1. Just look at that shit last week. Jesus. What was rational about that? And it's not at all atypical.

2. There no longer seems to be much of an incentive to direct capital to viable businesses in need of capital (AKA the entire purpose of capital markets). It seems that the real money is in developing ridiculous self-destructing financial products and proprietary trading techniques.

5/12/2010 7:56:21 PM

If you mean, have I lost faith in a incestuous government-industrial complex which exists only to feed itself through coercion via the power of the state then yes I have.


If you mean, have I lost faith because I expect the world to be perpetually functioning for my short term benefit and any disruption in this is cause for panic then no I have not.

5/12/2010 8:35:07 PM

What in particular was irrational about last week?

5/12/2010 8:50:50 PM

You had faith in them? LOL

5/12/2010 9:05:33 PM

Fairweather fans ITT.

5/12/2010 9:22:22 PM

Quote :

"What in particular was irrational about last week?"

We lost billions of dollars in value.

Did American industry truly lose billions in value, or did traders chase their tails down the toilet bowl?

Quote :

"incestuous government-industrial complex which exists only to feed itself through coercion via the power of the state"

Errm. Howso?

Quote :

"Fairweather fans ITT."

In all fairness, I'm a liberal, which means I have a deep-rooted hatred of capitalism, regardless of how it's performing.

[Edited on May 12, 2010 at 9:35 PM. Reason : ]

5/12/2010 9:32:47 PM

Quote :

"We lost billions of dollars in value. Did American industry truly lose billions in value, or did traders chase their tails down the toilet bowl? "

You're presuming that the value lost was real in the first place. In other words, yes.

[Edited on May 12, 2010 at 9:44 PM. Reason : asg]

5/12/2010 9:43:51 PM

I read a huge theory of a group of people getting together to make a fire sell and sell all of thiers at onece. Causing a minor crash in value which would, as they planned, cause people with automated 10% value loss sale clauses to have computers sale theirs lowering the value even more. Then, the group of people who sold int he first place (organized through a chain email or some wide array of communication) could buy the same value they had in the first place but at much much lower price for shares. Then, by the time everything recovered, they've made like a 20% gain in one day.

That 20% was essentially stolen from the people who had the automated loss-sale clauses computerized.

It all makes perfect sense when you hear someone who knows more about explain it but this was a group heist of sorts.

5/12/2010 10:29:53 PM

Quote :

"You're presuming that the value lost was real in the first place."

Who's to say it was or wasn't? Regardless-- last week's sell off was not based on any sort of value judgment one way or another.

5/12/2010 10:47:18 PM

Quote :

" It seems that the real money is in developing ridiculous self-destructing financial products and proprietary trading techniques."

Yeah, but the only reason this occurs is because there's an "incestuous government-industrial complex which exists only to feed itself through coercion via the power of the state."

Don't you see? It's the government's fault, not capitalism!

5/12/2010 10:51:53 PM

Quote :

" That 20% was essentially stolen from the people who had the automated loss-sale clauses computerized. "

Sounds like some traders need to not have their trading run entirely by a computer, or at the very least have a smarter program. Besides, for every fool that had their program set to dump everything, someone else had a program set to buy as much as possible after the price dipped below a certain point. Some people lost money, others gained it, and if you trust your entire investment strategy to computer systems, you run the risk of not having a say in it when something weird happens.

Quote :

"Who's to say it was or wasn't? Regardless-- last week's sell off was not based on any sort of value judgment one way or another."

But if the value was all imaginary in the first place, then whether it was based on a value judgment or not is meaningless. Ultimately the sell off happened one way or the other, there was some freaking out that happened, then people got their heads screwed back on, re-evaluated the value and buying and selling resumed as normal, it just so happens that after everyone re-evaluated things, they decided that it really wasn't worth as much as they thought it was.

To be clear, I have very little trust in what the actual numbers in the market say, but I don't find anything that happened all that irrational or unexpected.

[Edited on May 12, 2010 at 11:28 PM. Reason : uoh]

5/12/2010 11:04:57 PM

Quote :

"Don't you see? It's the government's fault, not capitalism!"

Truly sad that you're joking, because that is precisely correct.
Seriously. I think many, if not most liberals are playing dumb, knowing all along that the government is at fault, but blaming capitalism to help their efforts to intentionally destroy it.
Keep it up, liberals. See if you don't start a civil war you can't win.

5/13/2010 12:47:22 AM

^ was that your daily devotional to your religion? Do you think the human system of “capitalism" is inherently perfect and beyond critique?

[Edited on May 13, 2010 at 1:02 AM. Reason : ]

5/13/2010 1:01:50 AM

^
I don't worship capitalism, or anything else. And no, I don't think that capitalism is inherently perfect and beyond critique. Far from it. I mean, really? You're gonna equate my defense of capitalism (in general,) for some sort of irrational religious-like devotion to it being perfect? Really? That's pretty weak, dude.

5/13/2010 1:30:30 AM

1) Stock markets are only one part of the capital market

2) Although it is cool to frown on "developing ridiculous self-destructing financial products" right now, that really isn't what got us into the subprime mortgage crisis (the only reason anyone in the commentariate has an opinion on financial products). The real problem wasn't the products themselves (mortgage backed securities), but how rating agencies and investors estimated the risk associated with them (hint: they were riskier than they though they were). After the fact, its easy to see their error, but it isn't clear how any regulatory agency could have corrected this problem before hand. So sure it sucks that the this led to a crisis, but there is really nothing we can do about it. Well, except maybe if we put a stop to all financial innovation. But why stop at mortgage backed securities and new financial innovations moving forward? Why not roll back all financial innovations for the past 300 years?

3) Unless you have an alternative to capital markets for transforming savings into investments, then this thread is really just a case of idle complaining. Would it be great if investors were perfectly rational and excellent foresight so stock prices rarely fluctuated? Sure. But if we're playing the wishing game, there's a few things I'd rather wish for first (winning the lottery would be awesome). Capital markets may be imperfect, but they are really the best thing going.

That is all.

PS* In 50 years, historians will look back and see the subprime mortgage crisis as a hickup in the development of a new financial product that will allow for better distribution of risk and ultimately enable more people to own their own homes. Growing pains in a process that will ultimately make everyone richer.

[Edited on May 13, 2010 at 12:32 PM. Reason : ``]

5/13/2010 12:25:04 PM

Quote :

"That 20% was essentially stolen from the people who had the automated loss-sale clauses computerized."

Here you go with your idiotic class warrior bullshit again. How about the people who bought in after march lows last year? Were they stealing from people who were dumb enough to sell at the bottom?

Quote :

"It all makes perfect sense when you hear someone who knows more about explain it but this was a group heist of sorts."

Does it? Because it makes absolutely no sense when you hear it from someone who has no idea what the hell they are talking about.

5/13/2010 3:03:08 PM

^


Buyers cannot exist without sellers, and both of them are making the transactions on their own free will.

5/15/2010 1:58:05 PM

Quote :

"Did American industry truly lose billions in value, or did traders chase their tails down the toilet bowl?"

If I were you, I'd be more worried about an ever expanding State funded by the devaluation of fiat currency by the fed than a one-off glitch in the stock market.

5/17/2010 6:47:08 AM

Quote :

"Here you go with your idiotic class warrior bullshit again."

Seen this meme a few times in the last couple of days, which conservative pundit revived it this time around?

5/17/2010 7:46:39 AM

^^ what’s wrong with that?

Isn’t the prevailing economic theory that a low level of inflation is “healthy” ? I presume you know the reasons economists state this...

5/17/2010 9:27:50 AM

^^ Wasn't aware that it was a meme.

5/17/2010 10:48:08 AM

I, too, love graphs with no titles

5/18/2010 9:08:57 PM

^ ha if i had to guess i'd say it was the value of the dollar relative to 1776

5/18/2010 9:11:34 PM

that's what i'd guess, too, lol

5/18/2010 9:12:34 PM

look what devaluing our currency has done to our living standards!!!!!!

5/19/2010 8:34:27 AM

You'd strengthen your case if you were honest about latent causes here

5/19/2010 12:26:10 PM

to answer the thread's question - a loud on resounding NO.

i do however think Glass-Steagel (spelling?) needs to be reinstated. there was a goddammned good reason it was instated in the first place.

the right amount of regulation is a good thing. ultimately, children and animals need responsible and ethical adult supervision.


i'll leave you with this word on the laws of nature: capital markets are semi-efficient the way DNA replication is semi-conservative. ... if i ever get my head out of my ass i'll publish a paper on it someday

5/19/2010 12:40:33 PM