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  • #31
    I found two interesting graphs that will explain what I mean.



    Graph A is going downwards, in a free market that graph would be going up. But because of stupid government regulation it isn't.
    Graph B is going up, that's because it's a bubble made by the government. This line won't always be going up. One day it will drop because you can't sustain it without a free market.
    Please note that I look at thousands of these kind of graphs a day, so I am not just saying these things.
    You ate some priest porridge

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    • #32
      Although the fact that the Fed no longer publishes M3 is actually pretty interesting. In my opinion the current crisis handily proves that the M3 measure does have some utility beyond M2
      Originally posted by Ward
      OK.. ur retarded case closed

      Comment


      • #33
        Originally posted by Vykromond View Post
        Although the fact that the Fed no longer publishes M3 is actually pretty interesting. In my opinion the current crisis handily proves that the M3 measure does have some utility beyond M2
        someone got vyk to post somethign relevent outside of ear sex forumz


        1996 Minnesota State Pooping Champion

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        • #34
          Zerz, my offer from just about every other thread still stands - if you say anything, one single freaking good point as to why anything I say may be grossly incorrect - well, I don't remember what I said I would do but at this point I'll paypal you ten bucks.

          Yeah I might see patterns in things - not sure if you know this, but thats what "theories" tend to attempt to explain - perceived patterns that may point at something generally behind them. My walls of text are attempts to draw the various patterns I see into one relatively cumulative theory-of-things. My method in of itself is not flawed if you can't find any good reason besides "oh, you're just seeing patterns in things". If I saw a pattern in chicken blood - then I would write about it. But I don't.

          As of this point you have yet to offer any truly useful information to anyone. As far as I can tell, you've made no effort to even educate yourself in the hopes of one day bringing a serious criticism of my views to bear. Congrats, that is superior intellectual pursuit.

          Remember when I used to derive my ideas from logic alone, not even really using "evidence" or "statistics"? And now suddenly I'm just manipulating data? Show me one single human who objectively derives implications from data and I'll show you my flying pig.

          As far as this is concerned, everyone involved is using the same set of data and deriving different conclusions. All I am offering is my view. Your criticisms could easily apply to many other arguments, if not all, yet you are selecting me individually because you can't provide any real sort of response.

          Anyways, Nycle, I'm still working on my response to your post.
          NOSTALGIA IN THE WORST FASHION

          internet de la jerome

          because the internet | hazardous

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          • #35
            But then you still don't see me advocating destroying our current system, with as argumentation some unproven ideology again and again and again.
            I don't have to prove how the current system works, because its existence shows how it works. And it can sustain itself.
            All I ask of you is proof of how your theory would work. Not the repetitive bashing of the current system.
            It's not bias towards you, it's towards the ridiculous theory that we would be better off without regulation. You use it as argument time and again, like it's something that's been proven and can't be questioned anymore.

            I still question it! What the fuck makes you think your system will work?

            What's the use of burning down an old bridge when there are no plans for a better bridge even made? It's clear that you don't mind swimming cross the river in the meantime, but I do.

            Originally posted by Jerome Scuggs View Post
            If I saw a pattern in chicken blood - then I would write about it. But I don't.
            I bet you tried hard though.
            Last edited by Zerzera; 10-16-2008, 01:54 PM.
            You ate some priest porridge

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            • #36
              Part One

              Aight. This post is long, as, fuck. But I tried to keep as much of my personal/political beliefs out of it and focus entirely on the pure economic aspect. I don't even think I used the phrase "government" or "anarchy", nor did I go into any sort of detail about either. In doing so, I think I've presented a compelling argument without "changing the subject".

              I'm quite pleased with the end result - I definitely have learned a fuckton and arrived at new ideas and conclusions, while maintaining the sort of analytical validity I try to extend to my derived ideas. I'll even have to thank Zerzera... I think I finally understand what you're trying to say, and I think by not bringing anarchism into the analysis, I make a better case.

              What I meant to say was that confidence is one of the most important fundaments of capitalism, especially in the monetary economy. Capitalism is nothing more than a product of human cultural evolution, and demonstrates something that seperates us from the animals: the ability to attach value to tangible or even intangible objects beyond their intrinsic value. It takes confidence to make this possible, and once confidence is damaged in any way, it will make the entire capitalistic system, including the monetary and "real" economy, unstable until it is restored.
              I agree that "confidence" is a part of capitalism, but I argue that is not as a significant a factor as it seems. But there is a peculiar distinction you make - between "real" and "monetary" economies. I find it peculiar since the two are not different - as long as money represents something, be it gold, or bread, or anything else, so long as it is tangible - there is no distinction between currency and goods, since they are exchangeable.

              At the point where money no longer represents any sort of tangible, exchangeable value, then "confidence" does begin to play a major role - because yes, all participants within such a "fiat-money" economy must have confidence, or perhaps even faith, that the paper dollar has some sort of "intrinsic" value. Of course, the debate then becomes a discussion of "intrinsic" value versus "subjective" value - I would argue that all goods have no value other than the subjective values given to them by humans.

              This can very easily be explained through the wage-price spiral. Employees are in constant negotiation with their employers over their salary, and this is mainly caused by decreasing purchasing power on an average basis. Once employees start to notice this, they will demand an increase in wages. This increase will set a precedent for producers and retailers to increase their prices in order to maximise profits further, but by doing that, they will also decrease the purchasing power per capita and the cycle starts again. This is a generally accepted and acknowledged development, and provides for evermore increasing prices even if scarcity or supply exceeding demand don't play a role. This is also why unions in Europe, which generally hold a lot more sway than in the US, are always called upon by their governments to temper their wage increase demands whenever we hit rough economic times. This isn't only to prevent a sudden acceleration of the inflation, but also to maintain a competitive advantage relative to other countries regarding labour costs.
              The "wage-price" spiral model still misses a crucial point - as you assert, the process begins when employees demand wages due to decreasing purchasing power. But you're still missing something: what causes the decreasing purchasing power in the first place? It's a pretty generally accepted view, in Mainstream and Jerome-stream economics, that market prices tend to have a downward trend. As the price of goods lower, then purchasing power increases - meaning that wages, even if they stay the same over a long period of time, will gain purchasing power. This is why lower-income consumers can afford today what only the highest-income consumers could afford only a few years ago.

              Of course, we should also follow through with your "wage-price spiral" model. Here, I see a distinction that once again needs to be considered: short-run and long-run implications. This is not something that I am pulling out of my ass, it is a very important tool that Mainstream economics teaches; it was one of the first things I was taught in my Macroeconomics 101 class.

              1. Let's assume there is a short-run price increase in the goods a business sells.

              2. This raises an interesting point: businesses rarely, if ever, adjust their prices "for no reason". I say this because businesses, in order to "maximize profits", can't just raise the price of their goods and call it a day. Often times, the prices reflected in a marketplace are, more or less, ideal. Thus, if the price of a good rises, this can indicate a few things. The first conclusion could be that the good was in fact under-valued - meaning the company was taking a loss of potential profit. If this is the case, then a company can raise the price of their good without hurting demand. Otherwise, a rise in the price of a good will, ceteris paribus, lower demand - thus potentially lowering overall profit. In conclusion, "maximizing profit" does not necessarily imply "raising the price of a good" - Companies may even find that lowering prices will attract enough marginal demand to generate a net profit.

              3. This brings us to your conclusion of decreased purchasing power, per capita. This makes the assumption that the price change of a good by an individual business will somehow systematically affect the entire economy. In order for such a massive effect to occur, the company would have to simultaneously increase prices while every other business' prices stayed the exact same - which would decrease the net purchasing power. But in reality, different industries' prices fluctuate, going higher as well as lower. This not only "balances out" purchasing power on a general level, but also re-organizes resources as they see fit. For instance, the shift from horse-and-buggy to automobiles led to the wages of horse-and-buggy industry employees to decrease as the wages of automobile manufacturers increased. Because of this, labor left one industry and flooded another - without causing any serious "per capita" change of purchasing power or serious, sudden economic shock.

              4. This brings us to the long run. In the long run, a raise in prices reflects not any particular short-run "maximization" of profit, but is a aggregate reflection of information about said good. For instance - the price of a barrel of oil has more or less risen steadily over time. This indicates that oil, being a non-renewable resource, is becoming increasingly rare. The high price serves to sustain availability while moderating demand, as to prevent shortages.

              Concluding this, the "wage-price spiral" model fails to sufficiently account for long-term price increases in which scarcity or over-supply can't be seen as overt reasons.

              the Fed has a dual mandate: to maintain price stability while promoting maximum employment. This is also why you can't really see a general trend in the base borrowing rates between the Fed and the ECB in the graph you showed.
              I would argue that you can't see a trend because, well, the Reserve and the ECB are independent central banks whose rates (supposedly) reflect their respective economies. But the trend you can see is that in both graphs, the interest rates of interbank loans has become increasingly disparate with the target rate - demonstrating the failure of central bank rate-adjustments to accurately reflect market information.
              NOSTALGIA IN THE WORST FASHION

              internet de la jerome

              because the internet | hazardous

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              • #37
                Part Two

                I don't really see how lowering interest rates and fending off a recession can be the direct cause of a bubble? What bubble in particular are you referring to? A bubble is created whenever people deem something more worthy than it actually is. When the perceived worth of something starts colliding with other economic indicators that imply that the value has reached unsustainable levels relative to other indicators, a sudden devaluation (or "correction") takes place and the bubble bursts. Lowering or increasing interest rates has nothing to do with that, why exactly do you think that is so?
                The first sentence in this paragraph can be explained by starting with the last sentence. In a market, prices reflect the "value" of the good - and they fluctuate with changes in demand, supply, or both. Likewise, in the market for money, interest rates reflect the "price" of money - ie, the "price" of a loan.

                When loans are in high demand, interest rates will rise. When there is not enough capital to make a loan, interest rates will rise. Therefore, a high interest rate will not only discourage too many consumers taking out loans, but it will prevent banks from "over-lending" their funds, which destroys their equity and sets them up for a potential "bank-run" if the loans default.

                When loans are in low demand, interest rates fall. When banks have a large amount of money to be loaned out, interest rates will fall. Therefore, a low interest rate will stimulate consumers into taking out loans, which allows banks to then make loans which otherwise would not have been made, because banks cannot generate profit from money that they don't loan out. When this happens, an economy can then begin the next round of investment and expansion.

                Of course, such an economy, in order to function properly, would necessarily require a few things. One is the availability of capital - not loans, but capital. Our current economic model is almost completely devoid of any real savings, and is focused on debt. In fact, a majority of businesses don't even pay for their own paychecks out of pocket - they take out a loan, pay the wages, and then re-pay the loan, assuming their profits cover it. Similarly, banks take out loans without having the necessary capital - thanks to fractional-reserve banking which allows loans to be made without necessarily having the required capital.

                This presents a major potential risk - a problem of "equity". The current model of credit-driven monetary expansion works fine - so long as the economy expands, infinitely. An infinitely expanding economy would require quite a few physics laws to be re-written - at some point, supply and demand must meet. This means at some point, profits will have to slope off - and some businesses will have to cut back, or risk failure. For businesses who take on debt to pay wages, this means that if demand drops off, the profit may not cover the debt. For banks who take on debt to make loans, this means that in the case of a defaulted loan, the bank now has no money to cover their debt.

                Over time, banks' equity ratios have been increasing to increasingly risky levels - on average, modern banks are leveraged at a 40:1 ratio. This explains why Iceland was the first country to "go bankrupt" - their banks were some of the most obscenely highly leveraged banks in the world.

                Now let's swing back to the first sentence. As stated earlier, interest rates used to reflect the supply/demand of money. But the Federal Reserve manipulates the interest rate, in order to change supply and demand to what it perceives as "best" for the economy. Thus, interest rates no longer represent a reflection of market attitudes, but cause market attitudes.

                As I stated earlier, lower interest rates cause banks to make lots of loans, and consumers to take out lots of loans. And so when the Fed lowers the interest rate, regardless of market information, they send a false signal - a signal which influences consumers and banks to begin taking on loans. As I stated earlier, in a market the rate would drop only when banks had enough capital to cover their loans - which would lower the potential risk in case of defaults. So here, the Federal Reserve encourages risky loan-making behavior. Consumers who see rates lowering will become more inclined to take out loans, which will in turn begin anew a process of expansion, as new businesses and industries find startup capital, assuming they can not find capital anywhere else, or are very confident in the expected profits.

                And so loans will be taken out - and the economy will expand as new industries and businesses emerge. Of course, some of these entrepreneurial ventures will fail, and some loans will be defaulted on - but, as stated earlier, this presents no serious risk since banks are well-capitalized and excessive debt-taking is discouraged. The net result is profit for the banks, profit for consumers, new jobs, new products - everything that generally falls under the term "economic growth".

                Of course, the Federal Reserve distorts the interest rate. This sends false signals to banks and consumers to begin "over-spending". When this money floods the market, and consumers begin purchasing things with this new money, the increased demand for products will increase their prices. This is where "bubbles" begin to form - because as we see, the Fed has created demand artificially, by manipulating the interest rate.

                So the Fed can potentially form bubbles - so why, in this case, was it the housing market? Well, a few things. First and foremost - the Federal Reserve injects money into the market via banks. They do not give consumers the money. So this new money will then first be used by banks - in order to give out loans. This means that any market that is then touched by these loans, will see increased prices as demand floods the market. This explains why certain markets are more prone to bubbles - consumers don't take out loans to buy groceries.

                In this case, people used the flood of new money to buy houses. The demand for houses, in return, drove up prices. Thus, the bubble grew. Of course, the rise in prices then encourages other market actors to enter the growing market, expecting to see profits from what they perceive as a true rise in demand for housing.

                Concluding that, the Federal Reserve, by manipulating the interest rate, artificially drove demand up, which created the bubble. This in turn distorted the market by re-allocating resources away from other markets into the bubble. This explains why so many banks got caught up in the fiasco when prices eventually began "correcting" themselves to the real market prices.

                Another thing to see from this is the "redistribution effect". When the Fed creates new money, it follows a trail of users - from the "first-user" to the "end-user". As it passes hands, the money supply is increased. This is known as the "multiplication effect". If the Fed creates 50 million dollars and gives it to a bank, who then loans out 90% of that (assuming the reserve minimum is still at 10%) to another bank, who then loans out 90% of that, etc... in the end, what started as a 50-mil injection could result in as much as 500-mil's worth of new dollars within an economy. Of course, this is heavily reliant on credit and credit expansion - which is why there has been a shift away from saving to going into debt. (Credit in-of-itself is not a bad investment method - but there is a distinction between healthy ways of extending credit and unhealthy ways of extending credit. I argue that the Fed's policies encourage the latter.)

                Because of this, the Fed's newly-created money necessarily spreads out into an economy unevenly, and over a period of time. This means that the increased revenue for some people will increase quickly - in this case, the "first-users", a.k.a. the banks. Since they acquire this money before the markets react and adjust to the new demand, banks' real revenue - their purchasing power - has increased.

                But as the banks distribute this new money into the economy, the markets begin to react - prices rise in response to the new purchasing power. But this means that the "end-user" of the money - the consumer - must begin paying for the higher prices, before they have seen any real increase in real revenue. Thus, creating money increases the purchasing power of the banks, while decreasing the purchasing power of the consumers. Within this conclusion, an alternative explanation to your "wage-price spiral" model appears - as well as providing an explanation as to why purchasing power would decrease in the first place.

                Of course, by the time the new money finds itself in the hands of the "end-user", prices have already risen and thus overall purchasing power does not increase or decrease dramatically - which is why people tend to think that the Federal Reserve's inflation is not harmful in the long-run. But this conclusion ignores the short-run impacts which create more long-run problems themselves.
                NOSTALGIA IN THE WORST FASHION

                internet de la jerome

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                • #38
                  Part Three

                  What I'm trying to explain is that in the current financial crisis, where confidence is seriously damaged, it's only natural for banks to hold on to their money because of the uncertainty that arises when they lend it out (will they get their money back at all from the receiving party?). Once they start freezing parts of their money/capital and decide not to trade it on the capital market anymore, this money is not readily available to be spent (or from the bank's point of view: to be loaned out) on anything by anyone. It doesn't make sense that money that cannot be spent can cause inflation. What you seem to do is to count this frozen capital in the available (or spendable) amount of money anyways. From that point of view, sure it's rational to assume that this will cause monetary inflation. But since much of it is frozen it should be left out and the dollars that the central banks are pouring in right now are there to replace the frozen capital that otherwise would have entered the capital market had this crisis not occured.
                  Here we must look into the meaning of "frozen". Your explanation, while perhaps true to an extent, misses something - the fact that the credit market is not frozen. In my previous post I linked to an article describing why this is untrue - as well as showed some recent stock market data showing what companies were actually gaining value - and they were all banks.

                  Only the big banks are tightening their lending. This is because the big banks are the direct recipient of Fed money injections, meaning most of the bad loans originated within these massive companies. Smaller banks, who do not have access to fresh injections of dollars, have as a result been more careful in their investments, as well as maintaining their capital.

                  Recall my analysis of market interest rates - at high levels, banks are not as willing to part with their money, and consumers are not as willing to take out a loan. Now, let's apply this to the interbank market - and look at the graph I posted previously. The graph shows that interbank interest rates have significantly increased - and if my analysis holds true, such an increase would of course reduce available loans and potential buyers of loans - which is exactly what we are seeing today.

                  Now, the Fed has, of course, been attempting to tackle this from the supply-side: injecting tons of new dollars to increase supply of dollars, which would theoretically lower interest rates. Yet the banks are still unwilling to lend. What would account for that? Here, I refer back to the topic of "healthy" versus "unhealthy" credit - and my assertion that the Fed injects the latter type.

                  But from here a new question emerges: if the credit market isn't "frozen", if there are in fact banks out there with great credit and plenty of loanmaking capacity, what's the problem? In a normal market scenario, there would be an industry shift - just like the earlier example of horse-and-buggies giving way to automobiles. In this case, the re-organization is within one industry - the current big banks give way to smaller banks who, eventually, gain market shares and become the new big banks.

                  In a normal market, this is, in fact, no problem - some banks will fail, some people may lose money tied up in said bank, but overall, the economy would continue as normal, without a 700-point Dow drop and a global economic crises. The problem arises when the Fed enters the picture. The Fed injects money by creating money and then proceeds to "buy" bonds from banks. Of course, this means that the Fed's activities is limited to interacting with bigger banks who have higher "capital" and are present in many markets - qualities necessary in order to create the amount of money they desire, and distribute it across as many markets and areas as possible.

                  Of course, if "big" banks begin failing, the Fed's ability to inject money is neutered - until new competing banks begin to rise as the leaders of their industry. But until that happens, these smaller banks do not have the required capital to buy up bonds/securities, and they do not have enough market penetration to disperse these new monies into different economic sectors.

                  When that happens, then the Fed is powerless to prevent the market from doing what it, up until that point, has been trying to do - return to equilibrium. Subsequently, the economy contracts on a massive level as years upon years of over-expansion and resource mis-allocation begin to unwind, which has a disastrous effect.

                  And so, the Fed must "preserve" the economy, exactly as it is. In doing so, they prevent normal market processes from occurring - they must bail out the big banks who made bad decisions and suffered serious losses. This ensures that bankers who are truly more responsible and have the ability to keep safe loan portfolios are never given a chance to offer their services to a bigger market where such services are desperately needed. In doing so, the Fed pursues a self-destructive path - which has consequences for everyone involved.

                  From here, we can then return to the first point I make in this post, pertaining to "confidence" and how it is vital to fiat-money economies, but plays a significantly smaller role in a normal economy. The conclusion I reach here is that we are not losing confidence in "capitalism", but rather: we are losing confidence in the Federal Reserve itself. It is not the market that is being questioned - but the Fed's policies towards the market.

                  Do you mean the "correct" total amount of money within an economy (M3) or the total amount on the capital market? In the former case: inflation rates. In the latter one, it's not up to a central bank to have this determined because the free market is designed to do so. But once the capital market shrinks or becomes more "expensive" (higher interest rates) in such a way that it will have a detrimental effect on the real economy, I suggest they inject as much money as is necessary to keep the capital market flowing, provided of course that the only normal way the capital market would shrink is due to fading confidence which naturally leads to banks holding their money back from the capital market which causes it to shrink in the first place.
                  I'll respond to both. Following from my analysis, the money supply can self-regulate itself to ensure proper amounts of capital exist to fund proper amounts of growth. How do market participants do this? It occurs through the constant process of exchanges that occur within a market. Supply, demand, interest rates, sustainability... these are only a few things that lead to conclusions about whether or not the money supply needs to be increased or decreased. By observing only the rate of inflation, a central bank ignores vital other signals and information that would provide significant amounts of insight into the state of a particular market - or even the economy as a whole.

                  As for capital markets - you mention it is not the central bank's duty, that the market can self-regulate itself. This brings up a question: if capital markets can be self-sustained, then why not the money supply itself? But in light of recent events, another question must be raised: why, then, has the Federal Reserve taken over the capital markets?

                  The answer lays within your own analysis - the Fed took over the capital markets because the capital markets were tightening up. But as per my own analysis, the reduced supply of capital is a signal - a signal indicating that the market has taken on alot of new growth, and further growth is unsustainable. When this happens, yes, the economy will begin to "slow down" its growth. But the Fed, through its fiscal policy, instead injects new money into the economy, which then sustains new levels of growth above actual market supply/demand. As the disparity between actual market levels and the artificial levels increase, the overall impact of the eventual "correction" becomes bigger, and bigger. This means as time goes on, what would have been a slightly uncomfortable "slowdown" morphs into the potential for a major, systemic, market-wide, full-blown depression - or even collapse. This is why the Fed, by "fending off" the 2001 recession, merely "put off" the inevitable market correction - and now, the potential for a collapse is closer than ever. Worse than that, is the possibility that absolutely nothing can be done - since the possibility for a relatively non-disastrous "correction" was rejected at every single point where the opportunity presented itself.
                  NOSTALGIA IN THE WORST FASHION

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                  • #39
                    lines too long; eye tracking fail

                    ltl;etf
                    Ferengi Rule of Acquisition #98: Every man has his price.

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                    • #40
                      http://www.innovestgroup.com/index.p...=193&Itemid=61

                      http://waronyou.com/forums/index.php...icseen#msg4484
                      Last edited by Jerome Scuggs; 10-17-2008, 12:51 AM.
                      NOSTALGIA IN THE WORST FASHION

                      internet de la jerome

                      because the internet | hazardous

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                      • #41
                        Jerome, although I admire your seemingly infinite curiosity to learn more about politics and economics, I believe you're seeing connections that aren't really there and then proceed to draw conclusions that are far from realistic and sometimes give a twist to what I actually say.

                        From what I can tell from your previous massive post is that you largely blame central bank intervention for "delaying and therefore causing evermore bigger bubbles". In practice this basically comes down to "borrowing" your way out of rough economic times or recessions with debt-fueled growth. I agree with you that this is not a good thing, and America is notorious for its already massive and still increasing outstanding debt, and people still think too lightly of this. Realistically though, your current gross debt as a percentage of the GDP remains at 72% which isn't that healthy but not too uncommon either. A big difference for the US is that about 40% of the public debt is held by foreign entities which choose to hold on to it in the form of securities. Once they choose to start selling these securities en masse, this will pose a severe problem but realistically this is not going to happen. Countries like China need the US to take in their products to sustain their own economic growth and will continue to accept US dollars in order to do so, but one starts to wonder for how long. The US would be doing good in adopting some fiscal sound policies in order to reverse the continuing deficits that they run every year and use the surpluses to decrease the level of outstanding debt, but in the current political climate this is easier said than done and the US continues to live beyond its means.

                        But to come back to this financial crisis, through all the text that you read you seem to dwell off more and more from the true cause of the crisis: the fact that American bankers, and they alone, thought of too complicated and too risky products which then, through trade, became widespread throughout the world banking system. This might have worked for a while, but like any bubble it's bound to burst and when shit hit the fan and uncovered these toxic products as a serious burden that might not be redeemable, that's when confidence started to fade and all of this started. Your "walls of text" about central banking has absolutely nothing to do with American bankers creating this financial abominations which has caused the whole system to tremble, and is now affecting the real economy with a threatening recession as well.

                        What you seem to do is to lay a causal connection between a general ongoing development which I described in the second paragraph, and an exceptional and isolated situation which is the financial crisis (and its threatening recession) we are experiencing today, the direct cause of which can easily be pointed out, and it's not the Fed. If you really want someone to blame, blame the bankers who thought of these toxic products who were able to thrive in an underregulated system, and not the central banks.

                        This all has already gone far too off-topic imo, so I'll just rest my case with my previous posts.
                        Last edited by Nycle; 10-17-2008, 04:24 AM.

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                        • #42
                          Originally posted by Saturn V View Post
                          lines too long; eye tracking fail

                          ltl;etf
                          remember that one day i walked in on you in the shower
                          Originally posted by turmio
                          jeenyuss seemingly without reason if he didn't have clean flours in his bag.
                          Originally posted by grand
                          I've been afk eating an apple and watching the late night news...

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                          • #43
                            After reading walls of text, I'm going to go with the simple explanation. People are greedy as fuk. The banks wanted to gain a shit ton of money so they found a way to prey on the weak through subprime lending. Risky investments were made. As proved by 9/11, a building does not collapse very easily when it is hit near the top or middle, however remove the base of a building and the entire thing goes to shit. The base of the lending could not make the payments when the ARM fired off, so in order to keep profits up or not close banks took risky loans, made risky investments, or called for money from higher up. The retardation continued on up and we had dumbass mistakes made left and right. In essence, people got so greedy that they preyed on the weak and now we are all paying for it. Moral of the story, it's not always about the bottom line you greedy bastards.
                            TWDT Head Op Seasons 2, 3, and 4
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                            Originally posted by kthx
                            Umm.. Alexander the Great was the leader of the Roman empire, not the Greek empire guy.

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                            • #44
                              Originally posted by Saturn V View Post
                              lines too long; eye tracking fail

                              ltl;etf
                              sounds like you've recently renewed your license at the local DMV
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                              • #45
                                Seeing as you like to read so much Jerome, here are a couple of articles I think you should read:

                                Besides the 2 articles with links under them, I have all the .pdf files uploaded. If you are interested in reading them, give me a pm and Ill give you the links. I am not posting the location here, because well, its not exactly legal for me to just provide these articles (the 2 with the link given can be found on the internet for free, the rest I got through my university).

                                Camerer, C., Issacharoff, S., Loewenstein, G., O’Donoghue, T. and Rabin, M. (2003) Regulation for conservatives: Behavioral economics and the case for “asymmetric paternalism“. University of Pennsylvania Law Review, 15 (January), pp. 1211-1254.

                                Regulation for conservatives: Behavioral economics and the case for “asymmetric paternalism“

                                Choi, J. J., Laibson, D., Madrian, B. C. and Metrick, A. (2001) For Better or For Worse: Default Effects and 401(k) Savings Behavior. NBER Working Paper no. W8651 (December).

                                For Better or For Worse: Default Effects and 401(k) Savings Behavior.

                                Diener, E. (1994) Assessing Subjective Well-Being: progress and opportunities. Social Indicators Research, 31 (2), pp. 103-157.

                                Loewenstein, G. and Haisley, E. (2007) The Economist as Therapist: Methodological Ramifications of 'Light' Paternalism. To appear in Caplin, A. and Schotter, A. (Eds.), “Perspectives on the Future of Economics: Positive and Normative Foundations”, volume 1 in the Handbook of Economic Methodologies. Oxford, England: Oxford University Press

                                Solnick, S. J. and Hemenway, D. (1998) Is more always better? A survey on positional concerns. Journal of Economic Behaviour & Organization, 37, pp. 373-383.

                                Sunstein, C. R. and Thaler, R. H. (2003) Libertarian paternalism. American Economic Review, 93 (2): 175-179.

                                Tversky, A. and Kahneman, D. (1974) Judgment under Uncertainty: Heuristics and Biases. Science 185 (4157) pp. 1124-1131.

                                There is a ton more I could give, and seeing at it has been a while, prob even a more complete overview, but this is not a bad starting point. It talks about economics and governments involvement regarding economics.

                                Also, this might be an interesting one, but you will have to get the book for it, I only have it on paper, not a digital version.

                                Brickman, P. and Campbell, D. T. (1971) Hedonic relativism and planning the good society. Adaptation Level Theory: A Symposium. New York: Academic Press, pp. 287-302.
                                Maybe God was the first suicide bomber and the Big Bang was his moment of Glory.

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