Rolling US Economy Into The Shitbin Thread

ok i've showed you mine, now show me your "restructuring the industry as a whole"!!

im little weary of putting an industry thats an indispensable cog in the economy and when run right a legitimate profit center on the government side

"legitimate profit center" - this could be argued, both the "legitimate" part and the "profit" part; the temporary fictional excess money generated certainly wasn't being INVESTED in actual things

at any rate, it wasn't run right and is now "on the government side" yet is still in stuck in a tarpit mainly because the government is telling them to do two contradictory things: 1) get loans back up to something approaching former levels and 2) stop lending to people who can't pay their loans back, which right now is like, everybody

ha well as an example u can remove a lot of the motivation for corporate malfeasance just by changing the rules governing executive compensation xp

def recently the banking sector hanst been a legitimate profit center but historically it has

agreed tho that at least some in government and punditry are discounting the whole its a bad time to loan to people since no one has any jobs or money angle a little too steeply

the problem is that no loans = less debt = less actual money, since debt = money

i'm stunned that the CEOs of these places are still there, in japan they would have resigned months ago

its outrageous and completely unsurprising

elliott says that apart from krugman and stiglitz there is no policy establishment in the US doing the heavy lifting over the past 30 years to effectively seize this window of opportunity the way reagan and thatcher seized theirs in the late 1970s.

umm everyone from CAP to the brookings dudes have written up policy proposals about how to use the current economic crisis to transform the economy - you or elliot can def argue that some or even all of these proposals dont go far enough - but pretending like there is no centre-left policy establishment is retarded.

also lol that your big moment of truth is nationalization of the banks as if the treasury didnt spend a couple billion some months ago using TARP funds to take equity stakes in large FIs. maybe it's a good idea to have to defend things i take for granted but i dont really want to argue over why it is a TERRIBLE idea to fully nationalize the banking industry let's just admits that's an unrealistic thing to pin your transformation on.

i also think it's pretty disingenuous to claim "there's no concrete evidence i've seen that obama seez any keynez steez as necessary beyond a two-year recovery program" and then show that a) you don't even understand kenyes and b) argue that because someone doesn't take as drastic steps as you'd like they must logically not want to take any steps at all. like "well, obama has been careful and measured in his plans he must just want to get back to 'fuckin with makiw 2010' asap"

inbetween you being an asshole i can sort of make out a few points, but it is kind of rough going

yah i apologize to you and professor gregory mankiw my tone there was unnecessary and patronizing - i think you've got a skewed take on keynes and the banking industry but that's no justification for acting like a dick

if u cant run with the big dogs u should stay on the porhc

thanks for the apols Lamp. if you want to give someone a logistical beatdown, do it to the economics editor of the guardian not me - i don't really know shit!

aw, the giving spirit of keynesian economics has infected this very thread

lol wamu. that used to be my bank! i didn't know they were so crazy. definitely nobody ever tried to give me meth.

While Mr. Parsons, whose incarceration is not related to his work for WaMu, oversaw a team screening mortgage applications, he was snorting methamphetamine daily, he said.

“In our world, it was tolerated,” said Sherri Zaback, who worked for Mr. Parsons and recalls seeing drug paraphernalia on his desk. “Everybody said, ‘He gets the job done.’ ”

At WaMu, getting the job done meant lending money to nearly anyone who asked for it — the force behind the bank’s meteoric rise and its precipitous collapse this year in the biggest bank failure in American history.

... WaMu gave mortgage brokers handsome commissions for selling the riskiest loans, which carried higher fees, bolstering profits and ultimately the compensation of the bank’s executives. WaMu pressured appraisers to provide inflated property values that made loans appear less risky, enabling Wall Street to bundle them more easily for sale to investors.

“It was the Wild West,” said Steven M. Knobel, a founder of an appraisal company, Mitchell, Maxwell & Jackson, that did business with WaMu until 2007. “If you were alive, they would give you a loan. Actually, I think if you were dead, they would still give you a loan.”

(i don't know if the banks should be nationalized, but they def. shouldn't be run by these people.)

it's just generally a bad idea to let low-information investors publicly trade shares in investment/lending businesses. No point in closing the barn door on that now regulation-wise; a lot (a lot (A LOT)) of the cleaning-up and learning-from is going to have to take place within the boardrooms and investor relations, and as far as transparency requirements and executive compensation issues, the SHAREHOLDERS should be pushing on the SEC and Congress for what they want. Of course, I guess that might mean some admission of dimness on their part, so maybe that'll stop it from happening; otoh, it seems like more and more trading and brokerage firms are getting pretty vocal and borderline activist on some of this stuff

dude this situation has v little to do w/low info investors - they control too small a share of the pie to matter too much - unless u consider instiutional investors to be low info - right now theyre seeming more low sense than anything

hahahahaha well whichever you want to call it. I will pretend low info because it's a better excuse - "I was too busy working on my car and raising my kids right, I didn't have time to take a hard look at the fundamentals of where I put the endowment"

"this bernie madoff seems like a nice fellow!"

rich ppl cant be expected to use google

it's just generally a bad idea to let low-information investors publicly trade shares in investment/lending businesses.

it's not the whole of the solution but i actually think the NYSE and other exchanges should go back to forbidding investment banks to list. increased shareholder activism/awareness can't change the fundamental relationship between an ibank's performance, its share price, and its ability to lend and i've read convincing arguments that initial stages of the crash, esp w/r/t to lehman bros would not have been so bad if the ibanks had been private parternships still.

that's partly a tautology - the ibanks were able to become so leveraged because they were public cos. in the first place but still affirms the central argument

yah thats def one of the no brainers as far as restructuring goes

more big picture forecasting from the wsj about retail

fun times housing interactive graphic http://www.nytimes.com/interactive/2008/12/04/business/economy/HOUSING_PRICES_GRAPHIC.html

A friend confessed to me the other night she is a Madoff victim (grandparents from Queens steered her folks to him).

http://img.photobucket.com/albums/v134/tracerhand/Thecarindustry.jpg

i've read convincing arguments that initial stages of the crash, esp w/r/t to lehman bros would not have been so bad if the ibanks had been private parternships still

you have a number of things working in favor of a horrific outcome as a publicly traded ibank - shareholders demand growth on par with similar outfits, meaning you have to stoop to wamu standards, risk is being held by those shareholders, meaning who cares if you stoop to wamu standards, and yeah basically an individual broker or other money manager eventually has all his or her priorities completely thrown out of whack in favor of following the herd to the poison well and damn the consequences.

lol efficient markets. ibankers certainly did and may still argue that the demand for growth and the risk of return would be linked and properly priced in the market. or they may now be bleating that sheepish refrain of more/better/smarter/ regulations + greater transparency idk. i think your right, actually - but those problems arent eliminated by delisting Deptford and Sharpman.

the argument as i understood it was more about preventing a loss of confidence from turning into a self-fulfilling prophecy which is some old knowledge probably maybe but it isnt always a wonderful life

Re low-info vs institutional investors 3 days ago: dichotomy possibly not altogether clearcut:

guys helming local government eg counties/municipalities/departements/communes/provinces with sometimes LOTS of funds to sink into vendors (yes) that might convince them things are safe & sound, while being only regular elected officials with barely any economics between them: low low info + at the same time pretty "institutional"?

thats a good point tho i still say the vast majority of institutional investors are typical high info insider financial types what w/yr mutual hedge pension and all other sorts of funds

id love to see a breakdown of all this shit and obv a lot of the time the low info and pro info people are in on it together

story of the financial crisis as told through one arizona shack http://online.wsj.com/article/SB123093614987850083.html

btw im so jealous of this lady for getting her v own wsj dot portrait

we're saved btw: http://www.nytimes.com/2009/01/03/business/economy/03econ.html?_r=1

FYI you can commission stipple portraits

yah i just found that - i prefer to earn mine tho

the wsj is weird it has some of the best reporting on markets and politics and a decent food column but then it was really weird and creepy articles like that one last week about why liberals hate the suburbs

the editorial board was taken over by supply-side wackjobs like forty years ago but otoh they have to compete with the FT

http://ibdeditorials.com/IMAGES/cartoons/toon010509.gif
http://ibdeditorials.com/IMAGES/CARTOONS/toon122908.gif

http://picayune.uclick.com/comics/gm/2008/gm081231.gif

shit, wrong thread

lil primer on the irish economy http://www.nytimes.com/2009/01/04/business/worldbusiness/04ireland.html

That deal amounted to 54 million euros an acre, one of the highest amounts ever paid for land in Europe. His subsequent architectural plan featured a soaring Dubai-like office tower cut in the shape of a diamond that anchored a futuristic community of expensive houses and glamorous shops, and the price tag of one billion euros shocked Dubliners with its gall and ambition.

dubailin

i hate my generation and everyone in it - http://www.economist.com/business/displayStory.cfm?story_id=12863573&source=hptextfeature

Charlotte Gardner, a 25-year-old Californian who was made redundant by a financial-services firm in November, has since been using online job and social-networking sites, as well as micro-blogging services such as Twitter, to promote her skills to potential employers. Ms Gardner, who is optimistic she will find another job soon, describes herself as “a glue kid” — someone who can get different kinds of people to work well together.

lol

the straw that stirs the drink, i'm sure...

its really just like the dotcom crash except so much worse

michael lewis on what happened http://www.nytimes.com/2009/01/04/opinion/04lewiseinhorn.html

and hoe to fix it http://www.nytimes.com/2009/01/04/opinion/04lewiseinhornb.html

david einhorn rules too I watched a youtube of him for give a talk for like 30 mins and am thinking about checking out his book

mr. einhorn certainly deserves the "LOL-ing up his sleeve" award for 2008 for his bulldogish stance on Lehman Bros. shame that the folks who mattered didn't pay him as much mind as they should've.

ya well for most of these dudes banking $100m was a more attractive proposition than being called smart after all fell down

frankly i would rather have $100m than be called smart

something kind of fucked up happened during my generation that becoming a federal civil servant seems almost like a punk rock thing to do