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  • The Newest Economic Thread

    New administration, new year, new thread.

    Read a great interview today, thought some folks here might like it. The interviewee, Jim Rogers, expatriated from the US to Singapore in 2007.

    Excerpt:

    What do you think of the government's response to the economic crisis?

    JIM ROGERS: Terrible. They're making it worse. It's pretty embarrassing for President Obama, who doesn't seem to have a clue what's going on—which would make sense from his background. And he has hired people who are part of the problem. [Treasury Secretary Tim] Geithner was head of the New York Fed, which was supposedly in charge of Wall Street and the banks more than anybody else. And as you remember, [Obama's chief economic adviser, Larry] Summers helped bail out Long-Term Capital Management years ago. These are people who think the only solution is to save their friends on Wall Street rather than to save 300 million Americans.

    You have said Bear Stearns and Lehman (LEHMQ) would still be around if Greenspan hadn't bailed out Long-Term Capital Management in 1998. Can you explain?

    Well, if Long-Term Capital Management had been allowed to fail, Lehman and the rest of them would've lost a huge amount of money, their capital would've been impaired, and it would've put a terrible crimp on Wall Street. It would've slowed them down for years. Instead of losing capital, losing assets, and losing incompetent people, they hired more incompetent people.
    A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

    "$250,000 a year won't get me to Central Park West."

  • #2
    Re: The Newest Economic Thread

    I'm looking forward to the discussion in this thread. While I don't contribute much usually, I do find out a lot of stuff from posts and article links!
    "Sympathy means a lot, coming from Kulmar. I didn't think it was possible.
    Good luck getting rid of your disease. If you're infected, though, stay away--I can't afford to be a zombie right now.
    " Ednos


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    • #3
      Re: The Newest Economic Thread

      Two things the guy said makes me doubt his knowledge.

      going to bail out the 100,000 or 200,000 who did it wrong.
      and

      It's going to be the 29-year-old farmers who have the Lamborghinis.
      It is way more that 100-200k. Could be as many as 10 million that could be facing foreclosure. So the guy doesn't even seem to have the basic facts.

      And farmers have never been rich unless they also had mineral rights. Some that owned the land became rich off of farmers working the land.

      A good farmer can have a comfortable life, but getting rich off farming is a silly idea that only and ignorant fool would believe.
      Iím not racists, I have republican friends. Radio show host.
      - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
      - "A foolish consistency is the hobgoblin of little minds" - Emerson
      - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
      - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette
      - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
      - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

      Comment


      • #4
        Re: The Newest Economic Thread

        Everything said can be can heard on any given news channel. Long-Term Capital Management blah blah, bankers aren't going to let each other fail because if one falls they all do and that includes the incestuous fed. And noone has faith in the finance sector anymore? Really? Stock brokers are already driving cabs and working at McDonald's. People are already investing in real business, not mob based stocks. What's this guys motivation? If he's so smart why is he answering questions? Why isn't he relaxing on his yacht? He had a successful fund once apon a time and now he peddles books.

        Lets give him our money so he can tell us how make money. Wow sounds like a work at home envelope stuffing business where you only pay $89.99 to get started.

        Comment


        • #5
          Re: The Newest Economic Thread

          His old partner, George Soros, peddles books too.

          As does Bill Gates.
          A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

          "$250,000 a year won't get me to Central Park West."

          Comment


          • #6
            Re: The Newest Economic Thread

            Originally posted by El_Gringo_Grande View Post
            It is way more that 100-200k. Could be as many as 10 million that could be facing foreclosure. So the guy doesn't even seem to have the basic facts.
            Basic facts, eh?

            How about some basic reading comprehension to go along with your facts?

            Rogers was not talking about all homeowners facing foreclosure - only about those who are going to be bailed out by the Obama administration.

            Honestly, Gringo, you've been pretty caustic and shrill lately. Disagreement is fine - that's why we're here - but bad intentions are a whole different ball of wax. I've tried to be pretty patient and thorough in responding to you, but sometimes get worn out - such as in the last thread. Pointing out the obvious problems in your posts feels pretty unrewarding, and I'm frankly not interested in wasting any more time doing so.
            A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

            "$250,000 a year won't get me to Central Park West."

            Comment


            • #7
              Re: The Newest Economic Thread

              Originally posted by Nikolas View Post
              His old partner, George Soros, peddles books too.

              As does Bill Gates.
              Ok, so lets read these books and all become billionaires. What's the problem? It would be similar to A-Rod writing a book on how to hit home runs. *No steroid reference intended*. What I did find interesting is that Rogers moved to Singapore because there is no capital gains or global taxation.

              Comment


              • #8
                Re: The Newest Economic Thread

                Originally posted by Nikolas View Post
                Basic facts, eh?

                How about some basic reading comprehension to go along with your facts?

                Rogers was not talking about all homeowners facing foreclosure - only about those who are going to be bailed out by the Obama administration.

                Honestly, Gringo, you've been pretty caustic and shrill lately. Disagreement is fine - that's why we're here - but bad intentions are a whole different ball of wax. I've tried to be pretty patient and thorough in responding to you, but sometimes get worn out - such as in the last thread. Pointing out the obvious problems in your posts feels pretty unrewarding, and I'm frankly not interested in wasting any more time doing so.
                No, he was talking about those that did things "Wrong".

                I'd like to see them let these people go bankrupt, let the bankrupt go bankrupt, stop bailing them out. There are plenty of banks in America that saw this coming, that kept their powder dry and have been waiting for the opportunity to go in and take over the assets of the incompetent. Likewise, many, many homeowners didn't go out and buy five homes with no income. Many homeowners have been waiting for this, and now all of a sudden the government is saying: "Well, too bad for you. We don't care if you did it right or not, we're going to bail out the 100,000 or 200,000 who did it wrong." I mean, this is outrageous economics, and it's terrible morality.
                Let us dissect this.

                He starts off talking about banks that did things "right".

                He then talks about people that bought large numbers houses without adequate funds to back it up.

                Then he talks about homeowners that where like the banks and did things "right" and where waiting for this.

                Because he associates the "right" homeowners with the "right" banks I assumed he was talking about homeowners waiting for the bubble to burst so that they could go in and buy the remaining assets. So the "right" home owners where waiting for those (100-200k) owners to fail so they could buy up their assets.

                But the fact is there are way more than 100-200k homeowners that bought in the bubble with very bad (ARM) loans. They bought with the expectation that the value could only go up and, worse case, they would sell the house when the interest rate increased the payments beyond their means and pocket a nice profit.

                The fact is many more than 100-200k people are living in homes where the value is below what they owe.

                The fact is way more than 100-200k people are looking to the government to help them out of the mess they are in.

                In fact those that the guy pointed out as getting help (speculators that bought multiple homes with no assets to speak of) do not get help from the government from what I can tell. Those that will get help are going to be those that have an income that can support the payments of a refinanced, and slightly tweaked loan for their residence.

                Where did my reading comprehension fail?

                Your statement that I am "caustic and shrill" is a bit over the top, isn't it? I wasn't even disagreeing with you. I was disagreeing with some guy in an article.

                Point out what was either "caustic" or "shrill" about my response? Is disagreeing and/or pointing out factual errors, in and of itself, "caustic" or "shrill"?

                Again, please explain how exactly I was "harsh or corrosive in tone" or "being sharply insistent on being heard".

                Was it my deriding his talk about farmers getting rich? I grew up in a farming community and I still am very close to real farmers and their families. None of them got rich simply by farming. None of them. So his statement is stupid.

                Investing in agriculture (commodities) might make one rich. But investing is vastly different from actually farming the land. Go ask a real farmer, he will tell you.

                BTW, most farmers are very dependent on government subsidies of one form or another (ie socialism).
                Iím not racists, I have republican friends. Radio show host.
                - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
                - "A foolish consistency is the hobgoblin of little minds" - Emerson
                - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
                - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette
                - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
                - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

                Comment


                • #9
                  Re: The Newest Economic Thread

                  Rogers has it backwards - it's worth risking federal bankruptcy to prop up a giant like AIG because the alternative is guaranteed bankruptcy, and not just for the U.S. His credentials may be sound, but his opinion is not- and apparently his forecasting track record is spotty. To let some of these giants fall would cause an economic catastrophe - look at what happened when Paulson decided to let Lehman Brothers fall down - the biggest daily market drop in history, rapid contagion, and another failed investment house bubbling to the surface. Free market principles have failed, and it's too late to go back.

                  These guys seem pretty real to me: http://baselinescenario.com/

                  Comment


                  • #10
                    Re: The Newest Economic Thread

                    The big issue here is the stock prices are already fantasy-land for a lot of these companies. A good portion of these companies should already be in chapter 11 as they are sitting on negative equity. At negative equity their stock prices should be zero. Thanks to god uncle sam is running in and basically being the soverign wealth fund for all these companies and getting stock options in return where the options are worth less then the paper they are written on. That's a great deal however since all we are taxpayers have to do is throw enough money at these companies, and eventually *some* of them will recover so those stock options we got will be worth something!

                    There is no such thing as "to big to fail" in a true capitalistic system, but thank god for socialism to be there to back us up! Yes it sucks that if this was dealt with properly a lot of the "little people" who didnt do anything to cause this problem would suffer with their 401k's being lost, but playing the stock market is supposed to be a gamble, and when you gamble, sometimes you loose.

                    Comment


                    • #11
                      Re: The Newest Economic Thread

                      Just look at some of the news within this week alone - talk of trillion-dollar deficits in pension funds, 1/8 of US homeowners late in paying or in foreclosure, and the increasingly clear demise of GM.

                      Keep on reading, because this is what an economic disaster looks like while it is still happening.

                      Comment


                      • #12
                        Re: The Newest Economic Thread

                        Originally posted by AMosely View Post
                        Keep on reading, because this is what an economic disaster looks like while it is still happening.
                        Bush was driving us slowly but surely towards an inevitable, impending disaster. Obama's contribution so far has been to open the throttle and see how much faster we can be moving when we hit the impact point.

                        A car crash is a limited metaphor here though, because after spending a long time driving and lining up the impact, the actual crash takes only a fraction of a second and by that point the driver is no longer relevant. Our economic disaster is happening on a much wider timescale, and the driver is still highly relevant for the whole process. It's too late to avoid the disaster, but it could still be either mitigated or worsened, and every indication from our leadership right now is that they are making it worse.

                        Comment


                        • #13
                          Re: The Newest Economic Thread

                          Originally posted by Kerostasis View Post
                          Bush was driving us slowly but surely towards an inevitable, impending disaster. Obama's contribution so far has been to open the throttle and see how much faster we can be moving when we hit the impact point.

                          A car crash is a limited metaphor here though, because after spending a long time driving and lining up the impact, the actual crash takes only a fraction of a second and by that point the driver is no longer relevant. Our economic disaster is happening on a much wider timescale, and the driver is still highly relevant for the whole process. It's too late to avoid the disaster, but it could still be either mitigated or worsened, and every indication from our leadership right now is that they are making it worse.
                          I don't understand what you are saying.

                          What did Bush do (or didn't do) and how is Obama making it worse?

                          Details please.
                          Iím not racists, I have republican friends. Radio show host.
                          - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
                          - "A foolish consistency is the hobgoblin of little minds" - Emerson
                          - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
                          - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette
                          - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
                          - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

                          Comment


                          • #14
                            Re: The Newest Economic Thread

                            Bush failed to reform the corrupt regulatory system that should have prevented this years ago, then when the disaster began Bush initiated the suspension of capitalism with the TARP-1 bailout (we had like a 20-page thread on it at the time). Obama has taken the beginnings that Bush handed him and kicked it into high gear, and is doing his best to bring the Free Market to a complete halt. (TARP-2 saw barely a mention, though it was worse than the original). For example, the FDIC announced recently that they're going to be insolvent by the end of the year, unless they start imposing heavy fees on the banks that aren't failing to make up the difference.

                            Comment


                            • #15
                              Re: The Newest Economic Thread

                              I should get in on some of this somehow. You know, start acting like a grasshopper instead of an ant, and stop preparing for winter, but instead party all the time, knowing that Uncle Sugar will bail me out.
                              Dude, seriously, WHAT handkerchief?

                              snooggums' density principal: "The more dense a population, the more dense a population."

                              Iliana: "You're a great friend but if we're ever chased by zombies I'm tripping you."

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