So by supposedly pumping the price, tether outwitted 900 companies, including some of the smartest hedge fund investors. Is this logical?
To be honest, those CDOs, squared, etc. and the rest of them were not risky at all once upon a time. In fact, what made them popular was they were very risk adverse. So what the hell happened? All that changed when a president 'Obama' changed the rules that originally protected the system (and also public). Sub-prime USED to be prohibited (for obvious reasons, as later shown). This was over-ruled because the liberals began to preach that the banks were oppressing and targeting 'colored' communities by not lowering lending standards. As I said, if you thought this was a foolish thing to do, you were right. So after generations of cautious lending practices, all that blew up in disaster, when the banks were not just TOLD they could circumvent the rules, but were specifically asked to do sub-prime practices. The irony? Now the same liberals who used to cry that banks were racist and oppressive for NOT making the risky loans, are now saying the banks are racist and oppressive specifically BECAUSE they made the loans in the first pace. lol There is just no pleasing people like this. Unfortunately, the tax-payer is the one who ended up paying for this mess. And it's a mess that will be around for many generations. And you know what else is ironic? If it weren't for this very same crisis, Bitcoin would not have sprung out of it. I guess BTC maxis really do owe Obama for that.
Maybe you could explain that to me. I thought that CDOs and their brethren imploded under GWB's watch and that the mess had to be cleaned up during Obama's administration.
Typo! Obama = Clinton Admin. Yes, you are correct in that everything came home to roost under GWB. But to be honest, it was the Clinton admin that pushed banks for lending to the low income families.
This works both ways. You might be spectacularly wrong. So the question is how do you decide which it is? Too many people start with the idea that they know they are right based on some core belief they have, but what if that belief is flawed? You can go back a few years here and read me argue with John about why bitcoin won't work. I think my biggest issue was that the government would shut it down. I think this was valid back in 2011 or 2012, and I've read lots of people suggest that the government could have at the time, but they totally missed the boat. Today, any government attempting to shut it down will just shut their citizens out of participating in the future. The bitcoin network clearly can't be shut down, so all the government can do is prevent citizens from having access to it, and once you go down this road, you end up like North Korea. Another concern people have is that its just the tulip mania, a pump and dump scheme. Ok, lets look at that. The tulip charts clearly show a huge run-up, like bitcoin, followed by a dump, which has also happened to bitcoin, but then those tulips never came back, very much unlike bitcoin. In fact, bitcoin already had at least 4 of these cycles. So its not really fair to compare it to the tulip mania anymore when Bitcoin clearly has been making higher highs and higher lows on the chart. I think most people are stuck at the stage where they assume the government has to control everything. They think that if they give the government the power to control the money, to set interest rates, to decide how much they want to devalue the currency, to choose which country to invade, to decide which industry should be supported (hello communism), etc., that this will make the country strong and the citizens better off. But when you really look into this, you actually learn that the US prospered when the government did none of this. The die hard Bitcoin haters all have a deeply rooted core belief, and this belief prevents them from getting it. But this core belief is flawed and its likely quite easy to reveal this if people are just honest with themselves. Most of the time, the core belief is actually a lack of understand about the belief itself, but people don't want to learn about how it actually works. When people say that bitcoin could never be used as money, I asked them to explain to me how money works. Where does money come from? Its very easy to explain where bitcoins comes from, but where does money come from? Most don't know. They blindly trust the government to control money, but they don't know where it comes from. If you bought a house with a huge back yard, and the developer comes in one day, moves the fence, reduces your back yard to nothing, and starts building a new house on land that was yours, you would be pretty upset. But when the government distributes trillions of dollars, that they don't have, to lock you in your house, thereby devaluing your own money, and claims it won't be inflationary, nobody comes to the conclusion that the power to control money should be taken away from the government. You have no problem screaming at the developer who steals your backyard, but you are happy to let the government continue to do what it wants to do because taking this power away from the government seems like a scam to you.
Perhaps you could provide some specifics and timelines for clarity for clarity. Regardless, it was always Republicans who pushed to reduce or eliminate protective regulation without which these blowups recur for one reason or another. So there’s that.
Spot on. The haters rattle off the usual few scenarios where things rose and crashed. They should be thinking also of the scenarios where things were scorned,rose,rose again,kept rising and then the people were happy to pay whatever the price to secure a piece. Its a judgement call.Don't look down your nose at someone at the opposite end of the call,they may be buying Apple in 1980.
Issac Newton was unarguably a genius... He still fell for the South Sea bubble. Being smart is not enough. I'm from the school of "you have to do some work and place a value on what you are buying." From my point of view, it's going to be the Netscape navigator of cryptos. FOMO and herd psychology is the only way to come up with the current price under these conditions. It's usage statistics show that it is primarily a speculative vehicle. Bitcoin certainly has some possible value based on the transactions volume and market size. Similar to buying a company for their order book. The trouble is, you can't come up with anything resembling the current price. Bitcoin has no significant patent protection or government granted licenses or status. It also has significant issues with its design. Do your homework. Don't be lazy and assume "big firm X has a position therefore it must be a good buy". Engage in debate. Arguing is a great way to learn about your argument and someone else's. Think about Newton and the South Sea bubble. He certainly had the mathematical tools at has disposal to calculate a value for the shares in the South Sea company based on current earnings and a practical future growth rate, but he seems to have just been caught in the the hysteria. Sure, but Bitcoin isn't very good inflation protection. Look at the charts I posted earlier. It's not well correlated and it's super volatile. Don't take my word for it. Look at past price performance vs whatever metric for inflation you like. Every bubble provides an opportunity to learn. What was different about pets.com vs apple? Crazy Eddie's vs Microsoft? Madoff vs Berkshire Hathaway? All the bubbles and frauds had warning signs. Things that a smart person, willing to do some work could have flagged before they crashed. This is the key.
To be fair, it wasn't like he had the technological ability to just watch three trading-ships idling on the ocean day after day and not shipping anything... It was a fraud...so you can't go too hard on him for that. 99% of Wall Street fell for Enron too. Only a few people like Chanos bet the other way.
The CDOs pushed by Goldman, Morgan, etc. during the 2004-2007 were indeed fraudulent thanks to the rubber stamping by the CRA mafia. S&P, Moodys, Fitch, etc. all gave AA & AAA ratings to CDOs that were in reality a mix of default & at best A rated mortgages. That is why they collapsed when the recession hit & the ARMs came due. The most amazing thing about that era, as covered by The Big Short film, was the same firms selling junk CDOs were also selling CDS' against that same junk and in the case of Goldman were in fact shorting the same CDOs they sold to customers. Its still amazing to me that the Obama administration never even considered going after the CRAs with RICO like the Bush I admin did to Milken & Drexel, Burnham, Lambert or Bush II did to Andersen. They even had internal e-mails from S&P stating that they rubber stamped fraudulent loans & the government still did nothing. The Obama administration was a fucking disaster & an embarrassment.