Do Rich People do the Lottery ?
29 September 2010, 07:48 AM
#151
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EFA
Were they fraudulent - probably not at the beginning - I am pretty sure that no-one at Northern Rock thought their sub-prime was fraudulent, but they probably saw it as manageable risk. Went the market went sour there were probably a small number who did continue to package sub prime fraudulently!
Were they fraudulent - probably not at the beginning - I am pretty sure that no-one at Northern Rock thought their sub-prime was fraudulent, but they probably saw it as manageable risk. Went the market went sour there were probably a small number who did continue to package sub prime fraudulently!
Often a defence of the western financial system (and I have heard it expressed on here before) is that is was a tiny number of people who practised these exotic trades - so lets just carry on and get back to normal
And that maybe so – and if it is, it surely shows that something is wrong with the system if a hundred or so people can bring the economy of the western world to a grinding halt
as ever the desire for people to have their cake and eat it is very strong
Last edited by hodgy0_2; 29 September 2010 at 07:49 AM.
29 September 2010, 07:51 AM
#152
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I don't agree with his point though.
The cause wasn't a small number of exotic trades - maybe that was an accelerant - the cause was everything from the media and consumer obsession with rising property prices and the democratisation of property ownership.
It was mortgage brokers selling 'liar's loan' to all and sundry - this was sanctioned by regulators.
It was supported by banks selling mortgage securities in the credit markets - these were not exotic products but an increasingly advanced way of raising cash in the credit markets.
And they were bought buy investors who felt they could do well on the promised high returns.
Everyone got their hands dirty.
I believe you could blame the consumer/media/government obsession with property as much as you can with products made available to fund them.
The cause wasn't a small number of exotic trades - maybe that was an accelerant - the cause was everything from the media and consumer obsession with rising property prices and the democratisation of property ownership.
It was mortgage brokers selling 'liar's loan' to all and sundry - this was sanctioned by regulators.
It was supported by banks selling mortgage securities in the credit markets - these were not exotic products but an increasingly advanced way of raising cash in the credit markets.
And they were bought buy investors who felt they could do well on the promised high returns.
Everyone got their hands dirty.
I believe you could blame the consumer/media/government obsession with property as much as you can with products made available to fund them.
Last edited by Trout; 29 September 2010 at 07:56 AM.
29 September 2010, 08:14 AM
#153
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I don't agree with his point though.
The cause wasn't a small number of exotic trades - maybe that was an accelerant - the cause was everything from the media and consumer obsession with rising property prices and the democratisation of property ownership.
It was mortgage brokers selling 'liar's loan' to all and sundry - this was sanctioned by regulators.
It was supported by banks selling mortgage securities in the credit markets - these were not exotic products but an increasingly advanced way of raising cash in the credit markets.
And they were bought buy investors who felt they could do well on the promised high returns.
Everyone got their hands dirty.
I believe you could blame the consumer/media/government obsession with property as much as you can with products made available to fund them.
The cause wasn't a small number of exotic trades - maybe that was an accelerant - the cause was everything from the media and consumer obsession with rising property prices and the democratisation of property ownership.
It was mortgage brokers selling 'liar's loan' to all and sundry - this was sanctioned by regulators.
It was supported by banks selling mortgage securities in the credit markets - these were not exotic products but an increasingly advanced way of raising cash in the credit markets.
And they were bought buy investors who felt they could do well on the promised high returns.
Everyone got their hands dirty.
I believe you could blame the consumer/media/government obsession with property as much as you can with products made available to fund them.
29 September 2010, 08:28 AM
#154
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and as a i posted on a previous thread
Marx, who analysed capitalism in great detail, saw increasing Inherent flaws in its operation, leading him to write that “a good capitalist will willingly sell you the rope with which to hang him”
Which seems to sum up the financial crisis quite well
Marx, who analysed capitalism in great detail, saw increasing Inherent flaws in its operation, leading him to write that “a good capitalist will willingly sell you the rope with which to hang him”
Which seems to sum up the financial crisis quite well
29 September 2010, 08:31 AM
#155
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Have scanned his thread and there are some interesting points in it, but I'm intrigued by the anti-capitalist posts - what do people think is a genuine alternative? (I wonder this every morning when I see the banners in Westminster Square!).
Gordo
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29 September 2010, 08:41 AM
#156
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It's actually highly libertarian since it opposes the basis of a fiat currency; central banking and government power.
29 September 2010, 09:08 AM
#158
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TDW - can you demonstrate a strong economy that has been based on hard currency?
A hard currency economy is a deflationary economy and that comes with it's own serious issues.
PS And most of these mechanisms that you accuse of being the cause of the crisis are all possible with a hard currency economy.
A hard currency economy is a deflationary economy and that comes with it's own serious issues.
PS And most of these mechanisms that you accuse of being the cause of the crisis are all possible with a hard currency economy.
Last edited by Trout; 29 September 2010 at 09:09 AM.
29 September 2010, 09:17 AM
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Rome, Byzantium, China, France, Wiemar.
Rome and Byzantium were strong until they used fiat, leading to devaluation and collapse.
You can see it now with the US as well. It's on the decline. The greenback is the ultimate fiat currency, but it used to be gold backed.
29 September 2010, 01:19 PM
#161
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TDW - can you demonstrate a strong economy that has been based on hard currency?
A hard currency economy is a deflationary economy and that comes with it's own serious issues.
PS And most of these mechanisms that you accuse of being the cause of the crisis are all possible with a hard currency economy.
A hard currency economy is a deflationary economy and that comes with it's own serious issues.
PS And most of these mechanisms that you accuse of being the cause of the crisis are all possible with a hard currency economy.
Deflation is really the goal of an economy. Look at the technology sector... prices fall consistently through increases in efficiency and advances in the technology itself. You don't get that elsewhere because of the masses of rules and regulations forced upon industries trying to operate in western countries now. Falling prices and an abundance of goods is the whole point of an economy. We work to have stuff.
29 September 2010, 01:37 PM
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29 September 2010, 03:04 PM
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Les
29 September 2010, 06:28 PM
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The U.S.A. had that and deflation all through the 19th century accompanied by one of the greatest rises in living standards in the history of the world.
Deflation is really the goal of an economy. Look at the technology sector... prices fall consistently through increases in efficiency and advances in the technology itself. You don't get that elsewhere because of the masses of rules and regulations forced upon industries trying to operate in western countries now. Falling prices and an abundance of goods is the whole point of an economy. We work to have stuff.
Deflation is really the goal of an economy. Look at the technology sector... prices fall consistently through increases in efficiency and advances in the technology itself. You don't get that elsewhere because of the masses of rules and regulations forced upon industries trying to operate in western countries now. Falling prices and an abundance of goods is the whole point of an economy. We work to have stuff.
The latter deflationary periods was driven partly by a step change in productivity though so the potential was there for an increased standard of living - if only people had had employment and so salaries to pay for all the new shiny things!
As for Moore's law I would argue that is the force of technology and competitive - is it really deflationary at a macro-economic level?
The argument is also flawed on a national level as productivity has come from globalisation of the workforce not any core economic driver thus increasing local unemployment.
30 September 2010, 05:14 PM
#167
Not sure exactly where the thread went, so bringing it back on track...
Yes they do play the lottery even when they have won big before...
http://www.kcra.com/money/25195365/detail.html
Yes they do play the lottery even when they have won big before...
http://www.kcra.com/money/25195365/detail.html
01 October 2010, 02:27 AM
#168
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It is brilliant being able to critisize with hindsight, as you have done with banking and capitalism in general, but I would love to hear how you would have done it, and more importanly, what you would do to stop it happening again. If you constantly point out what is wrong without offering solutions, people might start to think you are the Scoobynet wing of the Daily Mail...IMO - Was the system wrong... Yes, it failed, so it was wrong.... Was there a better alternative? I don't know.... there isn't one that I could suggest
01 October 2010, 10:57 AM
#169
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The US had a deflationary recession in the 1830s and the Great Deflation a.k.a. the Great Sag in second half of the 19th century. In between there were also periods of strong inflation. So not really a consistently and managed deflationary period.
The latter deflationary periods was driven partly by a step change in productivity though so the potential was there for an increased standard of living - if only people had had employment and so salaries to pay for all the new shiny things!
As for Moore's law I would argue that is the force of technology and competitive - is it really deflationary at a macro-economic level?
The argument is also flawed on a national level as productivity has come from globalisation of the workforce not any core economic driver thus increasing local unemployment.
The latter deflationary periods was driven partly by a step change in productivity though so the potential was there for an increased standard of living - if only people had had employment and so salaries to pay for all the new shiny things!
As for Moore's law I would argue that is the force of technology and competitive - is it really deflationary at a macro-economic level?
The argument is also flawed on a national level as productivity has come from globalisation of the workforce not any core economic driver thus increasing local unemployment.
As for the workers having employment and therefore salaries to buy stuff... it's irrelevant. It's production that allows people to consume and provide services. So an increase in production will lead to employment elsewhere. Not sure what you're getting at there? You don't just have jobs for the sake of having a job and recieving paper. People will get a job doing something in a free market. And in the case where people don't have jobs, they don't have them for a reason, it's not that they just need to be given paper to go out and buy things. If they're in a service that can no longer be afforded by production, they need to produce stuff themselves.
01 October 2010, 02:24 PM
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02 October 2010, 09:42 AM
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The point is that it doesn't need to be consistently managed, it shouldn't be attempted to be controlled either, and certainly not to inflate the money supply to try to counteract deflation. Is it even deflation we face now, or just falling asset prices which have been bid up in a mania?
As for the workers having employment and therefore salaries to buy stuff... it's irrelevant. It's production that allows people to consume and provide services. So an increase in production will lead to employment elsewhere. Not sure what you're getting at there? You don't just have jobs for the sake of having a job and recieving paper. People will get a job doing something in a free market. And in the case where people don't have jobs, they don't have them for a reason, it's not that they just need to be given paper to go out and buy things. If they're in a service that can no longer be afforded by production, they need to produce stuff themselves.
As for the workers having employment and therefore salaries to buy stuff... it's irrelevant. It's production that allows people to consume and provide services. So an increase in production will lead to employment elsewhere. Not sure what you're getting at there? You don't just have jobs for the sake of having a job and recieving paper. People will get a job doing something in a free market. And in the case where people don't have jobs, they don't have them for a reason, it's not that they just need to be given paper to go out and buy things. If they're in a service that can no longer be afforded by production, they need to produce stuff themselves.
Two things create a problem with genuine deflation - falling production and lower employment. It is very easy to say the market will deal with it but a contracting economy does not generate jobs!
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