O/T: What's Next?

Page 9 of 10  
On Sun, 21 Sep 2008 16:40:42 -0500, Morris Dovey wrote:

Same thing apples to motorcycles - I've been riding for 57 years without any adverse results other than a rare case of road rash when I screwed up :-).
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Mike, you say that as if it is a bad thing. I've always wanted to own my own insurance company and now I do. I'm going to get interest on my money, of course so that makes it a great investment. The interest will assure that I have a comfortable retirement when the checks start rolling in. We're now eligible for the "Friends and Family Discount" on al AIG policies too.
With the added interest income, maybe I'll buy General Motors. As an owner, we all get company cars. Are you in?
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"Edwin Pawlowski" wrote

And since I have no credit card debt - zero, zip, nada, none, I should go out and get me a boatload while I can so it can be forgiven.
... and speaking of boatloads, there's that bass boat I've always wanted, and it's only $32,000 .... used!
I'm in!
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At a limit of say, 32 x 3 lb bass times 10 years.. lemme see... that's about $ 30 per pound of bass. Not including fuel, magaritas and maintenance.
That's okay. I paid $ 600 per duck on a trip once.
<G>
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Yeahbut you don't understand the real problem here Edwin. Leave it to the government to do a deal... So here we are, now part owners in our own insurance/finance company. Could be good - we should be expecting those nice big bonuses pretty soon, don't you think? I mean - just give it a short time to get things right, and then we should be able to expect those. But - like I said leave it to the government to screw up a deal. Just about the time the company is healthy enough to start paying us those sweet bonuses, we have to give the damned thing back.
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Mike Marlow wrote:

Greed was only the motivation. What the greed produced was an unstable structure without real support, like a house of cards. When it fails, it doesn't fail slowly, one element at a time, but in an accelerating cascade of failures. The suddenness shouldn't be a surprise.
It's worth noting that while Congress was aware of the mess all along the way, it chose to not act to promote the interests of ordinary citizens in a disturbingly bipartisan fashion.
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Morris Dovey
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Elrond Hubbard wrote:

I can understand how clue less TV talking heads can't grasp simple concepts but isn't the general public at least supposed to think on occasion? The country has a 6.1 % unemployment rate (historically never considered high or particularly significant). The mortgage industry has a approx. 6.2% default rate that is 3X higher than probably desired but well under the 40% rate of the 30's. The country has a well trained and educated work force. A infrastructure of roads, rail and air that allow relatively cheap and abundant transport. A farm and food production capacity dwarfing any historical norm. A college and university system that attracts the best and brightest from around the world. We have millions clamoring both legally and otherwise to get into the country. Please explain for us less mentally endowed how a temporary Wall street big paper shuffling debt problem trumps all of the real physical properties that actually make this a great and the most productive country in the world. In fact if the country in both the business and private sector could learn that credit should be used with serious discretion and that indeed you should pay cash whenever possible, long term we'll be much better off.......The easy credit and borrow mentality is really a fairly recent development (20-30yrs).....Rod
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Rod Jacobson wrote:

Uh ... you are going to confuse the Bush-haters and assorted other effluvium from the left with all those facts and numbers. See, you don't learn math when doing ritual tribal dances to get your political viewpoint clarified. The stock market is not the economy, this too shall pass, and - as you point out - we are not remotely in Depression era trouble. However, Comrade Obama and his fellow Marxists *are* in political trouble. They need to manufacture and emergency to have a hope of being elected.
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Avenue to entice people who are not credit-worthy to go into debt over (far over) their heads. Plus incompetents who sell Ponzi schemes of insurance on that exorbitant debt. It is a defect of laissez-faire and utter lack of regulation, as well expressed by the short sellers who now want to have their cloak of deception back now short selling has to be publicized unless totally forbidden. Finally the despicpublicans realize that unfettered financial deception has led us to the brink of financial disaster as a country, not just a few individuals and corporations, because of the domino effect and the ability of short sellers to trash big and small companies. My Lehman stock is still on the books, but practically worthless of course. The Us is founded on free exchange of information and free trade where people can take risks without having the wool pulled over their eyes. Indeed I have never voted Republican, but that doesn't mean that fisccal responsibility is really (REALLY) my first concern. Fairness is the only thing that trumps that.
As always, my opinions are just that, opinions, and I respect yours even if I disagree. I admit even to sometimes being wrong, but not this time, <grin>!
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Han
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Han wrote:

Ohhh, those poor people. They clearly cannot be responsible for themselves and need a huge government to be their daddy ... viva la revolucion comrade. Madison Ave. (and no one else, for that matter) has never managed to entice me into debt far over my head. Ditto most of my friends. However did we manage to do this without the help of Big Brother, I wonder?

What you have witnessed is NOT laisses-faire. A true free market would not be bailing out either the borrowers or the lenders. You and your ilk want to bail out the borrowers but screw the lenders. This is a particularly nasty bit of dishonesty. (Similarly, the bias of the right is to protect the lenders first - also a horrid travesty. Moreover, in many states, some kinds of insurance are mandatory (auto, leaps to mind). When you have government-forced insurance, you no longer have laissez-faire. In general, people love to criticize the defects of *interfering* with laissez-faire, while blaming it at the same time.

Or ... maybe the companies in question really were overvalued and needed the market to correct them. People with your views always make me chuckle. You act as if the short sellers have no market forces controlling stupidity on their part. There is a slight case to be made against naked short selling because it trades "value" without an underlying equity. But shorting as a general trading mechanism is no better- or worse than buying long positions.

Then let me be the first to point out to you that life is not "fair" and in some particular way, neither are markets. A Noble was won years ago (Hayek) for demonstrating that all opportunities to profit in markets come from an *imbalance* in information. (At least, that's how it was explained to me.) Should markets be *honest*? Yup. Should they be transparent? Yup. But markets are never going to be "fair".

At this point, it matters very little who is right or wrong. The Big Government monsters are using this set of events to further Federalize our nation. We have taken another gigantic step into the hell of a collectivist nation - in large part to our own foolish greed as individual citizens who want what we want without caring much whether we are legitimately entitled to it.
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I think we are much more alike than you suspect. I am for individual responsibility, and I do think those who went in over their head should not come off scott-free (sp?). But I still think the basic mistake for want of a better word is not enough regulation and oversight. In a free market there should be responsibility (enforced or natural) to prevent excesses such as the savings and loan debacle, the dotcom bubble and now the housing and debt bubble. To let the free market correct itself with boom and bust is not good governance.
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Han
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Han wrote:

Really? You think Federal regulators are more trustworthy and honorable than politicians and incompetent CEOs??? I don't. With the exception of the military and parts of the DOJ, most government jobs draw people who are *less* competent and would have trouble functioning in the private sector in my observation.

You need to read a bunch of Econ 101 stuff. What you propose is a fantasy: That free markets can be regulated and remain effective/efficient. You CANNOT regulate a financial system of any size without doing great harm to it. The idea that economies can be managed should have died with nauseating example of the USSR, but Western lefties never seem to get it.

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Han wrote:

Good heavens! How much more regulation can we stand!? After Enron, Sarbanes-Oxley should have prevented anything like happened to Lehman what with all of its reporting requirements, transparency, and data collection down to the smallest project. How much more intrusive do things have to get? As Hank Greeneburg stated, "there is no amount of regulation that can save you from bad management."
The problem here has been the fact that with the government backing these loans and pushing by regulation or threat the requirement for "affordable housing" (code for loans to people with little or no ability to repay), the onus of responsibility was removed from both lenders and borrowers, leaving the mess at the feet of taxpayers.
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Mark & Juanita wrote:

From a non-paritisan standpoint:
In 1999, Glass-Steagal was repealed. This law from the 1930's distinctly separated commercial and investment banking. Phil Grahmm (R) sponsored it, Clinton signed it. Grahmm soon became a banking lobbyist.
In 2007, The "uptick rule" was eliminated in the US stock markets. This allows hedge funds to grossy short stocks, in some cases greatly hurting the market cap of a company.
These should be re-regulated.
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B A R R Y wrote:

I'm about as anti regulation as you get, and I at least partly agree with you. The idea of naked shorting seems to be the ultimate ponzi scheme to me. It distorts the financial reality of the markets by trading "value" that doesn't even exist. On its face, it sure feels like a scam to me ...
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"B A R R Y" wrote

were imposed as a result of Joseph's Kennedy's pulling enormous amount of money out of the stock market during the 1929 crash. It was an anti Kennedy rule.
The big problem was not so much the short selling, which can work quite well as eveidenced in the futures and currency markets. It was the practice of "naked short selling". It was the ability to make a trade without putting up any of your own money. No matter how highly leveraged the futures and currency markets are. you put your own ass on the line with every trade. And you have the funds to back it up. The exchanges have strict margin requirements.
If you have a bad trade, you pay for it. And if you can't, your broker does. This keeps the traders honest. And this is strictly regulated. Some margin requirements were changed for a short while about three months ago. These were rescinded because nothing had changed and the risk was being addressed in the way that it had worked will for quite some time. That said, some brokerages that handle commodities and futures are tightening up on their margin requirements.
Anyway, what had occurred recently by the big boys speculating in stocks was that they were making some vry big short sells WITHOUT PUTTING UP ANY OF THEIR OWN MONEY. This is what John Mc Cain has been referring to as not having any skin in the game. The whole problem with the subprime martgages, etc has always been is that the folks who make the loans pass them off to others. And that is exactly what the stock short sellers had done. Without any risk to themselves, they make others pay for their trades. Indeed, in many ways, they fueled a market that may not have existed as strongly as it did because of their naked short sells.
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Lee Michaels wrote:

When?
Or do you mean "The List"?
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Within the last few days, I think last wednesday or thursday. Don't quote me on that. This is not my area of expertise. Just the general fallout I hear from the financial news. I do not directly work with stocks.
I do know that the naked short selling is now prohibited.
I am pretty sure that stock based futures are still intact. But these only exist for certain stocks and it is a very limited market. It hasn't really caught on. The equity index futures are available for that sort of thing. And all of these have strict margin requirements.

No.
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Lee Michaels wrote:

I read that only applies to a list of mostly-financial stocks.
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"B A R R Y" wrote

That could be. That sounds right.
Short selling of stocks in general isn't that popular.
But profiteering on the financial shipwrecks does seem quite popular in certain circles.
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