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  1. #106
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    Quote Originally Posted by TheVillageIdiot View Post
    Go back and read your history. This should have been basic high school stuff.

    The word of the day int he 20s was "Laissez-faire" and "social darwinsim".

    This meant no regulation at all. This allowed the Getty's and the Rockerfellers and such to manipulate market prices becuase they would buy and sell at large volumes driving prices up and down.
    Oh please when did the politicians do as they said? Fucking Obamasiah is a walking contradiction.

    Btw the market technique you described is not bad and results in better prices for consumer and more competition. Rockfellers were losing their monopoly by the time they were broken up.

    Glass-Steagal did a number of things. One was create the fed discount window. This is a good thing. This allows the government to steer monetary policy and create liquidity in the markets.
    Wtf are you smoking. All those things should be set by the market. When government adds liquidity to the market it forces out investors out of the market.

    Fed discount window means that FED can lend at ultra low interest rates to the banks resulting in devaluation of the currency. You got to be fucking kidding me if you think that is good.

    Without the feds current ability to keep interest rates low companies, commercial banks would be doing the stuff like you currently see with credit cards like providing cards for 28% interest in a down economy (FYI< Usury used to be illegal).
    Um yeah recession needs high interest rates. This means that all the capital needs to go to bussiness so they can start producing. What they are trying to do now is take credit away from sectors of economy that badly need it and give it to consumers. Broke consumers at that. Look you need to learn economics.

    However, the fed setting rates is does not solve everything. It allows somewhat ordered chaos when corporation are behaving sanely.
    No what it does it distorts market operations. Companies act based on interest rates. When interest rates are low the companies are investing capital and are expanding. When they are high companies save money and liquidate bad assets.

    When you keep interest rates artificially low for 30 years you get very little liquidation of bad assets and the productivity of the economy slows down. Not to mention when government burrows a fuckton of money to bailout the bad assets of the economy it destroys the entire foundation. We keep pushing back the enevitable correction. Everytime we push it back it becomes much worse.

    Other things Glass-Steagal did are:
    • Add deposit rules for banks
    • Establish the FDIC to stop bank "runs"
    • Separate commercial banks from speculatory investment banks
    Deposit rules merged investment banking with deposit banking. It bassically destroyed the entire concept of a bank. FDIC is a moral hazzard. Before FDIC people reserached their banks before making deposits. Now the speculator banks get the most depositors. As you can see that is disastrous.

    With deposit rules there is no difference between comercial and speculatory investment banking. Both use deposits for investment.

    Other important regulations of the period were the establishment of the uptick rule. The Uptick rule was extremely important as the robber Barron's buy and sell large volumes to drive prices artificially up and down. Since the elimination of the uptick rule we now see wide fluctuations due to speculation in the markets (energy is one of the biggest areas we see speculation).
    I don't know if you know this but speculation on the market does not reflect on how the economy works. A companies stock can be devastated but if it is making profit it will continue to function and work just fine.

    There is no one to blame but the speculators if they bid up stocks. Why should we protect failures?

    Your robber barrons comment has nothing to do with the uptick rule.

    You really need to understand what happens in an environment where there are no regulations. You can't get any better example than the 1920's. The era of Ponzi and the robber Baron's.
    LOL government is the biggest polluter. Comapred to the pollution done by our industry the government contributes several times more. And they give themselves sovereign immunity which prevents the people making decisions from answering to the law.

    Sadly enough the regulations which came out of the great depression were very even handed and sane. These laws have what engineers call a "dampening effect" on the economy. This does not mean the grows "slower" it means there are lower high and higher lows. It allows the economy to grow in a more more stable manner. These laws allows the US to grow with relatively few mild recessions until the 90's when they were repealed.
    LOL where do you read such propaganda? Our boom bust cycle has been bigger since the introductions of these rules. They simply pushed back the real lows until the future.

    The current crises can be linked directly to removal of many of the reforms of the 30's. We have seen a massive resurgence of ponzi schemes (Eclipsing the great Ponzi himself). We see Enron's, AIG's, and others who are now (through laws enacted in the 90s) completely exempt from regulation.
    When government practices a ponzy scheme it self I don't think it is unrealistic to think that other people would think they can also do so. Plus ponzy schemes are easy to detect the people who give their money to defrauders are to blame. If anything none of the rules that were used for deregulation address the ponzy schemes.

    • Rules on margin requirements? gone
    • Rules governing "hedges" as insurance? Gone
    • Rules allowing oversight of derivative as securities? expemt
    • Rules governing margin requirements? gone


    With each repeal of these laws we have seen worse and worse recessions occurring more often.

    Unfortunately I don't see any of the old rules which worked so well being replaced.

    Read your history. It is there. Don't just read a single book and take some partisan spin on it.
    You are a funny guy. You mention all the rules that were patches for government created problems. None of those rules actually stopped the problems they just pushed them back.

    For examples rules on the margin requirement only hurt the speculators. People who invest their money are not effected. The others all have something to do with trying to regulate speculators.

    What you also do not understand is that the markets regulate them selves. If the government fails miserably to control derivatives the market would not do so. Derivatives are only possible to grow this big with FED discount window. What they do they burrow at an ultra low rate and use that burrow money as a hedge. If they were forced to burrow from someone else they would not be able to get a good rate and would not make any money.
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  2. #107
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    I know exactly how people get fucked by the system. The problem is that you have partisan goggles on. You only look for instances of private corruption and when you find them you consider it to be a problem only government can solve. Yet when government fucks up you give them a big fucking pass.
    No I don't. I've made post about how to fix problems created by the government and how to keep the government more accountable.

    Plus you only care about how poor people get fucked by the system.
    The middle class are the ones getting fucked by the system the most. Its why the middle class is shrinking.

    I don't think you do. You attempt to change it in a way that is not compatible with nature.
    This statement coming from someone who knows nothing about power theory and believes the free-market is the answer to all aliments. Irony
    Last edited by xpiher; 11-22-2009 at 23:42.
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  3. #108

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    Libertarianism do have a good chance of hitting the bulls eye. Republicans are not doing well so they can make use of this.
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  4. #109

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    Quote Originally Posted by Silverhandorder View Post
    Oh please when did the politicians do as they said? Fucking Obamasiah is a walking contradiction.

    Btw the market technique you described is not bad and results in better prices for consumer and more competition. Rockfellers were losing their monopoly by the time they were broken up.



    Wtf are you smoking. All those things should be set by the market. When government adds liquidity to the market it forces out investors out of the market.

    Fed discount window means that FED can lend at ultra low interest rates to the banks resulting in devaluation of the currency. You got to be fucking kidding me if you think that is good.



    Um yeah recession needs high interest rates. This means that all the capital needs to go to bussiness so they can start producing. What they are trying to do now is take credit away from sectors of economy that badly need it and give it to consumers. Broke consumers at that. Look you need to learn economics.



    No what it does it distorts market operations. Companies act based on interest rates. When interest rates are low the companies are investing capital and are expanding. When they are high companies save money and liquidate bad assets.

    When you keep interest rates artificially low for 30 years you get very little liquidation of bad assets and the productivity of the economy slows down. Not to mention when government burrows a fuckton of money to bailout the bad assets of the economy it destroys the entire foundation. We keep pushing back the enevitable correction. Everytime we push it back it becomes much worse.


    Deposit rules merged investment banking with deposit banking. It bassically destroyed the entire concept of a bank. FDIC is a moral hazzard. Before FDIC people reserached their banks before making deposits. Now the speculator banks get the most depositors. As you can see that is disastrous.

    With deposit rules there is no difference between comercial and speculatory investment banking. Both use deposits for investment.



    I don't know if you know this but speculation on the market does not reflect on how the economy works. A companies stock can be devastated but if it is making profit it will continue to function and work just fine.

    There is no one to blame but the speculators if they bid up stocks. Why should we protect failures?

    Your robber barrons comment has nothing to do with the uptick rule.



    LOL government is the biggest polluter. Comapred to the pollution done by our industry the government contributes several times more. And they give themselves sovereign immunity which prevents the people making decisions from answering to the law.



    LOL where do you read such propaganda? Our boom bust cycle has been bigger since the introductions of these rules. They simply pushed back the real lows until the future.



    When government practices a ponzy scheme it self I don't think it is unrealistic to think that other people would think they can also do so. Plus ponzy schemes are easy to detect the people who give their money to defrauders are to blame. If anything none of the rules that were used for deregulation address the ponzy schemes.



    You are a funny guy. You mention all the rules that were patches for government created problems. None of those rules actually stopped the problems they just pushed them back.

    For examples rules on the margin requirement only hurt the speculators. People who invest their money are not effected. The others all have something to do with trying to regulate speculators.

    What you also do not understand is that the markets regulate them selves. If the government fails miserably to control derivatives the market would not do so. Derivatives are only possible to grow this big with FED discount window. What they do they burrow at an ultra low rate and use that burrow money as a hedge. If they were forced to burrow from someone else they would not be able to get a good rate and would not make any money.
    about this you are incorrect. Markets will eventually regulate themselves but wipe out the small investor in the process.

    The market self regulation follows what is called a closed feedback loop. However closed feedback loops can have problems and become unstable if they are under damped.

    Take the crash in the 20s. The only survivors of the crash were very large investors such as Getty, Rockerfeller and others. These are the same people who actively manipulated the market by dumping and then buying large volumes of shares. There is no way to eliminate this behavior directly, however doing this while leveraging yourself 20-to-1 impacts the entire market not just 1 or 2 individuals. How does this impacts others?
    • Banks must cover losses on the margin call when the payer cannot pay (reduces liquidity)
    • This artificially changes the prices of sticks so that they do not reflect the true intrinsic value
    • Small investors cannot afford to lose 80% of thier net worth and wait 10 years for it to recover


    The margin problem in particular is huge. This causes any disturbances int he market to become amplified. Add to this that there is never enough capital to cover huge margin calls and you end up with a situtation like we saw late last year. No market liquidity. Banks have no money to lend. This would take years to self correct. The other alternative is to replace the margin requirements we have had in place since the great depression.

    If you think markets self relgulate you only need to look at the economic policies of Hoover. Laissez Faire has been done before and it does not work. You must have a minimal set of "smart" regulations or predators will find ways to steal everything. Other good exampels can be seen with countries like Russia and Poland and the fall of the USSR. The lack of regulation in thier markets fed huge numbers of ponzi schemes as well as wild market manipulation.

    Certainly the big guys can win, but the small guys get fucked.

    Add into this the recent trends like "flash trading." These do not help the market at all. This is the worst type of market manipulation possible. It completely obscures the true intrinsic values of the underlying stocks. flash trading amounts to high tech insider trading.

    Derivatives.......

    Derivatives did not have access to the Fed discount window until the recent crises. Until the recent financial crisis only commercial banks (not investment banks) had access to the discount window. My own personal opinion is that derivatives contract should either follow the same regulations as insurance companies or as casinos.

    Another fun one to look at is the "Private Equity" funds. These guys are predators and add nothing to the market. 3 years ago the company I worked for was bought out in the largest private equity buy out in US history. Certainly I made bundle on the deal. However, these guys had no interest in growing the company, saddled the company with a HUGE debt, and ended up driving 60% of the business into the ground. Rule need to be put into to place to prevent these guys from buying out companies then saddling them with the debt incurred from the buyout.

    Finally executive compensation MUST be reigned in. But this will be hard to do. Right now executive pay is set by a good ole boys club with no accountability to shareholders or employees. In most cases these extravagent salaries completely rape companies of much needed working capital. Unfortunately capping pay would be a ludicrous solution, what is needed is some form of transparency laws with binding shareholder votes. Also, clawback provisions should allow clawback of salaries in excess of 10 times the employee pay. Clawback should occur anytime an executive manifests negligence to such a degree as to manifest culpability.
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  5. #110
    25,000+ xpiher's Avatar
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    Add into this the recent trends like "flash trading." These do not help the market at all. This is the worst type of market manipulation possible. It completely obscures the true intrinsic values of the underlying stocks. flash trading amounts to high tech insider trading.
    You should explain what something is when making an argument. Its linked to high-frequencey algorithmic trading which basically motors market trends throughout a day to find a peak point. Flash trading capitalize on this ability by brokers charging clients for snippets of information about buy and sell orders before they actually go through. The practice is only profitable if you have about $20k or more to play around with, but generates billions of dollars without creating anything.
    Last edited by xpiher; 11-23-2009 at 07:47.
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  6. #111
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    Quote Originally Posted by xpiher View Post
    Becuase I don't agree with how 90% of insurance companies operate? Theo only profit insurance companies should make is through getting cheaper rates for their customers, efficiency, and trying to insure long term health to avoid high cost.
    How insurance companies operate today really has nothing to do w/ what insurance was intended to provide.

    For example: pregnancy is not an event that should be covered by insurance. It's not an accident. Does your car insurance cover routine maintenance? Does it cover accessories? Does it cover custom paint jobs?

    The reason health care costs are so high is b/c health insurance is no longer insurance. It was never meant to cover routine care. The inclusion of all of these routine costs is what has driven up prices. The inclusion of more people paying into the pool is what drives up these costs. The ability to spread the cost of routine care over millions of insured allows the care providers to charge ridiculous sums for that care. The gov't mandated coverage has only added to this cost increase. Gov't subsidies of the health care industry also raises overall costs. General gov't monetary policy also increases the costs.

    High costs are not the fault of private insurance companies. Handing control of the system over to the gov't will never cut costs. Be prepared for extensive add'l taxation to pay for a system that will continue to raise the cost of health care and reduce the quality of service.

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