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Author Topic: The crumbling of the US financial system (NC)  (Read 32041 times)

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pipsqueak

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Re: The crumbling of the US financial system (NC)
« Reply #200 on: October 08, 2008, 02:27:52 AM »

he went to UIUC  ;D
i dont trust the bugger

Kashkari in 20 years? (what's up with Goldman Sach and bald guys?)

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RicePlateReddy

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Re: The crumbling of the US financial system (NC)
« Reply #201 on: October 08, 2008, 07:06:44 PM »

i dont trust the bugger

His wide-eyed look and bugger just seem to fit together  ;D
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LosingNow

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Re: The crumbling of the US financial system (NC)
« Reply #202 on: October 13, 2008, 08:34:38 PM »

Thoughts from one University of Chicago professor..

http://faculty.chicagogsb.edu/luigi.zingales/research/PSpapers/plan_b.pdf
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Cover Point

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Re: The crumbling of the US financial system (NC)
« Reply #203 on: October 13, 2008, 10:32:23 PM »

stocks up by 11%

 wish I had some money :)
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LosingNow

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Re: The crumbling of the US financial system (NC)
« Reply #204 on: October 13, 2008, 11:37:48 PM »

One thing constant in this market is volatility!!
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CLR James

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Re: The crumbling of the US financial system (NC)
« Reply #205 on: October 14, 2008, 12:45:16 AM »

he went to UIUC  ;D
i dont trust the bugger

Hay! Watch your language young man!
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keep-it-cool

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Re: The crumbling of the US financial system (NC)
« Reply #206 on: October 14, 2008, 04:25:42 AM »

stocks up by 11%

 wish I had some money :)

what happened to your AIG?

& shouldnt you be reaching for your money when stocks are down? ;D
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LosingNow

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Re: The crumbling of the US financial system (NC)
« Reply #207 on: October 14, 2008, 05:15:02 PM »

Our man - Raghuram Rajan - on his solution..

http://www.voxeu.org/index.php?q=node/2373
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LosingNow

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Re: The crumbling of the US financial system (NC)
« Reply #208 on: October 14, 2008, 05:34:19 PM »

WOW.. he was on ABC NEWS...

http://abcnews.go.com/Video/playerIndex?id=6026381

--

BTW, was just talking to my local banker - which is a small regional bank- which is very conservative and properly run. He is pissed off.

A month ago, he was losing depositors to "BIG" Banks like Wells and Wachovia ..because people feared a run on the smaller banks.

Now the BIG banks were collapsing.. because of the mistakes made by them.. and now they are being re-capitalized by the government.

Net net.. he was competing with "big and strong" banks .. who made wrong decisions.. but who will not pay for their mistakes .. and now they are re-capitalized by government and have become a stronger competitor for him.

Welcome to crony capitalism where the little guy who fights fair and square is getting effed by the government because the big guys have deep connections and probably are turning around and donating large contributions to political parties.

Pathetic pathetic pathetic!!
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LosingNow

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Re: The crumbling of the US financial system (NC)
« Reply #209 on: October 14, 2008, 05:46:10 PM »

Reminds me of Bizarro World (as made famous by Jerry Seifeld)

http://en.wikipedia.org/wiki/The_Bizarro_Jerry

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The concept of a Bizarro universe is directly taken from the Superman universe, in addition to verbal references to Superman:

Jerry: Yeah. Like Bizarro Superman. Superman's exact opposite, who lives in the backwards bizarro world. Up is down, down is up. He says "Hello" when he leaves, "Good bye" when he arrives.
Elaine: Shouldn't he say "bad bye"?
Jerry: No, it's still goodbye.
Elaine: Does he live underwater?
Jerry: No.
Elaine: Is he black?
Jerry: Look, just forget the whole thing, all right.
At the very end of the show, a scene takes place in Kevin's apartment in which Kevin, Gene, and Feldman all join in a group hug, and the following line is spoken in the same way that the Bizarro from the Superman Universe speaks:

Kevin: Oh. Me so happy. Me want to cry.
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prfsr

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Re: The crumbling of the US financial system (NC)
« Reply #210 on: October 15, 2008, 03:05:10 AM »

http://www.project-syndicate.org/commentary/stiglitz101

The End of Neo-liberalism?
by Joseph E. Stiglitz
 
Joseph E. StiglitzNEW YORK – The world has not been kind to neo-liberalism, that grab-bag of ideas based on the fundamentalist notion that markets are self-correcting, allocate resources efficiently, and serve the public interest well. It was this market fundamentalism that underlay Thatcherism, Reaganomics, and the so-called “Washington Consensus” in favor of privatization, liberalization, and independent central banks focusing single-mindedly on inflation.

For a quarter-century, there has been a contest among developing countries, and the losers are clear: countries that pursued neo-liberal policies not only lost the growth sweepstakes; when they did grow, the benefits accrued disproportionately to those at the top.

Though neo-liberals do not want to admit it, their ideology also failed another test. No one can claim that financial markets did a stellar job in allocating resources in the late 1990’s, with 97% of investments in fiber optics taking years to see any light. But at least that mistake had an unintended benefit: as costs of communication were driven down, India and China became more integrated into the global economy. 

But it is hard to see such benefits to the massive misallocation of resources to housing.  The newly constructed homes built for families that could not afford them get trashed and gutted as millions of families are forced out of their homes, in some communities, government has finally stepped in – to remove the remains. In others, the blight spreads. So even those who have been model citizens, borrowing prudently and maintaining their homes, now find that markets have driven down the value of their homes beyond their worst nightmares.

To be sure, there were some short-term benefits from the excess investment in real estate:  some Americans (perhaps only for a few months) enjoyed the pleasures of home ownership and living in a bigger home than they otherwise would have. But at what a cost to themselves and the world economy! Millions will lose their life savings as they lose their homes. And the housing foreclosures have precipitated a global slowdown. There is an increasing consensus on the prognosis: this downturn will be prolonged and widespread.

Nor did markets prepare us well for soaring oil and food prices. Of course, neither sector is an example of free-market economics, but that is partly the point: free-market rhetoric has been used selectively – embraced when it serves special interests and discarded when it does not.

Perhaps one of the few virtues of George W. Bush’s administration is that the gap between rhetoric and reality is narrower than it was under Ronald Reagan. For all Reagan’s free-trade rhetoric, he freely imposed trade restrictions, including the notorious “voluntary” export restraints on automobiles.

Bush’s policies have been worse, but the extent to which he has openly served America’s military-industrial complex has been more naked. The only time that the Bush administration turned green was when it came to ethanol subsidies, whose environmental benefits are dubious. Distortions in the energy market (especially through the tax system) continue, and if Bush could have gotten away with it, matters would have been worse. 

This mixture of free-market rhetoric and government intervention has worked particularly badly for developing countries. They were told to stop intervening in agriculture, thereby exposing their farmers to devastating competition from the United States and Europe. Their farmers might have been able to compete with American and European farmers, but they could not compete with US and European Union subsidies. Not surprisingly, investments in agriculture in developing countries faded, and a food gap widened.

Those who promulgated this mistaken advice do not have to worry about carrying malpractice insurance. The costs will be borne by those in developing countries, especially the poor. This year will see a large rise in poverty, especially if we measure it correctly.

Simply put, in a world of plenty, millions in the developing world still cannot afford the minimum nutritional requirements. In many countries, increases in food and energy prices will have a particularly devastating effect on the poor, because these items constitute a larger share of their expenditures.

The anger around the world is palpable. Speculators, not surprisingly, have borne more than a little of the wrath. The speculators argue: we are not the cause of the problem; we are simply engaged in “price discovery” – in other words, discovering – a little late to do much about the problem this year – that there is scarcity. 

But that answer is disingenuous. Expectations of rising and volatile prices encourage hundreds of millions of farmers to take precautions. They might make more money if they hoard a little of their grain today and sell it later; and if they do not, they won’t be able to afford it if next year’s crop is smaller than hoped. A little grain taken off the market by hundreds of millions of farmers around the world adds up.  

Defenders of market fundamentalism want to shift the blame from market failure to government failure. One senior Chinese official was quoted as saying that the problem was that the US government should have done more to help low-income Americans with their housing. I agree. But that does not change the facts: US banks mismanaged risk on a colossal scale, with global consequences, while those running these institutions have walked away with billions of dollars in compensation. 

Today, there is a mismatch between social and private returns. Unless they are closely aligned, the market system cannot work well.

Neo-liberal market fundamentalism was always a political doctrine serving certain interests. It was never supported by economic theory. Nor, it should now be clear, is it supported by historical experience. Learning  this lesson may be the silver lining in the cloud now hanging over the global economy.


Joseph E. Stiglitz, Professor at Columbia University, received the 2001 Nobel Prize in economics. He is the co-author, with Linda Bilmes, of The Three Trillion Dollar War: The True Costs of the Iraq Conflict.
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Cover Point

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Re: The crumbling of the US financial system (NC)
« Reply #211 on: October 15, 2008, 03:13:00 PM »

stocks up by 11%

 wish I had some money :)

what happened to your AIG?

& shouldnt you be reaching for your money when stocks are down? ;D

thats a long term investment .... been trading at around 2.50 ... about what i bought it at. Thats money i consider sunk :)

and wish i had the money to reach :) ... could be a good opportunity to buy. Spent all my money on buying the house. You know those things that used to be up in value :P


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LosingNow

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Re: The crumbling of the US financial system (NC)
« Reply #212 on: October 15, 2008, 09:06:44 PM »

One thing constant in this market is volatility!!
Up 900, down 700 .. rollercoaster
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pipsqueak

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Re: The crumbling of the US financial system (NC)
« Reply #213 on: October 15, 2008, 10:44:00 PM »

One thing constant in this market is volatility!!
Up 900, down 700 .. rollercoaster

dow will sink to 7500 - maybe a good time to nibble but then it could be a L type recession...
« Last Edit: October 15, 2008, 10:56:06 PM by pipsqueak »
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RicePlateReddy

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Re: The crumbling of the US financial system (NC)
« Reply #214 on: October 17, 2008, 03:22:42 AM »

One thing constant in this market is volatility!!
Up 900, down 700 .. rollercoaster

dow will sink to 7500 - maybe a good time to nibble but then it could be a L type recession...

Let us prepare for an n type recession   [god]
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I balance, I weave, I dodge, I frolic, and my bills are all paid. On weekends, to let off steam, I participate in full-contact origami. Years ago I discovered the meaning of life but forgot to write it down. - (thanks, Hugh Gallagher)

poondu

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Re: The crumbling of the US financial system (NC)
« Reply #215 on: October 17, 2008, 06:32:38 PM »

Monkey Man and Wall Street

A parody of how Wall street works

Once upon a time in a village, a man announced to the villagers that he would buy monkeys for $10.

The villagers seeing there were many monkeys around, went out to the forest and started catching them. The man bought thousands at $10, but, as the supply started to diminish, the villagers stopped their efforts. The man further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to their farms. The offer rate increased to $25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!

The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now act as buyer, on his behalf.

In the absence of the man, the assistant told the villagers: 'Look at all these monkeys in the big cage that the man has collected.. I will sell them to you at $35 and when he returns from the city, you can sell them back to him for $50.'
The villagers squeezed together their savings and bought all the monkeys.
Then they never saw the man or his assistant again, only monkeys everywhere!

Welcome to WALL STREET.
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pipsqueak

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RicePlateReddy

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Re: The crumbling of the US financial system (NC)
« Reply #217 on: October 11, 2010, 02:21:53 PM »

Bumping this up - 2 years and counting ...... Was I right about the "n" type recession  ;D
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I balance, I weave, I dodge, I frolic, and my bills are all paid. On weekends, to let off steam, I participate in full-contact origami. Years ago I discovered the meaning of life but forgot to write it down. - (thanks, Hugh Gallagher)
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