THE Super Ultra Wealthy Man can see the future, he sees horror ahead

I don't have a vacation home in southern Spain, but thank you for the idea. And of course, the mkt is perfectly capable of setting the price of money. However, there's plenty of theoretical and empirical evidence to suggest that the mkt AND a central bank together do a better job at setting the price of money than the mkt alone. To establish a parallel, let's think a bit further about your statement that the mkt seems capable of setting the price of AAPL shares. This is indeed the case, but the very same mkt also benefits from insider trading laws and a regulator that attempts, with various degrees of success, to enforce these laws and punish the most egregious violators. The reason for the existence of such a mechanism that "assists" the mkt with the pricing of various shares, AAPL among them, is the accumulated evidence that it's beneficial. Same for central banking. Now you may hold a different view, but, no offense, on the issues of monetary economics I would much rather listen to someone like Milton Friedman.

I am confused. First we were talking about the seniors, now we're talking about the personal loan rates for middle-class and poor people. Moreover, if you think policies should be targeting the well-being of "single black mothers of 3 on the south side of Chicago" even more than they are currently, you're much further to the left in the political spectrum than I thought you were. Where's all this socialist angst coming from, all of a sudden? Don't you think the US government is doing enough for the poor already?

Regarding the fate of the seniors, let me give you some statistics that may or may not contradict your anecdotal findings. Firstly, the poverty rate among the 65+ age group has been in steady decline since the 1970s, including during the post-crisis years. Secondly, according to the data I have seen, the share of near-retiree households with retirement assets has held reasonably constant since 2000 at arnd 70%. The median amt of retirement assets peaked at $111k in 2007 and was at arnd $100k after the crisis (measured in constant 2010 dollars). Finally, there's some research that has examined the standard of living of retirees by measuring their incomes before and after retirement. According to these studies (I can give you references, if you like), median retiree's inflation-adjusted after-tax (real net) income remained steady at or above 100% of their pre-retirement income.

Again, I might not spend as much time as you arnd poor people, but I know quite a few people on Social Security really well. Their lives sure don't appear that poor to me, but maybe that's 'cause I used to live in much less generous circumstances. Similar to what I mentioned above, if you feel there should be more policies targeting the well-being of retirees and that the US govt isn't doing enough, I am a little confused.

P.S.: I'd be happy to respond to the specific points raised in the articles you have posted, but a little later.

 

First of all great exchange...

However marty you just wrote a a classic piece of statist propaganda...


"However, there's plenty of theoretical and empirical evidence to suggest that the mkt AND a central bank together do a better job at setting the price of money than the mkt alone. To establish a parallel, let's think a bit further about your statement that the mkt seems capable of setting the price of AAPL shares. This is indeed the case, but the very same mkt also benefits from insider trading laws and a regulator that attempts, with various degrees of success, to enforce these laws and punish the most egregious violators. The reason for the existence of such a mechanism that "assists" the mkt with the pricing of various shares, AAPL among them, is the accumulated evidence that it's beneficial. Same for central banking. Now you may hold a different view, but, no offense, on the issues of monetary economics I would much rather listen to someone like Milton Friedman."


Lets... break this down...

1.
"However, there's plenty of theoretical and empirical evidence to suggest that the mkt AND a central bank together do a better job at setting the price of money than the mkt alone.
No study could ever confirm this... this is the debate that has been raging for years... the anti fed and interventionist state the fed excacerbates swings and the apologists say no.

In my trading life time I witnessed the incredible... "this is not a bubble" stuff from greenspan. I saw the fed allow the loosening of credit, lending standards and allowing incredibly low rates for second loans as housing prices sky rocketed. Cleaning ladies were getting 500,000 dollar first loans in CA plus getting seconds at incredible rates.
This caused a massive bubble and it was completely artificial. No one would have lent second at the same rates as first if the FED had not been operating. It all became more obvious when the FED replaced what... 1.5 trillion of china's bad loans with bonds?
So we saw what the FED did on the way up...

Now what are they doing... well they have been buying up bad paper and holding down rates to and incredibly distorted close to zero percent.
Which crushes savers
they also are devaluating the hell out of the dollar... which
destroys the middle class and working class.

So how on this earth could any study show that FED and the market do a better job than the market alone.
not study could be competent to make the comparision. It would be a hypothetical.

I was not planning to hammer the FED.
but your statement was such horseshit.



If you want to look at things further back in history... we can start with one of the big causes of the great depression...
we can go to Milton Freidman... I will go to that in the next post.


2. As to your second point... Insider trading prohibitions do not parallel market distorting purchases and holding rates down in any way shape or form.

a. insider trading laws supposed protect the integrity of the market...

b. the Fed bought up the entire market for worthless instruments.
see the story about how the fed used pimco to bond an enormous amount of at the time virtually worthless bonds.

c. I am not even sure you can find a study that preventing insider trading assists in pricing... it may decrease volatility a little but prices should in theory return to the correct price once the info is disseminated. In fact if you allow insiders to trade... it should get there in a less gappy way.

 

I just could not sit back and watch your FED apologist propaganda...
as I said no study could show the market coupled with Fed intervention is than just the market.
It is purely a hypothetical... no way to really say....
but lets see what Friedman and Bernanke say on the subject of the great depression.



http://www.fee.org/the_freeman/detail/the-great-depression-according-to-milton-friedman

Cause of great depression... Freidman showed it was the Feds monetary policy...
and Bernanke agreed and apologized in 2002.

The Great Depression created a widespread misconception that market economies are inherently unstable and must be managed by the government to avoid large macreconomic fluctuations, that is, business cycles. This view persists to this day despite the more than 40 years since Milton Friedman and Anna Jacobson Schwartz showed convincingly that the Federal Reserve’s monetary policies were largely to blame for the severity of the Great Depression. In 2002 Ben Bernanke (then a Federal Reserve governor, today the chairman of the Board of Governors) made this startling admission in a speech given in honor of Friedman’s 90th birthday: “I would like to say to Milton and Anna: Regarding the Great Depression, you’re right. We did it. We’re very sorry.”

.....

According to Friedman and Schwartz, this was a complete abdication of the Fed’s core responsibilities—responsibilities it had taken away from the commercial bank clearinghouses that had acted to mitigate panics before 1914—and was the primary cause of the Great Depression.
The obvious question is: Why didn’t the Fed act? We don’t know for sure, but Friedman and Schwartz proposed several possible explanations: 1) the Fed officials did not fully understand the disastrous consequences of letting so many banks go under. Friedman and Schwartz wrote that Fed officials may have “tended to regard bank failures as regrettable consequences of bank management or bad banking practices, or as inevitable reactions to prior speculative excesses, or as a consequence but hardly a cause of the financial and economic collapse in process”; 2) Fed officials may have been acting out of their own self-interest since many of them were affiliated with large Northeastern banks. Bank failures, at least in the early stages, “were concentrated among smaller banks and since the most influential figures in the system were big-city bankers who deplored the existence of smaller banks, their disappearance may have been viewed with complacency”; 3) The inactivity may have been caused by political infighting between the Federal Reserve Board in Washington, D.C., and regional Fed banks, in particular the New York district bank, which was the most important part of the system at that time. But we may never know the real reason.

Dangers of Centralized Power
There is an important lesson to be learned from this episode: When we centralize great responsibility and power in one institution, its failure will have far-reaching and terrible consequences. The Fed was instituted to act decisively in the exact circumstances that occurred in 1930–33. Friedman and Schwartz pointed out that the Fed’s failure was all the more serious and difficult to understand given how easily it could have been avoided:

 

"If you think seniors can afford to pay more for Medicare, let’s take another look at that thought." more . . .

 

Before (not sure whether I will, tbh) I proceed trying to discuss the specific points raised, let me mention a bigger conceptual issue (and a bit of a proof by contradiction, to boot)... Pls note that below is just a conceptual exercise and has nothing to do with reality.

Suppose, for argument's sake, that I am an extremely wealthy and influential "crony" capitalist. Furthermore, suppose that, through my influence and connections, I have been able to ensure that the Fed and its policies directly benefit me and mine, by increasing the value of my assets, financial and otherwise. Such behavior on my part is perfectly understandable and rational, since I am a self-interested capitalist. On the other hand, anyone who talks to me about the plight of the poor, the middle classes and the retirees is a "leftist socialist", because he/she cares about these less fortunate people and wants me to care as well. Since I am a capitalist, it's not my job to care, especially since I regularly give the govt a small share of my enormous wealth so that they can make the worst of these problems go away. So, as a result, I must conclude that the most vocal anti-Fed characters must surely be the most convinced left-leaning socialists.

On that note, I bid y'all adieu, seeing as how it's Bastille Day...

 

heureux jour de bastille or whatever is the appropriate way to say it.
happy independence day perhaps?

The cronies and the trough feeders against the rest of the country. Until recently the cronies still allowed for opportunity. Now they are shutting it down competition with things like Obamacare and a huge federal govt.
The cronies fear conservatism. Its a cronism vs liberty. The cronies changed the rules the last 30 years. They have become statists - pre fascists.

 

And I said the reason why is that the conflict today is not between Republicans and Democrats in Washington like we grew up thinking it was. The opposing forces in this country are not Republicans and Democrats in Washington.

Now, they are during elections because obviously they're vying for power and who's gonna run the town. But after the election they join up, because what's changed here is the nature of the conflict. The conflict now is all of Washington versus people like you and me who do not want an ever-expanding, increasingly powerful, and in-control-of-everything government. But they do. And I told him, I read a really good piece at RedState.com today explaining this by defining the new crony capitalism or crony socialism and how it works. And it's just a microcosm of how a lot of things in Washington are working.

In the old days company A in the same business as company B and therefore competing with company B would try to beat company B with a better product and better customer service, lower prices, better retail op, whatever. The competition took place in the market between company A and company B. With the advent of Barack Obama, somebody willing to co-opt the private sector and use it and therefore control it, the seductive nature of that appealed to quite a few CEOs. And so now company A does not compete with company B directly. Company A competes with company B by aligning with government, rendering company B helpless.

For example, let's use, as the Red State piece does, Walmart. In the old days, if a Democrat liberal comes along and wants socialized medicine, national health care, the assumption would be that there isn't a company in the world that will want to go along with this, because the people that run companies are interested in free markets and freedom and liberty, and open competition and so forth. It might appear attractive to them in the sense that maybe they'd like to get rid of the health care expense. But what's changed is that Walmart is happy to support Obama and Obamacare as a means of competing with company B and company C, because they are so is big, they can afford whatever new costs that Obamacare presents them.

As they support Obama, they're in good stead with Obama, and Obama treats them well and maybe gives them some breaks and some waivers or what have you, that company B doesn't get. Company B can't afford Obamacare, and so company A wins without having to be any better. It's just their alliance with government that overpowers company B. Another example from the story, Costco. You would think that no legitimate private sector business would ever be in favor of raising the minimum wage. Costco is. Why? They can afford it, and they know that their competitors can't.

So they associate with the government, the government becomes their best buddy, again granting them waivers on Obamacare or other things that come down the pike, all for supporting Obama's ideological desire of raising the minimum wage, and whatever happens to the market is of no consequence. All that matters is that company A, in this circumstance, is winning by virtue of its alliance with government.

Financial services companies, same thing. They are protected if they support Obama. What do they do? Well, look, the stock market is going through the roof while the economy's contracting. How's that happen? One of the ways it happens is the Federal Reserve is printing money and giving it to the stock market and people that invest in the stock market.

So people who are moving and buying and selling and making deals with money are making more money, but there isn't a better product for consumers, there's not additional customer service, and yet these companies are becoming more and more profitable, all the while Obama runs 'em to shreds. But that's just for show. American business, at least as represented by the Chamber of Commerce and K Street, is deeply and profoundly opposed to the idea of the Tea Party and free markets. "American business has entered a twilight where government coercion is used to put competitors out of business and to prevent new entrants to business." He cites the Walmart example.

"Walmart’s support of Obamacare is obviously predicated on the fact that Walmart can absorb the increased labor costs more readily than their competitors, likewise Costco’s enthusiasm for a higher minimum wage is inspired by the knowledge that this will hurt competitors. The fierce resistance of taxi companies to companies like Uber have nothing to do with safety or customer service but rather a determination to maintain their comfortable monopoly. The Chamber of Commerce is pushing 'comprehensive immigration reform' in order to provide its member companies with sources of cheap labor both in the high tech industry as well as in agricultural and unskilled service jobs."

"We are hardly a generation away from a government-crony capitalist oligopoly such as exists in Russia. American business, as personified by the Chamber of Commerce, Wall Street, and K Street are right to fear conservatism. And the sooner that we conservatives come to the conclusion that our interests ... are not the same as the Chamber of Commerce the sooner we can get about our business."

His point here is that we -- the Tea Party, the Republican base, conservatism -- is the real enemy of all of this crony capitalism, while those of us who make up the base may not know it. We think that our friends are like us and think the Democrats are the enemy. But our guys don't think the Democrats are. They think we're the enemy!

Have you not found that to be the case? Conservatives are thought to be the nutcases, the wackos. Why? Free markets, individual responsibility, all of these things that built the country? No, no, no! That would end the crony capitalism. That would mean these people competing on their own. They don't want to do that.

It's seductive to be close to power, particularly if you have a president whose totally willing to take over as much of the private sector as possible. If that gets your stock price up and keeps you profitable while the economy's in the tank for sure everybody else, so what? All the while people are thinking that Big Business is Republican, and it isn't. It's Washington! This is why they hate the Tea Party.

This is why Washington -- every political consultant, every Democrat, every Republican -- rips the Tea Party. It is why they do it. There's a lot of money being made by this crony socialism or capitalism going on, and the money is being made by not having to compete, not having to be better than your competitor. The simple association with government wipes out your competition, 'cause they don't have it and can't compete when you do.

END TRANSCRIPT


http://www.rushlimbaugh.com/daily/2014/06/17/the_irs_and_the_new_crony_socialism

 

Rush Limbaugh. An even better source than YouTube

 

Ah, so Rush Limbaugh is a bleedin' heart socialist as well? Good to know...

 

typically... leftist drone brainless attack of the messenger instead of the message.

rush was commenting on a redstate.com piece.