The Economy


Normally open July 4th only---the one day a year when partisan politics, religion, etc. are acceptable topics on this Board (within reason). The forum is now closed.

Postby jhc68 » Tue Sep 16, 2008 7:09 pm

Aiden wrote:
Frankly, it's good to have nothing. I don't spend much time worrying about hanging on to it.


Janis summed it up:
Freedom's just another word for nothin' left to lose.


Well, yeah, that is a good attitude but viewpoints change when your REALLY have nothing.
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Postby BruceFlorman » Tue Sep 16, 2008 7:36 pm

I'm not a particularly religious man myself, and religious discussions are considered somewhat taboo in this forum anyway, but I found the musings on the current economic situation by N. Thomas Wright, the Anglican Bishop of Durham, England, to be rather thought-provoking, and at least until this post gets noticed and axed, I thought I'd pass along the link.
Two generations ago wry commentators like T.S. Eliot and C.S. Lewis noted that in the Bible and the Koran it is forbidden to use money to make money, i.e. to take interest -- and that our entire modern western economy, and now more or less the global economy, is built on that system and nothing else. Ironically (in view of the moral posturing of 'the West' against Islam in recent years) some countries, certainly my own in recent legislation, have quietly made provision for Muslims to 'do business' in different ways so they can keep (a version of) their laws. Nobody has suggested making similar provisions for Jews or Christians.

Excerpted from: http://newsweek.washingtonpost.com/onfa ... nd_wa.html
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Postby tandfman » Tue Sep 16, 2008 8:15 pm

richxx87 wrote:
Aiden wrote:Frankly, it's good to have nothing. I don't spend much time worrying about hanging on to it. :wink:

Janis summed it up:
Freedom's just another word for nothin' left to lose.

And then, of course, there was Ira Gershwin's take on this:

http://www.akh.se/harbel/lyrics/oh_i_go ... nothin.htm
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Postby catson52 » Wed Sep 17, 2008 3:26 am

richxx87 wrote:
Aiden wrote:Frankly, it's good to have nothing. I don't spend much time worrying about hanging on to it. :wink:


Janis summed it up:
Freedom's just another word for nothin' left to lose.


Janis was very late in "joining the game". It was, of course, Kris Kristofferson.
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Postby Aiden » Wed Sep 17, 2008 3:31 am

jhc68 wrote:
Aiden wrote:
Frankly, it's good to have nothing. I don't spend much time worrying about hanging on to it.


Janis summed it up:
Freedom's just another word for nothin' left to lose.


Well, yeah, that is a good attitude but viewpoints change when your REALLY have nothing.


Been there.
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Postby Pego » Wed Sep 17, 2008 11:07 am

BruceFlorman wrote:I'm not a particularly religious man myself, and religious discussions are considered somewhat taboo in this forum anyway, but I found the musings on the current economic situation by N. Thomas Wright, the Anglican Bishop of Durham, England, to be rather thought-provoking, and at least until this post gets noticed and axed, I thought I'd pass along the link.
Two generations ago wry commentators like T.S. Eliot and C.S. Lewis noted that in the Bible and the Koran it is forbidden to use money to make money, i.e. to take interest -- and that our entire modern western economy, and now more or less the global economy, is built on that system and nothing else. Ironically (in view of the moral posturing of 'the West' against Islam in recent years) some countries, certainly my own in recent legislation, have quietly made provision for Muslims to 'do business' in different ways so they can keep (a version of) their laws. Nobody has suggested making similar provisions for Jews or Christians.

Excerpted from: http://newsweek.washingtonpost.com/onfa ... nd_wa.html


The way I understand the Muslim way of doing business (not sure of the source) is that they simply replace interest with some sort of fees. A different instrument, same music.
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Postby lonewolf » Wed Sep 17, 2008 12:11 pm

I have been closely associated with a devout Muslim woman author for the past six years and have learned more than I ever expected to know about Islam.
There are many escape clauses in the Koran to fit circumstances. Many Muslims are not fanatics about dietary restrictions, alcohol, etc.
Just so, they have come up with a negotiable financing system which basically charges "fees" up front in lieu of "interest" over the term of the loan. Works out about the same for everyone but they are definitely not strictly altruistic when it comes to money.
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Postby BruceFlorman » Wed Sep 17, 2008 7:01 pm

I hope you guys actually read the linked article. It's quite short - only four paragraphs, and you've already read one of them. It's actually the next one that I found "thought-provoking", but it's the longest of the four, and if I'd excerpted that one without the lead-in, I think it would've seemed strange, and it definitely would've pushed the envelope on the board policy regarding the quoting of external sources.

The article itself isn't really about Islam at all, though I'd hoped it would make a nifty hook to pull people into the conversation (It appears I was wrong about that). Rather, the article questions whether we should be taking a serious look at the ethical underpinnings of the system as a whole. It does not offer any answers. Just suggests that we consider the question.
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Postby catson52 » Thu Sep 18, 2008 4:30 am

BruceFlorman wrote:I hope you guys actually read the linked article. It's quite short - only four paragraphs, and you've already read one of them. It's actually the next one that I found "thought-provoking", but it's the longest of the four, and if I'd excerpted that one without the lead-in, I think it would've seemed strange, and it definitely would've pushed the envelope on the board policy regarding the quoting of external sources.

The article itself isn't really about Islam at all, though I'd hoped it would make a nifty hook to pull people into the conversation (It appears I was wrong about that). Rather, the article questions whether we should be taking a serious look at the ethical underpinnings of the system as a whole. It does not offer any answers. Just suggests that we consider the question.


Haven't read the articles in question and, to be honest, may not do so. The reason is a nice quotation I saw in a book recently, attribution "anonymous".

"Philosophy asks questions that cannot be answered, and religion gives answers that cannot be questioned".
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Postby tandfman » Thu Sep 18, 2008 4:33 am

catson52 wrote:"Philosophy asks questions that cannot be answered, and religion gives answers that cannot be questioned".

Economics also asks questions that cannot be answered, like "What's the stock market going to do next week (month, year)?"

Of course, there are a lot of fools, and also some wise people, out there telling us the answers to those questions. Problem is that there's almost no way to tell which is which.
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Postby catson52 » Thu Sep 18, 2008 5:32 am

tandfman wrote:
catson52 wrote:"Philosophy asks questions that cannot be answered, and religion gives answers that cannot be questioned".

Economics also asks questions that cannot be answered, like "What's the stock market going to do next week (month, year)?"

Of course, there are a lot of fools, and also some wise people, out there telling us the answers to those questions. Problem is that there's almost no way to tell which is which.


The difference may be that ALL philosophical etc. from the quotation I used, but NOT ALL economics etc. Re figuring out the foolish from the wise. We had a quotation in one of the threads here from Euripides about critical faculties/reasoning, being one of mankind's greatest qualities. Watching all the pundits on TV, and noting that most all of them have a vested interest in the hoi polloi continuing to put money in the market, can be quite amusing. In my profession, I have made it a habit to apply critical reasoning (as far as I am able) to all data/hypotheses. Naturally, it led to my being a pariah with most of my "colleagues".
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Postby tandfman » Thu Sep 18, 2008 9:28 am

tandfman wrote:Of course, there are a lot of fools, and also some wise people, out there telling us the answers to those questions. Problem is that there's almost no way to tell which is which.

By coincidence, after I posted that, I came across a perfect example of this. It's from an article at nytimes.com.

Some economists worry that a psychology of fear has gripped investors . . . While investors’ decision to protect themselves may be perfectly rational, the crowd behavior could cause a downward spiral with broader ramifications.

“It’s like having a fire in a cinema,” said Hyun Song Shin, an economics professor at Princeton. “Everybody is rushing to the door. You are rushing to the door because everyone is rushing to the door. Clearly, as a collective action, it is a disaster.”

This guy is an economics professor at Princeton, and so you might assume that he is not a fool. But you'd be wrong.

People are NOT rushing to the door when there's a fire in a cinema because everyone is rushing to the door. They're rushing to the door because there's a fire in the cinema. You know that, and I know that, and anyone who lives in the real world (and not in academia or the world of media punditry) knows that. But apparently not all economics professors know that, and not all newspaper editors know it either.

There's just an awful lot of nonsense out there, and it's very hard for ordinary people to know whom to listen to.

Full story at: http://www.nytimes.com/2008/09/18/busin ... rkets.html
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Postby Pego » Thu Sep 18, 2008 9:48 am

tandfman wrote:
tandfman wrote:Of course, there are a lot of fools, and also some wise people, out there telling us the answers to those questions. Problem is that there's almost no way to tell which is which.

By coincidence, after I posted that, I came across a perfect example of this. It's from an article at nytimes.com.

Some economists worry that a psychology of fear has gripped investors . . . While investors’ decision to protect themselves may be perfectly rational, the crowd behavior could cause a downward spiral with broader ramifications.

“It’s like having a fire in a cinema,” said Hyun Song Shin, an economics professor at Princeton. “Everybody is rushing to the door. You are rushing to the door because everyone is rushing to the door. Clearly, as a collective action, it is a disaster.”

This guy is an economics professor at Princeton, and so you might assume that he is not a fool. But you'd be wrong.

People are NOT rushing to the door when there's a fire in a cinema because everyone is rushing to the door. They're rushing to the door because there's a fire in the cinema. You know that, and I know that, and anyone who lives in the real world (and not in academia or the world of media punditry) knows that. But apparently not all economics professors know that, and not all newspaper editors know it either.

There's just an awful lot of nonsense out there, and it's very hard for ordinary people to know whom to listen to.

Full story at: http://www.nytimes.com/2008/09/18/busin ... rkets.html


You are not making us feel any better, you know :) :( ?
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Postby bad hammy » Thu Sep 18, 2008 11:05 am

It is weeks like this that point out one of the problems for average workers when companies replace pensions with 401k programs.
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Postby jhc68 » Fri Sep 19, 2008 7:20 am

What a mess.

For years business and government (on both sides of the aisle) have embraced the "invisible hand of the free market" as the be-all, end-all of economics... now the only way out is to use as much as a trillion bucks in tax money to cover the casino losses that unregulated wheeler dealers have created. We buy their worthless debts.

The same guys who did everything possible to resist any controls over their business practices now lead the resurgence (today at least) of the market based on aggressive tax-payer bailouts. Government regulates and we nationalize the debt AFTER the damage has been done. Ptoeey.

Joe Stiglitz, the Nobel Prize winning economist, says that just as the fall of the Berlin Wall symbolized the collapse of the Soviet Communist model, current events harken the end of the Milton Friedman / Chicago School of Economics laissez-faire notions of economics.

Whattya think? I think we should have seen this coming but we all hoped it would be later rather than sooner.
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Postby malmo » Fri Sep 19, 2008 1:23 pm

Q Well, I want to give you a chance to respond to what Speaker Pelosi is saying, because it really seems like the -- at least the sort of finger-pointing is ratcheting up, accusing Republicans, and it sounded like the White House, of mismanagement of financial-market regulation. It really seems as though there's a accusation that the White House is to blame in some way, or the Bush administration policy is to blame in some way. Your response?

MS. PERINO: Well, unfortunately -- unfortunately, I don't think that the reaction of finger-pointing from Democrats to the White House is anything new.
I would ask you to go back and look and ask Speaker Pelosi or any of the other Democrats who are pointing fingers, what specific regulation did they want that we blocked? What specific regulation did we eliminate? In fact, it was the White House that worked to try to get them to act on GSE reform as early as 2003. Unfortunately, they did not act on that until most recently when there was a crisis and we got the authorities that we needed in August of 2007. What we were looking for in that GSE reform was a strong regulator. That's what we wanted. It was more regulation, more transparency, and a stronger independent regulator who could actually look at the books of the GSEs, Fannie Mae and Freddie Mac, and tell us exactly what was going on.

In addition to that, we wanted FHA modernization so that more low-income people could have their mortgages backed by the FHA. They didn't move on that until there was a crisis at hand. We wanted rules -- they're called RESPA rules, I can't remember what it stands for, it's Real Estate Settlement Act -- but it would help people understand what they're getting into when they have a loan. Unfortunately they didn't act on that. Hank Paulson's regulatory blueprint that he laid out early last spring fell on deaf ears to the Democratic members of Congress.

Q But there's a -- I guess a criticism raised is sort of a philosophical question that a cornerstone of Republican philosophy has been deregulation, less government, less regulation. And so the extension of that thought is that this is what happens when you have less regulation.

MS. PERINO: But let me -- but again, I would go back and ask you, can they name one regulation that we eliminated? Can they name one regulation that they wanted to have us implement that we blocked? And I'm sure that they can't. And what we have asked for is smarter regulation across the board, and that's what we have laid out. We had a regulatory blueprint for them to follow, and they declined not to. But as I said yesterday, we're not going to be in the blame game. We're going to continue to lead, act and govern and take the necessary steps to prevent broader damage to the economy.

and this gem:

Senate Majority Leader Harry Reid, asked today what actions Congress can take, said, bluntly, "No one knows what to do."
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Postby sprintblox » Fri Sep 19, 2008 3:29 pm

Pego wrote:The way I understand the Muslim way of doing business (not sure of the source) is that they simply replace interest with some sort of fees. A different instrument, same music.

I don't know how they deal with interest on bank accounts, but what they do for mortgages is that the bank buys the house, then sells it over to the individual in installments over an agreed number of years. Profit is built into the installments, as they are allowed to buy and sell goods at a profit although they can't charge interest per se.

If the resident stops making payments, the bank doesn't have to go through complicated foreclosure proceedings, as the bank already owns the house.
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Postby Kurt Francis » Fri Sep 19, 2008 4:39 pm

bad hammy wrote:It is weeks like this that point out one of the problems for average workers when companies replace pensions with 401k programs.



Why is it that people keep thinking themselves as "workers"??? That kind of nomenclature is straight out of Karl Marx socialism. Refering to EMPLOYEES as "workers" removes the responsibility that people have for improving themselves in life. It also implies that those who run companies are somehow NOT working. Nothing but class-warfare nomenclature designed by Marxist followers to pit classes against each other.

PEOPLE ARE RESPONSIBLE FOR THEMSELVES! If you want to get ahead in life, it is up to YOU! It is not the responsibility of employers to make your life better. In the USA, one has the greatest opportunities in life to be whatever you want to be and achieve whatever station in life you want to achieve. Aside from fraud, no one else has anyone else to blame for their status in life than the person looking back at in the mirror.

I have found that most of the poor in life in a country like mine are poor because of decisions that they made, not because the decisions of others. I have been my own worst enemy because of decisions that I've made, not because of others.

I hope people come to realize that they are far more capable of improving themselves through hard work and wise decision making than through any government program. The best government is that which stays out of the way of people. Government should be there to provide physical security both internally and externally, the physical infrastructure of the country, and laws through which people transact business. Our current system is rife with socialist-utopian ideals where trillions have been transferred from one generation to another in the forms of Social Security, Medicare, Medicaid, and the whole host of other socialist programs. Far more has been confiscated from taxpayers in the forms of these programs than has ever been spent on those duly noted in the Constitution.

badhammy, this is not meant as a rant against you. I am speaking out in general against the prevalence of Marxist-socialst philosphy and its practice in today's world. It robs people of the motivation needed to improve their own circumstances in life.

QUIT LOOKING TO OTHERS TO IMPROVE YOUR LIVES, PEOPLE! YOU ARE RESPONSIBLE FOR YOURSELF!
Last edited by Kurt Francis on Sat Sep 20, 2008 3:38 am, edited 1 time in total.
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Postby lonewolf » Fri Sep 19, 2008 4:43 pm

What Kurt said.
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Postby SQUACKEE » Fri Sep 19, 2008 4:57 pm

Ask not what your country can do for you....but rather ask what you can do for your country...JFK
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Postby rasb » Fri Sep 19, 2008 5:02 pm

lonewolf wrote:What Kurt said.


What Kurt said is absolute crap. Make an intelligent argument, don't resort to outdated labels - i.e, Marxism, Socialism, etc.
The facts are clear --- the big money boys are absolutely free-market economy guys, until things go wrong, and then they are the first to cry for Government intervention. How many different ways do you want it? The USA was scheduled for a $ 400. billion deficit for the year, before this latest crisis. Now, with maybe another trillion or so "solving the crisis", where do you think that money is coming from? The Wall Street Gang are fine, but the guy/gal whose retirement funds are being raped and pillaged, and their jobs are being shipped overseas, and their home values are plummeting, are not doing fine. I guess where Kurt and I might agree is that the only clear thing about the American economy is that you are either the screwer or the screwee.
Maybe that's a fine set of values for some - not me. Of course, I live in Marxist-Socialist Canada, so my opinion is irrelevant. :)
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Postby bad hammy » Fri Sep 19, 2008 5:12 pm

Kurt,

Wow, did you have maybe too much coffee today??? All of that just because I used the word 'worker'???? Last time I checked anyone who earns a living, generally with a resultant paycheck, was by definition a worker. Get a grip . . .
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Postby malmo » Fri Sep 19, 2008 5:37 pm

rasb wrote:and their home values are plummeting, )


Do you really believe that over-priced homes shouldn't fall in value? What are you smoking?
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Postby bad hammy » Fri Sep 19, 2008 5:55 pm

malmo wrote:Do you really believe that over-priced homes shouldn't fall in value?

Not when you're trying to sell it!
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Postby malmo » Fri Sep 19, 2008 6:08 pm

bad hammy wrote:
malmo wrote:Do you really believe that over-priced homes shouldn't fall in value?

Not when you're trying to sell it!


I want to buy stuff that I can't afford and sell it for more than it's worth too. Who doesn't? But if I can't make the payments on the over-priced stuff and/or have to sell it for a loss, who's fault is that?
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Postby rasb » Fri Sep 19, 2008 6:21 pm

malmo wrote:
rasb wrote:and their home values are plummeting, )


Do you really believe that over-priced homes shouldn't fall in value? What are you smoking?


Smoking nothing - just sipping some fine Canadian home brew.
But, malmo, you know what I am saying. Don't just pick out one snippet, and try to make your point, please. My impression is that the average, hard-working American family, who are just trying to keep their jobs, and raise their kids, and have a life, are being buffeted (no pun intended) by forces which are totally beyond their control or comprehension, really, because who can comprehend that the Feds will jump in and bail out this or that, and then change their minds, and then change them again. My sense is that the worst is far from over, and you honestly don't believe that the little guy on the street is responsible for this mess, do you? Or can somehow immunize themselves to avoid what's going on?
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Postby malmo » Fri Sep 19, 2008 6:48 pm

rasb wrote:
malmo wrote:
rasb wrote:and their home values are plummeting, )


Do you really believe that over-priced homes shouldn't fall in value? What are you smoking?


Smoking nothing - just sipping some fine Canadian home brew.
But, malmo, you know what I am saying. Don't just pick out one snippet, and try to make your point, please. My impression is that the average, hard-working American family, who are just trying to keep their jobs, and raise their kids, and have a life, are being buffeted (no pun intended) by forces which are totally beyond their control or comprehension, really, because who can comprehend that the Feds will jump in and bail out this or that, and then change their minds, and then change them again


Yes, I agree with you. The average hard-working American family who, are just trying to keep their jobs, and raise their kids, and have a life, are being buffeted (no pun intended) by forces which are totally beyond their control or comprehension? What's new about this?

Those who bought houses that they couldn't afford, SHOULD lose their asses. This was totally within their control or comprehension.

Those who gave mortgages to people without verifiable income or credit then repackaged them into undecipherable CDOs and shipped it off in "traunches" to institutional investors, all of them with MBAs from top schools, lost their asses. They SHOULD lose their asses. It was "totally within their control and comprehension" too.

AIG and Bear Stearns had too much counter-party risk to let them fend for themselves. Lehman Brothers had no excuses (they were both predator and victim in this debacle) nor a legitimate compelling interest to be bailed out.

You can sum this whole debacle up in two words: TULIPS and LEMONS.
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Postby rasb » Fri Sep 19, 2008 7:10 pm

Yes, that is a fair enough summary.
Obviously, you are way on the inside of some of this debacle, and I am just commenting from the outside.
What must be frustrating is not being able to determine whether you are a TULIP or a LEMON, until you have heard what the FEDS are going to do or not do about any particular bail out possibility.
I'm thinking the average guy/gal with a Pension Plan has been adviced that AIG, Bear Stearns, etc., will be great long term holds, and allow them to retire with no worries - right?
And also, that the average guy/gal who is out trying to buy a house for their family to live in, is not really in a position to assess whether that property is about to lose 50 % of it's value in the next 12 months --- it's just not on their radar, and we can discuss whether it should be, but they may be more involved in doing their daily job, and driving their kids to soccer (not hockey), and keeping their relationship working, and so on...Never mind that the heads of the corporate ladder are about to decide that their job can be outsourced to wherever, and they are now expendable. There is no easy answer to some of these issues of course, but the dialogue around solutions should be at a record level, as some of the problems seem to be.
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Postby malmo » Fri Sep 19, 2008 7:29 pm

rasb wrote:What must be frustrating is not being able to determine whether you are a TULIP or a LEMON,

Tulip refers to Tulip craze. We've had two of them in the last ten years no, the Tech Bubble and the Housing bubble. Both were irrationally overpriced. "Lemon" refers to CDOs. They were lemons from the get-go.

rasb wrote:And also, that the average guy/gal who is out trying to buy a house for their family to live in, is not really in a position to assess whether that property is about to lose 50 % of it's value in the next 12 months --- it's just not on their radar, .


The biggest single expense of one's lifetime and you're telling me people don't know when it is overpriced? You mean to say that mom and pop middle America would pay $60,000 for a Toyota Camry and not know it's overpriced? Mom and pop are really good at seeking deals at flea markets, why do they pay too much for a home?
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Postby lonewolf » Fri Sep 19, 2008 8:13 pm

Granted and regretably, average people, through no fault of their own, do lose money when companies by which they are employed or in which they are heavily invested go belly up. But, it is not my fault.
The trick seems to be to invest in a corporation so huge that the economists in charge of national fiscal policy/pursestrings deem it too big to be allowed to fail.
I feel no obligation to rescue people who buy houses they cannot afford or the lending institutions that make it possible and I bitterly oppose the "golden parachutes" for the officers of mismanaged corporations.

Where do you draw the line? Nobody reimbursed me when I lost tens of thousands dollars in the Enron debacle or more than a million dollars when my book distributor filed bankruptcy or more than three million when a refinery refurbishment project collapsed under irrational federal environmental regulations. Nobody makes up my loss when I drill a dry hole or a marginal well does not pay out.

Nor should they. I made these investments with my eyes wide open. Some worked out, some didn't.
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Postby paulthefan » Fri Sep 19, 2008 9:49 pm

lonewolf wrote:Where do you draw the line?


investment bank CEOs have been deemed entitled to millions of dollars by other bank CEOs.
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Postby Kurt Francis » Sat Sep 20, 2008 3:31 am

DELETED - Accidental quote instead of edit from above
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Postby Kurt Francis » Sat Sep 20, 2008 3:53 am

bad hammy wrote:Kurt,

Wow, did you have maybe too much coffee today??? All of that just because I used the word 'worker'???? Last time I checked anyone who earns a living, generally with a resultant paycheck, was by definition a worker. Get a grip . . .


Bad hammy,

Like I said, my comments were not directed at you personally. The term "worker" is a term used by those who promote class warfare in the political arena. The underlying assumption behind it is that there are certain people who "work" and those above them don't.

I AM NOT A WORKER. I have been an EMPLOYEE, freely choosing to trade my time and labors in return for monetary rewards. I make no claims to rewards other than those that I have duly earned.

I have now moved into the role of OWNER, having recently begun my own business. I will engage in activities that I freely enter into, as I did as an employee, with greater risk now in hopes of greater rewards. However, I still make no claims to rewards other than those I agree to that I have duly earned with my customers.

Sorry, Bad hammy, but the term "worker" is a perjorative word with me, and no, I have no coffee this morning, yet. Just getting warmed up in the bullpen :D
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Postby Kurt Francis » Sat Sep 20, 2008 4:19 am

rasb wrote:
malmo wrote:
rasb wrote:and their home values are plummeting, )


Do you really believe that over-priced homes shouldn't fall in value? What are you smoking?


Smoking nothing - just sipping some fine Canadian home brew.
But, malmo, you know what I am saying. Don't just pick out one snippet, and try to make your point, please. My impression is that the average, hard-working American family, who are just trying to keep their jobs, and raise their kids, and have a life, are being buffeted (no pun intended) by forces which are totally beyond their control or comprehension, really, because who can comprehend that the Feds will jump in and bail out this or that, and then change their minds, and then change them again. My sense is that the worst is far from over, and you honestly don't believe that the little guy on the street is responsible for this mess, do you? Or can somehow immunize themselves to avoid what's going on?


Yes, the "little guy" on the street is to blame, also, for ageeing to loans that were well beyond their means to affordably pay off. Nothing is guaranteed in this life, nor should it be, as we are all human beings with inherent flaws. Much wisdom has been passed down from the ages with regard to how to conduct oneself in financial matters, yet people, including myself, fail to heed such wisdom from hard learned lessons of the past. For instance, the wisdom of not agreeing to loan terms that would make housing more than 30% of your take home pay. Or buying a home when your credit is less than very good and ending up paying sub-prime interest rates.

Both lenders and borrowers have been at fault to the same degree in this mess. Both are guilty of greed. Both should suffer the consequences for their actions. I made my own mistakes financially in the past, and I paid everything I owned plus MUCH interest on the principal. I went through my own particular financial hell, and so should those suffering today. Unfortunately, this is how we learn as human beings. Without consequences for poor decisions, nothing is learned, and decisions like what have been made this week in the Fed have done little to change behaviors among enough people.

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Postby Pego » Sat Sep 20, 2008 5:14 am

malmo wrote:Those who gave mortgages to people without verifiable income or credit then repackaged them into undecipherable CDOs and shipped it off in "traunches" to institutional investors, all of them with MBAs from top schools, lost their asses. They SHOULD lose their asses. It was "totally within their control and comprehension" too.


I don't think, there would be much sympathy from any corner here for those predators, or people that bought homes well beyond their budget, but.....
Once are these potentially disasterous financial instruments repackaged into all sorts of mutual funds, owned by retirement funds and tank, the value of those mutual funds nosedives.
These are the people (current and potential retirees) that get hit without a fault of their own. I think, these are the "little guys in the street" of rasb and bad hammy.
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Postby tandfman » Sat Sep 20, 2008 5:49 am

I'm guessing that the very high end of the real estate market is going to fall apart soon. You've got all of these financial hot shot types who made a few million bucks a year for a few years and just assumed that they'd be doing that for the rest of their careers. So they went out and bought houses that they thought they could afford. Now quite a few of them are out of jobs, and many others are looking at having to live on their base pay (which may be a small fraction of what their total comp has been). They're going to have to reduce their housing costs, and there will be a whole bunch of multi-million dollar houses on the market.

If you're among the survivors of this mess and can afford to put that kind of money into your personal residence or second home, you may find some real buying opportunities out there. This would be a great time to trade up your house, if you have enough money to do that without otherwise compromising your lifestyle. There will be bargains.
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Postby jazzcyclist » Sat Sep 20, 2008 6:46 am

One idea that I've heard that I believe would have bipartisan support, would be that any company that gets bailed out by the government could pay no one in that company more than a GS15 for so many years or until the government gets repaid.
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Postby tandfman » Sat Sep 20, 2008 7:04 am

jazzcyclist wrote:One idea that I've heard that I believe would have bipartisan support, would be that any company that gets bailed out by the government could pay no one in that company more than a GS15 for so many years or until the government gets repaid.

I am as disturbed by excessive bonuses as anyone, but I'd be concerned that a restriction like that would cause talented and valuable executives to leave and seek appropriate comp elsewhere.
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Postby paulthefan » Sat Sep 20, 2008 7:31 am

tandfman wrote:
jazzcyclist wrote:One idea that I've heard that I believe would have bipartisan support, would be that any company that gets bailed out by the government could pay no one in that company more than a GS15 for so many years or until the government gets repaid.

I am as disturbed by excessive bonuses as anyone, but I'd be concerned that a restriction like that would cause talented and valuable executives to leave and seek appropriate comp elsewhere.


I have a talent too: Golf, lets go for a round and discuss how I can vote to give you a 10million dollar bonus while your company is soaring like a frozen turkey if you will vote on my board to give me a 20million dollar bonus, we can hire someone else and give him a GS15 salary to ensure that those bonuses do not show up on the balance sheet
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Postby jazzcyclist » Sat Sep 20, 2008 7:39 am

paulthefan wrote:
tandfman wrote:
jazzcyclist wrote:One idea that I've heard that I believe would have bipartisan support, would be that any company that gets bailed out by the government could pay no one in that company more than a GS15 for so many years or until the government gets repaid.

I am as disturbed by excessive bonuses as anyone, but I'd be concerned that a restriction like that would cause talented and valuable executives to leave and seek appropriate comp elsewhere.


I have a talent too: Golf, lets go for a round and discuss how I can vote to give you a 10million dollar bonus while your company is soaring like a frozen turkey if you will vote on my board to give me a 20million dollar bonus, we can hire someone else and give him a GS15 salary to ensure that those bonuses do not show up on the balance sheet

The bonuses would be considered part of the compensation under my plan and the the GS15 salary restriction would only apply to companies that had to be bailed out by the government, not all companies. Other companies would still be free to pay their executives whatever they want. The truly gifted executives would look at these companies as opportunities. If they're really good, they will be able to turn the company around and get paid anyway. The incompetent executives will stay stuck at a GS15 salary. Remember, Lee Iacocca agreed to work for a one dollar salary until he turned Chrysler around, but he didn't leave Chrysler empty-handed.
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