A billionaire explains the middle class

walter snipped-for-privacy@post.com wrote:


It wasn't bank deposit money that was funding the flaky financial products. Stress testing banks doesn't address the question.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Monday, January 5, 2015 2:07:38 PM UTC-5, snipped-for-privacy@googlegroups.com 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 ... "
-- http://www.wsj.com/news/articles/SB1000142405270230422380457644776100815 2824?mg=reno64-wsj
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Tue, 6 Jan 2015 06:15:04 -0800 (PST), snipped-for-privacy@hotmail.com wrote:
<snip>

</snip>
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 http://tinyurl.com/kjoowa5 ]
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] http://tinyurl.com/qynxdjk
An even earlier cycle and lead-in to the 1929 stock market bubble. [Florida land bubble] http://tinyurl.com/nctz7cy http://tinyurl.com/pm2j5r2
Humans are the only animals you can skin more than once...
--
Unka' George

"Gold is the money of kings,
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
snipped-for-privacy@hotmail.com wrote:

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.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Tuesday, January 6, 2015 12:01:16 PM UTC-5, snipped-for-privacy@googlegroups.com wrot e:
ote:

ts?

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."
-- http://www.crainsnewyork.com/article/20051214/FREE/512140710/new-york-co mmunity-shares-up-on-mergers

It wasn't there for Lehman Brothers.

y.
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.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 12/31/14 F. George McDuffee wrote:

</snip>
You may find the following of interest:
http://tinyurl.com/79epfea
http://tinyurl.com/ppoez4o
http://tinyurl.com/om5aykk

*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.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
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 position:
http://image.slidesharecdn.com/internettrends052913final-130529094939- phpapp02/95/slide-73-638.jpg?1370374322
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Sun, 1 Feb 2015 03:39:06 +0000 (UTC), Przemek Klosowski

That's an amazing chart! A power chart spanning nearly 200 years...
--
Self-development is a higher duty than self-sacrifice.
-- Elizabeth Cady Stanton
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

It is not the wealth, it is GDP.
A very interesting chart, indeed, thanks for posting.
i
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Math, yes, but I don't think it's *simple* math.

Yeah, and *that* is simple math.

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 t+1.

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 next second.

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.
--
Mike Spencer Nova Scotia, Canada

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Mon, 29 Dec 2014 18:25:48 -0500, Ed Huntress

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.
--
Cheers,

John B.
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 12/29/2014 4:14 PM, snipped-for-privacy@krl.org 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...
David
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Mon, 29 Dec 2014 12:20:38 -0500, Ed Huntress

<Much snipped>

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 slope.
Granted there are differences between Japan and China but at least in certain industries, perhaps in many, there is a very definite intent on improving.
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: https://www.flickr.com/photos/percyverance/sets/72157629962147807/ For an action shot see:
https://www.youtube.com/watch?v
meF4jV8gw 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.
--
Cheers,

John B.
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
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 junk.

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.
'Still waiting.

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: 118,868,000.
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 measure accurately.
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 about. d8-)
--
Ed Huntress

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 12/29/2014 9:56 PM, Ed Huntress wrote:

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? Welfare rolls/costs? 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 period 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.

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

It sounds like the real problem is that you'd rather speculate than look the numbers up.
Most of what you're asking is readily available. Just look.
--
Ed Huntress

>>
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 12/30/2014 6:56 AM, Ed Huntress wrote:

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.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

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 wrestle with:
http://www.nxtbook.com/nxtbooks/fabshopmagdirect/november2014/#/3

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. <g>
--
Ed Huntress

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
typed in rec.crafts.metalworking the following:

    In September, it was 100%. Then I got the call from the placement people. -- pyotr filipivich "With Age comes Wisdom. Although more often, Age travels alone."
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 12/31/2014 10:48 PM, pyotr filipivich wrote:

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. ;-)

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Polytechforum.com is a website by engineers for engineers. It is not affiliated with any of manufacturers or vendors discussed here. All logos and trade names are the property of their respective owners.