tag:blogger.com,1999:blog-7366878066073177705.post5693991293787665374..comments2024-02-09T18:16:45.614+00:00Comments on The Psy-Fi Blog: The Business of Capital is Busttimarrhttp://www.blogger.com/profile/06254802085744425067noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-7366878066073177705.post-16826803813230802262010-10-20T09:40:38.937+01:002010-10-20T09:40:38.937+01:00Well, well, well. That is one of the weakest posts...Well, well, well. That is one of the weakest posts from you I have read so far.<br /><br />First, there is no good or bad capital. There is _real_ capital and then there are speculations. What banks incl. investment banks were doing since the 90s was speculation. What you call bad capital has in fact nothing to do with capital, i.e. utilised productive capacity. Housing per se has zero productive capacity. It is not capital.<br /><br />Next you confuse loanable funds theory with "we are doing God's work" claims. Loanable funds theory died together with the gold standard. In the fiat money world banks create money and that is how they managed to get to such leverage and to blow bubbles. In the fiat money world loans create deposits and everything else is satisfied by the central bank since its primary policy target is short-term interest rate.<br /><br />Finally, the only reason that Milkin and LBOs have to live is because we (governments) subsidize them. There is no intrinsic or economic reason why interest payments should be tax deductible and the only economic effect of it is to pass these taxes onto banks at the expense of budget and broad public. This then leads to larger loans that banks will give and in the end higher asset prices. The essence of financial industry is to capture any income of non-financial sector in interest payments. Any benefits that we, consumers, explicitly gain is implicitly shifted onto asset price and in the end larger loans that we, consumers, have to take.Игры рынкаhttps://www.blogger.com/profile/12001273098690387194noreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-19217783180222032682009-10-26T12:17:54.302+00:002009-10-26T12:17:54.302+00:00You're right - there needs to be a massive cha...You're right - there needs to be a massive change. <br /><br />But it won't be able to come from within - why will investment bankers who are there now want a change? they are just taking the money now and running as they know in a few years that it will be it be all over - the gov't won't have money left - or maybe they'll put up VAT to 30% so bankers can continue with their state subsidised employment.<br /><br />PS - "A message from the hoi-polloi" - great post :)<br /><br />We better get praying to God that we will see some justice in this world - and soon (as looks like everyone else is too scared of the 'talented' bankers in the city!)<br />In Jesus name.<br />AmenAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-51402082593152979012009-10-26T11:45:57.478+00:002009-10-26T11:45:57.478+00:00A message from the hoi-polloi:
Not much time to r...A message from the hoi-polloi:<br /><br />Not much time to respond (working) STOP<br />Hoi-polloi understand well enough already. Amusing that you seem to think not. Guess you’re very detached STOP<br />Hoi-polloi already got used to idea of wankers in The City getting paid lots back in the 80s- remember- British society meets nature-red-in-tooth-and-claw- all a long time ago now- we’ve so got over the jealousy thing already girlfriend STOP<br />Angry now because of public money bail-out rescuing useless *failed* wankers who keep their jobs despite being useless and *failing* but then continue to get paid lots- comprende? STOP<br />Investment banking not as important as you think. Just another pond-life world like all the rest. All ultimately based on dull drone hoi-poloi activity STOP<br />Not only money taken from puppies and orphans (“uh- uh- oh- you’re so funny”) but also from doctors, dockers, taxi-drivers, squaddies, chiropodists, plumbers, jockeys, radio-presenters, sociologists, shelf-stackers, North-Sea divers, tree-surgeons, assemblers, call-centre workers, psychiatric nurses, telecoms engineers, musicians, shop assistants, cooks, bookies, farmers, physicists, blacksmiths, miners, teachers, train-drivers, fishermen, work-shy benefit-cheats, poets, typographers, firemen, drug-designers, mountain-climbers, key-grinders, vets, politicians, estate-agents, hairdressers and pompous house-husbands with too much time on their hands... (I could go on) STOP<br />Can’t ever fix- capital always has and always will be misallocated- “it is ebb and flow, tidal gravity, it is ecological balance”. Structural change would help (regulation- the process- largely discredited) so at least separate utility and speculative banking so that failure can happen, then no problem with them paying each other as much as they like. Less anger ensues STOPAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-57515439953850044102009-10-26T11:28:18.919+00:002009-10-26T11:28:18.919+00:00Ideally all the investment banks would have gone b...Ideally all the investment banks would have gone bust last year which would have triggered the shakeout that was needed. <br />But as the collaterall damage of that would have been massive economic, and probabaly social, disruption governments choose the lesser evil of bailing out the banks. <br />The trick now is to resolve the agents v principals dilemma of allowing bankers to use our capital in a sensible way. The key is for our capital to be adequately rewarded for the risks managers take with it on our behalf.Robhttp://www.fundamentaltracker.comnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-10484614521947669992009-10-26T10:17:54.987+00:002009-10-26T10:17:54.987+00:00Great article. Only criticism I would make is the ...Great article. Only criticism I would make is the consistent mis-spelling of Michael Milken's name as "Milkin".Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-27280504810083305912009-10-26T09:37:09.191+00:002009-10-26T09:37:09.191+00:00no, the problem is that the bankers received a bai...no, the problem is that the bankers received a bailout that allowed themselves to remain solvent when they were not. but it does not end there. it is compounded by the fact that 'real people' are not being bailed out, rather, the very institutions that were saved are now foreclosing on the 'real people', or demanding untenable aggreements on distressed loans given to 'real people'. 'real people' here that this is happening to other 'real people', and whether it is their own situation or not, they are enraged. It is also begining to dawn on 'real people' that the personhood status given corporations is a privileged gift. the greedheads days are numbered... viva la revolucion!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-10461043685449924012009-10-25T22:37:42.883+00:002009-10-25T22:37:42.883+00:00My view is that people make explanations of the ec...My view is that people make explanations of the economic crisis far more complicated than they need to be.<br /><br />Stocks were priced at three times fair value in January 2000. If you do the math, that tells us that there was about $12 trillion of money floating through the economy fated to go "poof!" in the not-too-distant future.<br /><br />What should we expect to see happen to an economy that loses $12 trillion worth of assets? About what we see before us today, no?<br /><br />I don't think it had anything to do with the bankers. Except that they believed in the Efficient Market Theory to the same extent as most of the rest of us. And they happened to be in the wrong place at the wrong time. <i>Someone</i> had to be there when things went "pop!' It happened to be the bankers. But I don't see that as being the biggie here.<br /><br />I see the $12 trillion of funny money as being the biggie. I point to the reckless and non-stop promotion of the Passive Investing concept (the idea that there is no need to lower one's stock allocation when prices become insanely dangerous) as the primary cause of that one.<br /><br />RobRob Bennetthttp://arichlife.passionsaving.comnoreply@blogger.com