On Monday, January 5, 2015 2:07:38 PM UTC-5, firstname.lastname@example.org wrote:
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 ...
On Tue, 6 Jan 2015 06:15:04 -0800 (PST), email@example.com
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
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 http://tinyurl.com/p2ovckk .
"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 http://tinyurl.com/lde7vvh
For an earlier cycle [Enron]
An even earlier cycle and lead-in to the 1929 stock market
bubble. [Florida land bubble]
Humans are the only animals you can skin more than once...
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.
On Tuesday, January 6, 2015 12:01:16 PM UTC-5, firstname.lastname@example.org wrot
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
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."
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.
You may find the following of interest:
*intent* seems to be the ethics problem in international finance, not certa
in types of re-alterable, even re-issuable structured financial products (o
nly offered by stock and bond brokerages, investment banks, etc...), becaus
e this *intent* can usually be found underlying the product offered and tho
se offering it.
This age-old *intent* is to steal all money from all things possible *witho
ut* facing legal consequences... guaranteed.
On Tue, 30 Dec 2014 10:03:30 -0500, Ed Huntress wrote:
On the other hand, China used to hold about third of the world's wealth
in 1820, so they may simply be on track to regain their historical
But such an admission is at least confronting the truth.
Which, lacking totalitarian authority over more or less everything, is
probably the best you can do.
The non-simple math is that of the complexity catastrophe. There are
N variables in the equation, N a *very* large number. A change in
any one variable at time t influences the value of P other variables
at time t+1, 0 <= P <= [medium-sized number]. The result is a system
that is inherently unpredictable, possibly at all scales.
The extremist right-wing morons think that if you remove all controls
from such a system, everything will work out for the best for
everybody due to the magical ability of "the market" to to produce an
analytic solution to the equation.
The extremist left-wing morons think that the only solution is to
impose total, hierarchical control from the top down and then
everything will work out for the best for everybody due to the magical
ability of Marxist teleology to bring us to a perfect world.
Both of them can, each with a few differing initial assumptions, prove
their case with a simple model based on, say a US colonial village,
17th c. international trade or industrial capitalism in 1850. Neither
of them deals with with the complexity (in the above technical sense)
of society, economy and finance today.
Good model, prior to complexity. Not so much now.
Right. And "initial conditions" is now, time t. See above re. time
Just so, but no complexity. A first approximation assuming simple
ballistics is pretty good. All components of the wreck are moving a
100 mph. They're going to go somewhere else ant nearly 100 mph in the
Not proven, especially when the complexity catastrophe is relevant.
In some models, random choices appear to be as good, statistically, as
any calculatedly "optimal" one.
Yes, I like that. It's a third magical alternative to the essentially
religious or magical dogmata of the capitalists and Marxists.
Yes, that is correct. But at the same time the international markets
are so much larger now and as Walmart seems to have proved there is
money in selling to the bottom end.
Well, yes, but two of the top 7 banks in the world are Chinese (None
of them is a U.S. bank). China accounts for a fifth of the world's
manufacturing. The U.S. lies 2nd, I believe - it was first in 2010
and manufacturing jobs have decreased about 30% since 2000.
"Innovative vitality" is the sort of term one often hears in
advertising and political speeches, but what does it really mean? That
the U.S. is the leader in the ship building business, or the high
speed train business? Nope, the Japan pioneered the advances in both
of those. Or perhaps the personal computer or smart-phone business?
Nope, China seems to be the leader there. Computers? The most powerful
computer I see is a Chinese made computer, the Tianhe-2 at
33.86-petaflops is as of Nov. 2014 the most powerful.
On 12/29/2014 4:14 PM, email@example.com wrote:
At the end of WWII, the US was the only major industrial country in the
Northern hemisphere that hadn't had its industrial infrastructure
devastated. Europe and and Japan had to rebuild from scratch, with all
new stuff which we helped pay for.
OTOH, the US infrastructure was mostly pre-WWII but only prospered
because we had no real competition.
For a while...
Do you remember Japan after WW II?
The Japanese did exactly what the Chinese are doing now, albeit on a
smaller scale, they leaped into foreign trade with what they could
manufacture and the words "Made in Japan" was a synonym for "Junk!".
Now look at them. The first Nikon FP camera was made in 1948 and by
the Korean war Nikon and Canon had become the preferred camera of most
news correspondents and Leica and Contax were headed down the slippery
Granted there are differences between Japan and China but at least in
certain industries, perhaps in many, there is a very definite intent
A friend does fiberglass work on yachts and a Wholesaler in Bangkok
recently sent him some fiberglass cloth samples in an effort to
convince him to buy from them. It was really rough stuff with the
weave very uneven and a lot of knots where a strand had been spliced.
He sent the stuff back and included a sample of the Australian (I
believe) cloth that he uses. The Wholesaler called home to discuss the
matter and in the conversation the Wholesaler said that he had sent
the cloth back to the Chinese factory and they were very interested in
my friend's comments and would strive to do better and would send
improved samples at a later date.
Here there are many single cylinder, water cooled, diesel engines used
- they even "home build" built a small truck with them called a "Etan"
which originally was powered with Japanese made "Kubota" engine, see:
For an action shot see:
Today, they are nearly all powered with either a Chinese copy of the
Kubota, or a Chinese made Kubota as Kubota has established factories
in China in order to remain competitive.
I suspect that question is how much longer can the U.S. maintain its
current levels of income as more and more jobs move overseas. The
current unemployment rate in the U.S. is, I believe, 5.8% and it is
being bragged about. Thailand, on the other hand is 0.7.
On Tue, 30 Dec 2014 10:31:50 +0700, John B. Slocomb
I wasn't born until 1948. But I remember when Japanese products were
In about four years. After 1950, and Deming, Japanese industry focused
on quality and it paid off in just a few years:
"Deming is best known for his work in Japan after WWII, particularly
his work with the leaders of Japanese industry. That work began in
August 1950 at the Hakone Convention Center in Tokyo when Deming
delivered a seminal speech on what he called Statistical Product
Quality Administration. Many in Japan credit Deming as the inspiration
for what has become known as the Japanese post-war economic miracle of
1950 to 1960, when Japan rose from the ashes of war to become the
second most powerful economy in the world in less than a decade,
founded on the ideas Deming taught:"
Japan became interntaionally recognized for quality in just over a
decade. China is still known for junk, after three decades or so.
We'll see how successful they are. Fourteen years ago, executives at
VW's China factory said they'd be ready to export to Western countries
within five years.
We could go on forever with anecdotes, John, and I could point you to
some analyses by specialty labor and trade consultants, but you could
find them if you want. Let me just say that the number of US jobs
"lost" to offshoring is wildly exaggerated for a number of reasons.
But the most importnat figures are these:
Total private (non-government) US employment, before the effects of
the recession were felt, Nov. 2008: 113,636,000. As of Nov. 2014:
Even counting losses due to fast-climbing productivity improvements,
and counting the recovery from the recession, our net job gains are
not bad. Offshoring has hit some specific job categories and
industries pretty hard, but the US has one hell of a resilient
economy. Overall, the effect of offshoring is estimated to reduce our
employment growth by around 10% to 12%. It's a very hard thing to
As for those "trucks" you linked to, they tell a story in themselves
-- and it's not a story that US truck manufacturers are going to worry
Can you put that ratio in context with other metrics over 6 years?
Population? GNP? Income distribution? Cost of living vs wage growth?
How many highly paid manufacturing jobs got replaced by "do you want
fries with that?"
Job availability for young workers entering the work force for the first
time and those forced out by cheaper/new workers?
How many of the newly employed were forced to do that because one
income could no longer support the family?
And in relation to government employment that all the rest of us pay
for with taxes?
A favorite trick of statisticians is to pick two points in time
that maximize the peak in goodness for whatever they're promoting
while avoiding the hockey-sticks on either end of that period.
That gets compared to some other metric over a slightly different time
that either avoids or includes those hockey-sticks as required to
support the thesis. Results of one action often show up as delayed
responses in later time periods.
So, it's not too hard to claim whatever you want and support it with
facts...as long as you're vague enough. You're not unemployed
if you've given up looking for work or your benefits have run out
and you're no longer counted.
If I were young or had descendents, I'd be very worried the future.
I'd like to hear some good news, but I'm jaded.
I'm far too lazy to do that. Just which set of numbers should one use?
I merely asked that the person presenting the numbers put them in context
that HE used so we can look at a coherent set of assumptions and data.
Random sound bites that support your opinion are not very helpful
out of context.
Then you will never know, because you'll never be satisfied with
someone else's numbers.
It depends on what you want to know. Be specific, and I'll try to
help. My first articles on this subject were published almost 40 years
ago, so I'm familiar with what's available.
Here's a recent one that will give you an idea of what we have to
There is never enough "context" to satisfy those who sit back and wait
for others to present the data.
They are not random, and I present different ones every week or so.
Stick around, and you'll see quite a spread of data.
But I have to repeat myself often because some people keep forgetting.
That's the problem with statistics. Works great for sizing a power plant
or a water reservoir.
When it gets closer to home, it's either 0 or 100%. I take no comfort
in the fact that most of YOU are employed. ;-)
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