Financial Crisis

[midas]

I didn’t comment the other day but I have never believed Case-Shiler, had much credibility

Well now there is proof this is the case !

There is a pretty substantial scheme to artificially "boost" existing home prices by up to 40%, putting all the NAR data, and all other relevant public housing data materially into question.

This is from an email a few days ago:-

“ Real estate agents are not reporting the true sold prices on homes. Here are 2 examples. If a home is listed on the MLS and then sells at auction like Hudson & Marshal or RealtyBid, you can see the sold price online or if you attend the live auctions, see the house sell at open outcry auction. The next day the houses are reported sold on the MLS but always at full price.

The example below sold for $115,000 at Realtybid but is listed as sold for $159,500 on the MLS.

Also, homes are listed on the MLS and sold on the HUD site. You can see the sold area on HUD and the Bid Stats. The house listed below sold on the Hud site for $90,061 but again was listed as sold for full price on the MLS $113,400.

These are only 2 examples, I have seen over 100 and assume it is occurring everywhere. I understand that foreclosures are not included in the sales stats from the Realtor Assoc. but the stats they use are taken from the sold prices listed on the MLS. They are all false. ”

 

Simply said, this means that any pricing data coming off Multiple Listing Services is fatally flawed, and if this observation is verified, could potentially be a simplistic means to misrepresent the true home price by up to 40% higher.

Yes Midas,

I am sure that is true. Houses in a down market can generally be 'bought' well below market price. The question is whether the 'transaction' price rather than the 'reported' price is a good one to buy at. So I do not argue that current 'reported' prices are overstated but whether there might or might not be some 'good buys' around.

The Case-Shiller index is pretty good because he has done backdated numbers until 1890 and 450 years in terms of Amsterdam. If you look at the chart it still shows that prices are too high (quite clearly.) However, transaction prices might now be in the right ball park and (personally) while interests rates are at very low levels I wouldnt really expect this chart to fall below 100.

You can also see that if say Detroit prices have fallen 90% it would be unprecedented even from the peak of exuberance.

http://www.ritholtz.com/blog/2010/07/updating-the-case-shiller-100-chart-forecast/

Its quite a good chart by the way. Although I guess Bernanke didnt think so.

" generally be 'bought' well below market price " hang on a minute -i think if you ask any reputable

valuer or appraiser the " market price " = the price at which there was a transaction ?

What is all this about a ' transaction ' price - never heard of it Abrak - when the deal is done

its what the buyer and seller agree- simple as that.

So in the example above, the market value was $115,000 at Realtybid because this is all they achieved

and the fact that is was listed for $159,500 on the MLS is meaningless - in fact they could have asked anything.

That is why lenders are totally scared at marketing properties right across USA above $300,000 because they know

there are so few buyers for them so they allow the original buyers to live there ( in some cases 18 months now ) mortgage free and

rent free just so they can go and spend money on " stuff " - Alice in Wonderland.

And if Case-Shiller index is relying on these totally inflated and fairytale prices it's hardly " pretty good " -

because it's misrepresentation

Edited September 2, 2010 by midas

[Naam]

Ever heard of Thorium ?

Sounds like it could solve a few problems !

Obama could kill fossil fuels overnight with a nuclear dash for thorium

If Barack Obama were to marshal America’s vast scientific and strategic resources behind a new Manhattan Project, he might reasonably hope to reinvent the global energy landscape and sketch an end to our dependence on fossil fuels within three to five years.

http://www.telegraph.co.uk/finance/comment/7970619/Obama-could-kill-fossil-fuels-overnight-with-a-nuclear-dash-for-thorium.html

Fascinating topic!

There is an intro video, etc. here from the Thorium Energy Alliance

http://www.thoriumenergyalliance.com/

I wish Thailand would wait to construct this type of reactor to generate energy. It sounds like a much cheaper and safer alternative to uranium reactors.

1. Sounds too good to be true - doesn't it -

2. Are there any negatives ?

3. and why aren't governments rushing to develop ?

1. it is

2. too many to list (take that from a physicist)

3. because governments are not that stupid and believe in the wacko theories of a few wannabe scientists.

thorium case closed.

next!

[Abrak]

Sorry Midas,

Maybe I should have been more specific.

The 'transaction' price is the price at which the 'transaction' takes place. Transaction - an agreement between a buyer and seller for the exchange of an individual asset.

'Market prices' are often misleading in property because 'transactions' may not reflect the underlying 'market.'

It is the consistency of the data of Case Shiller rather than the accuracy I am interested in. I do not really care how someone defines unemployment in a chart going back 120 years as long as their definition of unemployment is consistent.

It is 100% clear to me that the underlying methodology of the index overstates price to income ratios through both the way it calculates price and its underlying premise of using 'median' incomes, certainly in a down market.

Bottom line is you misinterpret the index rather than it misinterprets the numbers.

[churchill]

Ever heard of Thorium ?

Sounds like it could solve a few problems !

Obama could kill fossil fuels overnight with a nuclear dash for thorium

If Barack Obama were to marshal America’s vast scientific and strategic resources behind a new Manhattan Project, he might reasonably hope to reinvent the global energy landscape and sketch an end to our dependence on fossil fuels within three to five years.

http://www.telegraph.co.uk/finance/comment/7970619/Obama-could-kill-fossil-fuels-overnight-with-a-nuclear-dash-for-thorium.html

Fascinating topic!

There is an intro video, etc. here from the Thorium Energy Alliance

http://www.thoriumenergyalliance.com/

I wish Thailand would wait to construct this type of reactor to generate energy. It sounds like a much cheaper and safer alternative to uranium reactors.

1. Sounds too good to be true - doesn't it -

2. Are there any negatives ?

3. and why aren't governments rushing to develop ?

1. it is

2. too many to list (take that from a physicist)

3. because governments are not that stupid and believe in the wacko theories of a few wannabe scientists.

thorium case closed.

next!

Well it would be nice if somebody found an 'ium to solve some of the world's problems - and there seem to be some who believe in Thorium so perhaps still some hope /

[midas]

Sorry Midas,

Maybe I should have been more specific.

The 'transaction' price is the price at which the 'transaction' takes place. Transaction - an agreement between a buyer and seller for the exchange of an individual asset.

'Market prices' are often misleading in property because 'transactions' may not reflect the underlying 'market.'

It is the consistency of the data of Case Shiller rather than the accuracy I am interested in. I do not really care how someone defines unemployment in a chart going back 120 years as long as their definition of unemployment is consistent.

It is 100% clear to me that the underlying methodology of the index overstates price to income ratios through both the way it calculates price and its underlying premise of using 'median' incomes, certainly in a down market.

Bottom line is you misinterpret the index rather than it misinterprets the numbers.

Don’t try putting lipststick on a pig Abrak

It is simple i.e. if Case Shiller index isn’t using the price at which the properties are actually selling on the open market as " input data " then to use your favourite expression all it's fancy research is " <deleted> ".

You wrote “ Market prices' are often misleading in property because 'transactions' may not reflect the underlying 'market.' “

When and why would it be wrong to consider the sales evidence for any home at an agreed price between a willing buyer and willing seller as “ not reflecting the underlying market “ and who in that case would be determining what the “ underlying market “ is really meant to be ? Give me an example ?

This is straight out 'manipulation' – you know the manipulation you so conveniently dismiss as a “ conspiracy theory “ over in the Stock Market thread because no one can get the proof. But in housing market things are more transparent and they have been caught out. This is manipulation of house prices straight out.

And yes indeed Case Shiller may have been consistent – i.e. consistently bloody wrong based on wrong data. Indeed why isn't this fraud ?

Edited September 2, 2010 by midas

[LaoPo]

Well it would be nice if somebody found an 'ium to solve some of the world's problems - and there seem to be some who believe in Thorium so perhaps still some hope /

I can't solve the worlds' problems but I suggest we talk a little about precious metals containing metals like:

Palladium - Tellurium - Rhodium (!) - Iridium - Osmium - Rhenium and with a lesser value, Germanium, as well as Sauerkraut mit Eisbein

LaoPo

[AlexLah]

Snip:

The off shoring of American jobs resulted from (1) Wall Street pressures for “higher shareholder returns,” that is, for more profits, and from (2) no-think economists, such as the ones engaged in the debate over fiscal stimulus, who mistakenly associated globalism with free trade instead of with its antithesis--the pursuit of lowest factor cost abroad or absolute advantage, the opposite of comparative advantage, which is the basis for free trade theory. Even Krugman, who has some credentials as a trade theorist has fallen for the equation of globalism with free trade.

As economists assume, incorrectly according to the latest trade theory by Ralph Gomory and William Baumol, that free trade is always mutually beneficial, economists have failed to examine the devastatingly harmful effects of off shoring. The more intelligent among them who point it out are dismissed as “protectionists.”

More here: http://www.counterpunch.org/roberts09012010.html

[Abrak]

When and why would it be wrong to consider the sales evidence for any home at an agreed price between a willing buyer and willing seller as “ not reflecting the underlying market “ and who in that case would be determining what the “ underlying market “ is really meant to be ? Give me an example ?

This is straight out 'manipulation' – you know the manipulation that you so conveniently dismiss as a “ conspiracy theory “ over in the Stock Market thread because no one can get the proof. But in housing market things are more transparent and this is manipulation.

And yes indeed Case Shiller may have been consistent – i.e. consistently bloody wrong based on wrong data. Indeed why isn't this fraud ?

Because Midas you have to compare like with like.

If you wish to understand how prices have moved you need to compare say one 2 bedroom house with how that was sold 5 years ago with the same price that the same two bedroom house sold for 5 years later.

There is absolutely no point in comparing the average sales prices when one has many condominiums and another has many castles. There is little point in comparing an off sales condominium against its resale because the owner puts in bathrooms furnitures etc. Even auctions are difficult to include unless it is auction against auction.

You need to compare one transaction with the same like transaction. You cannot simply add up large numbers of transactions or simply state that the fact that I sell my property for US$1m means every property is worth US$1m.

Fraud is the intention to deceive. His data is totally transparent. Go and look it up properly and if you wish devise a better methodology for understanding house prices over the last 450 to 120 years go ahead. But as usual your refusal to actually read or understand or investigate has left you with a 'fraud', 'conspiracy' theory idea based on the very simple fact you have never analysed the underlying data in the first place.

Lets start at the beginning Midas? Do you think he should be using median incomes and why not?

And honestly Midas what do you have against its data. It shows that prices by 2006 were 100% overvalued, that they now appear to be 30% overvalued. Do you actually disagree?

Edited September 2, 2010 by Abrak

[midas]

When and why would it be wrong to consider the sales evidence for any home at an agreed price between a willing buyer and willing seller as “ not reflecting the underlying market “ and who in that case would be determining what the “ underlying market “ is really meant to be ? Give me an example ?

This is straight out 'manipulation' – you know the manipulation that you so conveniently dismiss as a “ conspiracy theory “ over in the Stock Market thread because no one can get the proof. But in housing market things are more transparent and this is manipulation.

And yes indeed Case Shiller may have been consistent – i.e. consistently bloody wrong based on wrong data. Indeed why isn't this fraud ?

Because Midas you have to compare like with like.

You seem to have gone off on a tangent ? The issue has nothing to do with “comparing like with like ”

If you wish to understand how prices have moved you need to compare say one 2 bedroom house with how that was sold 5 years ago with the same price that the same two bedroom house sold for 5 years later.

No you dont........what the property sold for 5 years ago is completely irrelevant to what " market value " is today !

Let us keep it simple :-

1. Realtybid property was sold at $115,000 at but was listed as sold for $159,500 on the MLS.

2 . property was sold at for $90,061 but again was listed as sold for full price on the MLS $113,400

That is the fraudulent part !

There is absolutely no point in comparing the average sales prices when one has many condominiums and another has many castles. There is little point in comparing an off sales condominium against its resale because the owner puts in bathrooms furnitures etc. Even auctions are difficult to include unless it is auction against auction.

You need to compare one transaction with the same like transaction. You cannot simply add up large numbers of transactions or simply state that the fact that I sell my property for US$1m means every property is worth US$1m.

Fraud is the intention to deceive. His data is totally transparent. Go and look it up properly and if you wish devise a better methodology for understanding house prices over the last 450 to 120 years go ahead. But as usual your refusal to actually read or understand or investigate has left you with a 'fraud', 'conspiracy' theory idea based on the very simple fact you have never analysed the underlying data in the first place.

Lets start at the beginning Midas? Do you think he should be using median incomes and why not?

And honestly Midas what do you have against its data. It shows that prices by 2006 were 100% overvalued, that they now appear to be 30% overvalued. Do you actually disagree?

[ronz28]

1. it is

2. too many to list (take that from a physicist)

3. because governments are not that stupid and believe in the wacko theories of a few wannabe scientists.

thorium case closed.

next!

Dr. Naam,please educate us with some of the more significant points on your list. There are apparently thousands of people worldwide working on this. Maybe its just a welfare program for engineers but a lot of people apparently think there might be some fire at the base of the smoke screen. Here is an interesting remix of a Google conference on a liquid-fluoride thorium reactor (LFTR) that mentions at 6:19 of 16:31 the aircraft reactor concept you mentioned.

Is there a better way to cheap safe power?

[Abrak]

Snip:

The off shoring of American jobs resulted from (1) Wall Street pressures for “higher shareholder returns,” that is, for more profits, and from (2) no-think economists, such as the ones engaged in the debate over fiscal stimulus, who mistakenly associated globalism with free trade instead of with its antithesis--the pursuit of lowest factor cost abroad or absolute advantage, the opposite of comparative advantage, which is the basis for free trade theory. Even Krugman, who has some credentials as a trade theorist has fallen for the equation of globalism with free trade.

As economists assume, incorrectly according to the latest trade theory by Ralph Gomory and William Baumol, that free trade is always mutually beneficial, economists have failed to examine the devastatingly harmful effects of off shoring. The more intelligent among them who point it out are dismissed as “protectionists.”

More here: http://www.counterpunch.org/roberts09012010.html

Alexjah,

I think you are simplifying Krugman's position. He clearly built his reputation on 'New' trade theory and championing 'free trade' and 'globalisation' but has back tracked a long way. Krugman is currently calling for tarriffs against China. As you rightly point out trade theory is more built around comparative rather than absolute advantage.

I also believe that there has been a big misunderstanding about financial liberalisation and underlying free trade.

Also the commitment to 'free' markets is much more an 'American' concept built out of the cold war and the opposition to some ridiculous central communist economic structure than out of real economics. You can be capitalist and believe in regulation, consumer protection, limited capital controls, regulation of speculation without being a socialist.

The idea that free trade would potentially have damaging consequencies is not new at all. It is words like 'protectionist' that give it a bad name. Because the word in itself gives the implication that you are preventing economic progress which is not inherently true.

[Abrak]

You seem to have gone off on a tangent ? The issue has nothing to do with “comparing like with like ”

Yes I clearly have. He certainly doesnt need me to defend him.

You are free to claim he is a fraud and a conspirator etc.. all you like. Go for it.

Just get the spade out... and dig.

[Naam]

Dr. Naam,please educate us with some of the more significant points on your list. There are apparently thousands of people worldwide working on this.

Is there a better way to cheap safe power?

there is no doubt that worldwide millions of people are working in thousands of various research sectors. but that is no conclusive evidence that positive results can be achieved.

generating energy with thorium reactors is much safer (hardly any dangerous waste) but not cheap. as far as "cheap" is concerned nobody can fathom the cost of building reactors. conventional reactors cannot be modified (as opposed to some publications) to use Th as fuel. replacing existing reactors with those using Th cannot be financed, except if it is done step by step lasting decades. BUT as of now (and since decades) we are only dealing with theories and assumptions. fusion experiments (like CERN in southern France) are generations ahead; not only in theory but in practical experience. a couple of decades ago "fast breeders" were supposed to be the solution of all our energy problems and the fact is they could be... if there were no safety concerns. my home country spent billions building a fast breeder. alas, it never even went online to produce one single kWh.

in my [not so] humble view :jap: discussions about energy problems and their solutions are extremely interesting. but even if there were solutions they couldn't solve any financial crisis (which is the topic of this thread), prevent fraudulent banksters to fleece investors and taxpayers or prevent incompetent politicians to waste the money of the taxpayer.

[ronz28]

Thank you Dr Naam. I guess the recent media activity on Thorium reactors is probably to drum up funding for research projects that are on the chopping block due to the financial crisis. I would rather we spend money on research than on banksters, etc. but the money has already been wasted and I don't see the responsible people being held accountable for the most part.

[AlexLah]

Snip:

Mr Blinder’s final suggestion is that the Fed ease bank examination requirements to encourage relatively healthy banks to take greater risks extending credit to riskier borrowers. For him to make such a recommendation, given that just about everyone agrees that aggressive lending practices were one of the key ingredients for the US housing bubble, bust and associated global financial crisis and subsequent US recession, is breathtaking to say the least. But we’re quite certain that when Mr Blinder makes this suggestion, he does so with complete seriousness and certainty that he represents the US economic policy mainstream. This, of course, should tell us something about that “mainstream”. Just who are these economists anyway? Did they predict the crisis? Did they predict the double-dip? If not, why not? And why on earth do they do persistently prescribe the same monetary “medicine” that has already nearly killed the US economy? Isn’t doing the same thing over and over again, anticipating a different response, a classic definition of insanity?

Yes, the US economic mainstream appears insane. There, we said it. Mr Blinder could not have been implicitly clearer on this point. In this and other op-eds and other academic and policy papers, we read the same Neo-Keynesian rubbish over and over, that the solution to excessive debt and consumption is even more debt and excessive consumption. And if the private sector is not willing to co-operate in such insanity–and quite clearly it is not–then the Fed and the government must step in to provide it. It’s for our own good. It’s as if a government-run rehab clinic were prescribing progressively larger rather than lower doses of a drug in a chimerical effort to help an addict. It can’t possibly work. With each larger dose, the patient will remain addicted as before while the side effects, anticipated or not, grow and grow.

From here: http://www.financialsense.com/contributors/john-butler/there-may-be-no-free-lunch-but-is-there-a-magic-wand

Take care all, working on the reply to Abrak on my previous post.

[badge]

http://www.zillow.com/local-info/#metric=mt%3D29%26dt%3D1%26tp%3D5%26rt%3D14%26r%3D102001%26el%3D0

interesting graphs on avg. US res. property prices, foreclosures etc

[12DrinkMore]

Overdose: The Next Financial Crisis

A documentary about the financial crisis and the usual suspects Celente, Schfff & Co forecasting the bursting of the latest bubbles. Nothing new, but amusing to see Bush (what a lame duck), Bernanke (don't trust what this man says), Brown (words fail), Greenspan (he knew what he was doing) and Obamah (the mouthpiece) amongst others.

Plus a few sobering statistics on the cost of this episode, for example Bush spent more than the sum of all the presidents before him and Obamah is on target to beat Bush. Or that it has cost more than the two world wars, a couple of other wars and the moon landing put together. At least there were results and peeps could get on with their lives.

This dam_n crisis doesn't look like there is an end in sight, the can is going to take a lot more kicks down the road.

The FDIC hasn't reported any failed banks last week. Wonder what happened, surely there are one or two more ready to go under?

[12DrinkMore]

Here comes the UK taxman after offshore savings again.

http://blogs.telegraph.co.uk/finance/ianmcowie/100007480/best-amnesty-ever-for-tax-dodgers-includes-inheritance-tax/

Offshore tax dodgers are being offered “the best amnesty ever” which could even enable them to avoid inheritance tax (IHT) on undeclared assets, accountants claim.The deal follows the theft of computer discs from banks in the tiny principality of Liechtenstein, containing the names of many thousands of wealthy Britons, for which HM Revenue & Customs (HMRC) is understood to have paid millions of pounds. Now the Liechtenstein authorities have begun writing to British depositors, urging them to accept the amnesty while they can. HMRC is offering these depositors – and tens of thousands of others with money hidden in other tax havens – the chance to ‘come clean’ before they are prosecuted.

No escape guys, you have to help bail out the banks.

Here we go, where are the Greeks heading?

http://www.telegraph.co.uk/finance/economics/7980291/EU-austerity-policies-risk-civil-war-in-Greece-warns-top-German-economist-Dr-Sinn.html

“We are in the second Greek crisis right now, today,” said Dr Sinn.

The Greeks have never been out of a crisis.

[Abrak]

Here we go, where are the Greeks heading?

http://www.telegraph.co.uk/finance/economics/7980291/EU-austerity-policies-risk-civil-war-in-Greece-warns-top-German-economist-Dr-Sinn.html

“We are in the second Greek crisis right now, today,” said Dr Sinn.

The Greeks have never been out of a crisis.

[/font]

Well here is a slightly different view about where the Greeks are heading....

http://www.propertywire.com/news/europe/greeks-buying-london-property-201005064102.html

Greece however is just really digging itself a bigger hole.

[BlackJack]

It would kill nuclear power ( No excuse for the Iranians ) and reduce development in other alternative energies .

Hold on investing in Uranium !

there are over 50 nuke power stations being built now and so in the next few years there will be more demand for 308

[mania]

The FDIC hasn't reported any failed banks last week. Wonder what happened, surely there are one or two more ready to go under

Even the FDIC would never work on Labor Day weekend....3 day holiday in the USA

[12DrinkMore]

Well here is a slightly different view about where the Greeks are heading....

http://www.propertyw...1005064102.html

Greece however is just really digging itself a bigger hole.

There are always the uber-wealthy with a shed load of tax free cash to disperse around the globe . But I don't reckon the rest of the Greeks are too happy about it. Austerity and being Greek somehow just don't fit too well together. The Irish are taking their medicine very well, but ultimately to no avail.

They're all going down together, and the Germans, still under the guilt from WWII, should stop bailing the buggers out. There is no more debt from that generation to be paid 65 years later. It's finished.

Everybody in Greece and Europe knows that the Greeks have lied and committed fraud. It is the national pastime.

And why don't the euro-politicians just kick them out? Because it comes around to the same damned issue; the German and French banks have squandered billions trying to gain an extra percent and the so called "hair cut" will cause a certain amount of "difficulty". So why didn't these "clever boys" have their CDS insurance policies in place. Surely not because the idiots trusted the Greeks to pay up, blindly believed the US rating agencies, or even issued the insurance themselves?

Come on guys, shove the Greeks out of the system. No more subsidies, no more cash. Otherwise they will suck you dry and provide an example to the other members oft the PIIGS to do the same. The deutsche Bank will take a major hit, but it is about time; so what? All bankers are a bunch of usurers; and the DB, when they walk in with the suits and briefcases it is time to walk out of the room, so it's time for them to take a hit.

Europe needs to be firm on this issue and stop being so soft on liars and thieves, The Greeks should be immediately expelled, no more money should be wasted. They came to the EC to extract as much as they could, have given nothing in return, have not made the slightest attempt to put their economy and books in order. OK, let them enjoy what has been taken, but no more. It is enough.

But no, it won't happen.

The banks will continue to ruthlessly screw us all and the politicians will pander to them and the Greeks. "we must help them out" or threaten us with "we have to bail out the banks or else..."

<deleted> do we.

Banking has to be the easiest and most profitable business in the universe. If they have to be "bailed out" by the population, then there are some very serious issues that have failed to be addressed.

And the Greeks, well fuc_k 'em. Somebody has to call a stop to this lunacy, and this is a good place to start.

[Abrak]

12D,

I was making a slightly different point which is when it comes to screwing an economy into the ground there are plenty of crooks to take advantage of it and become incredibly wealthy. When it comes to paying for your sins they all disappear and their wealth with them.

To the extent there was corruption and tax avoidance in Greece, those guys will not be there to pick up the pieces or pay.

I do agree that Greece needs to be discarded though.

[Abrak]

The FDIC hasn't reported any failed banks last week. Wonder what happened, surely there are one or two more ready to go under

Even the FDIC would never work on Labor Day weekend....3 day holiday in the USA

Really? I heard they were busy in Kabul.

[12DrinkMore]

A readable analysis of the origins of the crisis from one of the world's leading experts on Marx.

THE ENIGMA OF CAPITAL AND THE CRISIS THIS TIME

(paper prepared for the American Sociological Association Meetings in Atlanta, August 16th, 2010)

http://davidharvey.org/2010/08/the-enigma-of-capital-and-the-crisis-this-time/#more-585

The central problem to be addressed is clear enough: compound growth for ever is not possible: capital accumulation can no longer be the central force impelling social evolution. The troubles that have beset the world these last thirty years signal that a limit is looming that cannot be transcended. Add to this the fact that so many people in the world live in conditions of abject poverty, that environmental degradations are spiraling out of control, that human dignities are everywhere being offended even as the rich are piling up more and more wealth at the expense of everyone. Meanwhile, in most places the levers of ideological, political, institutional, judicial, military and media power are under tight political control. This serves to perpetuate the political status quo and frustrate opposition even as the economy and living standars deteriorate. “Freedom” then becomes just another word to justify repression.

But unfortunately he ultimately peters out with no solid solution, except a dose of anti-capitalist revolution.

And for those of you with the time, inclination and sheer staying power, he has a series of video presentations on "Das Kapital".

[Abrak]

But unfortunately he ultimately peters out with no solid solution, except a dose of anti-capitalist revolution.

And for those of you with the time, inclination and sheer staying power, he has a series of video presentations on "Das Kapital".

But that is Marxist theory in a nutshell. It is an incredibly powerful theory of the weaknesses and shortfalls of capitalism but I dont believe he even attempted to provide an alternative. Their is talk about the socialism of capital by the people for the people but what does that mean? Marxist economics is simply a critique not a solution. Capitalism is built into our genes. Theoretically in a Marxist economy everyone would act in the best interests of the community - how stupid is that? We act in self interest.

4 million years of evolution turned on its head. Which is why communist economies have turned into a) a complete disaster fascism (usually both) or more recently c) capitalism with benefits (i.e. China) (which believes in the destruction of capitalism through capitalism.)

Capitalism is very proud of its success over communism without realizing they never had a solid solution. It really wasnt much of a victory. Everyone suspects there is a bit of a problem now. But words like liberalisation, free markets, deregulation, globalisation sound good and capital controls, regulation, protection, sound bad. This is purely political ideology.

And you get screwed cos bankers that you bailed out 'because they are vital to the economy' now say if you regulate or tax us it will restrict our ability to innovate and will affect borrowers so we might piss off and go elsewhere. So everyone knows that banks need to be closely regulated and if they are allowed to run riot in free liberalized and deregulated markets it is an experiment that has been tried and ended in disaster but they cant quite say so.

China has capital controls and a regulated controlled banking system but as it is basically moving towards capitalism that doesnt matter we think that a manipulated undervalued currency reduces the price of products rather than hollows out the economy. Suddenly capitalists are worshiping an economy where Marx is part of the curriculum. A pegged currency whereby the central bank governor admits it will destroy the economy of the Central Reserve economy by definition.

The real problem is the 'bias' of capitalist political philosophy. Which is say that bankers are allowed to argue against regulation because 'liberalisation' is 'good'. Bankers should just be told to 'fuc_k off' because the only reason they were bailed out was because the disaster they created was so horrendous. Look say banks only being allowed to lend 75% of the value of a property just seems a sensible rule to me.

At the end of the day people know there is something wrong, that the problems are not being addressed but until people either 'remember' or understand that say free capital markets, financial deregulation and liberalization can have very 'destructive' as well as very 'creative' consequencies nothing will be resolved. Capitalism is the most powerful economic force there is and that is why it needs to be tamed.

Do you really think a peacock wanted its big feathers?

Edited September 5, 2010 by Abrak

[teletiger]

Here's an old friend. It's put on a bit of weight since we saw it last. You'll understand why.

Regards.

Edit: I should explain, the dotted line is presuming 230K new jobs created per month from....3 2 1...oops, we're behind already.

More here.

http://www.zerohedge.com/article/obama-must-create-230000-jobs-month-until-end-his-second-term-return-breakeven-charting-new-

Edited September 5, 2010 by teletiger

[lannarebirth]

I am slightly surprised that nobody has mentioned this idea that is doing the rounds.

http://blogs.reuters...ise-from-obama/

I know it is a blog but it is from a fairly well regarded journalist and the underlying idea seems to be getting some support from the major investment banks (not surprisingly.)

The proposal is both absurd as well as highly imaginative.

The concept is to use the unlimited funding of Freddie Mac and Fannie Mae (both of which are already bankrupt) to write off negative equity in existing mortgages and refinance them. This would benefit at least 15m american households. (well the banks as well of course.) It is actually quite a clever idea in its own way (although unamerican, anticapitalist, moral hazard and deeply unfair.)

Pigs at the trough

Commercial Real Estate Lobby Ask For Taxpayer Aid To Help Recapitalize Banks Saddled

With Billions In Underwater CRE Loans

in case taxpayers are wondering where the next fiscal stimulus will end up going, wonder no more: "The new investments would be specifically used to pay down debt, resulting in lower loan-to-value ratios of existing loans as well as improved debt coverage ratios." As the CRE lobby concludes: "By giving lenders the ability to responsibly refinance debt and rebalance capital reserve levels, the CRE Act will provide the opportunity for additional lending capacity that will help stimulate lending to small businesses, job formation and economic growth in communities across the country."

In other words, it is time for taxpayers to help purge banks of existing toxic debt, so that these same banks can resume lending like drunken sailors, in unviable commercial real estate projects just to guarantee that the next major market blow up also destroys the regional banking system, in addition to the TBTFs

I think its a scheme to create new loans because a HUGE percentage of sub-prime and No Doc loans are un-repossessable. Either they were not properly assigned and there is no creditor with standing or they have illegal clauses in the contract or they were written fraudulantly. If it happens it may look like a big bailout, but in fact I think it is a means to put the screws to debtors with whom they have no real current repossessive rights.

Lanna, I see your point, but isn't that still effectively a bailout, indirect or otherwise? Also, there were no-doc CRE loans? Freaking disaster.

The Hamburglar is sneaky, indeed.

Of coutse it is still a baiiout . In this particular scenario however, as litttle trickle down and a whole lot trickes up to creditors whom now hsve stanning to pursure their re -possessive right.s.

[lannarebirth]

has anybody looked into the rare element Unobtainium?

I'm stll waiting for energy producers to get serious about exploiting Easobtanim. If Jed Clampett coud.find it with a wayward bullet, I think most anyone be able too also:

[Naam]

nobody mentions Anglo Irish Bank?