Finance Investment - Berkeley CSUA MOTD
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Berkeley CSUA MOTD
2022/08/19 [General] UID:1000 Activity:popular

2009/2/20-22 [Finance/Banking, Finance/Investment] UID:52613 Activity:high
2/20    Interview with Peter Schiff (economics, 2008)
        \_ gee, a government-is-evil site has an interview with a
           government-is-evil guy.  how useful.  -tom
        \_ How's that hedge fund going Petie?  OOOOPS.
        \_ Peter wants to go back to the Gold Standard. I agree with that.
           \_ You mean you agree with Mr. My Hedgefund Completely Imploded?
              Yeah, he sure seems like a *smart* guy.
             \_ You can be right about some things and wrong about others.
                You can also be right but get the timeframe wrong.
                Hedge funds make bets that are inherently uncertain.
                \_ He was a consistent bear from 2002 until now, so he was
                   dead wrong for five years.  A stopped clock is right
                   twice a day.  -tom
                   \_ One could correctly recognize the dot com bubble, oil
                      bubble, and housing bubble.  It's much tougher to know
                      when it would pop, and what the world reaction would be.
                      \_ Exactly. I thought <DEAD><DEAD>s were overpriced and
                         yet they kept going up and up and up! Eventually,
                         I was proven right but the devil is in the details.
                \_ Well, I guess that justifies being a fringey Austrian
                   econonomics nutcase.
        \_ Peter Shiff Was Wrong
  (Mish's blog)
           \_ Yeah, basically, Schiff was wrong about just about everything.
2009/2/20-22 [Politics/Domestic/Election, Finance/Investment] UID:52608 Activity:high
2/20    Was just watching Thu's CNBS on tivo.  Gosh, Obama has no idea what
        he's doing, does he? -Dem
        \_ No, he doesn't. Everyone knew that. That's why I voted for Hilary.
           However, I expected him to have competent advisors. I think
           part of the problem is "What happens when you have competent
           advisors who *disagree*?" as I feel is the case now. Someone
           has to make the call.
           \_ And this just occured to you?
              \_ No. "I voted for Hilary."
           \_ what happens when Krugman (!advisor), Geithner, Summers, Buffet,
              and Volcker are all fucking wrong?
              \_ Greenspan? Bernanke? Roubini? I actually think Buffet is
              \_ Greenspan? Bernanke? Roubini? I actually think Buffett is
                 right and history will prove it.
                 \_ Buffet has been selling, after he told you to buy
                    \_ Bull.
                       Sure, he sold some positions. He's also been buying
                       Intersoll-Rand, Nalco (NLC), and Burlington Northern
                       Ingersoll-Rand, Nalco (NLC), and Burlington Northern
                       since end of 3Q 2008. Most holdings are unchanged.
                       That's in BRK. Buffett's article was talking about
                       his personal holdings, which we don't really know
                       about what's happening there.
        \_ What is "Thu's CNBS"?
           \_ Sorry, Thursday CNBC.  Specifically about 2-3 segments where
              Rick Santelli and Steve L. are yelling at each other; also the
              Meredith Whitney interview.
              \_ Yeah the CBOE traders are all such great representatives
                 of the common man. How can you take this guy seriously, he
                 was a hedge fund advisor and one of the architects of CDOs?
        \_ Your use of CNBC as a barometer of anything of substance says
           more about you than about Obama.
           \_ See above about specific segments on the bullshit channel;
              I'm not too impressed with you myself
        \_ Gibbs has a great response to Santelli's right wing frothing:
           \_ Uh, great response?  He's a press secretary, and what I got from
              that was:
              - You're a derivatives (actually, bond) trader you motherfucker
              - By preventing your neighbor's foreclosure, your house will
                maintain value (Santelli actually addressed this yesterday,
                saying most people buy a house to live in, not as in investment
                and the need for house prices to return to normal supply/demand
                levels overrides subsidy of foreclosed properties)
              - Really smart people created this plan
              - Go read the plan, and you'll see it helps a lot of people
              Once again, Obama has no idea what he's doing -Dem
2009/2/19-25 [Finance/Banking, Finance/Investment] UID:52599 Activity:moderate
2/19    "There is no scenario under which you would claim the government was
        not involved ... -tom"
        \_ Apparently there is no scenario under which you would agree
           government policy has a hand in creating financial crises.
           My point isn't about getting rid of the government itself
           but the banking system supported by governments around the world.
           These crises keep happening around the world and yet people always
           find something to blame except the actual system.  It's like
           building your house next to a flood zone and then blaming the rain
           when your house inevitably gets trashed.
           On the surface, you can blame banks in these crises because we
           always get these situations where banks create massive amounts of
           debt based on overvalued assets.  This is natural because greed is
           natural.  The problem is a) they are shielded from the consequences
           and b) the govt-sanctioned system allows them to pyramid debt upon
           debt in a tremendous explosion of newly created money, and a
           tremendous skewing of the economy's fundamentals (trade balances,
           capital allocation).
           In a conservative system (not talking GOP or Dems here) a series
           of failures would simply not be able to cause such deep problems.
           After you unwound the failures then you'd still have the same
           basic money supply in the economy.
           With the current system, you are putting an impossible regulation
           task onto the government.  The current crisis is really an
           extension of problems that have been building up for decades.
           In the latest episode the Fed kept interest rates too low for too
           \_ Not a "conservative system", a "free market system".  The free
              market cannot work unless there's profit AND loss.  Oh, and the
              government shouldn't tell the companies to do something
              unprofitable and then blame them for it.
           \_ (The Economist)
              Your lefty fellow travelers over at The Economist don't seem
              to agree. Financial crises are as old as capitalism.
              \_ That article doesn't even touch on the issue of the banking
                 system itself.  It's mostly ignored by all mainstream
                 sources as if it must be, always has been, and always will.
                 There's no proof that this credit expansion system is
                 really a benefit.
                 This isn't really a left/right issue either.  The only people
                 who talk about this kind of thing are, I guess, libertarians.
                 \_ What are you talking about? Every macro econ class talks
                    about money supply. Read Chapter 13 of Keynes General
                    about money supply. Read Chapter 17 of Keynes General
                    Theory for the first modern discussion of it, but so did
                    Friedman, Von Mises, Krugman, all the greats. It might be
                    true that libertarians (and their fellow travellers, the
                    Austrians) are the only ones who seriously consider that
                    fiat money and franctional lending are a bad idea. Do you
                    notice that no one in the world is on the gold standard?
                    That is because it is a crappy way to run an economy, full
                    of booms and busts far worse than what we are experiencing
                    \_ There's no evidence it's a crappy way to run an economy.
                       The real reason is very simple.  Government inflation of
                       the currency is a hidden tax on holders of money.  Govts
                       used this repeatedly in times of war, though they
                       usually returned to gold afterward.  This is just a
                       fact, look at the history of about every major British
                       or US war.  They inflated the currency tremendously in
                       WWI, then tried to deflate it again afterwards which was
                       doomed to failure.
                       This is also orthogonal to fractional reserve banking
                       where demand deposits are treated as bank assets,
                       and the money supply is exponentially expanded via debt.
                       There is no evidence this is needed or even beneficial.
                       Most of the historical problems, if you look into it,
                       were either a) not really crises or b) not actually
                       a free market gold standard.
                       The deflationary spiral problem is endemic to fractional
                       reserve inflation, so is the risk of widespread bank
                       failures.  Banks today, in general, are not allowed to
                       fail.  We pay for their mistakes via the government
                       bailing them out in one way or another.  It's private
                       profits socialized losses.  But actually this has been
                       the case for hundreds of years... because it wasn't
                       nipped in the bud, it's always been too painful to undo.
                       Govts bailed out banks many times in history.
                       \_ You imply that having a hidden tax on holding money
                          is a bad thing.  I would argue that we don't want
                          people hoarding money a'la Scrooge McDuck.
                          \_ Let's see you argue it then.
                       \_ If you are not familiar with the historical poverty
                          of humanity and the many long periods of depression
                          and famine before 1900, then I cannot hope to type
                          enough words to educate you. Go read a history book
                          or something. The explosion of human wealth since the
                          invention of capitalism is really unprecedented.
                          \_ Capitalism is not synonymous with central banking.
                             There are no periods of famine and depression that
                             can be blamed on a lack of central banking.
                             You're also placing credit on "capitalism" when
                             there are so many other technological advances in
                             the same time frame.
                             \_ What do you think that the "capital" in
                                capitalism represents?
                                \_ Not central banking, that's for sure.  Why,
                                   what do you think it represents?  Is this
                                   a joke?
           \_ Do you even know why we went off the gold standard?
              \_ So that the gov't could inflate the currency whenever they
                 \_ It all sounds like funny money to me.
                 \_ Is it better when completely random effects inflate the
                    money supply? (Someone discovered gold!)  Or, even worse,
                    business as usual deflates the money supply? (Hold amount
                    of gold constant, increase GDP, automatic deflation!)
              \_ You don't need a gold standard.  The money-is-debt, fractional
                 reserve thing is mostly orthogonal to having a gold standard.
                 You could still have fiat money but make it non-debt based
                 (i.e. just directly create X amount of money by fiat).
                 A gold standard is a separate debate.  Many arguments against
                 it are bogus though.
                 We left the gold standard so that the government could
                 finance wars without worrying about taxes or voters.
           \_ Are you getting paid by the word?  -tom
              \_ I should be.  My day job is boring, I guess.
        \_ what is this quote from?
           \_ an earlier motd thread
2009/2/19-22 [Finance/Investment] UID:52598 Activity:low
2/19    The Bush Decade was as bad economically as the Great Depression:
        \_ It's only bad if you're the middle class or lower. Wonderful
           for corporations and stock holders.
           \_ I'm a stock holder and it hasn't been that great. The NASDAQ
              never recovered and now the DOW is at 1990 levels. Awesome.
              \_ Self reliance. Blame yourself for not getting out earlier.
                 \_ I'm not *blaming* anyone. I'm just pointing out that
                    Bush wasn't really favorable to anyone except his oil
                    buddies and defense contractors. The perception is
                    that all those "fat cat stockholders" like, I dunno,
                    just about everyone with a 401k, made out like bandits
                    and we most decidedly did not.
              \_ Not that bad. More like 1997.
        \_ Oh, come on.
        \_ That's about the dumbest thing I've ever seen.  The Dow is down 35%
           IN THE LAST 6 months, forget the last decade.
2009/2/13-18 [Finance/Banking, Finance/Investment] UID:52566 Activity:nil
2/13    Bubbles have repeatedly plagued Western finance since its origins
        in the Italian Rensiassance: (The Economist)
        (and an explaination why the CDS trades should "net to zero")
        \_ They won't net to 0 if some people go bankrupt, drops out of
           the system and can't pay up.  Finance is not a zero sum game.
        \_ Top people to blame for the financial crisis:
2009/2/11-18 [Finance/Banking, Finance/Investment] UID:52555 Activity:high
2/10    Why tax cuts are a bad way to stimulate demand in a deflationary
        (Freakonomics Blog at NYT)
        \_ Oh sure, you can't trust people with their own money.
           \_ No, you can't, when the collective interest is
              diametrically opposed to the individual's interest.
              We, collectively, need the economy stimulated.
              However, we, individually, don't want to spend our
              However, we, individually, want to save our money
              money to maximize our personal financial security.
              So, right now, you can't trust people with their
              own money.
              \_ Is this why the fed has racked up debts that work out to
                 over $30,000 per capita?
                 \_ How large are the debts that the private sector has
                    racked up?
              \_ People know what they need and don't.  We've been living in a
                 mode where people spend way beyond their capacity.  Retreating
                 from that is normal.  Deflation is good.  We have tons of
                 immigrants and an inefficient culture of buying tons of
                 cheap crap.
                 "Deficient aggregate demand" isn't a problem.  We still have
                 a huge trade imbalance so there are plenty of jobs we could
                 theoretically be doing instead of importing all that shit.
                 But the only way that would happen is if we let conditions
                 move towards equilibrium instead of borrowing trillions to
                 prop up the status quo.
                 \_ You almost make some sense.  Good thing you aren't running
                    the Republican party or I'd have to vote for you.
                \_ Do you think that people knew what they needed and what
                   they didn't need when they decided to leverage up buying
                   McMansions, flipping houses and buying SUVs? How about when
                   they bought all those exotic financial instruments which
                   bet on the housing bubble? Do you know what a deflationary
                   trap is? What you are advocating would put us in one,
                   the same as Japan post-bubble, and would give us our
                   own "lost decade" or two.
                   \_ People did that because it was what makes sense to do
                      given abundant cheap credit.  The government's policies
                      steered the market towards cheap imports and housing
                      instead of real industry -- not only our direct
                      policies but how we allowed e.g. China to manipulate our
                      own economy.  See:
                      Of course long-term deflation is not good.  But if it
                      wants to happen there's no point going around trying to
                      ignore the laws of gravity.  We should look for ways to
                      cushion the fall and set things up for long term success.
                      The previous economy (dot com then crazy mortgage bubble)
                      was based on a tremendous amount of imaginary wealth.
                      To keep on pretending just prolongs and exacerbates.
                      The ideas you're talking about is the thinking that lead
                      us to where we are.
                      \_ No, it was a deliberate decision by the GOP to
                         deregulate the financial sector which led to the blow-
                         up in available credit, more than anything. There were
                         certainly other contributing factors, but that was
                         number one. To lower the Debt/GDP ratio, you can try
                         to lower debt or raise GDP. Your plan would try and
                         lower debt, but probably lower GDP even more - that
                         is what has happened in the past when debt bubbles
                         have been allowed to pop without any attempt to
                         clean up the mess afterwards. There is a chance that
                         by reallocating capital to more effective uses, we can
                         grow GDP and reduce overall debt that way. Most of
                         the increase in govt debt recently has just been a
                         shift from private to public hands, so has not
                         increased the overall debt burden to the US economy.
                         This is not guaranteed of course, a lot of it depends
                         on how good a job govt does in allocating capital to
                         productive uses. It is hard to imagine that they would
                         do a worse job than the private sector has over the
                         last decade, but anything is possible.
                         \- you can blame the GOP for some crazy tax policies
                            gutting enforcement funding or "capturing"
                            regulatory agencies and most of deregulation, but
                            there is a lot of blame to go around on dereg
                            and mkt fundamentalism. i'd be ok chaining
                            robert rubin and phil gramm together and sending
                            them off into interstellar space.
                            \_ Please see the Commodity Futures Modernization
                               Act of 2000.
                         \_ Even given the deregulated system,
                            there were clear lapses on the part of the
                            regulatory systems that did still exist.  And
                            failures on the part of private regulators like
                            S&P.  I believe part of that is simply a lack
                            of competition -- the need for government
                            oversight is directly related to market health.
                              Markets don't know what's productive, they just
                            tend to maximize utility in terms of profit.  If
                            the environment is skewed the result is skewed.
                              It's like when "kind" people put out food for
                            animals; the animals will base their "economy" on
                            maximizing this free benefit.  They don't
                            understand why there is free food, so they can't
                            understand that it might go away, or that the
                            humans might round them up and gas them.
                            Low interest rates, perpetual borrowing, and
                            China's market manipulations are our free food.
                            Even now China keeps investing in overcapacity and
                            trade surplus.
                              The deregulated financial industry made mistakes,
                            but basically it was drunk on the free shit.
                            Cheap credit was influenced by the trade deficit.
                            The Fed also maintained relatively very low
                            interest rates even while the housing bubble was
                            growing insanely fast.  Greenspan denied that there
                            was a bubble.  The government was basically telling
                            people that housing was the place to be.
                            \_ Look, you ideological nitwit; the housing bubble
                               is *not* the cause of our financial crisis.
                               \_ I rather think it is. If housing recovers
                                  then all of these problems instantly go
                                  away. Loose credit and low interest rates
                                  combined with fraudulent mortgage lending
                                  practices and dishonest borrowers are at
                                  the heart of the problem. If you want to
                                  know where most of the $$$ went, it went to
                                  anyone who sold a property in the last 5
                                  years that they had owned more than 5
                                  years prior. Some of it when to speculators
                                  and some of it went to people like you
                                  and me whose house value doubled in a few
                                  years. When salaries and real estate prices
                                  match more closely then this will all blow
                                  over but not until then. Leverage just
                                  made things worse by wiping out capital,
                                  but those speculators had a good run prior to
                                  that so some should weather this. Some won't.
                                  C'est la vie.
                                  \_ We have had credit bubbles that did not
                                     involve housing and we have had housing
                                     cycles (bubbles?) that did not bring down
                                     the financial sector. Unregulated and
                                     overly risky speculation is what brought
                                     down the financial sector, mostly the IBs
                                     and hedge funds leveraging 30:1 on their
                                     the financial sector.
                                     \_ S&L crisis?
                                        This isn't the first time Citi has
                                        borrowed from the gov't either.
                                        Was 1991 the last time?
                                        This crisis is more severe because
                                        the bubble was bigger, partly
                                        because interest rates were lower
                                        and other instruments were
                                        underperforming or viewed as
                                        risky. That's all. CA has had housing
                                        bubbles that popped, but this is new
                                        to most of the country.
                               Financial institutions leveraging themselves
                               ridiculously is the cause of our financial
                               crisis.  Oh, if only the government didn't
                               exist, the invisible hand would have made sure
                               that the banks acted safely!
                               Here's a news flash: The financial crisis
                               *IS* THE FUCKING INVISIBLE HAND.  The free
                               market is perfectly happy to drive off a cliff
                               and destroy a society.  Government's job is
                               to make sure that doesn't happen.  -tom
                               \_ Leveraging wasn't THE cause; misclassifying
                                  risk was the cause, and is directly
                                  related to the housing bubble.  And the
                                  mother of all the leveraging is the fed's
                                  low interest rates.
                                  The financial crisis is not the invisible
                                  hand because government was riding
                                  shotgun the entire way. Or more accurately,
                                  the government was building a bridge to
                                  the promised land out from the cliff, but
                                  actually it went into thin air.
                                  In any case you are arguing a strawman: I
                                  am not arguing that gov't regulation is
                                  unnecessary. I'm saying it didn't do its
                                  \_ Yeah, whatever.  How about this: Could
                                     you describe a possible scenario where
                                     the free market, by itself, could cause
                                     a financial crisis?  Or is that
                                     impossible?  -tom
                                     \_ Obviously yes, with banks: bank runs.
                                        Although modern banks are completely
                                        married to the government via the
                                        central bank, and via the laws that
                                        allow them to create money and lend
                                        money that they simultaneously owe
                                        to their depositors.  That's not
                                        really the free market; it's inherently
                                        unstable, and supposedly the govt is
                                        managing this in order to be able to
                                        easily stimulate the economy.
                                        It is theoretically possible to have
                                        banking which is not based on the
                                        current scheme.
                                        You can't honestly have a free market
                                        without a hard currency and a situation
                                        where actors are held accountable for
                                        their dealings.
                                        A market run on an arbitrary government
                                        fiat currency is inherently not free.
                                        If banks were required to lend money
                                        out of their own capital instead of
                                        their customers, or else enter specific
                                        contracts with customers to lend their
                                        money, you could not have bank runs.
                                        \_ Go sell it at Top Dog.  -tom
                                           \_ The model of modern corporations
                                              is too conducive to disaster.
                                              Responsibility is abdicated onto
                                              a non-person legal entity, and
                                              management transfers between
                                              speculators who individually
                                              do not have full understanding
                                              of the business, but neither
                                              stand very much to lose.  The
                                              executives and employees stand
                                              to profit greatly from short
                                              term schemes which are measured
                                              by quarterly results.
                                              Then you have the abomination of
                                            "government sponsored corporations"
                                              How can you say that the fin.
                                              crisis is not directly related
                                              to the actions of this agency
                                              and the govt that created and
                                              controlled it?
                                              \_ Fannie Mae was a drop in the
                                                 bucket (and late) compared to
                                                 the total amount of CDOs
                                                 written. You should have
                                                 stopped at "bank runs have
                                                 happened long before there
                                                 was government regulation of
                                                 banks." Tell us how Tulip
                                                 Mania was big ole' gubmints
                                                 \_ Fraud and speculation are
                                                    not limited to the govt,
                                                    no, but the govt allows
                                                    for a special depth of
                                                    scope.  Nothing's wrong
                                                    with a periodic recession.
                                                    But the govt banking scheme
                                                    creates vast money supply
                                                    variances which is what
                                                    creates a crisis.
                                                    \_ Prove it.
"Whether the U.S. had a central bank or not, the banks were  _/
assured that if they inflated together and then got in trouble,
government would bail them out and permit them to suspend
specie payments for years. Such general suspensions of specie
payments occurred in 1819, 1837, 1839, and 1857..."
US banks are on the government's credit teat, and mommy government
always saves them, or at least the vast majority of them.  And it
lets them multiply credit exponentially.
There's no real benefit to all that credit. It just inflates prices
and gives the fed. government a backdoor tax method.

Here, listen to FDR trying to explain away banking fraud.
Money as debt.
Mystery of Banking
        \_ that's not proof of anything; it's pure assertion.  And it very
           specifically does not address the question, which is whether
           a crisis can be created without government intervention.  (Hint:
           it is completely obvious that a crisis can be created without
           government intervention.)  -tom
           \_ I don't need to prove anything, I'm not your slave and your
              question isn't "the" question.  Hint: all the major crises
              in US history were entangled with the government.  Your Tulip
              example was not a crisis and is anyway half legend.
              You're going around calling people idiots making assertions
              but demanding that others "prove" things (hint: no economic
              theories have ever been "proven").  But you have the status
              quo mainstream theories which you accept as gospel even though
              repeatedly they have failed to prevent massive crises.  I
              don't claim that you can't have economic problems, that's not
              a relevant question; an alternative system does not have to
              involve 100% protection from recession for example; in fact
              it's likely that recessions are necessary for healthy economy.
              Only if some fail is competition meaningful.
              \_ I didn't mention tulips.  "All the major crises in US
                 history were entangled with the government" is tautalogical;
                 the US has a government that ideological morons like you
                 blame for everything.  There is no scenario under which
                 you would claim the government was not involved, therefore,
                 the government is always involved, therefore, the goverment
                 is bad.  QED.  Or not.  -tom
        \_ How ironic that you blame government response to financial crises
           as being responsible for creating these crises. Do you blame the
           fire department for fires, too?
           \_ If you weren't an idiot, you'd realize that's not what I said.
2009/2/9-17 [Finance/Banking, Finance/Investment] UID:52543 Activity:nil
2/9     motd finance whizzes, if the total value of CDS last year was
        62 trillion, and now it's basically worthless, does that mean
        somewhere, somehow, someone collectively has lost 62 trillion?
        \_ Yup.  Somehow, somewhere, $62T of money just went with the
           wind.  And what's more, if people suddently decide that CDS
           is worth something again, that money comes right back.
        \_ These things are supposed to net out, so for every loser, there
           should be a winner. Some of the losers are bankrupt though and won't
           be able to make good on the claim. Your second proposition "now
           it's basically worthless" is dubious, btw.
           \_ Who are these 'winners'?  Also I'm asking a real question, not
              being an ass. thanks.
              \_ I understand that you are not being an ass, but you are
                 repeating some common misperceptions here. If I buy a CDS
                 from you, giving you some cash up front in return for your
                 promise to make me whole if GM goes bankrupt and I lose the
                 money on a bond I just bought, and then GM goes bankrupt, you
                 are the loser and I am the winner. Is that clear enough? Now
                 if I go to redeem my claim and you declare bankruptcy, then
                 we are both losers, which is what people are afraid of now.
                 We don't know what this "counter-party risk" really tallies
                 up to right now, which is why the economy is in such a mess,
                 but it is certainly less than $62T.
           \_ I disagree with you about this being a "zero sum" game.  Here,
              I definitely think there are losers without there being any
              winners.  Suppose suddenly all stocks are worthless.  Who
              wins?  People who just got out of stocks might consider
              themselves lucky, but they didn't directly benefit from
              stocks going to zero:  they won "otherwise".  Short sellers
              might win, but that's a small fraction of the loss, not a
              zero sum.
              \_ Stocks aren't very much like CDSs. If I redeem my CDS to
                 you and you honor it, you lose money and I gain it. The only
                 way there can be an overall loss if via counter-party risk
                 e.g. you don't make good on the contract.
        \_ Why do you think they are worthless (URL, please)? They are still
           enforceable contracts, unless written by Lehman. They also aren't
           "supposed to net out." That was the undoing of the ibanks. They're
           supposed to be underwritten by people who can price the risk of
           default accurately. They're like tradeable insurance.
           \_ Yes, for every person losing a dollar, another person gains
              a dollar. That is what "net out" means. The $62T didn't just
              disappear, except in bankruptcy cases, where it can be argued
              that it never really existed in the first place.
              \_ Correct me if I am wrong, but the costs of insuring debt
                 fluctuates because these things are traded. Worse,
                 derivatives based on these things were traded.
                 \_ Yes, but their book value is not $62T, just the nominal
        \_ I would argue that most of the value of the 72T CDS market is/was
           imaginary, and therefore all of the profits and jobs and stock
           fluctuations based on CDS trade profits are a load o'crap,
           and this is a huge contributing factor to current financial woe.
2009/2/2-8 [Finance/Investment] UID:52498 Activity:nil
2/2     How do smart people put up with idiocy and continue to respond with
        rational arguments? This is a general question, but responding to
        people who think $20B is a good idea is a good example. Tom, how do you
        respond and not spontaneously combust when responding?
        \_ It's not $20B is a good idea or a bad idea. It's "Is this
           reasonable?". I do not think it is reasonable if it is spread
           among 12 CEOs. However, that's not how it is allocated. This is
           part of the pay package for most employees on Wall Street. Maybe we
           should cut all Wall Street salaries to zero and eliminate their
           health insurance. Is that more your speed?
           \_ I wasn't asking you. I'd go crazy talking to you. I already am.
           \_ nice straw man.  -tom
           \_ How about we cut all Wall Street salaries to 10X the median
              income and give everyone in America health insurance. -!op
              \_ Sounds good, comrade. Do you know how many people could
                 live in one of their expensive Hamptons mansions?
                 \_ No, but I have a funny feeling that in the next decade or
                    so we just might find out.
              \_ How about we let companies fail intead of bailing them out and
                 not care about exec pay/bonuses if we aren't their employees
                 or stockholders?
                 \_ Banks failing will have far-reaching consequences on
                    the global economy and may cost more money than bailing
                    them out will.
2009/2/2-3 [Politics/Foreign/Europe, Finance/Investment] UID:52496 Activity:low
2/2 (Jesse's cafe)
        Stock tip ... what is it, #6?  Start with paragraph 6.
        What the knowledgable and "insiders" are talking about.
        Note they may be wrong.  (fyi, some bozo probably set that tiny URL
        code earlier)
        \_ What a waste of time. Many paragraphs to say that they don't
           know anything and that the situation is fluid. Genius.
           \_ Sorry, there is no "buy at x" "sell at y" type advice, but isn't
              identifying what they don't know, and what they think will happen
              in/around 2010 helpful?
        \_ This is fearmongering at its worst.
2009/1/28-2/4 [Finance/Banking, Finance/Investment] UID:52483 Activity:very high
1/28    Pork bill passes the House, no R's vote for it.
        \_ which pork bill?
        \_ Yay, fair and balanced NPR:
           Also, GOP apparently unclear on definition of pork.
           \_ Even Chris Matthews called it one big earmark.
              \_ The fact that you think he represents informed liberal
                 opinion says a lot about you.
        \_ Pell Grants are pork?
        \_ Apparently the R's haven't heard that old adage about
           holes, shovels, and digging.
           \_ Apparently, you're an idiot.
              \_ Thanks for playing anyway.
        \_ I think Democrats should of tied the "Pork" bill along with
                             should've or "should have" -- ...
           TARP and Auto bail out.  I failed to understand why money to
           investment bank / commercial bank (e.g. TARP) is not considered
           "pork" by Republicans while putting money into infrastructure is.
           \_ Bankers donate money to the Republican party, but construction
              workers do not.
           \_ I wasn't particularly pro-bailout, but there are a few important
              differences.  The bailout money was often used in ways that
              might come back.  (Loans, stock, etc.) The bailout was also a
              targetted attempt to have an immediate effect on a vital piece of
              the economy.  No capital and capitalism doesn't work.
              Infrastructure may take years to even begin construction, that's
              not a quick action.  The stimulus bill also also is not
              particularly targeted.  It seems to chuck a billion or two to
              anyone the dems like.
              \_ As opposed to $18.4 billion for bonuses for the investment
                 bankers who got us into this mess.  -tom
                 \_ tom prefers life in the mud.
                 \_ Yawn.  Justify your side's naked corruption by pointing out
                    the other side's flaws.  How exciting.
                    \_ what in the stimulus bill is naked corruption?  -tom
                       \_ I already told you. Pell Grants. -!op
                          \_ I see: funding golden parachutes for
                             millionaires is OK; funding higher education
                             for the poor is naked corruption.  Great.
                             Enjoy losing in 2012.  -tom
                 \_ This number is bandied about, but what does it mean? I
                    read it is about 50% less than last year. What is the
                    average size of the bonus awarded and what is the base
                    pay? For instance, if total payroll is $1T (say) then
                    $18.4B in bonuses seems small. Or even if total
                    payroll is $18B then $18B in bonuses can still be
                    small if it is spread over 1M employees. I don't
                    sympathize with the banks, but this number is thrown
                    out there without much explanation. Were these bonuses
                    all cash or was there stock or options also awarded?
                    It costs the bank no cash to award someone $1M in options,
                    for instance.
                    all cash or were stock/options also awarded? It costs the
                    bank no cash to award someone $1M in options, for instance.
                       The number is based largely on personal income tax
                       collections.  It excludes stock options.  -tom
                    \_ It almost doesn't matter what it means, other than
                       this: the guys who ruined our economy, destroyed their
                       companies and lost trillions of dollars are being
                       rewarded with bonuses.
                       \_ I think the word "bonus" is what trips people
                          up. It's just salary. It's more in good years
                          and less in bad years, like you might expect.
                          It will never really be zero any more than
                          you can expect those people to work for free no
                          matter how poorly they are performing. Certain
                          professions earn a significant amount of salary each
                          year in a lump sum "bonus" and it's not quite the
                          same thing as if you or I get a bonus at work.
                          For example, my sister's ex-husband worked for a
                          law firm and every year they got a "Christmas
                          bonus" of 1 week's salary. It's common in law
                          just as in banking. Eliminating the bonus is
                          equivalent to cutting salary. Would it make you
                          feel better if they said they were reducing their
                          "base salary" 50%? That's essentially what is
                          happening. Their salary is tied to performance,
                          but that doesn't mean their poor performance = zero
                          salary any more than yours should be. If they
                          perform poorly enough they will be fired and
                          many have been. BTW, the average bonus was $112K,
                          which was down 36.7%. Sounds like a big pay cut
                          to me. Did you get a 37% pay cut because your
                          company's revenues went down in the poor market?
                          many have been.
                          \_ What was the average base pay?  The bonus could
                             go to zero and these losers would still get paid
                             more than enough.  Using taxpayer dollars to
                             give incentive-based pay to people who drove
                             their companies into bankruptcy and the entire
                             economy into crisis is absolutely, completely
                             indefensible.  And then to attack Pell Grants!
                             I suppose the conservative strategy of asserting
                             things too ridiculous to argue against is still
                             in force.  -tom
                             \_ 1. I didn't attack Pell Grants.
                                2. I like how you say their pay would be
                                   "more than enough", comrade. I think you
                                   could survive on half your current salary
                                   and in a studio apartment instead of a
                                   house, but the market values your services
                                   more than that. I read that the average Wall
                                   Street salary is around $300K with a base
                                   salary of $100-250K. So it's reasonable
                                   to think a typical package might be $150K
                                   base salary and a $150K bonus. If you
                                   eliminate the $150K bonus entirely then
                                   base pay is still more than enough to live
                                   on, but likely far less than what it would
                                   take to retain top talent. Heck, you can
                                   barely get a sysadmin for City of SF for
                                   $150K. Lots of these guys are Harvard
                                   Business grad with years of experience
                                   who fell prey to the whims of their
                                   CEOs who decided to use a lot of leverage.
                                   The CEOs should suffer. The rank-and-file
                                   traders and bankers are suffering
                                   enough if you pay attention to how many
                                   are out of work now.
                                   \_ No, they haven't suffered enough. The
                                      banking sector is still bloated and
                                      overpaid. There is no particular reason
                                      that a Harvard MBA should make $300k,
                                      unless he is contributing that much to
                                      society. For the last 10 years, the
                                      bankers have disastrously misallocated
                                      capital. If they don't like mere $150k
                                      salaries, good luck finding an industry
                                      that will support them in the lifestyle
                                      they think they deserve.
                          \_ (WSJ)
                                      \_ People aren't paid according to
                                         "what they contribute to society".
                                         Most of those guys are very smart
                                         and will find something else to
                                         do, which would leave the banks
                                         run by people less capable. You think
                                         it's bad *now*?
                                         \_ I don't think there's any evidence
                                            that the people running the banks
                                            are very capable.  If they're so
                                            fucking capable, why are they all
                                            going bankrupt?  The argument about
                                            "that's what it costs to retain
                                            top talent" is 100% bullshit.
                                            The system is rigged.  CEOs, VPs
                                            and hotshots get to decide who to
                                            pay what--and, surprise surprise,
                                            they decide that it's vital to
                                            the interest of the company to
                                            pay CEOs, VPs and hotshots more
                                            and more as a function of total
                                            revenue and earnings.  Until the
                                            whole thing comes crashing down
                                            and they ask the government to
                                            bail them out.  The absolute first
                                            thing that should happen before
                                            any bankrupt institution is bailed
                                            out is that all performance-based
                                            pay should be immediately suspended
                                            until the company is solvent.  If
                                            that means that executives leave
                                            for other companies that managed
                                            their assets better and therefore
                                            aren't going bankrupt, that's fine;
                                            isn't survival of the fittest one
                                            of the tenets of the market
                                            economists?  -tom
                                           \_ Lots of free-market cheerleaders
                                              seem to forget the basic econ 101
                                              stuff that says what is needed
                                              for markets to function. Namely
                                              competition and low barriers to
                                              What is it about these banks that
                                              makes them able to keep fat
                                              profits year after year?
                                         \_ Somehow society was able to function
                                            with a banking sector that was half
                                            the current size - as a proportion
                                            of the economy - for many decades.
                                            All those Ivy geniuses can go find
                                            another way to game the system (and
                                            ultimately rip off the taxpayer, no
                                            doubt). Almost every "invention" of
                                            the financial sector in the last 10
                                            years was crap. Is it seriously
                                            your contention that these guys
                                            deserve lifetime employment on the
                                            public dime at $300k/yr, even though
                                            what they produce has no value to
                                            society whatsover?
                                         \_ Somehow society was able to
                                            function with a banking sector that
                                            was half the current size - as a
                                            proportion of the economy - for
                                            many decades. All those Ivy
                                            geniuses can go find another way to
                                            game the system (and ultimately rip
                                            off the taxpayer, no doubt). Almost
                                            every "invention" of the financial
                                            sector in the last 10 years was
                                            crap. Is it seriously your
                                            contention that these guys deserve
                                            lifetime employment on the public
                                            dime at $300k/yr, even though what
                                            they produce has no value to
                                            society whatsoever?
                                            \_ I don't think they deserve
                                               lifetime employment on the
                                               public dime forever. I never
                                               said that. However, letting
                                               the big banks BK would be a
                                               disaster. This whole thing
                                               about bonuses is a PR stunt
                                               as is Obama's outrage. Banks
                                               are going to need $1T and we're
                                               worrying about $20B in bonuses
                                               that were earned? Do you really
                                               contend that banks have no value
                                               to society?!
        A bank that does a good job of allocating _/
        capital to productive uses has a value.
        Do you think that the primary inventions
        of the financial sector of the last decade
        or so (CDS, CDOs, SIVs, etc) have had a
        net positive value? If so, why are all
        the banks collapsing? If anything, the
        total contribution to society by the
        financial sector over the last decade
        has been strongly negative. This is
        reflected in the change in their
        equity value, and in the collapse in
        value of all the stupid things they
        allocated capital to (most exurban
        McMansions, but also the mostly
        speculative paper instraments used
        speculative paper instruments used
        to gamble on them).
                          \_ (WJ)
                             Check out the comments. Even the WSJ readers
                             are getting restless.
                             \_ Just the media stirring up shit and now the
                                rabble is roused. What about bailing out
                                auto workers who made shit cars? I know a
                                lot of people are against that, too, but
                                at some point you have to place blame
                                where it is due, which is management. The
                                auto workers were just building the cars
                                they were told to build. Likewise, the bank
                                employees were just selling the products they
                                were told to sell while the government
                                cheered from the sidelines about how many
                                more people could now afford home ownership
                                while keeping rates insanely low and wasting
                                $$$ in Iraq. Blame Bush for this mess.
                                \_ It is funny that you think that the
                                   readership of the WSJ is "the rabble."
                                   You can imagine what the actual rabble
                                   think of the bank bailouts.
                                   \_ Doesn't matter what they think. They
                                      don't realize what will happen without
                                      lending or credit. For instance, most
                                      hospitals use large lines of credit to
                                      cover bills during the period between
                                      when services are rendered and the
                                      insurance companies finally pay. The
                                      average consumer relies on banks for
                                      a lot more than they realize.
                                      \_ In a democracy, what the people think
                                         matters. Especially when you coming to
                                         the taxpayer, hat in hand, asking for
                                         a bailout. The current overleveraged
                                         banks could all fail and all that
                                         would happen is that new bunch would
                                         crop up to take their place. No doubt
                                         the economy needs credit. Why do we
                                         need Citibank, JPM and all the other
                                         \_ That's why we have a republic.
                                            We don't need uninformed citizens
                                            making these decisions.
                                            \_ I am mostly unimpressed with
                                               what our elected representatives
                                               have done so far, but you are
                                               probably right, a directly
                                               democratic response would
                                               probably be even worse.
                            \_ automaker bailout is what, 1/100th of the
                               bank bailout?
        \_ In other industries, you are awarded a bonus for doing well
           or if the company has done well in that year.  There is no sane
           person who can claim the banking industry did well in 2008.
           So why did they get bonuses?  That's what bugs me.
           \_ This is not "other industries" and Wall Street and law firms
              work differently.
              \_ They work differently because they've stacked the deck in
                 favor of lining their own pockets.  The role of government
                 is to protect taxpayer assets, not performance-based
                 compensation for executives of bankrupt companies.  Let
                 them try to convince the bankruptcy court that the first
                 priority is to pay them their bonuses.  -tom
                 \_ Bankruptcy courts are genrally in favor of companies
                    making payroll.
                    \_ Bonuses != payroll.
                       \_ Except that in the case of certain firms (like banks)
                          they really are almost the same thing. Bonuses
                          are not some optional incentives based on merit
                          or something, although they can be tied to it.
                          Think of bonuses more like tips for a waitress.
                          Sure, you make more if you're good but they aren't
                          really optional. Even bad service results in a
                          tip (or should anyway) because the payscale and
                          taxes are based on that.
                          \_ Bankers don't make $2.80/hr.
                             \_ This is back to the "They make more than *I*
                                think they are worth" argument. We can say
                                that about software engineers or any job,
                                really. However, that's not how salaries
                                are determined in this country. Go back to
                                Soviet Russia. It's much more equitable there.
                                \_ Except software engineers are not asking
                                   for handouts from the Federal government.
                                   You keep "forgetting" that part.
                                   \_ Tangential. You can argue that companies
                                      shouldn't be receiving aid, but that's
                                      not your argument. Your argument is
                                      that the government should dictate
                                      salaries in turn for aid. That will
                                      leave those companies without any
                                      employees, because paying them 50%
                                      of market rate for salaries will
                                      have them leaving in droves. How
                                      will that help anything? The banks
                                      may as well BK then.
                                      \_ OK.  -tom
                                         \_ So let's be clear that your issue
                                            isn't "bonuses". It's that the
                                            banks are receiving any money
                                            at all. Why beat around the
                                            bush for 6 paragraphs?
                                            \_ So let's be clear that you
                                               love to beat up straw men
                                               rather than paying attention.
                                               Fine.  I'm not particularly
                                               pleased that the banks are
                                               receiving money, and I'm
                                               outraged that the money
                                               they're receiving is going
                                               incentive-based pay for the
                                               assholes who caused the
                                               problem.  And it's totally
                                               typical for the Republican
                                               typical of the Republican
                                               disdain for the American
                                               public.  -tom
                                      \_ I seriously doubt that the employees
                                         will be leaving in droves, even if they
                                         were paid the starvation wages of
                                         will be leaving in droves, even if
                                         they were paid the starvation wages of
                                         $300k/yr. Especially since 100s of
                                         thousands of others in their field
                                         will be out of work. But it is a risk
                                         I am willing to take.
                                         \_ Exactly... this is ridiculous.
                                            where exactly are they all gonna
                                            go? The best they might do is
                                            start a new company, or perhaps
                                            use their genius to go to one of
                                            those other lucrative $500k
                                            careers out there, which would be
                                            such a terrible loss for America
                                            I know, our capital would be so
                                            \_ One obvious place is to the
                                               hedge funds and regional
                                               banks, growing them into
                                               megabanks of the type they
                                               work for now. Of course, only
                                               the best will leave. The bad
                                               ones will remain to handle
                                               the delevering, valuation
                                               of assets, and spending of
                                               TARP funds. My fear is that
                                               the best ones are leaving
                                               *anyway*. Wouldn't you?
                                               \_ And if they go to a regional
                                                  bank (probably not making
                                                  $300k/yr) and grow it into
                                                  a well-run company that
                                                  efficiently makes loans, has
                                                  a well-run risk management
                                                  department and is not sucking
                                                  off the taxpayers teat, this
                                                  is a bad thing how, exactly?
                                                  \_ The Bad Thing is what
                                                     happens to the banks
                                                     they left.
                                                  Most hedge funds are closing,
                                                  not hiring, btw.
                                                  \_ Many are folding b/c
                                                     investors are withdrawing,
                                                     but this is a blip on
                                                     the radar. Mutual
                                                     funds, pensions, and
                                                     even hedgies still
                                                     manage a lot of money.
                                                     \_ Hedge funds are closing
                                                        because the returns on
                                                        their strategy have
                                                        dropped to 20% of
                                                        the original, rather
                                                        small percentage.
                                                        In fact, according to
                                                        DeLong it was a large
                                                        hedge fund getting
                                                        out of the business,
                                                        which hosed a number
                                                        of other highly
                                                        leveraged hedge funds,
                                                        which acted as the
                                                        trigger for the
                                                        whole liquidity
                                                        crisis.  -tom
                        "It's just a tough, tough time, and there are a lot of
                        good people out there looking for work."
                        \_ Right, but they aren't going to work for $6.50/hour.
                           Let's not confuse "looking for work" with "looking
                           for any work at any price".
        \_ I have a friend who does ibanking for UBS, 1st out of biz school,
           didn't get fired in the 4 rounds of layoffs, I was adding up
           her base salary (120k) to the bonus she got 140k and wondered
           what the hell she did that was worth 260k a year.
           \_ Is she hot? picsP
2009/1/22-26 [Computer/Companies/Google, Finance/Investment] UID:52443 Activity:kinda low
1/22    And that's why you should own GOOG.
        \_ Google reported fourth-quarter net income of $382 million, down 68%
           from $1.2 billion a year ago.
        \_ I don't get it. How can you have 68% down but sales going up
           18%? Are they getting more sales but with less money per
           \_ Profit = (Price - Cost)xQuantity - Fixed Costs
              Costs went up?
              \_ They wrote down the value of a few investments.
                 \_ $1.09B
                    \_ Leaving aside the asset write-down, GOOG had $1.48B
                       in operational profit for the quarter, up 23% from
                       last year.  In this economy that's amazing.  GOOG
                       is still a frieght train.  -tom
        \_ I do own GOOG and I am underwater on it even though I bought at
           a comparatively low price. Brilliant.
        \_ AAPL profits are still growing at an increasing rate.
           $2.3B in adjusted net income ($1.61B GAAP profit)
           \_ AAPL is another good company to own.
2009/1/13-22 [Finance/Investment] UID:52374 Activity:nil
        Financial managers are so awesome. People like this makes me want
        to pull my money out of 401K. You just don't know what kind of
        people are managing your asset.
        \_ No.  This is not a reason to pull your money out of your 401k.
           This is the reason why you don't give your financial advisor/wealth
           manager trading authority in your accounts.  The fund managers
           who run the funds in your 401k are much more stringently regulated
           than the Bernie Madoffs of the world.  The brokerage that holds
           your account is reasonably regulated as well.  This guy is someone
           people hired as an additional layer on top of that, and gave
           authority to move assets around as needed.  The lesson is that if
           you hire someone for their investment advice, place the trades
           yourself (and never give them the authority to do it for you).
           \_ Or just use low-cost stock/bond index funds for 90% of your
              401k and "play" with the other 10%.
           \_ what about Mervyn's employees with 401(k)'s?  It's also the same
              company that manages a whole lot of other retail employees plans.
              As I understand it, rollovers have been delayed for a couple
              months already because of "illiquid assets" in funds with "Stable
              Value" in the same, and significant "administrative fees" have
              been nailing them since.
2009/1/8-12 [Finance/Investment] UID:52345 Activity:nil
1/8     Financial services industry appears to have been ripping off states
        and cities for years in the municipal bond business
        \- say it with me, "clawback".
2009/1/8-12 [Finance/Investment] UID:52342 Activity:nil
1/8     Stock market isn't going anywhere... and I haven't made a penny
        for a few weeks. It's been dry, but not unexpected.  -week trader
        \_ I am up over 10% since Dec 1. -buy and holder
2009/1/7 [Finance/Investment] UID:52338 Activity:nil 61%like:52335
        Barron's article warning about Treasuries.
        \_ Buy corporate bonds while you still can!
2009/1/7-12 [Finance/Investment] UID:52335 Activity:nil 61%like:52338
        Barron's article warning about Treasuries says to buy TBT and PST.
        \_ Of course last year Barron's was telling us that the housing
           crisis would be minor and blow over by mid 2008.
           \_ CBS Marketwatch commentary says the same:
              I am not saying this is good advice. It may be a contrarian
              indicator. However, it is something to consider and do more
              research on.
2009/1/5-8 [Finance/Investment] UID:52314 Activity:low
1/3     Need stock market tip. What is the historic normal for the
        first quarter of the year? Up, down, random, etc? I had a bunch
        of limit orders but there were very little movement in the second
        half of Q4, which was expected but disappointing considering that
        I make most of the money on big swings                  -week trader
           In general, the first part of the year is not so great,
           especially the first year of a new President's term. However,
           based on history 2008 should have been a great year and we know
           how that went. That's why past results don't guarantee future
           returns. Overall, the markets have been more stable and less
           volatile recently which has been making it harder to trade, but is
           better for the long-term outlook of the markets.
           \_ 404 Not Found
              \_ Typo. Fixed.
2022/08/19 [General] UID:1000 Activity:popular

2008/12/22-2009/1/7 [Finance/Investment] UID:52293 Activity:nil
12/22 (
        Optimist Roubini sez:
        - Unemployment will continue to increase through 2010
        - 33% probability a multi-year economic stagnation continues beyond
          that (
        NBER member sez:
        - Unemployment may exceed 10% and could "stay there for a while"
        - 50% change of calling depression over next three years
        \_ To some people, a bad economy is good.  It weeds out competitors.
        \_ Welcome to the Great Depression of Barack Obama
           \_ Didn't Dubya have something to do with it?
           Economy should turn up in Q2 of 2009.
           \_ You can have GDP being less negative or slightly positive
              in Q2 of 2009, and all of the above still be true.
2008/12/15-28 [Finance/Investment] UID:52252 Activity:nil
12/14   Short-term pop possibility: FDRY is being bought by Brocade.
        Deal is priced at $16.50 (cash, not tied to BRCD's stock price).
        FDRY is currently trading at $15.70; shareholder vote is on
        Wednesday 12/17.  FDRY shareholders will gladly take the deal;
        the only risk is that financing for the deal falls through,
        but it looks solid to me.  Quick 5%.  -tom
        \_ Will look into it, but there's not much room for arbitrage
           at this point. When would the deal close?
           \_ Supposed to close by 12/31.  There will also be a special
              dividend to shareholders from sale of auctionable securities.
              ($50 million is about 30 cents/share).
              Looks like pretty easy money to me.  -tom
              \_ Update: Auction rate securities sold, proceeds 24.9 cents
                 per share to be paid as dividends on the sale.  -tom
        \_ this doesn't sound like tom. -tom #1 fan
           \_ Why not?  I am on record as holding FDRY.  -tom
              \_ I didn't think of you as someone who believed that
                 individual investors can effectively act as arbitrageurs.
                 \_ As a general rule, that's true, but I think this market
                    is pretty broken, which leaves some opportunities out
                    there.  If the deal fails, FDRY will tank, so you're taking
                    on some risk.  If the deal succeeds, the math is pretty
                    obvious.  -tom
                    P.S.: Just bought some at 15.50 in my play account.
                    \_ Update: Merger approved, deal expected to close
                       tomorrow, stock at 16.66.  Too late to get in now.
                       Brocade might be interesting as a long-term play,
                       if you think adding Foundry improves their business.
                       \_ Good trade. Congrats! That's almost 10% if you
                          include the dividend. You selling now?
                          \_ I'll just wait for the deal to close, they'll
                             be paying out cash.  -tom
2008/12/14-17 [Finance/Investment] UID:52247 Activity:nil
12/13   I've been reading about this super awesome day trader giving you
        advice. I'm sure he's good and made a lot of money, but
        unfortunately, his advice does NOT work for everyone, esp. those
        who don't have time to stare at the stock market every few
        hours or so at work, or those who don't have a lot of money,
        or those who don't like big risks. If you want to trade but want
        to minimize risk and don't want to stare at motd + ticker, week
        trading is the way to go. You'll at most spend anywhere between
        20min-60min a day, and 0-5 transactions a week. Here is the
        thing, you can spend a bunch of time staring at the ticker and
        make transactions, or just take advange of the fact that 1) the
        stock market isn't going anywhere. It's not going to do down 50%
        and it's not going to go up 50%. 2) there are a bunch of mini-wave
        while the market is flat, especially for the next year or so.
        3) at any given time, 1/2 of the people will tell you to buy
        and "just trust me!" and 1/2 of the people will tell you to sell
        and "just trust me!" Fact of the matter is NOBODY knows what the
        next day will be, so ignore those people. Just keep putting down a
        tiny little chunk of money when it goes down 5-10% from what you feel
        is a low point (hint, when people panic and think it's the end
        of the world because the Fed did something, THAT is the time to
        buy), antd sell when it reaches your goal (2-8%). The key is SELL
        even if you only made a little profit. The market will keep going
        up and down, but mostly flat. It's *not* going to go up 50% or down
        50%. So fuck the day trading advice if you don't have time, or you
        just don't feel like each day will make a huge gain or huge
        loss for you. Ride lots of safe little waves, and be happy when
        you have a little gain. I guarantee that you're not going to do
        fabulously or get super rich like the super awesome day trader,
        but I guarantee you that your total gain throughout the year will be
        moderate (way higher than CDs and bonds), and if you could hold
        long term (if market tanks for 2-5 more years) you'll never lose a
        anything. It's safe, stress-free, and it's been working
        out fabulously for me. Do the week trade with me guys.
        \_ Now that I get the ticker on my Blackberry it's really easy to
           watch the markets. Good advice here, though. Invest in whatever
           way works for you, but invest. Especially now. You will regret
           it if you don't. Most money is made in a bear market.
        \_ How is your advice any different than your bog-standard "reversion
           to mean" strategy?  I think you've got a pretty high opinion
           of yourself.
           \_ I believe the super duper day trader dude last week has
              a much much higher opinion of himself than anyone else,
              including this risk averse week trader.
2008/12/12 [Finance/Investment] UID:52242 Activity:nil
12/12   Poor Japanese investor!  25 years and down 18%, excluding inflation.
        How many more years until he can sell?  ob should have bought American
    stocks!  he'd be up 6.8 times, or 8% per year cumulative!
2008/12/12-17 [Finance/Investment] UID:52238 Activity:moderate
12/12   $50B Ponzi scheme uncovered:
    \_ The Invisible Hand should take care of this.
        \- "We are victims" --hedge fund people
           This guys need to have an electrode planted in his brain
           to fry him if he's ever caught pushing deregulation as the
           solution to everything:
             "Where were the auditors?" asked Bill Grayson, the
             president of Falcon Point Capital, a hedge fund based in
             San Francisco. "Where was his chief compliance officer?
             Where was the S.E.C.?"
                \_ I thought the whole point of hedge funds was maximum return
                   for maximum risk -- if it goes belly up, either through
                   fraud or for legitimate reasons, you're supposed to be
                   able to shrug it off because you're a rich fatcat with
                   tons of money to invest and lose.
                   \_ Dave Barry put it best: "If things go well, you take
                      a small profit.  If things go badly, you take a
                      plane to Venezuela."  -tom
                      \- i prefer "if you owe the bank $100, you have a
                         problem. if you owe the bank $1million, the bank
                         has a problem." --psb
                         \_ Rosalie Goes Shopping?
        \_ Another waterboarding candidate:
2008/12/12-17 [Finance/Investment] UID:52234 Activity:high
12/12   Make sure you buy stocks today. You can thank me later. I am
    looking at UYG and DIG, but you might have your own favorites.
    Markets are overreacting to the auto bailout.
        \_ 1% down? DOW is still above 8000 S&P above 800.
           \_ I bought UYG at open for 4.79. It is 5.16 now.
              DIG opened at 28.01 and is now at 28.82.
              Both have traded higher than that already today, too. (UYG
              as high as 5.30 and DIG as high as 29.61). That's 10% on
              UYG and 6% on DIG in 2 hours. (I posted the advice pre-market.)
              You are welcome.
              P.S. It is now 9:37am PST and I am still holding these. I
                   think they have more room to run. Good luck with your 0%
                   Treasuries, Treasury Guy.
              \_ You talking to me ASSHOLE??
                 Treasury guy sez:  80% in safety, 20% in whatever the hell
                 you want. *snort*
              \_ making a call on one stock that's +1.14% for the day and
                 another that's -1.16% for the day, and claiming that's a
                 10% increase, is fairly silly.
                 \_ My silliness is buying me a new 52" LCD TV this
                    weekend. How's yours working out for you? UYG went
                    from 4.79 to 5.49. You need to track stocks from the
                    open, not from yesterday's close like the ticker does.
                    \_ next time I'm awake at 4:00 AM I'll be sure to
                       take your advice.
                       \_ You gotta be up with the market.
                    \_ Your advice was "make sure you buy stocks today", and
                       that "markets are overreacting to the auto bailout."
                       The DJIA is currently up 0.12%, which means that the
                       rationale for your advice was shit; the markets
                       aren't overreacting to anything.  Neither of the stocks
                       you suggested have been remarkable performers on the
                       day.  Congratulations on making money, if you really
                       did, but it's a lucky call, not a good one.  -tom
                       \_ You don't follow the markets that closely, or you
                          would have known that Asia was down heavily last
                          night, as was S&P futures, supposedly on the news
                          that "the market is upset that the automakers were
                          not bailed out." And stocks were down at open.
                       \_ The markets did overreact. Overseas markets tanked
                          greatly and so did the premarket in the US. The
                          market looks like it's up 0.12% *NOW* which is after
                          I made my gains from the pre-market 8% down these
                          picks were at, dude. I acted on it, and you are
                          just a hater.
                          \_ Stop stomping my changes, schmuck. What he said,
                          \_ Woo, the Dow opened down about 1%, and went almost
                             to 2% down before rebounding to flat.  Whiplash,
                             I tell you, whiplash!  I will stop pointing out
                             the obvious, since you're clearly a brilliant
                             market analyst who regularly uses $100 bills as
                             toilet paper and only deigns to communicate
                             with us out of a feeling of benevolence towards
                             the masses.  -tom
                 \_ I didn't tell you to buy the DOW. I gave
                you picks that were down about 8-10%. I
                hope you are having fun buying-and-holding,
                though. How's that GOOG working out for you?
                \_ Up 5.18% today, thanks.  I must be
                   brilliant.  You didn't tell me to buy the
                   Dow, but given that the Dow was basically
                   flat, your reasoning has no basis in
                   reality.  -tom
        \_ obviously op is saying you will make at least 5%.  Just make sure
           to tell us when to sell or how much percentage profit to take.
           \_ That's for you to decide. I'm not giving away all of my secrets.
              I will say I sold out of DIG already.
              BTW, I am not doing this to brag as much as because someone
              here was complaining that I only talked about trades post-facto.
              So I gave you a cookie, posting the trade before the markets
              even opened based on pre-market trading and what happened in
              the international markets overnight.
              \_ the problem is if you tell people to buy, they hold for a week
                 they're down -10% at some point and sell then and you just
                 they're down -10% at some point and sell, then you just
                 fucked someone.  you should have said it was a daytrade imo.
                 \_ I think even if you bought UYG as an intermediate play
                    you will make money. Heck, buy it tomorrow and hold
                    and I bet you will make 10% on it easy if you are
                    willing to hold it and sell when it hits 6. That's why
                    I chose it to spoonfeed people with in case anyone
                    took my advice. It's both a good daytrade *and* a good
                    stock to hold for a week or four or fifty. I trade it
                    and I buy it to keep, which is what I do with a lot of
                    my trades. If I am not willing to own it then I won't
                    trade it.
                    \_ ok great, I think you do both yourself and the ppl you
                       intend to help a favor if you say, "buy uyg at 12/12
                       market open and sell during day, or hold up to a year
                       for possible 10% profit"
              \_ I agree with the above poster, if you want to demonstrate
                 your daytrading prowess (which I am impressed with btw) you
                 need to call out when you sell as well as when you buy. What
                 are you worried about, that we will all trade with you and
                 move the market? I appreciate the info though, I was
                 the guy who asked you to tell us when you traded.
                 \_ Worried about giving away information for free that
                    some people pay a lot of money for. I think I've helped
                    CSUA enough for free already. The strategy for selling
                    is "Sell, when you are comfortable with the gain." My
                    comfort level and yours might be different. I have
                    made a lot of money recently and so I am more willing
                    to take some risks than someone trading with their
                    last $5K might be. I also have hedged some positions.
                    So it's not really important when *I* sell. You can
                    figure that part out for yourself. I think a 5-10% gain
                    in a day would've been a good target. Some of my picks
                    (like C) I am *still* holding even though they are up
                    big (and were up bigger).
                    \_ Are you actually getting paid to do this, or is this
                       "some people pay a lot of money for" all in your own
                       \_ No, I am not paid. My point is "Why exactly should I
                          help make you money?" What's in it for me? I'm
                          just trying to help people better understand the
                          market and convince people that the market is
                          the best place to make money. Not cash, not
                          treasuries, not bonds. Too much scared money
                          right now. If you want detailed advice subscribe to
                          a newsletter. If there's enough demand for my
                          advice maybe I'll start my own newsletter and
                          charge for it. But there's no reward in it for
                          me to publish all of my trades.
                          \_ We all contribute to the motd in our own way.
                             I was kind enough to warn people about the
                             housing bubble, for which I was widely ridiculed.
                             If you make enough money daytrading, you can set
                             up your own fund. My advice it to quite while you
                             are ahead, but enjoy your luck while it lasts.
                             \_ No luck involved in being long equities.
                                Luck is for shorts.
        \_ This is relevant to my interests, but alas, I have no capital
           whatsoever :( . --toulouse
2008/12/11-16 [Finance/Investment] UID:52230 Activity:kinda low
        \_ Cool I just bought a couple of bottles. I hope it turns out to
           be good and expensive wine.
           be both a good and an expensive wine.
2008/12/8-12 [Finance/Investment] UID:52202 Activity:nil
12/8    Today was such a good day on the market. I got one great sell
        triggered from a limit I set last week. I love the stock
        market. I love week trading. No stress whatsoever. By the way,
        are you guys expecting the rally for a while? I'm actually a
        bit of pessimistic. I'm buying a bunch when it drops another 10%
2008/12/6-10 [Finance/Banking, Finance/Investment] UID:52184 Activity:nil
12/6    Interesting finance/business story:
2008/12/5-10 [Finance/Banking, Finance/Investment] UID:52177 Activity:nil
        52-year-old CEO of Switzerland's largest wealth mgmt fund kills self
        \_ "wealth management."  Nice euphemism.
2008/12/3-9 [Finance/Investment] UID:52156 Activity:nil
12/3    Another chief investment strategist says bottom is IN!
        UBS analyst says S&P may rally to 1,300 by end of 2009!
        omfg I'm gonna be *RICH*!
        \_ Everytime I listen to some "expert" I get screwed. Lately,
           I've been doing the opposite and have been doing marvolously.
           Don't listen to the experts man. Do the opposite.   -week trader
           \_ I made 50% this week even with a slightly down day today.
              Pretty easy when we keep bouncing off of the same lows in a
              range. When financials tanked on Monday I doubled my
              position in them (I had bought into Citibank last week). Life is
              good. It will suck when the markets stabilize and I will have
              to convince myself that a 12% up year was "good". I can make
              that in a good day right now. Why wait for 2009? The worst
              thing for the stock market is for it to stay flat, which
              thing for the stock market is for it to stay flat, which I
              is what I think will happen when things settle down after
              the "big buy back in" that the scared money will do once almost
              the "big back buy in" that the scared money will do once almost
              all the big gains have already been made. "You make most of
              your money in a bear market -- you just don't know it at the
              time." I am now 88% in equities, holding 12% cash to buy on
              more dips, although I have no problem trading out for a profit
              and waiting for a lower re-entry point. I'm also waiting for
              oil stocks to dip some more before going in there. Almost there,
              but not quite yet. I think it will take some (negative) earnings
              reports to scare the prices down more. People are still too
              bullish on oil.
              \_ You are just playing the roulette table now. Good to be
                 in the market though, your biggest risk is missing out
                 on a big week.
                 \_ Except this roulette table is guaranteed by the Fed.
                    Up another 6% today. It's good to have skeptics like
                    you, though. When everyone is bullish it will be time
                    to sell.
2008/12/2-9 [Finance/Investment] UID:52146 Activity:nil
        Chief market strategist says a "very very very strong rally" is coming,
        +25% to +40% starting ~ Dec 15, ending in July '09.
        GODDAMMIT I'm going to make BUX!!1
        \_ Cool, free money machine!  What could go wrong?  I am dumping all
           of my savings into QQQQ right now.
           \_ ^QQQQ^GOOG
           The average bull market goes up 40% in its first year.
           \_ ...if you could predict the day it starts going up, which
              you can't.  -tom
2008/12/1-6 [Finance/Investment, Recreation/Media] UID:52137 Activity:nil
12/1    Isn't Star Wars Guy going to give us a quote about today's market?
        \_ no, one guy hated it more than lulz guy, so ... in any case, last
           week was all about the torps having gone in and the death star folks
           still flipping switches as if everything were okay.  today:
           The rumble of a distant explosion begins.
           \_ Last week was weird because people (like me) were on vacation.
              I heard the number of shares available for trade was low.
              \_ Yes, Thanksgiving week is usually very light volume, so h0z3r5
                 can move prices easily.
2008/11/26-29 [Politics/Domestic/President/Bush, Finance/Investment] UID:52113 Activity:nil
11/26   Government bailout represents 60% of GDP! (
        \_ Thanks Bush!
2008/11/24-12/1 [Finance/Investment] UID:52094 Activity:nil
11/23   Investors giving up on the market:
        \_ That's weird, I am doing alright doing week trade.
           That's for spending only 5-10 min a night setting up limit
           orders, and not looking at the ticker or even thinking about
           it during the day. I could probably make more if I stare
           at it during the day but that's over my stress limit and
           will interfere with my real work.            -week trader
           \_ You have to remember that traders like you and I are not
              'investors'. I will dump a stock the minute I make my 10% on
              it. That's not really 'investing'.
              \_ That's very very true
2008/11/24-12/1 [Finance/Banking, Finance/CC, Finance/Investment] UID:52089 Activity:nil
        \_ bahahahaha most hilarious
        \_ Whatever happened to all the FREE MARKET IS BETTER vote
           for GWB drones on motd?
2008/11/24-12/1 [Finance/Investment] UID:52086 Activity:nil
        Citigroup gets $306B bailout.
        \_ hey econ whizzzzes, Citigroup is worth about 15 billion now.
           Why doesn't the Government just buy Citigroup completely?
           \_ What would they do with it afterwards?
2008/11/22-12/1 [Politics/Domestic/SocialSecurity, Finance/Investment] UID:52079 Activity:moderate
11/22   Pension gap divides public and private workers:
        At what point do we Just Say No? Making more money *after*
        retiring seems like an issue. I say this as someone with family
        who retired from the military who makes more now than when active.
        \_ Come back when you stay at your crappy public sector job for 20+
        \_ have you ever served?
        \_ Public sector do not get stock options, generally do not get
           bonuses, they do not get 401k matching, they do not have ESPP
           options [there are obscure exceptions], they dont have crazy
           expense accounts, they get most of their income on W-2, so their
           tax loopholes are limited [compared to say 1099 people]. Sure
           there are lame public sector employees and there is fraud and
           corruption, but it's silly to focus as a class on military or
           say CALPERS pensions. Take a look at something like the finance
           industry which actively conspires with its elites by structuring
           compensation [moving income to cap gains], paying for what is
           clearly private income as corporate expense [car leases, club
           memberships, subsidized loans], helping individual incorporate etc.
           [yes, i know there are some exception to the above]. You might
           looking at how LLNL is doing under public vs private management
           (when Bechtel took over, people were basically kicked out of
           CALPERS) ... $280M in cost overrruns and the lab continues to
           deteriorate. Note also: the quality of "public employee/govt
           worker" is quie different at a UCB, the National Labs, or the SEC
           vs say the Port of Oakland.
           Can you honestly say that these employees are overpaid? I am
           a mid-level manager in a Fortune 500 company and I make more
           than the Undersecretary of the Navy. This is nuts. Low level
           employees, like bus drivers and mechanics, are probably overpaid
           in the civil service sector though. We need stronger unions in
           the private sector, obviously.
           \_ I think people are missing the point here, which is that we
              are paying certain people more to *not* work than to work.
              That makes absolutely no sense. So for 20 years of good work
                \- are you against paid sick leave? how about
                   employer subsidized health care? how about
                   employeer subsidized health care? how about
                   dependent coverage ... i mean that's paying for
                   people who dont even work for you. the person
                   missing the point is you, and the point is
                   "net present value" (of benefits) in this case
                   [although  really there are a few other points ...
                   risk and  return, at will employment vs public sector
                   terms, and to some extent "the sanctity of contract".
                   \_ "net present value" is too effing high. Only in your
                      socialist utopia does someone make more money at
                      retirement than when working.
                      \- do you understand the difference between when
                         money is "made" and when it is "paid"?
                         the issue is *length of service* i.e. the
                         amount of time over which you are earning the
                         money, not the age/time you are collecting it.
                         there is nothing magically different between
                         your pension being 99% of your income and 101%.
                         there is a big difference between whether you
                         earned it after 20 yrs or 40 yrs or whether
                         you are gettign paid at age 55 or 65.
              these people get 20-30-40 years of paychecks at, or for more
              than, the wage they retired at?! That's a sure way to
              bankruptcy. I am in private sector and I make more, but at
              age 65 I will get jack shit and that's the way most of
              industry is. Why should Uncle Sam do any different?
              \_ Because those people took lower-paying jobs partly because
                 of the retirement benefits and job security.  A simple
                 choice of how to run your business, if you're one of the
                 people who thinks government should run like a business
                 (it shouldn't).  -tom
                 \_ The jobs are not really that much lower-paying. You
                    might have a point if they were all working for 50% of
                    market rates, but the reality is that government
                    workers are paid pretty well. We've already been over
                    \_ we've "been over that", you mean, back when you
                       made ridiculous assertions that were flatly contradicted
                       by the data you were presenting?  -tom
                       \_ You mean when I showed you that tree trimmers for
                          LA County were making $70K or something like
                          that? That workers in SF were routinely making
                          over $100K? That crazy sysadmin pulled down
                          something like $120K? The DWP workers pull down
                          big bucks? Please rely on the actual data
                          and not your faulty memory and perceptions.
                          Here's a good start: the link I just posted,
                          which no one bothered to read.
                          \_ Data points with no context are meaningless.
                             The link you just posted is a USA Today story
                             with an editorial slant and similarly
                             context-free numbers.   -tom
                             \_ How about the UC article some other kind person
                                dug up? You are always rationalizing. Get your
                                head out of the sand and WAKE UP!
                                \_ The UC article doesn't say anything about
                                   compensation relative to the private
                                   industry.  And I agree that people shouldn't
                                   be able to retire and come back to work
                                   full time at the same salary; in fact,
                                   it's against UC policy to do so, and
                                   the article says they're going to
                                   crack down on the very small number of
                                   cases where it has happened.  -tom
                    \_ Those ES level government workers I gave you the wiki
                       link to are making 50% or less what they would make
                       for similary responsible jobs in the private sector.
                \_ 20 years is an extreme exaggeration, except for the military
                   you don't retire after 20 years and even there you only make
                   50% of your active duty salary. You don't make your case
                   stronger by exaggeration, you just make yourself look
                   \_ Actual data: If I were to retire from UC at age 50,
                      with 24 years of service (I started working here at
                      age 26), I would get less than 30% of my final
                      salary.  -tom
                      \_ Actual data: read the article
                         \_ Your confirmation bias is showing.  -tom
                            \_ I'm the one who is biased? Check out how
                               your UC colleagues are doing.
                   \_ Did you read the article I posted?
                      \_ Yes, and it said nothing about retiring at 20 years.
                         You just made that part up.
                         \_ How long do you think a police chief worked
                            who retired at age 46? Certainly not 30 years.
                            WTF should someone 46 years old be retired and
                            making $125K/year for the rest of his life to
                            sit on his ass at taxpayer expense? He might
                            make more money not working than he did when
                            he worked over the course of his life. We
                            can't afford those excesses for civil servants. He
                            can collect when he's 65 like everyone else.
                            Getting full salary at that time would be more than
                            generous. I'd support him getting HALF his salary
                            at age 65. To get a raise when retiring at age 46
                            is beyond the pale. He should still be contributing
                            to society in some way at that young age and
                            not sitting on his ass cashing checks from the
                            \_ Once again, you're using one anecdote from
                               an article with an editorial slant and
                               with no context, and suggesting that the
                               issue is meaningful and widespread.  It's
                               not.  Aren't you suspicious when the article
                               says it will "boost his retirement benefit to
                               *as much as* $125,000 a year"?  Why the
                               qualifier?  [Here's why--they're not telling
                               you the whole story.]  You'll believe what
                               you want to believe, go ahead, but you really
                               are demonstrating complete cluelessness here.
                               "Bill Fenniman retired in January 2007 after 27
                                years in law enforcement, the last 17 as Chief
                                of Police in the City of Dover NH." 35% more
                                than your claim of 20 years, it turns out.
                                And it turns out that he is contributing.
                                I hope to retire at 50 on my 401k and savings,
                                who are you to tell me I can't? I will probably
                                contribute to society in some way afterward,
                                but that is my business, isn't it?
                                \_ 401k and savings is your money. Do as you
                                   wish with it. Not the same as getting
                                   free checks for life starting at age 46.
                                   \_ A worker's pension belongs to that
                                      worker just as much as his 401k does.
                                      \_ Of course. And how many employers
                                         are contributing enough money to
                                         their 401k plans such that you are
                                         guaranteed to maintain your full-time
                                         salary after you retire? Not many.
                                         The government is paying A LOT more
                                         than market for this. I've been
                                         in the workforce 13 years and
                                         there's barely 1 year worth of
                                         my current salary in my 401k and that
                                         counts my money plus my employer's
                                         very generous 8.5% contribution.
                                         (Most 401ks match a lot less than
                                         this.) I read that the average
                                         employee has about $100K in his 401k.
                                         This dude is getting that each year
                                         guaranteed forever starting at age 46.
                                         As a taxpayer, I feel ripped off.
                                         BTW, EBRI says that the average 401k
                                         balance of someone in their 60s with
                                         30 years of tenure is $190,593.
                                         \_ If you don't understand why you
                                            can't compare 401k balances
                                            directly with pensions, it's not
                                            worth wasting any more time on
                                            you.  -tom
                                            \_ You can't compare directly,
                                               but you can compare.
                                         \_ So you took the gamble of a private
                                            sector job with higher pay and
                                            lower benefits, it hasn't worked out
                                            that well for you, and now you are
                                            upset that others who took the
                                            safer route are doing better? What
                                            a piece of work you are! What is
                                            the value of 15k + 7k employer
                                            is the value of 15k + 7k employer
                                            match invested yearly for 27 years
                                            at a 10% (average stock market)
                                            gain? Here, I will make it really
                                            easy for your: $2.8M. I bet you want
                                            to privatize social security, too.
                                            Am I right?
                                            \_ Most people "take the gamble"
                                               of a private sector job
                                               with roughly THE SAME pay
                                               as the government and end
                                               up worse for it. Another
                                               way of stating this is that
                                               the average person in the
                                               private sector is receiving
                                               less compensation than the
                                               average person in the
                                               public sector. You cannot
                                               count the $15K, because that's
                                               my own money and you should
                                               be aware that $7K is hardly
                                               the average. So your $2.8M
                                               number is bogus. Yes, I do
                                               want to privatize SS, but
                                               that's neither here nor there.
                                               \_ you keep asserting that
                                                  public sector employees
                                                  are compensated more, but
                                                  asserting it over and over
                                                  doesn't make it true.  -tom
                                               \_ You are full of it. I showed
                                                  you the BLS stats that proved
                                                  that private and public
                                                  sector pay, including benefits
                                                  was similar, but you ignored
                                             \_ Stop stomping my edits. As I
                                                was saying, I showed you the BLS
                                                data that public and private
                                                sector workers are paid similary
                                                including benefits and you
                                                ignored it.
                                                   CA says it pays lower
                                                   than other public
                                                   sector employees and
                                                   yet even its salaries
                                                   are comparable (and
                                                   sometimes even lead) the
                                                   private sector.
                                                   Salaries, not total
                                                   \_ ...when you compare the
                                                      state maximum to the
                                                      private sector median.
                                                      \_ Did you read why
                                                         the State did that?
                                                         \_ yes.  the
                                                            justification is
                                                            ridiculous.  -tom
                                                   \_ That is not how I read
                                                      Table 4. All above average
                                                      private sector paying jobs\
                                                      pay lower than market rate
                                                      when working for The
                                                      State (and most below
                                                      average paying jobs are
                                                      higher, why might that be
                                                      do you think?) Managerial
                                                      jobs are particularly low
                                                      \_ Sure, and how many
                                                         Americans are CFOs
                                                         and MDs?
                                                         \_ And programmers and
                                                            accountants, and
                                                            engineers and
                                                            nurses and ...
                                                  \_ Why don't they just work
                                                     for the government then,
                                                     if they pay is the same
                                                     and the benefits higher?
                                                     \_ Most people, like MOTD,
                                                        are laboring under the
                                                        impression that those
                                                        jobs pay less.
                                                        \_ you think that
                                                           "most people" are
                                                           incapable of
                                                           reading job
                                                           postings which list
                                                           job descriptions and
                                                           salary ranges? -tom
                                   \_ Contract law only applies to private
                                      sector employees?
2008/11/21-28 [Finance/Investment] UID:52073 Activity:nil
11/21   E*Trade survival depends on TARP funding.  Larger brokerages reluctant
        to acquire company because of its MBS/CDO liabilities (would rather
        acquire brokerage side only via bankruptcy).
        \_ If my online tradng account is with ETrade, how will this
           affect me?  Should I transfer ASAP?  Any recommendations?
           I make ~10-20 trades a year at most.
           \_ your immediate concern is articles like this leading to a
              stampede for the door and contributing to a chaotic closure.
              What do I think?  I would close my account today and not take
              no for an answer.  The second this appears as a lead story on
     you may be in for a very long wait on the phone. -op
           \_ You are covered for up to $1/2M by the Federal Govt, so if you
              have less than this, your biggest inconvenience might be having
              to wait a few months while your claim is processed. If you have
              more than this, you should move some to another brokerage.
              \_ My wife was in the Reserve Primary Fund in her 401(k), they've
                 gotten back 75%, but it's a waiting game while they try to
                 extract funds from the govt and figure out how to liquidate.
                 *Your* nightmare is if your stock portfolio is frozen, the
                 markets are crashing around you, and you can't do shit.  All
                 that SIPC covers is return of stock, not value of stock when
                 a brokerage goes boom.  Cash should be safe, though, up to
                 the insured amount. -op

                 \_ Not a nightmare if you are a buy and hold investor. But
                    if you want to be able to trade in and out of the market,
                    this could be problematic.
        \_ Thanks.  Any recommendation where to move to for online trading?
           I only keep $50-$100k for a situation like this.  Most of my
           money I have with my brick and mortar bank and the financial
           services compnay which manager our defined contribution retirement
           plan.  But I do want access to a way to trade online with low fees.
           \_ People seem to like Scottrade, though if you are into daytrading
              you can use like angry sysadmin.
        \_ fyi, this showed up on drudge just now, not highlighted though
2008/11/20-27 [Finance/Banking, Finance/Investment] UID:52054 Activity:nil
11/19   Remember the 100-age investment rule we learned in grade school?
        For example, if you're 65, you should put at least 100-65=35% of
        your savings in stocks. Let's say I'm retiring at 65 today, then
        effectively I'd have 1/2 of that much than say, 2004-2005, or
        35%/2. I've lost nearly 17.5% of my savings because I retired at
        the wrong time. Buy and hold works well when the market is stable
        (post 1940 and pre 2008). In the end, do you think the 100-age
        rule is still applicable in the turbulent market of the 21st century?
        \_ The average return you get is directly related to the amount of
           risk you take on.  Come back when you've groked that concept.  -tom
        \_ Hell.  My 401(k) balance went from $200k a year ago to $120k today.
           YetI still think stocks is the way to go.
           Yet I still think stocks is the way to go if you don't need the
           money in a short time.  I've never heard of that investment rule
           since I didn't attend grade school in this country, but I guess its
           idea is that you don't need all your money today even if you retire
           \_ We are in basically the same boat here.
        \_ I think you should be about 75% in equities (25% in bonds)
           throughout. I don't plan to change that mix just because I'm
           60, although I might cash out to buy some property once I can
           do so without any penalties.
        \_ No.  Even at a relatively young age (under 35), you should be
           invested >= 50% into safety (CDs and Treasuries).  I think this is
           particularly true for those earning the median or less where they
           live.  For those earning more, you can afford to risk more.
           particularly true for those earning the median or less for where
           they live.  For those earning more, you can afford to risk more.
           \_ You are on crack if you put >50% of your retirement into CDs at
              age 35. You might not even beat inflation.
2008/11/19-25 [Finance/Investment] UID:52050 Activity:moderate
        Angry sysadmin's comments today are pretty good, and extend beyond Ben
        Stein's idiocy.  What he really needs to do is nail Krugman.
        \_ You need to find yourself a new hero.
           \_ can you point out what's wrong with his position?
              \_ besides the complete lack of data backing his own position,
                 and the logical fallacies present in virtually every
                 paragraph?  -tom
                 \_ click on November 18.  Ignore any discussion of technical
                    indicators--they are not necessary to support his position.
                 \_ click on November 18.  Ignore any technical analysis--it
                    isn't necessary to support his position.  Yes, I try to
                    ignore the hand-wavy statements.
                    ignore the hand-wavy claims.
                    \_ He is mostly wrong here, too, the credit markets have
                       in fact mostly unfrozen, which you can see by looking
                       at the LIBOR rates. He is just looking at recessionary
                       indicators here.
                       \_ Corporate bond yields.  Commercial paper.
                          Securitization market.  CDS spreads on BRK.
                          here's a Reuters article saying the "credit markets
                          are still frozen":
                          consensus (which may be wrong) is that credit markets
                          are "thawing"
                          \_ Risk is just being priced appropriately, with a
                             major recession looming. Money is there to be
                             borrowed, the interest rates are just high.
                             \_ what is it called when market rates are so high
                                that the seller of debt can't afford the rate,
                                and therefore doesn't want to sell bonds?
                                and therefore doesn't sell the bonds?
                                consensus is also that central banks are the
                                only entities lending right now (in volume).
                                \_ What do I call it? A return to rationality
                                   in lending. Okay, yield spreads are higher
                                   than I realized, but plenty of bonds are
                                   being issued:
                                   in lending. Non-junk bond yeild spreads are
                                   not unusually high. Billions of dollars of
                                   commercial paper are being rolled every day,
                                   so your "consensus" (which is not what I
                                   have seen in places like the WSJ and The
                                   Economist) is wrong.
                                   \_ "growing signs of a thaw" != "in fact
                                      mostly unfrozen"
                                      \_ fair enough
                              \_ Recession looming? We're in it. We just
                                 haven't made it official yet.
              \_ Yes, he is a moron with no understanding of economics. We
                 do in fact need inflationary government deficit spending, so
                 as to avoid a deflationary collapse. Pretty much every
                 economist agrees at this point, outside of the Austrian
                 school nutters.
                 \_ I think the misunderstanding here is that deficit spending
                    is not necessarily exclusive of the transparency he
                    is not necessarily exclusive of the transparency/reform he
                    \_ In this post at least, he mostly claimed that
                       government spending would lead to hyperinflation, which
                       is plainly wrong. He has some points, but they get lost
                       in the big mistake he makes where he presents the false
                       dilemma of deflation vs. hyperinflation.
                       \_ a huge weakness is he does not forecast an inflection
                          point.  sure, we spend like Yermom, but when is it
                          when foreign purchasers decide U.S. Treasuries are
                          not a good bet?  This could theoretically last 20
                          more years or forever for that matter. -op
                          \_ Well, since long term Treasury rates are under
                             4%, we must be a long way from saturating the
                             demand for US backed bonds, don't you think?
                             \_ the uncertainty here is exactly my point.
                                there is the rumor that the Fed is buying
                                long-term T's to reduce the rate, but I'd
                                consider that tinfoil for now. -op
                                \_ You understand how unlikely that is, right?
                                   That would reduce the money supply, which is
                                   the exact opposite of what The Fed is trying
                                   to do right now.
                                   \_ can you please stop repeating what I'm
                                      saying back to me and sounding like you
                                      made a point?  it's irritating.
                    \_ I can agree that transparency would be good, but I don't
                       think he has any data which show that lack of
                       transparency is the root cause of the market problems
                       as he claims.  -tom
                       \_ okay, step by step.  shadow banking system.  SIVs.
                          securitization.  major effect on the global market?
                          yes/no.  take all the data you know yourself--let's
                          not confine it to this one blog post.
                          \_ Wake me up when he starts talking about ameros.
                             \_ ameros are truly tinfoil -op
2008/11/17 [Politics/Domestic/California, Finance/Investment] UID:52014 Activity:nil 72%like:51977
        PSOTO thinks we're all gonna die.
        \_ lulz lulz   lulz   lulz      lulz   lulz     lulz        lulz
           \_ does this sequence converge?
        \_ That's a pretty terrifying chart
        \_ "worst downturn since the Great Depression" - duh?
           we're all gonna die / mad max?  I don't see that.
2008/11/14-26 [Finance/Investment] UID:51983 Activity:low
11/14   Interesting stock trader psychology I noticed today. The markets
        were mixed and I was pulling for a huge $$$ day (as opposed to the
        so-so one I ended up with) but when it became clear that was not
        going to happen and the rally died then everyone just stopped
        buying, which led to the bloodbath at the close. If you just
        looked at the open and close you would think there was a crazy
        sell-off, but the reality is that most of the eventual losses were
        over the last 10-15 minutes when the bulls decided to call it a week
        and the shorts continued to sell. Given that I expect a rally on
        next week at some point, because "it was not as bad as it looked".
        That plus the G20 meeting over the weekend. Even though my positions
        are still positive (and I usually sell at the end of every day) I will
        hold them overnight. No point selling into the hands of the shorts
        and I'm still green on the day even after the sell off.
        \_ I enjoy reading your motd posts about day trading.  Do you do this
           as a full time job?  Or do you have your brokerage account web
           site open at work at all times?  I don't have the world's most
           demanding job, but I would go insane doing my work and managing
           my account all day like you do.
           \_ All you have to do is watch a handful of stocks on a ticker.
              It's not much time at all. I get up before the markets open
              and see what's up. Then I go about my regular business until
              8am or so when I check again. Between then and lunch I just
              glance at the ticker every few minutes and then at lunch
              time I really watch intently for a time to get out (if I
              haven't already and still have a position open).
        \_ Most day traders end up losing their shorts.
           \_ This can't be true, because for most of history the market
              has risen. A rising market erases a lot of mistakes. It's more
              challenging now than it typically is. If the market is up then
              you will be up even if your buy and sell signals are goofed
              and if the market is down then you will be down no matter
              what you do.
              \_ No, it is true. Volatility + leverage + frequent trading
                 by an amature leads to most of the money ending up in the
                 hands of the pros, over time. I can show you how this works,
                 but I think you can figure it out for yourself pretty
                 easily. If you have real talent at this, you should try
                 to get a job with a brokerage and use OPM. But they aren't
                 really hiring right now.
                 \_ 1. No one said you need to use leverage. I think it
                       would be foolish to even for buy-and-hold. I don't.
                    2. You have a point that transaction fees can eat up
                       profits, but I don't pay any and "Lower profit because
                       of fees and taxes" is not the same as "losing your
                       shirt". It's just less profit (all else being
                       equal) - during a rising market, of course.
                    \_ How do you avoid commissions again?
                       \_ Maintain a certain balance in my account
           \_ All right, both you guys put forth excellent reasons.
              Is there any data?
              \_ Yes, but nothing really great and it is contradictory.
                 Part of the problem is defining what a "day trader" is.
                 There are many strategies that involve buying and selling
                 on the same day and many studies are not careful about
                 differentiating. Someone making money on spreads and
                 trading 400 times per day is doing something very different
                 from a person range trading, for instance. Leverage plays
                 a big part in it, too, because you can be wiped out very
                 quickly if you buy $100K of stock with just $25K in your
                 account if it goes against you. That's why I don't use
                 leverage, although I do use margin for legal reasons.
2008/11/14-26 [Politics/Domestic/California, Finance/Investment] UID:51977 Activity:low 72%like:51974 72%like:52014
11/14   lulz
        BDELONG thinks we're all gonna die.
        \_ lulz lulz   lulz   lulz      lulz   lulz     lulz        lulz
           \_ does this sequence converge?
        \_ That's a pretty terrifying chart
        \_ "worst downturn since the Great Depression" - duh?
           we're all gonna die / mad max?  I don't see that.
2008/11/14 [Politics/Domestic/California, Finance/Investment] UID:51974 Activity:nil 72%like:51977
        BDELONG thinks we're all gonna die.
2008/11/12-26 [Computer/Companies/Google, Finance/Investment] UID:51948 Activity:low
11/12   Intel warns.  Q4 revenue forecast down 10%.  At 1996 levels.
        GOOG afterhours at 285.  Time to buy?
        \_ I think GOOG is a buy under $300 and I bought. --GOOG h8ter
           \_ how long are you holding for?  will you buy more if it gets
              \_ I'll hold until I need the money, however long that
                 is. I'll buy more if it continues to fall as long as nothing
                 significant changes with GOOG's business (like a strong new
                 competitor developing). I'd reconsider buying more shares if
                 it falls below $200, but I wouldn't sell what I own.
                 \_ tnx.  i am also trying to figure out when to buy in.
                    \_ Yesterday was a good time. I made 25% today by
                       buying a favorite daytrading stock near the low and
                       selling just before close. I wonder who the morons
                       are who are selling low and buying high?
                       \_ Please post on the motd when you make your trades,
                          not the next day. TIA.
                          \_ GOOG is still low even after today. Buy tomorrow
                             if it opens the same or down. The philosophy
                             is simple: Buy low, sell high. I have made a
                             lot of money the last ~6 weeks using this
                             simple idea. When strong stocks break 52 week
                             lows then by all means BUY. A lot of the pain
                             of the market is behind us. Many stocks are down
                             50% on the year. They aren't going to fall
                             another 50% IMO. Only the kooky DOW 5000
                             people think that and you know what, even if
                             they are right, I will be there on that DOW
                             5000 day buying. I am holding very few
                             positions long and overnight, although GOOG
                             is one of them.
2008/11/12-13 [Finance/Investment] UID:51939 Activity:nil
11/12   angry lol poker guy says wall street is doomed
2008/11/12-13 [Finance/Investment] UID:51933 Activity:nil
11/12   I am renaming myself Dow 7000 Guy
        \_ Optimist
           \_ Should I Move To Emerging Market Country Guy?
              \_ between the 2x bush elections and prop8 passing and the
                 dow tanking you'd think there'd be nobody living in
                 the BA, but i guess that moving talk is just.. talk.
2008/11/11-26 [Finance/Investment] UID:51902 Activity:nil
11/10   As an employee of a company, I'm prohibited to short my own
        company's stock. I'm also prohibited to trade during blackout
        period. But am I prohibited to day trade my own company's
        stock during open period? Thanks for any help!
        \_ If you were prohibited during open period, why have a blackout
           period at all?
        \_ You are always prohibited from trading stock if you have
           material insider information, but otherwise, you should be
           allowed to trade in your own companies stock during open
           trading periods. Why not ask your company instead of the motd?
        \_ Vader's wingman panics at the sight of the oncoming pirate starship
           and veers radically to one side, colliding with Vader's TIE fighter
           (MMIFF delayed)
2008/11/10-26 [Health/Disease/AIDS, Reference/Tax, Finance/Investment] UID:51901 Activity:nil
11/10   lolz when your 401k is gone, heroin will look pretty attractive
        \_ Hardly, that crap's expensive!  Now, crank maybe...
        \_ shooting heroin leaves you VERY constipated.  seriously.
           sometimes when i shoot junk i don't have to shit for 2 weeks.
2008/11/10-26 [Finance/Investment] UID:51896 Activity:nil
11/10   What is the difference between QQQQ and SPY?  How should I decide
        which one to buy?
        \_ punch them into yahoo finance, click on Profile
        \_ I trade QQQQ all the time, betting that it's going nowhere but
           will have a lot of mini waves (up down 5-7% in a week), and I've
           been riding on QQQQ and doing well based on this guess. I've been
           monitoring SPY and see that both waves are so similar, that
           it's most likely not worth trading both. DIA on the other
           hand is like QQQQ, but more gentle mini-waves. I also do DIA.
           I've been doing VERY conservative week trades.       -week trader
           \_ If that's your belief, look at butterfly spreads.
           \_ Can you post to the motd each time you trade? TIA.
        \_ Check out QLD.  It basically follows QQQQ, but the returns are
           ~2x QQQQ (up or down).
           \_ Leverage, leverage, leverage! What could possibly go wrong?
2008/11/5 [Finance/Investment] UID:51843 Activity:high
11/5    When Bush talks, stock prices go down. That is a perfect time
        to buy more stocks. I've been doing pretty well with this
        simple yet effective strategy.                  -week trader
        \_ DEATH STAR INTERCOM VOICE: Commence primary ignition.
2008/11/4 [Finance/Investment] UID:51830 Activity:nil
11/4    What is KFC's stock symbol? How do I buy it BEFORE tomorrow's
        market opens (e.g. how do I do off-hour trading)?
        \_ It's awesome how quickly you went from annoying to
           just plain pathetic.  Have a great 4 years!
2008/11/4 [Finance/Investment] UID:51813 Activity:nil
11/4    It's time for CHANGE!!! Watch the stock market swing wildly in
        either direction. Good luck guys.               -super hedge guy
        \_ A large burst of Vader's laserfire engulfs Artoo.  The arms go limp
           limp on the smoking little droid as he makes a high-pitched sound.
2008/10/30 [Finance/Investment] UID:51734 Activity:nil
10/29   Dear motd Republicans: you're about to lose. You should take some
        time and look in the mirror. The majority wants change. Look in
        the mirror, and think why your ideology is dated, and what you
        need to change. Better luck next time!
        \_ Congratulations on getting more than 50.1% of the popular vote
           for the first time since 1964. Even a broken clock is right
           twice a day.
           \_ The Republicans had to preside over a stock market crash,
              dragged-out war, and nominate a 70-year old geezer with an
              airhead sidekick to get to this point, and it's still in
              \_ LOL
2008/10/29 [Finance/Investment] UID:51728 Activity:high 80%like:51723
10/29   wtf is going on with the last 5 minutes of trading?
        \_ automatic trading?
           \_ do you mean:
              (a) lots of market-close orders
              (b) i've got a lot of shorts that need to be worth something
              \_ no idea
                 \_ as i understand it GE just warned on earnings -op
                    \_ Not true. DOW reported it, but it's a fabrication.
                       \_ the ceo said something wishy-washy at a speech and
                          the company said it was "taken out of context"
        \_ I dunno but I sold some stuff in the afternoon high point
           so I'm happy.
        \_ Did you buy puts like I told you?
           \_ have you heard of the VIX/volatility crush
              \_ You mean the high premiums on options right now because
                 of the high VIX? If so, yes. If not, do tell.
                 \_ So you should be selling calls, not buying puts.
2008/10/29 [Finance/Investment] UID:51718 Activity:high
10/28   Angry sysadmin says:
        "Buy and hold for decades" is the most dangerous piece of shit advice
        anyone can give anyone.  You have no fucking idea where the market will
        be when you need the money.  Buy and hold for decades presumes you will
        be in one of the "up cycles" when you need out.
        This is frequently not true, and when its not true you get it in both
        holes.  That is an ASININE market strategy.  If the last 20 years have
        taught you ANYTHING, its this.
        \_ You should put money into stocks when you do NOT need the money
           immediately. Long term means 20 or more years, and if you need
           money or anticipate the money you put into stock market, don't.
           Why would you anyways?
        \_ Who gave you such an advice?  The standard advice for 401(k) is
           to gradually move from high-risk high-yield items (e.g. tech stock)
           to low-risk low-yield items (e.g. CD) as you approach retirement
           age.  There are even funds that automatically does this for you
           according to your age and projected retirement age.
              \_ Do you want resume of timecube guy
        \_ Now we know why he is so angry, he lost all his money in the stock
           \_ actually ...
              \_ I am guessing this guy got crushed in 2001, he has it written
                 all over his face.
                 \_ actually ...
        \_ VTIVX baby! Ride it for the next 30 years...
2008/10/28-31 [Finance/Investment] UID:51713 Activity:low
10/28   Biggest DJIA up days (ob past history does not guarantee future reslts)
        1.  March 15, 1933  15.34%
        2.  Oct. 6, 1931    14.87%
        3.  Oct. 30, 1929   12.34%
        4.  Sept. 21, 1932  11.36%
        5.  Oct. 13, 2008   11.08% <--
        6.  Oct. 28, 2008   10.88% <--
        7.  Oct. 21, 1987   10.15%
        8.  Aug. 3, 1932     9.52%
        9.  Feb. 11, 1932    9.47%
        10. Nov. 14, 1929    9.36%
        11. Dec. 18, 1931    9.35%
        \_ Interesting, where did you get this data? I'd like to find out
           how much they declined (or even rise) the next day. My feeling
           is that most of the activities will be profit taking.
           \_ Also interesting is where they went the previous day.  The
              stock market recently looks like a rubber ball, bouncing up
              after selloffs pass a certain threshold.  Then it all gets
              sold off again at the next excuse.  It *seems* like at some
              point it should start trending up again.  A lot of cash was
              pulled out of the market and is apparently itching to get
              back in.
              \_ that's funny.  my impression is that there's a lot of money
                 still in the market waiting to get out at higher prices.
                 \_ Well, you can say that about all the money in the market,
                    ultimately.  If these guys are waiting to get out then
                    they must implicitly think that current values are ok
                    and stocks will go up.  If they have some better place
                    place to put their money then they should get out now
                    and put it there.
                    and put it there.  So those signs point to current
                    valuations being at some approximate floor.
                    \_ they must be thinking, "I have so much money in the
                       market, I can't sell it all at once.  Hope I can sell
                       it over time at decent prices before things really go
                       in the crapper."  Not counting pension funds.
                       \_ That would imply they think the market will first
                          go up significantly, then go down even more
                          significantly.  That's kind of an odd scenario.
                          \_ but it would be the best scenario for me if I were
                             stuck and wanted out at good prices
                          \_ an ideal scenario if I were in that position
                          \_ I am sure the market is going to up or down and
                             then move the other way and then turn around and
                             do something else for a while.
                             \_ No you idiot, it is going to do the exact
        \_ Note that 30s and 87 were really ROUGH financial times.
           \_ and we have FDIC-backed deposits.  '87 was a one-time affair. -op
        \_ If you had invested on Day #1, you would have doubled your money
           in three months and tripled it in a year.
           \_ super
              \_ If you had invested on Day #2, you would have been down
                  60% within nine months.
                 \_ :-(
2008/10/28-29 [Reference/RealEstate, Finance/Investment] UID:51712 Activity:nil
10/28 ( (
        Oldies but goodies, Greenspan sez:
        - More H-1Bs -> Buy more overpriced homes -> Home prices stabilize
          -> Overpaid engineers/professionals make less -> PROFIT!
2008/10/28-30 [Finance/Investment] UID:51702 Activity:nil
10/28   Dow up 10% today.  This is not healthy.
        \_ now that we are healthy again Obama can tax us all
           \_ You aren't taxed?  How did you pull that off?
        \_ No indeed.  Volatility is bad.
        \_ Stop whining and make some money like the rest of us. Now is a
           good time to buy puts, because Thursday's GDP report has a good
           chance of sending the markets back down.
           \_ thanks for your advice. What stocks/indices are your personal
              favorites and what do you think may go down by (5%? 10%)?
              Note that I'm asking for YOUR opinion that's all.
              \_ I'd buy puts on the DOW. DOW is heavy financials which
                 are not out of the woods yets.
        \- if you were investing today, you have have implicily
           (or explicitly) been betting on what the fed will do
2008/10/27-31 [Finance/Investment] UID:51697 Activity:nil
10/27   In housing markets, why is high prices associated with high number of
        transactions, and low prices associated with low number of
        transactions?  From my simplistic view using supply and demand curves,
        the prices and the number of transactions should be independent.  Thx.
        \_ Doesn't that indicate that more people buy houses as investments,
           rather than as a place to live in?  Sad sad world.
        \_ Gee, "supply and demand curves" are not as gospel as the little
           Invisible Hand is Everything brains believe.  Here's a hint, simple
           rules for complex systems are never right.
           \_ simple rules often are correct for statics or equillibrium
              conditions, e.g. conservations rules, but often you are
              interested in dynamics or out of equillbirum situations.
              analogous to the great conservation rules in physics are the
              "great" accounting identities in econ.
              "great" accounting identities in econ. the simp;est explanation
              of higher prices being postiives correlated with higher
              transactions is liqudiy preference, but there are some
              subtler issues that are difficult to summarize here. it involves
              modeling some asymmetries between the buyers and sellers,
              modelling the growth of the housing stock in an area and the
              change in demand in that area etc.
              \_ The economy is *not* an equilibrium system, despite
                 what traditional econ teaches you (and then attempts
                 to un-teach you at the graduate level).  Check out
                 "The Origin of Wealth" for a good overview.
                 \- yes, and the same is true of "real world physics". but
                    the point is that you first learn simple normative stuff
                    [PV=nRT, F=ma, GDP=C+I+X-M], and than add increasingly
                    complicated boundary conditions and complicating factors.
                    these simple rules are often quite powerful when thinking
                    about problems, e.g. the parition of energy, energy
                    conservation etc. it cant answer all questions ... like
                    the positive effect on trade vs loss of purchasing power
                    when your currency goes down, but it's a necessary starting
                    point. BTW, you want wish to see the "new growth theory"
                    whichs seems to try an account for some of the stuff
                    in the book you mention. the "king" of new growth theory
                    is PROMER, formerly of ucb dept econ, currently at the
                    'Fraud, not related to DROMER and CROMER currently still
                    at UCB Econ. (whoa, according to wikipedia PROMER is the
                    son of RROMER. "i did not know that.").
                    \_ Agreed, but at least in Physics the simplifying
                       assumptions and abstractions allow you to make
                       predictions which are still borne out when you
                       introduce complicating factors.  The issue with
                       the assumptions made in traditional econ is that
                       they often don't hold up in the real world.  Thanks
                       for the pointers, btw.
                       \- there are some areas where "economics" most
                          definitey is in equillibirum: cross-currency
                          arbitrage for example. now you are right, long
                          term currency rates are uncertain. and yes that is
                          why in advanced econ classes you study stuff like
                          dornbusch overshooting, CIP, UIP, PPP etc. and
                          the other thing is some of these "simple normaitve
                          statements" do lauch research agendas, like the
                          efficient markets hypothesis ... you dont have to
                          believe in that has a description of the mkt but it
                          is a starting point just like "rational economic
                          man" is a point of departure from normative to
                          behavioral economics. OK TNX.
2008/10/24-28 [Finance/Investment] UID:51668 Activity:nil
10/24   Week trade guy, what brokerage do you use? I'm curious about how
        you are trading indexes.
        \_ I'm using Etrade. It's very expensive, at $10 a trade. But
           since my volume is super low, it's not a big deal. Also I
           have Etrade bank at 3.3% interest rate and that's where my
           paycheck goes. I only trade 2 things right now: DIA and QQQQ.
           I make it VERY SIMPLE and only use limit orders. If it goes down
           10-15% more, limit trigger buys more. If it go up 10-15%,
           trigger sell and I simply wait till the next market panic. At one
           I only have 4 limit orders to worry about: sell DIA/QQQQ if high,
           buy more DIA/QQQQ if low. My life is very carefree. I don't run
           all that number crunching bullshit. It's meaningless in a recession
           where anything goes. KEEP IT SIMPLE and your life will be
           carefree... My typical day is just 5 min research, adjust limit,
           then go to sleep. I go to work without having to stare at the stock
           market ticker. It's been carefree and profitable. I like week
           \_ Is it possible to trade VIX?
2008/10/23-28 [Finance/Investment] UID:51661 Activity:kinda low
10/23   So, day trader guy, what's your method? What are you trading?
        \_ BIGGS: (over headset) Hurry up, Luke!
        \_ I'm doing week trade. I trade index like DIA and QQQQ, which
           don't have as big of a movement. I set my expectations to be
           low (5-8% up down). I set limit (if up, sell 1/2, if down,
           buy more). I don't like day trade anymore, it's too stressful.
           Week trade is the way to go.
           \_ This sounds like the old coin-flip double-down strategy.
              If the index trends downward, won't you lose money this
              way? Or, actually you'll end up with all your money in
              the index, which I guess will eventually go back up if you
              wait long enough... -op
              \_ You'll never time it perfectly. You'll always miss
                 opportunities. The hardest thing is getting in at the
                 right time. When people panic and all is gloom, that's
                 when I go in. By doing so, I don't make big bucks, but
                 I don't lose much either. By the way, I only use this
                 strategy when I anticipate the market to be flat
                 (recession), where you can ride a lot of micro-waves.
                 \_ Interesting, when things are up you just buy and hold?
                    That's actually pretty reasonable...  How long have you
                    been doing this?
                    \_ Been doing it this year, with anticipation of a long
                       recession. My dad did the same thing in the housing
                       slump and recession of the 90s (1994-1998). You can't
                       do this when the economy is booming/rising... only
                       when it's slumping and flat. When everyone panics,
                       that's a good time to buy. Look at 911 and the stock
                       prices during that time. Note that there are some
                       index that I bought that are higher than it is now, and
                       I'm just holding them on till the next boom, maybe
                       in 5-8 years. The key is to not tie a lot of money
                       that you'll need, and instead break it up into a bunch
                       of chunks and *ladder* it so that you'll always have
                       an in/out flow of capitals. And also expect to not see
                       1/2 of that money till the next boom. You'll make it
                       really well, it's just a matter of time (1-2 decades).
              way? -op
        \_ I'm a different guy, but I was trading MS until recently. Still
           am sometimes. Been doing WFT, but it has been scarier and I'm
           rethinking that. Also sometimes GS and GE. GE is not a great trade,
           but the advantage is that if you get stuck it will usually work its
           way back and it's not a terrible stock to own if you become a
           bagholder. Trade stocks you wouldn't mind buying and holding.
           (Except MS, which is purely speculative on my part, I do.) My
           method involves buying in on weakness and selling high. Duh. Find a
           stock with a lot of volatility (just about everything right now), a
           decent volume, and a recent history of wide swings in *both*
           directions.  (Don't buy something just working its way down except
           to short.) I adjust my stops so that I never lose more than my goal
           (usually 10% but in this volatile market, even 10% stops me out
           too early sometimes). I try not to hold overnight. Occasionally I
           do. It's a good way to: 1) Get screwed, or 2) Score a big gain, and
           3) Die young of heart failure.  Another rule: Never trade in the
           first hour the market opens unless you are liquidating an overnight
           position. I use a lot of technical indicator mumbo jumbo, but I
           find it relatively useless in this market. Just buy low, sell high.
           If the trade turns against you sell for a loss and live to fight
           another day, but don't sell too early. Set your stops so that
           the stock has room to wiggle. Sell short *and* long to make money
           both ways. Buy options for leverage. I tend to do this more for
           short plays, because options have a fixed downside compared to a
           short sale, margin is a bitch, and lots of stocks have had short
           restrictions lately (if you can find shares to short!) Also, be
           keenly aware of the federal regulations involving day trading (e.g.
           settled money, minimum balances, buying power). I learned a lot of
           these the hard way. Profits have been down this week but I am
           still green for the week and overall. The market tends to move
           *very* quickly when it does move and my biggest failing over
           the week has been being away from my computer during the day's
           high/low and not having a sell order in place because I wanted
           to "let it run" and it runs against me in a matter of minutes.
           This is why I've had small gains when I could have had large ones.
           Example: Stock opens at 14. Buy stock at 13.50. Stock drops to
           12.50 (still not 10%). Keep holding. Stock moves to 14.50. Adjust
           Example: Stock opens at 14. Buy stock at 13. Stock drops to 12
           (still not 10% from 13). Keep holding. Stock moves to 14.50. Adjust
           bottom stop all the way to, say 14, but don't have a limit sell in
           because I want to see if it hits 15 and "I can always sell on the
           way down". Go make coffee (or something) secure that my profit is
           "locked in" (it's not going to fall .50 in 15 minutes and I
           have a sell in at 14).  Get back and see that it's trading at
           have a stop sell in at 14).  Get back and see that it's trading at
           14.30. Shit. Okay. Just sell. Type type type. Order in. Buy the
           time it executes stock is at 14.20. Take small(er) profit and be
           thankful. Stock closes at 14 again. Realize that SOB stock
           actually went all the way to 14.70 while I was away. Curse
           fricking $500 cup of coffee. This has happened more than once
           and I need to pay more careful attention. Daytrading is
           sometimes all about a few moments in a long trading day.
           \_ Where do you read about the federal rules?  I understand there
              is a 3-day settlement period on trades (ie, the money from
              is not available for buying for 3 days) , but trading on
              margin takes care of this?
              \_ Yes, you pretty much need a margin account or else you
                 need to trade less frequently or with a smaller % of your
                 capital. This is because of Reg T (free ride). You will
                 also need a $25K minimum balance and be aware that buying
                 power for daytrading is 4x but if you hold overnight it
                 is only 2x. Calculating exactly how much $$$ you can
                 trade with without a call cqn be nasty. Your broker can
                 help you and I understand some online brokerages do this
                 math for you but mine doesn't.
                 \_ You are daytrading on margin?? Please post to the motd
                    the day you go broke, which will probably be sooner
                    rather than later.
                    \_ You pretty much *have* to daytrade on margin, brainiac.
                       This is because of the regulations mentioned above.
                       However, it doesn't mean what you think it does.
                       Trading on margin doesn't necessarily mean I:
                       1) Trade more than the cash value of my account, or
                       2) Pay interest.
                       For example, let us say I have $100K in my account.
                       I buy stock XYZ for $40K. I sell it later that
                       day for $60K. Then I buy ABC for $40K and sell it
                       for $60K the same day. Using a cash account I can
                       only execute one more trade that day (for $20K) and
                       indeed for the next 3 days until settlement even
                       though I made $40K because you have to use settled
                       funds to trade. A margin account avoids all of
                       that, because when you buy on margin you don't have
                       to wait for settlement. Anything else you don't
                       know that I can help you with?
           \_ MS as in Morgan Stanley or Microsoft?
              \_ If you have to ask this you are not ready for my advice.
                 \_ Ah, get off yer high horse.  This is the motd.  Not that
                    I was planning to day trade anyway.
2008/10/23-28 [Finance/Investment] UID:51649 Activity:nil
        Greenspan Concedes He `Found a Flaw' in His Free-Market Ideology
        Oh man, I can't wait to socialize the entire nation. I'm tired
        of people who got rich by the virtue of being lucky.
        \_ You're such a player-hater.  Being rich from being lucky,
           that's something we should tolerate (maybe envy) but
           tolerate.  Being rich by crushing those beneath them,
           intolerable.  Being rich and avoiding paying reasonable taxes,
           intolerable.  Being rich through theft, intolerable.  We
           should work toward leveling opportunities, not unreasonable
           \_ How about being rich by winning the sperm lottery? Or is that
              just another variant of being rich by being lucky?
                \_ I addressed that by saying we should work toward
                   leveling opportunities.  Sizeable inheritance tax is in
        \_ Troll+++
2008/10/20-21 [Finance/Investment] UID:51585 Activity:nil
10/19   Oldie but goodie:  Don't borrow (leverage up) to buy stocks
2008/10/19-21 [Finance/Investment] UID:51583 Activity:nil
10/19   MacGruber checks his stock portfolio (
2008/10/19-21 [Finance/Investment] UID:51576 Activity:moderate
        \_ All that cash just sitting on the sidelines now getting 3% is
           going to end up being put to use somewhere. What do you think
           investors are going to do with it, buy houses?
           \_ what's the next bubble?
              \_ Guns and canned food?
              \_ I don't know. I think "alternative energy" is probably
                 a good candidate. What about you, what do you think?
2008/10/19-23 [Finance/Investment] UID:51574 Activity:nil
10/19 (
        Response to Buffet's "buy equities you fucks" op-ed letter
2008/10/17-21 [Finance/Investment] UID:51571 Activity:kinda low
        44-year-old veteran trader kills self after losing several million
        daytrading S&P 500 futures on Wed.
        \_ And we should pity gamblers because ......
           \_ Because he worked very hard like many Americans do.
              \_ Most Americans don't live on gambling.
                 \_ What's fundamentally different between a Math PhD at
                    Goldman Sachs doing numerical analysis to beat the
                    market vs. a stock broker who uses his superior
                    understanding of psychology to beat the market?
                    \_ Neither of them are doing anything particularly
                       useful, so no, not fundamendally different.
           \_ who says we are pitying da foo'?
           \- nouriel roubini has killed himself:
2008/10/17-20 [Finance/Investment] UID:51567 Activity:nil
10/17   Up up and away:
2008/10/17-20 [Finance/Investment] UID:51561 Activity:nil
10/17   Buffet:  Buy stocks now you fucks </troll>
           \_ I was about to post this as well.
        "I've been buying American stocks. This is my personal account I'm
        talking about, in which I previously owned nothing but United States
        government bonds. (This description leaves aside my Berkshire Hathaway
        holdings, which are all committed to philanthropy.) If prices keep
        looking attractive, my non-Berkshire net worth will soon be 100
        percent in United States equities."
2008/10/17-22 [Finance/Investment] UID:51559 Activity:kinda low
10/22   How many people here still day trade (compared to the dot-com
        days when almost everyone played)?
        \_ it's too dangerous right now.
        \_ looks like only Thu was an OpEx up day - but expectation was met
        \_ Dude, I just *started* day trading. It's an awesome environment
           to trade in. These wild, crazy swings up and down are great for
           trading! I can make $1000/day easy. I can see why some people
           get overconfident and quit their day jobs. I'm just enjoying it
           while it lasts.
           \_ What are you betting on these days? I'm too chicken so I
              only do QQQQ and DIA and I'm actually doing OK with the
              predictable fluctuations. In addition I'm trading such
              low volume that if I get screwed, I'll just hold on for
              5-20 years and will still be ok.
              \_ Just close out your position at the end of each day and
                 you'll never be screwed. I place stops to limit losses.
                 The bad part is that I miss big gaps up at open. The good
                 part is that I miss big gaps down at open.
                 \_ But you end up paying transaction fees.
                    \_ 1. I get free trades through my broker.
                       2. Even if I didn't, you think I am going to sweat
                          a $20 fee to make $1000+? It's not as many
                          trades as you think. 2-4 per day is all I need.
                          You can keep changing the stops and limits all
                          you want and it's still the same "trade" if it
                          doesn't execute.
                          \_ Doesn't the capital gains tax make your gains
                             go away for the most part?
                             \_ No more than it does for other income.
2008/10/17-20 [Finance/Investment] UID:51557 Activity:nil
        Okay, here's one emerging mkts article.  I'm not offering it to support
        my case--just take it as a data point.
        \_ There is no evidence of leverage here, just a flight to quality,
           which is occuring in markets worldwide.
2008/10/15-20 [Finance/Investment] UID:51535 Activity:moderate
10/14   DJIA and S&P500 suffer worst 1-day percentage declines since 1987 Black
        Monday crash.
        \_ It's all ACORN's fault.
           \_ You laugh, but the market is clearly terrified that there is
              going to be Obama Socialism in America.
              \_ Clearly!  Why just the other day the market and I were
                 having dinner and after it had a few too many glasses of
                 wine it sheepishly admitted that while things may have been
                 rough lately, what with the housing market and all, what
                 really was worrying it, deep down inside, was the prospect
                 of Obama Socialism in America.
                 really kept it up at night was the prospect of Obama
                 Socialism in America.  It took real willpower not to pat it
                 on the hand and say "It's ok, we've all known this about you
                 for a while now.  There's nothing to be ashamed of."
              \_ Yeah, that damn socialist might bail out the largest
                 insurance company in the world, or *nationalize the banks*!
                 Oh wait...
        \_ sorry about my earlier post where I had written something like "get
           rid of 50% more on some multi-week rally". I had originally meant to
           write "get rid of 50% on some rally which may last from 1 day to
           a few months".  I'm sticking to my original thesis:  this fucker can
           collapse at ANY moment, and, you may see REAL panic selling, and
           panic or not, the strong likelihood is it's going down. -op
           \_ I bought today. If tomorrow is a bad day I will buy more. I'm
              making money with these fluctuations by trading, but I still
              have the majority of my $$$ "buy and hold". I'm down on the
              year because of that, but I'm not 64 so I don't sweat it.
              \_ an excellent way to approach this.  as long as you have a
                 model.  i'm all in favor of keeping 80% in "safety", and 20%
                 doing whatever the hell you want.  although I would have
                 liquidated that 80% a few weeks ago when I mentioned it and
                 had it ready to buy now at lower prices.
                 \_ "Had it ready" is not the same as buying. Or is it?
                    \_ let's put it this way:  if you had sold when I said, you
                       would currently be very right.
                       \_ I don't believe you (or anyone else) can time
                          the markets. However, you can do an analysis and
                          realize that a global recession isn't the end of
                          corporate earnings for many, many businesses and
                          that the markets are reacting to fear and uncertainty
                          instead of acting rationally. That's the time to
                          make smart purchases. Many companies might see
                          growth slow or sales decline, but that doesn't
                          necessarily dictate a 50% drop in stock value. I
                          wouldn't touch most banks with a 10 foot pole
                          right now, but people are still going to drink
                          beer, get laid, buy aspirin, etc. KO (which I do
                          not own) fell 34% this year because why? No good
                          reason. Even if sales slowed a little (which they
                          didn't) you've got to be kidding me... You wait
                          for the rally to buy. I'll buy before the rally
                          and lock in some really nice dividend yields
                          while I'm at it. I figure in another 10-15 years
                          my dividends will be yielding double figures based
                          on what I bought some stocks for. Some are
                          already close. Sure, the dividends might be cut
                          some near-term, but I don't sweat that.
                          \_ see my post "clearly what I am saying".  I agree
                             with you on many points, actually.  the biggest
                             place where we differ is what "timing the market"
                             means, but we can agree to disagree.
                          \_ What do Soros and Buffett do except time the
                             \_ I don't know about Soros, but Buffett
                                looks at long-term potential and doesn't
                                worry about what the markets overall will do
                                tomorrow or 3 months from now.
                                \_ He holds onto his cash and waits to buy
                                   when he sees good values. I don't know how
                                   you can call that anything but "timing."
              \_ I'm on the same boat as you are, and I can hold for a very
                 long time, though if the market goes down 15% more,
                 I'd be a little bit worried because I'd have to keep
                 buying until... I run out, and god knows how low it's
                 gonna get. My gutsy feeling is that we're already hitting
                 the bottom, though, if it goes down say, 30-50% more,
                 I'd be very very anxious. But like you said, I'm not 64
                 so I got a few decades to wait, so that is good news.
           \_ This is called "testing the bottom."
              \_ clearly what I am saying is that there is a strong likelihood
                 that bottom will fail from 1 day to x months from now.  that's
                 a thesis that may be totally wrong, but i do believe it.
                 I also believe there is great merit to the "buy well-
                 diversified value stocks in businesses you understand" model
                 of investment--there's nothing wrong with that.  Index and
                 targeted retirement funds though ...
                 of investment--there's nothing wrong with that.  to put it
                 most clearly, the conclusion one could have reached not too
                 long ago was:  "My investments are excellent and diversified.
                 The stock will outperform.  However, the market is
                 overleveraged, and as funds and other financial entities
                 delever out of the market to raise cash in a multi-year,
                 global credit deleveraging (with all its associated nastiness)
                 I will move out into cash and replace it into the same stocks
                 at a lower entry point, maximizing my long-term compounded
                 gains.  When is that entry point?  Well, let's start with
                 the idea that it's a multi-year slow down ..."
                 btw, I'm also the guy who posted about traders expecting a
                 bounce tomorrow, Fri, or both, as Fri is OpEx day.  Yes, I'm
                 playing with my 20% money.
                 bounce tomorrow, Fri, or both, as Fri is OpEx day.
                 today, funds shat out of overlevered energy and commodity
                 based equity investments at a "high price", because they
                 believe in the multi-year thesis too.
                 I wonder how long it will take to purge all the levered
                 emerging market bets.
                 \_ What makes you believe that there are levered EM bets?
                    To me, China looks like it has the healthiest balance sheet
                    of any economy period right now.
                    \_ EM in general will continue to get super-smacked by
                       credit deleveraging.  as far as fund investment, "hot"
                       areas, like energy, commods and EM, were all levered up.
                       what i said was that, of these 3, EM has furthest to go
                       \_ Why do you think that EM is levered? You still have
                          not answered this question, just restated that you
                          are convinced that it is true. Stocks generally
                          are hard to leverage, unlike those other asset
                          \_ okay you got me there.  all i've got is that
                             general feeling based on the forums I troll.
2008/10/15-17 [Finance/Investment] UID:51534 Activity:nil
10/14   Stocks down further. Are you avoiding a falling knife, or
        or going in because it may have bottomed out already? Discuss.
        \_ You worry about those fighters! I'll worry about the tower! <groan>
           \_ Millenium Falcon == bond traders/market
        \_ Traders are expecting Thu, Fri, or both to be significant "up"
           days as Fri is an OpEx day.  Sticksave announcements or significant
           LIBOR contraction therefore need to happen from now through Monday
           morning for us to keep this propped up.  (what we do not need is
           another bank/country going critical).  Economic numbers were
           horrible this morning.
           \_ What does OpEx mean? Options Expiry?
2008/10/14-17 [Finance, Finance/Investment] UID:51515 Activity:low
10/14   Too much debt from law school? Be a prostitute!
        \_ This link is not working?
        \_ Clearly the lesson here is that you should only study something
           if you're rich!
           \_ heard of "Go to grad school only if you can afford it" ?
              \_ In what way does your statement contradict mine?
        \_ At least it's honest work.
        \_ Bah, they're getting her on tax evasion!  Fer chrissake.
        \_ I love how she ended up marrying a rich Dot Commer. I personally
           would have liked to hit that.
           \_ That link doesn't work.
              This does:
              It would be nice to screw a lawyer instead of the opposite
              for a change.
              \_ Weird, it worked this morning. Someone must have gotten
                 it pulled.
2008/10/13-15 [Finance/Investment] UID:51495 Activity:nil 63%like:51494
10/13   Paul Krugman's Nobel Prize, you heard it here first:
        *Boredcast Message from 'psb': Tue Oct  7 13:13:54 2008
        || i wonder if the nobel people will give PKRUGMAN the econ prize
        || as a way of sticking it to BUSHCO
        || well the econ nobel people
        Good informal commentary at:
 [tyler cowan]
        This is also an intereting essay for PK fans:

        Given all the yammering from Ben Stein lately, it is time to
        recycle this:

        \_ The already insane have gone insane:
2008/10/13-15 [Politics/Foreign/Canada, Finance/Investment] UID:51492 Activity:low
10/12   Is a good website to trade precious metal with?
        \_ How many manhole covers did you steal today? :-)
           \_ Are you trying to be funny? How is this "clever" or "funny"?
2008/10/11-15 [Industry/Startup, Finance/Investment] UID:51477 Activity:nil
10/11   "Firms Try to Shore Up Incentive Pay"
        Good news for us.
2008/10/10-15 [Finance/Banking, Finance/Investment] UID:51472 Activity:nil
        The Economy is just fine, really.
2008/10/8-9 [Finance/Investment] UID:51439 Activity:nil
10/8    Stock market finally getting to about where it should be
        \_ This person is an idiot.  Even he is right about this (which I
           doubt).  For instance he also is a global warming denier.
        \_ So should I buy stocks now? It's so low and tempting...
2008/10/8-9 [Reference/RealEstate, Finance/Investment] UID:51438 Activity:nil
10/8    Fed cuts interest rate by 1.5%. It's going to save the housing
        market! Yeah baby! Good job! Make America an ownership society!
2008/10/8-9 [Finance, Finance/Investment] UID:51437 Activity:low
10/8    Curious, how does our economy today compare to Japan's economy
        10-15 years ago? I heard that they had a housing crises as well
        in the old days where home values dropped over 50% of the value
        and had an extended (decade long) recession. Is this true? What
        are some similarities and differences between our current economy
        and Japan's economy 10-15 years ago?
        \_ U.S.:  No savers, reserve currency, natural resources, WMDs
           Japan:  Savers, carry currency, export driven, no WMDs
           Common:  Housing bubble, equity bubble, zombie banks
           \_ Not bad. You get a B+.
        \_ A big difference is that Japan has declining population, with
           low birth rates and virtually no immigration.  -tom
        \_ Japan has no gay people, just like Iran.
           \_  BTW what does this have to do with
              their economy anyway?
              \_ We should be able to export gay porn and build our economy
                 that way, an option that was not open to the Japanese.
                 \_ Have you heard of yaoi?
2008/10/8-9 [Finance/Banking, Finance/Investment] UID:51429 Activity:kinda low 80%like:51427
10/8    Coordinated intl rate cuts
        Ten year note up significantly even though equities down
          -> potential "game over" (or ass-raping) scenario
        In case anyone didn't see it yet, please see "Stock tip 3" from two
        days ago
        \_ I asked and he doesn't know what he's talking about. Now what?
           You didn't give a single advice.
           \_ well, my advice from 3 weeks ago was for the desired safe part
              of your portfolio to be out 33% at 11388.  I said back then that
              this market could shitnap at any time so it was time to sell the
              pop the next day.
              My advice in "Stock tip 3" is:  Don't go "all-in long" now in
              case you're thinking about it.
              Should you sell now, now that we're down to 9,270?  It's your
              call, but do your research and ask me a fundamentals question.
              At this point I won't tell you to sell (but I will tell you to
              "don't buy" index funds or the equivalent).
              Actually, I will say I would go 80% into safe money right the
              fuck now, but I'm not going to tell you to do that.  It's your
              \_ I think it's time to buy. The market has overreacted.
                 \_ dude, the tip is:  LEH CDS settlement in TWO FUCKING DAYS.
                    you don't hear this in mainstream news.  i haven't been
                    playing a game with you guys for the last three months.
                    \_ what is LEH CDS
                       \_ lehman credit default swap settlement
                          financial institutions (including insurance co.'s)
                          will need significant cash to pay off insurance on
                          Lehman debt and other securities as a result of LEH
                          bankruptcy.  these swaps are held around the world.
                          \_ oh i thought that all got sold to barclays
                             \_ only brokerage piece, because that has a whole
                                bunch of regular-investor money, I believe
                    \_ This is already priced in, imho.
                       \_ okay, I'm glad you're thinking though.  IMO you
                          stand a better chance than people who haven't done
                          enough research to confidently say that.
                          \_ do you think the solvent finance firms will ask
                             for a gov. loan to help cover the costs of buying
                             the former assets of Lehman at firesale prices?
                             that would be ironic.
                             \_ if no one objects, sure!  solvent financial
                                entities will be getting a whole lot of free
                                money. -op
                           \_ Well, I thought so last week and I was obviously
                              wrong. I am about 90% in right now and really
                              itching to go "all in" but the 10% that is still
                              out is my wife's IRA and she won't give the go
                              ahead. At some point I will start selling bonds
                              and buying stock, but I will probably wait until
                              Q1 for that. To clarify, I mean "all in" for the
                              65% of my capital that I risk in the equity
                              markets. I always keep about 6 months cash (that
                              works out to about 10%) 10% in US Bonds and 15%
                              in CA munis.
                              \_ marital bliss >> possible equity gain
                                 besides, you already are 90% in.  you'll be
                                 a hero if you can sell at a good price.
                                 a hero if you can sell at profit.
                                 \_ I am pretty sure that by the time I
                                    retire the stock market will be higher
                                    than it is today.
                                    \_ ^will be higher^return better than CD
                                       rates -op
                                       \_ Since the dividend yield on the SPY
                                          alone is equal to current CD
                                          alone is close to current CD
                                          rates, it is hard to imagine how
                                          I could go wrong. I guess all the
                                          companies in the S&P 500 could cut
                                          or eliminate dividends.
2008/10/8-9 [Finance/Investment] UID:51428 Activity:nil
10/8    By the time the next president takes office, President George W. Bush
        may have earned the dubious honor of being the first president to see
        the Dow Jones Industrial Average fall, on a percentage basis, during
        his two terms of service, in almost 90 years.
        \) what's the point of saying "on a percentage basis"?
        \_ what's the point of saying "on a percentage basis"?
        \_ The Dow never fell before?
2008/10/8 [Finance/Investment] UID:51427 Activity:nil 80%like:51429
10/8    Coordinated intl rate cuts
        In case anyone didn't see it yet, please see "Stock tip 3" from two
        days ago
        \_ I asked and he doesn't know what he's talking about. Now what?
           You didn't give a single advice.
           \_ well, my advice from two weeks ago was for the desired safe part
              of your portfolio to be out 33% at 11388.
2008/10/7-9 [Finance/Investment] UID:51412 Activity:nil
10/6    Stock prices are really low. Is now a good time to buy stocks?
        GOOG is only $350 now. What do you guys think?
        \_ I think it's going to go lower.
        \_ If you're going to invest in stocks right now, your primary
           consideration should be that the companies you invest in
           should be companies which are likely to survive or thrive in
           an extended economic downturn.  My guess would be that this
           market is going to go down more before it goes up, but I
           wouldn't bother trying to time it; invest in good companies
           and you'll be OK.  -tom
        \_ like tom wrote, just see how TM did relative to the Nikkei 225 from
           it's peak.  use
           its peak.  use  ob TM != GOOG, but someone find
           a better example.
2008/10/7-9 [Finance/Investment] UID:51411 Activity:nil
10/6    Financial advice from our good 'ol Ben Stein:
        \_ Finally a reason to agree with Ben Stein, at least mostly.
           \_ A broken clock is right twice a day.  I'm sure Stein supported
              most of the things he's now decrying.  -tom
              \_ ob the asspounding he was getting for the last year or
                 so on finance segments
              \_ Total agreement. -pp
2008/10/6-9 [Finance/Investment, Finance/Banking] UID:51397 Activity:nil
10/6    Stock tip 3:  Ask your professional financial advisor how "LEH CDS
        settlement this Friday might affect my portfolio".  If he doesn't
        know what you're talking about ...
2008/10/6-9 [Finance/Investment] UID:51395 Activity:nil
10/6    Jim Cramer:  All Your Stock Are Belong To Us
        \_ Any money you need in the next five years does not belong in the
           stock market. This is always true, not just today.
2008/10/6-9 [Finance/Investment] UID:51393 Activity:low
        35-year-old former Goldman VP Neel Kashkari to head new dept in charge
        of $700B bailout fund - known as The Office of Financial Stability
        \_ ob he worked in the IT department! -op
           \_ did he really?
              \_ No. He worked in IT investment securities.
           \_ He should hire Angry Sysadmin to help him.
2008/10/6-9 [Finance/Investment] UID:51392 Activity:nil
10/5    This American Life has a great (and extremely scary) podcast on
        the commercial paper market, credit default swaps, and the current
        financial armageddon.  Worth an hour of your time...
        \_ one important mistake early in the program:
           the host says no one wants to buy MBS/CDO.  This is not correct.
           the banks don't want to sell them at market prices, because then
           they wouldn't have assets to mark to model with.  so, the govt
           gives them free money and everyone's golden.
           \_ Most of the program was about CDS, not MBS.  This is an
              important distinction.
              \_ true.  but he can't fuck up the MBS/CDO intro.
        \_ also, if you have iTunes go look up Bloomberg on the Economy
           podcast, the one with Nouriel Roubini last week.  It's even better
           \_ Is that the NYU economist who thinks we're all headed for
              the Stone Age next year?  That guy is really depressing.  I
              hope he's not right.
              \_ Stone Age?  He said in the show that he's long equities and
                 does not believe in timing the market.  Go listen.  What have
                 you learned about trading stocks if not:  Don't get emotional.
2008/10/5-9 [Recreation/Dating, Finance/Investment] UID:51385 Activity:nil
        Behold, the list of companies affected by LEH bankruptcy and the
        cash amounts.  CDS settlement this Friday!
2008/10/3-6 [Industry/Startup, Finance/Investment] UID:51367 Activity:nil
10/3    Stock tip 2:  Lifetime of this pump will be much more short lived
        than people might expect.  (I.e., do not go all in long, although you
        could do so if you put in some stops--but that isn't long, is it?
        times like this are where the phrase "don't try to time the market"
        originate from)
        \_ Stock tip A: VIX levels like this are only seen at the top or the
           bottom of the market. We know we are not at the top, so...
           \_ Stock tip mu: Ignore stock advice based on technical factors
              given by random hosers.
           \_ VIX is a measure of put and call options based on volume and
              difference from fair value.  Notice how shorts are prohibited
              for about a 1,000 stocks?  They're all in options now.  Stock
              tip mu guy is right--you'd be hosed if you didn't understand
              this. -op
              \_ VIX has nothing to do with "fair value" whatever that means:
                    ok, probably the wrong term, but let's just say, "the
                    current market price of the underlying"
        \_ Lifetime of the pump after House passage was assured: 0 minutes. -op
2008/10/3-6 [Finance/Banking, Finance/Investment] UID:51363 Activity:nil
10/3    House passes bailout by significant margin.  Guys, THINK about your
        long-term equity investments.  You'll have PLENTY of people to blame
        in the near future, but where will your money have gone?  Please
        consider the advice of a professional financial advisor, too, but
        in the end, it's YOUR MONEY.
        Practical advice:  If you're not sure, move part into safety.
        \_ Coherence isn't your strong point is it?
           \_ WHAT is your problem dude?
        \_ At 3% CD rates, subtracting taxes and inflation, you are losing
           about 2%/yr with your cash position. This is a guaranteed way
           to end up poor in your old age. Is that what you want? I have
           gone from 0->$1M in 10 years, how have you done?
           \_ Past performance is not a predictor of future results.  The
              specific reasons why have been what all my posts for the last
              two months have been about.
              I won't argue with you if you are confident in what you're doing.
              Good luck.  I sincerely hope you do well in your investments.
              \_ Good luck to you, too. I think you should spend some more
                 time thinking about how to hedge against what imho is the
                 inevitable dollar devaluation to come. Sitting in Treasuries
                 is not going to cut it.
                 \_ thanks.  fyi, that's exactly what I'm working on.
                 \_ I am buying lots of TIPS and have for a while now. If
                    the dollar falls then inflation should rise.
                    \_ This is not a bad call, but I assume you know about the
                       "upfront tax" costs of a TIP. This is not an issue in
                       a IRA.
2008/10/2-6 [Finance/Investment] UID:51355 Activity:low
10/2    Prison Mackerel economics
        \- hello the famous paper in this spirit is:
           it is somewhat odd that paper is not referenced in the article.
           it is somewhat odd that paper is not referenced in the article. tnx.
        \_ I'd love to pay strippers with mackerels
        \_ I love the idea that it was chosen as currency because noone
           actually wants to eat that crap.
           \_ I don't get that part.  Cigs were used because they were
              extremely valuable to many people.  Why would you use something
              with no particular value, that isn't backed up by anything?
              \_ If you think of cigs as the gold standard, mackerels are now
                 more of a free-floating economy. That said, they're very
                 similar to greenbacks: they're not in infinite supply; they
                 have no intrinsic value by themselves, though they _can_ be
                 eaten if it comes to that (much as you _can_ heat or wall-
                 paper your house with dollar bills if it comes to that); and
                 they can be traded for services because there are people who
                 will pretend that they have value. Added bonus: they're of
                 use and value as themselves to people who want to build
                 muscle, so you're getting in the good graces of big dudes
                 when you trade them to them. Big dudes are their own kind of
                 currency in the joint.
        \_ So wait, smokers who go to prison my immediately go cold turkey now?
2008/10/2-6 [Finance/Investment] UID:51348 Activity:low
10/2    Why is it I see on TV about all the J6P's talking about how their
        401(k) has blown up implying they couldn't do anything about it.  Like
        they didn't realize they could login (or call their broker) and
        transfer some or all into the 401(k)'s money market fund?
        Well, you guys, Berkeley grads, know you can do that right?
        I'm talking about 401(k), not IRA or your personal stock portfolio.
        \_ Yes they can transfer, but isn't it too late to transfer after it
           has blown up?
           \_ well, guess it was more of a rhetorical question.  I already have
              my own answer.  anyways, investment tip guys:
              "repricing of U.S. credit" - you may be hearing this in the
              future.  I have not read this phrase anywhere else, yet. (in
              fact there are 0 phrase matches on google)
              (disclaimer:  this is not a suggestion to plow everything into
              random foreign stock markets.  instead, you are all berkeley
              grads and can create your own model about how this will evidence
              itself in market indicators and impacts your investments.)
              \_ What do you think this will do to the value of the dollar?
                 \_ in the short term, the value of the dollar is being
                    driven up by financial entities delevering dollar-denom
                    investments and fear that more european banks won't survive
                    the delevering.  in the medium term ...
                    also keep in mind that smart money right now is trying
                    to figure out if there is anything safer than long-term
                    U.S. Treasuries (and there may not be--but the general
                    hedge of reallocation has been going on for some time)
                    hedge of reallocation has been going on for ~1-2 yrs)
                    \_ The "smart money" was busy buying MBS last year.
                       \_ and the 3-5 years before that (volume wise).  the
                          topic is not whether this is "smart", but how you
                          stay ahead of the game.
        \_ Not every 401k is the same. For instance, at my old company the
           only 401k option was company stock. Not all are so restrictive,
           but there are at least some without a money market or equivalent
2008/10/2-4 [Finance, Finance/Investment] UID:51344 Activity:nil
10/1    "Maria Sharapova could be yours for a cool $10,000" - Y! Sports Blogs
        So affordable.  I wonder what the rate is for not-cute-but-busty
        Serena Williams.
2008/9/30-10/4 [Finance/Investment] UID:51332 Activity:nil
9/30    Mommy, why is GOOG closing at 320 in my brokerage account and why is showing it real-time as 298, both with spike
        volume at the close?  At least NASDAQ is investigating ...
        ob GOOG to 100 guy, was that you?
        \_ official closing price of 341 -op
        \_ NASDAQ busts all trades below $400 at close.  Official close is
           $400.52. -op
        \_ Yeah, I finally covered my short at a small gain. Damn that NASDAQ!
2008/9/24-29 [Finance/Investment] UID:51274 Activity:nil
9/23    btw, the 9/23 video for is pretty good
2008/9/23-29 [Finance/Investment] UID:51268 Activity:nil
9/23    hey bought GS @ 100 guy.  Mr. Buffett is buying preferreds.  Time to
        sell before everyone realizes that preferreds are dilutative.
        (Good job.)
        \_ You know, I might just do that. I was buying an IB, not a bank.
           \_ Should have sold at $135.
              \_ It is trading at $135 in afterhours, you know.
              \_ It is trading at $135 in afterhours, you know. I'll call
                 my broker and dump it.
                 \_ I didn't know, but sounds like a good time to get out.
                    You can always buy back in if you feel this is a
                    long-term hold, but if you just wanted a trade I'd
                    bail with the 35% gain.
2008/9/23-29 [Finance/Banking, Finance/Investment] UID:51267 Activity:nil
9/22    Roaring 20s       --> Great Depression
        Roaring Millenium --> Great Depression II
        \_ does our state have a BUDGET yet?
           More concerning is we are about to hand $700B to one person and our
           Fed chief Ben Bernanke fully supports this idea--and if you Dems,
           Republicans, and libertarians haven't figured out by now:
           He who controls the money has the power.
           \_ Oh, I get it!  In our crisis, we're appointing a Dictator.
              \_ but he knows much more about finances than you do and he wants
                 to help you
                 \_ Right after he helps himself and his former i-banking
                    \_ but Ben Bernanke supports the plan, and he has a Ph.D.
                       in Economics from MIT, did his dissertation on the Great
                       Depression, got his B.S. in Economics from Harvard, was
                       class valedictorian and got the highest score on the SAT
                       in his state when he took it.  He wrote three books on
                       macroeconomics!  He chaired the Princeton Economics dept
                       for 7 years before joining the Fed!
                       \_ Obviously smart and probably knows much more about
                          economics than I do. Perhaps not very wise, though.
                       \_ the idea that turning ONE knob in a stereo
                          system to make it sound pleasing to everyone,
                          is ridiculous.
                          \_ huh?
                       \_ Hey, we could have had Harriet Miers.
                       \_ Should he have seen this coming? He sure didn't
                          seem to from his past comments. Not that I'm blaming
                          him per se, since this is really complicated and
                          unpredictable stuff, but I don't feel like any of
                          these guys are sure how this plan is really going
                          to turn out. So it's basically a $700 B hunch/prayer.
                          \_ "Large amounts of risk, particularly
                             credit risk, have become concentrated in
                             the hands of relatively few derivatives
                             dealers, who in addition trade
                             extensively with one other. The troubles
                             of one could quickly infect the others....
                             [leveraged] derivatives severely curtail
                             the ability of regulators to curb
                             leverage and generally get their arms
                             around the risk profiles of banks,
                             insurers and other financial
                             institutions. Similarly, even experienced
                             investors and analysts encounter major
                             problems in analyzing the financial
                             condition of firms that are heavily
                             involved with derivatives contracts.  The
                             derivatives genie is now well out of the
                             bottle, and these instruments will almost
                             certainly multiply in variety and number
                             until some event makes their toxicity
                             clear. Central banks and governments have
                             so far found no effective way to control,
                             or even monitor, the risks posed by these
                             contracts. In my view, derivatives are
                             financial weapons of mass destruction,
                             carrying dangers that, while now latent,
                             are potentially lethal."  --Warren
                             Buffett, 2002
                             [Yes, he should have seen it coming.  -tom]
                             \_ Predictions are all fine and good, and someone
                                is bound to get it right, but I don't think
                                anyone really saw it coming to this extent.
                                \_ Buffett wasn't making a prediction;
                                   he was describing a risk.  A large
                                   portion of his business is managing
                                   risk, and he's very good at it.  He
                                   didn't say "in fall 2007, some
                                   weird activity by hedge funds will
                                   trigger a liquidity crisis which
                                   will eventually cause multiple
                                   major financial institutions to
                                   fail during calendar 2008."  He simply
                                   pointed out that the proliferation of
                                   derivitive contracts in a deregulated
                                   financial market set up a situation where
                                   numerous institutions were taking on
                                   risks they could not measure, and
                                   declaring assets they could not quantify,
                                   and that it was likely that some trigger
                                   event would cause massive problems for
                                   the entire industry.  And it's not like
                                   there wasn't any warning; the LTCM bailout
                                   was a foreshock that was pretty much
                                   ignored.   -tom
                                   \_ He described a risk and predicted it
                                      would cause pain in the industry. I'm
                                      just saying no one really thought it
                                      would cause this much pain. Anyway,
                                      back to the real point -- if the guys
                                      on top didn't clearly see this coming,
                                      then they probably don't clearly see
                                      a way out.
                                      \_ Or more likely, they just didn't care,
                                         since it's "not my problem."
                                         \_ The Invisible Hand will take care
                                            of it.
2008/9/22-29 [Finance/Investment] UID:51259 Activity:nil
9/22    What caused the Great Depression? Is it happening now?
2008/9/22-23 [Finance/Banking, Finance/Investment] UID:51254 Activity:kinda low
9/21    Krugman on the Paulson "Plan":
        "... it will be crippled by inadequate capital unless the federal
        government hugely overpays for the assets it buys, giving financial
        firms — and their stockholders and executives — a giant windfall at
        taxpayer expense....if the government is going to provide capital to
        financial firms, it should get what people who provide capital are
        entitled to — a share in ownership, so that all the gains if the
        rescue plan works don’t go to the people who made the mess in the
        first place."
        \- i dont think PAULSON is too bad, but this clearly has to be
           decided by more than 1-2 people no matter who they are. and this
           is one case where diversity would be a good thing, i.e. not ideal
           if the dems say shoved RRUBIN into the process [also a GS elite
           then to citgroup] ... better to have LSUMMERS, NROUBINI, PVOLKER,
           JSTIGLITZ and various other non-tainted, not-super-ideological
           finance or macro academics ... probably cant involve people now
           in the private sector like MDELRAN].
        \_ I'd be all for this if they included a provision limiting the pay
           of every employee of these firms to 100k, just this year.
2008/9/19-23 [Politics/Foreign/Europe, Finance/Investment] UID:51240 Activity:nil
9/19    bumped for discussion:
        \_ My financial advisor says to not try and time the market.
           \_ what else did your financial advisor say?  did you ask them about
              getting more of your portfolio into safer, lower yielding assets?
              \_ No, actually he told me that the latest recommendations for
                 someone my age was to be 50% in overseas stocks. He also seems
                 to think that I have a bit too much in dividend paying blue
                 chips and that I should buy more small caps, but he hasn't
                 said anything like that in a few months. He also said that
                 there was no reason to be concerned about Pimco Total Return
                 anymore, since the Fed guaranteed all the FNM debt.
                 \_ re PIMCO Total Return:
                    - ask him why funds seem to be selling agency paper this
                      week if there is no risk
                    - ask him what about the MBSs inside
                    re overseas:
                    - what is the breakdown by country/region?
                      \_ Can regular individual give PIMCO money to manage
                         or is it just for the super-rich and institutions?
                         \_ Anyone can buy Pimco Total Return, it is the
                            largest fund overall, in terms of assets. Ticker
                            is PTRAX.
                     \_ Get him as your advisor yourself and ask him all these
                        questions if you are so curious. Who told you that
                        funds are selling all this agency paper? I just looked
                        and it looks like PTRAX is 80% in cash right now
                        anyway. I will eventually ask him the country by
                        country breakdown, probably by email next week. If
                        you are curious, I can post it to the motd.
2008/9/18-23 [Finance/Investment] UID:51230 Activity:kinda low
9/18    Here's your pop.  This may last from 1 to x days/months.  Please
        consult a professional financial advisor.
        (I personally would sell ~15% of whatever I wanted to end up being safe
        on tomorrow's peak, and more later if the market continued up.  This
        RTC plan is going to levitate the market again for an undetermined
        amount of time *if* it gets implemented.  if it gets held up ...)
        \_ When will be the peak tomorrow?
           \_ Today was +3.86% in DJIA.  Expect up to +4%, then look for
              resistance on upward movement.  Largest volume occurs in the last
              1-2 hours, so you could wait for that too.
              Then again, remember I said we can shitnap at any time, starting
           \_ Today was +3.86% in DJIA.  Expect +0 to +4%, then look for
              resistance on upward movement.  Finally, largest volume occurs
              in the last 1-2 hours, so you could wait for that too.
              Then again, remember I said we can shitnap at anytime, starting
              My personal opinion based on what I know and not based on
              technical analysis is "the dislocation is going to happen
              sooner than people think".  What this means is I would be out
              16% tomorrow on a +2% pop and 16% every other day there is a
              +2% pop from my last sale price, six times, until I am 100% safe.
              That is, if I wanted 80% safe I would be moving 16% of that
              80% on each move.  And my 20% whatever the hell I wanted to do
              with it.  fyi if you do the math this means I would be completely
              done with my 80% safety portfolio at DJIA 12,388.  I hope you
              will get the chance to liquidate 66% (4 moves out of 6).
              You can modify to suit your tastes, but the generail idea is:
              - You believe this will be a temporary uptrend
              - You have a disciplined plan to re-allocate
              - You don't swing in and out of trades
              - You're not putting MORE money into stocks other than in the
                speculative side of your portfolio
              - You have some model of where you will re-enter markets again,
                like the 50DMA/200DMA +1% cross that I mentioned
              All of the above is worth what you paid for it:  Please consult
              a professional financial advisor.
              \_ My financial advisor says to not try and time the market.
2008/9/18-19 [Computer/Rants, Finance/Investment] UID:51223 Activity:kinda low
9/18    Easy advice 2.  If you have PIMCO, please consult a professional
        financial advisor about whether to move ALL of that PIMCO money into
        cash or a mostly Treasury-backed bond fund (note to avoid agency paper,
        MBS, and swaps with major banks, ESPECIALLY investment banks).
        I got my wife to sell all her PIMCO today; I originally said to sell
        after the FNM/FRE bailout.
        Also read today's latest PIMCO news and how Bill Gross is feeling.
        Yes, a lot of institutional funds (including pension/retirement) have
        \_ There are a lot of different Pimco funds, what are you talking
           about? All of them?
           \_ the ones with lots of MBS and agency paper.  Total Return is one.
              \_ I see your point, though this stuff looks like it is
                 backed by the US government at this point. How is it
                 different than a T-Bill?
2008/9/17-19 [Finance/Investment] UID:51207 Activity:high
9/17    Guys, several days ago I posted (not on soda) that confidence was
        severely shaken in the financial markets and this effect would be
        Today, there is almost a sense of panic among U.S. investment bankers,
        traders, and politicians in the finance/banking committees.
        You know what white collar workers are thinking by virtue of
        being one.
        Note I am not telling you what to do, just giving you data points.
        \_ I believe in the 2G currency in our new economy: gold and guns
        \_ What exactly will this lower confidence mean?  What exactly does
           "confidence in the financial markets" mean?
           \_ -op
              \_ Ok, America government is totally fucked. What is new?
                 Should we stock up food and ammos? What's your advice?
                 \_ you've been given the tools.  i posted to motd at least
                    three times on 8/21, 8/22, and 9/10 about this, and I got
                    yelled at then and I got yelled at after the market
                    dropped.  i posted because i would've felt guilty if i
                    didn't give you guys a warning.  i did, three times.  i
                    have not gloated at all.  what should you do?  do some
                    research, and come back in a few days with a proposal -op
                    \_ 1) Liquidate
                       2} Buy bonds
                       3) open up Swiss accounts
              \_ I like the Find Your Russian Beauty ad to the right.
        \_ I bought 100 shares of GS for $100 today. All kinds of stocks are
           on discount, I can barely contain myself. "Be greedy when others
           are fearful." -Warren Buffet
           on discount, I can barely contain myself. Anyone with half a brain
           takes this as an opportunity to buy. "Be Greedy When Others Are
           Fearful" - Warren Buffet
           \_ That assumes you know something other people don't.
              Investors are punishing all financials now because no one knows
              who's telling the truth anymore. Do you have inside sources or
              do a lot of your own research? Otherwise you might want
              to stick to a more diversified strategy.
              \_ hey, he's up $14.  Well, only $10 if you count afterhours.
                 who knows, if the stock goes up to $130 tomorrow that's a
                 $30K profit.
                 \_ You added a zero.
                    \_ oops, should be $3K.  silly me I thought he put in
                       $100K into GS.
              \_ I know that Paulson, who is an ex-CEO of GS, is the Secretary
                 of the Treasury. I know enough about how Wall Street (and the
                 world in general) to know that he won't let his former pals
                 down. I also know that it is better to move contrary to the
                 herd, having sold my overinflated <DEAD><DEAD> stock in 2000. But
                 I sometimes move early, I admit.
                 \_ You might be interested to know that Warren Buffet is
                    not buying investment banks right now. The rumor is
                    that he called them a "falling knife". I considered buying
                    GS, but I think their prospects are uncertain. People on
                    Wall Street think we are not near the end of this mess. As
                    far as GS fell, they are still only at a 3 year low. What
                    you need to do is buy stocks that fell because of sheer
                    sympathy and I don't think that qualifies GS.
                    \_ Yeah, this one is "mad money" and is already down
                       again today. I am mostly in boring dividend paying
                       stocks like KO and PM and GE. Got any other suggestions?
                       \_ MON?
                       \_ I heard GE gets over 50% of its profits, revenue, or
                          something from its finance divisions. Which is
                          probably why it got punished more than you'd
                          otherwise expect.
                          \- are you thinking of GE capital? GE capital isnt
                             finance in teh sense of retail loans and such.
                             for example they used to own a huge fraction of
                             shipping containers in the world.
                          \_ Where did you hear that? I read in the WSJ that
                             they got 25% of their profits from that division
                             last year, so that part might be down. It is still
                             a steal at current prices. I just bought some
                             EWG, too.
                       \_ I'd say GS starts to get interesting in the low 90s
                          and is a definite buy at 85.
                          \_ How did you calculate those price points?
                          \_ It's up to $135 now. WTF in their right mind
                             would buy at $135 in this market? Sure, it's
                             lower than it was but no effing way. I am
                             curious if the guy who bought at $100 is out now.
                             \_ No, I am just happy that I got some stock in
                                such a great institution at such a low price.
                                Though I am temted to sell some calls at this
                                level to lock in some of my gain.
2008/9/17-19 [Finance/Investment] UID:51204 Activity:nil
9/17    Okay, easy stuff first.  If you are invested in a "targeted retirement"
        fund (where it auto-allocates into stocks/bonds/money markets depending
        on your age), it is currently cornholing you in both eye sockets and
        will assfuck you for years to come.  As of this year, new employees are
        auto-enrolled into the 401(k), typically with 100% allocation to this
        type of fund.  This is a SCAM.  Also, I have NOT seen a single news
        article (and I read a lot) criticizing the safety of this type of fund.
        \_ What's your gripe? My only gripe with these types of funds is
           that they are too conservative. I want to be 80% equities now,
           10 years from now, and 10 years into retirement.
           \_ what KIND of equities and bonds are these funds buying ...
              \_ The same kind that other funds are buying. A lot of these
                  targeted funds are "funds of funds".
                 \_ so we're saying the equities ultimately bought should
                    perform at least as well as a DJI or S&P index? (minus fees
                    or if they're being run in a riskier fashion, some amount
                    above or below a DJI/S&P index?  by riskier, I mean you are
                    in a retire-in-30 years fund, so conventional wisdom is not
                    only can they allocate you to more stocks, but they can
                    allocate you into "growth stocks" and "emerging market")
2008/9/15 [Finance/Banking, Industry/Startup, Finance/Investment] UID:51169 Activity:nil 58%like:51173
9/15    Fed now accepts equity (company stock) as collateral for loans.  Yay!
2008/9/11-17 [Finance/Investment] UID:51132 Activity:nil
9/10    Guys, have you moved 50% of your 401(k) and IRA out of equities and
        into high quality bonds or Treasury-based money markets?  I'm not
        kidding.  Here you are, arguing about Obama, McCain, and Palin, and
        your money is disappearing.
        \_ What are you talking about? My portfolio looks fine.
           \_ good.  now what about the rest of you?  all the equity-based
              choices in my 401(k) plan are all negative 3-month and 1-year.
              \_ You're an idiot.
                 \_ are you angry about something?
        \_ You don't think the President has influence over the economy?
           \_ I don't either can stop the multi-year move in equities.
           \_ I don't think either can stop the multi-year move in equities.
        \_ No, I have the same allocation I always have, which is 6 mos
           living expenses in CDs, 20% of my total investment portfolio in
           CA Munis (taxable part, of course) about 10% more in high quality
           bonds and 70% in stocks. I am leaning way toward blue chip dividend
           paying stocks though, but I have been in a multi-year move in that
           direction. I saw the financials ready to blow up over a year ago.
           I am down a bit from the top, but not losing any sleep over it.
           Oh, I also am heavily invested overseas and I recommend you do the
           \_ IMO, your equity allocation is too high (assuming you are in
              index funds), and I personally have been shorting emerging
              I do agree that you aren't too far away from what a professional
              financial advisor would suggest; but I'm saying CFPs are wrong.
              \_ I am not in index funds, as I said, I am leaning heavily
                 towards profitable companies with little debt who pay a
                 big dividend and are either located outside the US or do
                 most of their business outside the US. I am starting to doubt
                 the "great decoupling" theory though.
                 \_ ok.  i hope your portfolio does not get pulled down with
                    the rest of the market (even if they are profitable blue
                    chips with little debt).  FYI, China and Japan are going in
                    the toilet.  European, especially UK banks are arguably in
                    more trouble than the U.S. financial system.
                    \_ I hope you are not still sitting out the month the
                       market goes up 20%, which it inevitably will, sooner
                       or later. How are you going to decide to jump back in?
                       \_ when the 50DMA increases past the 200DMA by 1%
2008/9/11-18 [Finance/Investment] UID:51130 Activity:nil
9/11    Thanks Bushies, for nationalizing F&F to bail out China: (WSJ)
        \_ I think it was a bipartisan failure.
           \_ Congress gave Hank the gun, but isn't Hank the one who fired it?
              Guns don't kill people--people do!
2008/9/8-14 [Finance/Investment] UID:51098 Activity:nil
9/8     My company stock is really low right now and I'd like to buy
        stocks. However, I think I am subject to this "Quiet Period"
        contract I signed. Does the quiet period prohibit me from buying,
        selling, shorting, or all of the above? Where do I find out more
        information? Thanks.
        \_ Read the contract.  -tom
           \_ what tom said.  but generally, if you are not an officer,
              director, or have >= 10% of the company's shares but are a
              regular employee, it is STILL insider trading if you trade
              based on "material non-public information".  In practice this
              means squishing depends on:
              - how closely your bet was to some major product announcement/
              - e-mail evidence of your receipt of non-public info
              - magnitude and rate of stock price change
              - how much money you made
              - how many other people traded on the inside information
              - one data point:  an nvidia engineer got nailed for a $60K
                profit on a trade from ~ $76 -> $118 in which the deal
                announcement was made within 1 week of the buy.  14 other
                nvidia employees were also charged.  that was in 2000.
        \_ you cant but CEO can and that is what he is doing right now
        then he'll buy them back toward the end after you all sold your
        stocks.. then buy them and put out good news to raise stock price
        \_ According to tom CEOs don't buy stock because they are already
           compensated in stock.
2008/8/29-9/3 [Recreation/Food, Finance/Investment] UID:50999 Activity:nil
8/29    I'm a Googler. I'm also one of the most senior Googlers and I
        barely joined in 2005. A bunch of old timers, esp. those before
        2003 dumped their options a while ago. One guy I know became a real
        estate developer. Another started his own coffee shop.  Another guy
        is traveling around the world. There were also quite a few who went
        in stealth mode trying to start their own companies. Ya know, when
        a bunch of old farts realized they could pursue their lifelong dreams
        without financial worries, they simply dumped their stocks and did
        what anyone else would do. Pursuing their dreams. Most of them loved
        pre 2004 Google but wanted to pursue their dreams even more. I presume
        this is common everywhere else even Microsoft in the heydays. People
        may call the liquidation of stocks "insider trading." I think it's
        normal in a successful company that has become too successful. Ya
        know, I joined late and I'm not a millionaire, but if I were in
        their shoes, I'd do the exact same thing. I'd love to open up my own
        coffee shop. I hate tech. Fuck tech. Bye for now.
        \_ Coffee shops are not capital intensive enterprises. You probably can
           own one if you want to. Joe Blow employee is not usually an insider,
           by the way. We're talking about officers, directors, board
           members, and so on.
           \_ But living well on the income from a coffee shop is hard.  It
              is nice to be able to do somthing you want to do and not have
              to worry about making money.
2008/8/26-9/3 [Finance/Investment, Industry/Startup] UID:50970 Activity:moderate
8/26    I just bought GOOG at 500 last week, WHY IS IT DOWN??? What's
        up? I don't see any news that would indicate that it's in
        trouble. Argh!                          -newbie investor
           Opinion: Why Google has lost its mojo -- and why you should care
           Sorry. You should have shorted it.
           \_ that article is awful.
        \_ if you're going to freak out every time a stock you own goes down,
           you shouldn't be investing in the stock market.  What's your
           time horizon on GOOG?  -tom
           \_ I'm looking at maybe 5 years? -op
              \_ So don't worry about the stock price.  Do you think the
                 company has changed since last week?  -tom
                 \_ No, but it's possible sentiment has. GOOG was driven to
                    heights by investor sentiment more than by any actual
                    quantitative analysis. Number of insider buys over
                    the last year: 0. 399 sells, though.
                    \_ GOOG was driven to heights by making enormous gobs
                       of money.  They appear to still be making enormous
                       gobs of money.  If you believe they will stop making
                       money, sell.  If you believe they'll continue to grow
                       and make more money, don't worry about the stock
                       price.  "In the short term, the stock market is a
                       voting machine, in the long term, it's a weighing
                       machine. --Buffett".  -tom
                       \_ Interesting that insiders don't see it as a buy,
                          but as a sell. As for the long term, how did
                          GOOG do 5 years ago? Oh wait, it wasn't around.
                          Nice quote from Buffett. I doubt he owns GOOG.
                          \_ Isn't this what they mean when they say
                             "X continues to defy analysts expectations"?
                          \_ Why would insiders buy, when they already have
                             stock built into their compensation package?
                             And of course insiders sell; that's what
                             happens when you use stock or stock options
                             as part of compensation.  Microsoft had 77k
                             shares purchased, 40 million shares sold by
                             insiders.  That has nothing to do with the
                             propsects of the company; it just has to do
                             with whether people's options are above water
                             or not.  -tom
                             \_ Would you buy if you strongly felt it would
                                double in a year and the market was
                                undervaluing it? I'm not saying it's a
                                predictor necessarily, but 399 sells and 0
                                buys doesn't fill me with warm fuzzies.
                                \_ you really have no idea what you're
                                   talking about.  -tom
                                   \_ Nice rebuttal. Did you spend all day
                                      coming up with that?
                                      Maybe you should read some of these
                                      One of his conclusions:
                                      "This paper provides evidence that
                                      insiders possess, and trade upon,
                                      knowledge of specific and
                                      economically-significant forthcoming
                                      accounting disclosures as long as
                                      two years prior to the disclosure.
                                      Stock sales by insiders increase
                                      three to nine quarters prior to a
                                      break in a string of consecutive
                                      increases in quarterly earnings.
                                      Insider stock sales are greater for
                                      growth firms, before a longer period
                                      of declining earnings, and when the
                                      earnings decline the break is
                                      greater. Consistent with avoiding an
                                      established legal jeopardy, there is
                                      little abnormal selling in the two
                                      quarters immediately prior to the
                                      Another addressing the <DEAD><DEAD> bubble:
                                      "Furthermore, stock corrections
                                      after the bubble burst are strongly
                                      negatively associated with estimated
                                      levels of earnings management and
                                      insider selling during the bubble."
                                      \_ how about this: find a technology
                                         company that uses stock-based
                                         compensation, that has gone up in
                                         stock price over the past year,
                                         that doesn't have a huge amount
                                         of insider selling.   -tom
                                         \_ That's the catch. If the stock
                                            went up significantly then why
                                            would they buy? It's already
                                            higher than their built-in price
                                            target. If you only look at
                                            companies whose stock has gone
                                            up of course you will find few
                                            buyers: It's overpriced! Why not
                                            find one which has few sales, or at
                                            least a better ratio than 399:0?
                                            AAPL has had some inside buyers. I
                                            am not sure GOOG has ever had an
                                            insider buy. (Not that I could
                                            find.) Are you implying this guy's
                                            research is garbage? It implies
                                            that insiders trade on knowledge
                                            they have, which anyone with common
                                            sense would think is a sound
                                            conclusion. Compare AAPL to
                                            GOOG. AAPL has some buyers. I
                                            am not sure GOOG has ever had
                                            an inside buy.
                                            \_ In the last 6 months Apple has
                                               zero insider purchases and
                                               > 1 million shares sold by
                                               insiders (14.6% of the total
                                               insider holdings).  That's
                                               just what happens when stocks
                                               go up.  That doesn't mean the
                                               stock is overpriced; it means
                                               that people are exercising
                                               options and having to sell
                                               to cover taxes, or just taking
                                               profits.  If you are getting
                                               stock-based compensation, it's
                                               probably a stupid idea to
                                               buy more stock in your company;
                                               you should be diversifying.
                                            \_ AAPL has had zero insider buys
                                               and over 1 million shares sold
                                               in the past 6 months (16% of
                                               insider holdings).  That's just
                                               what happens when you have
                                               stock-based compensation; people
                                               sell to cover taxes on their
                                               option exercises, or they just
                                               take profits.  It is generally
                                               stupid to buy stock in your
                                               company when you already get
                                               paid partly in stock; you
                                               should diversify.  -tom
        \_ shouldn't you be shorting GOOG at 100 ?
           \_ I'm not the short GOOG at 100 guy -op, different guy
2008/8/26-9/3 [Finance/Investment] UID:50969 Activity:nil
8/26    I just place limit buy on Etrade for X amount worth of $$$ but I
        don't actually have X amount in the trading account. What would
        happen if the order actually executes? Do I owe Etrade a steep %
        of interest or it gets taken out magically from my savings/checking
        \_ The buy probably doesn't execute, unless you have a margin account
           with them.
        \_ I'm going to guess that you get as many shares as you have $$$
           for, but it's possible it will execute and you will have to
           fund the account ASAP (plus fees, I'm sure). This will depend
           on your brokerage, so ask them and not us.
2008/8/15-21 [Finance/Investment, Science/GlobalWarming] UID:50873 Activity:nil
        He buried the lede:
        "The purchasing power of the typical worker has now fallen back to
         1998 levels, despite a 29% increase in productivity over that period."
        \_ It's just another sign of the ongoing third-worldization of the
           US.  Concentration of wealth in the hands of the elite, less
           social mobility, no middle class, decreased access to medicine
           and education.  Third-worldization.
           \_ *yawn*
           \_ Excellent ... - mr. burns
           \_ This only happens when the Republicans are in power. Hopefully
              not for too much longer.
2008/8/12-18 [Finance/CC, Finance/Investment] UID:50852 Activity:high
8/11    Our Phony Economy
        \_ This is an outstanding article.  My hope for Obama is that
           he could become the first serious politician on either side
           of the aisle to challenge the assumption that GDP growth shoulds
           of the aisle to challenge the assumption that GDP growth should
           be our primary metric of success.  -tom
           \_ Success is how many countries we can free from TYRANTS
              and AXIS OF EVIL in this world.
           \_ Given the success of a $ measurement of "the economy", perhaps
              the fix is to provide $ values for the things that have been
              left out?  Estimates of the value of "health", "environment"
              and "resources"?
           \_ This article doesn't mention any concepts not taught in Econ 1.
              Every economist knows these things. I'm not sure what's so
              great about the article or how it really addresses what's
              wrong with measuring the growth of the economy via GDP. An
              $800 pair of shoes *does* contribute 40x more to the economy
              than a $20 pair of shoes.
              \_ Proving you don't know what you are talking about.  If I buy
                 an 800 dollar pair of shoes and wear them once or twice
                 less is added to the economy then if 40 people buy 20 dollar
                 shoes and use them to be more productive as people with shoes
                 can contribute more to the economy than people without shoes,
                 they can walk longer distances, are less likely to hurt
                 themselves, etc etc.  Big luxury items don't create as much
                 wealth as a simaler level of basic needs.  That's not to say
                 they don't contribute ANYTHING.
                 \_ You have it BACKWARDS. It's called Demand and
                    Supply (or it should have been). How are you going
                    to make those other people buy the 40 pairs of
                    shoes because you've given up the $800 pair?
                    People make their own decisions about what to buy,
                    which leads to demand, which is fulfilled by
                    supply.  Now if you think 40 x $20 shoes >> $800,
                    then you let us know when you come up with a new
                    mathematical model that is internally consistent,
                    which somehow awards bonus dollars for having been
                    bought by the noble and now magically more
                    productive.  Also, do you think people buy a $20
                    pair of shoes and then say, oh, I can be so much
                    more productive now. No, poor people without shoes
                    with an entrepreneurial bent decide to take a
                    chance and make some money, then realize they can
                    be more productive with shoes, and so buy a
                    pair. The whole theory is backwards.
                    \_ Why are you assuming people are attacking capatalism?
                       Noone is trying to say people shouldn't buy luxuries.
                       People are saying when the economy becomes too geared
                       towards buying and selling luxuries that do not
                       generate work in and of themselves that an economy
                       suffers, even if the GDP is still going up.
                       \_ This doesn't make sense. Nothing generates work in
                          and of themselves. "Real GDP" going up means there
                          is more overall value in the country, regardless of
                          what it was. The market is better at deciding value
                          than you are. A real problem that is mentioned in
                          the article is when "commons" damage is not accounted
                          \_ Please provide some proof that the market is
                             "better at deciding value than you are."  That's
                             merely an assertion.  -tom
                             \_ America = free market, the strongest nation
                                in the world. You're an idiot. Go back to
                                \_ America = democracy, the largst government
                                   in the world, therefore the most central
                                   control of spending.  I see you are totally
                                   incapable of arguing your point.  -tom
                             \_ Well, is it just a coincidence that market-
                                based economies outperform planned economies?
                                Were those planned economies just unfortunately
                                saddled with the wrong planners?
                                But let me put it another way: it's not so
                                important that the market is better at it.
                                It's that *I* am better at deciding what's
                                valuable *to me* than you are. And when we
                                all do that it's called a market.
                                \_ Is Bernake a market planner?  There
                                   are aspects of planning in all
                                   Western countries, and aspects of
                                   market economies in Cuba and China.
                                   Are we outperforming China right
                                   now?  By what metric?  It has already
                                   \_ China mysteriously has been doing
                                      *far* better since they reformed their
                                      system to incorporate market principles
                                      beginning in 1978.
                                      Chinese people are the biggest fans of
                                      the free market in the world.
                                   been proven that groups of individuals
                                   making "rational" decisions for them as
                                   individuals can produce negative results
                                   for the entire system.  And the use of
                                   GDP as a proxy for success has problems
                                   well beyond the problems of the commons
                                   or of incomplete information; the use of
                                   GDP as a proxy for success places a value
                                   judgement on monetary transactions--
                                   monetary transactions are inherently
                                   more valuable than non-monetary
                                   transactions.  Buying food is valued more
                                   highly than growing your own.  Paying
                                   $1000 for a cat is valued more highly
                                   than adopting a stray.  It is clear that
                                   dialog and politics in the US are
                                   beholden to these values, but it is not
                                   at all clear that they produce good results
                                   for the society.  -tom
                                   \_ If you have $1000 and you adopt a
                                      stray cat then you have $1000 to
                                      spend on something else. The $1000
                                      doesn't go away unless you stuff it
                                      in your mattress.
                               \_ All economies are planned, to a certain
                                  extent. The best performing economies over
                                  the long run are mixed economies, apparently
                                  ones with a bit more central planning than
                                  in the US. See Sweden vs. US long term median
                                  per capita salary growth. Even in per capita
                                  GDP they pretty much equal us, with a more
                                  evenly distributed income structure and
                                  less income volatility.
                                  \_ Sweden and the US still have roughly
                                     similar economic structures: market
                                     based democracy plus socialist programs.
                                     Sweden and the US have too many other
                                     differences... the US gets huge numbers
                                     of poor immigrants.
                                     \_ I don't really disagree, but then again
                                        the Democrats and Republicans don't
                                        really disagree either. What's 30% vs.
                                        40% state control of the economy?
                                        Mostly, a tempest in a teapot, but
                                        listening to FOX NEWS, you would think
                                        it was the difference between liberty
                                        and slavery.
                 \_ Who says what's more productive? That's USSR mentality.
                    If someone wants $800 shoes, why not? The money doesn't
                    disappear: the shoe makers profit and buy stuff from
                    others etc. and people are happier. That guy had to first
                    come up with the $800 somewhere too, probably doing
                    something productive somewhere in that chain.
                    \_ Do you have a problem with reading comprehension?
                       Noone said you shouldn't be able to buy 800 dollar
                       shoes.  But 800 dollar shoes do not help the economy
                       as much as 40 $20 shoes, assuming 40 $20 shoes are used
                       in the manner most people use them.  Just like buying
                       a 500k supercar doesn't help as much 30 people buying
                       middle of the road vehicles that let them be more
                       productive.  If you don't understand that you have
                       no bussiness saying the article writer doesn't know
                       what they are talking about.
                    \_ Can you prove that people are happier because they have
                       $800 shoes?  Because all the attempts to measure how
                       happy people are have found little or no correlation
                       between the number of luxury items someone has and
                       their level of happiness.  America has gotten
                       ridiculously wealthy in the past 60 years and has
                       not gotten any happier.  I think discussing what is
                       or isn't more "productive" is totally missing the point;
                       the purpose of our country isn't to produce as much
                       as it possibly can, the purpose is to promote the
                       general welfare of the people.  The assumption built
                       into much of our discussion is that growing the GDP is
                       equivalent to promoting the general welfare, but there
                       is really no evidence that the two are equivalent or
                       even correlated.  -tom
                       \_ Says Comrade Tom
                          \_ You have no substance.  -tom
                                            ,. ^_^ .,  <-------- tom
                                         _ .'         '. _
                                        /\)             (/\
                                       / /               \ \
                                      ( Y)               (Y )
                       \_ The point is people buy what they want. Whether they
                          are happy or not is beside the point. It might be
                          found that slaves were happier as slaves than free
                          \_ Actually, whether we are happy is exactly the
                             point.  Would you prefer a large and growing
                             economy where everyone is unhappy, or a static
                             economy where everyone is happy?  Getting rid
                             of weekends would do a great job of growing
                             the economy, but it would not be of societal
                             benefit.  The point is that growth of the
                             economy is not equivalent to improvement of the
                             country.  -tom
                             \_ Getting rid of weekends would be a planned
                                totalitarian move, not a market action.
                                Would it really grow the economy, I'm not
                                so sure... people need days off for errands,
                                shopping, and recreation which generates a lot
                                of GDP.
                                Of course it's better if we're happy.  Maybe
                                we should put antidepressant drugs in municipal
                                water supplies?
                                You can't make everyone happy though.  Which
                                country is so ideal in this regard?
                                This country has a highly stressed cultural
                                fabric.  We have many different races and
                                cultures which contributes to isolation and
                                lack of unity.  This is just the nature of
                                our nation and has little to do with markets.
                                Anyway, people seem pretty happy to me.
                                \_ You know that the "free market" didn't
                                   invent the weekend, right?  -tom
                  \_ Huh? That $800 already exists in the pocket of someone.
                     Whichever way they spend it is going to put $800 in
                     the pocket of the shoe company (for sake of argument
                     let's say the same company makes $800 snakeskin boots
                     and $20 rubber shoes) which will be used to pay wages and
                     investors who will then spend the money as they see fit.
                     It doesn't really matter what they buy with that $800 as
                     long as they spend it instead of saving it. In fact, since
                     luxury items have a higher markup you might argue that
                     luxury items have an environmental benefit because it's
                     less harm to the environment to make one pair of snakeskin
                     boots versus 40 pairs of rubber shoes. Same with your
                     car example. One supercar is better for the environment.
                     \_ Wealthy people spend money on vehicles that pollute
                        more. Look at Larry and Sergey. They got 2 Prii
                        but decided to get a modified 757 instead of
                        LearJet/CitationX which are more efficient. Also
                        jets carrying 2-4 people have horrible mileage
                        compared to automobiles, yet, they choose to fly
                        frequently. $$$ = more usage = more waste =
                        more pollution.
                        \_ side note: it is fucking stupid to pluralize
                           "prius" as "prii".  -tom
                           \_ Priusen
                     \_ But shoes have value.  If you take a man with no
                        shoes and give him a pair of cheap shoes he is better
                        equiped to create wealth.  Probably more wealth than
                        those shoes cost in the first place.  Luxury goods,
                        on the other hand, don't add as much beyond their
                        purchase price.  You know the whole concept that money
                        makes money?  It's not as productive if all that money
                        is being spent on is luxuries.
                     That millionaire is going to spend his $$$ on something
                     and 30 middle-of-the-road vehicle is not as efficient.
                     He's not going to give the $500K to someone else, which is
                     an assumption you seem to make. However, the $500K ends up
                     in the economy in either case where it gets spent on
                     other goods and services, perhaps on middle-of-the-road
                     vehicles purchased by the people who made the supercar.
                        \_ Sure it is, because it ends up in the same place
                           either way - in the pockets of the people who made
                           the goods. How does a millionaire buying 40
                           pairs of $20 shoes contribute more to the
                           economy than the same millionaire buying one
                           pair of $800 shoes? It doesn't.
                           \_ Generally utilitarian items are used more
                              productivly than luxuries.  Are you really this
                              stupid?  Items used friviously have less
                              benefit to an economy than items used
                              productivly.  Expensive luxuries are much more
                              likely to be used friviously.  And that's a
                              problem in economies where the wealth is
                              concentrated among a small portion.  Yes,
                              they will spend money.  Yes that money will
                              go to people who spend money.  But most of
                              the money stays in the small percentage it
                              will be spent on luxuries it won't be as
                              beneficial to the economy as a whole creating
                              less wealth than if the money was being spent
                              \_ Virtually all shoes are luxuries. You can
                                 buy sturdy utilitarian shoes for $10 on
                                 sale or $20 new. People choose fashionable
                                 ones as luxuries. Luxuries make people's
                                 lives happier. This is good: we're not
                                 all working for the glory of the fatherland.
                                 Demand for luxuries creates demand for
                                 productive stuff to make those luxuries and
                                 people jobs.  We're far past the point of
                                 struggling for really basic stuff like
                                 a pair of shoes (most of us anyway). It's
                                 all about improving quality of life now.
                                 Wealth concentration is a separate issue
                                 from whether GDP growth in luxuries is
                                 somehow bad for the economy.
                                 Trade imbalances are bad, wealth
                                 concentration is bad. Economic activity good.
                                 \_ You have a hard time with reading
                                        \_ No, this person is apparently
                                           just missing the point..
                                           Hey you!  Another, hopefully clearer,
                                           analogy:  is $10k of medicine which
                                           keeps a scientist alive, who makes
                                           a key breakthrough that makes
                                           cars 10% more efficient MORE or LESS
                                           "economically beneficial" than some
                                           rich doofus spending $10k on designer
                                           toilet paper?  Which is the better
                                           Hey you!  Another, hopefully
                                           clearer, analogy:  is $10k of
                                           medicine which keeps a scientist
                                           alive, who makes a key breakthrough
                                           that makes cars 10% more efficient
                                           MORE or LESS "economically
                                           beneficial" than some rich doofus
                                           spending $10k on designer toilet
                                           paper?  Which is the better
                                           allocation of the $10k resource?
                                           Which benefits society in general
                                           more?  Which individual is "happier"?
                                           YES, the $10k is given to someone
                                           either way, and is "recycled", but
                                           the HUMAN EFFORT required to earn
                                           the $10k is WASTED in one case and
                                           BENEFITS SOCIETY in the other.
                                           more?  Which individual is
                                           "happier"? YES, the $10k is given
                                           to someone either way, and is
                                           "recycled", but the HUMAN EFFORT
                                           required to earn the $10k is WASTED
                                           in one case and BENEFITS SOCIETY in
                                           the other.
                                           \_ This is fallacious. The $10k is
                                              not either spent on saving a
                                              scientist or someone's luxury.
                                              There are enough resources for
                                              both things to happen. You also
                                              \_ But there are not resources
                                                 enough for EVERYTHING to
                                                 happen.  The key point is
                                                 to maximize benefit of
                                                 resources expended.  $10k
                                                 designer toilet paper is
                                                 of less benefit than $10k
                                                 of beneficial preventative
                                                 immunizations, since you
                                                 apparently don't like
                                                 scientists.  Same with
                                                 $800 pair of luxury shoes
                                                 vs. 40 pair of $20 utility
                                                 shoes.  The market sometimes
                                                 does a very poor job of
                                                 maximizing benefit.
                                                 \_ The market does a better
                                                    job than any other method
                                                    can. It's not 100%
                                                    efficient, but as close to
                                                    it as one can get.
                                                    \_ Maybe, or maybe not,
                                                       but GDB does not measure
                                                       many economic goods with
                                                       value, as this article
                                                       points out.  It is broken.
                                                       points out.  It is
                                                    \_ Your theory says this.
                                                       But the reality is that
                                                       the market is better at
                                                       optimizing distribution
                                                       of some resources and
                                                       that community decision
                                                       making (democracy) is
                                                       better in other cases.
                                              don't know ahead of time whether
                                              medical spending will keep
                                              someone alive or that someone
                                              will do something good. Maybe
                                              scientist will actually go nuts
                                              and SHOOT everyone in his lab
                                              thereby HARMING SOCIETY. And at
                                              the end of the day, what do we
                                              get out of the efficient cars?
                                              Cars are luxuries too. They are
                                              mostly conveniences for people.
                                              Aren't we all supposed to move
                                              to the city and use mass transit?
                                              \_ Look, you don't know what you
                                                 talking about and you are
                                                 either trolling or stupid.
                                                 You also seem to think that
                                                 our point is that everyone
                                                 should live in a communist
                                                 society with no luxuries.
                                                 That's not what anyone is
                                                 saying.  So take off your
                                                 blinders and read the whole
                                                 thread again or just please
                                                \_ Here we go with ad hominem
                                                   SPLUTTERING. Nice job,
                                                   Your argument is totally
                                                   disingenuous. What you're
                                                   really getting at is wealth
                                                   equalization, and hinting
                                                   at some sort of eugenics-
                                                   based resource allocation.
                                                   The guy buying ridiculous
                                                   luxuries is doing that
                                                   because he's an EVIL RICH
                                                   \_ How did you ever pass
                                                      the reading comprehension
                                                      CAT tests?
                                    \_ Maybe you just don't get it.
                                       What is the point of all the "productive
                                       spending"? what is it all for? at the
                                       top of the food chain is luxury.
                                       You don't even make sense. "most of the
                                       money stays in the small percentage it
                                       will be spent on luxuries" What? speak
        \_ 30-40% of growth in healthcare doesn't have to mean we're getting
           more sick. It may mean we're just more and more focused on being
           \_ Or getting ripped off more and more by the insurance companies.
           \_ And this is the point of the article: GDP, by itself, with no
              analysis of where the money is going, is not itself an indicator
              of efficiency or success. A more meaningful figure would include
              an analysis of American health, and corruption and inefficiency
              in the healthcare industry.
              \_ That's a straw man argument. No one claimed GDP growth
                 measures efficiency, quality of life, or "success" (whatever
                 that means). However, a larger GDP almost by definition
                 means a larger economy and a larger economy means, again
                 almost by definition, more goods and services produced.
                 Think of it as "economic capacity" or "economic capability".
                 A larger GDP nation can outproduce a smaller one, whether
                 all those goods and services go to one individual
                 (dictatorship), everyone (communism), or are distributed
                 by the free market (capitalism).
                 \_ Read the article. The author argues that when the govt.
                    says that the economy is strong based solely on GDP, that
                    is a meaningless simplification. Yes, a _significantly_
                    higher GDP demonstrates the difference between a
                    modern industrialized nation and a third-world developing
                    nation. However, if the President says the economy is
                    strong because GDP has increased half a percent, what does
                    that mean? Does it mean people paid more money for the
                    same amount of gas (money that goes directly into the
                    pockets of the House of Saud)? Does it mean more people
                    are eating out? Does it mean that it was hotter this
                    summer so ice cream sales are on the rise? It might mean
                    any of the above or none at all. At small levels of
                    difference, it's a meaningless stat.
                    \_ But it's a straw man argument, because no one is
                       saying that GDP by itself is so incredibly meaningful.
                       This is mentioned in Econ 1, as are externalities.
                       Real GDP versus nominal GDP are also basic concepts.
                       So this genius author points out something every Econ 1
                       student learns - that there are limitations and
                       caveats when measuring economic output and that GDP
                       (even Real GDP) alone doesn't tell the whole story. BFD.
                       Even the Wikipedia article on GDP talks about its
                       limitations. There was nothing interesting or novel
                       in that article.
                       \_ Sweet mother of god, this guy is not talking about
                          people who've taken Econ 101, he's talking about
                          politicians who wave around a 1-point increase in
                          GDP as if it's the holy fucking grail.
                          \_ So you're damning a statistic and centuries of
                             economics on measuring econ output because Bush
                             and other policticians are abusing the term?
                             and other politicians are abusing the term?
                             \_ Did you read the article?
                                \_ I don't know if he did, but I did and
                                   it was full of crap like (coming full
                                   circle) the specious argument about $800
                                   shoes somehow contributing less than
                                   40 pairs of $20 shoes. He worries that
                                   "[t]he money in the big pot could be going
                                   to cancer treatments or casinos, violent
                                   video games or usurious credit-card rates."
                                   Yes, it could. So what? It's still economic
                                   output. Somehow "violent video games" are a
                                   lesser form of economic output or something?
                                   It sounds like he wants to characterize
                                   what is "good spending" and what is
                                   not. In fact, he goes so far as to say
                                   that people are not rational with their
                                   expenditures. Presumably they would be
                                   a lot happier if he made their expenditures
                                   for them? He speculates that marriage is a
                                   threat to GDP because there's no divorce
                                   spending? Is he on crack? The money that
                                   isn't spent on divorce will be spent on
                                   something else (or invested). It doesn't
                                   disappear and will be reflected in the
                                   GDP either way as the person who receives it
                                   will then make his own economic decisions.
                                   Economics is not about value judgements.
                                   His article boils down to: "People
                                   don't spend their money the way I think
                                   they should." No wonder Tom likes it.
                                   \_ His point was that touting an increase in
                                      the GDP as some sort of indicator of
                                      the health of the nation is overly
                                      simplistic and meaningless. We're
                                      measuring throughput while ignoring
                                      destination. We don't know if the end
                                      result is investment in our own
                                      economy (yay!) or pools full of diamonds
                                      in Riyadh (boo). He's saying that we
                                      \_ GDP includes an exports minus imports
                                         in the equation. Consumption isn't a
                                         one way street. To pay for diamonds in
                                         Riyadh requires spending money.
                                      need to assess more than just the amount
                                      of money that trades hands. That's not
                                      the same as a "planned economy" a la
                                      Stalin or Mao; it's arming the consumer
                                      with tools for making more informed
                                      choices. His point about divorce was an
                                      obvious exaggeration designed to show
                                      that an activity which increases money
                                      flowing from one set of hands to another
                                      is not necessarily an indicator of a
                                      a healthy economy; it's an indicator of
                                      nothing more than money moving. I don't
                                      see where you see this ominous shadow
                                      of socialism that seems to have you in
                                      a tizzy. I don't see anything anti-
                                      capitalism in wanting to know where the
                                      money's flowing; if anything, I think
                                      it's the basis for the purest capitalism.
                                      \_ Nothing wrong with knowing where
                                         the money is flowing, but what does it
                                         matter? His undertone is that it's not
                                         necessarily flowing where it should
                                         be. He can't make that call. Divorces
                                         make plenty of people happy. Recall
                                         the days before they were common.
                                         I can sell you a service and then you
                                         can sell me one back. It's not
                                         "nothing more than money moving". Two
                                         services were performed.
                                         \_ Do you think that having two
                                            parents working and paying a
                                            nanny to raise the kids is
                                            inherently better for the
                                            country than having one parent
                                            stay home?  -tom
                                            \_ No idea and, unlike you, I don't
                                               profess to know.  However, if
                                               parents are doing it then they
                                               must feel it benefits them and
                                               their family.
                                               \_ The problem is, because we
                                                  are measuring our success
                                                  by GDP, we create political,
                                                  economic, and social
                                                  incentives to make the
                                                  choice to outsource
                                                  parenting.  Prior to Keynes,
                                                  families with two working
                                                  parents were virtually
                                                  unheard of; now they are the
                                                  common case.  It's
                                                  fallacious to consider this
                                                  the result of the free
                                                  market, except insofar as
                                                  free market ideology values
                                                  monetary transactions and
                                                  thus encourages them.  You
                                                  get what you measure.  -tom
                                                 \_ Uh, that's not due to
                                                    measuring GDP. Those
                                                    incentives exist anyway.
                                                    Prior to Keynes women
                                                    couldn't even vote in
                                                    general and their
                                                    economic opportunities
                                                    were culturally limited.
                                                    How do you propose to
                                                    "get the women back in
                                                    the kitchen"?
                                                    \_ Look, it's simple;
                                                       the metric you use to
                                                       measure success has
                                                       effects on behavior.
                                                       This is self-evident.
                                                       The primary measure we
                                                       have used to measure
                                                       success of the country
                                                       in the past 60 years
                                                       has been GDP.  It is
                                                       not at all coincidental
                                                       that the society we
                                                       have built in that time
                                                       values consumption,
                                                       planned osbolescence,
                                                       and outsourcing.  Those
                                                       are predictable effects
                                                       of using GDP to measure
                                                       success.  The point is,
                                                       no one ever bothered to
                                                       prove that we'd be
                                                       better off with GDP
                                                       as our primary success
                                                       metric.  And it's not
                                                       clear that we are.  -tom
                                                       \_ Dude, you are way out
                                                          on a wobbly limb here.
                                                          The BEA uses GDP as
                                                          a measurement of
                                                          economic strength.
                                                          You'll have a hard
                                                          time proving that
                                                          individual purchasing
                                                          and business
                                                          decisions are
                                                          somehow tied to that
                                                          measuring stick.
                                                          Consumers and
                                                          corporations aren't
                                                          making decisions
                                                          based on how they
                                                          affect GDP. GDP
                                                          reflects the
                                                          decisions. It doesn't
                                                          drive them.
                                                          \_ The incentives
                                                             our society puts
                                                             in place are based
                                                             on how they affect
                                                             GDP.  Individual
                                                             decisions are
                                                             skewed based on
                                                             those incentives.
                                                             \_ I assume you are
                                                                referring to
                                                                interest rates
                                                                when you say
                                                                I think your
                                                                position is
                                                                Rates are
                                                                by a lot more
                                                                than just GDP
                                                                and it's not
                                                                clear to what
                                                                extent monetary
                                                                policy affects
                                                                the economy.
                                                                (See Japan's 0%
                                                                rates and yet
                                                                You are
                                        Why would you assume I'm
                                        referring to interest rates?
                                        I'm referring to an enormous
                                        number of decisions around
                                        taxation, subsidy, and policy.
                                        For example, farm subsidies
                                        for factory farms.  "Get big
                                        or get out."  Subsidy for the
                                        road system, while passenger
                                        rail is starved.  Oil
                                        subsidies.  The military-
                                        industrial complex.  Allowing
                                        obnoxious advertising
                                        virtually everywhere.  Christ,
                                        the week after 9/11 there were
                                        press conferences that weren't
                                        about terrorism or security,
                                        they were about "America: Open
                                        For Business!"  All these
                                        things are in support of the
                                        idea that more consumption is
                                        better.  You can't go through
                                        an election cycle without
                                        hearing virtually every
                                        politician talk about "growing
                                        the economy" and "creating
                                        jobs"; no one even suggests
                                        that growing the economy might
                                        not be the right goal.  -tom
                                       \_ Please provide proof that any of
                                          these are tied to a large extent to
                                          the way that GDP is measured. I
                                           mean, seriously, how does the
                                           way GDP is measured lead to the
                                           decision (if it's even true,
                                           which is its own argument) to
                                           subsidize roads versus rail?
                                           How would you change the way
                                           GDP is measured in order to get
                                           the "correct" result?
                                          mean, seriously, how does the way
                                          GDP is measured lead to the decision
                                          (if it's even true, which is its own
                                          discussion) to subsidize roads
                                          versus rail? How would you change
                                          the way GDP is measured in order to
                                          get  the "correct" result?
                                          \_ hi dim!
                                          \_ I'm not talking about changing the
                                             way GDP is measured, I'm talking
                                             about changing the way *success*
                                             is measured.  Success is measured
                                             in the US by GDP growth, therefore
                                             politicians make decisions which
                                             encourage GDP growth.  An
                                             auto-based culture has many more
                                             transactions than a transit-based
                                             culture; its inefficiency
                                             "creates jobs" and therefore is
                                             good if you're measuring success
                                             by GDP.   -tom
                                             good if y
                                             good if you measure success by
                                             GDP.  -tom
                                             \_ What you are missing, just like
                                                before, is that *if* a
                                                mass-transit-based culture has
                                                fewer transactions and/or
                                                smaller transactions (not
                                                necessarily true) then that
                                                leaves more resources to
                                                spend on other projects,
                                                which makes the GDP pretty
                                                much unchanged as compared
                                                to auto-based. These are not
                                                decisions that affect the size
                                                of GDP. These are distribution
                                                decisions: how do we spend the
                                                GDP that we are capable of
                                                \_ What *you* are missing is
                                                   that GDP is the result of
                                                   labor, and that the US
                                                   systematically encourages
                                                   choices which result in
                                                   increased labor.  For
                                                   example, if someone stays
                                                   home with the kids, that
                                                   family will have less
                                                   income and spend less money.
                                                   If someone decides to take
                                                   a lower-paying job so he
                                                   doesn't have to commute
                                                   an hour each way, the family
                                                   will have less income.
                                                   If someone decides to work
                                                   a part-time job because he
                                                   really enjoys working in
                                                   the garden, and is able
                                                   to provide a good percentage
                                                   of the food the family
                                                   consumes, the family will
                                                   have less income.  In all
                                                   these scenarios, the family
                                                   spends less and thus
                                                   contributes less to GDP.
                                                   It's not a zero-sum game.
                                                   Why should Americans work
                                                   more hours and have less
                                                   vacation than Europeans?
                                                   Shouldn't our excees
                                                   capacity be used at least
                                                   partly to give people more
                                                   leisure time?  -tom
                                                   \_ That's not some official
                                                      policy. That's just
                                                      economics. Yes, choosing
                                                      to work less results in
                                                      less output. If you work
                                                      a good job you can afford
                                                      to have lots of free time
                                                      if you want. Maybe our
                                                      capacity isn't as excess
                                                      as it seems... tons of
                                                      people are in debt. Maybe
                                                      it's a function of our
                                                      banking industry which
                                                      idolizes debt. Debt
                                                      pushes up money supply
                                                      and inflates everything.
                                                      We have to go into debt
                                                      to compete for resources
                                                      against everyone else who
                                                      is in debt, working off
                                                      their monthly payments.
                                                      We're all indentured to
                                                      people are in debt.
                                                      Americans don't like to
                                                      "do without".
                                                      \_ Our use of GDP as a
                                                         measure for success
                                                         is not merely an
                                                         official policy; it
                                                         is deeply ingrained
                                                         in our culture.  The
                                                         idea that more is
                                                         always better has been
                                                         so effectively sold to
                                                         us that most Americans
                                                         accept the idea as
                                                         axiomatic.  It's not.
                                                         There is no reason
                                                         why Americans need
                                                         to use 2-3 times more
                                                         resources per capita
                                                         than Europeans; we
                                                         just assume that the
                                                         ways we do things are
                                                         the best ways, because
                                                         that's the way we've
                                                         "always" done it. -tom
                                                        \_ It's not just us.
                                                           Immigrants who come
                                                           here lap it up. And
                                                           they all use GDP to
                                                           measure their econs.
                                                           \_ GDP is a decent
                                                              measurement of
                                                              the size of an
                                                              economy.  It's
                                                              not clear it's
                                                              a good
                                                              measurement of
                                                              the *success*
                                                              of an economy.
                                \_ You are just wrong about there being
                                   centuries of measuring economic statistics.
                                   This stuff was practically invented by FDR
                                   and his economists. Keynes is considered
                                   the father of Macroeconomics.
2008/8/7-10 [Finance/Banking, Finance/Investment] UID:50808 Activity:nil
8/6     The Financial Times has published an excellent series of articles on
        the root causes of the current financial crises and suggestions of
        what to do next (not light reading):
        \_ didn't the FT publish an article a few months ago about
           ROGUE COMPUTERS that forced Moodys to grade bonds as AAA ?
           \- people you want to read and listen to who are not as well-known
              as WBUFFET: Bill Gross, Martin Wolf, Md El-Erian.
        \_ root cause == real estate bubble, infection of monetary institutions
                         with bonds backed by real estate
           solution == stuff the bad bonds and future mortgages into FNM/FRE
                       and bill the taxpayer for any losses
           who benefited == finance guys, real estate agents, mortgage brokers
                            \_ also: conservative ideologues who use the
                               governmental debt they manufactured as an
                               excuse to cut government services.  -tom
                               \_ There are more government services now
                                  than ever before.
2008/7/24-28 [Finance/Banking, Finance/Investment] UID:50680 Activity:nil
7/24    Hope none of you or your relatives have > $100K in checking+savings+
        CDs or any bonds/stock in Downey S&L or WaMu.  Friday night is
        bank failure night.
        \_ URL?
        \_ (NYT)
           S.E.C. Warns Wall Street: Stop Spreading the False Rumors
           \_ This says nothing about Downey or WaMu. More URL?
2008/7/16-23 [Politics/Domestic/President/Bush, Finance/Investment] UID:50595 Activity:nil
7/16    Yes let's start making interest rate super low and make it super easy
        to get loans so that every American can own a home! Go for it
        Greenspan, and keep it up Bernanke. "We're ownership
        society in this country, where more Americans than ever will be able
        to open up their door where they live and say, welcome to my house,
        welcome to my piece of property," Bush said in October 2004.
        Please don't f***ing paste your f***ing CATO links here, thank you.
        \_ All of that started in 1996.
           \_ It is all Bill Clinton's fault.
        \_ related to the carbon emission thread above. This is the perfect
           time for US to curb consumer behaviors.  we can now impose
           heavy taxes on housing that has sq.feet per person larger than a
           a preset limit, *AND* we can impose rules on developers that mediem
           house size to a fixed sq feet.   China has similiar regulation
           already in place to curb large houses.   Time for US to do something
2008/7/16-23 [Politics/Domestic/SocialSecurity, Finance/Investment] UID:50587 Activity:nil
7/15    My mom's fixed annuity is maturing and we're wondering what we
        should be doing with it. She's 70 and we gotta put the money
        where it is safe (no stock market, no 401k). What are some good
        choices to make now, considering that the US economy is failing
        and the banking industry is fubar?
        \_ I would buy another fixed annuity with enough of it so that
           annuity + SS = bare bones enough to live off of, put half the
           rest into a CA Muni ladder (or bond fund, if you have less than
           $1/4M to do this right) and buy an index fund with the rest.
           She is still too young to get 100% out of the market. What is
           wrong with an annuity?
           \_ I thought if you have over $3000 then you're not eligible
              for SS? Or is that something else?
              \_ I think this is related to SSI (Supplemental Security
                 Income) for low income, not the Retirement SS. SSI allows
                 a higher paycheck from the government.
              \_ No, even Warren Buffett gets SS. It is for everyone who
                 has contributed for at least five years. Maybe you are
                 thinking of the bankruptcy code. I think you are allowed
                 to keep a car worth $3000 in a bankruptcy.
                 \_ Ok so I tried to Google for Social Security but it seems
                    complex, is there a SS for Dummies web site? Thanks!
                       Courtesy of Bill Gates
2008/7/14-16 [Finance, Finance/Investment] UID:50567 Activity:nil
7/14    Onion once again more like reality than "real news"
2008/7/11-13 [Finance/Investment] UID:50538 Activity:nil
7/11    Private the gains, socialize the losses. Thanks for the billions,
        now I am going to retire suckahs, says the financial sector!
        \_ You missed the "force the losses"
2008/7/9-13 [Science/Space, Finance/Investment] UID:50514 Activity:nil
        Economy today is very very healthy compared to say, the 70s
        and 80s. However the problem today is very different. Over-leveraging.
        Thanks to deregulation, commercial and investment banks used
        ridiculous degrees of leverage on investments that turned out to have
        much less value than they thought. Yay to deregulation!!! Let's
        deregulate EVERYTHING in the name of PROFIT! Deregulate electricity,
        healthcare, education, transportation, water, air, etc etc
        \_ Please list all of the successful planned economies of the
           last 100 years.
           \_ Straw man.  Regulation != "planned economy".
              For that matter, list all of the successful free markets
              of the last 100 years.  (I know, all market failures are
              due to government regulation).
           \_ Sweden, Norway, Luxemborg... need I go on?
              \_ Norway is a mixed economy. So probably is Sweden, although I'm
                 not sure. You're already down to Luxembourg? What's next
                 Monaco? Please do go on.
2008/7/8 [Politics/Domestic/President/Reagan, Finance/Investment] UID:50492 Activity:nil
7/7     The Failures of Neoliberalism: (Stiglitz)
2008/6/19-23 [Finance/Investment] UID:50313 Activity:nil
6/19    If I place a limit order to buy 500 shares at $20, is it always all
        or nothing?  Meaning I will end up with 0 rather than 300 shares
        if the price doesn't stick around at $20 long enough for an order
        of 500 to be filled?  I obviously don't want to break it up into a
        lot of transactions to save on fees.
        \_ No, it is not always all or nothing, though you can usually contact
           your broker and make it that way, usually for a fee. In practice,
           they always get filled for me anyway, even if it is in a few
           \_ So you are saying I might end up with only 300 shares?
              I don't want to end up only with a really small number filled
              since then the transaction fees will swamp my gains.  Is
              this a realitic concern with a $2000-$5000 trade?
              \_ Your broker should have some kind of document that explains
                 what they do when an order is not completely filled. You
                 probably won't run into this problem if you trade stocks
                 that have reasonable volume.
2008/6/10-13 [Politics/Domestic/California, Finance/Investment] UID:50215 Activity:low
6/10    Millions Paid to Dead CEOs Outrage Over 'Golden Coffins': Tech T: (
        "Among the more outrageous posthumous packages:
            * $298.1 million for Comcast CEO Brian Roberts
            * $288 million for Nabors CEO Eugene Isenberg
            * $115.6 million for Occidental CEO Ray Irani
            * $17 million for Shaw Group CEO J.M. Bernhard to not compete with
              the firm after he dies"
        I wonder if J.M. Bernhard is thinking about breaching the contract.
        \_ Why should you care what someone's compensation is?
           \_ It's just funny that a firm is willing to pay a CEO to not
              compete with the firm after he dies.  --- OP
              \_ That's the wording of the author, not of the contract.
                 \_ see the WSJ link; it's a non-compete clause in the
                    contract, which still pays off if he's dead.  -tom
                    \_ Correct.  Which is different than the wording of the
                       author. -pp
                       \_ I understand now.  Thx.  -- OP
                       \_ it's still pretty lame to have a non-compete clause
                          pay off in the case of death.  -tom
                          \_ duh.  It is just to make sure his family gets the
                             money if he leaves the company by dying instead
                             of by leaving.  It is to encourage him to stay
                             until he dies and not leave early to cash in on
                             the non-compete when he's otherwise doing a good
                             job.  It is not lame if you accept that any
                             non-compete clause was worth that number.  Why is
                             it necessary to explain such a simple concept?
                          \_ What better way to guarantee fulfillment of the
                             non-compete side of a contract than to die?
2008/6/8-10 [Finance/Investment] UID:50184 Activity:nil
6/8     How many different mutual funds should I have in my roth IRA?
        I know there are many factors, but I want to know shoudl I just
        invest all my roth IRA money into one mutual fund, or divide it up
        into 2, 5, 10, whatever. thanks in advance.
        \_ It's not about how many funds you have, it's about what's in them.
           Consider diversifying your assets. If you buy a small-cap fund,
           for example, you'll want to also buy at least one large-cap fund
           to spread the risk. On the other hand, if you buy just
           one target-date fund (which contains an asset allocation mix
           that the fund company judges is appropriate for your age), that
           may be all you need. This sounds like the best option for you,
           at least until you learn more about asset allocation and decide
           that you would rather do your own management.
2008/6/1-2 [Finance/Banking, Finance/Investment] UID:50109 Activity:nil
6/1     No comment:
        \_ Why does the NY Times not include their postal address so I can
           send them my feces?
2008/5/26-30 [Science/GlobalWarming, Finance/Investment] UID:50054 Activity:nil
        The WSJ on the commodity "bubble."
2008/5/24-30 [Finance/Investment] UID:50049 Activity:nil
5/24    I'm looking for a financial advisor/planner to help guide me
        with where to invest my money. I have the foundation set up
        (Roth IRA and 401(k)) but I want someone to recommend good
        funds to invest them in. I prefer one that doesn't get a
        commission if I buy from a certain company. I see lots of ads
        for  Charles Schwab. Would they be what I want? Thanks.
        \_ Their fee for service consultation seem reasonably priced. If they
           recommend "Schwab" funds, run for hills. For 401k, you can do this yourself
           by finding recommended Asset Allocation for your age, then mapping
           the categories therein to the limited options you have in yer 401k.
           Asset Allocation says put 10% in a small-cap US stock fund -> Hey, I only
           have one fund to choose from in this category.  Easy as cake. Repeat.
        \_ Their fee for service consultation seem reasonably
           priced. If they recommend "Schwab" funds, run for
           hills. For 401k, you can do this yourself by finding
           recommended Asset Allocation for your age, then mapping the
           categories therein to the limited options you have in yer
           401k.  Asset Allocation says put 10% in a small-cap US
           stock fund -> Hey, I only have one fund to choose from in
           this category.  Easy as cake. Repeat.
        \_ Email me and I will hook you up with my guy. -ausman
           \_ GAAAAAYYY.
              \_ Gay hooking.
2008/5/23 [Finance/Investment] UID:50038 Activity:moderate
        Who is to blame for surging food and energy prices?
        \_ No! It's India and China and anyone who says otherwise is an
           idiot! Peak oil!
2008/5/23-24 [Computer, Finance/Investment] UID:50036 Activity:nil
5/23    Erroneous computer programs made Moodys incorrectly
        give AAA ratings to crazy weirdo debt CDO stuff I really
        do not understand:
2008/5/10-16 [Finance, Finance/Investment] UID:49927 Activity:nil
5/10    psb are you Fair and Handsome Modern Indian Man?
        \- Bachnaa ae haseenon lo main aa gayaa [see below]
2008/5/1-8 [Finance/Investment] UID:49870 Activity:kinda low
5/1     Assuming a depreciating dollar, does that really mean foreign stocks
        would be more attractive? After all, the inherent value of any given
        company should be independent of the denomination -- if the dollar is
        worth less, the company is worth more dollars. And revenue goes up
        as prices go up. It would depend on whether there is something about
        a stronger dollar that the individual company depends on.
        \_ Value of foreign stocks and value of the dollar are not entirely
           orthogonal.  Any company that exports to the US would suffer
           from a stronger dollar.  Still, I would expect, and have observed,
                  ^ by "stronger" i meant "weaker".
           a general trend that investing in foreign stocks during a time
           of a declining dollar has limited the damage from the recent
           wall street bloodbath on my overall portfolio.
           \_ What bloodbath? The drops that happened earlier were not
              related to value of the dollar, but fears about the US and/or
              world economy, which is somewhat orthogonal to exchange rates.
        \_ If the US economy craters, overseas companies will take less of a
           hit than US companies, but they'll still take a hit.  Companies
           which rely heavily on US consumerism will be hit hardest, of the
           overseas companies.   -tom
           hit than US companies, but they'll still take a hit.  Of the
           overseas companies, those which rely heavily on US consumerism
           will be hit hardest.  -tom
           \_ I'm more asking about the inflation/exchange rate issue, not
              cratering of the US market itself. I saw a couple people imply
              that a falling dollar implies foreign stocks, which sounded
              like the way someone would advise moving into foreign currency
              instruments, but I think that's fallacious for stocks.
              \_ It depends on the company.  Owning stock in foreign
                 companies is a hedge against the weak dollar; my foreign
                 holdings have done very well since the dollar has tanked.
                 But there are also foreign companies which will have
                 business problems due to a weak dollar.  -tom
        \_ It is a good hedge against the dollar falling, similar to the
           hedge you get from foreign currency. Foreign stocks are demoninated
           in their home currency, I hope that is obvious. You also get the
           added effect of any stock market: more volatility combined with
           more potential for gain.
           \_ But my point is that stocks != holding currency. Currency will
              just go down because it has no other value than itself. But
              say, GE as a company has some real world value in terms of
              physical and intellectual property, and its products have a
              value independent of the currency (so if dollars were worth
              2x less, that refrigerator will cost 2x more dollars, basically.)
              Well, I guess it depends if the dollar is worth less due to
              inflation or due to exchange rates... so US companies which
              sell stuff overseas seem safe enough.)
                  \_ You realize that NOTHING has a fixed "intrinsic" value?
                     Things are "worth" what you can trade for it.  If people
                     woke up one morning and decided they didn't want gold
                     anymore, it would lose nearly all it's "value".
                     That is perhaps not too likely to happen to gold, but
                     it happens to companies *all the time*.  All markets
                     and currencies are pretty much imaginary constructs.
                     And imaginations sometimes run away.
                     \_ Nothing you said here appears to conflict with what
                        I said.
              \_ It's a multivariate, chaotic system; you can't isolate one
                 variable like that.  There are fundamental problems in the
                 US economy which are leading to the dollar's fall; those
                 problems affect US companies more than they do foreign
                 companies.  -tom
              \_ The simple answer is: no that is not how it works. A company
                 that only sells products in the US, with no overseas
                 competition, is not going to be able to raise their price.
                 The dollar is worth about 1/2 what it was in 2001, but
                 prices are not double, except for the price of oil, which is
                 a fungable commodity. Most goods are only up 25% or so.
                 a fungible commodity. Most goods are only up 25% or so.
                 A bunch of stuff (mostly made in China) has actually
                 gone down in price.
                 \_ But the US company's revenue will not show a 50% drop, it
                    is denominated in dollars. The US stock might rise if it
                    becomes more attractive for foreign investors.
                    If costs go up (oil, inflation-hit production inputs) then
                    they can raise their price, because they have to and so
                    does everyone else. Foreign companies can't come in and
                    undercut the US company if the exchange rate cheapens the
                    dollar and oil prices are high globally. So I still don't
                    see why falling dollar and/or inflation is, in and of
                    itself, bad for US stocks. Economic slowness due to
                    related factors might be a reason.
                    \_ There's no such thing as a falling dollar "in and of
                       \_ Okay. But the associated factors are not clearly
                          bad for the US stocks either. For example:
                          low interest rates tends to devalue a currency, but
                          low interest rates tend to make stocks more
                     \_ Okay, I agree with your reasoning. But you can see
                        how stocks in a foreign market would tend to outperform
                        ones denominated in a local depreciating currency,
                        \_ Yeah, obviously if nothing else changed then you
                           are gaining the exchange rate on top of the stock
                           growth. I guess there are too many variables as
                           tom implied. I should look at how NASDAQ or the
                           DOW performed relative to various international
                           indices on a dollar-basis over the last 5 years.
                           But there have been many many variables besides
                           exchange rate.
2008/4/30 [Finance/Investment] UID:49858 Activity:high
4/30    James Bond arrested for threatening to kill someone
        \_ It was a KGB consparicy.
         \_ Dude, it's SPECTOR.
           \_ More like KAOS.
2008/4/16-23 [Finance/Banking, Finance/Investment] UID:49765 Activity:high
4/16    You thought gasoline was expensive now? You ain't seen nothing yet! (Yahoo Finance, includes video)
        \_ The free market will solve our energy crisis   -dimwit #1 fan
        \_ PEAK OIL alert.  Also 'rationing by price' -- gotta love it.
           \_ If the govt doesn't step in and do rationing, rationing by price
              is how the market would do it.
              \_ How many of you recall the gas lines of the 70s?  Without
                 rationing by price we'll have lines *and* expensive gas, if
                 you can get it.  Or oh hey we can do that whole even/odd
                 numbered plate thing again, yeah that was great.  And don't
                 forget to ticket/fine/arrest any private citizen who dares
                 to give gas to anyone on the side of the road who runs out,
                 that was good for a laugh back then too.
                 \_ Dld that latter actually ever happen? I lived through
                    this, though I was quite young, but I don't remember
                    anything like that.
           \_ Huh?  What's wrong with 'rationing by price?'  That's what the
              market is FOR.
              \_ Because when you ration nesseccities by price poor people
                 die.  Old people die all the time in cold climates because
                 they can't afford heating oil.
                 \_ So how do you determine how much food/oil/whatever is
                    necessary and how much is beyond necessary? If you are
                    concerned about the poor then give them $$$ and let
                    them choose where to spend the $$$. That's still
                    rationing by price. I disagree with the idea that
                    every American should get a similar bundle of goods
                    that is "necessary".
                    \_ that's because you're an overprivileged twerp
                       \_ I forgot that you know what's best for people
                          more than they do. It's the leftist way to
                          boss people around.
                          \_ How do you "know" that freezing to death is
                             what is best for someone? Did they tell you
                             \_ Can you read? "let them choose where to
                                spend the $$$" -!pp
                                \_ Nonono, the soviet style command economy
                                   is clearly superior to western style
                                   \_ We actually live in a mixed economy.
                                      But you probably already know that.
                                \_ Sorry, missed that.
                    \_ Being able to survive a cold winter is pretty high
                       on the list.
                       \_ Some people have more tolerance for cold and
                          would prefer to spend the heating oil credit on
                          something more important to them like strippers
                          or booze or HDTV or whatever.
                       \_ Just wear a jacket at home.  That's how I save on
                          gas bill.
                          \_ Cause where you live it regularly gets below 0F
                 \_ No, sorry.  Government rationing will cause even worse
                    shortages and hurt even more people.  Where do you
                    central control command economy guys get the idea the
                    government can actually make anything better?  With gvt
                    imposed rationing you'll get a Soviet style system where
                    the rich and powerful get everything and the poor and
                    middle classes get nothing.
                    \_ And with no regulation, you get booms and panics
                       like in the 1880s. Why argue against the Straw Man
                       of a Soviet economy? Is your position so weak that
                       can't make your point any other way? Is there more
                       or less wealth inequality in Sweden or the US?
                       \_ A system in which everyone is equally poor is
                          a possible result and that wouldn't be a good
                          system. We can see examples of that in the China
                          of a couple decades ago, Soviet Russia, Cuba,
                          and so on. I don't think it matters how much of
                          the pie you get if it's a big enough pie.  Everyone
                          sharing a small pie isn't a great alternative.
                          \_ That may be true, but it's a well known
                             psychological finding that people (a) care about
                             relative equality and (b) care specifically
                             about inequality of transferable assets, much
                             more so than other, much more 'unfair' and
                             blatant kinds of inequality.  (There are some
                             interesting theories about how our attitudes about
                             fairness may have evolved which explain (a) and
                             (b)). -- ilyas
                             \_ I think most people in the USA don't care
                                or there would have been riots already. I
                                think people here assume (correctly) that
                                a rising tide lifts all boats. A wealthy,
                                powerful USA is something most Americans
                                desire and so far it has made us by far
                                the largest consumers in the world.
                                \_ Funny you should claim that right now.
                                   Here is a front page article from the WSJ
                                   that argues otherwise:
                                   (The rising boats opinion, not the
                                    wealthy powerful America comment.)
                          \_ Do you think that people in Sweden, Denmark, The
                             Netherlands, etc are "poor"? Do you think that they
                             think of themselves as poor? The countries are
                             much more egalitarian than the US and people are
                             in general happier. And no one goes hungry or lacks
                             for housing or medical care.
                             Netherlands, etc are "poor"? Do you think that
                             they think of themselves as poor? The countries
                             are much more egalitarian than the US and people
                             are in general happier. And no one goes hungry or
                             lacks for housing or medical care.
                             \_ The Netherlands is a wealthy nation, but the
                                individuals are poor by American standards.
                                I say this as someone with a Dutch mother
                                and most of my family still living in Holland.
                                Sure, they aren't lacking in necessities.
                                On the other hand, they don't have any of the
                                luxuries people here have. I wouldn't eagerly
                                live their lifestyle nor that of my godfather's
                                Swedish ex-wife. Of course, someone who is
                                homeless would disagree. However, I think
                                overall the middle class in the USA is better
                                off than the middle class there. The rich are
                                rich both places. GDP per capita US is #2
                                in the world behind Luxembourg. Holland is
                                #16. Sweden is #25. I think our system,
                                while "unequal" benefits the citizenry more
                                than any other even though it's not "fair".
                                \_ But don't Dutch people consistently have
                                   a higher "happiness" rating than Americans?
                                   Food for thought.  I believe Switzerland
                                   comes out on top in that list, although
                                   America is pretty high at number 20.
                                   \_ Happiness can be acheieved with drugs.
                                      It's not really something I aspire
                                      to. YMMV.
                                      \_ -1 to you, +1 to me.
                                         \_ I am just saying that happiness is
                                            a state of mind. I wouldn't
                                            want to live in Third World
                                            conditions just because the
                                            people that do claim they are
                                            happy about it.
                                            \_ You were doing so good there for
                                               a while too, after you dropped
                                               the "a slightest bit of tax
                                               increase is exactly equal to
                                               Stalinism" line of argument, too.
                                               Though you may in fact be
                                               Stalinism" line of argument,
                                               too. Though you may in fact be
                                               another person, since your tone
                                               is so different. But do you
                                               really think that Swedes live
                                               in "Third World" conditions? I
                                               do not. The Dutch seem to have
                                               quite pleasant lives and I have
                                               been there many times. What you
                                               say about the relative prosperity
                                               of the middle class is no doubt
                                               true, but all that junk that
                                               Americans have doesn't seem to
                                               improve their lives any.
                                               say about the relative
                                               prosperity of the middle class
                                               is no doubt true, but all that
                                               junk that Americans have
                                               doesn't seem to improve their
                                               lives any.
                                               \_ That's pretty paternalistic.
                                                        -- ilyas
                                                  \_ I am one of those liberal
                                                     elitists you keep hearing
                                                     \_ Good luck in the next
                                                        election!  People LOVE
                                                        \_ I am not running for
        \_ There may not be much of an oil trading system left by 2020 since
           the "global economy" might be totally wrecked by nonstop warfare.
           \_ Nonstop warfare?   Caused by what?  And fighting over what?
        \_ Time to get a high gas mileage vehicle before manufacturers put an
           SUV-like premium on them.
           \_ Haven't they already?
              \_ Yes on the hybrid ones, not yet on the regular engine ones.
           \_ Get a bike as well!
2008/4/15-23 [Reference/RealEstate, Finance/Investment] UID:49754 Activity:nil
4/15    Massive numbers of homes with negative equity
        and the associated article:
        I had no idea the negative equity problem was as widespread as the
        first link would suggest.
        \_ It's "Number of homes purchased in 2006"!
        \_ It's "homes ***purchased in 2006*** with negative equity"!
            \_ well taht certainly lowers the scale of the problem, but its
               still pretty big.
        \_ "most affected are those who bought recently with little or no money
           down". hahah, damn fools.
           \_ I'd rather be negative equity with no money down than in the
              same situation but 20% commited.
              \_ Well, with 20% down and the same price they would be in a
                 better situation with the mortgage. The example woman
                 seemed to still want to live in the house she bought.
                 She bought more house than she could afford, relying on
                 unreasonable price increases.
        \_ ObSuburbsSuck
2008/4/13-19 [Politics/Domestic/California, Finance/Investment] UID:49744 Activity:low
4/14    The Conservative solution to the housing mess: print lots of money. (WSJ)
        \_ And the solution to the federal deficit. What is a better
           solution to cut your deficit by 1/2 than inflation? MORE TAX?
           \_ LESS SPENDING?
              \_ Let's cut social programs.
                 \_ Agree. Let the homeless people go rampant on the street,
                    and let the desperate and starving ones carry their
                    struggle in their 'hood. Let's put them away somewhere
                    far so that we don't have to deal with them, ever.
           \_ (inflation is, effectively, a tax on people with savings)
                    Let's designate that place as Southern California.
                    \_ Can we put them in all the empty McMansions in the exurbs
                    \_ I think these places are called SF, Berkeley, Oakland,
                       Hollywood, Venice, and Santa Monica.
                       \_ Sadly, criminals don't stay in one place. Therefore
                          a better solution is to put them far away from
                          the civilized world (e.g. putting criminals in
                          S Cal)
                          \_ Northern Cal seems to have more of an affinity
                             for these people based on voting trends and
                             anecodotal evidence. Southern Cal on the
                             other hand (e.g. Orange County) does not
                             except for the cities I mentioned.
                             \_ You have obviously never been to downtown
                                Los Angeles.
                                \_ Skid row? Skid row is a perfect example
                                   of how poorly the homeless in SoCal are
                                   treated and how unwelcome they are. For
                                   example: ordinances against camping on
                                   the street, ordinances against sleeping
                                   on the sidewalk during the day, and so
                                   on. The ACLU and LA constantly clash.
           \_ (inflation is, effectively, a tax)
2008/4/11-16 [Politics/Domestic/Election, Finance/Investment] UID:49721 Activity:nil
4/11    McCain campaign attacks George Soros for funding third party groups,
        even though Soros has funded McCain's own causes:
        \_ What's the betting pool like for odds on McCain self-destucting
           or having a stroke before the election?
        \_ "I was for George Soros before I was against him"
2008/4/10-12 [Industry/Startup, Finance/Investment] UID:49709 Activity:nil
4/10    Can an impartial stock investor please clarify the following statement
        for me so that I can vote to the best of MY interest and not the
        interest of the CEO/CTO/CFO?
        "Approval of an amendment to X's 200X Stock Plan to increase the
        number of authorized share of Class A common stock issuable
        thereunfer by 6,500,000"?
        \_ It is hard to say, without knowing more about the companies
           condition. They are trying to increase the amount of preferred
           shares available to sell, in case they need to raise capital.
           This generally dilutes existing shares, but might be needed, if
           they are low on cash or something.
           \_ If I give you more details would that help? The company has
              between 10-20K employees, their stock was inflated to
              ridiculously high in Q4 2008 but has since then tanked about 40%.
           \_ They might also be supplying shares for stock options and ESPP.
              -- !OP
2008/3/27-28 [Reference/RealEstate, Finance/Investment] UID:49585 Activity:nil
3/27    "Ten Days That Changed Capitalism"
2008/3/26-28 [Science/GlobalWarming, Finance/Investment] UID:49568 Activity:nil
        Federal Reserve is a Failure while the White House praise
        America's new society of ownership during the housing boom.
2008/3/25-28 [Reference/Tax, Finance/Investment] UID:49563 Activity:low
3/25    How much are you guys expecting from GWBush's tax rebates?
        \_ $0.  Combined income of my wife and me is probably over the limit.
           \_ So you're the wealthy?
        \_ $600, a whole lot of money for a poor grad student..
        \_ $1200 tax deduction, which, since we already overpaid through
           withholding, means a $1200 bonus to our refund.
        \_ $0.  My income is too high.
        \_ How do you figure this out based on your income?
           \_ More than $75K if single or $150K if married and you're
              probably getting nothing. I imagine most s/w engineers are
              getting nothing, like me.
              \_ 75K taxable income.  (Post 401k, post all deductions.)
                 And it doesn't go away at 75k, although it does go down
                 pretty fast.  If you have a house you probably will get
                 a refund.
                 \_ You mean if you have a MORTGAGE with a lot of interests
                    to deduct?
                    \_ Yes I did.  See you knew exactly what I meant.
                       \_ ...the fact that it is wrong notwithstanding
                 \_ No, it's based on adjusted gross income. No mortgage
                    (or other itemized) deductions.
                    \_ None of you have actually explained how I would
                       calculate it.
                       \_ Learn to use google.
        \_ Nothing. We make too much.
2008/3/20-25 [Finance/Investment] UID:49519 Activity:nil
3/20    Huge money flows out of equities as stock indexes rocket higher (
        (Look at the Money Flow column, then click Find Historical Data,
        choose any another date, compare to today)
        \_ Look at the "Buying on Weakness" link. What's your point?
           \_ did you check the historical data?  do you know how to count?
              \_ What's your point?
        \_ The stock market appears to be recovering. Why does this upset you?
2008/3/19-21 [Finance/Investment] UID:49495 Activity:nil
3/18    Fed cuts the interest rate by another 3/4% and saves the
        housing market. Moral of the story: BUY THAT HOME NOW!
        Bush promises to make the economy good no matter the cost!
        \_ PS: US to Yen went from 120 to 98 from 2007 to now.
2008/3/18-21 [Finance/Banking, Finance/Investment] UID:49491 Activity:nil
3/18    Tent cities springing up in LA:
        \_ lazy people = poor people, proof that we shouldn't waste any
           more money on social programs and handouts!  -Republican
           \_ You can go and give them your money. Why don't you?
        \_ America! Fuck yeah!
2008/3/17-21 [Finance, Finance/Investment] UID:49479 Activity:nil
3/17    So, are we or are we not in a recession?
        \_ A rule of thumb is "two consecutive quarters of declining GDP."
           We may not have actually hit that yet, but it seems obvious we
           will.  -tom
           \_ it's not a rule of thumb, it's the definition used in the field.
              \_ there are two definitions:
                 (a) what you guys said
                 (b) NBER defined, to summarize:  significant economic slowdown
                     as measured by a combination of factors, including (a)
              \- on a local note, of these people:
                 frankel is ex-ucb dept econ, c. romer and d. romer are
                 ucb dept econ.
2008/3/17-21 [Finance/Investment] UID:49471 Activity:nil
3/17    BSC chart for last 5 days, making dot com bubble stocks proud!
        \_ "Unless derivatives contracts are collateralized or
            guaranteed, their ultimate value also depends on the
            creditworthiness of the counter-parties to them. But
            before a contract is settled, the counter-parties record
            profits and losses--often huge in amount--in their current
            earnings statements without so much as a penny changing
            hands. Reported earnings on derivatives are often wildly
            overstated. That's because today's earnings are in a
            significant way based on estimates whose inaccuracy may
            not be exposed for many years.  The errors usually reflect
            the human tendency to take an optimistic view of one's
            commitments. But the parties to derivatives also have
            enormous incentives to cheat in accounting for them...The
            two parties to the contract might well use differing
            models allowing both to show substantial profits for many
            Another problem about derivatives is that they can
            exacerbate trouble that a corporation has run into for
            completely unrelated reasons. This pile-on effect occurs
            because many derivatives contracts require that a company
            suffering a credit downgrade immediately supply collateral
            to counter-parties...The need to meet this demand can then
            throw the company into a liquidity crisis that may, in
            some cases, trigger still more downgrades. It all becomes
            a spiral that can lead to a corporate meltdown.
            A participant may see himself as prudent, believing his
            large credit exposures to be diversified and therefore not
            dangerous. However under certain circumstances, an
            exogenous event that causes the receivable from Company A
            to go bad will also affect those from Companies B through
            The derivatives genie is now well out of the bottle, and
            these instruments will almost certainly multiply in
            variety and number until some event makes their toxicity
            clear...In my view, derivatives are financial weapons of
            mass destruction, carrying dangers that, while now latent,
            are potentially lethal."  --Warren Buffett, 2002
2008/3/16-21 [Finance/Investment] UID:49469 Activity:moderate
3/16    JPM buys BSC at $2/share in stock swap (pending shareholder approval).
        Fed agrees to take BSC collateral for $30B cash and will eat any loss.
        Stock had been trading at $85/share in Jan.
        Fed allows investment banks to borrow directly from Fed (previously
        only banks with traditional checking/savings accounts were allowed).
        Fed discount rate cut 0.25%.
        All action announced just prior to Tokyo Stock Exchange open.
        Scheduled Fed meeting this Tuesday, futures expecting 0.5 to 1.25%
        cut to fed funds target.
        Now at 97 Yen = 1 USD.
        \_ Bush = Hero
        \_ It is pretty weird that JP Morgan was able to buy all assets
           of Bear Stearns, today, for 1/100th of what Bear Stearns was
           worth a week ago.
           \_ More like 1/30th,  but still.
              \_ if you also consider the Fed threw in $30B non-recourse on BSC
                 collateral, and the purchase price was $240M, you might
                 say JPM was GIVEN money to buy BSC -op
                 \_ That is what the markets think too, since JPM's stock
                    went up about ~$10B today, while most of their rivals
                    went down.
                    \_ I went to a career fair once where JPM brought in
                       a lot of 'real live employees' (as opposed to
                       recruiters) from NYC to man the booth. I cannot
                       believe how incredibly beautiful these women were.
                       I guess JPM management has good judgement in all things.
                       (Actually, my mom worked there after a merger and
                       at First USA under Jamie Dimon and Mr. Dimon is a
                       very well-regarded CEO, but JPM kind of sucked to
                       work for. Yes, my mom was a hottie back in the day.)
                       \_ ObYerMomJoke
        \_ The Bear Stearns buyout was engineered to hide the fact that a
           GIGANTIC portion of the assets of these investment houses are
           "innovative financial instruments" that have even less value
           than subprime mortgages.  Most of the wealth is hallucinated
           credit with no attachment to any tangible economic activity.
           \_ It is just a big giant casino.
              \_ Well, it is if you daytrade, but it's not to guys like Buffett.
              \_ Well, it is if you daytrade, but it's not to guys like
                 \_ Not just for the day traders. For the derivatives guys,
                    the LBO guys, the foreign exchange guys, the CDOs, the
                    SIVs, the entire economy is run like one big slot machine.
2008/3/15-17 [Politics/Foreign/Asia/Japan, Finance/Investment] UID:49464 Activity:nil
3/14    Is it GDP growth or GDP/person that is the best measure of
        an economies growth?
2008/3/14-17 [Finance/Banking, Finance/Investment] UID:49457 Activity:high
3/14    Fed provides emergency financing to BSC via JPM as other banks refuse
        to lend to BSC at fed funds target
        Fed to take on all credit risk for BSC collateral used to obtain
        On Monday, BSC said in a statement, "there is absolutely no truth to
        the rumors of liquidity problems"
        \_ Someone please translate this to plain English?
           \_ You went to Cal?
           \_ Read the WSJ article.  WSJ = Wall Street Journal.  If you have
              q's, come back.
           \_ The wsj article seems reasonable clear. In any event, here is
              my understanding:
              Bear Stearns Co. (BSC), a large NY investment bank, may not
              have enough money to meet its obligations. J.P. Morgan (JPM)
              has borrowed money from the Federal Reserve Bank (Fed) and
              loaned it to BSC to ensure that BSC has enough money to meet
              its obligations. JPM, unlike BSC, is not technically an
              investment bank, and therefore it may borrow money directly
              from the Fed.
              JPM is merely acting as a conduit for the Fed's loan to BSC.
              BSC has pleged its assets to the Fed as security for the
              loan. If BSC's asserts drop in value, then the Fed, and the
              loan. If BSC's assets drop in value, then the Fed, and the
              taxpayers, will take the loss; JPM is not taking on any risk.
              \_ Why would we care? I mean, we're already borrowing a lot
                 of money and our deficit is huge, why can't we just borrow
                 more? I mean, if you owe the bank $1 million dollars,
                 the bank owns you. But if you owe the bank $100 trillion
                 dollars, then you own the bank.
                 \_ Which is why the dollar is doing oh so well on the
                    international market right now.
                    \_ 99 yen to 1 dollar!
                 \_ Personally I am concerned about the level of debt the
                    government takes on. I do not know if bailing out BSC
                    is better than the alternative, which is to let if fail.
                    I guess we have to trust that the Fed knows what it is
                    \_ The Fed is in panic mode:
                       "The Fed's role in the deal suggests federal officials
                       fear a systemic collapse of the U.S. financial system
                       were Bear Stearns to fail. The fear stems from Bear
                       central role in a multitrillion-dollar web of
                       interconnecting derivative contracts."
                       \_ Probably. Something about this situation reminds me
                          of the LTCM fiasco a few years back.
                          \- I dunno how old you were in 1998, but the funny
                             part of this is Bear Stearns is the banks that
                             part of this is Bear Stearns is the bank that
                             refused to play ball ... the scrappy outsider...
                             during the "genteel" bailout of LTCM. It's also
                             amazing to read about the  arrogance of the LTCM
                             insiders dictating terms of the bailout. Just
                             unfucking believable.
                          \- I dunno how old you were when LTCM happened, but
                             the funny part of this is Bear Stearns is the
                             bank that refused to play ball ... the scrappy
                             outsider ... during the "genteel" bailout of
                             LTCM. It's also amazing to read about the
                             arrogance of the LTCM insiders dictating terms
                             of the bailout. Just unfucking believable.
                             \_ I didn't remember that BSC was one of the
                                hold outs during the LTCM bailout. That is
                                so ironic.
                                Re arrogance of LTCM insiders - Being a
                                nobel prize winner and 'furd prof goes to
                                some people heads.
                                \- it's not just merton and scholes.
                       \_ Deregulating the financial system was a mistake.
                          \_ Libural socialist rant! Why do you hate America?
                             \_ Yeah, me and FDR. Known America haters.
                                \_ FDR hated America, not only did he
                                   sell out this country at Yalta, he
                                   also instigated the New Deal which
                                   was pratically communist.
                                   was practically communist.
                                   \_ Whoa!  When the did the Birchers show up
                                      on the motd?!
                          \_ Time to return to a gold and/or silver standard!
                             \_ Time to put Glass-Stiegel back in place.
                                Though it is too late for this recession, at
                                least it will keep the next one from being
                                as bad. I fear we will see a New Deal style
                                nationalization of the banking system before
                                this is all said and done.
2022/08/19 [General] UID:1000 Activity:popular
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