I'm been a firm believer for many years that the US is headed for major economic disaster mainly because of the blatent greed and ignorance that has taken over corporate America. Although I believe that fundamentally America is just as strong as ever I think that there is a huge disconnect with what is happening on the market and in the lifes of every day Americans.
What I mean is that the infrastructure is somewhat solid(well, for the most part... not that it couldn't be better) but that there is extreme volatility in the markets. The markets are no longer what the were created for.
There reason is, is that the markets serve almost no purpose except to make people rich who know how to play the game... and many of those people do not contribute any tangable product or service. In some sense they are like actors and actresses. Their is no purpose but they seem to be a sink for huge amounts of money. (sure they enterain but at a disproportionate amount)
I curious as to what others are thinking about the what is going on with the recent events? To me it is a predictor that america will most likely go into a huge depression where many of the top companies will drop like a chain of dominos. I do not know exactly why it is going on, if it's ignorance at the top or greed but I imagine it is a combination.
In any case I'd like to here a few of the moronic ideas that will no doubt come out of a discussion... I figure it will be entertaining.
America has been killed by the bean counters who can think only in terms of "growth this next quarter"... a constant steady percentage profit is considered failure.
...Jim Thompson
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| James E.Thompson, P.E. | mens |
| Analog Innovations, Inc. | et |
| Analog/Mixed-Signal ASIC\'s and Discrete Systems | manus |
| Phoenix, Arizona 85048 Skype: Contacts Only | |
| Voice:(480)460-2350 Fax: Available upon request | Brass Rat |
| E-mail Icon at http://www.analog-innovations.com | 1962 |
What\'s the difference between a horse\'s ass and Barack Obama?
Lipstick!
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| James E.Thompson, P.E. | mens |
| Analog Innovations, Inc. | et |
| Analog/Mixed-Signal ASIC\'s and Discrete Systems | manus |
| Phoenix, Arizona 85048 Skype: Contacts Only | |
| Voice:(480)460-2350 Fax: Available upon request | Brass Rat |
| E-mail Icon at http://www.analog-innovations.com | 1962 |
Obama snickers, claiming McCain is running for Bush\'s third term,
While he thinks running for Carter\'s second term is a good thing?
This is a long way of saying: You can make more money designing the shoe, than actually manufacturing & selling them.
The Economy has morphed into a financial instrument - something the average worker does not understand, and therefore cannot compete effectively. Couple that with lax regulatory oversight, and you have the makings for a tremendous transfer of wealth from the have-nots, to the downright greedy.
America will go into a huge depression because the top companies' rotting corpse will be propped up in their seats as if they are still alive.
Look at how Fannie Mae and Freddy Mac were bailed out. Government steps in to take them over, lock stock and barrel. This means assets, liabilities, corporate jets and all. It would have been better to let them go Chapter 7, auction off all the performing assets (mortgages) and turn the bad debt and office furniture over to collection agencies and auction houses. Notice which debt was honored first. The exec's took their employment contracts and cashed them in. Before even waiting to see if the new organization might have kept them on the job. They knew better.
Japan went through a similar problem that lasted for more than a decade. Lets look at what they did wrong: They refused to cut the good old boys off at the knees and walk away from their losses.
The financial institutions are claiming that nobody is smart enough to unwind the mortgage backed securities because nobody knows who is holding which piece of a mortgage.
Bullshit! They seem to figure out how to take my monthly payment and distribute it among the holders pretty efficiently every month.
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Paul Hovnanian mailto:Paul@Hovnanian.com
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Matter cannot be created or destroyed, nor can it be returned without a
receipt.
: :On Tue, 16 Sep 2008 15:28:23 -0500, "Jon Slaughter" : wrote: : :>I'm been a firm believer for many years that the US is headed for major :>economic disaster mainly because of the blatent greed and ignorance that has :>taken over corporate America. Although I believe that fundamentally America :>is just as strong as ever I think that there is a huge disconnect with what :>is happening on the market and in the lifes of every day Americans. :>
:>What I mean is that the infrastructure is somewhat solid(well, for the most :>part... not that it couldn't be better) but that there is extreme volatility :>in the markets. The markets are no longer what the were created for. :>
:>There reason is, is that the markets serve almost no purpose except to make :>people rich who know how to play the game... and many of those people do not :>contribute any tangable product or service. In some sense they are like :>actors and actresses. Their is no purpose but they seem to be a sink for :>huge amounts of money. (sure they enterain but at a disproportionate amount) :>
:>I curious as to what others are thinking about the what is going on with the :>recent events? To me it is a predictor that america will most likely go :>into a huge depression where many of the top companies will drop like a :>chain of dominos. I do not know exactly why it is going on, if it's :>ignorance at the top or greed but I imagine it is a combination. :>
:>In any case I'd like to here a few of the moronic ideas that will no doubt :>come out of a discussion... I figure it will be entertaining. :>
: :You'd probably prefer to "hear" a few ;-) : :America has been killed by the bean counters who can think only in :terms of "growth this next quarter"... a constant steady percentage :profit is considered failure. : : ...Jim Thompson
What, you don't think it has anything to do with the fact that banks forgot that credit is for those who can repay?
That's exactly what happened in the last Savings and Loan crisis. Insolvent S&L's were simply absorbed or sold piecemeal. A friend of mine was one of the administrators in charge of sell off the wreckage. During the melt-down, the number of S&L's declined from 3200 to about half that number. However, the problem was not limited to just the S&L's. Of the 4000(?) federally insured (FDIC) banks, 1600 close up shop, or had to get bailed out between 1980 and 1995. Basically, this is business as usual, except that the numbers are much bigger this time around.
What's interesting is that the basic cause of the current sub-prime meltdown is partly a result of the S&L crisis. The banks offering sub-prime mortgages were inspiring home owners to refinance at lower rates, thus stealing the customers from the S&L's. To get the best rates, the S&L's bought paper that was backed by the same mortgages they had just unloaded.
Nope. They're covering their posterior in case the government gets wise. I don't expect that, so the execs will probably keep their jobs unless someone can find some appropriate criminal charges. That's highly likely as they also tend to pocket their investors money. Incidentally, executives are pair exorbitant salaries primarily so they won't steal from the company. That doesn't always work.
One of my neighbors has their house in foreclosure. They're not being very cooperative and have refused to move. Apparently, the eviction ceremony was set for Sept 1. I arrived in the middle of a major argument. It seems that were 2 mortgages and 5 different entities claiming they owned a piece of the puzzle. My guess(tm) is that someone sold some "financial paper" using the mortgage as backing perhaps 3 times.
Cash flow not symmetrical. Money in and money out are completely different channels and mechanisms. Banks religiously track money coming in to the fraction of a cent. Money going out is vague and almost uncontrolled process because there are many people with their hands in the cookie jar.
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# Jeff Liebermann 150 Felker St #D Santa Cruz CA 95060
# 831-336-2558 jeffl@comix.santa-cruz.ca.us
# http://802.11junk.com jeffl@cruzio.com
# http://www.LearnByDestroying.com AE6KS
Quarterly performance greed applies to bank management just as easily as to other forms of corporations. They were playing statistics when anyone with half a brain knows that the economy IS trickle down/up... every economic gain/fault is multiplied by 5X/10X.
Anyone who thinks that liberals aren't full of hate hasn't watched Bill Maher on HBO :-(
...Jim Thompson
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| James E.Thompson, P.E. | mens |
| Analog Innovations, Inc. | et |
| Analog/Mixed-Signal ASIC\'s and Discrete Systems | manus |
| Phoenix, Arizona 85048 Skype: Contacts Only | |
| Voice:(480)460-2350 Fax: Available upon request | Brass Rat |
| E-mail Icon at http://www.analog-innovations.com | 1962 |
Liberals are so cute. Dumb as a box of rocks, but cute.
Really? Who would you guess tells those bean counters to concentrate on short term profits instead of long term growth? Sure, the execs want their performance bonuses, even if it's based on fabricated sales and shipments. However, the bulk of the pressure comes from the stockholders. They want their profits like -now- and not many many years later. Since it's very easy to move money in and out of a company on the stock market, they would happily trash any companys future in trade for a fast buck and a fast exit. Even institutional investors have been tempted to think in the short term thanks to their anxious stockholders. The problem is that they've run out of companies that can be raided, pumped, and discarded. If it matters, I worked for a company in about 1980 that worked exactly like you describe. Make the numbers for next quarter or find a different job. The most important product was pumping up the stock price.
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# Jeff Liebermann 150 Felker St #D Santa Cruz CA 95060
# 831-336-2558 jeffl@comix.santa-cruz.ca.us
# http://802.11junk.com jeffl@cruzio.com
# http://www.LearnByDestroying.com AE6KS
I'm starting too believe their might be such a rift between ideologies in America now and because each is about 50/50 that maybe it's time for america to split into two? Obviously this isn't going to happen but what is one 1/2 was ran be the democrats and the other 1/2 was republicans.
Instead of competing ideas that end up sabotaging each other so nothing gets done and actually hurts each "country-state"(don't know what they would be called).
I'm looking at it from a pure economic and social aspect.
The way I see it is democrats try to take this country in one direction and republicans in another. Each pulling their own way and makeing no ground but the tension is destorying this country.
For example, Democrats try to regulate through government while republicans let the markets do the job. What happens is we get mixed messages, mixed laws, loop holes, waste, etc...
Maybe government has really become too big just as many of these corporate companies? Maybe these companies are not failing so much becuase of their own short commings(ultimately) but because government has "set them up" to fail.
I guess an analogy would be two parents with completely different ideas of how their kid should be raised. The kid ends up becoming a total wreck. (exclude environoment in this because it is outside the domain)
Obviously we are not going to do such a thing but I'm just wondering as it seems like a logic solution to the problems we have... Of course wiping out the country is another logical solution to the problems too.
"Jim Thompson" wrote in message news: snipped-for-privacy@4ax.com...
Yes... I agree this is a huge prolbem. Even negative profits is failure. It's wrong to expect that profit must be a monotonicaly increasing. What this does is push people to do anything to get the profits up without understanding the consequences.
It is called capitalism and is occurring in its most base raw form now.
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They were created to allow the very wealthy to become even richer. Nothing has changed.
Trading of speculative derivative instruments with extremely high leverage ratios and an opacity so dense that not even top academic experts can make sense of the intrisic risks has created a false market bubble. The chickens are coming home to roost. Levers can cause a lot of damage when used unwisely.
Lehman was caught holding the parcel of worthless paper when the music stopped. There will be others.
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=A0 =A0...Jim Thompson
Some growth is usually a good thing. The instrumentation industry had some rules of thumb and if you were not growing by the right amount for two years in a row the CEO tended to get the push even in the
80's.
UK bean counters and bankers are even worse. Only in Japan and Germany is there a decent careeer path for technical experts to get into the corporate boardroom.
ot that
The problem was that they thought they could predicated on continuously rising house prices. So long as that situation held you could give NINJAs mortgages in the certain knowledge that they would default and you got all their premiums up to that point and the house to sell again at a still higher price. Safe as houses... But in a falling market it (sub-prime) all goes totally pear shaped. They invented all sorts of ways to disguise the worthless paper debt in gold coloured wrapping paper and found they could reclassify it as AAA. Greed and stupidity in equal measure did the rest. Look at how high the Masters of the Universe bonuses were right up to the final crunch point.
Their motto was always "heads we win, tails you lose". Now the taxpayer foots the bill for their excesses. Wall street banker spoonerises rather well.
The new trick in this bear market is to pick a perceived to be weak bank or financial institution start bad rumours, short sell its shares in very large lumps and then buy them back when the price has dropped through the floor. HBOS is currently suffering this type of extremely leveraged attack at the moment. The business is relatively sound, but they could still be driven under by a combination of concerted predator attack and malicious rumours.
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Note the huge downwards glitch at 0855-0905 on 17/9 someone sold enough shares to drive the price down by more than a factor of two. Then it rebounded. Timing is everything. LSE realtime website is currently not responding.
It is time for short selling attacks on businesses (borrowing huge numbers of their shares to sell and then buy back after panicking the market to drive the share price down further) which is a form of market manipulation to be banned. Until a few big hedge funds have their arms chopped off this crisis will continue. They are the ones who benefit from driving good businesses to the wall and then picking over the pieces in a fire sale. Barclays have in effect done this to Lehman Brothers. Although without a federal guarantee on liabilities their moves were entirely rational. AIG got a bail out because it was too big to fail and another $80bn of US tax payers money down the drain.
HBOS will be interesting because like AIG it is in the category of institutions that are "too big to fail".
On a sunny day (Tue, 16 Sep 2008 18:09:14 -0700) it happened "Paul Hovnanian P.E." wrote in :
The real reason is much simpler. Look here:
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The total debt when I looked FOR EACH LIVING SOUL in the US was: 31,622.80
So, each baby, women, child.....
Those do not even have a decent collateral.... How much do you really own?
So what is really happening is that the ones with the money (China, Japan, some big funds) are withdrawing and investing elsewhere then the US. The do no longer want to lend YOU money.
This is why it is 'billions' and this is why it affects all banks.
The rest is a consequence.
There is also a point where the national product will no longer be able to pay for the interest on that loan, then the shit really hits the fan. I am weary to check if US has reached that point yet. In such a case even using cheap ink jets to print money will only increase inflation..... like that African country that has an inflation in the millions of percents.
US has been living on borrowed money for too long. A tax increase? Would it help?
And other interesting site is this one:
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And here you can better see the movement of foreign capital:
That isn't an assessment of worth, just and observation that people buy as much house as they can with the money they have/can get. An assessment of worth it how much or little house they are prepared to accept for that money.
So the main problem in the states was people borrowed and spent more than they could afford when interest rates rose and people walking away left an excess supply of housing resulting in falling prices? Can you buy housing in the States for less than it would cost to build at the moment?
Ah, but realize that, back in the day, the economy would crash about every 30 years. The Great Depression? Hardly. Try 1870. Try 1840. I guess the most recent would be 1970, which wasn't nearly so bad (what was the big '70s thing, stagflation and OPEC?) as the earlier ones. And we're in one now that's just getting started, but it's not looking too bad either. This is proof that modern economic thought and regulations are stabilizing the economy.
Like Windows Vista, the government is way too big for its own good, but nonetheless, we cope with it, and on the average end up better for its benefits, despite its numerous faults.
Before the real estate market fell on its face, the idea that a speculator cared about how much or little house they were buying was completely foreign to the real estate market. People who had money in their pocket to invest were driving out people who were searching for a certain size residence, a particular location or similar attributes. The realtors were used to dealing with people who qualified for a certain sized mortgage and were shopping for that price range. Period.
That's what came back to bite the market. There's a pile of crap that has been build based upon the speculative market that may not have any residential value. I think this is the case because: The rental market is really heating up. People who walked away from houses need a place to live and they aren't going to qualify for another mortgage anytime soon. So, why are so many empty houses siting on the market in the same region? There's a big disconnect between the utility value of these properties reflected by rents and their mortgages. In other words, people were buying what they thought the speculative market would demand, not what they needed to live in.
Yes.
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Paul Hovnanian paul@hovnanian.com
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Have gnu, will travel.
Or you have a market that drove gullible people to believe this.
When I was buying a house many years ago, I couldn't get a realtor to show me anything small, cheap and easy to maintain. Not until I lied and understated my net worth.
Later on, I bought some acreage with waterfront and tried to get a small house built on it. I had a tough time getting a contractor to build something as small as I wanted because they were busy convincing people that they have to spend a certain amount of their income on housing and build a certain sized house on a lot of a given price.
Marketing is the art of convincing people that they should buy something other than what they need. People are gullible, or just not willing to fight the salesmen.
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Paul Hovnanian paul@hovnanian.com
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Have gnu, will travel.
"Paul Hovnanian P.E." wrote in news: snipped-for-privacy@hovnanian.com:
True. Also, tho', now would be the time to do as much as one can to prepare for the disappearance of social security. "Hope for the best but plan for the worst."
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