timedelay
Full Member
Posts: 153
Age Range: 46-50
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Post by timedelay on Oct 23, 2020 6:41:24 GMT -5
Apologies for lowering the intellectual tone of this very interesting discussion but I can't think about world economics without also thinking of the solution proposed by an Irish comedian back in 2011:)
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Post by Handy on Oct 23, 2020 7:16:45 GMT -5
Mirrororchid
They don't understand quantitative easing.
They think sovereign debt works like their household debt.I will agree with your statements. I was thinking of why I distrust MMT and quantitative easing when compared to my previous "automatic overdraft loan" situation. With the bank automatic loan situation, the bank is the minder or the ine that enforces the rules and repayment of any loan unless the client defaults. With the government (USA in this case) who enforces the rules and are the rules fair to the common person. As I see things, the minder in this case doesn't exist except for some written set of rules written by the "fox that is put in charge of the hen house." I am not asying quantitative easing doesn't work but to me it favored the idiots (people that manipulated the system to their advantage, that made much of the 2007-2008 mess in the first place. From my perspective the financial manipulators got rewarded twice while some of the people that lost real money got little or nothing. My mental version of "government standards" is a policy that benefits companies that make large political donations and the money elite so the rules/laws are written in their favor. Many years ago I got a letter from the government (draft notice) saying I had to give 2 years to "Uncle Sam" and I promised that I would uphold the constitution of the USA. I fulfilled my obligations and now I see that this 2 year chore I worked at has some advantages for the population but some parts of the population get special privileges because of some cleaver legislation or are the results of special sessions not open to the public or the majority of the senators or congress. I know this is off topic regarding quantitative easing ans such. Too many bills with cute names get passed. Why not call something like it is? Quantitative easing? What would be a better descriptive name that conveys honesty? To save myself and the idea of quantitative easing and MMT, to me it works to a point but the downfall is "who is minding the minders." Another idea I have is why do we call the Federal Reserve or simply the Fed) and not "13 regional private banks" which is more truthful. en.wikipedia.org/wiki/Federal_Reserve
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Post by Handy on Oct 23, 2020 7:41:15 GMT -5
Timedelay about national debt and the collective nations debt. National debt is one thing but there are contracts written that some people estimate are 10 times more than a nations debt and those private contracts are classified as derivatives. Add the national debt to the derivative market and you will get an idea of how far we have stretched the rubber band in the pursuit of the standard of living. My concern is how far will the rubber band stretch without breaking? The below statement is about derivatives (I will pay you $$$$ if________ happens or if _______ doesn't happen) and it is not about national debt. Some market analysts even place the size of the derivatives market at more than 10 times that of the total world gross domestic product (GDP). www.investopedia.com/ask/answers/052715/how-big-derivatives-market.aspYes, it is complicated. |
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Post by Handy on Oct 24, 2020 20:18:18 GMT -5
More complicated reading about MMT and the government creating money by computer strokes.
Also keep in mind banks create money through what is called "fractional reserve banking."
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Post by mirrororchid on Oct 26, 2020 19:19:41 GMT -5
A lot of doomsayers scream about the absurdity of the derivatives market. They seem to imply there's some mechanism by which all those promises MUST be kept. They needn't. They are promises made by financial institutions of finite scope. Lehman Brothers Bear Sterns Merrill Lynch all failed to pay off their derivatives losses. The result? They're all dead and many derivatives investors didn't get the money they were promised. Derivatives are risky and the Fed made no guarantees to help the financial institutions that made the promises. That said, some assistance was lent because it seemed most major institutions did have exposure to these hare-brained schemes. I'm concerned that many reckless investment houses who survived will only do it again because they didn't die the first time around.
Fractional banking creates money when they create loans for sums 10 or 20 times more than the money they actually have on hand. As the loan payments come in, the created money is erased again, but the interest stays "real". It increases money supply by the rate of the interest. If a loan defaults, I don't know what becomes of that "created money". I can imagine it at least stays tied up while a foreclosure process and collections process is followed, tying it up so it cannot be reloaned. The amount is limited by that reserve requirement of cash on hand and bad loans will eat away at what's available. |
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Post by Handy on Dec 27, 2020 0:51:17 GMT -5
Why Economists Never Agree on Anything?
Modern Monetary Theory: How it Could Answer All Of Our Economic Problems
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Post by Handy on Dec 31, 2020 13:26:51 GMT -5
What’s It Like to Live with Negative Rates? We’re Already There, So Consider How to Position (video at the end of the read)
Economic History
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Post by mirrororchid on Jan 1, 2021 11:07:31 GMT -5
Why Economists Never Agree on Anything?
Modern Monetary Theory: How it Could Answer All Of Our Economic Problems
I find most of "Economics Explained" thorough and fairly well balanced; a good resource for those worried about national "debt", as everyone is about to be now that a Democratic president is taking the helm (assuming no martial law or coup.) The purpose of worrying about debt is to slow down spending which slows down economies and makes presidents look bad. This works because people think national "debt" is the same as their credit card. Any Senator who compares the two is either ignorant, or deceiving you. Neither should be acceptable in a leader. |
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Post by Handy on Jan 1, 2021 19:10:56 GMT -5
I know the politicians aren't planning on paying off debt. It is going to be, borrow and spend until the inflation rate is 5% or 6%, which is double what the "fed" (private banks) say the nation can tolerate. Federal Reserve Bank of Boston Federal Reserve Bank of New York Federal Reserve Bank of Philadelphia Federal Reserve Bank of Cleveland Federal Reserve Bank of Richmond Federal Reserve Bank of Atlanta Federal Reserve Bank of Chicago Federal Reserve Bank of St. Louis Federal Reserve Bank of Minneapolis Federal Reserve Bank of Kansas City Federal Reserve Bank of Dallas Federal Reserve Bank of San Francisco Some banks also possess branches, with the whole system being headquartered at the Eccles Building in Washington, D.C. They are not a departments of the government. They are private corporations in which the government has an interest." en.wikipedia.org/wiki/Federal_Reserve_Bank |
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Post by baza on Jan 5, 2021 0:46:58 GMT -5
Suggestion.
Get a copy of "Sapiens" by Yuval Noah Harari.
It's a good read in its' own right - but of interest might be Chapter 16 starting on page 341 titled "The Capitalist Creed"
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Post by Handy on Jan 28, 2021 21:11:40 GMT -5
Not exactly Economics but related to the stock of Game Stop, AMC and American Airlines.
The First Short Sell Was Made For Revenge | Planet Money | NPR
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Post by mirrororchid on Jan 29, 2021 6:30:42 GMT -5
Not exactly Economics but related to the stock of Game Stop, AMC and American Airlines. The First Short Sell Was Made For Revenge | Planet Money | NPR Imagine my shock when my smattering of GameStop tock went haywire. Sold at $300. Not a nest egg by any stretch, but I hadn't expected GME to be much of anything ever. The benefit of a diverse portfolio? Short sellers sometimes pick one of your nothing stocks and makes it a boon. I read a forum post describing the use of options to cause the spike. Short sellers have computers primed to sell if the stock starts going up. Moreover, they are programmed to look for signs the stock is going to go up. One of the signs is "futures" These are contracts that reserve the right to sell a stock at a future price. These Reddit investors placed Futures contracts calling for the right to buy GameStop at a measly $300 a share or something similarly absurd. The computer program saw this prediction that buying at $300 would be a great deal within 90 days and the computer program panicked and started buying the shares it was obligated to buy under the short sell contract. The automatic buy bought up the cheap shares and more options were put in to make the computers panic even worse. This trickery of automated systems will be tweaked, so I don't expect these short squeezes like AMC, American Airlines, and GameStop to last long. Alas, uber rich investors remain safe in their private jets. |
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Post by Handy on Jan 29, 2021 14:44:43 GMT -5
I don't know enough to trade futures or short sell so I just do the old fashion basics of PE, EPS, ROI, future sales estimates and 5 yr expected growth along with some estimates of future competition. Five years ago I was thinking of buying 100 shares of GME but never did because the story at the time was GME was going to be in a situation like the video rental company Block Busters in a short time, where people went from store rentals to online rentals of movies. I already saw the trend so decided to buy MDU, the utility and gravel company. I get a steady dividend from MDU which suits me. I had a distant relative that set the type for the financial page in the newspaper. He saw prices change often, invested his money a little at a time based on price fluctuations and died a millionaire even with only earning a low wage at the news paper where he worked for 40 years. Uncles advice to me was never get greedy and buy a stock that looks like the maximum best deal because it often doesn't last. Instead go for something more stable and you will make enough money in the long run and not worry so much. There are some videos on Youtube with the word "quant" that explains high-frequency trading and some that deal with short selling that are interesting to watch. I watched a video about Jim Simons that was an eye opener. He is a math wiz and hired a lot of PhD's to help run his highly successful hedge fund company. I thought "who am I compared to his group of some of the smartest minds." I felt like I didn't stand much of a chance against those experts. To me the thing that makes the market go up is new money chasing after a limited amount of products.
Tulip mania is worth a read for those people that don't know what it is. |
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Post by Handy on Feb 2, 2021 13:54:31 GMT -5
Logic VS Emotions Book: The Hidden Brain: How Our Unconscious Minds Elect Presidents, Control Markets and Save Our Lives | Author: Shankar Vedantam
Podcasts on Hidden Brain topics
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