HAHAHA

 

It's not like anyone in my family is really religious or anything. :shrug: I haven't really bought into the whole beleive-in-a-god-or-go-burn-in-hell shtick.

 

I wouldn't say I have perfect faith in government doing everything we want and need, but I don't think anarchy would really work out. It's not like I'm some blind patriot toting a gun and waving a little American flag or anything...

 

Oh SHIT, is that how I come off as...? :uhoh2:

Oh SHIT, is that how I come off as...?

 

lol, to me it is. But that's how most people are, so you're in good company.

 

I don't think I've never been an atheist, but I go between being agnostic and deist. I think God just observes, and that generally he's good and he wants us to be happy. But I don't think he's like a human in a white robe on a throne or anything.

 

EDIT: OMG your signature! The Wiggles ftw!

SHIT. Shit shit shit. Here I was thinking I was all socially hip and progressive XD.

 

I don't think I've never been an atheist, but I go between being agnostic and deist. I think God just observes, and that generally he's good and he wants us to be happy. But I don't think he's like a human in a white robe on a throne or anything.

 

Kind of what I think. Except it's IF there's a god thats what it does. And I don't think whatever force ran the universe would be simple enough for a normal human mind to wrap itself around -- thereby making a nice lazy escape for me so I don't have to worry about the "imponderables" of life -- or any sort of theism. I just try to be a reasonably nice person -- I mean it's better to be nice for niceness' sake than to be nice because you're going to burn eternally in hell. You know?

 

EDIT: OMG your signature! The Wiggles ftw!

I know. Have you seen Coldplay's cover of them? It brought me to tears. :cry: Evidently Apple really digs the Fruit Salad song. Which is sort of scary when you think about it.

Anyone see the new plan from Geithner today?

 

http://finance.yahoo.com/tech-ticker/article/216311/Part-I-Geithner's-Plan-%22Extremely-Dangerous%22-Economist-Galbraith-Says?tickers=%5Egspc,%5Edji,c,bac,jpm,WFC?sec=topStories&pos=2&asset=TBD&ccode=TBD

this thread is amazing.

Yeah, isn't it? XD It's actually one of the most intelligent conversations I've had in... well, my life.

The Geithner plan is just the same old solution we've been hearing about for a while, with a bigger price tag. Home prices WILL drop, because their value has already dropped. It dropped when too many of them were manufactured and put onto the market (a dearth of supply and limited demand). The only way to make home values increase again is to start burning houses down (reducing supply).

 

It's amazing how such a painfully simple subject like economics can be lost on these supposedly brilliant minds who are running things now.

 

EDIT: From the article Nick linked to -

 

Once the banks start lending, the economy will recover. The reality: American consumers still have debt coming out of their ears, and they'll be working it off for years. House prices are still falling. Retirement savings have been crushed. Americans need to increase their savings rate from today's 5% (a vast improvement from the 0% rate of two years ago) to the 10% long-term average. Consumers don't have room to take on more debt, even if the banks are willing to give it to them.

 

Here's why this recession will turn into a depression. What's the incentive to save money when there is rampant inflation? There is none! Americans might start saving again, but it won't do them any good until interest rates skyrocket beyond inflation rates. It's not going to be pretty.

I agree, high five :D

If only everyone agreed with me, life would be so much easier!

 

I feel like Rush Limbaugh right now. Always right!

HAHA that has got to be the most politically nerdy joke I've ever heard

 

well, at least the most politically nerdy joke I've ever heard and simultaneously UNDERSTOOD.

Nick:

 

The DOW just broke a key trendline according to Kirk, starting to look overbought:

 

 

I put in an order to buy TZA after hours today.

wuuuuuuuuuuuuuuut?

 

I feel stupid now.

Nick and I play the market to make money. Sometimes it's like gambling because we aren't professionals, but when you win you win big! ;)

 

We come up with theories about how the market will react to certain news and position accordingly. So in this case, I'm buying TZA, which is a three-letter symbol for an ETF (exchange traded fund) that trades like a stock, but is actually a basket of underlying assets which attempt to mirror the Russell 2000 index (which is an index of stocks that are "small cap" which means they are tiny companies - small capitalization) and then multiplies the result by 3. So if the Russell 2000 drops 4%, TZA will go up 12%.

 

Attempting to explain that made me realize how damned convoluted it is.

ooooh... I thought TZA was a company's ticker symbol I'd never heard of. I mean it kind of is, but not for a company...

 

Seriously, the only ticker symbols I know are... hmm, GE, YUM, DNA, and... yeah, that's all.

 

small companies have the biggest risk... AND obviously the biggest reward. :D See I totally understand this whole stock-trading thing. :rolleyes:

Yes indeed, you're right! So TZA is leveraged 3x. Think about the key part of that word, "lever"aged, and you can get a mental image of a lever with a fulcrum in the middle. The more money I borrow to trade, the greater my leverage.

 

So if I borrow a billion dollars for one day, and make just 1% return that day, I'll be massively leveraged but I would have made a gobsmacking ten million bucks for hardly doing any work. That's what's dangerous about low interest rates. Money is tossed around like candy, and before you know it everyone is in debt because they've made bad investment decisions.

 

Except me and Nick, because we always make good investment decisions. ;)

...Right. Actually my poor stock-trading dad has tried to explain most of these things to me.

 

The Fed lowers interest rates because they WANT people to toss money around like candy, though. To stimulate the economy, etcetera. Isn't that right?

Yep, that's right. The theory is known as "Keynesianism" (pronounced cain-see-an-ism) named for the early 20th century economist who came up with it, John Maynard Keynes. He's well regarded by many academic economists these days, but it is my opinion that the Austrian school of economics disproved keynesianism.

 

Basically the goal of Keynesians is to use the government to create an ideal amount of demand in the economy. The theory is that low demand throughout the economy ("aggregate demand") is what causes depressions. Keynes' phrase was "animal spirits"... that somehow psychologically, everybody decides to cut back on spending at once. So the solution, they say, is to increase demand by making credit easy to come by. Credit is defined as loans - loans to businesses, homebuyers, credit card holders, etc. The way you do that is to print money (lowering the interest rate in a decidedly unnatural way).

 

But of course the Austrians say this is nonsense, because they view the economy as having no "aggregate" demand. Just because Alex doesn't feel like spending money on an iPod, doesn't mean you won't! Each individual in the economy chooses what percentage of his income to spend versus save.

 

You can think of the Austrian school as the cranky uncle who everybody sort of avoids at Thanksgiving dinner. He's unpopular, but right... sort of a party pooper. Because if you accept the Austrian theory of economics, you accept this really far-out political theory (anarchism) by extension.

 

EDIT: Noonsun, here's Peter Schiff, an investment advisor and economist (who's more on the Austrian side of things) discussing the American economy. I bet you'll understand most of what he's saying.

 

[ame=http://www.youtube.com/watch?v=WPmdzKcDe-s]YouTube - Peter Schiff The Crisis Just Begun[/ame]

 

Remember all these debates boil down to is what you choose to do with the "savings pool". Leave it alone, and let interest rates remain high (so people are encourage to put their money in the bank)! That will naturally lower interest rates, rather than the unnatural method of lowering them (printing money).

naw, that made a fair amount of sense. Thank you very much. :nice:

Jay, I think were in a for a sustained false rally. Which I heard a few people talk about earlier saying it would start in March or April after the governments efforts do a little bit of good in the short term. Of course long term TALF and TARP and the newest plan from Geinther will cause problems, I think its enough in the short term to fool the investors.

 

I do think the new plan to buy toxic assets with the partnership of hedge funds will work in the short term and provide liquidity to to market. I think we'll start to see more private loans such as credit cards, cars and commercial paper, as things have hit the "bottom".

 

The new plan will allow banks to bid up the price on these toxic assets and get more money then they're worth. So I see a possible few month rally or at least false bottom.

 

I need to add, I like Peter Schiff but I think he's a little bit wrong about the dollar. The dollar won't lose too much value compared to other currencies because most other currencies are in more trouble. As someone put it its a "race to the bottom" so all currencies are dropping and since the dollar isn't dropping the fastest it looks better then many other currencies. However inflation will cause loss of purchasing power, which the dollar has already lost too much. We shouldn't worry or look at the dollar index as much because most other currencies are doing worse, but look at purchasing power of the dollar.

 

In the long term, we'll see a new reserve currency but that is still year away, this just sowed the seeds for a new one.

Well I agree about there being inflationary pressure across the globe, and you may be right that the dollar won't be the currency that's hardest hit. But I tend to view our Federal Reserve as too proud to admit its mistakes. Which means it will probably keep printing dollars long after it should have raised interest rates.

 

The possibility of Obama making it to a second term is difficult to imagine. The increased regulation and power of the government under his watch will make America a far less attractive investment for foreigners - just the other day, Obama announced he would like the power to seize financial businesses (not necessarily banks) that pose a "systemic threat" to the economy. That means hedge funds and the like. If such a bill passes, it would be insanely investor unfriendly.

 

So far the stock market has gotten it right. Investors are aware that increased regulation is bad for the economy, and the market has reflected that after each announcement by Obama and Geithner. These short-burst rallies you see are people like you and I trying to eek out a few extra percentage points here and there. I don't consider it anything more than market noise and volatility. A sustained rally in this environment would be very difficult to pull off... anything more than 1,500 points in the DOW would catch me way off guard.

Well now they're talking about letting the tax cuts that were in Obama's "stimulus" plan fade out after this year to make up for the high deficit. Then you have Obama and the Treasury wanting supreme power over more businesses like you were talking about. This could drive the market down, but the real question is will the removal of MTM, uptick rule and the new plan for toxic assets be enough to compensate for it? I simply think it will and dow at 10,000 is not out of the question. But I'm betting that the average person is a complete idiot and buys into the propaganda as the markets on the short term run on emotions, long term on facts.

 

Banks are cooking the books, inflation and bail outs will be added to GDP reports, with consumer spending probably up, credit will flow more and a false rally will probably occur.(all while the fundamentals rot away, which will result in another crisis bigger then the one were in).

Nick, this is where it would get difficult running a hedge fund with you. ;) Which one of us would have the power to veto the other?

 

You make a really convincing argument, and you were absolutely right about oil being an attractive investment... it's up almost 19% since you mentioned it on here a few weeks ago.

 

I sold that 3x Bull ETF literally two days before the huge rally. I would have made another 24% if I had held onto it... still kicking myself for that.

Nick, this is where it would get difficult running a hedge fund with you. ;) Which one of us would have the power to veto the other?

 

You make a really convincing argument, and you were absolutely right about oil being an attractive investment... it's up almost 19% since you mentioned it on here a few weeks ago.

 

I sold that 3x Bull ETF literally two days before the huge rally. I would have made another 24% if I had held onto it... still kicking myself for that.

 

I think you'd have the veto power, you know a lot more about economics and the market then me.

 

Jim Rogers said he's the worst market timer.;) You understand economics very well, and know in the long run what is going to happen, but the time frame is the hardest thing. Its economics vs human nature, thats why for me the market in short term is hard to understand.

 

But were both young, with many things to learn and a lot of money to make.

 

I just ran 5.5 miles and my stomach hurts so, I'll be back on tomorrow, g'night.

No the Free Market would NOT allow these super rich CEO's to be created. Government caused it. The private corporations and government are in bed, holding each other up, not a product of the free market.

YES, the Free Market would allow super-rich CEO's to be created, because it contains no checks against the amassing of corporations under one entity, and the eventual domination and control of markets, if unchecked by our governments' anti-trust laws (that need to be more effective, BTW). The fact that we have no final check on the agglomeration of media control, nor an effective check on buying politician's via campaign ad blitzes, are the reasons the free market alone cannot check the ultimate domination by a few powerful groups or entities. The private corporations are in bed because the markets need oversight, as does the separation of the influence of unlimited money in campaigns.

Even if most the money went to construction workers and others, it will only stimulate it for a very short time before it causes real harm. We aren't learning that doing something for the short term hurts us in the long term.(another example the fed is printing 300 billion to buy our own debt)

True, long-term planning and carefully accounted and bid contracts with a steady, growing supply of demand supports economic improvement; the money going to working-class jobs with descent pay and benefits helps create a steady demand for goods and services, and allows those who make the actual goods the ability to afford them. Here, it's pistons, valves, paper, cheese, boats, and the like.

 

They are trying to re-created the bubbles that helped ignite this, and trying to make more even biggers ones...the cause is not the solution!

They may create a problem if the goals and stimulus is too short-term, but I at least hope they're smart enough to not re-create the conditions that led to this disaster.. It's still a matter for straitening out, if they're unwilling to address the underlying causes, and the root cause I think has to do with money flowing from the very groups who are responsible for the debacle to the politician's 'campaign' pockets. Stopping that may take a lot of pressure from an informed electorate, or a severe downturn that's protracted, but I'm hoping we can force fairness back into the process without severe long-term economic suffering..

They are re-creating the problem because they are the problem.

 

[ame=http://www.youtube.com/watch?v=xWqouBvy2sM]YouTube - Government Intervention, Regulatory Policy, and the Financial Crisis[/ame]