USA was 3 hrs away from Economic, Political Collapse... last Sept. by pizmobeach

I have a vote and I'm not afraid to use it!

"Urban unrest this summer. Already started in southern europe."

Europeans actually demand a benefit from their government, their society and their economy. They are unlike people in the US who are so beaten down by rampant capitalism they feel grateful to get tinkled-on.

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Silence is consent.

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Thursday, February 12, 2009 7:04 AM

PIZMOBEACH

... fully loaded, safety off...

Quote:
Originally posted by Hero:
Quote:
Originally posted by NewOldBrownCoat:
How come nobody else anywhere respectable has reported this?

Because its a load of crap. At best its part of the continuing effort to scare up stimulas support by ignoring the last fifty years and pretending we're looking at the worst economy since the great depression. At worst its crazytalk.

So they picked this guy as their front man for this? Think they'd have picked someone better known, and a different look...

at least a better venue, like one a lot of people would see.

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Thursday, February 12, 2009 7:04 AM

NEWOLDBROWNCOAT

Quote:
Originally posted by Hero:
Quote:
Originally posted by NewOldBrownCoat:
How come nobody else anywhere respectable has reported this?

Because its a load of crap. At worst its crazytalk.

H

I thought so too. Just too polite to come right out and say it

Did some further searching last night.

Conde-Nast Publishing has a nice piece showing that it didn't happen, with stats and numbers. I'm too lazy to actually go back and check the record, but I believe them. They wouldn't fake something that easy to check.
This guy Kanjorski turns out is chairman of the Financial Services Comittee or some such- the folks that have been grilling the Treasury Secretaries and Bankers. He questioned Paulsen just days later. He's the guy questioning the Bankers the other day. He went after Obama's guy a couple of times in hearings Never emntioned this again.

And ElRusho did mention it- found a link to his official site- but ya gotta subscribe to view what he had to say. I ain't gonna give that fat hoon-dahn any money just to have him link to the same video clip.

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Thursday, February 12, 2009 7:46 AM

I have a vote and I'm not afraid to use it!

"Because its a load of crap. At worst its crazytalk."

And yet - the Federal Reserve did increase bank guarantees to $250,000 and the major banks are truly insolvent. (see Roubini article, above)

So there you have it - the banking system has already failed, and the only thing keeping it going are the people who are keeping their money there. At present the failure is invisible. If there shoud be a run on the banks in any form, it will all come apart in a visible way.

BTW - a lot of the economy is about confidence, where the word con comes from in the phrase 'con-man'. If people lose confidence in the banks, the currency, or the economic structure then those things which have value due to common agreement lose all their value. And that includes gold, since gold has about as much use-value as lead or argon. Something Midas mythically found out centuries ago.

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Silence is consent.

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Thursday, February 12, 2009 8:34 AM

HERO

Quote:
Originally posted by rue:
And yet - the Federal Reserve did increase bank guarantees to $250,000 and the major banks are truly insolvent. (see Roubini article, above)

So there you have it - the banking system has already failed, and the only thing keeping it going are the people who are keeping their money there.

I note for the record that the only thing that EVER keeps the banks running are the people keeping their money there.

Banks failed. The banking system was in the process of self-correction. The FDIC guarantee was modified to protect capital while the system righted itself. That way if a bank went under due to the mortgage and credit crisis, the FDIC could take it over and then resell the bank to another bank, leaving depositers intact but with liabilities removed or minimized. Its why Citibank suddenly had branches in Columbus after last November...they bought a failed bank from the FDIC after TARP had stripped away its toxic assets.

H

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Thursday, February 12, 2009 8:45 AM

I believe in solving problems, not sharing them.

Quote:
Because its a load of crap. At best its part of the continuing effort to scare up stimulas support by ignoring the last fifty years and pretending we're looking at the worst economy since the great depression. At worst its crazytalk

The guy who predicted this, Dr Roubini, was hailed at Davos as having extraordinary vision. He's not a craptalker (like you). He knows a thing or two which support hs opinions.

You?

You're an ignorant pissant not worth any more of my time.

www.rgemonitor.com

---------------------------------
It's the end of the world as we know it, and I feel fine.

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Thursday, February 12, 2009 8:49 AM

I have a vote and I'm not afraid to use it!

"I note for the record that the only thing that EVER keeps the banks running are the people keeping their money there.
Banks failed. The banking system was in the process of self-correction."

Not really. The entire banking system worldwide is precarious, and it's not a matter of one bank, or two - but of them all going down, like dominos.

And the only thing holding the entire SYSTEM up now - is people too stupefied to notice.

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Thursday, February 12, 2009 9:08 AM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)

Quote:
Originally posted by citizen:
Quote:
Originally posted by kpo:
So I don't see how any of their economic success could be credited to socialism, since the only aspect of these countries that is (vaguely) socialistic is an economic burden.

Seems more a vague ideological dismissal of evidence than anything else. You're unwarrantably dismissing any positive effects these "socialistic economic burdens" may have on society and it's economy. Perhaps they're not net burdens? Perhaps they cost on the front end, and pay for themselves many times over on the back.

I think it's interesting that the more heavily socialism plays in the states of Europe, the better their economies perform per-capita. Denmark for instance, probably one of if not the most socialist of all the states of Europe, is the second highest per capita economy in the world. It's outstripped only by Luxembourg, which is a tiny principality and tax haven for the rich.

While your calling them 'soft-socialism' and remarking on how all the success is really down to capitalism, you might want to remember that the implication of 'soft-socialism' is that they're also operating 'soft-capitalism'. I'd put it that neither socialism OR capitalism really create a workable system, which is why no state has successfully implemented either (try to find a purely capitalist society now or in history). It's pretty clear to me, that Capitalism can't function without 'socialist' programs like the police, like a universal education system, hell like the dole and even universal health care. Think about it, you fall ill you can't work. You lose your job and there's no safety net, you might never again become a productive member of society, I'd be willing to bet that's more costly to the economy overall than the cost of the programs in the first place.

Your statement could be fairly easily turned on it's head. Perhaps the success of these countries is all down to socialism, and Capitalism is just a social drag, that helps pay for it.
Quote:
Originally posted by kpo:
Are you guys all still waiting for an exemplary, purely socialist, model state that you can hail as a success? Because a lot of times people have got hold of countries and tried to create one... I'd be interested to know how you account for quite a long catalogue of failures.

There have never been any socialist states. Show me an example of one. There's been some communist ones, and a few that have called themselves socialist, but that's a different thing entirely. As I said elsewhere, the Democratic Republic of Congo is neither Democratic, a Republic, or in the Congo (which is a river that runs through it, also known as the zaire).

More insane ramblings by the people who brought you beeeer milkshakes!
No one can see their reflection in running water. It is only in still water that we can see.

Cit:

THANK YOU!!

I think you're on the right track; countries like Sweden, Canada, and Denmark DO have more "socialism" than other "capitalist" countries - yet they still somehow work BETTER than many other nations. How can that be? Could it be that BECAUSE of the social programs, people are better prepared and more able to work harder and be more competitive?

Imagine this: Your tax rate is some 40 percent - $40 out of every $100 that you earn goes straight to the government, before you even get your check. BUT you pay no health insurance; you pay no income tax, nor sales tax, nor property taxes, nor luxury taxes. You pay no tuition - if you want to go to college, you show up and enroll. If you want to go to a shrink, you show up and talk about your mother (do ALL shrinks start with your mother?). You want to go on vacation? Go for it - you've got time off, paid.

So the 60% of your pay that actually goes home with you is YOURS - you can buy a car with it (but your car insurance is paid already), get a bigger house, buy clothes, buy stinky cheese and strong, room-temperature beer, whatever you want, because your disposable income is actually disposable. The basics are already covered.

Sound like hell? It's called Denmark, and it's right here on Earth, today. Or so I'm told...

Mike

"It is complete now; the hands of time are neatly tied."

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Thursday, February 12, 2009 9:19 AM

PIZMOBEACH

... fully loaded, safety off...

Quote:
Originally posted by rue:
Pizmo

If you are looking for non-obvious places in the home may I suggest the compressor compartment in your refrigerator ? Or the gap behind the kickplate under your kitchen counters ?
.

Sorry, first place my wife would look.

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Thursday, February 12, 2009 9:23 AM

I have a vote and I'm not afraid to use it!

Most people would look in closets and cupboards and under beds. Some people might look in freezers and toilet tanks. Your wife must be one of those a natural-born finders.

But, not to be toooooooo nosy or anything like that - why would you not want your wife to find the family money ?

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Oh, just b/c it tickles me - my car - which is 95 Corolla SW - has two modifications. One is a toggle switch on the dash that disables the front passenger door electronic door lock (due to transporting a family member who has lots of seizures where they do goofy things like play with the lock and seat belt - called automatisms.) The other is an ignition switch built in to the cigarette lighter. I always get a giggle thinking that anyone trying to steal the car will be flipping the toggle back and forth trying to make the car start.

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Thursday, February 12, 2009 10:07 AM

JONGSSTRAW

Quote:
Originally posted by pizmobeach:
According to Rep. Paul Kanjorski (D) (PA-11), in mid-September of 2008, the United States of America came just three hours away from the collapse of the entire economy.

Rep. Kanjorski: "It would have been the end of our economic system and our political system as we know it."

I don't believe any of that, never did, never will. The crooks who stole all the money from Wall Street were and are the same crooks who got all the Federal Tarp money. What did they do with it? I think everryone knows what they did with it. It's all total bullshit, and until these bastards are arrested, prosecuted, and convicted for their crimes, no one will have any confidence to invest a dime in the rigged Wall Street shell game.

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Thursday, February 12, 2009 10:09 AM

I believe in solving problems, not sharing them.

Quote:
anyone trying to steal the car will be flipping the toggle back and forth trying to make the car start.

Bweh heh heh heh!!!

Oh, that's just.... MEAN!!!!

---------------------------------
It's the end of the world as we know it, and I feel fine.

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Thursday, February 12, 2009 10:11 AM

I have a vote and I'm not afraid to use it!

For those (Hero) who still think the problem is a merely few failed US banks:

http://www.rgemonitor.com/

Asia Amid Global Crisis: It's Different This Time; Will the Recovery Be Different Too?
----------
U.S. Oil and Gas Demand and Supply: A Sharp Build in Inventories, Still Bearish For Oil?
----------
Chinese Exports Contract by 17.5% in January How Deep Will the Export Slump Get?
----------
Will Russia Restructure Its Corporate Debt?

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Silence is consent.

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Thursday, February 12, 2009 10:19 AM

I believe in solving problems, not sharing them.

Quote:
I don't believe any of that, never did, never will. The crooks who stole all the money from Wall Street were and are the same crooks who got all the Federal Tarp money. What did they do with it? I think everryone knows what they did with it. It's all total bullshit, and until these bastards are arrested, prosecuted, and convicted for their crimes, no one will have any confidence to invest a dime in the rigged Wall Street shell game.

The problem is JS that both can be true at the same time: The system WAS within hours of collapsing AND its was rigged. It was an economic game of chicken.

Waaaaay back when in May 08 or thereabouts, long before the collapse was being talked about by anyone (but Roubini and me!) I found an interesting analysis by a UBS economist. Basically he tallied up the risks, looked at all of the leverage and said: A bailout by October (2008) is a sure thing. Because nobody would let the system fail. So the PTB drove the system over a cliff then got their golden parachutes. And WE, poor sods, had to ante up because we were going to rooked no matter what.

I'll see if I can find that quote. It was damn chilling.

String them up and take their money. That's MY view.

---------------------------------
It's the end of the world as we know it, and I feel fine.

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Thursday, February 12, 2009 10:21 AM

http://youtu.be/VUnGTXRxGHg

You know what we need to do?

Restructure our cash.

Insert strips of gold into every dollar, more in 5s and 10s. 100s get platinum. Change gets copper.

Money would then have intrinsic value.

Just shooting that out there.

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Thursday, February 12, 2009 10:31 AM

I believe in solving problems, not sharing them.

Here it is (from the Financial Times of London):

"A homeowners' bailout by U.S. Congress is a "surefire thing", according to George Magnus, UBS senior economic advisor, and the first bailout package is likely to be implemented by October...

Looking at the losses in subprime and collateralised debt obligations and related instruments, including the spillover into leveraged loans, for example, certainly colleagues and I think that it's something of the order of about $500 or $600 billion, which would make it on a scale of the banking crisis of Japan between 1990 and 1994. But I'm afraid we're still counting, because on top of all of these problems that we've had, of course, the US economy is in or close to being in a recession and the European economy is clearly slowing down very significantly... If you want to take a sort of a round number, something close to $1,000 billion at the end of the day is not an impossible number...

I think the central banks are, or at least the Federal Reserve, I think, has taken out a very, very extreme form of insurance against this sort of meltdown. And, clearly, the speed and the rapidity with which interest rates have come down is indicative of that, and most people agree that that's not the end of the story that the Federal Reserve will carry on cutting interest rates maybe at least another 100 basis points... But, actually, it's only a part of the solution...

I think that a bailout for homeowners in the United States is as close to a surefire thing as I can imagine. The losses on mortgages are so high and the stories and estimates which, perhaps, more significantly, people make about repossessions and delinquencies in the housing market are so high that, especially in a presidential election year, I think it's just inevitable that there will be very strong action from the Congress...

And I think we have something of a time limit too because, of course, in October the US Congress goes into recess and the new Congress won't reconvene, I suppose, until after the State of the Union message in late January 2009. So by the time they get round to action it might actually be quite late in the day, so I think the first bailout package, to be honest, I think is going to happen between now and the end of October."

Unfortuantely, the bailout didn't go to the homeowners but the the very richest of the rich.

---------------------------------
It's the end of the world as we know it, and I feel fine.

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Thursday, February 12, 2009 10:42 AM

I have a vote and I'm not afraid to use it!

I also remember reading this when it was recirculated by the media late last year:

RBS Says Switch to Cash to Avoid 'Nasty' Selloff

CNBC.com | 18 Jun 2008 | 06:32 AM ET

The Royal Bank of Scotland issued a stark warning to investors Wednesday, stating global stock and credit markets could be on the verge of a steep market sell-off as central banks have their hands tied by soaring inflation, the Telegraph reported.

"A very nasty period is soon to be upon us - be prepared," Bob Janjuah, credit strategist at RBS, told the UK daily paper.

The S&P 500 index is likely to slump by more than 300 points by September, according to a report from the bank’s research team, as "all the chickens come home to roost" from over-easy lending practices and other excesses of the global boom period, the report quoted by the Telegraph said.

"I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names. Cash is the key safe haven. This is about not losing your money, and not losing your job," Janjuah told the paper

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Silence is consent.

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Thursday, February 12, 2009 10:59 AM

http://youtu.be/VUnGTXRxGHg

and Ron Paul was predicting this from WAAAAAAAYYY back.

In fact, when I talked to him he let me know that. (heheh, sorry to drop names)

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Thursday, February 12, 2009 11:05 AM

HERO

Quote:
Originally posted by rue:
The entire banking system worldwide is precarious, and it's not a matter of one bank, or two - but of them all going down, like dominos.

You can't compare US banks to foriegn banks. Foriegn banks are much more centrally controlled in almost every other nation. That means that the failure of one is very often the failure of all.

US Banks have never had that level of control. They operate more or less independently. This means that if, for example, 5th 3rd Bank of Ohio collapsed, Keybank would be unaffected...in fact Keybank would be among the many other banks looking to buy 5th 3rd. Which is exactly what happened when CitiBank bought a chain of closed banks in the Columbus area and National City Bank did its merger.

Its the same diversification of economic assets that allows our market to fall by 30% while others fall 80-90% in the same period.

Unfortunately it is also the very thing that the Obama administration is seeking to undo with their banking policy.

H

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Thursday, February 12, 2009 11:10 AM

HERO

Quote:
Originally posted by rue:
For those (Hero) who still think the problem is a merely few failed US banks:

It may be bigger, but if so there is massive accounting fraud.

We're giving a trillion dollars to prop up banks. Banks have NOT reported a trillion dollar missing from their bottom line. If they in fact need a trillion dollars and did not report it as required by law, that is illegal.

Also I visited that website. Not very helpful. If you want to know how many banks have failed...visit the FDIC.

H

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Thursday, February 12, 2009 11:14 AM

I have a vote and I'm not afraid to use it!

But if CitiBank or Bank of America go - and they are both insolvent - then the entire US system does collapse. Additionally, US banks and foreign banks are tied to each other through massive investments. How ? Those foreign banks buy our bonds to generate money for our vaults.

Or, if that doesn't do it for you, try applying a little logic to the immediate reality. If it wasn't the case then US banking troubles wouldn't have spread overseas so quickly - it would have taken a US economic collapse to perturb those banks through trade collapse and then economic disruption of those foreign economies.

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Silence is consent.

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Thursday, February 12, 2009 11:18 AM

I have a vote and I'm not afraid to use it!

No fraud Hero - banks only need a few percent 'capitalization' - actual money - to loan out 100% of the balance. The problem, as you may need some reminding, is when many people go to pull their money out. And which the banks - by law - are not required to have on hand. That is how banks fail.

***************************************************************

Silence is consent.

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Thursday, February 12, 2009 11:27 AM

Quote:
Originally posted by rue:
No fraud Hero - banks only need a few percent 'capitalization' - actual money - to loan out 100% of the balance. The problem, as you may need some reminding, is when many people go to pull their money out. And which the banks - by law - are not required to have on hand. That is how banks fail.

It's called leverage. Most banks work at a leverage of 30 times their worth. I believe Fannie Mae and Freddie Mac ran at around 70 times.

More insane ramblings by the people who brought you beeeer milkshakes!
No one can see their reflection in running water. It is only in still water that we can see.

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Thursday, February 12, 2009 12:12 PM

FREMDFIRMA

I refer to that as the parking garage model.

Like someone has a parking garage and oversells it cause won't everyone be parkin there at the same time, but instead of being reasonable about it, oversells it hard, neglects to keep it up, and skims a little off the profit to set up an automated phone runaround and retain a lawyer to stifle complaints as the money rolls in and he funnels it into some dominican tax shelter or holding company...

And then when it finally looks like it's gonna come apart, sells it off to a bigger corp and runs like hell for a country where it's too much hassle to extradite him from.

You know, like America Online did - and got away with, initially setting the standard for companies like Tyco and Enron to follow.

If you knew half of what that company inspired by example, you'd want to see Steve Case at the end of a rope as bad as I do.

-Frem

It cannot be said enough, those who do not learn from history, are doomed to endlessly repeat it

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Friday, February 13, 2009 6:56 AM

JONGSSTRAW

Quote:
Originally posted by rue:
banks only need a few percent 'capitalization' - actual money - to loan out 100% of the balance. The problem, as you may need some reminding, is when many people go to pull their money out. And which the banks - by law - are not required to have on hand. That is how banks fail.

That is a built-in guaranteed recipe for failure and chaos if ever I heard one. It's really nothing more than Madoff's ponzi scheme, except with a Federal Seal of Approval, and free toasters. A banking system based on the premise that everyone won't want to take their money out at the same time sounds utterly frightening to me. And now with banks paying a whopping 2% on CDs, they'll never get my money again.

Banks, Insurance Co's, Social Security, etc. etc. are all based on the same flawed principles, and when we need them the most, in a crisis, they fail. I guess the curriculum at Wharton & others taught these fine, upstanding financial leaders, with their meticulous suits and perfect executive hair to:

1. Rake in all the cash you can, anyway you can.
2. Pay out nothing, except the bare minimum needed to perpetuate the fraud.
3. When the castle starts to crumble, steal all of it for yourself, and then ask Bush & Obama for all that's been stolen back, and more.
4. Then buy several multi-million dollar homes as insurance against possible future prosecutorial financial ruin, and then top it off with a rousing celebration in the Bahamas over how filthy stinkin' rich you are, while laughing your ass off over all the millions of people you f'kd.

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Friday, February 13, 2009 7:20 AM

I believe in solving problems, not sharing them.

Quote:
I believe Fannie Mae and Freddie Mac ran at around 70 times.

Um, not really. They were better capitalized than banks because they were operating under a consent decree just about the time the subprime market REALLY took off. I can't find the exact figure, but I know it was better than 30:1. I'll try to post it later. BTW, US bank captalization requirements were set by USA policy at about 20:1. The Euro banks chose to follow Basel II capitalization requirements, which allowed them to leverage at 30:1.

But if you really want to gain some insight, you should ask yourself (1) What would happen if the banks only loaned the money they actually had on -hand? (instant collapse) and (2) What is it about the economic system that REQUIRES so much lending. (Hint: Its' all about the money supply.)

Jongstraw: I'm with ya there, man!

---------------------------------
It's the end of the world as we know it, and I feel fine.

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Friday, February 13, 2009 7:44 AM

Quote:
Originally posted by SignyM:
Um, not really. They were better capitalized than banks because they were operating under a consent decree just about the time the subprime market REALLY took off. I can't find the exact figure, but I know it was better than 30:1.

I'll have to look for the figures for Fannie, but Freddies clearly indicate otherwise.

Freddie Mac's figures:
http://www.freddiemac.com/investors/er/pdf/financial-statements_080608
.pdf

Total Liabilities = $865,964 Million
Stock Holders Equity = $12,948 Million

865,964 / 12,948 = ~66.8.

Quote:
I'll try to post it later. BTW, US bank captalization requirements were set by USA policy at about 20:1. The Euro banks chose to follow Basel II capitalization requirements, which allowed them to leverage at 30:1.

Average American Banks leverage at the end of 2008 was 25:1. Some were higher, some were lower.

EDIT:
Found some figures for Fannie Mae. They're harder to sift through, and I really can't be bothered to read through the whole thing, but these seem to be what we're looking for:

I used the "estimated fair value", page 59:
http://www.fanniemae.com/ir/pdf/earnings/2008/q22008.pdf

Total Liabilities: $892,378 Million
Shareholder Equity: $12,452 Million

892,378 / 12,452 = 71.6

The GAAP Carrying values from the same sheet paint a different picture though:
Total Liabilities: $885,918 Million
Shareholder Equity: $41,226 Million

885,918 / 41,226 = 21.4

More insane ramblings by the people who brought you beeeer milkshakes!
No one can see their reflection in running water. It is only in still water that we can see.

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Friday, February 13, 2009 8:42 AM

KWICKO

Quote:

Total Liabilities: $892,378 Million
Shareholder Equity: $12,452 Million

892,378 / 12,452 = 71.6

The GAAP Carrying values from the same sheet paint a different picture though:
Total Liabilities: $885,918 Million
Shareholder Equity: $41,226 Million

885,918 / 41,226 = 21.4

Am I the only one looking at those two sets of numbers with the :shock: look on his face?

I mean, they're accurate to within plus-or-minus fifty per cent, eh?

Scary shite.

Mike

"It is complete now; the hands of time are neatly tied."

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Friday, February 13, 2009 8:55 AM

Quote:
Originally posted by Kwicko:
Am I the only one looking at those two sets of numbers with the :shock: look on his face?

I mean, they're accurate to within plus-or-minus fifty per cent, eh?

Scary shite.

Good ain't it. Reading through their criteria, I would actually lean to the first set being more accurate. Despite the GAAP figures being industry standard, they seem to be based on how much things should be worth, rather than how much they are worth. If I'm reading it right it indicates the GAAP values are the 'on books' ones, and the Fair estimates are an estimate of their actual worth.

Of course to admit my own bias, the first set are the ones that support what I said, and the second are more in line with Signym. However the value of the shareholders equity is how much it is worth, not how much it was bought for, or how many dollars were put in. The sheet seems to indicate there's nearly a $30,000 Million dollar deficit there. Maybe Signym can weigh in?

EDIT:
Also the estimated figures are more in-line with those of Freddie Mac.

More insane ramblings by the people who brought you beeeer milkshakes!
No one can see their reflection in running water. It is only in still water that we can see.

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Friday, February 13, 2009 9:24 AM

I believe in solving problems, not sharing them.

Ugh. Too much accounting!

My brain... I can feel it going... Dave... stop.....

Been dealing with professional crisis, family problems and personal illness so, on a quick note:

My understanding is that capital calculations are VERY rigidly calcuated. Tier I capital includes common and preferred stock, retained earnings, capital surplus, treasury stock, reserves, and stock options which are under the sole control of the institution. I guess that's all good unless the value of the stock drops significantly, in which case the institution's capital reserves suddenly start looking thin.

The problem is that an institution's stock price can drop for reasons that have nothing to do with the soundness of institution itself or of its underlying investments, including general market panic. In fact, some of the more conservative institutions were "negatively rewarded" by a drop in stock prices because they weren't offering the highest rates of return (generated by predatory lending).

I dunno. It's all a swirl to me. I try to follow it: mark -to-market accounting, CDOs, tranches, mezzanine products, calls and puts... but none of it really makes sense. It's gone way beyond the simple concept of making and selling goods and into the very stupid concept of making money with money.

Ask me in about a year if I've got it figured out. Maybe by then, I will have.

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Friday, February 13, 2009 9:27 AM

I believe in solving problems, not sharing them.

BTW- thanks for linking that report! In my quest for a better general education, I'll do my best to read it!

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Friday, February 13, 2009 9:52 AM

Sometimes you own the libs. Sometimes, the libs own you.

Quote:
Originally posted by rue:
kpo

The 'weight' that you seem to think is 'soft socialism' is actually the fuel that keeps capitalism running.
B]

This strikes me as a poor analogy - surely people (their talents, efforts and enterprise) are the fuel in the capitalist engine? There is therefore an economic argument for taking care of people, with social welfare - as well as obvious moral arguments. But you don't think that there is a balance in this, that spending more and more on social welfare can place a burden on an economy?

And of course the US is already balancing itself, spending significantly (tho not as much as other countries) on social welfare.

So what you guys are contrasting as black and white, capitalist and socialist (in order to claim a victory for socialism), are just different shades of grey - and not even of the engine itself, but the fuel...

Because, I would say that all of the countries you compared have *black* capitalist engines, it is only the fuel which is a different shade of grey (in that the welfare of the *people* is socialised to a different extent).

By my definition of socialism it is an engine not a fuel(primarily a model for industry, right?), a white alternative to the black capitalist model. We see many well functioning capitalist engines, with some adjustments to stop them blowing up (they sometimes fail) - why are there no well functioning, white socialist engines? Is the idea of one just a pleasant fiction?

I don't mean to keep challenging you specifically Rue, by the way - I think by chance i may have been singling you out a lot lately... it's nothing personal!

Heads should roll

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Friday, February 13, 2009 9:58 AM

I have a vote and I'm not afraid to use it!

After investment banks pushed the federal reserve, the capitalization rate dropped to as low as 33 to 1: http://www.nytimes.com/2008/10/03/business/03sec.html?pagewanted=all
Agency’s ’04 Rule Let Banks Pile Up New Debt
At Bear Stearns, the leverage ratio — a measurement of how much the firm was borrowing compared to its total assets — rose sharply, to 33 to 1. In other words, for every dollar in equity, it had $33 of debt. The ratios at the other firms also rose significantly.

Fannie Mae and Freddie Mac, which don't write loans, originally had 80% capitalization requirements, which were dropped to 70% in 2008 to help liquidity.

I couldn't find general figures for US commercial banks, but my recollection is somewhere around 2%, or a ratio of about 50 to 1.

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Friday, February 13, 2009 10:00 AM

Sometimes you own the libs. Sometimes, the libs own you.

Quote:
Originally posted by SignyM:

FWIW, what the right wing refers to as "socialism" fails to meet the most basic definition. So maybe we could call it a "welfarism" but not socialism.

B]

I agree with this (only just saw it), seems like a correct distinction.

Heads should roll

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Friday, February 13, 2009 10:00 AM

FREMDFIRMA

Ouch, glad I don't have my money in that system.

Although right now I got as much in metal and stones as imma sink there, and while the ammunition* markets doin pretty well currently, imma lookin for other investments into hard, tangible goods, myself - might be able to pick up some bargains given the current economic status.

*I got my hooks deep in some folk at Igman, by virtue of personal contacts deployed there who spoke the language and experience with metal trade/sales contacts which were useful to them.

Ergo, what with all the loons stocking up for doomsday and double-jumping the price of 7.62x39mm there's certainly a buck (BAM) to be made, especially when you can clout it to Euros at 2 fer 1 and then from there to USD for about 10%-15% more over.

And that's just on hooking up folks to the supplier without ever touching the product.

Personally, I find it hi-larious and ironical that so many of the white supremecist bastards buying ammo right now are doing so from those "lesser" peoples they supposedly hate so much, those of whom who KNOW this are both gouging them and laughing up their sleeve about it.

"It's nice to give them a REASON to dislike us for once, hahahahaha."
*said as he was tallying the books, too*

-Frem

It cannot be said enough, those who do not learn from history, are doomed to endlessly repeat it

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Friday, February 13, 2009 10:03 AM

FREMDFIRMA

Quote:
It's gone way beyond the simple concept of making and selling goods and into the very stupid concept of making money with money.

That would be the original definition of Usury.
http://en.wikipedia.org/wiki/Usury

Which has been considered a nefarious practice since it was invented.

EDIT: and on second thought, this is one place where Islam does a better job of things than we do, for all it's flaws.
http://en.wikipedia.org/wiki/Islamic_banking

-F

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Friday, February 13, 2009 10:04 AM

Quote:
Originally posted by kpo:
By my definition of socialism it is an engine not a fuel(primarily a model for industry, right?), a white alternative to the black capitalist model. We see many well functioning capitalist engines, with some adjustments to stop them blowing up (they sometimes fail) - why are there no well functioning, white socialist engines? Is the idea of one just a pleasant fiction?

I think it was earlier in this thread that I original asked, but could you provide any examples of purely capitalist economies?

I'd wager you can't find any. There isn't any, because Capitalism can't stand alone any more than socialism can, so declaring a victory for capitalism there would seem to be doing for capitalism what you accuse Rue of doing for socialism.

More insane ramblings by the people who brought you beeeer milkshakes!
No one can see their reflection in running water. It is only in still water that we can see.

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Friday, February 13, 2009 10:13 AM

Sometimes you own the libs. Sometimes, the libs own you.

Quote:
Originally posted by citizen:

Your statement could be fairly easily turned on it's head. Perhaps the success of these countries is all down to socialism, and Capitalism is just a social drag, that helps pay for it.

Come on, think in specific terms, how can the social welfare spending be directly responsible for any of the wealth generation? All it can ideally be is kind of a lubricant for the capitalist engine, which creates the wealth.

Heads should roll

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Friday, February 13, 2009 10:17 AM

I believe in solving problems, not sharing them.

Quote:
This strikes me as a poor analogy - surely people (their talents, efforts and enterprise) are the fuel in the capitalist engine?
The fuel of capitalist economies is capital: where it flows, who controls it. That's why it's called capitalism and not socialism.

Quote:
There is therefore an economic argument for taking care of people, with social welfare - as well as obvious moral arguments.

While there is an economic argument for taking care of people, you will not find that argument in capitalism.

Quote:
But you don't think that there is a balance in this, that spending more and more on social welfare can place a burden on an economy?

What IS the purpose of an economy EXCEPT to meet the needs of people? So how can people's needs be a "burden"?

But what I think you mean is: If too many people are consuming and not enough are producing, eventually that will lead to poverty for everyone.

And while that may have been true enough in a pre-technological society, when all work was done by hand and survival was a matter of relentless toil, with current production techonology one person can produce enough to meet the needs of many multiples of people. We are not anywhere near a shortage of productive capacity. What there is, oddly, is a shortage of DEMAND.

Quote:
And of course the US is already balancing itself, spending significantly (tho not as much as other countries) on social welfare.

The REAL waste of money is in military spending and profit.

Quote:
So what you guys are contrasting as black and white, capitalist and socialist (in order to claim a victory for socialism), are just different shades of grey - and not even of the engine itself, but the fuel. Because, I would say that all of the countries you compared have *black* capitalist engines, it is only the fuel which is a different shade of grey (in that the welfare of the *people* is socialised to a different extent).

Not sure what you're getting at here.

Quote:
By my definition of socialism it is an engine not a fuel(primarily a model for industry, right?), a white alternative to the black capitalist model. We see many well functioning capitalist engines, with some adjustments to stop them blowing up (they sometimes fail) - why are there no well functioning, white socialist engines? Is the idea of one just a pleasant fiction?

I'm having a hard time with your analogy. There is production, consumption, and surplus. There is money supply. There is "need" (which is the raw human condition) and there is "demand" (which is "need" mediated by money).

I think the nub that you're struggling with is the basic capitalist problem, which rears its ugly head in all its full glory every several decades: If you keep taking money out of circulation (which is what happens when money is removed as "profit") and concentrating it into the hands of fewer and fewer people, eventually nearly everybody will be able to buy almost nothing. That is how you wind up with the contradiction of the desperate unemployed: During the last Great Depression warehouses were full of good while people starved. Human need and human production were separated by lack of capital, which was sequestered away and unavailable.

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It's the end of the world as we know it, and I feel fine.

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Friday, February 13, 2009 10:17 AM

I have a vote and I'm not afraid to use it!

kpo

The world has already tried capitalism without pesky government taxes and social spending - that was Britain during the time 'The Adventures of Oliver Twist' and 'Jane Eyre' were published. There was great wealth of a very few and deadly poverty of the many. It was the impetus for the lengthy study 'Das Kapital'.

You have to ask yourself, if you have any perspective at all - what is the reason to support an economic system that ensures, at best, a marginal lifetime of drudgery (us wage-slaves) for all but a few thousand people out of 6.8 billion ?

What IS the purpose of an economy, anyway, if it isn't to take care of people ?

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Friday, February 13, 2009 10:25 AM

Sometimes you own the libs. Sometimes, the libs own you.

Quote:
Originally posted by citizen:

I think it's interesting that the more heavily socialism plays in the states of Europe, the better their economies perform per-capita. Denmark for instance, probably one of if not the most socialist of all the states of Europe, is the second highest per capita economy in the world. It's outstripped only by Luxembourg, which is a tiny principality and tax haven for the rich.

What's this, per capita income? But if everything in your country is more expensive because of added tax on things (to pay for the expensive social welfare) then your purchasing power and standard of life may be no better, or worse. It seems to me your argument is heavily flawed.

Heads should roll

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Friday, February 13, 2009 10:28 AM

Quote:
Originally posted by kpo:
Come on, think in specific terms, how can the social welfare spending be directly responsible for any of the wealth generation? All it can ideally be is kind of a lubricant for the capitalist engine, which creates the wealth.

That's not an example of any purely capitalist economies.

Why, precisely, does it have to be directly responsible any way? That would seem to be a semantic trick in order to dismiss contribution made by socialist programs. Does a public school system have a direct effect on the economy? I don't know, you tell me if you think a high standard of education in the populace will have a positive effect on a nations economy.

More insane ramblings by the people who brought you beeeer milkshakes!
No one can see their reflection in running water. It is only in still water that we can see.

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Friday, February 13, 2009 10:32 AM

http://youtu.be/VUnGTXRxGHg

Seriously, you guys have the answers... start your own society!

REALLY!

Make it heave on earth for you, and those who believe like you.

Just go away.

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Friday, February 13, 2009 10:33 AM

Quote:
Originally posted by kpo:
What's this, per capita income? But if everything in your country is more expensive because of added tax on things (to pay for the expensive social welfare) then your purchasing power and standard of life may be no better, or worse. It seems to me your argument is heavily flawed.

How? Because you want it to be flawed? You can't just declare it flawed on an assumption that the data goes your way. Now that IS a flawed argument.

Regardless, no it's not per capita income. It's the total economic turn over of the country, divided by the number of people living in it. Which would be a measure of how productive the economy is, which is what we were talking about. Now if you want to discuss living standards, we can do that, but we weren't talking living standards, we were talking economy.

More insane ramblings by the people who brought you beeeer milkshakes!
No one can see their reflection in running water. It is only in still water that we can see.

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Friday, February 13, 2009 10:33 AM

I believe in solving problems, not sharing them.

Quote:
But if everything in your country is more expensive because of added tax on things

Ranking is adjusted for differences in currencies.

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It's the end of the world as we know it, and I feel fine.

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Friday, February 13, 2009 10:40 AM

I have a vote and I'm not afraid to use it!

Wulf

"What IS the purpose of an economy, anyway, if it isn't to take care of people ?"

Pretty scary question, isn't it ?

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Friday, February 13, 2009 10:41 AM