molson_golden2002 Posted April 28, 2008 Share Posted April 28, 2008 Its ok, we can always just print more money http://www.nytimes.com/2008/04/27/business...&ei=5087%0A It looks to me as if the inmates are running the asylum. One truth, that deregulation is sometimes a good thing, has been followed down so long and winding a road that it has led to an immense lie: that deregulation carried to an extreme will not lead to calamity. To think that people of this mind-set are in charge of the finances of the nation that is the cornerstone of world freedom is terrifying. Mr. Einhorn may well have done us a service of great value. Link to comment Share on other sites More sharing options...
ieatcrayonz Posted April 28, 2008 Share Posted April 28, 2008 Its ok, we can always just print more money http://www.nytimes.com/2008/04/27/business...&ei=5087%0A It looks to me as if the inmates are running the asylum. One truth, that deregulation is sometimes a good thing, has been followed down so long and winding a road that it has led to an immense lie: that deregulation carried to an extreme will not lead to calamity. To think that people of this mind-set are in charge of the finances of the nation that is the cornerstone of world freedom is terrifying. Mr. Einhorn may well have done us a service of great value. I'm with you Bud. I didn't read the article, only the prelude. Any article about Wall Street that starts with a quote from Don Henley has instant credibility. Link to comment Share on other sites More sharing options...
SD Jarhead Posted April 28, 2008 Share Posted April 28, 2008 What is this "amoke' you speak of? Link to comment Share on other sites More sharing options...
molson_golden2002 Posted April 28, 2008 Author Share Posted April 28, 2008 What is this "amoke' you speak of? I better change that.... Link to comment Share on other sites More sharing options...
KD in CA Posted April 28, 2008 Share Posted April 28, 2008 Who's the retard that illustrated the die? The 5 and 2 are on opposite sides, not possible to see them both simultaneously from a fixed point. Just another example of NYT misinformation. Link to comment Share on other sites More sharing options...
molson_golden2002 Posted April 28, 2008 Author Share Posted April 28, 2008 Who's the retard that illustrated the die? The 5 and 2 are on opposite sides, not possible to see them both simultaneously from a fixed point. Just another example of NYT misinformation. Surprise, surprise, you can't get past the picture Link to comment Share on other sites More sharing options...
KD in CA Posted April 28, 2008 Share Posted April 28, 2008 Surprise, surprise, you can't get past the picture With good reason. But just for sh--s and giggles, I didn't have to go very far down to find a classic NYT gem: Often, an astonishing 50 percent of total revenue goes to employee compensation at Wall Street firms. Astonishing?? Can someone explain to me what exactly is 'astonishing' about a company (with no raw material costs) spending 50% of it's total revenue on employee compensation? Where else would they spend the money (the Times certainly would not approve of higher dividends to eeeevil shareholders!) I've never worked for a company that spent less than 50% of it's total revenue on its people. My current company will spend about 70% this month. Do heavily unionized industries like auto and airline also spend an 'astonishing' percentage of revenues on employee costs? Or is it not astonishing if the money ends up in the pockets of Democratic voters? Or maybe it is not astonishing at all. Maybe the author just thought that inflammatory language would help get the average emotion-driven, intellectually simple reader who believes everything he reads in the NYT worked up enough to cut and paste the link to the article on random message boards. Link to comment Share on other sites More sharing options...
molson_golden2002 Posted April 28, 2008 Author Share Posted April 28, 2008 With good reason. But just for sh--s and giggles, I didn't have to go very far down to find a classic NYT gem: Astonishing?? Can someone explain to me what exactly is 'astonishing' about a company (with no raw material costs) spending 50% of it's total revenue on employee compensation? Where else would they spend the money (the Times certainly would not approve of higher dividends to eeeevil shareholders!) I've never worked for a company that spent less than 50% of it's total revenue on its people. My current company will spend about 70% this month. Do heavily unionized industries like auto and airline also spend an 'astonishing' percentage of revenues on employee costs? Or is it not astonishing if the money ends up in the pockets of Democratic voters? Or maybe it is not astonishing at all. Maybe the author just thought that inflammatory language would help get the average emotion-driven, intellectually simple reader who believes everything he reads in the NYT worked up enough to cut and paste the link to the article on random message boards. When I first read that I thought he was talking about executive compensation. Whatever, its still a good piece. Link to comment Share on other sites More sharing options...
KD in CA Posted April 28, 2008 Share Posted April 28, 2008 When I first read that I thought he was talking about executive compensationI completely misunderstood so I just substituted in whatever preconceived viewpoint I held and applied it to the story. Whatever, its still a good piece. And even though I'm wrong, I don't care, I'm just going to keep pretending that it fits my preconceived agenda. Link to comment Share on other sites More sharing options...
DC Tom Posted April 28, 2008 Share Posted April 28, 2008 When I first read that I thought he was talking about executive compensation. Whatever, its still a good piece. Reading comprehension sucks, don't it? Is there anything you've ever not misunderstood? Link to comment Share on other sites More sharing options...
bills_fan Posted April 28, 2008 Share Posted April 28, 2008 When I first read that I thought he was talking about executive compensation. Whatever, its still a good piece. The piece sucks and is awfully researched. Since KD has already addressed the comp issue (by which there should be absolutely no argument), let me address this one.... Under an interesting set of rules promulgated by the Securities and Exchange Commission in 2004, called “Alternative Net Capital Requirements for Broker-Dealers That Are Part of Consolidated Supervised Entities,” the amount of capital that had to underlie assets was reduced substantially. (Mr. Einhorn rightly says that this set of rules should have been called the “Bear Stearns Future Insolvency Act of 2004.”) Through the act, the S.E.C. — acting as one of Wall Street’s chief regulators, mind you — also allowed such things as “hybrid capital instruments” (much riskier than cash or Treasuries), subordinated debt (ditto) and even deferred return of taxes, to be counted as capital. The S.E.C. even allowed the banks to hold securities “for which there is no ready market” as capital. These statements are technically incorrect and totally wrong. What was reduced by the act is the amount of haircuts applied to these securities when counted as capital, reflecting the fact that a market does exist. A broker-dealer must maintain a proscribed level of net capital. Net capital is not the same as liquidity, it is derived from a complex formula valuing various assets. Since many broker-dealers hold various securities, a discount is applied to what these securities are actually worth for net capital purposes. These discounts are called haircuts. For example, a broker-dealer holding any type of debt securities would incur haircuts based on how much time the security has until maturity. The longer until maturity, the higher the haircut. Also, the type of debt is taken into account. US Treasuries have a max haircut of 6%, reflecting a very liquid market. In the case of corporate debt (subordinated or not), you may see 15-25% haircuts depending upon the maturity. What the 04 act did was recognize that certain securities had markets and appropriately offered haircuts based upon those markets. Previously, some heavily traded debt securities had a 75% haircut which was unrealistic. Finally, the SEC has very specific rules for securities without a ready market. In some cases, the haircut is 100%. In others, less. Banks always held these securities as capital, it is just now the haircut is a bit less, reflecting that a market does exist. The writer of this piece is factually and historically inaccurate. Simply awful. Link to comment Share on other sites More sharing options...
GG Posted April 30, 2008 Share Posted April 30, 2008 The writer of this piece is factually and historically inaccurate. Simply awful. Don't have the patience to look it up, but I think Ben Stein had other awfully researched stories. (Kind of like reading Easterbrook for real game information) Meanwhile, this is probably the best summary by a real business publication. NYT should just start running cartoons in their business section. Link to comment Share on other sites More sharing options...
molson_golden2002 Posted April 30, 2008 Author Share Posted April 30, 2008 Don't have the patience to look it up, but I think Ben Stein had other awfully researched stories. (Kind of like reading Easterbrook for real game information) Meanwhile, this is probably the best summary by a real business publication. NYT should just start running cartoons in their business section. That was just excellent. The notion that the world can just regulate its way out of crises is thus an illusion. Rather, crisis is the price of innovation, so governments face a choice. They can embrace new financial ideas by keeping markets open. Regulation will be light, but there will be busts. The state will sometimes have to clear up and regulation must be about cure as well as prevention. Or governments can aim for safety and opt for dumbed-down financial systems that hobble their economies and deprive their people of the benefits of faster growth. And even then a crisis may strike. I guess we instutionalize bailouts and stop all this clap trap about how useless government is and the stigma of government handouts go down the toilet. Link to comment Share on other sites More sharing options...
GG Posted April 30, 2008 Share Posted April 30, 2008 That was just excellent. I guess we instutionalize bailouts and stop all this clap trap about how useless government is and the stigma of government handouts go down the toilet. Suffice it to say that you did not understand what the piece said, especially the single passage that you deemed worthy to restate. Link to comment Share on other sites More sharing options...
molson_golden2002 Posted April 30, 2008 Author Share Posted April 30, 2008 Suffice it to say that you did not understand what the piece said, especially the single passage that you deemed worthy to restate. I undrstood it perfectly Link to comment Share on other sites More sharing options...
GG Posted April 30, 2008 Share Posted April 30, 2008 I undrstood it perfectly So sayeth the Oompa Loompas in charge of your synapses. Link to comment Share on other sites More sharing options...
DC Tom Posted April 30, 2008 Share Posted April 30, 2008 I undrstood it perfectly No, you really didn't. Link to comment Share on other sites More sharing options...
molson_golden2002 Posted April 30, 2008 Author Share Posted April 30, 2008 No, you really didn't. Hey, who shot J.R.? Link to comment Share on other sites More sharing options...
molson_golden2002 Posted April 30, 2008 Author Share Posted April 30, 2008 So sayeth the Oompa Loompas in charge of your synapses. The Oompa Loompas say socialism for the rich is good. A social safety net for those things that are "too big to fall." *MG is out* Link to comment Share on other sites More sharing options...
DC Tom Posted April 30, 2008 Share Posted April 30, 2008 The Oompa Loompas say socialism for the rich is good. A social safety net for those things that are "too big to fall." You really, really didn't understand it. Do you think collapsing credit markets don't hurt the lower and middle classes? *MG is out* *Of touch with reality. And his mind. Still.* Link to comment Share on other sites More sharing options...
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