A billionaire explains the middle class

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Not really. Or at least I don't remember it that way. Generally you were given a job and you worked until you finished it and then, if it was an airplane, somebody came by to make sure you did it correctly.
That is specifically a Russian joke and to what extent it was applicable to all communist countries I have no idea, but I have a good friend that grew up in Hungary and he said that when he went to collage, under the communists, that if you didn't get grades of a certain level that you were dropped from school, so apparently success was demanded in some fields.
Reply to
John B. Slocomb
Then they will remain children for life. Perhaps the law could recognize that and on sufficient evidence declare then legally under age.
Reply to
Jim Wilkins
Most adults seem childish anyway, though. I don't believe I know of anyone who was "forced to grow up at an early age". Everyone was babied, spoiled heavily with "video games and MTV" and pampered, so that by the time they w ere 18, they were all still mental 5 year olds.
Almost everyone I know is like that. Even right here on this ng. Haven't yo u noticed that? Western civilization isn't like they are in Somalia where they are forced to be a man or a child soldier at the earliest stages in li fe, where they face a footrace to a funeral even to try to find simple clot hing to wear, let alone to find food/shelter.
Reply to
mogulah
Yeah, then they could share their criminal knowledge with the rest of Juvi inmates. Or, if they weren't criminals, at least that'd keep them from voting. Every little bit helps.
I'd just as soon stop trying to rehabilitate the unrehabilitatable wastes of oxygen. Help the fixable, compost the rest. Warehousing is far too costly for a zero return. Alas, so are the legal costs to prosecute to death penalty. Sumpin' needs a fixin'.
Reply to
Larry Jaques
And here's an example of what happens when it doesn't divulge truthfully en ough to those investing with it: ... "F-Squared Investments Inc., which bui lds investment portfolios out of exchange-traded funds, admitted it misled clients about its track record and agreed to pay $35 million in a settlemen t with regulators.
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(of course, at this socio-economic level crime and punishment is settled a bit differently)
Reply to
mogulah
The traditional answer has been to provoke a low-risk war that consumes the excess of unruly males, and subsequently keeps the less desirable females from finding mates.
Reply to
Jim Wilkins
There are supposedly tests on how long banks can stand during tough times. I think the current term they use is called a "stress test" as required by various central banks.
Reply to
walter_evening
Gunner Asch on Mon, 05 Jan 2015 06:18:11 -0800 typed >> wrote:
Me thinks you meant "They could immediately _be_ registered as Democrats." I mean, they're not really up to make such important decisions on their own, are they?
-- pyotr filipivich "With Age comes Wisdom. Although more often, Age travels alone."
Reply to
pyotr filipivich
It wasn't bank deposit money that was funding the flaky financial products. Stress testing banks doesn't address the question.
Reply to
jim
So what happened to you, that you went uninsured and wound up saddling the rest of us with your $200,000+ set of medical bills?
Remember, from your own words, you weren't a Democrat then. d8-)
Reply to
Ed Huntress
I was referring to today's costs. GC is much more cost-effective.
Don't forget to amortize the cost of that wire. It's multiple-use.
Reply to
Larry Jaques
It depends upon what type of bank and which budget their charters allow the ir executives to have and even raid. They have deposit set-asides, bonus s et-asides, interest budgets, P&L budgets, loan budgets, bitcoin budgets, br anch expense budgets. Even more types if they are an investment bank.
But what do top specialists in the field say? "The U.S. stress tests succe eded because they forced banks to raise a lot of capital," says Anil Kashya p, an economist at the University of Chicago's Booth School of Business ... "
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Reply to
mogulah

While this does indeed seem to indicate *SOME* positive action, if we look at the events leading up to 2008 a major contributing factor to the real-estate asset bubble appears to have been the so-called "merchant banks" such as Lehman, Bear-Sterns, and Merrill which were outside the regulatory pervue of the FDIC and FRB. These "merchant banks" had morphed into prop traders / hedge funds and were leveraged at 40:1 or more. These along with Goldman-Sachs, were among the leading creators and traders in the residential mortgage backed collateralized debt obligations, some of which were synthetic or virtual and contained no "bricks and mortar" assets at all. In other cases the CDOs were backed by other CDOs, producing the so-called CDO "squared." [This was a re-run -- see Goldman's Shenandoah and Blue Ridge from 1928
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The trouble seems to have started [from the perspective of those unlucky to own stock in the merchant banks] when the "masters of the universe" started believing their own hype, and began "investing" in their own paper creations, albeit only in the "safest" tranches
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"Those who learn nothing from history are condemed to repeat it" may be trite, it is also true. For anyone interested in this off topic thread [well gold is metal] watch these dramitizations on You-Tube to get the feel of what we are yammering on about.
About the collapse of Lehman From the BBC
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For an earlier cycle [Enron]
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An even earlier cycle and lead-in to the 1929 stock market bubble. [Florida land bubble]
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Humans are the only animals you can skin more than once...
Reply to
F. George McDuffee
No it doesn't depend on the type of bank. Only the type that take deposits are allowed to use deposit money to fund investments. And since the govt is on the hook if a deposit taking facility fails there are regulations that make sure that the money is not used recklessly.
The money that funded the reckless lending during the housing bubble came from private investors. And most of the reckless loans originated with non-bank mortgage lenders like CountryWide and AmeriQuest.
What they may say doesn't addresses the question. Stress testing banks doesn't address the question of of safety and soundness of financial products that are funded by private investor's money.
Reply to
jim
On Tuesday, January 6, 2015 12:01:16 PM UTC-5, snipped-for-privacy@googlegroups.com wrot e:
ote:
Yes it does. (for example a community bank as opposed to an investment ban k (as I said)
Banks have routinely borrowed to conduct investment procedures:
"New York Community Bancorp Inc. soared nearly 6% on Wednesday after an ana lyst said its pending purchase of two commercial banks will make it more pr ofitable.
Citigroup analyst Michael Diana raised his rating on the Westbury, L.I.-bas ed bank, which has been unloved on Wall Street since it made a bad bet on i nterest rates last year. The bank borrowed to invest in mortgage-backed sec urities, which squeezed corporate profits when short-term rates rose."
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It wasn't there for Lehman Brothers.
Regulations are never 100%.
As well as from companies, corporations and non-private sources such as non -profit institutions and governments and. For example, the government of O range County famously lost money due to derivatives based investment.
Reply to
mogulah
[...]
Which sort of begs the question, "Who will rate the ratings agencies?"
Is there some sort of qualifying exam for becoming a Recognized Ratings Organization?
Jes' curious...
Frank McKenney
Reply to
Frnak McKenney
It's more like having a proven track record for skill and integrity -- which the major agencies sacrificed when they started consulting to the same institutions they were rating.
That was stupid, and bound to destoy their credibility.
Reply to
Ed Huntress
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"Credit rating is a highly concentrated industry, with the
business."
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"Originally, the SEC did not adopt specific standards for determining which credit rating agencies were "nationally recognized", and instead addressed the question on a case-by-case basis.[23] NRSRO recognition was granted by the SEC through a "No Action Letter" sent by the SEC staff. Under this approach, if a CRA (or investment bank or broker-dealer) were interested in using the ratings from a particular CRA for regulatory purposes, the SEC staff would research the market to determine whether ratings from that particular CRA are widely used and considered "reliable and credible." If the SEC staff determined that this was the case, it would send a letter to the CRA indicating that if a regulated entity were to rely on the CRA's ratings, the SEC staff would not recommend enforcement action against that entity. These "No Action Letters" were made public and could be relied upon by other regulated entities, not just the entity making the original request. The SEC later sought to further define the criteria it uses when making this assessment, and in March 2005 published a proposed regulation to this effect. According to the SEC:[23]
The single most important factor in the Commission
issuer of credible and reliable ratings by the predominant users of securities ratings. The staff also reviews the operational capability and reliability of each rating organization. Included within this assessment are: (1) the organizational structure of the rating organization; (2) the
among other things, whether it is able to operate independently of economic pressures or control from the companies it rates); (3) the size and quality of the rating
procedures (to determine whether it has systematic procedures designed to produce credible and accurate ratings); and (6) whether the rating organization has internal procedures to prevent the misuse of nonpublic information and whether those procedures are followed. The staff also recommends that the agency become registered as an investment adviser."
One of the greatest weaknesses appears to be the lack of any publically available results, e. g. 10% of the bonds with a AAA rating from the Humperdink Rating Agency within 5 years of issuance, while only 1% of the bonds rated AAA by the Smith Agency were.
FWIW: Item(5) above appears to be the weak link as the NRSROs will not divulge their ratings methodology, so it is impossible to evaluate their appropriateness in today's markets. From the results and anecdotes, it appears this is a highly subjective and idiosyncratic process, being more a matter of taste or esthetics than facts.
There is at least one non-NRSRO maverick credit rating agency that uses the 10k and other publically available objective/numerical data as input to a computer program that calculates various ratios, and using the historical data from a large number of industries/companies, calculates the likelyhood of default. Their results appear to be much more accurate, and as this is a "mechanical" process, if the same data is input the same rating results, no matter who does it.
Reply to
F. George McDuffee

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