My guys solutions: What do you guys think?
http://market-ticker.denninger.net/

* No off-balance sheet anything. Period.
* No Level 3 anything. If you can't get a bid on it in the market, its worth zero. If you can get a bid, that's its value today. If it goes up in value tomorrow, fine, but today, that's its price.
* No off-exchange derivatives. You want to trade it, you can do it on an exchange with a central clearing house. This guarantees that margin supervision will be enforced because the "guy in the middle" is going to demand it. The OCC and DTC have done a damn good job of guaranteeing margin supervision. Bring that level of supervision to all derivatives and do it today. As a transition "tool" declare that any derivative not traded on a public exchange has a valuation and coverage against any other asset of zero.
* All "assets" must be disclosed and marked daily. No exceptions. My account must be marked every night to the market. So should everyone else's, especially those who are trading with (or are) regulated and/or public entities.
* No exceptions. You cheat, you go to pound-me-in-the-butt prison. PERIOD.

akuma587 said: senseinobaka said: akuma587 said: Yeah, well I mean we are faced with two shitty alternatives, let the market correct itself and have everyone in the financial sector shit a brick when mass defaults on loans occur, or try to ease the transition by bailing out a bunch of people who in no way shape or form deserve a bailout (especially the idiots who accepted a variable interest rate and now can't pay). So either way we are pretty screwed, and will be screwed for several months if not years.   Both options are not great, but one leads to more problems. We have a situation here where these banks and investment houses have thrived and advocated for a free market. And now that the free market is telling them to go screw themselves, they cry for government help. It doesn't work like that. Even worse, bailing out businesses that fail causes more problems down they road. To name one, it gives no incentive to correct or fix the problem. To name another, smaller more innovative organizations (read: less corrupt and more responsible) are not given the chance to fill in the gaps, instead they are obstructed by government intervention.   The free market actually caused this problem, you know, because there weren't enough government regulations on unscrupulous lending practices.

I think you have that wrong. This correction (read failure) is a free market function. Unscrupulous lending practices do not last long in a free market and the free market eventually rips a new anus into corporations that practice them. Now, I dont agree with economic fascism (fascism = government legislative control of private business and property, it's different than socialism which is government seizure of private business and property), so I definately dont think the government should dictate how a business uses it's own money, but I dont think the government should protect the business from the consequences of using their own money unwisely. Facist policies have been shown to be more damaging in the long run than the free market. Just think about it, how often do you hear about large free market businesses failing compared to large businesses in a fascist market. Compare financial institutions to airlines for starters.

 

 

 

senseinobaka said: I think you have that wrong. This correction (read failure) is a free market function. Unscrupulous lending practices do not last long in a free market and the free market eventually rips a new anus into corporations that practice them. Now, I dont agree with economic fascism (fascism = government legislative control of private business and property, it's different than socialism which is government seizure of private business and property), so I definately dont think the government should dictate how a business uses it's own money, but I dont think the government should protect the business from the consequences of using their own money unwisely. Facist policies have been shown to be more damaging in the long run than the free market. Just think about it, how often do you hear about large free market businesses failing compared to large businesses in a fascist market. Compare financial institutions to airlines for starters.

I stopped listening as soon as you said that government legislative control of private businesses and property is economic fascism.

 

senseinobaka said: akuma587 said: senseinobaka said: akuma587 said: Yeah, well I mean we are faced with two shitty alternatives, let the market correct itself and have everyone in the financial sector shit a brick when mass defaults on loans occur, or try to ease the transition by bailing out a bunch of people who in no way shape or form deserve a bailout (especially the idiots who accepted a variable interest rate and now can't pay). So either way we are pretty screwed, and will be screwed for several months if not years.   Both options are not great, but one leads to more problems. We have a situation here where these banks and investment houses have thrived and advocated for a free market. And now that the free market is telling them to go screw themselves, they cry for government help. It doesn't work like that. Even worse, bailing out businesses that fail causes more problems down they road. To name one, it gives no incentive to correct or fix the problem. To name another, smaller more innovative organizations (read: less corrupt and more responsible) are not given the chance to fill in the gaps, instead they are obstructed by government intervention.   The free market actually caused this problem, you know, because there weren't enough government regulations on unscrupulous lending practices.   I think you have that wrong. This correction (read failure) is a free market function. Unscrupulous lending practices do not last long in a free market and the free market eventually rips a new anus into corporations that practice them. Now, I dont agree with economic fascism (fascism = government legislative control of private business and property, it's different than socialism which is government seizure of private business and property), so I definately dont think the government should dictate how a business uses it's own money, but I dont think the government should protect the business from the consequences of using their own money unwisely. Facist policies have been shown to be more damaging in the long run than the free market. Just think about it, how often do you hear about large free market businesses failing compared to large businesses in a fascist market. Compare financial institutions to airlines for starters.

Airlines have problems because the price of operation is so high due to fuel costs and only SW makes a profit because of deals they have made for better fuel prices (which other airlines do not have). These are NOT govt deals either. Govt saved airlines because its an important part of the american system. What are you gonna do if all but one Airline goes down? But they don't save every one because you can only save the ones that are managed the best.

 

You are fixated on facism (which this is not). So should the market go to hell and take SIGNIFICANTLY longer to be fixed because you don't like the feds helping out in this situation? This does not just hit the "rich". No, this affects EVERYONE. Small Bussnesses have a MUCH harder time getting loans in an economy like this, people with good credit and shining bussiness models even. People who can afford a house even have toruble getting mortgages. People with retirement plans loose money as market goes down. European and Asian markets go down too. Its not just the rich getting owned. What do you propose to do to help fix this?

The govt has to help make sure shit dont hit the fan. It has to make sure that companies are not engaged in corruptioin and that their practices are not setting up for a MAJOR economic downturn. Free Market will not fix everything if everyone, or almost everyne, in an industry is doing the same bad practice.

Aiemond said: senseinobaka said: akuma587 said: senseinobaka said: akuma587 said: Yeah, well I mean we are faced with two shitty alternatives, let the market correct itself and have everyone in the financial sector shit a brick when mass defaults on loans occur, or try to ease the transition by bailing out a bunch of people who in no way shape or form deserve a bailout (especially the idiots who accepted a variable interest rate and now can't pay). So either way we are pretty screwed, and will be screwed for several months if not years.   Both options are not great, but one leads to more problems. We have a situation here where these banks and investment houses have thrived and advocated for a free market. And now that the free market is telling them to go screw themselves, they cry for government help. It doesn't work like that. Even worse, bailing out businesses that fail causes more problems down they road. To name one, it gives no incentive to correct or fix the problem. To name another, smaller more innovative organizations (read: less corrupt and more responsible) are not given the chance to fill in the gaps, instead they are obstructed by government intervention.   The free market actually caused this problem, you know, because there weren't enough government regulations on unscrupulous lending practices.   I think you have that wrong. This correction (read failure) is a free market function. Unscrupulous lending practices do not last long in a free market and the free market eventually rips a new anus into corporations that practice them. Now, I dont agree with economic fascism (fascism = government legislative control of private business and property, it's different than socialism which is government seizure of private business and property), so I definately dont think the government should dictate how a business uses it's own money, but I dont think the government should protect the business from the consequences of using their own money unwisely. Facist policies have been shown to be more damaging in the long run than the free market. Just think about it, how often do you hear about large free market businesses failing compared to large businesses in a fascist market. Compare financial institutions to airlines for starters.       Airlines have problems because the price of operation is so high due to fuel costs and only SW makes a profit because of deals they have made for better fuel prices (which other airlines do not have). These are NOT govt deals either. Govt saved airlines because its an important part of the american system. What are you gonna do if all but one Airline goes down? But they don't save every one because you can only save the ones that are managed the best.   You are fixated on facism (which this is not). So should the market go to hell and take SIGNIFICANTLY longer to be fixed because you don't like the feds helping out in this situation? This does not just hit the "rich". No, this affects EVERYONE. Small Bussnesses have a MUCH harder time getting loans in an economy like this, people with good credit and shining bussiness models even. People who can afford a house even have toruble getting mortgages. People with retirement plans loose money as market goes down. European and Asian markets go down too. Its not just the rich getting owned. What do you propose to do to help fix this? The govt has to help make sure shit dont hit the fan. It has to make sure that companies are not engaged in corruptioin and that their practices are not setting up for a MAJOR economic downturn. Free Market will not fix everything if everyone, or almost everyne, in an industry is doing the same bad practice.

Whoa. This is the failure of a financial institution not a complete market collapse. The doomsday scenario you depict just isnt going to happen. What will happen is the feds using tax money, our money, to bail out private funds that were mismanaged. This bailout coming from a government that is 10 trillion in debt. All this will accomplish is to remove the consequences from risky investment (which is called risky for a reason) and devalue the dollar. The latter will have REAL adverse implications for the populace.

 

To Illustrate: The market lost 600 points based on this news yesterday. 24 Hours later it has regained 200+ points. Thats a 33% recovery in 24 hours. A failing financial institution can cause damage, but not enough to destroy the market. In a month or so this will all be fixed on it's own, naturally. The feds stepping in is really uneccessary.

 

akuma587 said: senseinobaka said: I think you have that wrong. This correction (read failure) is a free market function. Unscrupulous lending practices do not last long in a free market and the free market eventually rips a new anus into corporations that practice them. Now, I dont agree with economic fascism (fascism = government legislative control of private business and property, it's different than socialism which is government seizure of private business and property), so I definately dont think the government should dictate how a business uses it's own money, but I dont think the government should protect the business from the consequences of using their own money unwisely. Facist policies have been shown to be more damaging in the long run than the free market. Just think about it, how often do you hear about large free market businesses failing compared to large businesses in a fascist market. Compare financial institutions to airlines for starters.       I stopped listening as soon as you said that government legislative control of private businesses and property is economic fascism.

Of course you did. Because authoritative policy/control towards private property is really freedom. How can I miss that.

 

I hope you realize how childish you look plugging your ears with your fingers and yelling "LALALALALALALALA"

 

senseinobaka said: Aiemond said: senseinobaka said: akuma587 said: senseinobaka said: akuma587 said: Yeah, well I mean we are faced with two shitty alternatives, let the market correct itself and have everyone in the financial sector shit a brick when mass defaults on loans occur, or try to ease the transition by bailing out a bunch of people who in no way shape or form deserve a bailout (especially the idiots who accepted a variable interest rate and now can't pay). So either way we are pretty screwed, and will be screwed for several months if not years.   Both options are not great, but one leads to more problems. We have a situation here where these banks and investment houses have thrived and advocated for a free market. And now that the free market is telling them to go screw themselves, they cry for government help. It doesn't work like that. Even worse, bailing out businesses that fail causes more problems down they road. To name one, it gives no incentive to correct or fix the problem. To name another, smaller more innovative organizations (read: less corrupt and more responsible) are not given the chance to fill in the gaps, instead they are obstructed by government intervention.   The free market actually caused this problem, you know, because there weren't enough government regulations on unscrupulous lending practices.   I think you have that wrong. This correction (read failure) is a free market function. Unscrupulous lending practices do not last long in a free market and the free market eventually rips a new anus into corporations that practice them. Now, I dont agree with economic fascism (fascism = government legislative control of private business and property, it's different than socialism which is government seizure of private business and property), so I definately dont think the government should dictate how a business uses it's own money, but I dont think the government should protect the business from the consequences of using their own money unwisely. Facist policies have been shown to be more damaging in the long run than the free market. Just think about it, how often do you hear about large free market businesses failing compared to large businesses in a fascist market. Compare financial institutions to airlines for starters.       Airlines have problems because the price of operation is so high due to fuel costs and only SW makes a profit because of deals they have made for better fuel prices (which other airlines do not have). These are NOT govt deals either. Govt saved airlines because its an important part of the american system. What are you gonna do if all but one Airline goes down? But they don't save every one because you can only save the ones that are managed the best.   You are fixated on facism (which this is not). So should the market go to hell and take SIGNIFICANTLY longer to be fixed because you don't like the feds helping out in this situation? This does not just hit the "rich". No, this affects EVERYONE. Small Bussnesses have a MUCH harder time getting loans in an economy like this, people with good credit and shining bussiness models even. People who can afford a house even have toruble getting mortgages. People with retirement plans loose money as market goes down. European and Asian markets go down too. Its not just the rich getting owned. What do you propose to do to help fix this? The govt has to help make sure shit dont hit the fan. It has to make sure that companies are not engaged in corruptioin and that their practices are not setting up for a MAJOR economic downturn. Free Market will not fix everything if everyone, or almost everyne, in an industry is doing the same bad practice. Whoa. This is the failure of a financial institution not a complete market collapse. The doomsday scenario you depict just isnt going to happen. What will happen is the feds using tax money, our money, to bail out private funds that were mismanaged. This bailout coming from a government that is 10 trillion in debt. All this will accomplish is to remove the consequences from risky investment (which is called risky for a reason) and devalue the dollar. The latter will have REAL adverse implications for the populace.   To Illustrate: The market lost 600 points based on this news yesterday. 24 Hours later it has regained 200+ points. Thats a 33% recovery in 24 hours. A failing financial institution can cause damage, but not enough to destroy the market. In a month or so this will all be fixed on it's own, naturally. The feds stepping in is really uneccessary.

 

Where did i say there was a total market collapse? I just said it would take significantly longer for everything to settle out. Your not adressing the arguments i made. I said that letting al these firms die would make it much harder for the average american to get a loan, for small bussniesses to get a load, investors are gonna be nervous so the market downturns till it straightens out (which would be awhile).

Also how is this promoting mismanagement? You think its just a "ok, here some money" thing? No this is gonna cause a total restructuring of these companies, plus thier satus of Pillars of the economy is totally lost. You say the taxpayers are going to pay for this. you are correct, the money form taxes goes into this. But you fail to realize that the normal taxpayer would be hurt more if this did not occur. You say that the govt spending money on this is going to devalue the dollar, which is wrong (its much more complicated than the govt bailing out these bussniesses). No, the REAL consequences for REAL americans are the ones i showed earlier. People with retirement plans that have stocks in them (especially any of these) get hurt. People who want to buy a new home, or a first home. People who want to start thier own bussiness. People who are trying to get a job. People who are getting laid off due to this (its not just from these firms either).

Not every institution needs saving, but some of them do. And, it would take more than a few months to fix it if there was o intervention at all.

senseinobaka said: akuma587 said: I stopped listening as soon as you said that government legislative control of private businesses and property is economic fascism.   Of course you did. Because authoritative policy/control towards private property is really freedom. How can I miss that.   I hope you realize how childish you look plugging your ears with your fingers and yelling "LALALALALALALALA"

I hope you realize how bad of a situation the country would be in if the government just sat back and let the free market do as it pleased.  The economy would have imploded by now without federal help.

 

I stopped having arguments with free market people after one (a roommate) told me that anti-trust laws got in the free market's way, and a true free market would have a magical invisible hand come destroy the monopoly with a new small innovative company that can do it cheaper and/or better, instead of the monopoly buying it, stealing it, or crushing it. The only invisible hand I know is the one that fists the poor and gives handjobs to the rich. A pure free market is as wacky a fantasy as pure communism. That's why the U.S. is socialist as all hell and wiggles around in the middle.

(runs from thread)

The Ghost of RubangB said: I stopped having arguments with free market people after one (a roommate) told me that anti-trust laws got in the free market's way, and a true free market would have a magical invisible hand come destroy the monopoly with a new small innovative company that can do it cheaper and/or better, instead of the monopoly buying it, stealing it, or crushing it. The only invisible hand I know is the one that fists the poor and gives handjobs to the rich. A pure free market is as wacky a fantasy as pure communism. That's why the U.S. is socialist as all hell and wiggles around in the middle. (runs from thread)

 

Monopolies are not (necessarily) a bad thing being that there are certain markets (for example power generation) where the efficiency of scale means that one large company can produce a far better product at a far lower price. Now, if a monopoly takes advantage of their position and sells a product at a price higher than a smaller company can produce and sell the same product for while making a profit a smaller company will enter the market and provide competition.

Now, the problem is that a (bad) Monopoly may not dissolve in a timely manner and the inefficient state the market is in may persist for quite awhile; consider Windows, even though competition has arrived in the form of Linux and Mac it is taking a very long time for them to (slowly) chip away Window's marketshare.

Realistically, I don't think eliminating anti-trust laws is a good thing but I also don't believe that Monopolies pose the risk most people assume they do.