Occupy Wall Street

Discussion in 'Chit Chat' started by Spikekiller, Sep 29, 2011.

  1. achilles28

    achilles28

    I disagree with that.

    America is nowhere close to a Free Market. What we have is more plutocratic fascism where the top 50-100 Corporations run Government, by proxy, and highly-regulated "free markets" for everyone underneath.

    If it were a truly free market, bailouts wouldn't exist. Consequently, insolvent banks and funds would be left to fail and we wouldn't be having this conversation.
     
    #121     Oct 4, 2011
  2. gnode

    gnode

    Yup

    I can't stand it when people try to make the "negative externality" arguments and then try to claim the solution is government intervention.

    HELLO GUYS! Government intervention is when it *becomes* a negative externality.
     
    #122     Oct 5, 2011
  3. One thing I have not seen anywhere is - how much in dollar terms did all the bad mortgages in the US amount to? And by that, I mean - JUST the defaulting mortgages.

    It seems a bit far-fetched to think that whatever amount it was would be enough to tank the entire world economy. Instead, the derivatives created from them (trillions in $ecuritization via the Wall St machine) and then leveraging those 30:1 after paying ratings agencies to mark subprime as good money seemed to be the problem.

    So Mozillo the tanning-bed king was handing out money (yes, to deadbeats) just to make the paper that fed the gristle mill of securitization that was making sausages that were then sold as prime rib. And that was fed to the rest of the world.

    Sure people were stupid to buy them, but paying off ratings agencies makes the description of the product fraudulent - and fraud is still a crime even when its perpetrated on stupid people. :D
     
    #123     Oct 5, 2011
  4. jayre

    jayre

    +1. The leadership in corperate america seems to have only 1 concern, how to inflate the company stock prices so they can get better bonuses & stock option, ethics & responsibility are only "minor" issues on their mind. Having said that I am strongly with the opinion that once we got into this mess in 2008, the 2 choices the US faced was 1) a replay of the great depression and a collapse of the banking and liquidity system 2) Tresuary buying prfered shares in banks and get all of it back in 18 months (with a nice profit). They chose the second option which I think was the right one based on the circumstences.

    What's disgusting is that nothing has changed. Wall street keeps influancing policy relating to banking, trade, SEC, etc. Day in day out wall street crooks (CEO's) instead of standing trial are sitting in washington, lobying, advising, spending money, and writing letters, articles, what think american policy should be. No wonder we have a paradox these days, S&P companies have RECORD profits, while poverty levels are hittings RECORDS as well.
     
    #124     Oct 5, 2011
  5. achilles28

    achilles28

    ^If memory serves, total notional value of subprime mortgages was around 1.3 Trillion, in 2008. So no, a 1.3 Trillion writedown is not big enough to bring down the US economy, or the world economy, for that matter.

    Essentially, the problem was (and is) jobs. America has been in decline for the past 30 years, yet, thanks to dovish interest rate policy > lavish consumer credit orgies and exploding Government deficits, that growing hole in the labor market (thanks to offshoring, over-regulation and speculative bubbles), was papered-over with borrowed cash.

    The subprime/stock market collapse was merely the needle that threatened to break the camels back. An uninterfered collapse would put a immediate stop to all that borrowed money. With that, the economy would revert back to it's equilibrium state, which is probably north of 20% unemployment and S&P <550. The problem is structural. What our genius politicians have done over the past 3 decades is export a huge swath of our productivity to Asia, and kept our economic ship "afloat" with borrowed cash, to blur cause and effect.

    This is why Occupy Wallstreet and the contagion in Europe is just the beginning. The consumer is maxed out. And the Government is nearly at it's credit limit. Global wage arbitrage has our paychecks in decline saddled with astronomic debtloads. Unfunded entitlements like Social Security, Medicare, Medicaid, Obamacare are all just paper fiction that won't be around in 5 years, let alone 20.

    At this point, any credit crisis that severely chokes Government borrowing would implode the system. That's why Central Bankers have stepped in and taken over the role of commercial lenders, who are now on the ropes. Unless consumer debt-to-equity flips over in the next 24-36 months, or some type of revolutionary technology breaks into the mainstream on par with the combustion engine or electricity, we're headed for a serious Depression, with gutted Social Programs, social unrest, political chaos, and likely, "populist" solutions like price-wage controls, shortages, capital controls, FTT. etc. Bottom line: the economy is deficient by 25%, in terms of jobs. That means all paper assets are severely over-priced and headed for a collapse (real estate, stocks), unless the Fed props and we do Argentina and rape everyone, to keep the rich solvent. Which they very well may do. In that case, civil unrest, demonstrations and violence will be much worse as the inflation tax hits the poor and the underclass hardest.
     
    #125     Oct 5, 2011
  6. BUt what's the goal? Unlike in the arab nations where they have a goal of getting the president to resign, There is no such goal here. Without any objective the movement will fizzle out.



    http://edition.cnn.com/2011/10/05/politics/occupy-wall-street/index.html?hpt=hp_t2

    Several unions endorsed the two-week-old Occupy Wall Street movement and plan to join the protesters' street theater in New York on Wednesday, labor leaders said.
     
    #126     Oct 5, 2011
  7. Good description of the structural problem.

    The cause of the 2008 collapse seemed more the ravenous hunger for mortgage paper so the big banks could create trillions worth (and I use "worth" loosely) of derivatives. As you say, a $1.3 trillion default on plain old US mortgages just isn't enough to flush the entire world economy by itself.

    I don't think our "genius" politicians have done anything without the influence of businesses who would profit from the decisions made though, so as with all things, when it comes to why politicians did what they did - follow the money.
     
    #127     Oct 5, 2011
  8. achilles28

    achilles28

    Totally agree. Fortune 100 lobbied hard to pass free-trade and MFN status with China. Politicians spread their legs for lavish campaign donations and the idiot sheep were clueless, as usual. As for mortgage paper, you're right. Securitization generated massive profits for Wallstreet so there was a huge internal push for fresh meat - no doc, low doc liar loans etc.
     
    #128     Oct 5, 2011
  9. nitro

    nitro

    <object style="height: 390px; width: 640px"><param name="movie" value="http://www.youtube.com/v/9Bn3BA3EPCo?version=3"><param name="allowFullScreen" value="true"><param name="allowScriptAccess" value="always"><embed src="http://www.youtube.com/v/9Bn3BA3EPCo?version=3" type="application/x-shockwave-flash" allowfullscreen="true" allowScriptAccess="always" width="640" height="360"></object>
     
    #129     Oct 5, 2011
  10. GordonTheGekko

    GordonTheGekko Guest

    Lol! Doug Kass at Seabreeze shared Cypress Hill's Insane in the Membrane with everyone in the trading desk chatter cloud... he referenced it as the market is like Insane in the Membrane.

    Perhaps there is something with Cypress and Wall Street...
     
    #130     Oct 5, 2011