of Flux Online
|
 Right on the mark.
2009-03-20 08:53:14
Permalink | |||
|
Baldy Posts: 6555 Incept: 2008-05-16
Pittsburgh
|
Genesis- I left out a part in my post- if I take what I learn from others to use as help in deciding what to do with said money to create wealth (like investing in my bro's business or not)... I understand what you are saying. I do not disagree, just mean to say that speculators can do more than just provide liquidity.
---------- FY2011 Budget - Hist'l Tables (PDF 2.0 MB) http://www.whitehouse.gov/omb/budget/fy2011/assets/hist.pdf 1996-2011 budgets: http://www.gpoaccess.gov/usbudget/browse.html
2009-03-20 09:00:40
Permalink | |||
|
Thetemplateblog Posts: 60 Incept: 2008-10-21 
|
Quote:We are surrounded by wealth, but the machine is failing because all the oil(liquidity) has been contaminated by too much by water(debt) and dirt(fraud) Very interesting analogy, once you compare the current problem to an engine I understand it completely. Thanks! Dave ---------- ......................................................................... I will keep My Guns, My Freedom, and My Money...You can keep the change! Last modified:
2009-03-20 09:31:48 by thetemplateblog
| |||
|
Snooze Posts: 1652 Incept: 2007-07-09
florida Online
|
Mother Nature is the only entity that creates wealth.....and to the extent that you participate in that by not consuming the excess production; you are entitled to a temporary share of that wealth.
---------- We're on a journey - and we don't know it - back to a nation of communities where your character really matters, and where character rests on whether your deeds comport with truthfulness......KUNSTLER
2009-03-20 09:31:44
Permalink | |||
|
Bogey Posts: 728 Incept: 2008-03-12
Montana
|
Well put, Karl. I've been trading for over 10 years now, and the biggest struggle I've always faced is how to justify my choice of avocation to others, particularly the "professional class" to which I used to belong. They may not always come out and say it, but I've heard it enough to know that most of them look down on the choice I made to "not produce anything." While I could not articulate it, I could see intuitively that the rat race lifestyle that those critics were leading was by that point as much a zero-sum game as trading, only a lot less honest. What I felt back then was that the world had, through incredible productivity advances, created more than enough new wealth to lift every human's living standard substantially. Aside from the greed which kept the wealth from spreading (which I took to be a universal friction), the problem as I saw it then was that consumption and materialism had begun to destroy the new wealth as fast as we could produce it. (Of course, it wasn't until the last two years that that intuition was finally borne out, and I must admit to a certain degree of validation.) I think the bottom line is that traders understand and are intellectually at peace with the fact that they don't produce anything. The difference is we believe we can make better use of the wealth than those who create it with one hand and then **** it away with the other, or, worse, those who don't produce anything but PRETEND that they do.
2009-03-20 09:52:54
Permalink | |||
|
Markytom Posts: 217 Incept: 2009-02-19
|
. . . kicking back another $50,000 in campaign contributions DC would wink and nod. Actually that system worked pretty well for the last decade. I would say that the quid pro quo relationship is starting to fray a little but hasn't come close to collapsing yet. AIG, Freddie Mac, GM, BAC, etc. are still being treated quite special by DC. Hopefully there will be continued pressure on DC and exposure of the frauds to force DC to flip on some of these thieves. DC will continue to do token acts (like the bonus tax bill) but may end up being forced to do more. Problem is that many of the players in DC are just as dirty (Dodd, Frank, etc.) as the crooks they are "outraged" over. Honor among thieves. Question: Why aren't people (investors, regulators, media, Congress, etc.) demanding that the Board of Directors of all these companies be investigated and prosecuted to? What were they doing? These people were either incompetent or complicit in the fraud. Either way they should be held accountable.
2009-03-20 10:17:03
Permalink | |||
|
Genesis Posts: 71435 Incept: 2007-06-26
KD^2
|
Boards have been willfully blind for a VERY long time. Part of the problem is that institutional shareholders have tolerated crap for a very long time too. Shareholders DO have the ability to fire people, but just like in DC, if that right is rarely exercised the people in charge (correctly) deduce that there is no penalty for failure. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-03-20 10:25:50
Permalink | |||
|
Otiswild Posts: 1341 Incept: 2009-03-09
Teegeeack
|
Quote:You're not CREATING wealth as a speculator any more than a poker player who wins is. Playing poker is a zero-sum game (before the rake) just as speculation is (before commissions, fees and taxes) I guess we're in a situation wherein speculation is swamping real investing (aka allocating capital into growing, productive enterprises and expecting to take advantage of that gain)? I wonder if that inflection point is predictable? AKA: investing in new technologies or resource finds or whatever brings legitimate capital seeking to develop them, then the speculators' ears prick up, then speculation overwhelms the underlying in a bubble, then the burst. Probably as easy as predicting the weather :/.. Hail Eris! ---------- It appears that the yard wolves has grown up. Are we finally finished with the colds dead winters?
2009-03-20 10:31:04
Permalink | |||
|
Swrichmond Posts: 146 Incept: 2009-02-12
|
"That is, to misrepresent the credit quality in that deal so that people will pay you more than the deal is actually worth. What's worse is that the inherent law of business balance (that prohibits getting something for nothing) means that in order to have a total (across the spectrum of those loans) return that is higher than simply portfolioing them at origination requires lots of stealing, because every hand that a deal passes through is yet more stripping that inherently must take place, since nobody works for free." Of course, and beautifully and succinctly put. Mises wrote in his 1920 paper "Economic Calculation in the Socialist Commonwealth" that any system that attempts to manipulate price, rather than allowing the market to set prices, was doomed to misallocate resources and ultimately fail. By rigging MBS ratings, price was manipulated, causing capital misallocation leading to business model failure. Such is the destructive power of intervention in markets; government is of course the largest "interventionist". The existence of Fannie and Freddie guarantees misallocations and eventual failure (witness high home prices). The existence of student loan guarantee programs guarantees misallocations and eventual failure (witness outrageous tuition costs). I need not go on. Nor is the market a perfect mechanism, as it can obviously be corrupted. Corruption cannot exist, however, without the participation of our champions of justice, the government. Finally, IMO corruption of this scale cannot exist without moral hazard. "...we will continue to have distrust in the markets along with an increasing number of people taking their liquidity ball and bat and going home." These people buy physical gold. I would much rather apply my capital productively, when I do so it benefits me with a return and benefits society with increased wealth, but until capital is given the protection and respect it deserves my small piece of capital will stay in hiding in the Bank of Gaea. **** the system.
2009-03-21 22:20:34
Permalink | |||
|
Mayorquimby Posts: 5868 Incept: 2008-09-18
Ponzi Planet
|
Gen- Great ticker as always. This brings up a point I've yet to see mentioned really anywhere. I think it was you who said it was either incompetence or arrogance that brings our gvmt to make such spectacular missteps. I want to throw another theory out there - perhaps they don't want to say it (they being the banking 'elites' along with the exec. branch) - but think it nonetheless - that if it were not for these banking 'maneuvers', securitizations etc. America would not have seen much of the last dozen or so years of growth and success. IOW, what Obama, Paulson, Geithner really want to say (but obviously won't) to the American public is: "Stop your bitching. Without us, without these banks, you folks wouldn't have half the iPods/number of cable channels that you do have so shut the f up."
---------- It's a PONZI ECONOMY and it already HAS collapsed. Now they need more ponzi!
2009-03-22 08:54:06
Permalink | |||
|
Phirang Posts: 8824 Incept: 2008-10-25
bar khoba's revenge
|
quimby, phil gramm said exactly that a year ago...
---------- The Treasury can issue debt on your behalf because the State can and will stomp the wealth out of you and your family.
2009-03-22 08:55:50
Permalink | |||
|
Gemini Posts: 84 Incept: 2009-03-15 Maine
|
Quimby, don't you think that the current crisis is evidence that the *growth* provided by speculation is rather unstable, if not outright false? I don't think that Americans should be thanking the speculators for pulling forward demand to produce growth. I know that not ALL speculation has this effect, but I would gladly give up my trinkets for a stable economy. ---------- This country with its constitution belongs to us who live in it. Whenever they shall grow weary of the existing government they shall exercise their constitutional rights of amending it or their revolutionary right to dismember or overthrow it. Abraham Lincoln
2009-03-22 09:53:16
Permalink | |||
|
Mayorquimby Posts: 5868 Incept: 2008-09-18
Ponzi Planet
|
Of course! But my point is that the politicians may be patting themselves on the back everytime they see someone walking around with white earphones and a double latte skim no whip.
---------- It's a PONZI ECONOMY and it already HAS collapsed. Now they need more ponzi!
2009-03-22 10:08:51
Permalink | |||
|
Mayorquimby Posts: 5868 Incept: 2008-09-18
Ponzi Planet
|
Gem- To put it another way - they (politicians) are dumb. They see this as a short term problem and in general, do not worry about ANY long term issues. They are all concerned with what can we do NOW to make things better during MY term. "Outlook" today means the next 2 to 4 years. Outside of TF and maybe a few other places, very few people want to make the necessary sacrifices to see the US of A succeed over the long haul so they twist and contort and do what they can to make it appear to work in the now.
---------- It's a PONZI ECONOMY and it already HAS collapsed. Now they need more ponzi!
2009-03-22 10:40:38
Permalink | |||
|
Flapdoodle Posts: 659 Incept: 2008-01-25
La Serena, Chile
|
Great lubrication analogy. And of course the actual transaction price provides a tidbit of information which the next potential speculator can use in deciding to buy or sell or pass...
---------- --Smooth seas do not make skillful sailors. - African Proverb Last modified:
2009-03-22 11:59:50 by flapdoodle
| |||
|
Highrev Posts: 3124 Incept: 2009-02-21
ES
|
I sure hope the FBI and Treasury are investigating undercover. (Something that we don’t know about so as not to blow their cover.) Now, wouldn’t that be a rather bullish news item? Headline: *More than 100 Arrests Nationwide – Most Bankers* Snooze, Thumbs up! ---------- You may fool all the people some of the time; you can even fool some of the people all the time; but you can't fool all of the people all the time. - Abraham Lincoln
2009-03-22 15:22:52
Permalink | |||
| Top | Forum Top | Login | Control Panel | Logout |