Mostly, as has been explained to you, it is a number somewhere between 0 and up to that amount, some of which we will get back. And of what we don't some of it will not be spent for a long time yet. That changes on an almost daily basis, and does not equal the total that could possibly be spent.
An explanation of the problems with the banking system.
- Thread starter Teeninvestor
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Mostly, as has been explained to you, it is a number somewhere between 0 and up to that amount, some of which we will get back. And of what we don't some of it will not be spent for a long time yet. That changes on an almost daily basis, and does not equal the total that could possibly be spent.
ParadigmShifter
Random Nonsense Generator
But still, economics is a pseudo-science for people who aren't great at maths.
Or prefer wealth to knowledge, one or the other.
Or prefer wealth to knowledge, one or the other.
JerichoHill
Bedrock of Knowledge
Yes, because economics doesn't use any fancy math, like DSGE models that you find in engineering fields, or fractal models, that you find in the major sciences, or chaos theory...
Economics is a social science, it is not a hard science, but it is by far not a pseudo science. And it by far uses very advanced mathematics. I regularly work within a Hierarchial Bayes Structure utilizing general method of moments concurrent with a monte carlo markov process.
If you do not know what those are, do not criticize economists for being dumb at math.
And Sorry Neo, but when the only metric that is discussed is the DOW (now 1/6th owned by Uncle Sam!), it is quite clear that other metrics are not being considered.
ParadigmShifter
Random Nonsense Generator
I know exactly what those are 
I have a degree in pure maths and statistics.
I have a degree in pure maths and statistics.
JerichoHill
Bedrock of Knowledge
I know exactly what those are
Great. Then don't criticize economists for being lousy at math. We aren't.
We are lousy at many things, but math ain't one.
ParadigmShifter
Random Nonsense Generator
OK, they are lousy at applied maths.
JerichoHill
Bedrock of Knowledge
What's your problem chap? Further, what's your basis other than just spouting opinion? You're entirely off topic anyways from this thread, so take your insults elsewhere
JerichoHill
Bedrock of Knowledge
The DOW is a horrible metric, right now, because of the rules on how it is calculated and that the divisor is now off base. At least use the SP500 if you're going to cite a lone stock market indicator.
economists are good at math, they usually have to be. The problem is they believe the math correlates to the real world much more than it actually does.
ParadigmShifter
Random Nonsense Generator
Do you not think the global economic crisis may have been somehing to do with economists "applying" their "knowledge"?
Oh, and this...
Oh, and this...
potatokiosk
Deity
- Joined
- Dec 22, 2005
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- 2,292
I know the DOW is a poor indicator, but there seems to be a fairly consistent correlation between the DOW and the SP500 so why does it matter which people use?
JerichoHill
Bedrock of Knowledge
Do you not think the global economic crisis may have been somehing to do with economists "applying" their "knowledge"?
Oh, and this...
Last I checked, the finance analysts on Wall Street are not economists.
I think the global crisis was caused by a misapplication of economic thought based on severe misunderstandings. There was much cheerleading about housing ownership going above its natural rate. That's when many economists started to sound the warning bell. But the admin didn't care, they were focused on the short-term.
People abused the rules and the guys in place to enforce rules were asleep at the switch. Quit trying to create a "boogeyman" that doesn't exist.
JerichoHill
Bedrock of Knowledge
I think one shows a bit more thinking and sophistication. They're not perfectly correlated. Think about the different information sets.
Teeninvestor
Warlord
JerichoHill, I thank you for your answer. But you still haven't answered my main question: Which is how are we going to get all the assets off banks' balance sheets????
There are three ways:
1) buy them off- prints 10 trillion more/ cause hyperinflation
2) Economy magically recovers due to stimulus, while bernanke pumps just enough money to hold off the bankruptcies.
3) Bankruptcy- hyper-deflation due to asset devaluation.
2) is pretty much out of the question. I think any sane economist would agree we will get nowhere close to 2006 conditions in a while. if 2) doesn't work out, it will evolve into 1).
so we are left with 1) and 3).
I advocate 3) because it is much less painful and it will be over quickly. It is also more market friendly. 1) would pretty much mean the bankruptcy of America, and 2) willl not work.
It appears you advocate 2). However, I would like to ask you. In 1970's we pumped way LESS liquidity into our system and we ended up with nasty stagflation, 20% inflation. This time, how do you propose to do a better job, considering the Federal Reserve's utter incompetence in this area.
If we had 20% inflation the last time around, what will we have this time? 40%? 50%? 60%? also add to the destruction of the dollar after countries ditch it. THat is a formula for hyperinflation.
Also, regarding Federal Reserve's injections of liquidity, you are aware that eventually we will spend even more on these programs, as those figures were only the first round of bailouts. Add 2-3 trillion to the end, and 4-5 trillion to come(if bad bank goes through) and the cost will exceed 10 trillion in any case.
You write about "getting money back". Well guess what. I shorted C when the gov pumped money into it at $10 it is now $1.80. I guess there's no money there anymore.
Similar story to each bank.
Even if the figures were to take a 30% haircut each, it would still be around 5 trillion plus latest round of bailouts, that figure would easily exceed 10 trillion by the end of this crisis.
Ya, regarding to my portfolio I regard it a success considering i was short selling financials and financials rose 34% this week, the biggest pump in history, and a rally based on lies.
Next week I will get my just rewards.
Speaking of which, do you think that hyper-inflation is worse or hyper-deflation. I tend to regard deflation as better as it rewards the banks who have sane business methods, as well as rewarding those who actually SAVED. hyperinflation simply wipes out the liquid wealth of the country- not like we have many left anyways.
At this point, considering number of trading days after the high, unemployment and factory production are just as bad, if not worse than the Great Depression. Remember unemployment rose to only 9% in 1930 but jumped to 30% in 1931. If we use 2007 as 1929, we would be at early 1931, and the TRUE unemployment rate(which now doesn't include people not looking for work, welfare, etc...) would be 14.8%!!! US Factory production has been falling 9%. I watch this figures every day as I trade.
Also, remember, in the Great Depression we didn't have this "working group on financial markets" who pumps it up every day. Even with THAT we are now down more than in the great depression. That is a very bad sign.
There are three ways:
1) buy them off- prints 10 trillion more/ cause hyperinflation
2) Economy magically recovers due to stimulus, while bernanke pumps just enough money to hold off the bankruptcies.
3) Bankruptcy- hyper-deflation due to asset devaluation.
2) is pretty much out of the question. I think any sane economist would agree we will get nowhere close to 2006 conditions in a while. if 2) doesn't work out, it will evolve into 1).
so we are left with 1) and 3).
I advocate 3) because it is much less painful and it will be over quickly. It is also more market friendly. 1) would pretty much mean the bankruptcy of America, and 2) willl not work.
It appears you advocate 2). However, I would like to ask you. In 1970's we pumped way LESS liquidity into our system and we ended up with nasty stagflation, 20% inflation. This time, how do you propose to do a better job, considering the Federal Reserve's utter incompetence in this area.
If we had 20% inflation the last time around, what will we have this time? 40%? 50%? 60%? also add to the destruction of the dollar after countries ditch it. THat is a formula for hyperinflation.
Also, regarding Federal Reserve's injections of liquidity, you are aware that eventually we will spend even more on these programs, as those figures were only the first round of bailouts. Add 2-3 trillion to the end, and 4-5 trillion to come(if bad bank goes through) and the cost will exceed 10 trillion in any case.
You write about "getting money back". Well guess what. I shorted C when the gov pumped money into it at $10 it is now $1.80. I guess there's no money there anymore.
Similar story to each bank.
Even if the figures were to take a 30% haircut each, it would still be around 5 trillion plus latest round of bailouts, that figure would easily exceed 10 trillion by the end of this crisis.
Ya, regarding to my portfolio I regard it a success considering i was short selling financials and financials rose 34% this week, the biggest pump in history, and a rally based on lies.
Next week I will get my just rewards.
Speaking of which, do you think that hyper-inflation is worse or hyper-deflation. I tend to regard deflation as better as it rewards the banks who have sane business methods, as well as rewarding those who actually SAVED. hyperinflation simply wipes out the liquid wealth of the country- not like we have many left anyways.
At this point, considering number of trading days after the high, unemployment and factory production are just as bad, if not worse than the Great Depression. Remember unemployment rose to only 9% in 1930 but jumped to 30% in 1931. If we use 2007 as 1929, we would be at early 1931, and the TRUE unemployment rate(which now doesn't include people not looking for work, welfare, etc...) would be 14.8%!!! US Factory production has been falling 9%. I watch this figures every day as I trade.
Also, remember, in the Great Depression we didn't have this "working group on financial markets" who pumps it up every day. Even with THAT we are now down more than in the great depression. That is a very bad sign.
EnglishEdward
Deity
2) won't happen 1) will be tried and fail when treasury bonds
become perceived as worthless by the Chinese and others
and then 3) will occur anyhow.
What was of course required was 3) followed by 2).
The moral failure to let the realy worst banks etc go bankrupt,
prevents a resuscitation by stimulating via the better banks.
Teeninvestor
Warlord
If we have hyperinflation, we will have not only that but also the destruction of our currency, as well as the loss of foreign investors of any faith in our "financial system" whatsoever. All the liquid wealth of this country will be wiped out.
Integral
Can't you hear it?
Perhaps, but inflation is much, much easier to contain than deflation. Contrast Volker's success in 1981 with Japan's 'lost decade'. I'd rather see inflationary pressures than deflationary pressures.
Is there any particular reason you prefer U6 over U3 in the unemployment statistics?
Is there any particular reason you prefer U6 over U3 in the unemployment statistics?
