Welcome to the 80's! (Resolution trust group)

[J]

It seems putting 800 financial companies on the no shorting list wasn't really enough since the market fell as much today as it rose on Friday. Clearly, the solution is to add another 40 companies to the unshortables list. That ought to learn them darn dirty short sellers and keep share prices up! It's like dealing with a true believer, if something didn't work it's clearly because they didn't do it hard enough and have enough faith, not because it was absolutely the wrong thing to do. Then again the market is a faith based system...

[SirNitram]

Damn. Big drop. That's the market's reaction to you, Paulson. You hearing them?

Oh wait, you aren't. You don't care. This isn't about the financial firms: There's barely any left of consequence. This is about you and your friends getting ahold of that 700B, transferring as much possible without oversight into what will no doubt be a get rich quick scam that profits you, and then retiring far away.

[irishmick79]

At least the democrats are insisting to have at least a chance to review the bailout plan before shipping it off to the White House.

And fucking asshat Bush immediately demands a 'clean' bill (translation-a check without the dollar figure written in), and wrings his hands about time being of the essense. Time was of the essense at least two years ago, when the crap was for the most part confined to the housing industry, asshole.

I mean, my God - the man isn't even pretending to care about anybody who makes less than at least $250k a year anymore.

Things are changing so fast and with the regulatory environment in complete disarray, I don't even want to think about the number of potentially shady and/or outright illegal transactions that are going on right now, nevermind their actual dollar value. The IRS, FBI, and the SEC are going to need a damned army of investigators if they want to even think about stay ahead of the curve on this thing.

[Big Orange]

When a system reliably becomes nearly all stick and little carrot for the majority of people, things get ugly fast. The wranglings over this ill conceived bailout is hitting the British banks' shares pretty hard today (with HSBC stocks down 6%).

[Chardok]

Well, Nit - I think it's more a reflection on how stupid investors are, rather than the validity (Or absurdity) of this ludicrous bailout plan. I mean, on Friday, all they had to say was "bailout" and suddenly there's not a bank stock on the planet that didn't jump 20% or more. today, everyone's all "BAILOUT?! ZOMG SELL" and blammo, an overall 3.3% drop.

This whole market-driven system we live in is like a bad afterschool special, where even the slightest little rumor can make or break a megacorp.

[J]

Well, Nit - I think it's more a reflection on how stupid investors are, rather than the validity (Or absurdity) of this ludicrous bailout plan. I mean, on Friday, all they had to say was "bailout" and suddenly there's not a bank stock on the planet that didn't jump 20% or more. today, everyone's all "BAILOUT?! ZOMG SELL" and blammo, an overall 3.3% drop.

This whole market-driven system we live in is like a bad afterschool special, where even the slightest little rumor can make or break a megacorp.

You're right to a point, but it's not the whole story. Yes, investors are dumb, every time there's a bailout or even a rumour of one they go on a buying binge thinking they're all saved. Given some time to reflect, their brain cells start working and they realize nothing's really been fixed and they're just as screwed as before, which of course leads to a big sell off. Then there's all those computerized trading programs but that's another story. Rinse & repeat and we have last summer to the present.

Yet this wouldn't happen if the markets were actually transparent, well capitalized, and the if rules didn't change every few days. This causes a great deal of instability so every little event can swing the market several percent either way in an instant.

See for instance the Canadian banks, they usually move only 1-2% on any given day and I could count the number of times they've gone up or down more than 5% in a day on one hand. I'd probably have fingers left over too. That's because our banks are actually sound and our market rules don't change on a whim, unlike the US where most of the financials are hiding fecal sandwiches and pretending they don't stink, and the regulations which I woke up to this morning were out of date by the time trading was over in the afternoon. It's insanity, how can anyone invest with confidence in such a market? It's actually a small miracle I'm not seeing regular lock limit moves on the various indices.

[Count Chocula]

Holy Jesus Henry Christ - say goodbye to the middle class. Fuck. Fuck fuck fuck fuck fuck! This deal, if it becomes reality, will be just as bad as the 1913 Federal Reserve Act turned out to be, for the ordinary American anyway.

Let me see if I have the sequence right:

1) Federal Reserve created. Neither Federal, nor Reserve, but a creation of the European banking system.

2) Sixteenth Amendment ratified (supposedly). The legal basis for personal income tax in America

3) The ban on private possession of gold in 1933 in the US. Goodbye portable, heritable, inflation-resistant wealth. Gold ownership not legalized again in the US until the '70s, when the income tax system became well-entrenched and practically impossible to fight.

4) ~ 1972 - Nixon administration removes the gold backing from the US dollar because DeGaulle called his bluff and demanded a gold-dollar swap for French dollar holdings. Set the stage for the late '70s inflation, and removed the last theoretical cap on how many greenbacks the Treasury could print.

5) Frog in a pot - 50s to 2000. Personal income tax rates steadily increase, inflation roars, then subsides, then creeps up again. Constant reduction of middle class take-home pay and constant reduction of purchasing power of what does make it home. Savings rate declines to 0%.

6) "Moral Hazard" - dumbass investment firms creating CDOs, mortgage-backed securities, principal-interest split mortgage securities, etc. etc. Dumbass banks loaning money with no income verification, pushing interest-only loans and ARMs. Dumb dumb DUMBASS American mouth-breathers buying overpriced houses, counting on parabolic home price growth to keep their heads above water.

7) Today - Gee, people finally looked at the numbers and thought, "you know, maybe these mortgage-backed firms are going tits-up. I'd better sell my holdings." Chaos. Panic. Legislation being voted on that would give ONE MAN, who is not elected by Americans or even in one of the three branches of government (per the Constitution), the power to take over every bank or investment firm in the US! 300 million Americans who, if they are not rich or with the Fed crowd, are perfectly placed to be sheared by taxation, Fed bank takeovers, and inflation. And there's nobody to complain to because Congress and the courts would have no authority!!

Ask your neighbors how they're doing today. How much money are YOU able to save. If the reins of the US financial system get handed to one man, what we're going through today will look like a picnic.

And this is what my son has to look forward to? Despite his intelligence, (future) education, and (future) work, he'll have next to no chance to accumulate capital and assets to pass on to his kids. How do I know that? Right now, there's not much I could pass on to him.

Somebody, please, tell me this is all just a bad dream.

[Illuminatus Primus]

You read abuch of Paultard/bank conspiratist/gold standard literature, don't you?

[Count Chocula]

You read abuch[sic] of Paultard/bank conspiratist[sic]/gold standard literature, don't you?

Hey, thanks for the insult and fuck you. It appears - I have no proof but it appears - that you are a graduate of the ad hominem school of debate.

UF is one of the better schools in the Southeast. Too bad you're dragging down their rep. I'm guessing - I have no proof but I'm guessing - that you're not an English major.

Do you have anything to contribute, or are you just bored and trolling?[/quote]

[aerius]

Oh joy, more additions to the no short list.

MHS Medco Health Solutions, Inc.
ABR Arbor Realty Trust, Inc.
DDR Developers Diversified Realty Corporation
HRB H&R Block, Inc.
IBM International Business Machines Corporation
MFA MFA Mortgage Investments, Inc
ASI American Safety Insurance Holdings, Ltd.
LFG Landamerica Financial Group Inc.
PHH PHH Corporation
BAP Credicorp, Ltd.
LXP Lexington Realty Trust
BEE Strategic Hotels & Resorts, Inc.


Realty companies want in on the action too, at this rate every company on the S&P 500 and Dow 30 will be on the list by the end of the week.

Fucking idiots, they're just telling all the hedge funds to slap a boatload of Put options and LEAPS on every company on the list.

[aerius]

Speaking of hedge funds & speculators, they've been pretty much given a license to print money with all the market manipulation by the Feds and Treasury. It makes the market moves highly predictable if they have access to timely information, and all those guys do. They can, and have jumped ahead of every major move and made shitloads of money doing it. Hell, if I were a hedge fund right now I'd be praying for a couple more weeks of market action like this so I can buy my own tropical island.

[Count Chocula]

Medco Health?
IBM?

WTF? Who's next, WMT? AAPL? NKE? That makes no sense at all.

I've got a fiver that says GMAC will be added to the no short list.

[Illuminatus Primus]

You read abuch[sic] of Paultard/bank conspiratist[sic]/gold standard literature, don't you?

Hey, thanks for the insult and fuck you. It appears - I have no proof but it appears - that you are a graduate of the ad hominem school of debate.

UF is one of the better schools in the Southeast. Too bad you're dragging down their rep. I'm guessing - I have no proof but I'm guessing - that you're not an English major.

Do you have anything to contribute, or are you just bored and trolling?

[/quote]

Whatever, dumbass. I'm not the one who posted a question-begging screed on how the ruling class has deliberately debased currency and destroyed the middle class by removing the gold standard. The gold standard was not sustainable, and it was not responsible for the supposed American middle class "golden age" of the 1950s and 1960s (which of course were characterized by the legal segregation and marginalization of whole categories of minorities, and no one expected to have to employ women). Furthermore, real wages for the middle class became stagnant around the mid-1970s, not as early as the 1950s.

[Count Chocula]

Wow. Just...wow. How do I parse this dog's breakfast of a reply? I'll give it a try sentence by sentence.

Whatever, dumbass.

Like, fer shur, like, uh, yeah. Let's go to Old Navy!

I'm not the one who posted a question-begging screed on how the ruling class has deliberately debased currency and destroyed the middle class by removing the gold standard.

Was my post a screed? Sadly, no, it's not cogent, lengthy or witty enough to qualify as a screed.

Where in my post did I say 'ruling class' and attribute currency debasement to this 'ruling class'? Congress and greedy regular folk played their part in it too. It was not just banks, the Federal Reserve Act would never have passed without Congress going along with it.

Umm, you do understand what inflation is, right? What a fiat currency is? I hope so, because without knowing those you're bringing a Super Soaker to a gunfight.

The gold standard was not sustainable, and it was not responsible for the supposed American middle class "golden age" of the 1950s and 1960s (which of course were characterized by the legal segregation and marginalization of whole categories of minorities, and no one expected to have to employ women).

Wrong, wrong, misdirect, bring up off-topic "issue." In point of fact, the gold standard held until Nixon decoupled it due to Vietnam War spending, i.e. the US government printed more currency than there was gold to back up the gold-dollar foreign exchange ratio. That's why DeGaulle called the Fed's bluff and forced Nixon's hand. During the "golden age" the US dollar WAS backed by gold, dollar bills were actually silver certificates (until 1967), and dimes, quarters and half dollars were silver.

As far as the '50s and '60s having the 'legal segregation and marginalization of whole categories of minorities' statement, why would you throw in a comment like that? Have you been reading "How to Throw a Debate off Topic by Inferring Racism for Dummies?" Did it exist, sure. Does it exist today? Sure. Does it matter for the purposes of this topic? Actually, yes, but that's on another thread. Sorry, I didn't go into White Guilt Shutdown Mode©. Still on topic.

"[N]o one expected to have to employ women." Huh? That precedent was established in WWII. Three words: Rosie The Riveter. Women entered the workforce en masse in the 1940s.

And now, the piece de resistance:

Furthermore, real wages for the middle class became stagnant around the mid-1970s, not as early as the 1950s.

You just made my point for me! Thank you. The last restraint on the Treasury's printing as many greenbacks as Congress could get away with was done away with in the early 1970s. Real wages began stagnating soon thereafter, as you so politely noted. The 1950s and early to mid-1960s were characterized by low inflation and an overall high standard of living. You did go and brush up on the definitions of inflation and fiat currency before getting this far, yes? Good. Perhaps I could have worded point 5 on my posting better - tax rates began rising in the 1950s, not inflation.

Call me a Paulist (WTF is that? Do you mean Ron Paul?) or similar appellations all you want. I'll stick with my preferences for the most stable form of money in 6,000 years of recorded civilization, i.e. gold, even if I have to make do with fiat currency. This proposed legislation, which is after all the thread topic, looks to make our dollar bills even more worthless. That's my main problem with it.

Crack those textbooks, Chief. There's the beginning of a reasoned debate in your reply. Just pretend you're at a class debate and not around your buds when you throw around the statements.

[Dark Hellion]

Wow. I love how people can't understand that money is an abstract in any system outside of straight up trade/barter. Unless you are directly trading gold for the good or service you are buying, you are relying upon a part of the social contract in which we all pretend that little pieces of paper actual trade for the gold. Money isn't automatically coupled to gold by any naturalistic process. It's only the collective delusion that we all are willing to buy into that makes those greenbacks actually correlate to gold. So why should money match the gold? What is the point, given that money is seriously printed cotton paper? You can back that money up with anything of worth. Like say 10,000 nuclear warheads capable of ending civilization. What is the worth of the last 10,000 years of civilization? Can you put a dollar value on it? Because the greenback is just a casually linked to those nukes as to the gold in Fort Knox, and invariably those nukes have far greater value (priceless value when used).

You can pretend that somehow we where better on the gold standard, but is that because of the standard itself, with its complete lack of anything beyond a basic bit of metaphysical doublethink? Or are you really referencing rose-tinted goggle vision and regulatory rules you found preferable. Because the 50's weren't the magic time you are implying.

[Count Chocula]

Allow me to clarify. You are correct, just like language, culture, country, etc., the concept of money is a shared illusion (which is a large component of any culture's social contract).

Have other media of exchange been used? Certainly. Salt was very commonly used as currency in ancient days, as were tobacco leaves, cattle, and daughters. Gold and silver became the preferred media of barter because they are tangible, fungible, durable and portable.

As societies became more specialized, gold and silver retained their value as media of exchange because the properties that made them valuable for barter locally were a boon to inter-city and international commerce. They provided a consistent frame of reference for trade. No metaphysical doublethink, no rose-tinted goggle vision, just several thousand years of history.

Their relative scarcity also facilitated their use as backings for trade and currency. IF a nation's treasury only printed as much currency (as paper certificates, more secure and easy to use than pieces of metal) as there were reserves to back it up, that nation's inflation rate remained stable and low. The first currency ever issued by a bank were asset-backed certificates of deposit. For more info, Google "History of Banking."

Fiat currency, i.e. pieces of paper with nothing of tangible value to back them up, have always failed wherever they were used. Always. Google the phrase "Not worth a Continental." In many of the places where fiat currency inflation ran rampant, there were violent revolutions. Google "French Revolution" or "Fall of the Weimar Republic.' Or look at this image from 1923:

If this legislation is approved, as I stated earlier, my concern is that we'll have many more dead presidents chasing the same tangible items. Not gold or silver, but crude oil, corn, bread, eggs, etc. With one man with the power to decide whether my family eats steak or ramen noodles for dinner.

As for the 50s: I wasn't there, and can't comment as to how good or bad a time it was. Economically it was much more stable than today.

[Count Chocula]

Screwed up the linky. Here's a picture:


The photo is from 1923. Those are German Marks.

[PeZook]

You are aware central banks in modern systems are separate (almost) from the government precisely because this allows them to say "fuck you, we won't print more cash to pay for your latest insane project"?

If you should criticize something, it's the checks, balances and regulations in the American model, not the EEEEEBIL fiat currency itself.

Mind you, there is nothing stopping governments from printing money even if they have a gold standard. In 1923, German currency was, technically, based on the gold standard and, well...it's a game of smoke and mirrors, no matter what you "base" your currency on. "Basing" a currency on anything is a meaningless concept.

There are other problems with the gold standard, too. For example, the amount of gold is finite: therefore, even if we assume the money (gold) supply remains stable locally, with no sudden influxes or capital flight (Spain rings a bell?), industrial production will keep increasing exponentially, while gold supplies are pretty much finite.

Therefore, you will get gold deflation sooner or later, even in a perfect economic system. Deflation is bad, mmkay?

In fact, a well-managed system of fiat currency can match the "real" size of the economy much better than one based on gold, which is dependant on the supply of an arbitrary resource that a given nation can get. How is that magically better than what we have now? How is gold "inflation resistant" when its worth is purely arbitrary to most people? The most inflation resistant trading medium is food, not gold - food will always be valuable, unless we replace our hearts of nuclear batteries.

I also have a hard time understanding you attributing the income tax to pure evil. It's bad to have an automatic stabilizer and wealth redistribution method now?

Or perhaps you don't like your national infrastructure that much?

[Count Chocula]

Therefore, you will get gold deflation sooner or later, even in a perfect economic system. Deflation is bad, mmkay?

Do you have any instances where this has occurred? Can you support your axiomatic statement 'deflation is bad'? How many revolutions came amid a deflationary environment?

It's bad to have an automatic stabilizer and wealth redistribution method now?

Where's the 'automatic stabilizer' part? What does that semantically void phrase have to do with the US federal income tax?

Wealth redistribution: uhh, yeah, I think that's bad. Really really bad. It does not matter to me if it's a crook on the corner robbing me, or the full force of a govermnent - any government, mind you - taking what should be mine. All wealth redistribution comes from the barrel of a gun. I guess we'll have to disagree there.

Or perhaps you don't like your national infrastructure that much?

Oh, come on! See my prior post about ad hominem arguments. Don't put words in my mouth, please.

And here's a little Easter egg for you:
http://www.tiger.edu.pl/kolodko/artykul ... lation.pdf

Hyperinflation is baad, mmkay? That's where I'm afraid the US is headed

[Dark Hellion]

Yah for mindless selfishness. I like giving my money away so that people who didn't have the good fortune to have a genius IQ and the ability to go to a decent college can still buy food for their 7 children. Sure they shouldn't have had those seven children, they are morons for doing so, but can you honestly tell me that getting to keep all the money you earn is morally justified if those children will starve?

What a pathetically childish and immoral view of money. The barrel of the gun the government is pointing at you is the only thing protecting you from the guy next door who would kill you in your sleep, rape your wife and steal your property if he could get away with it.

Stop taking the social contract for granted you ungrateful little punk. You are hiding behind all its protections yet don't want to have to put your pittance in. You don't get to have your cake and eat it too. The cost of a government capable of performing its duties is that you must give up some of your freedoms, such as this freedom to your property that you are trying to pretend is somehow absolute.

Seriously, how old are you? I can understand this thing from someone in college, but if you have lived in the world for even a year you will realize that all this shit you are paying your income tax for is so worth it.

[PeZook]

Do you have any instances where this has occurred? Can you support your axiomatic statement 'deflation is bad'? How many revolutions came amid a deflationary environment?

Deflation is bad because it strongly encourages people to hoard money, rather than spending or investing them. Very strong deflation makes money virtually worthless, just as very strong inflation.

Where's the 'automatic stabilizer' part? What does that semantically void phrase have to do with the US federal income tax?

The progressive income tax is an automatic stabilizer, since it shaves off incrementally larger pieces of discretionary income: thus, if the economy is growing, along with wages, it automatically restricts consumption (lowering growth, but also inflation) of consumers who move into the higher brackets ; If economy is in a recession, it allows for people who fall into lower brackets to keep more discretionary income for themselves. Thanks to this mechanism, it smooths out the natural economic cycles.

Of course, like every mechanism, its effectiveness depends on the way it's implemented: most importantly, on regular assesment of the brackets, enforcement and amount of loopholes in the tax code.

Wealth redistribution: uhh, yeah, I think that's bad. Really really bad. It does not matter to me if it's a crook on the corner robbing me, or the full force of a govermnent - any government, mind you - taking what should be mine. All wealth redistribution comes from the barrel of a gun. I guess we'll have to disagree there.

The money you pay into the system is not what "should be yours". You have managed to earn it thanks to incredible support society gave you from the very day you were conceived (yes, conceived). That society (represented by a government) requires that you pay into the system so that it can continue to grant you its benefits is hardly unfair. That society demands the fabulously rich with hugely disproportionate discretionary income pay in more than those who can barely afford food and rent is hardly unreasonable as well. After all, without the society which educated and nurtured you, you'd be nothing. Since you command more resources than others, you should contribute more of them as well.

Plus, efficient wealth redistribution avoids a lot of social strife and the accompanying nastiness.

Hyperinflation is baad, mmkay? That's where I'm afraid the US is headed

You would do well to note that none of the anti-inflationary measures taken involved the dissolution of the Polish national bank or a return to some physical good as the "currency standard". For some reason, it seems, hyperinflation was not related at all to the fact we had a fiat currency since the end of WW2.

Of course, the current US way of handling the financial crisis is atrocious. In this, I think, we actually agree.

[Darth Wong]

Wealth redistribution: uhh, yeah, I think that's bad. Really really bad. It does not matter to me if it's a crook on the corner robbing me, or the full force of a govermnent - any government, mind you - taking what should be mine.

And why should it be yours? Did you single-handedly create the entire national economic infrastructure in which your livelihood is made possible, and which is far more responsible for your prosperity than any individual attribute of yours? Are you one of those raving imbeciles who can say with a perfectly straight face that if you'd been born in Somalia, you would have found a way to be just as affluent as you are here?

Without society, YOU ARE NOTHING. Without society, you're barely better than an animal. It is society that makes you what you are, allows the affluence you enjoy, and even gives you the thoughts that you use in your head and mental tools with which to express and understand them. To say that you owe society nothing is sheer idiocy.

All wealth redistribution comes from the barrel of a gun.

So do laws against child porn. So what?

[Patrick Degan]

Wow. I love how people can't understand that money is an abstract in any system outside of straight up trade/barter. Unless you are directly trading gold for the good or service you are buying, you are relying upon a part of the social contract in which we all pretend that little pieces of paper actual trade for the gold. Money isn't automatically coupled to gold by any naturalistic process. It's only the collective delusion that we all are willing to buy into that makes those greenbacks actually correlate to gold. So why should money match the gold? What is the point, given that money is seriously printed cotton paper? You can back that money up with anything of worth. Like say 10,000 nuclear warheads capable of ending civilization. What is the worth of the last 10,000 years of civilization? Can you put a dollar value on it? Because the greenback is just a casually linked to those nukes as to the gold in Fort Knox, and invariably those nukes have far greater value (priceless value when used).

And even at that, gold only has value because people decided it was worth something —an entirely arbitrary decision. All money, in whatever form, is essentially an act of faith. Money has value only as long as people believe in it.

[SirNitram]

Hyperinflation is baad, mmkay? That's where I'm afraid the US is headed

Comedy gold! I mean, the selfish arrogant twit shit is normal. But this is just hilarious.

Everything's on track for two trillion less availiable in HELOC's due to the credit crisis. Anyone with a functional frontal lobe can realize that two trillion out of the market(To say nothing of reductions in easy home loans, credit cards, etc, etc) means that deflation is here, not 'Hyperinflation'.

[SirNitram]

As for the 50s: I wasn't there, and can't comment as to how good or bad a time it was. Economically it was much more stable than today.

Tax rate on the top bracket during the 1950s you believe were economically awesome:

91%. From 51 to 60.

OMFG NOT THE WEALTH REDISTRIBUTION!

Do you know anything about which you blabber?