Discussion Topic |
|
This thread has been locked |
WBraun
climber
|
|
Yeah,
Something really stinks here in the govt.
Karl, thanks again for putting all that stuff together above.
They should make you the economic czar of USA.
|
|
John Moosie
climber
Beautiful California
|
|
Mighty Hiker,
That was a very good post. Thank you.
|
|
Karl Baba
Trad climber
Yosemite, Ca
|
|
|
Topic Author's Reply - Oct 6, 2008 - 12:04am PT
|
Fatty wrote
"TIG is right, I don't do day to day stuff, but sit on the board."
Hmmm. on the board of directors for a bank but TIG claims doesn't know banking. Seems pretty damning for the banking industry either way.
Euro is down because of the crisis that we started in a world economy. Still, best to have invested outside the dollar back when I started talking about it.
and to bring this back on topic. How do some economists track and attribute all these economic swings? Well, to the interest rate setting power of the Federal Reserve
http://www.fundmasteryblog.com/2008/06/09/how-far-has-the-dollar-fallen-and-why-whats-next/
Peace
Karl
|
|
Karl Baba
Trad climber
Yosemite, Ca
|
|
|
Topic Author's Reply - Oct 6, 2008 - 02:33am PT
|
LEB
"We are but specks of galatic dust in the Universe and not much more important in the whole scheme of things. This civilization as we know it will come and go just like so many countless others before us and so many after us......and the universe will not even notice our passing."
Very poetic. That will give you comfort when a gang of bikers is skinning you alive.
May be true,but what's your point? I'm at peace while fighting a war at the same time
Peace
Karl
|
|
TradIsGood
Chalkless climber
the Gunks end of the country
|
|
Euro is down because of the crisis we started! We screwed up so bad the dollar got stronger.
That is priceless Karl.
But I know that Euro up or down, you would blame us or the banks anyway. That is one of the classical fallacies. Take a position and use any evidence, for or against, as evidence supporting the thesis.
Karl, almost any serious company has board members with no expertise in the industry usually quite a few. Pick a company and research it. Keep trying until you find one that doesn't. Fattie would be a good board member if he only had good contacts for the bank, or they wanted somebody smart to think outside the box and review plans - avoids "corporate inbreeding" if you will. In fact, it is public policy, if not the law, to have a sizable number of outsiders on a board. Do you think GM would put Toyota and Ford employees on its board?
Werner, Karl is yacking about the assets or liabilities of citigroup, not its net worth. If you want to understand what banks do, you should see my thread. If you have questions, post 'em. Happy to answer.
FWIW, Citigroup's net worth as of Friday's close was just under $100 billion (99.992)
|
|
TradIsGood
Chalkless climber
the Gunks end of the country
|
|
Werner, instead of reacting to Karl's straight out of a conspiracy novel web of intrigue...
Ask yourself this. Exactly how could any lender be anything but fractional? If you had a house with a mortgage, or a car loan, and lent a friend 10 bucks to buy a pizza, you would be a "fractional lender", just the same as a bank that has borrowed money from depositors. The only difference is the size of the fraction and that you are an individual rather than a company.
If you are debt free and lend only your own money, then you could be a non-fractional lender.
So if we were to abolish "fractional lending" as evil, imagine trying to build a school. A community would either have to tax people in advance until sufficient surplus was created - people who might be dead or out of the community before the benefit was completed, or they would have to borrow the money from unencumbered people - their market would be people with no credit cards, home or car loans, or small business loans!
You could say banks create money, or you could say that the transaction between a lender (note buyer) and borrower (note seller) creates money, or you could even look at it as the use of the funds creates capital (even intellectual capital, in the case of a school) earlier than it otherwise would have.
The creation of money is a weird bogeyman. Has anybody noticed those windmills on his way to the ditch? Created money built them - financed by banks, and subsidized by taxpayers. The house you are living in, renter or owner - yup, built be created money. Oddly enough, the money may have been uncreated - if the construction loan or mortgage was paid off. But the house is still there. How can that be? :-)
|
|
Karl Baba
Trad climber
Yosemite, Ca
|
|
|
Topic Author's Reply - Oct 6, 2008 - 10:11am PT
|
LEB writes
"Frankly, this conversation is getting just a tad gruesome right now. I think I'll just quit and say goodnight. I am hitting the sack. I certainly hope I don't have any nightmares with THAT imagery. Karl, sometimes you come up with some truly amazing notions. How did we go from banks creating money to bikers skinning me alive. Somehow I missed that one."
Well, you had talked about the economic benefits of war, and then how nothing really mattered. I thought bringing the idea back to your OWN pain might make it a bit more real to you. In American we vote to bring that "skinned alive" level of pain to other people who didn't attack us, and then justify it as a casual mistake. Opps. skinned you alive. So sorry. Don't worry, I won't leave until we pick your garden!
Peace
Karl
|
|
TradIsGood
Chalkless climber
the Gunks end of the country
|
|
Update,
Werner, make that less than 95 billion for Citigroup.
|
|
Karl Baba
Trad climber
Yosemite, Ca
|
|
|
Topic Author's Reply - Oct 6, 2008 - 10:28am PT
|
TIG
"Euro is down because of the crisis we started! We screwed up so bad the dollar got stronger. "
I just heard it 3x yesterday on the news. Can't say I researched it further than that. That dang "marketplace" show on NPR is so lefty!
"FWIW, Citigroup's net worth as of Friday's close was just under $100 billion (99.992)"
Wonder what Citigroup's net worth was 3 years ago at this time?
Just curious, what's the net worth of the United states?
"Werner, instead of reacting to Karl's straight out of a conspiracy novel web of intrigue... "
Tiggy, bad dog! I've just been pointing out the system, and spiced it with a few remarks on what some notable folks have said about it. Presidents and famous bankers themselves!
You are the one pushing a few that doesn't resemble reality here. How accurate it is to protray Citibank CEO's salary as so modest without mentioning the rest of the picture. You never admiited in this whole thread my contention that the central bank loans out 10x what it has and so do the banks for practical purposes. Only how you are getting around to implying that whatever "fractional lending" is, it's a good thing. (I'm not saying it isn't, just liable to abuse like anything)
We're in the middle of a huge financial meltdown related to finance. People don't understand how money is created and talk about paying off the National debt and other near impossible things and you offer them kindergarten economics like "banks take your money and loan it out at a higher interest rate than they are paying you."
Why?
PS, Yes on the board question, but Fatty is also part-owner of the bank and is a financial professional. Perhaps you should do for him what you haven't done for me, and say what in his posts your have an issue with and tell your side of the story. You've implied all kinds of false information from me but only sniped at a few minor statements and math slipups (which you made plenty of yourself)
peace
Karl
|
|
Karl Baba
Trad climber
Yosemite, Ca
|
|
|
Topic Author's Reply - Oct 6, 2008 - 10:33am PT
|
Update: Citigroup's total equity was US$113.6 billion in 2007. Guess they are bleeding money fast like the rest of the financials.
Peace
Karl
|
|
Karl Baba
Trad climber
Yosemite, Ca
|
|
|
Topic Author's Reply - Oct 6, 2008 - 10:38am PT
|
TIG, providing documentation, something you have not. Regarding the effect of the US on Europe
http://www.eurointelligence.com/Article3.1018+M5cb25163573.0.html
"And this is where the bad news comes in. The US is still such a dominant player in the global financial markets – and the euro area relatively underdeveloped – that any financial distress would immediate spill over into the euro area, with effects that might be much worse than in the US itself. The IMF report includes an interesting box on the financial sector (Box 4.1: “Financial Linkages and Spillovers”, page 130-132). The US accounts for about 40% of global stock market capitalisation. It quotes an interesting study by Ehrmann, Fratzscher and Rigobon according to which 26% of the variation in European asset prices is due to developments in the US, against only 8% the other way round. The spillover is particular strong in equity markets, where it accounts for more than 50%. That means European assets are driven more by events in the US than in Europe itself."
|
|
raymond phule
climber
|
|
"We're in the middle of a huge financial meltdown related to finance. People don't understand how money is created and talk about paying off the National debt and other near impossible things and you offer them kindergarten economics like "banks take your money and loan it out at a higher interest rate than they are paying you.""
But aren't you doing the same thing? There are financial problems and all you do is try to explain how a bank works and try to use words and mechanism in a way that people in a way get scared.
There seems to be quite a lot of information about debt based money on the net these day. At least sometimes on conspiratory theorist sites. The arguments seems to that debt based doesn't sound good so it must be bad.
The fact that most economist seems to think it is a good system don't matter. I would say this is complicated system that most people don't understand and I really doubt that you or the authors on the conspiratory sites understand it.
I looked at part of zeitgast: addendum yesterday and you could find this stuff together with what is the most utopic world order I have ever heard about.
Back to the crises. There are a lot of possibly reasons for it. Why don't you look at the derivatives market instead? For example those CDS. One reason might be that people got loans that they really shouldn't have. A budget deficit might also be bad.
I really can't believe that todays crisis is due to the underlying rules for how banking works and I want a little better sources than the one I have seen.
|
|
Karl Baba
Trad climber
Yosemite, Ca
|
|
|
Topic Author's Reply - Oct 6, 2008 - 10:56am PT
|
If you remember earlier in the thread, TIG said that banks don't loan based on deposits but on the bank's Total equity. He says the Equity of Citigroup is 95 billion but they have liabilities of 1,963 Billion. Howz that?
Yes, we know Citi has other businesses and what not but these are big number differences. Just points that TIG's facts are misleading.
Peace
Karl
|
|
Karl Baba
Trad climber
Yosemite, Ca
|
|
|
Topic Author's Reply - Oct 6, 2008 - 11:01am PT
|
Raymond wrote
"Back to the crises. There are a lot of possibly reasons for it. Why don't you look at the derivatives market instead? For example those CDS. One reason might be that people got loans that they really shouldn't have. A budget deficit might also be bad."
Back to the crisis? Remember, I've written several times this thread is not supposed to be about the crisis. The monetary and banking system is just the bottom layer of the cake of the crisis. Yes about the CDS,another level of leverage and derivative risk. I just thought it would be important for folks to have the basics on the obscure way money is created and multiplied in our economy. It's an eyeopener. What part of the basic structure I've laid out don't you agree with?
Whether it's good or bad isn't the point. Capitalism or communism, if administered by wise saintly people to wise saintly people in times of abundance would work just fine. All systems have faults depending on the quality of our minds and hearts.
You say a budget deficit might be bad but many things in this thread point to why we have one. It's a hidden tax instead of a blatant tax.
This thread isn't about pointing fingers although we accidentally get there once in awhile. It's about the monetary system. If there is something substantial you disagree with regarding the monetary system I've written here, you are welcome to state it.
But I can already tell, you know way more than when we started. Is that a bad thing?
Peace
Karl
|
|
TradIsGood
Chalkless climber
the Gunks end of the country
|
|
under 90B as of 20 minutes ago....
|
|
raymond phule
climber
|
|
" It's about the monetary system. If there is something substantial you disagree with regarding the monetary system I've written here, you are welcome to state it."
I am not sure as I don't know enough but it is this "cry wolf" that you and other seems to do about the whole system. To see problems in things I don't see the problems with. To use concepts that most people don't understand the reason for or implications of in a way that such that we should believe something is obviously wrong.
|
|
TradIsGood
Chalkless climber
the Gunks end of the country
|
|
Nice Karl,
LOL. Good stuff, buddy.
Offer up an article from Nov 2007 as evidence. I do agree that the markets are coupled. You may remember somewhere along the line that I told you that the Fed did not have power all by itself to achieve policy any more. I mentioned that other central banks were involved.
So if I granted you that we dragged the Euro down, who dragged it up?
(There is a reason that Citigroup is fighting Wells Fargo for Wachovia. BTW)
|
|
Karl Baba
Trad climber
Yosemite, Ca
|
|
|
Topic Author's Reply - Oct 6, 2008 - 11:50am PT
|
"(There is a reason that Citigroup is fighting Wells Fargo for Wachovia. BTW)"
Update, they lost.
Raymond wrote
"I am not sure as I don't know enough but it is this "cry wolf" that you and other seems to do about the whole system. To see problems in things I don't see the problems with. To use concepts that most people don't understand the reason for or implications of in a way that such that we should believe something is obviously wrong."
Who is crying wolf? Even Bush cried wolf. There is obviously something wrong. The thing is, like I said. The main point of the thread is to make sure people understand the monetary system basics. Otherwise, it's like arguing the morality of sex, gay sex, unmarried sex and so on without knowing how babies are made
Peace
karl
TIG, you criticize the date of a source regarding links between our systems, but then admit it's true and yet you don't post sources yourself?
|
|
Karl Baba
Trad climber
Yosemite, Ca
|
|
|
Topic Author's Reply - Oct 6, 2008 - 12:01pm PT
|
"wrong' is an interesting idea. We burn oil in cars. Understandable? Sure. Wrong, probably not even though it polluted our world and added to climate change.
Will it be wrong if we don't forsee it's limitations and know oil will run out. All I know is that when you do something unsustainable, you better quit before the party is unexpectedly over
PEace
Karl
|
|
TradIsGood
Chalkless climber
the Gunks end of the country
|
|
"Update they lost"
Hmm.
So you know what Judge Lewis Kaplan is going to rule?
Wachovia v Citigroup, 08-cv-8503 US District Court, Southern District of New York
|
|
|
SuperTopo on the Web
|
Let us know!