LOL Street: open thread on Lehman/Merrill/AIG/Dow/Fed/FUD/OMG/WTF
This is an open thread to discuss what's happening in America's financial markets. Yesterday's thread is too big to load comfortably in a web browser. The Dow fell 504 points yesterday, the largest drop since 9/11, after some bummer news and then some more. Markets in Asia dived next, with Japan bank stocks taking their steepest decline in more than 20 years. The Fed meets today. Headlines are easy enough to find, you don't need us to repost them here -- but I wanted to continue the discussion thread, so here it is.
Image above, from Ape Lad, who explains: "There is long-standing animosity between hedgehogs and the hobo duo. Here's previous evidence of their nefarious ways.
Previously on Boing Boing:
"America's financial system was shaken to its core on Sunday."
the latest
latest episodes
Gold bars and black helicopters: a good investment strategy? Link discuss.
Just want to thank everybody for the data in the previous thread. You cats saved me a lot of panicking. I opted to go eat cheese at a state fair instead of freaking out thanks to BB.
I snapped a picture in downtown richmond va yesterday of a bank who's stock ticker thing showed the 504 plummet. I thought it was pretty crazy since that number was so tiny just a day or two before.
I'd just like to say that this thread—and the previous thread—are what really make BoingBoing great. And yes I know this thread hasn't really started, but hey.
@zikman, please post url to pic? (also: 804 in tha house! my home town.)
@RSTEVENS: You can afford cheese?
Funny how all the financial bigwigs are free market capitalists when things are going great and socialists when they're not. If the taxpayers have to bail out these companies then can't we at least get a bigger piece of that sweet hobo pie?
Its a sad state of affairs when 4chan can figure out the economy when those charged with keeping the economy running can't.
@Xeni: Farmers get lonely and I have strong hands. Long live barter!
@xeni: http://farm4.static.flickr.com/3031/2863051292_bbe72a94dd_o.jpg
Yeah, I've been watching my investments tank. I lost $3,000 in August. Not cool.
It warms my heart that people are trawling BB for asset allocation advice. Wait a minute, that presupposes we still have assets!
All my money is tied up supplying cheese to state fairs. Phew.
#8: Wow, that link is NSFW. The ads aren't at least, I quickly closed it when I saw no less than 8 nipples.
So far the Dow is down another 60 points, we'll see what AIG has to say at the end of the day. I still don't see how allowing AIG to loan money to themselves helps any of this.
my retirement account is with AIG. am i screwed, or is this insured somehow?
Yea, Capitalism. No one ever said that capitalism is supposed to be warm and fuzzy. It is risky and dangerous, and if you make bad decisions then you die like Lehman. Unless of course the government bails you out further encouraging risky behavior. Who will think of the children, bah. Brainspore is right though, we shouldn't bail them out, that is not the job of government to reward bad decisions. Oh wait they do that all the time for votes. Damn, I wish it wasn't an election cycle.
BTW, I cashed out on Friday, woot.
@13 Sorry about that. I've got adblock (yes, I do have it turned off for boingboing) and don't see these things.
Porn-free link:
http://imagechan.com/images/eebd108c814759bd82ed9d2866143acc.jpg
It was interesting to hear yesterday:
"President Bush acknowledged the "pain" of investors and workers in the finance industry, but assured the public that the government is working to iron out the problems."
Nice to see where his priorities are.
Well AIG isn't going to get any money soon it seems.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ak7ieyNgITEw&refer=home
So how many people here match the Swedish savings rate of around 7 - 8% per anum? Especially since the overall US Savings rate is 0%?
The mattress is a very good technology. If you'd had all your money under the mattress yesterday morning, you'd still have it today.
@SKR: Government rewarding bad decisions? I thought that's what government was for.
Blessed are the cheesemakers.
Rageahol: if you haven't seen it:
http://www.nytimes.com/2008/09/16/opinion/16lewitt.html
canhazbankrupc?
Don't worry, it seems like the government is ready to bail out AIG.
http://www.cnbc.com/id/26737942
Bah. Thank Texas Republican and Ex-senator (wife a waxwork on the Board of Directors of Enron IIRC) Phil Gramm and the exemption of derivatives from the oversight of the Futures and the Commodities Trading Regulators..snuck through his Bill for such...exemption given in the year 2000. What's up with the derivative Market lately? Or should I say, what's down? But then again thanx to Phil no one really knows...
So no universal single-payer healthcare for this generation, huh, USA? Too busy bailing out...insurance and investment companies? Too busy subsidizing Iraq's ability...to defend itself? Too busy re-arming that great champion of democracy ( and surprise sheller of sleeping towns and ex-Wall street lawyer and Mukasey co-worker)) Sakaashvili?
How did Fed. Bank Regulation extend to AIG? How did the President's appointees get these economic powers? Where is Congress? Who actually controls the "purse-strings" here?
#16: It's ok, I don't mind the pronz at work, I just wonder what my boss thinks. I wish I had adblock, the IT department here seems to think making everyone stick with IE 6.0 (!) is a safer option than any other browser. (!!)
And that 4chan thread is extremely entertaining. And a little bit scary.
Manchester United is going to need a new sponsor really soon.
Wait..wasn't that wealth supposed to trickle down to me?
Where's my freakin' trickle?
The only people gov. ought to bail out is people ie non-corps.... Roll back mortgage terms/rates by legislation. The people are sovereign, not the Bankers, Roosevelt fixed this long ago, Reagan and his successors undid it all, and now yer all screwed.
If Chris Dodd and Barney Frank has allowed banks to make loans to people as the banks had been doing, we wouldn't be in this mess. However banks were forced to loan to people who had no business getting a loan because Democrats thought that Credit Scores are "unfair". The Free Market doesn't need to be fixed it needs to be left alone.
For Chaz Harris, the developments didn't convince him that the U.S. was in any trouble.
``The economy's pretty bad, but people are still spending money on what they want,'' said Harris, 20, an unemployed warehouse worker who lives with his parents in Weehawken, New Jersey. Referring to the Take-Two Interactive Software Inc. video game, he said, ``I mean, `Grand Theft Auto' did half a billion in seven days. So the economy's not that bad.''
http://www.bloomberg.com/apps/news?pid=20601109&sid=a7pClNzdJSVw&refer=home
Indeed.
Now we get to test Warren Buffets description of Credit derivative products as "weapons of mass destruction".
I remember one person posting a while back, about how the Riverside Ca. lifestyle was shop clerks and fast food attendants driving around in Hummers and Escalades? Is this unique to California? Or is that an America wide phenomena?
#27: Feel that trickle? That's Reagan pissing in your mouth.
@21: It's not meant to be taken literally, it's obviously referring to makers of all dairy products.
The free market needs to be left alone? Why not then start by disbanding the police and courts and unlocking the prisons?
And that pesky outlawing of slavery and debt peonage will have to go too.
Well we won't have to go so far, this "little trouble" is not going to affect any "people of quality", eh Williamsbk?
Privatize the profits, socialize the risk! American 21st Century Capitalism at it's best!
There are hundreds, if not thousands of articles about business cycles, lists of fairly regular recessions, etc. all over the internet. Nor is it restricted to the US -- the earliest well known one is the tulip craze in the 17th century. Though I'm not entirely sure there is a *better* system, these cycles are obviously inherent to what we call "capitalism" at least, and maybe even human nature.
We left the free market alone, and look what happened: people started giving out loans to people that couldn't pay them back, and now we're all fucked.
I'm all for a free market, but it certainly needs to be regulated.
@35: Of course there is a better system, at least in theory. To say that we've solved the problem of an economy in the best way possible is absurd, or at least unproven. But even if someone were to design a superior system, there's a lot of momentum to overcome.
That said, any new system would need to take a few key features of capitalism with them, most specifically decentralization which pretty much means you need a demand driven system.
I have a hard time understanding anarchosocialism because I fail to see how you can implement socialism without a command economy. People tell me that it would work, but I just don't see how.
@Oskar: If we had an economy entirely made up of self-interested, rational actors, like game theoreticians and Randians assume, we wouldn't need regulation. But reality tells us that people are not always going to act in a self interested fashion, and they almost never act based on rational decision making, even if evolution guarantees that the output of their decision making process approximates rational action.
Interesting that the only female blogger at BB is the one addressing this, while all the men are posting about salami floors and such. Does that say something about gender, or is it just a coincidence?
I did something I've never done in my life: I did research on my bank. They seem to be doing ok, but I have no experience whatsoever wading through financial rhetoric, as I've never had enough money for it to matter.
I find it ridiculous that a bunch of obscenely wealthy corporations and financial institutions playing games with money could possibly bring about an armegeddon of sorts.It indicates to me that there is just a general problem with the system itself.
The economy is like the queen bee, and we are her workers, compelled to keep her alive by her secretions of I-phone pheromones. She is much more important than us, in fact the only point of our existence is to feed her. The queen is dead, long live the queen!
@Oskar: "free" and "regulated" are opposites.
By way of metaphor, you're saying you like iced coffee, except you'd prefer it were hot.
The question is: what balance of "free" and "regulated" is optimal?
My viewpoint: Before we start slapping new regulations on an already arcane system, maybe we would look at enforcing the ones we now have but we ignore (or even removing the ones that are nonsensical, if any such exist).
@Slida: I think it's a coincidence. Then again, I'm dubious about the claim that humans are a binary gendered species. That seems misleading and inaccurate to me, overt differences in plumbing be damned.
Unrelated note: BBkids- you really need to change it so that TAB->ENTER submits my comment, not goes to preview. Seriously, I can read what I wrote just fine in the text box, I want an easy way to post, not preview.
Pet peeve.
Teknomanser's onto something.
Bottom line is ensuring adequate caloric intake and shelter for all. The rest is "optional", a matter of style.
Cold comfort to tell starving people its their own fault [ for falling for Repub/Dem. (same damned policies, same damned outcomes) + "News Media" lies], so I blame the system, specifically the debt-bondage interest-farming model of 21st C. "capitalism"...how productive is all that housing stock? Why is it so highly-priced, so as to be unaffordable to those with a median income? Well it won't be unaffordable for long, the price of housing will always tend to go to the level at which an average guy can afford an average house.
But the USA is not there yet, and those banks needing overvalued real estate and the stream of interest payments generated thereby are going to get hurt.
Time to switch back to Bibles from real estate, all you southern salesmen...
For crying out loud people, the volume of robot trades is approaching 25% on the NYSE. Shouldn't we be capping and trading that source of volatility? Oh, yeah, and let's replace fossil fuels with something that won't raise insurance rates on the coast, too. Pfft!
The G.O.P. broke this economy, they buy it. Bail it all out until you inflate the seniors and the retiring baby-boomers right out of their homes. Good job, way to win an election for the Dems who still care about class size reduction. Even if they can still bribe and Diebold their way through 2008, it's eventually going to catch up with them. 'Matter of time.
@Ugly Canuck
What does courts and police have to do with businesses? If I wanted Socialism I would move to a country that had it. I like freedom and that means freedom from the Government.
@Ugly Canuck: I think ensuring adequate caloric intake and shelter for all is a bit generous. Populations exist in equilibrium with the available resources, and it's a dynamic equilibrium.
If you increase the pool of available resources, the population will grow until it's back to straining the resource pool. If you shrink the pool, the population will shrink. Without instituting some kind of population control, you won't ever be able to provide enough resources for everyone, because the population will grow to exceed your provisions.
t3knomanser #45:
then why are developed nations, the ones with the highest levels of assurance of caloric intake and housing, the ones with generally lower birth rates? caloric intake and shelter for all would suggest that norway's birth rate should be pretty goddamned high, but it isnt.
seems like there's a confounding factor there in your analysis of the situation.
williamsbk #44:
freedom from government, the cry of the privileged class dupe, who doesnt realize how much of his or her wealth rests on the availability of public works programs. because that's "socialism".
i dont see you hightailing it to haiti, or afghanistan. you can get some pretty serious "freedom from government" there, i hear.
@t3knomanser:
That's the argument that's usually given for legalizing hunting: there aren't enough resources for wild animals, so we should kill them instead of letting them starve. Letting anything die (preferably investment banks) is a tragedy, but it must be done before we hit an asymptotic growth spike.
Xeni - nice posting! got a good laugh.
Thought I'd share a little humor as well and send you a posting I just read at Weekly World News.
Fuld lost count!
http://www.weeklyworldnews.com/?p=2686
@JS7A #43
It was not only the GOP who created this mess. Actually, it was Clinton who repealed Glass-Steagall, which was a regulation brought in after the Great Depression to prevent things like this happening again. It separated commercial banks, investment banks, and insurance companies. After getting to play together for almost 10 years, look what a mess they created as they all fall down. Clinton was a great deregulator too. Unregulated derivatives, as UglyCanuck pointed out, were also an essential ingredient to the witches brew.
Well, it didn't take long for the "we wouldn't have made these bad loans if it weren't for those mean liberals *forcing* us!" canard to pop up this time.
(I debunked this in comments #119 and #134 of the previous thread; in summary, the lending businesses that weren't regulated by laws like the Community Reinvestment Act dove into the muck deeper than the regulated banks did.)
Also, there's no such thing as an unregulated market; all markets have rules, backed up by some combination of law, custom, or other violent or nonviolent pressures, that give the participants sufficient confidence to participate in it. The rules may be fairly intuitive in simple markets, but they're there. (One example for simple markets: When can you no longer back out of a trade?) And in more complex markets the rules are less intuitive, and far from the only rules that could possibly be imagined.
This is not to say one regulation is just like any other-- clearly some regulations make markets work well, and others make them work appallingly poorly. But I distrust anyone who says they demand an "unregulated market" for anything whose operations are even remotely complex. (And financial markets are *very* complex.) It's basically saying "I intend to play by the rules I want. You shouldn't question them, or even notice that they're my rules and not just inherent Laws of Nature."
@t3knomanser
Though in general your population pressures argument is sound, it doesn't seem to (currently) apply to western people with access to birth control. Western Europe is barely at replacement numbers, even in the face of (relative) wealth and plenty. In this regard, greed and selfishness (for one's time and freedom) works. I believe that it *is* in fact possible to provide all necessities and maybe even some minor luxuries for all the world if we weren't wasting all our resourses on destructive or non-existent production (ie. war and insurance) and competition for its own sake (thousands of "different" shampoo)
No security of property = no business.
Courts + police limit freedoms so that property can exist.
The existence of property in and of itself puts limits on people's freedom. Property does not exist without the State. That is all.
Why property for its existence ought to be able to limit people's freedoms (ie for them to take your property by virtue of greater strength) via State mechanisms, while the State ought not be able to re-distribute that self-same property for the benefit and existence of Society, is at best unclear.
What the Law creates (property) the Law can also take away.
This is why democracy is important.
And why the rich will never really rule.
Nobel prize winner has an interesting piece about the crisis in the Guardian today.
http://www.guardian.co.uk/commentisfree/2008/sep/16/economics.wallstreet
A couple of highlights:
"The new low in the financial crisis, which has prompted comparisons with the 1929 Wall Street crash, is the fruit of a pattern of dishonesty on the part of financial institutions, and incompetence on the part of policymakers.
It’s not a zero-sum game, it’s a negative-sum game: as people wake up to the smoke and mirrors in the financial system, as people grow averse to risk, losses occur; the market as a whole plummets and everyone loses."
Stiglitz also sums up his confidence in the current government to address the crisis:
"It is difficult to have faith in the policy wherewithal of a government that oversaw the utter mismanagement of the war in Iraq and the response to Hurricane Katrina. If any administration can turn this crisis into another depression, it is the Bush administration."
As to myself, I never quite understood how it is that an economic system where everybody's encouraged to scupper as much as possible for themselves could ever be considered recommendable, let alone stable. I think the US would do well to return to some sort of Keynesianism, rebuilding the somewhat tattered welfare state in the process. Like, securing free health care for everybody as we have here instead of "heads I win, tails the taxpayers lose" style capitalism.
@Rageahol: I think the secret is to look at why birthrates are so low. I think low birthrates are a necessary factor for any socialist-type system to arise. They've had low birth rates for a long time, even before the social programs took hold.
@t3knomanser
It's been years, but I seem to remember that Game Theory presupposes selfish actors.
But otherwise you are spot on. Theory is great until it collides with the real world.
@Agger: "everybody's encouraged to scupper as much as possible for themselves"
Is that really a feature of our economic system? Some people take that approach to it, to be sure, but I've never felt encouraged to do so. Then again, I don't come from a background where material wealth was every really considered much of an option. Comfort before acquisition.
Look at the people at the top. The airline executives who "Save" money by laying off thousands of people and then grant themselves bonuses based on the money they saved.
Yup, they fire people and then put the money in their pockets.
@51:
As to myself, I never quite understood how it is that an economic system where everybody's encouraged to scupper as much as possible for themselves could ever be considered recommendable, let alone stable.
Well, that was when the most reasonable way to make more money out of money was actually investing it brick and mortar factories with lots of workers, who would be paid decent wages (enough for a husband, wife and 4 children - because 2 children would die before age 18). But whoever actually reads Adam Smith?
Smith was descriptivist, not prescriptivist. A true member of the Scottish enlightenment, he had little time for theories based upon assumptions. Like a scientist, observation was the first order of business for Smith.
Very unlike the ideological , " 'free' markets are always right, we'll explain away any problems as the government's doing" school. ( This latter is actually IMO funny, since without exception the Gov. is staffed by guys these same ideologues gave the "thumbs-up" to.)
These guys seem always to already know what the evidence will show...an "a priori" school of political economics.
I'm sick and tired of people who say that all government intervention/regulation limits freedom, and that freedom always is directly proportional to some sort of "goodness". It is blatantly and obviously not true.
A good example is the police. They limit our freedom in two ways, we have to pay taxes to support them and if we do something bad, they'll put us in jail. Yet I think every reasonable person would agree that a well-regulated and honest police force is fundamentally very healthy for a society (not that the police doesn't ever go bad, that's the "well-regulated and honest" part).
The same can be said for regulations in the market-place. Many people agree (although obviously not everyone) that anti-trust regulation keeps the market-place more free, by encouraging competition. More companies will be able to enter the market and they will give the consumers more choice. It does come at the expense of one big company, but the market as a whole benefits immensely. And even the staunches opponents of anti-trust laws (anti-anti-trusters?) agree that it is necessary in some cases. Robert Bork, perhaps the most famous anti-anti-truster of the previous century supported the Microsoft anti-trust case, for instance.
And now we find ourself in this quagmire. Has lax regulation kept this market healthy? Has it kept it as free as possible? No, obviously not. We have the Fed stepping in and spending borrowed money like crazy-people and that is something the American taxpayers will be paying off for decades to come. How is that promoting "freedom" in the market-place?
The thing that pisses me off the most is that all these pleas for freedom like it's the holy grail are almost always extremely affluent people. Ask a wicked smart, but poor black kid growing up in the hood about what college he plans to go. You think he'll say Harvard? If he lived in a country which, in the strictest sense, limited freedom by raising taxes to support his tuition, he would be a much choice, and indeed, freedom. So stop it with your fucking "The market must be free, and that means less government intervention!"-bullshit.
The truth is, it's a balancing act. Go too far in one direction, and you have communism. Go too far in the other direction, you get poor black kids with no future at all and the collapse of multi-billion dollar companies like Fannie, Freddie, Lehman Brothers and Bear Stearns. Neither scenario is good for anyone.
I blame the Gramm-Leach-Biley Act of 1999 which deregulated banking, including rules that had protected the industry since the Great Depression (is it any wonder that not 10 years after deregulating we're seeing what could amount to another Great Depression?)
When is Obama going to point out that one of the authors of that bill is McCain's top economic advisor Phil Gramm?
The concept of "the truly free market" is somewhere between a pipe dream and a lofty ideal-- left to its own devices the market will only ocassionally police itself, eventually people forget the last crash, the greed comes back and things like this will happen again-- "boom and bust", it's the nature of capitalism. Regulations exist to minimize the peaks and valleys-- sure you can complain that regulations keep institutions from earning their top potential, but at the same time regulations act to prevent huge crashes.
Sigh... I still yearn for the same dream Marx did... "from each according to his ability, to each according to his need"
If only we could have this work...
Too bad no one will ever even try.
@T3chnomancer
I have a hard time understanding anarchosocialism because I fail to see how you can implement socialism without a command economy. People tell me that it would work, but I just don't see how.
Have you ever read Looking Backwards?
It's not THE answer, but it does it look possible.
@Rageahol: I believe the reason developed countries have lower birth rates comes from where our time is spent.
If your country has low resources and all you do is sit around at home and or work sporadically, the outcome is the same as bored teenagers in large groups here, sex. Lots of.
If everyones at home spending their time on boing boing, or creating steampunk mechanial spiders to take over the world, working 50 weeks a year, and commuting 2 hours a day, the amount of time taken and amount of things to do goes up vs 'eat sleep sex". Stress, access to birth control, less time, more stuff to do and spend time and money on = less babies.
@#43
Hahaha you actually think FISCAL policy is what caused all this? The problem was with MONETARY policy, and neither the Ds or the Rs have control of that. Greenspan bought into his own hype and thought he could puppetmaster the economy into a perennial bull market. Whoops, I guess Mieses and Hayek weren't wrong after all.
Free Market != Corporatism. Many people are blaming the "free market" for our corporatist, war-mongering government collaborations with their corporate cronies.
Monopoly trustbusting is a different conversation. How many natural monopolies can you name? The significant (corporate) monopolies were government-granted, e.g. AT&T, PG&E, Fannie/Freddie. And those monopolies were bad news.
re anarchosocialism: every description I've read of anarchosocialism sounds like free market capitalism for people who don't to be uncool by supporting capitalism. Replace corporations with trade unions and workers' councils, but the story stays the same.
@#51
That article was a load of crap. Markets may have informational asymmetry, but his solution is not to alter the availablity of information but to institute socialism in order to correct the asymmetry. He must be jumping up and down for joy at this collapse, for now he can bring forth his socialist paradise. He won a nobel prize for his work on market efficiency not for his solutions to that inefficiency. Also, he states in the article that it is government's job to limit financial risk, that is ridiculous. That will just encourage more risky behavior. The financials were working on assumptions that were wrong because of the market distortion created by the Fed. Also, is a risky loan all that risky if you are pretty sure the government will loan you more moeny to cover or just simply bail you out? Lehman sure thinks it is risky now, even if they didn't then.
SKR - You have to admit though, bothe Clinton and the R-Congress drank Greenspans Kool-Aid. He did have plenty of enablers.
In a nutshell: "It's the business cycle, stupid."
Think of what happens with any price control. If the government mandates a price ceiling... such as bread cannot cost more than $1, which is intended to make bread more affordable, and thus more available... what happens is that bakers stop baking bread because they cannot afford to do so if they cannot sell it for more than $1... so you have shortages... which actually means bread is actually less available.
The same thing happens with credit and the money supply when interest rates are set artificially low. (And the core task of the Federal Reserve is to unilaterally set the primary rate at which the money supply is expanded. The Fed is a private company with a government-granted monopoly privilege to do this.)
So as the money supply is expanded with the intention of making goods and services more affordable (i.e. "the boom"), but the "unwinding" of this inflation actually makes goods and services less available (i.e. "the bust").
The solution is not more credit (i.e. "liquidity"), but less.
Oh, and allow Bear Sterns, Lehman Brothers, Merrill Lynch, et. al. to foreclose, just like people who could not afford their homes were foreclosed on. Their capital needs to be freed up for reinvestment just as much as the homes were from their previous owners. No bailouts!
American 21st Century Corporatism, but yes, quite.MDH - no doubt, he didn't exist in a vacuum. One problem is that the politicians have convinced an economically ignorant citizenry that they, the politicians, can manipulate the economy with fiscal policy. So by extension it is just a matter of voting for the right person and all will be fixed. I think they started looking at the polls that always rank the economy as a major concern. Once they are in office they figure out that they need to lean on the Fed to keep the economy churning upward in order to stay in power and to maintain the fiction that they are in control. The end result is that the Fed chair is under constant pressure for relentless growth without any threat of inflation regardless of whether the R's or D's are in charge. I certainly wouldn't want that job. Right now though I am proud of Bernake for holding the line today.
You are totally correct, however, about the myth that government can affect the economy in the ways that politicians claim: stimulating growth, job creation, etc.
Y'know, I know this whole stock market line graph thing looks pretty depressing.
At first.
It's a lot more fun when you try to draw it in LineRider.
http://www.nytimes.com/2008/09/17/business/17insure.html?_r=1&hp&oref=slogin
Feds throwing $85 billion at AIG.
I have been giving this some thought today. Here is what I came up with.
1) Our economy hinges on so many factors, but I think the most important one is faith. Not faith in the religious sense, but faith in the system at all. In a depression, people halt their normal spending habits and this behavior results in less revenue and less growth and less jobs and less spending in a cyclical fashion.
2) Our economy is not really our economy. Our economy is everybody's economy. We're all involved in an internationally interwoven economy, aka "the world is flat." So, much of the "faith" in point 1 belongs to the whole world.
3) That "faith" is a part of something greater. It's not just about faith in the economy itself, it's about an overall belief in the system working. Find the lack of faith in the greater system, find the catalyst for the cyclical loss of faith in the economy.
I think what I am saying is that the economy is not just about money. Money is just a marker of something greater going on.
Personally I have no faith that our current government will acknowledge the real problem.
What is the cause of the business cycle?
Nor do I, in precisely the same way I have no faith that Microsoft will acknowledge Free Software.Introducing currency competition would be one way to provide alternative choices for people who want off the monetary policy malfeasance rollercoaster.
Zuzu, thank you for responding.
Do you think a change in office will help resolve this cycle or do you think at this point some greater real reform is required?
I have been thinking that a president is a lot like a CEO. Positive spin accelerates growth, negative spin results in failure. Typically a CEO can lose their position when they do something terribly wrong, but we don't appear to have a board forcing our president to resign.
Zuzu, re: currency competition, is this what I saw happening in Northern Ireland? I seem to recall that banks printed their own money.
Could you give a good example of currency competition?
In a broader sense, there's the entire Forex market.
For a more academic treatment, Hayek's Denationalization of Money: An Analysis of the Theory and Practice of Concurrent Currencies.
(Interesting "little known fact", eBay accepts transactions with Canadian Tire money.)
So I've read the last thread (all 170+ comments)and this one -Whew- and I really don't understand the earlier comments here, where people started worrying less about what's going on.
Personally, I'm keeping a wary eye on WaMu as the place where my money lives seems to be taking a lot of blows lately. I've been told that in the worst case that FDIC will cover what I have in the bank (even by my bank exec brother says so), but I don't exactly have a ton of faith in government safeguards at the moment. Do you guys think putting money in a credit union is a better option? Or should I join the mattress club? Or build a cooking oil powered rail car to take me home to HoboCon? Or whore myself out as a mail order groom to some lonely Canadian? I don't know what to do! Gah!
Maybe I should read some Buckminster Fuller to keep myself from completely freaking out. In fact I highly suggest reading RAW's Schodinger's Cat Trilogy, as he lays down a basic but inspiring example of how a Fuller-esque economy would work (including the addition of complementary currency). One of these guys shouls have been president IMO.
Anyways, after all this serious discussion, I would like to ask the BB crowd: Who wants a hobo chaser?
Let me know, and I'll put up the link ^_^
HO - BO! HO - BO! HO - BO! HO - BO!
@Anuerism:
> Personally, I'm keeping a wary eye on WaMu as the
> place where my money lives seems to be taking a
> lot of blows lately [...]
> I don't exactly have a
> ton of faith in government safeguards at the
> moment.
>
[ How the dickens do I quote a post, unless with ?! ]
Why not? So far not a single bank depositor has lost their money, so far as I know. If your money's actually "in the bank" in the sense that you've invested in equity - it's probably too late to be worrying about it.
@80 - use the tags (html tags). I guess there's a more clever way to get an actual blockquote, but I don't know it.
Alrighty, here's you're hobo chaser my friends!
http://www.youtube.com/watch?v=RbpRp5vZtAU
Enjoy!