Jump to content

Have Financial markets gone socialist


Recommended Posts

Absolutes work in reality all the time, but not in politics. It's absolutely true that 2+2 equals 4, but not absolutely true on the best way to run a government as it is a work in progress based on factors seen and unseen. There I agree.

By definition that is true, but if you define 2 and 4 or just the plus differently it could be something else, hence it is not an absolute.

 

And if some math wiz on this board knows some sort of calculus derivative that can come up with an exception, then even by definition 2+2=4 may not be an absolute.

Link to comment
Share on other sites

  • Replies 75
  • Created
  • Last Reply

Top Posters In This Topic

And if some math wiz on this board knows some sort of calculus derivative that can come up with an exception, then even by definition 2+2=4 may not be an absolute.

 

:thumbsup:

 

 

In some non-Euclidian geometries I could get it to equal 3.9. In high-energy physics, I could force 2+2 to equal whatever I damn well want it to.

Link to comment
Share on other sites

Now all the bad bank debt will be taken care of by Motherment:

 

http://news.yahoo.com/s/ap/20080918/ap_on_...U05NSIcahGs0NUE

 

How much of this can the government take on?

 

I wonder how long it will take to enact this plan and how much the government will take on. Just saying it's going to take it on will calm things down though and that's what's needed at the moment.

Link to comment
Share on other sites

Now all the bad bank debt will be taken care of by Motherment:

 

http://news.yahoo.com/s/ap/20080918/ap_on_...U05NSIcahGs0NUE

 

How much of this can the government take on?

 

Hell, if I could afford it, I'd fund it myself. A lot of this "bad debt" that's completely toxic right now is probably seriously undervalued. If you buy a diverse set of mortgage bonds right now and hold to maturity, you'd probably make a pretty good chunk of change.

 

The problem is less bad debt right now than it is financial institutions can't hold to maturity. They need it on the balance sheet as cash, and the cash value of the bad debt right now is about zero. I fully expect anyone who picks up this debt and can hold it will make a killing in about ten years or so.

Link to comment
Share on other sites

Hell, if I could afford it, I'd fund it myself. A lot of this "bad debt" that's completely toxic right now is probably seriously undervalued. If you buy a diverse set of mortgage bonds right now and hold to maturity, you'd probably make a pretty good chunk of change.

 

The problem is less bad debt right now than it is financial institutions can't hold to maturity. They need it on the balance sheet as cash, and the cash value of the bad debt right now is about zero. I fully expect anyone who picks up this debt and can hold it will make a killing in about ten years or so.

 

 

Exactly correct. You have to be able to value it correctly now, to make the real profit in the future. If anyone has this formula, I'll quit my job and we're starting a hedge fund to buy this stuff.

 

The government will make a good chunk of cash on this, with very little downside.

Link to comment
Share on other sites

Hell, if I could afford it, I'd fund it myself. A lot of this "bad debt" that's completely toxic right now is probably seriously undervalued. If you buy a diverse set of mortgage bonds right now and hold to maturity, you'd probably make a pretty good chunk of change.

 

The problem is less bad debt right now than it is financial institutions can't hold to maturity. They need it on the balance sheet as cash, and the cash value of the bad debt right now is about zero. I fully expect anyone who picks up this debt and can hold it will make a killing in about ten years or so.

 

There was a point where the GSE's were given the right to make riskier investments (which caused the crisis now). If the Fed starts doing that and 50 years down the line, they get into a liquidity crisis, who will bail them out?

 

:(

Link to comment
Share on other sites

And now Bush Admin has become a socialistic regime... SEC Bans Short Selling.

http://news.yahoo.com/s/afp/20080919/bs_af...te_080919123052

 

Did this need to happen???

 

At this point, it could easily become a game to some of these massive hedge funds who could make a bet against Goldman or Morgan Stanley which would absolutely kill them.

 

I think it is necessary for the short term. For the long term, someone will write a book explaining how they knew that the markets were this unstable.

Link to comment
Share on other sites

There was a point where the GSE's were given the right to make riskier investments (which caused the crisis now). If the Fed starts doing that and 50 years down the line, they get into a liquidity crisis, who will bail them out?

 

:(

 

The goal is for the Fed not own them for more than 2-3 years. They're stepping in to hold the assets until the housing market stops falling, and then will spin-off the GSEs into the private sector in a bunch of smaller pieces. I'm guessing if Fan/Fred return as federally guaranteed entities, their license will be greatly curtailed.

 

Of course, we have no idea of what Congress will allow them to grow into in 50 years. Rinse, lather, repeat.

Link to comment
Share on other sites

And now Bush Admin has become a socialistic regime... SEC Bans Short Selling.

http://news.yahoo.com/s/afp/20080919/bs_af...te_080919123052

 

Did this need to happen???

 

 

They always go one step too far...buy index funds over the next days. Short covering rallies will take the market far higher in the next 2.5 days. This is not a rally.

 

Legitimate shorting is a very valid strategy. Hell, many hedge funds invest 3 to 1, For every 3 bucks they put into a stock, 1 goes on shorting it, just as a hedge. Fools.

 

I really hope this is just a temporary solution. The other SEC orders handed down regarding price disclosure and issuer repurchase of securities are good and ought to be permanent.

 

Talk about reactive bull...I thought McCain was an ass to say that about Cox, now I think Cox is even more of an ass than McCain said he was.

Link to comment
Share on other sites

×
×
  • Create New...