Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: bond_bubble who wrote (59132)	4/22/2006 3:30:11 PM
From: shades	Respond to of 110194

Shades, I think you are underestimating moral hazard. Tomorrow 200 bank branches close across the nation because they dont make enough money to pay 5 employees per branch - how much effect is that going to have on you personally? I saw hundreds of payday lender branches get shut down in Ga - lots of credit that had been extended to military housewives to get hairdo's went away - the payday lenders went and did something else and still put food on the table. Really it was a non event - how many AACE branch managers did you see jumping off tall buildings cause they were about to be unemployed? None that I recall. Some cussed the government saying we live in a fascist regime and free markets don't exist and nanny state killed thier business - most I know moved on to other ventures - life went on. In the past, LTCM failed and the Fed bailed them. So, today, lot of the financial institutions are making rotten loans for this reason - their reasoning is that Fed will bail them out!! I really don't think loantech gives a flip wether the fed bails out the bad loans or not - he already made his bonus - the comptroller of the currency is going to make tighter guidelines on these crazy loans - what more do you want? It takes time to turn the titanic around. If you were running the show - what would bondbubble do to get loantechs to act right? Cut off thier right hand? You know a foreigner in westpalm told me that - he said when you rob a store back home they cut off your hand - he had both his hands. I see significant acceleration in moral hazard. A long time ago one guy got a loan because he was cuban - one guy didn't get a loan - he was not cuban - is that a good reason to give one guy a loan and not another? Both those guys still doing just fine today. You seem to think that it will be minimal still. I see corruption everywhere - read my posts in various groups, our election system, black box voting, domestic spying, drugs(remember I turn these gangs in to FBI), crooked cops, crooked companies, crooked CEO's, corruption of the grandest scale in so many areas and avenues. Bush say taiwan can be slave to china as long as china slave to our global mega corp - HAHA! Just part of it all. I think people thinking all this corruption and deceit is new - but its just status quo - hording a bunch of shiny metal into a hole is not going to change it - why do so many believe that sillyness? Imagine a conservative banker who got little less commisssion because he was prudent - now he will be kicking himself to get massive commission throwing away the rules and regulations. No I met a lot of people that do good and are not about milking everyone they meet for the next dollar they can suck from a fool. Some people genuinely like helping others - crazy eh? Also, think about the house buyers. Their loan is now passed to friendly Fed and the Fed asks these people to pay whatever they can (basically nothing) Many people can still give up driving to the beach for the weekend and red lobster before they can't make thier house payments - cable tv, AC, new clothes - lots of areas to cut spending before they wont be able to afford house payments. When everyone on bicycle or walking, have cut off Oprah, no longer wearing new clothes, all eating ramen and the salvation army is empty instead of filled with 200 dollar silk shirts like now - then I will believe we are getting in precarious times - go to your local goodwill and salvation army and tell me they are BARE - nothing left - all the EXCESS being consumed - what city you live in? 18 months ago I went all over this country - I went to the poorest parts of every city - people were still living high and mighty off goodwill and soup kitchens from what I saw. All the goodwills all over the country stocked with lots of clothes and goodies - lots of food getting thrown away at the food courts in the malls and at various restaurants at closing time - we so far away from REAL PAIN its not even an issue really. Do an experiment like I did - imagine you lose every dollar - now go see if you can find places to get food, clothes, and shelter without a dollar to your name - I found so many. I went to mexico - they were shitty to me - but even the bums there lived high on the hog from all the wealth. I saw no starving - all the starving is in africa from what I can tell. and people like me who dont have any such loan thinking - why didnt I take the home loan and pass it as bad to Fed? Why pass a bad loan to the fed - take what you need from life - give what you can - why you want to go down the dark path and become evil jedi and start thinking like loantech who can I fuck next? You might say that, one has to be jobless to get the benefit of Fed's kindness. If by working, I make 40K and 20K goes to tax and interest on the loan - and by not working I get 15K from Social security and no need to pay off the loan - isnt my choice obvious? I have 2 paychecks from IBM mounted on my wall - one I worked 40 hours - one I worked overtime - the one where I worked less has a bigger amount - I was in lower tax bracket then - I loved my work so much and working with technology I still kept working overtime - somethings transcend money Jay - how much do you get paid to come here and talk and educate and learn with all the other SI posters - NOTHING - but you put a lot of your time into it - why? I do lots of free work with local computer clubs - I dont get money - its just FUN - imagine people getting together and spending lots of time with each other just for FUN - no money traded - strange eh? I know many people that would have PAID to have thier jobs they loved them so much. The money was an afterthought - crazy eh? I'll be much richer collecting the SS, right? There are some seniors around me who give thier SS away and give lots of thier time to volunteer work - some just sit around all day and watch oprah. . I paint all the 250M people with one brush because I think moral hazard will reek (and that is what Andrew Mellon refers to BTw) and no one will want to work. That link I post to Elroy earlier - how we measure GDP - why is it fair to give so much weight to bugsy's casino and NOTHING to bell labs invention of the transistor - which makes your life better - the bugsy casino or the transistor - Ahahah talks about how what we measure is so silly - Mish makes case after case of what we measure is basically IMPOSSIBLE for 7 billion people - I may value an orange and a hooker - you may value dali artwork and elvis records - without accurate measurement - everything else just a crapshoot eh? Bill gates and Steve jobs used to go to computer clubs for FREE and do FUN stuff - they are now huge players in our global economy and thier companies have much money and power - they kept working - take all thier money away - they still gonna wanna keep having fun with computers! Message 22129759 A BREAK WITH THE PAST KUZNETS' work set the tone for the rest of the century, not to mention helping win him the Nobel prize in Economics in 1971. Machines and buildings were counted as future-oriented investment, but spending on education, training, and R&D was not. No attempt was made to judge the social utility of expenditures. For example, the $6 million cost of building the Flamingo Hotel, the Las Vegas casino opened by Bugsy Siegel in 1946, was tallied as an investment. But AT&T's funding of Bell Labs, where the transistor was invented around the same time, wasn't even included in GDP. KUZNETS himself acknowledged the limitations of his system, yet it stayed basically the same for most of the postwar period. Imagine this: People bought houses because they always appreciate. If my house drops to zero value tomorrow - I will still live in it. If I had lots of real estate right now and couldn't make good cash flow - and couldn't sell it to someone else - I would have to hold right? This is what rich landowners did in the depression - got stuff at firesale prices like elroys 80% haircut knowing it would go back up with a little time - maybe 10 years - maybe 20 - but that was a good investment for retirement eh? After the Fed takes the bad loans, people must be more emboldened right? How tough is the Fed going to be? I see they going after poor broke katrina people. Are they going to throw the people out of the house? In some cases maybe - here in fla there are many seniors who do not pay - and the cops are not gung ho about throwing them out to die on the street cause they are so old - so many dont get thrown out - and they dont pay the full rent. Their nieghborhoods decay - repairs aren't made to the houses - the roads wear down - but they do get to live cheaply. If they are this tough, then no one is going to take loan!! I tell you what - I go to several local banks and visit website statistics for banks to see how much traffic they still get - they are still getting a lot - why don't you go to local banks and see if people have stopped taking loans - you know last year sean hannity had people on TV who got evicted from homes in fla for a marina development - he called this country fascist - I just posted links where eminent domain is being used to take peoples land - county says its a public blight - people still taking loans - why are they so dumb? As you aptly put in one of your link where the lady was having lot of eggs - but noone to buy and the cost of feed was higher (higher PPI and lower CPI theory I've been saying for so long) Right food fell 50% - you originally said that was bullshit. i.e the existence of bussiness itself becomes very tough - and why would they need those loans anyway? For extra capacity? If the extra loan is just to pay employees and not for future profit, then again you are underestimating moral hazard!!! Hoover gave mellon the boot when mellon said time for the slackers to die off and the good moral people will pick up the wreck. I still see too many people here that have much further to fall before they will be FORCED into doing evil things or crime just to eat. Go read about saddams childhood - he was forced to assassinate people or his uncle would kill him - how many kids in america do you know at 7 years old have to go kill someone or their uncle says they will be killed? We a long way from that bondbubble. I dont know that we will ever get back there in this country. Many nuclear bombs going off in major cities maybe take us there - but short of that I don't see it. well, both you and Chromatic are underestimating moral hazard (in my opinion) There is a lot of corruption out there - always has been - probably always will be - that doesn't mean economies can't grow and technology spread and many peoples lives get better. and I believe that Fed will raise interest rates this time come hell or high water and that should prove one of us right. They don't want to crush housing - at least not for long japan style - japan didn't have the ability to import citizens like we do - otherwise they could have found population to fill up all those empty condos they had - we dont seem to have a problem with importing people eh? We still have lots of undeveloped land in this country no? Housing may crash, may go down for a few years, will it drop for 20 years - not from all the sex and babies I see going on. Moral hazard will be slayed this time. You can't change the nature of a man with numbers in a book - come on - that is silly. A crook is a crook is a crook. inflation!! Today, we are going to have the equivalent of $ devaluation in a more violent manner Perhaps - if all we have to export is drug patents, dvd's and software and the rest of the world can steal that - why keep our dollars? Seems lots of people ready to dump them. - and you still think there is going to be interest rate decrease I have posted time and again where philster says interest rates beeing going up for a long time now while they keep coming on TV saying no it isn't and they will keep using this tactic. It is going to be 1929 Germany and not 1923 Germany ... Well I suggest you buy lots and lots of calls on wheelbarrow companies - I read you had to have wheelbarros to go buy a loaf of bread in hyperinflation germany - if you think that is the future what wheelbarrow company do you think I should purchase? See you play all these thought experiments and that is good - but I bet you not putting your money there - I bet you not getting a heloc on your house to buy puts on XLF and I bet you not buying calls on wheelbarrow companies. All talk - no walk.