Another example of the great divide

[Jim O'Bryan]

They break into morning news with a flash bar.

"Goldman Sachs Announces First Quarter Loss Ever Since Going Public."

Huh?

I do hope that someone told them stock could go up and down, and that going public, was not a guarantee. "We must rush in to help with more, we cannot let the "Goldman Sachs" name to be tarnished." Actual quote.

Pat Buchanan responded, "What?!"


FWIW


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[ryan costa]

[quote]No investment bank owned by its employees would have levered itself 35 to 1 or bought and held $50 billion in mezzanine C.D.O.’s. I doubt any partnership would have sought to game the rating agencies or leap into bed with loan sharks or even allow mezzanine C.D.O.’s to be sold to its customers. The hoped-for short-term gain would not have justified the long-term hit.

No partnership, for that matter, would have hired me or anyone remotely like me. Was there ever any correlation between the ability to get in and out of Princeton and a talent for taking financial risk?

Now I asked Gutfreund about his biggest decision. “Yes,â€

[Tim Liston]

Ryan I read that article a couple days ago. Let me say that I have probably read 1000 articles in the last year or two about our financial mess, and the one you linked above is almost without a doubt the most interesting, informative and well-written of all the stuff I have read. I would recommend that all Observers take the time to read it.

[Tim Liston]

Oh and Jim, I was watching the business news yesterday while cranking away on an exercise bike, a lady was on who was one of Madoff's "victims." To me it appeared she was making a case that because Madoff's clients were "sophisticated" and that they had been so cleverly defrauded, they were somehow deserving of a taxpayer bailout. But personally I am having difficulty discerning a major difference between what Madoff did, and what the other "players" who ran the investment banks, etc. did, the result of which has shown up in massive 401k losses nationwide. Both were managing OPM but were operating largely in their own self interest. Another example of your great divide....

[Jim O'Bryan]

Oh and Jim, I was watching the business news yesterday while cranking away on an exercise bike, a lady was on who was one of Madoff's "victims." To me it appeared she was making a case that because Madoff's clients were "sophisticated" and that they had been so cleverly defrauded, they were somehow deserving of a taxpayer bailout. But personally I am having difficulty discerning a major difference between what Madoff did, and what the other "players" who ran the investment banks, etc. did, the result of which has shown up in massive 401k losses nationwide. Both were managing OPM but were operating largely in their own self interest. Another example of your great divide....

Tim

What I got a kick out of was Mort Zucker talking about he lost $30 million with Maddoff. A PERSON overseeing one of his foundations had put everything with Maddoff because of the great returns. When Joe Scarbourgh asked what happened to THAT PERSON Mort said he was fired and will be sued in every county of New York he can sue him in. Diversifying is the key. What amazed me was that Mort does not see that HE did not diversify, he had one person watching his $30 million. To me that is a laziness shared by the fired investor.

I will tell you the ones that get my heart, are the ones dragged down. People that had to take bonuses in the form of company stock they cannot sell. The companies that supply the big three, etc.

Of course as already has been mentioned, Congress and the House understand how Wall Street make money. Well let me change that, most have money invested in Wall Street, and think they understand it. That is one reason why when Wall Street was in trouble they came running with checks and ZERO thought on what to do but throw it at them, and quickly.

For the life of me I do not see why the Government did not just guarantee loans that are currently outstanding. PERIOD. It would have taken uncertainity out of the market, in an afternoon, and for 1/10th of what they have blown already. However the more people I talk to the more that are now seeing that the banks have Trillions, ready to buy up failing companies for pennies on the dollar. It will be the largest transfer of funds from the middle class to upper class in the history of the world. And we just sit by and let it happen.

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[ryan costa]

If mere scandal could have destroyed the big Wall Street investment banks, they’d have vanished long ago. This woman wasn’t saying that Wall Street bankers were corrupt. She was saying they were stupid.

Wall Street is staffed by Globalists.

Free Market Champions invested in Madoff. Smart people who had earned many millions. Madoff took them for 50 billion. A New York Times article suggested he's got a few hundred million dollars stashed away. And that he will give it to some of his favorite people before being convicted and sentenced.

The Bull and the Bear don't fit as the avatars of wall street. Feral Boars sporadically herding big dumb feedlot-type Cows paints a better billboard. Hysterical baboons driving Lexuses. Some Peacocks on Learjets.

[Dustin James]

Wall Street is staffed by Globalists.

Free Market Champions invested in Madoff. Smart people who had earned many millions. Madoff took them for 50 billion. A New York Times article suggested he's got a few hundred million dollars stashed away. And that he will give it to some of his favorite people before being convicted and sentenced.

Not sure what your statement "staffed by globalists" means. The economy is global and will remain global from here on out, whether we whine loudly or softly.

The problem with Made-off and most of this money laundering looting on Wall Street is because we've careened off the road of capitalist principles, which were what made this country great. Back in the days when WE actually made things.

I certainly don't have the answers of why hucksters are now in
charge of distributing money we don't have to people who have already profited and then blown the money.

But here is a clue from Ayn Rand written 50 years ago in Atlas Shrugged:

The following is an excerpt from Atlas Shrugged, © Copyright, 1957, by Ayn Rand. Full excerpt in Capitalism Magazine http://www.capmag.com/article.asp?ID=1826

"So you think that money is the root of all evil?" said Francisco d'Anconia. "Have you ever asked what is the root of money? Money is a tool of exchange, which can't exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?

...."If you ask me to name the proudest distinction of Americans, I would choose--because it contains all the others--the fact that they were the people who created the phrase 'to make money.' No other language or nation had ever used these words before; men had always thought of wealth as a static quantity--to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created. The words 'to make money' hold the essence of human morality.

~~~~ please read the article for the entire speech...~~~~~~~~

So...
Unfortunately, when we make money or distribute money without the balance of earning it and the value for value tenet of fair trade, we are headed for an unsustainable model that will collapse under it's own weight. It's been said that what some of these firms did was not technically illegal. Well certainly the Ponzi schemes were. But even for the ones that were legal...were they immoral? Such a lofty word, until it has a price tag attached to it and the invoice is handed to us

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[Jim O'Bryan]

The following is an excerpt from Atlas Shrugged, © Copyright, 1957, by Ayn Rand. Full excerpt in Capitalism Magazine http://www.capmag.com/article.asp?ID=1826

Money is made possible only by the men who produce. Is this what you consider evil?

Why yes it is one of the things.

While we have publicly discussed and thrown away about $1.5 tillion in bailout money. A figure that was at least discussed in public, and we know about. The Federal Reserve has printed an estimated $3.5 Trillion, that we know nothing about except for little snippets that leak out.

It is one thing to burden the next generation with massive debts that we know about. That way when Mom and Dad at least know they stole their children's future for shiney objects and unjust wars.

It is far more evil, when we are not aware.

FWIW

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[Dustin James]

Here is a blog post that supports your assertion about the fed. http://benbittrolff.blogspot.com/2008/11/really-scary-fed-charts-nov-us-bankrupt.html

....from the link...
Total Borrowings of Depository Institutions from the Federal Reserve (BORROW) went from $290.105 billion in September to $648.319 billion in October. That is a 123.50% increase in just one month or a 1481.73% annualized increase. That is also 4.7% of GDP (2007). Currently, there is no evidence at all that the pace of borrowing is slowing down. Obviously, there is an upper limit somewhere.

Non-Borrowed Reserves of Depository Institutions (BOBNONBR) went from -$187.305 billion in September to -$332.750 billion in October. That is a 77.65% increase in just one month or a 931.82% annualized increase. That is also 2.4% of GDP (2007). In plain simple English: Banks are insolvent as a group. The money coming out of the ATM is money borrowed from the Fed. Currently, there is no evidence at all that the health of banks is improving.

Total Borrowing (BORROW) and Non-Borrowed Reserves (BOBNONBR) have clearly blown past each other as the ponzi scheme that was the US financial system finally and suddenly unraveled. This is EXACTLY what happened in Japan. This is EXACTLY how Japan ‘liquefied’ it’s overleveraged, overextended and insolvent banks. Creating the infamous Japanese ‘zombie’ banks resulted in deflation and economic stagnation that is now referred to as the Lost Decade.

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[ryan costa]

Ayn Rand is a fantasist who didn't understand American History.

Republicans believe in high tariffs and subsidizing rail. There are no Republicans in Congress. In Congress there are Democrats, and there are Giant Douchebags.

government wasn't small in the 19th century america. Government was poor and not very professional.

The economic theory behind "free trade" is coupled with that of progressive income taxes, transfer payments, etc.

As American history demonstrates, there was plenty enough trade when tariffs were high. Robert Dollar became a millionaire shipping magnate during the era of high tariffs.

If you want to base your premises for capitalism on Ayn Rand, you can get rid of most of our military, NASA, most of our museums, our Railroads, our interstate highway system, the CIA, the DEA, the NSA, the FBI, K12 education, all the contracting and research grants that developed computer and IT technology, and most of our post secondary colleges and universities.

[Dustin James]

Ayn Rand is a fantasist who didn't understand American History.

Republicans believe in high tariffs and subsidizing rail. There are no Republicans in Congress. In Congress there are Democrats, and there are Giant Douchebags.

As usual, one can hardly argue with the depth of your arguments and your maturity. Thanks again for clearing the path to wisdom for me.

[Jim DeVito]

On a completely unrelated note. I saw we dissolve all government agencys with 3 letter names... Oh wait then we will just have a bunch of guys with guns standing around with nothing to do. We all know how well that works out. Good Night All !!

[Dustin James]

If you want to base your premises for capitalism on Ayn Rand, you can get rid of most of our military, NASA, most of our museums, our Railroads, our interstate highway system, the CIA, the DEA, the NSA, the FBI, K12 education, all the contracting and research grants that developed computer and IT technology, and most of our post secondary colleges and universities.

BTW, think about what you're saying here. The entities you cited above did not spring forth from nothing. They came to being from government related programs or private funding. They all cost money. All of them exist in one form or another in socialist and communists countries. One could argue that the emphasis and governance increases for the spy agencies in these countries. But they would exist no matter what economic and social model is practiced.

How are they funded? Well ours were created from taxes -and taxes created because of robust commerce via capitalism. If you want the socialist model, look to every example the world has ever created. There is no proof that the kind of innovation we created time and again could be done by government employees (everybody in socialist countries works for the government you see). They find the funding too. The soviets took food off the table and bankrupted their system. We're trying hard to match them. The U.S Government is the largest employer and about to get a whole lot larger.

You've thrown together things that started as government initiatives such as railroads, NASA and Technology (DARPA) and failed to acknowledge that they are all instrumental to and from capitalism. Colleges are all run on credit (student loans).

So without going down your path that an elegant explanation of capitalism core principles by Ayn Rand be dismissed, it still gets back to things cost money. Money is made possible only by the men and women who produce. When we stop producing, money runs out. As Jim said, the fed can print money, but that throws dirt on the coffin.

The original and only point I was making is that we've gone off course to what role capitalism plays and what role government plays.

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[ryan costa]

Ayn Rand is like reading Dungeons and Dragons. occasionally you'll get something that makes ethical sense, in the context of a world that never existed.

Here is something from Henry Carey, an American economist from the 19th century past. economists love the 19th century past.

[quote]
Two systems are before the world; the one looks to increasing the proportion of persons and of capital engaged in trade and transportation, and therefore to diminishing the proportion engaged in producing commodities with which to trade, with {necessarily} diminished return to the labour of all; while the other looks to increasing the proportion engaged in the work of production, and diminishing that engaged in trade and transportation, with increased return to all, giving to the labourer good wages, and to the owner of capital goods profits.

One looks to increasing the quantity of raw materials to be exported, and diminishing the inducements to the import of men, thus impoverishing both farmer and planter by throwing on them the burden of freight; while the other looks to increasing the import of men, and diminishing the export of raw materials, thereby enriching both planter and farmer by relieving them from the payment of freight.

One looks to giving the products of millions of acres of land and of the labour of millions of men for the services of hundreds of thousands of distant men; the other to bringing the distant men to consume on the land the products of the land, exchanging day’s labour for day’s labour.

One looks to compelling the farmers and planters of the Union to continue their contributions for the support of the fleets and the armies, the paupers, the nobles, and the sovereigns of Europe; the other to enabling ourselves to apply the same means to the moral and intellectual improvement of the sovereigns of America. One looks to the continuance of that bastard freedom of trade which denies the principle of protection, yet doles it out as revenue duties; the other to extending the area of legitimate free trade by the establishment of perfect protection, followed by the annexation of individuals and communities, and ultimately by the abolition of custom-houses.

One looks to exporting men to occupy desert tracts, the sovereignty of which is obtained by aid of diplomacy or war; importing men by millions for their occupation.

One looks to the centralization of wealth and power in a great commercial city that shall rival the great cities of modern times, which have been and are being supported by aid of contributions which have exhausted every nation subjected to them; the other to concentration, by aid of which a market shall be made upon the land for the products of the land, and the farmer and planter be enriched.

One looks to increasing the necessity for commerce; the other to increasing the power to maintain it.

One looks to underworking the Hindoo, and sinking the rest of the world to his level; the other to raising the standard of man throughout the world to our level.

One looks to pauperism, ignorance, depopulation, and barbarism; the other to increasing wealth, comfort, intelligence, combination of action, and civilization.

One looks toward universal war; the other toward universal peace.

One is the English system; the other we may be proud to call the American system, for it is the only one ever devised the tendency of which was that of elevating while equalizing the condition of man throughout the world.

Such is the true mission of the people of these United States. To them has been granted a privilege never before granted to man, that of the exercise of the right of perfect self-government; but, as rights and duties are inseparable, with the grant of the former came the obligation to perform the latter. Happily their performance is pleasant and profitable, and involves no sacrifice.

To raise the value of labour throughout the world, we need only to raise the value of our own.

To raise the value of land throughout the world, it is needed only that we adopt measures that shall raise the value of our own.

To diffuse intelligence and to promote the cause of morality throughout the world, we are required only to pursue the course that shall diffuse education throughout our own land, and shall enable every man more readily to acquire property, and with it respect for the rights of property.

To improve the political condition of man throughout the world, it is needed that we ourselves should remain at peace, avoid taxation for the maintenance of fleets and armies, and become rich and prosperous.

To raise the condition of woman throughout the world, it is required of us only that we pursue that course that enables men to remain at home and marry, that they may surround themselves with happy children and grandchildren.

To substitute true Christianity for the detestable system known as the Malthusian, it is needed that we prove to the world that it is population that makes the food come from the rich soils, and that food tends to increase more rapidly than population, thus vindicating the policy of God to man.

Doing these things, the addition to our population by immigration will speedily rise to millions, and with each and every year the desire for that perfect freedom of trade which results from incorporation within the Union, will be seen to spread and to increase in its intensity, leading gradually to the establishment of an empire the most extensive and magnificent the world has yet seen, based upon principles of maintaining peace itself, and strong enough to insist upon the maintenance of peace by others, yet carried on without the aid of fleets, or armies, or taxes, the sales of public lands alone sufficing to pay the expenses of government.

To establish such an empire–to prove that among the people of the world, whether agriculturists, manufacturers, or merchants, there is perfect harmony of interests, and that the happiness of individuals, as well as the grandeur of nations, is to be promoted by perfect obedience to that greatest of all commands, “Do unto others as ye would that others should do unto youâ€