Re: Science and Ideals.
- Original Message - From: John Williams [EMAIL PROTECTED] If I moved to the US (which I wouldn't) part of the deal I would strike with the government would be to accept say bans on short selling of stick if the government decided that was a good idea, What if the government decided all citizens who immigrated from Australia should immediately become slaves? Would you accept that? Another part of the deal (there would of course be thousands of parts) would be assurances that I would not become a slave after I emigrated (I believe the American constitution would spell that out). I agree with you in theory when you say I do not think it is fair for someone to bar me from trading with a mutual consenting partner. I just want to point out that in the bigger picture a partner could be an individual or a corporation or a government, and that agreements can't be taken in isolation, and that to be fair you should probably take into account the trade you have done with the government (tacit or otherwise) to provide you (amongst other things) security for obeying the law. You can't trade away your right to trade something (slaves say) in exchange for Citizenship, and then expect to be able to sell slaves anyway anymore than you can trade your cow to one person for a horse and the same cow to a second person for a sheep. Sorry if the analogy is confusing or faulty, my main point is that governments are consenting partners too. Regards, Wayne. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
Sorry if the analogy is confusing or faulty, my main point is that governments are consenting partners too. That just ain't so. As has been observed Government is force. and there's sweet F.A negotiation between it, its agents and the citizens it bends to its will. Force generally is not required between consenting adults. There is the concept of a 'social contract' which is a presumption of an agreement of fair dealing between people, their fellow citizens and the government but in practice no one's enforcing that contract. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
On 23/09/2008, at 10:26 AM, Dan M wrote: Other posters have pointed out the fact that best suited is dependant on the particulars of the environment, the history of environments, etc. Charlie may correct me, but I think I recall him stating that there is no teleology in evolution. If I did, I was paraphrasing much greater thinkers than I. But yes. Evolution is a drunken walk. Or a moth in a disco. Charlie. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
On 23/09/2008, at 1:27 PM, Julia Thompson wrote: The general SEC requirement had been to limit it to 12X. An exception was made in 2004 for 5 companies - Goldman, Merrill, Lehman, Bear Stearns, and Morgan Stanley. None of which exist today in the form they did five years ago. D'oh. Charlie. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
On 23/09/2008, at 10:26 AM, Dan M wrote: Other posters have pointed out the fact that best suited is dependant on the particulars of the environment, the history of environments, etc. Charlie may correct me, but I think I recall him stating that there is no teleology in evolution. If I did, I was paraphrasing much greater thinkers than I. But yes. Evolution is a drunken walk. Or a moth in a disco. Charlie. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
Maybe I am in the minority, but I have never felt the government is opressing me, or forcing me to do things I don't want to do, and I reckon I get fair recompence for paying my taxes obeying the law. It is not required for a government to be oppresive for it to be true that you do not negotiate with it on equal terms. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
From: Euan Ritchie [EMAIL PROTECTED] Sorry if the analogy is confusing or faulty, my main point is that governments are consenting partners too. That just ain't so. As has been observed Government is force. and there's sweet F.A negotiation between it, its agents and the citizens it bends to its will. Force generally is not required between consenting adults. There is the concept of a 'social contract' which is a presumption of an agreement of fair dealing between people, their fellow citizens and the government but in practice no one's enforcing that contract. Maybe I am in the minority, but I have never felt the government is opressing me, or forcing me to do things I don't want to do, and I reckon I get fair recompence for paying my taxes obeying the law. AND if I felt I was being hard done by I am free to move to NZ, or to any other country that I can come to a mutually acceptable arrangement with. Sure some governments are brutal dishonest, but so are some corporations individuals. Regards, Wayne. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
Wayne Eddy [EMAIL PROTECTED] Another part of the deal (there would of course be thousands of parts) would be assurances that I would not become a slave after I emigrated (I believe the American constitution would spell that out). Since the American constitution can be amended, that would not protect you if there was a super-majority of people who wanted to force you to do something. Sorry if the analogy is confusing or faulty, my main point is that governments are consenting partners too. You seem to be talking about an odd sort of consent. You will consent to do any new thing that the government decides to tell you to do, as long as it is not too many things. In case it is not clear, the examples I listed are new rules. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
On Tue, Sep 23, 2008 at 7:06 AM, John Williams [EMAIL PROTECTED]wrote: You seem to be talking about an odd sort of consent. You will consent to do any new thing that the government decides to tell you to do, as long as it is not too many things. In case it is not clear, the examples I listed are new rules. I see some confusion here about consent versus consensus. Democracy doesn't seek consent, other than the consent to be governed by democratic means; it seeks consensus or lacking that, majority. I give my consent to be governed by people with whom I disagree, so long as they are elected by legal democratic means. Nick ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
Nick Arnett [EMAIL PROTECTED] I see some confusion here about consent versus consensus. I said nothing about consensus. Now that you've mentioned that you post nonsense if you don't have enough caffeine, I don't know when to take your posts seriously. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
On Tue, Sep 23, 2008 at 9:14 AM, John Williams [EMAIL PROTECTED]wrote: Nick Arnett [EMAIL PROTECTED] I see some confusion here about consent versus consensus. I said nothing about consensus. Now that you've mentioned that you post nonsense if you don't have enough caffeine, I don't know when to take your posts seriously. Yes, you said nothing about consensus. That is exactly why I brought it up. Nick ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
Nick Arnett [EMAIL PROTECTED] Yes, you said nothing about consensus. That is exactly why I brought it up. You seem to have confused me with someone else. You get confused a lot, don't you? ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
I give my consent to be governed by people with whom I disagree, so long as they are elected by legal democratic means. Nick Don't forget, Hitler was elected by Democratic means. Olin - Original Message - From: Nick Arnettmailto:[EMAIL PROTECTED] To: Killer Bs (David Brin et al) Discussionmailto:brin-l@mccmedia.com Sent: Tuesday, September 23, 2008 8:36 AM Subject: Re: Science and Ideals. On Tue, Sep 23, 2008 at 7:06 AM, John Williams [EMAIL PROTECTED]wrotemailto:[EMAIL PROTECTED]: You seem to be talking about an odd sort of consent. You will consent to do any new thing that the government decides to tell you to do, as long as it is not too many things. In case it is not clear, the examples I listed are new rules. I see some confusion here about consent versus consensus. Democracy doesn't seek consent, other than the consent to be governed by democratic means; it seeks consensus or lacking that, majority. I give my consent to be governed by people with whom I disagree, so long as they are elected by legal democratic means. Nick ___ http://www.mccmedia.com/mailman/listinfo/brin-lhttp://www.mccmedia.com/mailman/listinfo/brin-l ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
Olin Elliott wrote I give my consent to be governed by people with whom I disagree, so long as they are elected by legal democratic means. Don't forget, Hitler was elected by Democratic means. This is a myth. He was elected by the parliament, which is not democratic. It's like Bush II in 2000, who was elected by the electoral college, and not by the people. Alberto Monteiro ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
Olin Elliott [EMAIL PROTECTED] Don't forget, Hitler was elected by Democratic means. Let me guess Nick's response: I see some confusion about elected versus selected by a vote. Let's debate which is better. Or perhaps we could all vote on a rule about which language we may use. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
Alberto Monteiro [EMAIL PROTECTED] This is a myth. He was elected by the parliament, which is not democratic. It's like Bush II in 2000, who was elected by the electoral college, and not by the people. Ah, so you are saying it was only about 49.9% of the popular preference, instead of 50.1%? Sounds like a robust system. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
John Williams wrote: This is a myth. He (Hitler) was elected by the parliament, which is not democratic. It's like Bush II in 2000, who was elected by the electoral college, and not by the people. Ah, so you are saying it was only about 49.9% of the popular preference, instead of 50.1%? Sounds like a robust system. I have no fsking idea what you are trolling about. OTOH, Bush II was _accepted_ by 75% of the USA voters - only 25% voted against him. Alberto Monteiro ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
Alberto Monteiro [EMAIL PROTECTED] I have no fsking idea what you are trolling about. That makes two of us! I'm having a good day if I understand more that 50% of what I am trolling about. OTOH, Bush II was _accepted_ by 75% of the USA voters - only 25% voted against him. 26%, you didn't count my vote. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
This is a myth. He was elected by the parliament, which is not democratic. It's like Bush II in 2000, who was elected by the electoral college, and not by the people. Alberto Monteiro Hmmm ... I'm no expert on German History, so I'll take your word for it. Still, being elected by Parliament isn't quite the same as being selected by the electoral college, since the Parliament itself is presumably elected democratically, and the electoral college is not -- it is just a functional represenation of the various voting strengths of the states. And Bush in 2000 wasn't selected by the electoral college -- most independent audits have shown that Gore would have won Florida in a fair count, and thus would have carried the electoral vote. Bush was chosen, finally, by the Supreme Court. All this is nitpicking, though. My point was simply that being chosen by Democratic means does not mean that a leader is fit to rule, or that he has any respect for Democratic process. The consent to be governed should rest, not just on how the person was chosen, but on how they function once elected. That's why the drafters of the US Consititution were very determined to put pro visions for Impeachment into the process -- I suspect that it has been used less frequently than they invisioned. The idea that we have to continue to conesent to any government that is elected Democratically, no matter what it does, is not in keeping with America's founding principles. Olin - Original Message - From: Alberto Monteiromailto:[EMAIL PROTECTED] To: Killer Bs (David Brin et al) Discussionmailto:brin-l@mccmedia.com Sent: Tuesday, September 23, 2008 10:23 AM Subject: Re: Science and Ideals. Olin Elliott wrote I give my consent to be governed by people with whom I disagree, so long as they are elected by legal democratic means. Don't forget, Hitler was elected by Democratic means. This is a myth. He was elected by the parliament, which is not democratic. It's like Bush II in 2000, who was elected by the electoral college, and not by the people. Alberto Monteiro ___ http://www.mccmedia.com/mailman/listinfo/brin-lhttp://www.mccmedia.com/mailman/listinfo/brin-l ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Trolling
I have no fsking idea what you are trolling about. That makes two of us! I'm having a good day if I understand more that 50% of what I am trolling about. Trolling is Internet slang is someone who posts controversial, irrelevant or off-topic messages in online community discussion forums, or chat rooms, with the intention of provoking other users into an emotional response, or to deliberately disrupt normal on-topic discussion. It is a practice often used by those who can not refute an argument using reason and logic, or someone who just enjoys baiting anyone who has a divergent opinion. [sic] Jon ___ http://www.mccmedia.com/mailman/listinfo/brin-l
statistics...
OTOH, Bush II was _accepted_ by 75% of the USA voters - only 25% voted against him. are you saying that 75% of those eligible to vote, including those who boycotted or were apathetic? jon There are three kinds of lies: lies, damned lies, and statistics. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
UNCOUNTED: The New Math of American Elections
UNCOUNTED: The New Math of American Elections A Film by David Earnhardt Exposes how American voters were cheated during the 2004 and 2006 elections and why it will likely happen again in 2008. Trailer: http://www.uncountedthemovie.com/trailer.html Powerful and persuasive... - Howard Zinn, A People's History of the United States *** Post-Film Panel Discussion with Filmmaker David Earnhardt and Special Guests including Mimi Kennedy, Brad Friedman of BradBlog.comhttp://www.bradblog.com/ , Steve Heller of VelvetRevolution.us http://www.velvetrevolution.us/ Fairfax Cinemas 7907 Beverly Blvd. Los Angeles, CA Tuesday, September 23, 2008 - 7:30 PM Hosted by: Progressive Democrats of America http://www.pdamerica.org/ ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Trolling
Jon Louis Mann [EMAIL PROTECTED] Trolling is Internet slang is someone who posts controversial, irrelevant or off-topic messages in online community discussion forums, or chat rooms, with the intention of provoking other users into an emotional response, or to deliberately disrupt normal on-topic discussion. It is a practice often used by those who can not refute an argument using reason and logic, or someone who just enjoys baiting anyone who has a divergent opinion. [sic] My sister has this little yappy dog. When I read your posts, I often find myself thinking of it. What do you suppose it would type (if it had fingers)? Maybe it could use its nose? ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Teleology
Charlie may correct me, but I think I recall him stating that there is no teleology in evolution. which is why I am an atheist... If I did, I was paraphrasing much greater thinkers than I. But yes. Evolution is a drunken walk. Or a moth in a disco. Charlie. Teleology: 1. The study of design or purpose in natural phenomena. 2. The use of ultimate purpose or design as a means of explaining phenomena. 3. Belief in or the perception of purposeful development toward an end, as in nature or history. Jon It is the mark of an educated mind to be able to entertain a thought without accepting it. Aristotle ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
On Tue, Sep 23, 2008 at 10:43 AM, Olin Elliott [EMAIL PROTECTED] wrote: My point was simply that being chosen by Democratic means does not mean that a leader is fit to rule, or that he has any respect for Democratic process. If there isn't a reasonable correlation there, then democracy is in trouble. Perhaps so. Nick ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Trolling
Trolling is Internet slang is someone who posts controversial, irrelevant or off-topic messages in on line community discussion forums, or chat rooms, with the intention of provoking other users into an emotional response, or to deliberately disrupt normal on-topic discussion. It is a practice often used by those who can not refute an argument using reason and logic, or someone who just enjoys baiting anyone who has a divergent opinion. [sic] My sister has this little yappy dog. When I read your posts, I often find myself thinking of it. What do you suppose it would type (if it had fingers)? Maybe it could use its nose? projecting again, john? has it ever occurred to you why some dogs have flat noses?*) it's not from pressing their nostrils to a keyboard... jon ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
Nick Arnett [EMAIL PROTECTED] If there isn't a reasonable correlation there, then democracy is in trouble. Perhaps so. Or perhaps people place too much faith in politicians and government, and would be better off reducing their power and scope. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
RE: Meltdown
If I read correctly, and I multi-sourced this, there was a short period that companies couldn't sell short term paper; in other words companies with big assets couldn't get loans for a day or two that were a fraction of their assets. Not all companies...mainly the companies that had questionable balance sheets. I don't have direct access to the WSJ on-line because I'm cheap. But, here's a site that quotes themnote the companies involved: http://weblog.blogads.com/1565/credit-crunch-from-wall-street-to-main-street quote In the giant market for commercial paper, a reliable source of low-cost, short-term funds in normal times, the cost of borrowing shot up Wednesday. Traders said most lenders were unwilling to extend credit beyond a single day.Sears Holdings said it paid 3.6% Wednesday, about three-tenths of a point more than a day before, to sell $3 million in 30-day commercial paper. Ford Motor Credit Co., the finance arm of Ford Motor Co., paid 7.5% for overnight borrowings, according to one trader, who said the rate would typically be several percentage points lower. General Electric Co., rated one of the safest borrowers, paid 3.5% for overnight borrowing, about 1.5 percentage points more than would have been normal, this trader said. end quote Given this, a panic started Thursdaythat's when the Fed's announced the bailout. Now, you can argue that Sears and Ford are questionable, but GE? The point is that the liquidity of the market was drying up. And, at http://meganmcardle.theatlantic.com/ we see some of the consequences of a loss of liquidity, a short quote on this: quote Or take capital requirements. I'm in favor of higher ones. But a high capital requirement, perversely, hurts companies in a downturn. This sounds bizarre. But say you have a broker-dealer that is only allowed to leverage itself 5 to 1--a very, very safe capital ratio. (12-to-1 is, IIRC, about standard). Now say that the bank suffers a major setback, like a bunch of totally illiquid mortgage backed security whose nominal value has dropped to near zero. Having a lot of capital protects the creditors in bankruptcy, who now get 20 cents on the dollar instead of six. But the firm still goes into bankruptcy, because they can't dip into their other capital to make good the debts. Indeed, the higher their capital requirements, the more they have to deleverage in a crisis, because they need to unwind more positions to shore up the bad ones they can't sell. That deleveraging dries up capital in other markets, decreases the value of whatever securities they're dumping, and thus threatens other institutions. end quote Or, just take how I'm affected. If Fanny and Freddie went under, the place where roughly half of the mortgages end up is gone. So, it's much harder to find a mortgage, which drives prices down, which means more houses are under water and now bad debt, etc. The natural tendency of business (which we saw as the short term liquidity started to dry up on Wednesday) is to hunker down during bad times. That's why even GE had trouble selling short term debt on Wednesday. Finally, one part of the first quote struck me as critical: Traders said most lenders were unwilling to extend credit beyond a single day. That looks like the start of a panic to me. I'm not sure what you'd call it. Dan M. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
Dan M [EMAIL PROTECTED] Now, you can argue that Sears and Ford are questionable, but GE? The point is that the liquidity of the market was drying up. And, at No, the liquidity of the market was not drying up. Interest rates went up. As they should. As they should have long ago if there weren't so much government interference in the market. Or, just take how I'm affected. If Fanny and Freddie went under, the place where roughly half of the mortgages end up is gone. So, it's much harder to find a mortgage, which drives prices down, which means more houses are under water and now bad debt, etc. Home prices should be driven down. FNM and FRE, with their wrong-headed government charters and guarantees, inflated housing prices for years. They still have a ways to go down before they reach something closer to long-term equilibrium. The natural tendency of business (which we saw as the short term liquidity started to dry up on Wednesday) is to hunker down during bad times. That's why even GE had trouble selling short term debt on Wednesday. Yes, when insolvent companies are kept in limbo by silly government interference, the market does not behave efficiently. Big surprise, that. Traders said most lenders were unwilling to extend credit beyond a single day. That looks like the start of a panic to me. I'm not sure what you'd call it. A useless generalization. Naturally, anyone who cannot borrow because their balance sheet is full of an unknown amount of toxic waste is going to complain and make things sound dire if it will help them to feed at the taxpayer trough. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
RE: Meltdown
-Original Message- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of John Williams Sent: Tuesday, September 23, 2008 2:58 PM To: Killer Bs (David Brin et al) Discussion Subject: Re: Meltdown Dan M [EMAIL PROTECTED] The natural tendency of business (which we saw as the short term liquidity started to dry up on Wednesday) is to hunker down during bad times. That's why even GE had trouble selling short term debt on Wednesday. Yes, when insolvent companies are kept in limbo by silly government interference, the market does not behave efficiently. Big surprise, that. The problem was that no-one (including the board of directors of AIG knew that AIG was insolvent until the day the government intervened. Bubbles and panics are part of the nature of the market. You can repeat your mantra of free markets are perfect until you are blue in the face, but AIG was the biggest insurance company in the world and no one had any idea of their problems. At that point, _everything_ becomes questionable. GE having to pay nearly double for a 1 day note is an example of this. The viewpoint you are expressing here makes Milton Friedman look like Karl Marx. The government did not intervene in the market after the panic of 1929. It did after the panic of 1987. The latter turned out fine, the former was the start of the Great Depression. I'm sure you'd call it coincidence...or other factors in play, but panics and bubbles are inherent part of any market. Its irrational to think all market players act rationally. It may be true, like the early economist said the market will work in the long run. But as Keynes said in the long run, we're all dead. Dan M. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
Dan M [EMAIL PROTECTED] The problem was that no-one (including the board of directors of AIG knew that AIG was insolvent until the day the government intervened. LOL! Do you believe in the tooth fairy, too? At that point, _everything_ becomes questionable. GE having to pay nearly double for a 1 day note is an example of this. Oh, the horrors! The viewpoint you are expressing here makes Milton Friedman look like Karl Marx. Hmmm, if you actually knew what you were talking about, I might take that as a compliment. The government did not intervene in the market after the panic of 1929. It did after the panic of 1987. The latter turned out fine, the former was the start of the Great Depression. The Fed caused much of the Great Depression by not increasing the money supply during a banking panic. The stock market crash of 1987 was not a banking panic, it was volatility due to wrong-headed program trading and portfolio insurance, the propagators of which lost their shirts and the silly techniques largely disappeared from the market. I'm sure you'd call it coincidence...or other factors in play, but panics and bubbles are inherent part of any market. Its irrational to think all market players act rationally. It is funny that you would think I would disagree with this. It is also irrational to think that a bunch of politicians and people like you know how to fix the system by taking taxpayer money and using it to enrich a bunch of bozos who made foolish loans at ridiculously low interest rates because the government encouraged the process. It may be true, like the early economist said the market will work in the long run. But as Keynes said in the long run, we're all dead. Just a thought, but you might inspire a bit more confidence in your marks if you spent a little time learning about how markets and regulation actually work and a little less repeating cliched-jokes that were corny when my grandfather was young. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
On 24/09/2008, at 3:11 AM, Olin Elliott wrote: I give my consent to be governed by people with whom I disagree, so long as they are elected by legal democratic means. Nick Don't forget, Hitler was elected by Democratic means. Olin Kind of. Was horse-trading in the parliament that got him the Chancellorship as part of a coalition, even though the National Socialists were a minor party. He'd already been imprisoned in the '20s for his part in an attempted coup. Not exactly the best example of democracy in action... Charlie. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Teleology
On 24/09/2008, at 4:27 AM, Jon Louis Mann wrote: Charlie may correct me, but I think I recall him stating that there is no teleology in evolution. which is why I am an atheist... If I did, I was paraphrasing much greater thinkers than I. But yes. Evolution is a drunken walk. Or a moth in a disco. Charlie. Teleology: 1. The study of design or purpose in natural phenomena. 2. The use of ultimate purpose or design as a means of explaining phenomena. 3. Belief in or the perception of purposeful development toward an end, as in nature or history. Yes, most of us know what teleology is. Why did you post a definitition of teleology in response to my descriptions of evolution as non-teleological? Charlie. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
On 24/09/2008, at 6:40 AM, John Williams wrote: Dan M [EMAIL PROTECTED] The problem was that no-one (including the board of directors of AIG knew that AIG was insolvent until the day the government intervened. LOL! Do you believe in the tooth fairy, too? Instead of mocking, why don't you try EXPLAINING. 'cause all I see you do is say Ha ha, how could you be so stupid or words to that effect, without explaining why. Again, this is a DISCUSSION LIST, where we discuss many things. There are many points of view and opinions, and if yours are different, try arguing the point. Right now, all you're doing is being rude. Charlie. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
On 24/09/2008, at 6:21 AM, Dan M wrote: The problem was that no-one (including the board of directors of AIG knew that AIG was insolvent until the day the government intervened. That sounds implausible. Someone knew. It's what level they were at and what they choose to do with the knowledge that's important. Charlie. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
I give my consent to be governed by people with whom I disagree, so long as they are elected by legal democratic means. I doubt very much anyone ever asked you (who had the will and power to change it) if it was okay that you were governed by the system in place. And absent that you haven't had the opportunity to give consent. At best you're accepting of the current system. Modern Democracy is more than just voting for government, the term and concept is generally used to encompass social orders that include rule by law and institutionalised consideration for individual rights as well as the mechanism of electing government. The philosophy it represents is generally thought to be that the only proper authority to govern is derived from the consent of governed (as opposed to ancient claims by monarchs and the like to derive authority from Gods or right of force). That consent supposedly obtained from the majority in free competition in elections. But the 'consent' in that concept is a different thing than the literal consent that is given by one person to another. Perhaps you refer to the philosophical concept of popular consent to govern and not a more literal meaning? ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
Charlie Bell [EMAIL PROTECTED] Instead of mocking, why don't you try EXPLAINING. Instead of telling other people what you think they should do, why don't YOU explain whatever you believe needs explaining? ___ http://www.mccmedia.com/mailman/listinfo/brin-l
RE: Meltdown
-Original Message- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of John Williams Sent: Tuesday, September 23, 2008 3:40 PM To: Killer Bs (David Brin et al) Discussion Subject: Re: Meltdown Dan M [EMAIL PROTECTED] The problem was that no-one (including the board of directors of AIG knew that AIG was insolvent until the day the government intervened. LOL! Do you believe in the tooth fairy, too? At that point, _everything_ becomes questionable. GE having to pay nearly double for a 1 day note is an example of this. Oh, the horrors! No, rather Oh, the irrationality. Why would people be reluctant to by one day notes from GE. Does any sane person think GE will go belly up _tomorrow?_ That's what the interest rate measures...the willingness of folks to buy GE notes. All of a sudden, buyers dried up. That's a measure of the panic. A rational market wouldn't change GE's interest rate that quickly because companies with idiots as managers (e.g. AIG) went belly up and had to sell most of their equity to the government at a discount or go bankrupt. BTW, in saying this, I'm arguing that there is a problem that is not inherently related to the government, but originated with market players who build bubbles and panic, even though folks like Greenspan said and says both are foolishwhich they are. In a sense, the problem is not that there is a housing bubble in some areas of the country. It's the timing of the market response, and the irrational extension of it. Let me give an example. I live in a neighborhood near a city that has been growing like gangbusters: Houston. Our housing prices have always been low compared to the US. In one of the prime suburbs, a fancy house goes for $100 sq/foot. My house, including upgrades to its basic value (e.g. wood floors and granite counter tops) will probably sell for about 60% more than I bought it for 16 years ago. That's 3% per year, and I've upgraded the value of the house. That's not a bubble, that's barely keeping up with inflation. And we're in one of the top 10 growing counties in the nation. And our prices are very low, even compared with cities like Milwaukee. Nonetheless, our market is affected, even though our potential buyers are not the sub-prime folks. Banks are nervous about loans to well qualified buyers. This is a personal example of the irrationality of the market that I'm talking about. Out of curiosity, have you any experience or any friends who are connected to investment banking, have contact with CEOs of large corporations, etc.? You know my background, what's yours? Dan M. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
Don't forget, Hitler was elected by Democratic means. While initially true it is inaccurate to claim he took power democratically. His party was elected to a significant proportion of government but the position of authority he abused was bestowed by presidential executive fiat. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
Dan M [EMAIL PROTECTED] That's what the interest rate measures...the willingness of folks to buy GE notes. Gee, really? It couldn't possibly be just a little more complicated than that? A rational market wouldn't change GE's interest rate that quickly Again, really? Either you are stating a tautology, or you have no way of knowing whether the change was reasonable. BTW, in saying this, I'm arguing that there is a problem that is not inherently related to the government, but originated with market players who build bubbles and panic, How profound. Maybe you should write it up as a paper and submit it to an economics journal. Surely you are the first to realize this! In a sense, the problem is not that there is a housing bubble in some areas of the country. It's the timing of the market response, and the irrational extension of it. Sure, the government was largely responsible for creating a huge home price bubble and encouraging a bunch of bad loans to con-artists and people who had no business getting the loans, but that is not the problem. The problem is that the market finally began adjusting the price towards fundamental values. Right. Good point. This is a personal example of the irrationality of the market that I'm talking about. Right, blame the market for adjusting values to where they should be, not the government for being largely responsible for putting values out of whack. That's the ticket. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
This is a myth. He was elected by the parliament, which is not democratic. It's like Bush II in 2000, who was elected by the electoral college, and not by the people. Ah, so you are saying it was only about 49.9% of the popular preference, instead of 50.1%? Sounds like a robust system. The Nazis received about 38% of the seats in 1932 and were the biggest party in parliament. Mostly thank to the consequences of the ongoing depression (which was particularly onerous to Germany it is often argued because of the crushing terms of reparations in the treaty of Versailles). Because of the fractured nature of German governance at the time Hitler was able to use his leverage to get Hindenburg to appoint him Chancellor. As far as it goes Hitler getting power in 1934 was a legitimate process in the Weimar republic and a blunder by Hindenburg. It's the next election that matters. Having gained power the Nazis used it to remove competition and ensure no further fair elections. That combination of economic depression and exploitable militarism is something to worry about, really quite topical. As an interesting aside: Algeria had an election some time ago where popular votes won it for an Islamic party. The existing military dictatorship fearing a theocracy that would ban further elections (and possibly pursue them for past crimes) attempted to void the election and instigated a very vicious civil conflict. Although a problematic example it does give on pause to wonder about the situation where a democratic election may place people to whom democracy is disposable in power. I guess it's a string argument for rigid Constitutional rule. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
The problem was that no-one (including the board of directors of AIG knew that AIG was insolvent until the day the government intervened. Bubbles and panics are part of the nature of the market. You can repeat your mantra of free markets are perfect until you are blue in the face, but AIG was the biggest insurance company in the world and no one had any idea of their problems. It amazes me (was this AIG or Fanny and Freddie, I forget) that they went to ask for some 30 Billion but on a couple of days investigation it turned out to be more like 70 Billion was needed to meet their obligations. The management of the relevant company literally did not know the state of their cash flow. And they have the temerity to continue to claim they know something about economics. Not knowing your businesses demands on cash flow and impending ability to provide for its demands is impressive incompetence, except when its more accurately attributed to the carelessness of over-reaching greed. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
Euan Ritchie [EMAIL PROTECTED] That combination of economic depression and exploitable militarism is something to worry about, really quite topical. I agree. I think it is scary. Although a problematic example it does give on pause to wonder about the situation where a democratic election may place people to whom democracy is disposable in power. I guess it's a string argument for rigid Constitutional rule. I'm not sure how rigid constitutional rule would be able to stop a determined leader with control of the military and the support of even 25% of the people. The only thing that would put my mind at ease would be for the people to have a strong distrust for leaders as well as a culture of not forcing ideals upon others. And the courage to fight if the leaders break the trust that was placed in them when they assumed power. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Teleology
On 23 Sep 2008, at 23:13, Charlie Bell wrote: Yes, most of us know what teleology is. Why did you post a definitition of teleology in response to my descriptions of evolution as non-teleological? He was repulsing a windmill full of strawmen? Mixed metaphor Maru -- William T Goodall Mail : [EMAIL PROTECTED] Web : http://www.wtgab.demon.co.uk Blog : http://radio.weblogs.com/0111221/ Those who can make you believe absurdities can make you commit atrocities. ~Voltaire. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
Euan Ritchie [EMAIL PROTECTED] It amazes me (was this AIG or Fanny and Freddie, I forget) that they went to ask for some 30 Billion but on a couple of days investigation it turned out to be more like 70 Billion was needed to meet their obligations. The management of the relevant company literally did not know the state of their cash flow. I think it more likely that they did not know at first how much money they would be able to get away with. But either way, AIG did not deserve to continue in business. The government's behavior is shameful. The moral hazard being created is huge. Of course, politicians only care about looking good for a few years, and if they can do that by pushing the problems out into the future (even if it makes the problems greater), then they will do that every time. With a free market made up of a number of diverse players, when people make the inevitable stupid or greedy mistakes, they suffer the consequences, disappear, and the resulting system is slightly better than it was before. Businesses fail, some assets lose value, but things go on. But when the government gets involved, the incentives become perverse and the mistakes tend to be coordinated. Also, the government has proven that it will bail out many of the players who took excessive risks. So the instabilities grow and grow until they become so large and widespread that the politicians cry that the market is in crisis and must be rescued! Which will in turn allow the instabilities to build to even higher levels It boggles my mind that some people think politicians are capable of making decisions about billions or trillions of dollars of other people's money that will turn out well, when businesspeople who make decisions about much less money (and at higher potential cost to themselves) frequently make the wrong decisions. The bigger the dollar value of the decision, the bigger the cost of the inevitable mistakes. Better to keep the decisions smaller and in the hands of those who stand to gain or lose personally from their decisions. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
RE: Meltdown
-Original Message- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Charlie Bell Sent: Tuesday, September 23, 2008 5:28 PM To: Killer Bs (David Brin et al) Discussion Subject: Re: Meltdown On 24/09/2008, at 6:21 AM, Dan M wrote: The problem was that no-one (including the board of directors of AIG knew that AIG was insolvent until the day the government intervened. That sounds implausible. Someone knew. It's what level they were at and what they choose to do with the knowledge that's important. Well, I tried for half an hour to get a link to the article that detailed the AIG Board meeting that got the take it or leave it proposal from the US government to swap 80% of its equity for about 80 billion. I'm sorry about that. But, my understanding is that the bundling has become so layered and convoluted that folks really didn't understand what was happening in real time. With the amount of leverage that exists, a perfectly reasonable looking position can fall apart quickly. Most financial houses rely on analytical models that ignore the possibility of Black Swans. My article stated that at 5 PM the board had a plan that would work, at 6 PM a division called saying they had done their latest analysis and they needed 20 billion more, and everything fell apart. I've worked for companies that have been messed up enough so that no one knew what the real balance sheet was for a while. I think AIG was that badly managed. With margin requirements and what not, and AIG's foolish exposure to sub-prime mortgages, a lot can happen in a day. That's scary, at least to me. When I get back, I'll try to find the article and let you decide if you think it is possible. But, I've been chatting with folks who have connections to investment banking, and they've told me that this is the most likely scenario. Dan M. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
it does give on pause to wonder about the situation where a democratic election may place people to whom democracy is disposable in power. I guess it's a string argument for rigid Constitutional rule. I'm not sure how rigid constitutional rule would be able to stop a determined leader with control of the military and the support of even 25% of the people. Obviously no guarantee is given, but the idea is the one employed in the U.S - directing loyalty to the country and constitution rather than government or executive. As history demonstrates it doesn't always work but does provide a rallying point for resistance and a structure within which to work for the re-establishment of subverted authority. I don't claim it's THE answer, but it does have an argument for being a positive preparation to the danger of electing the undemocratically minded. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
Dan M [EMAIL PROTECTED] But, my understanding is that the bundling has become so layered and convoluted that folks really didn't understand what was happening in real time. With the amount of leverage that exists, a perfectly reasonable looking position can fall apart quickly. Yes, and if that is the case -- if the leverage is so high that a one-hour or one-day fluctuation can bankrupt you -- then you are insolvent by any practical measure. Whether some line in a model wanders up and down through the zero line over a period of hours or days does not make a practical difference. (Look, we're solvent! Wait, now we're insolvent no, look, it's coming up, just a little more...) It is nearly certain that many people at AIG knew that they had no margin of safety from insolvency, and that random fluctuations over the next hours or days would bankrupt them if they did not get acquired or bailed out. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
Gautam Mukunda [EMAIL PROTECTED] Freedom is not free http://www.mukunda.blogspot.com - Original Message From: John Williams [EMAIL PROTECTED] To: Killer Bs (David Brin et al) Discussion brin-l@mccmedia.com Sent: Tuesday, September 23, 2008 6:52:33 PM Subject: Re: Meltdown Dan M [EMAIL PROTECTED] That's what the interest rate measures...the willingness of folks to buy GE notes. Gee, really? It couldn't possibly be just a little more complicated than that? Me: Well then, what do you think it measures? For a first approximation analysis, that's a pretty good assessment of what it measures. There are more factors, but in the short-term money market, not that many, really. These are usually very short-term unsecured notes (1 day, I believe, in this case). The only way to lose money is if the company defaults _tomorrow_. Most companies, btw, rely on this sort of very short-term financing, and every company relies on it indirectly, because even if you don't (and the odds are really, really high that your company does) your customers surely do. A rational market wouldn't change GE's interest rate that quickly Again, really? Either you are stating a tautology, or you have no way of knowing whether the change was reasonable. Me: Well, he can't state it to a certainty, but I think you need to provide an alternative explanation here. We had enormous market events followed immediately by a pretty-much unprecedented increase in money market interest rates, paired (presumably not coincidentally) by a massive flight of investors from the money markets - massive defined as hundreds of billions of dollars. This flight was particularly odd given that _no person_ lost money in such investments. Fidelity, which would up its fund, covered its responsibilities and made up the money the fund had lost out of internal funds (and good for them too!). While such a massive movement of capital might be rational, it's stretching the Efficient Markets hypothesis _way_ past its breaking point to argue that this is so, and in particular ignores everything we know about behavioral finance. It also ignores everything any practitioner could tell you. BTW, in saying this, I'm arguing that there is a problem that is not inherently related to the government, but originated with market players who build bubbles and panic, How profound. Maybe you should write it up as a paper and submit it to an economics journal. Surely you are the first to realize this! Me: OK, this is just rude. Are you a professional economist? In a sense, the problem is not that there is a housing bubble in some areas of the country. It's the timing of the market response, and the irrational extension of it. Sure, the government was largely responsible for creating a huge home price bubble and encouraging a bunch of bad loans to con-artists and people who had no business getting the loans, but that is not the problem. The problem is that the market finally began adjusting the price towards fundamental values. Right. Good point. Me: I would say this is an opinion without a lot of evidentiary support. The government was not largely responsible for the run-up in home prices. It certainly didn't help - it was at least partly responsible. But there are many other actors involved. A conservative should understand the limits of the power of the government! Even if this were the case, the actions of the government were known and transparent. They do not - and cannot - explain the decision by AIG to take on $42BB in unhedged risk on credit-default swaps structured based on subprime mortgages. That's a purely private failure. The government made many mistakes in this case, but it's simply impossible to argue that it is solely, or even primarily, responsible for the decision by major financial institutions to (functionally) go massively long on sub-prime mortgages. The obvious support for that argument, btw, is that at least two major players in the financial markets - JPMorganChase (run by Jamie Dimon) and Goldman Sachs (run by Lloyd Blankfein) didn't. If the government were responsible, you'd have to explain why they were immune to pressure. Instead they - brilliantly - handled this potential crisis exactly right. And thank goodness, too, if Dimon hadn't called this one I think we'd be completely screwed. There's a difference between the position markets are usually the best way to allocate capital and markets are always right. I can't think of any economist who would agree with the latter statement. This is a personal example of the irrationality of the market that I'm talking about. Right, blame the market for adjusting values to where they should be, not the government for being largely responsible for putting values out of whack. That's the ticket. Me: The government certainly did some things that were very foolish. But I'm curious as to what, exactly, you think it
Re: Meltdown
At 03:40 PM Tuesday 9/23/2008, John Williams wrote: Just a thought, but you might inspire a bit more confidence in your marks if you spent a little time learning about how markets and regulation actually work and a little less repeating cliched-jokes that were corny when my grandfather was young. Mainly because the latter is MY job. . . . ronn! :P I Am A Trained Professional Smart-Aleck. Do Not Attempt This On Your Own. Neither The Author Of This Message Nor Any Organization He Represents Or Is A Member Of Assumes Any Liability Whatsoever For Any Consequences In The Event You Fail To Heed This Warning. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
At 05:35 PM Tuesday 9/23/2008, Euan Ritchie wrote: I give my consent to be governed by people with whom I disagree, so long as they are elected by legal democratic means. I doubt very much anyone ever asked you (who had the will and power to change it) if it was okay that you were governed by the system in place. And absent that you haven't had the opportunity to give consent. At best you're accepting of the current system. Modern Democracy is more than just voting for government, the term and concept is generally used to encompass social orders that include rule by law and institutionalised consideration for individual rights as well as the mechanism of electing government. The philosophy it represents is generally thought to be that the only proper authority to govern is derived from the consent of governed (as opposed to ancient claims by monarchs and the like to derive authority from Gods or right of force). That consent supposedly obtained from the majority in free competition in elections. But the 'consent' in that concept is a different thing than the literal consent that is given by one person to another. Perhaps you refer to the philosophical concept of popular consent to govern and not a more literal meaning? IOW, as someone has said, Taxation WITH representation ain't all that all-fired great, either? . . . ronn! :) ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Science and Ideals.
At 03:36 AM Tuesday 9/23/2008, Wayne Eddy wrote: You can't trade away your right to trade something (slaves say) in exchange for Citizenship, and then expect to be able to sell slaves anyway anymore than you can trade your cow to one person for a horse and the same cow to a second person for a sheep. How about anymore than you can sell a bridge in New York to more than one person? Beach Front Property For Sale Cheap Maru . . . ronn! :) ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
Gautam Mukunda [EMAIL PROTECTED] From: John Williams Gee, really? It couldn't possibly be just a little more complicated than that? Me: There are more factors, Yes, that is what I was referring to. but in the short-term money market, not that many, really. Surely the laws of supply and demand still hold? In other words, if the supply of money to be lent (in aggregate) goes down, then the price (interest rate) will have upward pressure. We had enormous market events followed immediately by a pretty-much unprecedented increase in money market interest rates, paired (presumably not coincidentally) by a massive flight of investors from the money markets Several large firms were in imminent danger of failing. I would pull my money out, too, if I thought I might lose it or it might get tied up in a bankruptcy. This flight was particularly odd given that _no person_ lost money in such investments. Do you wait until you have been in an accident to put on your seat belt? I would say this is an opinion without a lot of evidentiary support. The government was not largely responsible for the run-up in home prices. It certainly didn't help - it was at least partly responsible. It seems silly to argue about what constitutes largely. But here are some important factors: - 1997 Taxpayer Relief Act created a $500 thousand home capital gain tax exclusion http://www.businessweek.com/bwdaily/dnflash/jul2005/nf20050726_4208_db013.htm - 1999 ''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.'' Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings. http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260sec=spon=pagewanted=1 - 2001 These privileges do more than just give the GSEs a funding cost advantage, they also reinforce the perception of a federal guarantee on GSE debt obligations. In order to avoid a federal bailout like the one we saw with the savings and loan industry, policymakers may want to consider a variety of alternatives, including privatization of one or more of the GSEs. http://www.mercatus.org/PublicationDetails.aspx?id=21118 - 2002 The new underwriting systems being used by Fannie Mae and Freddie Mac, which are analogous to the credit-scoring systems used by banks, allow for higher loan-to-income ratios than in the past to encourage home buying. That's good for borrowers, but the relaxed ratios could pose serious problems in the future. http://www.businessweek.com/magazine/content/02_10/b3773052.htm - 2008: In order to curry congressional support after their accounting scandals in 2003 and 2004, Fannie Mae and Freddie Mac committed to increased financing of affordable housing. They became the largest buyers of subprime and Alt-A mortgages between 2004 and 2007, with total GSE exposure eventually exceeding $1 trillion. In doing so, they stimulated the growth of the subpar mortgage market and substantially magnified the costs of its collapse. It is important to understand that, as GSEs, Fannie and Freddie were viewed in the capital markets as government-backed buyers (a belief that has now been reduced to fact). Thus they were able to borrow as much as they wanted for the purpose of buying mortgages and mortgage-backed securities. Their buying patterns and interests were followed closely in the markets. If Fannie and Freddie wanted subprime or Alt-A loans, the mortgage markets would produce them. By late 2004, Fannie and Freddie very much wanted subprime and Alt-A loans. Their accounting had just been revealed as fraudulent, and they were under pressure from Congress to demonstrate that they deserved their considerable privileges. http://online.wsj.com/article/SB122212948811465427.html JPMorganChase (run by Jamie Dimon) and Goldman Sachs (run by Lloyd Blankfein) didn't. If the government were responsible, you'd have to explain why they were immune to pressure. Instead they - brilliantly - handled this potential crisis exactly right. Which would be great if the government didn't interfere. The strong companies that made good decisions would survive, and the others would fail. But instead we have the government bailing out the bad companies. For example, we had a series of events occurring. We saw the mark-to-market value of financial instruments constructed based on subprime
Re: Meltdown
Dan M wrote: The problem was that no-one (including the board of directors of AIG knew that AIG was insolvent until the day the government intervened. Bubbles and panics are part of the nature of the market. You can repeat your mantra of free markets are perfect until you are blue in the face, but AIG was the biggest insurance company in the world and no one had any idea of their problems There is a management consultant named Bob Lewis who puts out a weekly newsletter I get that illustrated the problem very neatly. Set up a spreadsheet so that cell A1 has the formula =B1 +1. Then go to cell B1 and enter the formula =A1+1. Now, most decent spreadsheet programs will not let you get away with this circular reference, but an unregulated market can. Essentially, it all came down to a shell game where everyone was insuring each others risks, and then convincing themselves that they had laid off the risk this way. Regards, -- Kevin B. O'Brien TANSTAAFL [EMAIL PROTECTED] Linux User #333216 Good teaching is one-fourth preparation and three-fourths theater. -- Gail Godwin ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
On Sep 23, 2008, at 8:00 PM, Kevin B. O'Brien wrote: Dan M wrote: The problem was that no-one (including the board of directors of AIG knew that AIG was insolvent until the day the government intervened. Bubbles and panics are part of the nature of the market. You can repeat your mantra of free markets are perfect until you are blue in the face, but AIG was the biggest insurance company in the world and no one had any idea of their problems There is a management consultant named Bob Lewis who puts out a weekly newsletter I get that illustrated the problem very neatly. Set up a spreadsheet so that cell A1 has the formula =B1 +1. Then go to cell B1 and enter the formula =A1+1. Now, most decent spreadsheet programs will not let you get away with this circular reference, but an unregulated market can. Essentially, it all came down to a shell game where everyone was insuring each others risks, and then convincing themselves that they had laid off the risk this way. ::facepalm:: ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
Dan M wrote: Oh, the irrationality. Why would people be reluctant to by one day notes from GE. Does any sane person think GE will go belly up _tomorrow?_ That's what the interest rate measures...the willingness of folks to buy GE notes. All of a sudden, buyers dried up. That's a measure of the panic. A rational market wouldn't change GE's interest rate that quickly because companies with idiots as managers (e.g. AIG) went belly up and had to sell most of their equity to the government at a discount or go bankrupt. I'm going to have to disagree with you here, to some degree. Your premise is not as true as you might like. The interest rate may have a long-run *tendency* to approximate the credit-worthiness of a borrower, but in the short-run it is simply the price that clears the market for loanable funds. If there is a sudden sharp reduction in supply, as happened here, it will result in a sharp increase in the interest rate. Now, you might say that the sharp reduction in supply is irrational, but I don't think that is the case. As you initially postulated, the interest rate for any particular loan is a function of the risk of that loan, and we have had a revelation in recent days that evaluation and pricing of risk was seriously wrong throughout much of Wall St. Regards, -- Kevin B. O'Brien TANSTAAFL [EMAIL PROTECTED] Linux User #333216 The theory of quantum electrodynamics describes nature as absurd from the point of view of common sense. And it agrees fully with experiment. So I hope you can accept nature as she is--absurd. --Richard Feynman ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
On Sep 23, 2008, at 8:00 PM, Kevin B. O'Brien wrote: Now, most decent spreadsheet programs will not let you get away with this circular reference, but an unregulated market can. Essentially, it all came down to a shell game where everyone was insuring each others risks, and then convincing themselves that they had laid off the risk this way. Another good analogy might be plugging a lamp into a power strip, then plugging the power strip into itself, then wondering why the light doesn't come on .. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
Kevin B. O'Brien [EMAIL PROTECTED] Now, most decent spreadsheet programs will not let you get away with this circular reference, but an unregulated market can. Essentially, it all came down to a shell game where everyone was insuring each others risks, and then convincing themselves that they had laid off the risk this way. I think it is more complicated than that. A derivative market (insuring each others risks) can be relatively stable, given an adequate framework. Look at the stock options market, which is organized by the Options Clearing Corporation that guarantees the contracts and imposes margin requirements. There are similar organizations in place for various Futures markets. In contrast, the market for credit default swaps (CDS) has no centralized clearing organization. No one can be sure that the CDS counter-party will pay off if the credit event occurs. I think this played a significant part in the instabilities last week. Too bad the government isn't doing anything to encourage the creation of a centralized clearing organization for CDS's. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
- Original Message From: John Williams [EMAIL PROTECTED] To: Killer Bs (David Brin et al) Discussion brin-l@mccmedia.com Sent: Tuesday, September 23, 2008 8:48:12 PM Subject: Re: Meltdown Gautam Mukunda [EMAIL PROTECTED] From: John Williams Gee, really? It couldn't possibly be just a little more complicated than that? Me: There are more factors, Yes, that is what I was referring to. but in the short-term money market, not that many, really. Surely the laws of supply and demand still hold? In other words, if the supply of money to be lent (in aggregate) goes down, then the price (interest rate) will have upward pressure. Me: Yes, but again, it's a circular problem. Why did the supply go down? Because people were afraid of losing money in the money markets (even though _no one had_). So there was a stampede for the exits. Fine, but when there's a stampede lots of people get trampled. Was the risk of defaults across the market so large that _GE_ was at a higher risk of default? Obviously not. But such a stampede could cause lots of otherwise fine companies to go under, which would cause still more companies to go under, and so on, until finally the only things left would be companies like, well, GE and Microsoft and Pfizer. We know what financial collapses look like. They look like 25% unemployment rates and a decade of disaster. It's hard to imagine _anything_ worth the risk of going through that when interventions can prevent it. We had enormous market events followed immediately by a pretty-much unprecedented increase in money market interest rates, paired (presumably not coincidentally) by a massive flight of investors from the money markets Several large firms were in imminent danger of failing. I would pull my money out, too, if I thought I might lose it or it might get tied up in a bankruptcy. Me: Sure, that's fine. The problem is that when everyone does it these actions can _cause_ a bankruptcy that will not otherwise occurred. This is a standard collective action problem. You have described exactly the mechanics behind a back run. If there's a run on the bank, you want to be first in line. But since everyone wants to be first in line, you can get runs on banks for no reason at all. That's not a market functioning perfectly, and if you can prevent it, you should. That's what the FDIC is for, and here we had a similar problem. This flight was particularly odd given that _no person_ lost money in such investments. Do you wait until you have been in an accident to put on your seat belt? Me: No, but _putting on my seat belt cannot cause an accident_. This is the fundamental problem with your analogy. JPMorganChase (run by Jamie Dimon) and Goldman Sachs (run by Lloyd Blankfein) didn't. If the government were responsible, you'd have to explain why they were immune to pressure. Instead they - brilliantly - handled this potential crisis exactly right. Which would be great if the government didn't interfere. The strong companies that made good decisions would survive, and the others would fail. But instead we have the government bailing out the bad companies. Me: Well, we don't yet know. _But_. If the run on the money markets had continued, we would have seen strong companies go under. Like, for example, Goldman, which probably was in some danger for a while there. That's what contagion means. You have people who didn't do anything wrong going under. The only financial institution which I have really high confidence in right now is JPMorganChase, and even they're not invulnerable. For example, we had a series of events occurring. We saw the mark-to-market value of financial instruments constructed based on subprime mortgages drop to near zero. Functionally that explains the collapse of Lehman and AIG. Although the value of these instruments is presumably substantially lower than their purchasers thought they were, a true value of zero is implausible at best (absent strange leverage constructions _unviersal across the instruments_ this would imply a default rate on subprime mortgages of nearly 100%, which is clearly not going to happen). This collapse forced Lehman to declare bankruptcy while it was technically still solvent - an unprecedented event, so far as I know. As I mentioned in another post, there is a practical definition of solvency and a technical definition. The market seems to follow the practical one. Extreme leverage necessitates a probabilistic definition of solvency. Me: That's fine, but I don't think you've thought through the implications of such a definition in a period of extreme ambiguity. You can have situations where _no one knows_ if you're solvent or not. If that's true, and people have suddenly ramped up their risk aversion, then companies that are, in fact, solvent can be rendered insolvent simply by the existence of these concerns.
Some random thoughts on Wall St. and the meltdown
1. Something definitely happened, but I doubt anyone knows exactly what, as yet. 2. It is almost certainly not as dire as Paulson and Bernanke are trying to make it sound. The world won't come to an end if we take the time to think things through. 3. Anyone who trusts what this administration says about this, or about any issue facing this country, is probably clinically insane. 4. Financial markets are not like other markets. Don't apply nostrums that seem to work in the corn flakes market and think they will work the same in a financial market. 5. People who have never read Adam Smith are probably not qualified to discuss what he said. And almost nobody has ever read Adam Smith. Even most economists have never gotten around to it. 6. Most people who have never studied physics would be unlikely to pontificate on the subject. Most people who have never studied economics not only will pontificate on the subject, but will explain to you in terms that suggest you are an idiot, why they are right and you are wrong. That they are unqualified will never occur to them. 7. Financial crises occur with a certain rhythm. This revolves around the time it takes for people to forget the lessons of the last crisis and develop the conceit that they are smarter than their forebears. John Kenneth Galbraith, who wrote a classic work on the 1929 crash, lays this out very clearly. Beginning in the late-1970s we have systematically eliminated all the constraints put in place in the 1930s to prevent another Great Depression from occurring. Each major deregulation was followed by a systemic crisis. The Depository Institution Deregulation and Monetary Control Act of 1980, and Garn-St. Germain in 1982 led inevitably to the SL crisis (McCain and the Bushes were part of that one too!). Gramm-Leach-Bliley (1999) led to this one. The long gap without major crises between the Great Depression and the SL crisis is explained by the fact that the Great Depression was so severe that it was difficult to get politicians to forget the lessons learned and open the door to new abuses until a lot of time had gone by. Then the SL problem occurred, but in the final analysis was not severe enough to restrain people for very long. What you should look for in this crisis is whether anyone draws the lesson that laws like Glass-Steagal worked very well for a long time, and should probably be re-instituted. I doubt that will happen, because the Republican Party has become our native criminal class, and the Democratic Party are such pussies that they haven't yet even mentioned the Keating Five. So you should prepare for a fix that papers things over for perhaps 5-7 years, followed by something even worse. Regards, -- Kevin B. O'Brien TANSTAAFL [EMAIL PROTECTED] Linux User #333216 God made an idiot for practice. Then He made a school board. -- Mark Twain ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
Gautam Mukunda [EMAIL PROTECTED] But such a stampede could cause lots of otherwise fine companies to go under, which would cause still more companies to go under, and so on, It's hard to imagine _anything_ worth the risk of going through that when interventions can prevent it. So, you imagine a problem, make it plenty scary, then imagine a solution, and say that a few people can magically do it. It is a good thing you guys are so much smarter than the rest of us dumb market peons, what would we do without you? You may not be a politician, but you have the mindset down perfectly. Let me try one. My god, there are thousands of asteroids in the solar system and one could slam into earth at any time. Billions would die! Mass hysteria! Dogs and cats, living together! But I have a PLAN! I can save us all! Just give me $700B and I will avert the disaster! Whadya say? Sure, that's fine. The problem is that when everyone does it these actions can _cause_ a bankruptcy that will not otherwise occurred. Would not have occurred if the firms were not excessively leveraged and invested in toxic loans. No, but _putting on my seat belt cannot cause an accident_. This is the fundamental problem with your analogy. That certainly is not a fundamental problem with my analogy. Difficulty with the money markets was only the latest problem for the big investment banks. The main reason people feared for their solvency was because of high leverage and bad assets. If the run on the money markets had continued, we would have seen strong companies go under. Like, for example, Goldman, which probably was in some danger for a while there. And if so, was not as strong as you claim. That's fine, but I don't think you've thought through the implications of such a definition in a period of extreme ambiguity. You can have situations where _no one knows_ if you're solvent or not. No, you have not understood what it means to have no margin of safety from insolvency. It means by any practical measure, you are insolvent. And plenty of people know. Of course, if you have a vested interest and know, you do not admit it. Well, it's not that uncharted. Barclay's and Deutsche Bank are both over 50x, I believe. Those are not pure investment banks. They derive some funding from deposits. That is why the investment banks have been merging with commercial banks or becoming bank holding companies. Having deposits mitigates some of the risk of money market problems. Now I absolutely think You're fond of absolutes, aren't you? - and have thought for a very long time - that we need regulatory limits on leverage, probably around the 12x range. But I doubt that's what you think we should have - I hope I'm not misinterpreting you. I don't know what we should have. Clearly the government does not, either, since they increased the allowable limits on the big 5 and then they all got into trouble. Certainly the insurer should have a lot of say in the matter. If the government is going to keep bailing out investment banks, then the government is the implicit insurer. But obviously I have little faith that the government will lead us down the path to stronger firms if they keep bailing out excessive risk takers. That's a problem, and the only institution that can do something about it is the government. Possibly true. I can imagine a few ways, involving consortia of private insurers, that it could stabilize the system without government imposed leverage limits. But I don't think it is likely that such a system will be started. But on what do you base your belief that the track record is otherwise? You haven't cited a single case. Not one. Heh, yeah. Considering that the government just bailed out Bear, Fannie, Freddie, and AIG, and still you feared armageddon last week, and Paulson says we need another $700B, I'd say you are the one who needs to cite examples of $700B bailouts being successful. But you know that, in his shoes, you would have made the same decisions, because money market funds _never lose money_. Anyone who thinks that way should be kept far, far away from managing my money. I'm afraid I'm not clear on what basis - either theoretical or empirical - you disagree. Quite simply, ego. You don't know nearly as much as you think you do about what will happen and how you can control it. You run around wild-eyed telling us how the world is ending but don't worry, you know how to save us. Then you do something, the world does not end, and you claim you saved us. Sorry, I have much less confidence in politicians and people like you than I do in the collective self-interest and creativity of a large group of talented people to solve problems competitively. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
On Tue, Sep 23, 2008 at 3:52 PM, John Williams [EMAIL PROTECTED]wrote: Sure, the government was largely responsible for creating a huge home price bubble and encouraging a bunch of bad loans to con-artists and people who had no business getting the loans, but that is not the problem. The problem is that the market finally began adjusting the price towards fundamental values. Right. Good point. The problem is government? Not greed? Or perhaps you'd be willing to acknowledge that it wasn't *just* government that was the problem? I put some of my faith in the greediness of people, including myself sometimes. I'm all for reducing the size and market interference... of greed. I'm not sure how to do that other than via some sort of political process. Nick ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
On Tue, Sep 23, 2008 at 4:54 PM, Gautam Mukunda [EMAIL PROTECTED]wrote: Now, you have these fund managers. All of them are worried. They've just seen several things happen that they've never seen before. They know that there are still securities on a lot of balance sheets that have probably not yet been marked down fully. But they don't know where they are. Furthermore, these financial instruments are so technically complex that _no one_, not the people who owned them, not the people who originated them, can properly value them under current market conditions. Thus not only do they not know the financial status of companies in which they might invest, those companies themselves probably no longer know what their financial status is. Gautam to the rescue! There was a lot to like in your post, but may I say that this is my favorite -- the insanity of billions of dollars in financial instruments that nobody can really value them as a whole and as a practical matter, not even individually in a comprehensive manner. That's a failure of valuation, which is rather deeply fundamental to an economy. In short... yipes! Valuation can be tricky (I've raised or helped raise tens of millions in venture money, so boy do I know) but this is, as you said, scary. Nick (Sitting in my negative equity home) ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
Nick Arnett [EMAIL PROTECTED] I'm all for reducing the size and market interference... of greed. I'm not sure how to do that other than via some sort of political process. You want to impose your ideals on the rest of us and destroy one of the main drivers of innovation and growth? You've outdone yourself this time. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
- Original Message From: John Williams [EMAIL PROTECTED] To: Killer Bs (David Brin et al) Discussion brin-l@mccmedia.com Sent: Tuesday, September 23, 2008 11:16:58 PM Subject: Re: Meltdown Gautam Mukunda [EMAIL PROTECTED] But such a stampede could cause lots of otherwise fine companies to go under, which would cause still more companies to go under, and so on, It's hard to imagine _anything_ worth the risk of going through that when interventions can prevent it. So, you imagine a problem, make it plenty scary, then imagine a solution, and say that a few people can magically do it. It is a good thing you guys are so much smarter than the rest of us dumb market peons, what would we do without you? You may not be a politician, but you have the mindset down perfectly. Let me try one. My god, there are thousands of asteroids in the solar system and one could slam into earth at any time. Billions would die! Mass hysteria! Dogs and cats, living together! But I have a PLAN! I can save us all! Just give me $700B and I will avert the disaster! Whadya say? Me: Well, I say I'd go to astronomers, and astrophysicists, and aerospace engineers. And I'd find the best ones in the world. I'd ask them - what's the risk of this happening? What's the best way to prevent it? How much would it cost? Then I'd decide if that was worth the risk. What would you do? Judging by your feelings about finance, none of those people would be worth consulting. Are you, by some chance, one of the best astronomers, astrophysicists, or aerospace engineers in the world? Is there some reason I should believe that you know what you're talking about? snipping stuff Quite simply, ego. You don't know nearly as much as you think you do about what will happen and how you can control it. You run around wild-eyed telling us how the world is ending but don't worry, you know how to save us. Then you do something, the world does not end, and you claim you saved us. Sorry, I have much less confidence in politicians and people like you than I do in the collective self-interest and creativity of a large group of talented people to solve problems competitively. Me: OK, your argument, just to be clear, is that you don't know anything about finance. You have no experience with financial markets. You don't know anything about me (so how do you know you shouldn't trust people like me?). You are aware of the overwhelming consensus of people who do have experience in finance, who have studied financial markets, and who (like me) have absolutely nothing to gain by exaggerating (or minimizing) the risks...but you think from a vague first principles belief in large groups of talented people (the same large group, it's worth noting, who caused this problem in the first place) that nothing should be done (even though the members of this large group are universal in their belief that something must be done) and you think it's _my_ ego that's the problem? You're welcome to that belief, but, well, I'm a political scientist. I believe in _data_. I believe in theory too - my work is highly theoretical - but theories need to be grounded in clear causal mechanisms and tested against the empirical evidence. You _still_ haven't come up with a historical example. Not one. You're talking about isolated bailouts of firms (and it's worth pointing out that, so far, the AIG bailout has worked - the markets have not collapsed, even though they came pretty close, so this cuts _against_ your argument, not for it). My point was that an organized and skillful bailout of an entire financial sector in panic can, and has, worked in the past. Even more so, you don't seem to understand what I've been saying, so let me try again. _My whole point_ is that we don't know what will happen. We know there's a chance of the next Great Depression. _We don't know_ what the odds of that happening are. Had the money markets collapsed, the odds were very high (in my opinion) but they haven't yet, so we just don't know. However, the best people in this field think that the odds remain uncertain but significant. _Given that fact_ almost all of them feel that it's worth risking significant amounts of money to minimize the risk. I'm the one saying We don't know what's going to happen, so we should play it safe. You're the one who seems to be arguing that your understanding of markets is so total that you can predict that only the bad companies will fail. Well that might be true. You're _so certain_ that's true you're willing to wager the an unknown possibility of a second Great Depression against it. I'm _so uncertain_ that I'm willing to pay significant costs to insure against the possibility. So I have two simple questions for you. What do you think the odds of such a collapse occurring are? 1% 5%? Whatever number you pick - what do you think should be done to lessen that risk? Nothing? If so,
Re: Meltdown
So I have two simple questions for you. What do you think the odds of such a collapse occurring are? 1% 5%? Whatever number you pick - what do you think should be done to lessen that risk? Nothing? If so, do you not buy health insurance? Best, Gautam I hate replying to m own post, but I had a good idea. Do you know what iatrogenic errors are? They're mistakes by doctors that cause harm to patients. Iatrogenic errors are among the leading causes of death in the United States - I'm not sure, but I think they might actually be the leading cause of death. Does that mean that you should never go to a doctor? After all, sometimes people get better on their own. Sometimes cancer goes into spontaneous remission. And unlike most of the people involved in this debate, doctors have a financial incentive to treat you unnecessarily! So does that mean you should never go to a doctor? Of course not. When you're sick you need to listen to your doctor. You shouldn't listen blindly, but it's probably not a good idea to ignore them completely either. Gautam ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
Gautam Mukunda [EMAIL PROTECTED] Well, I say I'd go to astronomers, and astrophysicists, and aerospace engineers. And I'd find the best ones in the world. Why haven't you? OK, your argument, just to be clear, is that you don't know anything about finance. It is? You have no experience with financial markets. You don't know anything about me (so how do you know you shouldn't trust people like me?) How many words have you written to the list today? Is every one of those a misrepresentation of your views? You are aware of the overwhelming consensus of people who do have experience in finance, who have studied financial markets, and who (like me) have absolutely nothing to gain by exaggerating (or minimizing) the risks... There are a large number of economists who think Paulson's $700B bailout is a bad idea. That you have the cahones to claim that your viewpoint is an overwhelming consensus of experts is a perfect example of the absurdity of people like you actually being able to fix the problem. (the same large group, it's worth noting, who caused this problem in the first place) Politicians and people like you, yes. but, well, I'm a political scientist. You don't say. I believe in _data_. Me too. You _still_ haven't come up with a historical example. Not one. Show me the data of the last three bail outs that I mentioned, and how they averted disaster. You're talking about isolated bailouts of firms Oh, so you mean that I haven't come up with one example that you like and proves your point. So sorry. (and it's worth pointing out that, so far, the AIG bailout has worked - the markets have not collapsed, Heh. I just saved the world, too. It was about to blow up, but I stopped it in the nick of time. Even more so, you don't seem to understand what I've been saying, so let me try again. Yes, that must be it. It couldn't be that you might not have a monopoly on the truth. _My whole point_ is that we don't know what will happen. We know there's a chance of the next Great Depression. _We don't know_ what the odds of that happening are. Had the money markets collapsed, the odds were very high (in my opinion) but they haven't yet, so we just don't know. However, the best people in this field think that the odds remain uncertain but significant. You are really good at that. Did you learn that in political science class? I don't know, but all the experts agree with me. So I must be right. It works even better when all the experts actually do agree with you, though. So I have two simple questions for you. What do you think the odds of such a collapse occurring are? 1% 5%? Whatever number you pick - what do you think should be done to lessen that risk? Nothing? If so, do you not buy health insurance? You sure are dramatic. Why not wait and see what happens? If things turn out as badly as you predict, surely your cadre of experts will be able to propose a simple solution in a few weeks or whatever. Oh but wait, then we might see that you were crying wolf. Hard to get re-elected then. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
- Original Message From: John Williams [EMAIL PROTECTED] To: Killer Bs (David Brin et al) Discussion brin-l@mccmedia.com Sent: Wednesday, September 24, 2008 12:15:33 AM Subject: Re: Meltdown Gautam Mukunda [EMAIL PROTECTED] Well, I say I'd go to astronomers, and astrophysicists, and aerospace engineers. And I'd find the best ones in the world. Why haven't you? Me: Well, I have. Or at least, I've read what they have to say. I even know who they are. Do you? John: There are a large number of economists who think Paulson's $700B bailout is a bad idea. That you have the cahones to claim that your viewpoint is an overwhelming consensus of experts is a perfect example of the absurdity of people like you actually being able to fix the problem. Me: Brilliant. You have paid such close attention to what I'm saying that you manage to...come to an opinion on something about which I have expressed no opinion. Remarkable. Actually, I don't think Paulson's bailout is a good idea. Although the fact that you keep citing it as $700B suggests to me that you don't understand it. I prefer Dodd's plan, which isn't perfect, but is much better. (the same large group, it's worth noting, who caused this problem in the first place) Politicians and people like you, yes. Me: Again, you know nothing about me, except that I'm taking the time to debate with someone incapable of even ordinary civility. Which, to be fair, doesn't speak well of constraints on my time. But I'm trying to procrastinate right now. I believe in _data_. Me too. Me: The data do not suggest that. You _still_ haven't come up with a historical example. Not one. Show me the data of the last three bail outs that I mentioned, and how they averted disaster. Me: It's not my job to educate you. It may amuse me, but it doesn't really do that at the moment. _My whole point_ is that we don't know what will happen. We know there's a chance of the next Great Depression. _We don't know_ what the odds of that happening are. Had the money markets collapsed, the odds were very high (in my opinion) but they haven't yet, so we just don't know. However, the best people in this field think that the odds remain uncertain but significant. You are really good at that. Did you learn that in political science class? I don't know, but all the experts agree with me. So I must be right. It works even better when all the experts actually do agree with you, though. Me: OK, so, I've talked about basic financial market mechanics and pointed to works by Kindelberger and Taleb. You have...talked about mystical properties of markets. Hmm. So I have two simple questions for you. What do you think the odds of such a collapse occurring are? 1% 5%? Whatever number you pick - what do you think should be done to lessen that risk? Nothing? If so, do you not buy health insurance? You sure are dramatic. Why not wait and see what happens? If things turn out as badly as you predict, surely your cadre of experts will be able to propose a simple solution in a few weeks or whatever. Oh but wait, then we might see that you were crying wolf. Hard to get re-elected then. Me: Ah yes, because I'm definitely running for office right now. Come on, this is just tiresome. At least try to have a simple discussion without accusing everyone of bad faith. When you get cancer, you go to the oncologist. She says, we need to do chemo now before it metastasizes. Your answer is, of course...let's wait and see what happens. After it metastasizes surely you will be able to propose a simple solution... Try that approach. Tell me how it goes. Gautam ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Meltdown
Gautam Mukunda [EMAIL PROTECTED] Again, you know nothing about me, Ah, so you are saying everything you have written today is nonsense. Not much point in me replying to your nonsense anymore. This will be the last email, then. It's not my job to educate you. Heh, good one. I have data, but I won't show it. Well done. OK, so, I've talked about basic financial market mechanics and pointed to works by Kindelberger and Taleb. You have...talked about mystical properties of markets. Hmm. Actually, you have written that you don't know, that all the experts agree with you, and that you are scared. And you have denied that the government was in large part responsible for the problem. I have presented evidence that government policy had a great deal to do with the problem. The bailouts so far have not made everything hunky-dorey. But you still imagine the government can fix the problem that it caused and that it hasn't cured after 3 bailouts so far. Maybe you should become a priest with blind faith like that! When you get cancer, you go to the oncologist. So, you've changed your tune already? Instead of not knowing what is going to happen and how bad it will be, now you claim the current situation will almost certainly be fatal, and that you know with high probability how to keep it from becoming so? My hero. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
