The Keynesian Nightmare Continues...

[sjt18]

Have you just put your hands in your ears and started screaming "Mary had a little lamb, little lamb, little lamb"?????

Over-regulation is the reason we had to pump a trillion into the system to keep its heart beating? Over-regulation?

Yes! In the particular case of the finance bubble burst... regulations that simultaneously gave the industry an illusion that they couldn't lose and forced them to qualify people for loans for non-economic reasons. A correctly regulated market would not do that.

It was improper regulation that created companies "too big to fail" in great measure by setting up artificial entry barriers to competitors.

This proves PRECISELY what my major point has been: gov't cannot simultaneously be a player and referee.

Some control is necessary but when you make it as complex and arbitrary as it becomes under any application of Keynes then you are bound to have incredible inefficiencies AND corruption. EXACTLY like what we've seen.

Would you like to step away from the crack-pipe and have a rethink?

I think you should take your own advice if you think that "trillion" did anything to keep the heart beating.

Once again, the Keynesian model has never been successful anywhere outside of a textbook or egg-headed professors classroom model.

 

[droski]

1. And yet these instruments were bought and sold as real wealth. Real estate comprised a substantial part, yes. And hence, these derivatives are valued at 500 trillion (actually more) with tangible world-wide assets at 50 trillion.

2. Agree. And yet the icon, Friedman, believes it is an "objective science." Moreover, as I've said, bundling the debt instruments under the rubric of JPL mathematical models were supposed to make them fool-proof. And yes, Lehman Bros et al is proof they did take it seriously.

3. I only know the dudes at Long Term Capital Management won the Nobel for coming up with a pricing formula for options (addendum: Long Term Capital Management collapsed and cost the taxpayers $4.6bn)

1. relavance?

2. for the 1,000th time how were they "building the debt instruments under the rubric of JPL mathematical models"? Do you realize the people who owned the models BOUGHT the debt and generally didn't do the underwriting? you do know what underwriting means right?

3. long term capital collapsed because the mangers got away from what they were good at, treasury bond arbitrage, and got into things they knew nothing about like russian debt and selling volitility. read when genius fails. you might learn something. maybe.

 

[utgibbs]

dude stop the condescension. either state your case or stfu and admit you don't know what you are talking about.

Dude, chill out. You live in Berkeley, man! Second greatest place in California. I love California, used to live there. Love it!

Seems I've caused quite a ruckus. I know it can be.... uncomfortable, when someone new comes to the Politics board. It's the new realities I'm afraid. I know quite well what I'm talking about, and I certainly know how to back it up cogently and authoritatively.

It's up to everyone else to raise their game. Getting to the SECCG is not enough.

 

[droski]

a) i live in los angeles, which is a far better place to live than berkeley

b) if you can back things up cogently and authoritatively i suggest you start doing so. rather than just repeating yourself and acting like a douchebag.

 

[utgibbs]

1. relavance?

2. for the 1,000th time how were they "building the debt instruments under the rubric of JPL mathematical models"? Do you realize the people who owned the models BOUGHT the debt and generally didn't do the underwriting? you do know what underwriting means right?

3. long term capital collapsed because the mangers got away from what they were good at, treasury bond arbitrage, and got into things they knew nothing about like russian debt and selling volitility. read when genius fails. you might learn something. maybe.

1. I have to explain the relevance to you?

2. Do you know what these derivatives actually are?

3. Okay. How does that change anything I wrote?

 

[droski]

1. I have to explain the relevance to you?

2. Do you know what these derivatives actually are?

3. Okay. How does that change anything I wrote?

1. you'll have to explain how it makes any argument for you whatsoever

2. yes. clearly i understand it far better than you do.

3. their option pricing models weren't what torpedoed the company. it was the leverage and stupid investments. if they had stuck to option pricing the company would still be around. so yes blaming them going under on the models is a fabrication.

 

[utgibbs]

a) i live in los angeles, which is a far better place to live than berkeley

b) if you can back things up cogently and authoritatively i suggest you start doing so. rather than just repeating yourself and acting like a douchebag.

1. Hmmmmm. I think I understand the problem.

2. Have been which is why you are upset. Let's take a look in the mirror though before calling out douchebags. I've challenged you, but haven't resorted to calling names.

 

[utgibbs]

1. you'll have to explain how it makes any argument for you whatsoever

2. yes. clearly i understand it far better than you do.

3. their option pricing models weren't what torpedoed the company. it was the leverage and stupid investments. if they had stuck to option pricing the company would still be around. so yes blaming them going under on the models is a fabrication.

1. Hmmmm, Lehman Bro + 1 trillion seem to support my point about leverage imbalance.

2. I'm not sure I'm convinced you understand securitization. I don't think anyone with clear thinking truly understands what these debt instruments really are.

3. Didn't say they were the problem. Just said they were part of the company. Obviously, they were not effective in leading the senior management then. No biggie, except to the taxpayer (I'm assuming you are one).

 

[droski]

1. Hmmmm, Lehman Bro + 1 trillion seem to support my point about leverage imbalance.

2. I'm not sure I'm convinced you understand securitization. I don't think anyone with clear thinking truly understands what these debt instruments really are.

3. Didn't say they were the problem. Just said they were part of the company. Obviously, they were not effective in leading the senior management then. No biggie, except to the taxpayer (I'm assuming you are one).

1. it has nothing to do with jpl math models

2. i'm thinking you don't understand the difference between derivatives and ABS.

3. everyone who bailed out long term capital made multiples on the money invested.

 

[BigPapaVol]

1. And yet these instruments were bought and sold as real wealth. Real estate comprised a substantial part, yes. And hence, these derivatives are valued at 500 trillion (actually more) with tangible world-wide assets at 50 trillion.

pure conjecture and senseless gobbledygook. The argument here, regarding derivative contracts and tangible assets is absurd. Insurance fees have never been about the underlying collateral. Hell, the vast majority of derivatives aren't about the underlying collateral - they're about the market price of the underlying collateral and bet placed thereabout.

2. Agree. And yet the icon, Friedman, believes it is an "objective science." Moreover, as I've said, bundling the debt instruments under the rubric of JPL mathematical models were supposed to make them fool-proof. And yes, Lehman Bros et al is proof they did take it seriously.

it really makes you look idiotic to talk about macro / micro econ in broad terms in response to a point about micro investment failure. The two are only tangentially related, and not remotely related as it pertains to this discussion. I guess you want to proclaim Chinese style oversight as some sort of magic bullet for this case, but that would be stupid. Japan had heavy government intervention all up in the middle of their banking system and the broad RE devaluation they experienced crushed them for well over a decade. The point about foolproof makes you look worse. Nobody has ever sold the math as foolproofing anything. The argument would be that a huge, diverse pool of mortgages would so offset the risk of loss as to make it negligible. This made people feel good about all the sub-investment grade debt, but it made the investments in it no less risky. It was stupid to assume it was otherwise. Michael Milken followed a similar strategy in pushing less than investment grade debt during his big runup, but there is a reason the market is pricing it where it does and that reason will always come home to roost.

3. I only know the dudes at Long Term Capital Management won the Nobel for coming up with a pricing formula for options (addendum: Long Term Capital Management collapsed and cost the taxpayers $4.6bn)

Do you have any idea why LTCM imploded?

 

[BigPapaVol]

1. Hmmmm, Lehman Bro + 1 trillion seem to support my point about leverage imbalance.

2. I'm not sure I'm convinced you understand securitization. I don't think anyone with clear thinking truly understands what these debt instruments really are.

3. Didn't say they were the problem. Just said they were part of the company. Obviously, they were not effective in leading the senior management then. No biggie, except to the taxpayer (I'm assuming you are one).

do you know what the insolvency was about - at Lehman, Merrill, LTCM, etc?

 

[MG1968]

through all of this, gibbs has yet to make a convincing argument that explains how massive government expenditures leads to economic prosperity. The economic boom after WWII had nothing to do with FDR's make-work programs and Vietnam expenditures had little or nothing to do with the economic doldrums of the 70's.

All I see is an academic economist, a true disciple of Keynes, making a sad attempt to explain how the real world works. It reminds me of Plato's "Parable of the Cave".

 

[gsvol]

through all of this, gibbs has yet to make a convincing argument that explains how massive government expenditures leads to economic prosperity. The economic boom after WWII had nothing to do with FDR's make-work programs and Vietnam expenditures had little or nothing to do with the economic doldrums of the 70's.

All I see is an academic economist, a true disciple of Keynes, making a sad attempt to explain how the real world works. It reminds me of Plato's "Parable of the Cave".

No doubt the doldrums of the 70s had nothing to do with the policies of Jimmy Carter aka Barack Obama I??

Since Obama has surrounded himself with academics who have wonderful sounding theoris but have never ever dealt with the real world, perhaps that is why there is such a disconnect between the political rhetoric and reality.

Just guessing, I have no idea what you're talking about, only aware that there is a hell of a lot of talk and no action!!


"A nation that is afraid to let its people judge the truth and falsehood in an open market is a nation that is afraid of its people." - JFK

 

[utgibbs]

Do you have any idea why LTCM imploded?

Bad investments spurred by deregulation.

 

[utgibbs]

through all of this, gibbs has yet to make a convincing argument that explains how massive government expenditures leads to economic prosperity. The economic boom after WWII had nothing to do with FDR's make-work programs and Vietnam expenditures had little or nothing to do with the economic doldrums of the 70's.

All I see is an academic economist, a true disciple of Keynes, making a sad attempt to explain how the real world works. It reminds me of Plato's "Parable of the Cave".

1. 1945 - 1971, large scale government programs / nationalization = greatest period of growth and development in human history coming after the greatest tragedy in human history.

2. Economic boom after WWII - Britain, Attlee. 1.3% unemployment, NHS, nationalizations; France, Monnet Plan "planification" - modernized the monopolized and under-performing French industries; punitive nationalizations of Vichy collaborators; economic miracle of 1950s. (Would be the model adopted by Deng in China); US - New Deal rolling, unemployment low and stable, "Peace Dividend." Shall I discuss Japan?

That's real world stuff after "worse than anything probably that has ever happened."

 

[utgibbs]

do you know what the insolvency was about - at Lehman, Merrill, LTCM, etc?

Feel free to explain it, BPV. Why do you still have a dog in this? Everytime you've put down your real thoughts, we seem to agree.

Are you just mad that Fulmer is about to be our new AD?

 

[droski]

Bad investments spurred by deregulation.

please be more specific about how deregulation even remotely had anything to do with it

 

[MG1968]

1. 1945 - 1971, large scale government programs / nationalization = greatest period of growth and development in human history coming after the greatest tragedy in human history.

2. Economic boom after WWII - Britain, Attlee. 1.3% unemployment, NHS, nationalizations; France, Monnet Plan "planification" - modernized the monopolized and under-performing French industries; punitive nationalizations of Vichy collaborators; economic miracle of 1950s. (Would be the model adopted by Deng in China); US - New Deal rolling, unemployment low and stable, "Peace Dividend." Shall I discuss Japan?

That's real world stuff after "worse than anything probably that has ever happened."

rubbish. Look at what the NHS and other nationalization has done to Britain's economy now. France's economy is no better. Japan had the "lost decade". China moved to a capitalist economy because it realized that a centrally planned economy couldn't possibly work to feed a billion people. Try to express religious freedom in China and see what happens.

you keep giving these trite, academic answers. They might work on a room full of 18 year olds or a conference of your fellow Keynesian travelers. They're not working here.

 

[utgibbs]

rubbish. Look at what the NHS and other nationalization has done to Britain's economy now. France's economy is no better. Japan had the "lost decade". China moved to a capitalist economy because it realized that a centrally planned economy couldn't possibly work to feed a billion people. Try to express religious freedom in China and see what happens.

you keep giving these trite, academic answers. They might work on a room full of 18 year olds or a conference of your fellow Keynesian travelers. They're not working here.

I don't think digging out of the rubble of WWII could be any less trite, actually.

Britain denationalized under Thatcher - and there is always talk of renationalizing (they may have done parts) of the rail system. Brits enjoy better health at far less cost than Americans (as do all National Health countries). BBC offers higher quality television and is highly profitable.

Facts simply work on anyone - except ideologies.

 

[MG1968]

if Britons enjoy better health at less cost, why are women with breast cancer being denied life saving medications under NHS?

why don't you just admit that you're a socialist?

 

[utgibbs]

if Britons enjoy better health at less cost, why are women with breast cancer being denied life saving medications under NHS?

why don't you just admit that you're a socialist?

Why do they live longer and have lower infant mortalities? These aren't obscure figures these are the figures we use to judge the merits of civilization.

Oh, and they do this for a lot less per capita. 100% comprehensive health coverage for every citizen at half the cost per head. It is just plain more efficient and it gets better results.

Actually, the "death councils" are in the USA with the insurance industry. An absolute travesty. None of the ancedotes of "waiting lists" and "death councils" actually work - they're a lot worse under the our system.

This is the problem with ideology. Government does some things well; private enterprise does some things well. It's not a totalitarian vision, as we have been arguing over for a century. It's about the Third Way, baby. It's about plurality.

 

[MG1968]

you keep mentioning this "third way" garbage, care to explain what you mean?

going by cancer survival rates, the British system is an abject failure. You can defend it all you want, since you're obviously a statist who believes that government is the answer to all problems.

edit:

never mind on the "third way" just looked it up on the wiki. Sounds like a watered-down version of European social democracy with the usual progressive BS such as social and economic justice.

 

[utgibbs]

you keep mentioning this "third way" garbage, care to explain what you mean?

going by cancer survival rates, the British system is an abject failure. You can defend it all you want, since you're obviously a statist who believes that government is the answer to all problems.

edit:

never mind on the "third way" just looked it up on the wiki. Sounds like a watered-down version of European social democracy with the usual progressive BS such as social and economic justice.

"Third Way" was coined, I believe, by Isaiah Berlin in a famous essay on FDR. FDR, recalling history, stood betwixt Fascism and Stalinism - totalitarian visions of both the right and left. He carved out a "Third Way," a balance, between these dark forces.

I'd like to see those cancer statistics, as I'm sure they don't exist. However, I can refer you to any WHO report regarding health statistics comparing the two countries.

As for the "BS" - I believe all those countries have better QoL than the USA.

 

[MG1968]

UK cancer survival rate lowest in Europe - Telegraph

http://www.medscape.com/viewarticle/561737

Most Cancer Survival Rates in USA Better Than Europe and Canada Secondhand Smoke | A First Things Blog

Britain, the sick man of Europe: Heart and cancer survival rates among worst in developed world | Mail Online

 

[CSpindizzy]

Third Way nonsense has been preached by Bill Clinton and Tony Blair for some time as well.

As for WHO, are you referring to the organization that preached the Swine Flu that would wipe out millions of people globally? WHO has a credibility issue.