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| Dear AIG - I quit.; going after bonuses a mistake | |
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| Tweet Topic Started: Mar 25 2009, 04:22 AM (1,257 Views) | |
| ivorythumper | Mar 25 2009, 11:56 AM Post #26 |
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I am so adjective that I verb nouns!
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No, adding value is the bedrock of a capitalist economy. Buying low and selling high is just a way of extracting value from fluctuating markets. |
| The dogma lives loudly within me. | |
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| Mark | Mar 25 2009, 12:04 PM Post #27 |
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HOLY CARP!!!
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Right. There is no value added or anything produced by buying and selling stocks and the like. |
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___.___ (_]===* o 0 When I see an adult on a bicycle, I do not despair for the future of the human race. H.G. Wells | |
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| QuirtEvans | Mar 25 2009, 12:25 PM Post #28 |
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I Owe It All To John D'Oh
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I don't think that's exactly right. The securities markets are a very efficient mechanism for matching up people who need capital with people who want to invest capital. Without people who wanted to buy low and sell high, there would be no liquid market for investments, and without a liquid market it would be an awful lot harder for people who need capital to find the capital they need, and for people who want to invest to find good investment opportunities. It's amazing to me how people who profess to believe in free markets don't understand the value of a marketplace. |
| It would be unwise to underestimate what large groups of ill-informed people acting together can achieve. -- John D'Oh, January 14, 2010. | |
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| Mark | Mar 25 2009, 12:27 PM Post #29 |
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HOLY CARP!!!
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I understand it just fine thanks. It's smoke and mirrors. You need capital? GO FVCKING EARN IT! |
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___.___ (_]===* o 0 When I see an adult on a bicycle, I do not despair for the future of the human race. H.G. Wells | |
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| QuirtEvans | Mar 25 2009, 01:20 PM Post #30 |
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I Owe It All To John D'Oh
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And when someone would like to invest their money? Their retirement funds, or just money they've saved? They can go put it in a bank savings account, I suppose. And suppose you own shares of a public company, and you need to sell ... How do you plan to do that without a stock market? I knew you were living in the 50's, I just didn't realize it was the 1750's. |
| It would be unwise to underestimate what large groups of ill-informed people acting together can achieve. -- John D'Oh, January 14, 2010. | |
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| Mark | Mar 25 2009, 01:53 PM Post #31 |
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HOLY CARP!!!
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I never said we should not have a stock market. However, all the crap that has caused the problems we are experiencing is a direct result of the creation of the Federal Reserve and less than ethical banking practices combined with a government who thinks it can do no wrong and gets in bed with the unethical bankers. |
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___.___ (_]===* o 0 When I see an adult on a bicycle, I do not despair for the future of the human race. H.G. Wells | |
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| ivorythumper | Mar 25 2009, 02:31 PM Post #32 |
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I am so adjective that I verb nouns!
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I agree with you that there is a value to the markets generally in terms of matching up investors and those in need of capital, which is due compensation. My point was that buying low and selling high is not about that -- it is not adding value, but subtracting value from the market. The only real investment is with an IPO or a secondary offering, etc. My buying a stock does not influx the company -- I am not really investing in the company but rather speculating on whether I think the stock is going to rise. There is nothing wrong with doing that, but that is not a bedrock of a capitalist system. |
| The dogma lives loudly within me. | |
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| Luke's Dad | Mar 25 2009, 02:47 PM Post #33 |
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Emperor Pengin
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Where it starts going nuts is when they start using unrealized income and dividends as collateral, and assigning values to it that there is no basis for except high hopes. Outstanding loans are not assets, but liabilities until such time as they've received at least enough back to cover the difference should they need to foreclose on a note. |
| The problem with having an open mind is that people keep trying to put things in it. | |
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| Jolly | Mar 25 2009, 05:46 PM Post #34 |
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Geaux Tigers!
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Amen. You take the bull by the horns, you get the bull's butt, also. |
| The main obstacle to a stable and just world order is the United States.- George Soros | |
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| Horace | Mar 25 2009, 05:59 PM Post #35 |
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HOLY CARP!!!
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What, that they entered into the industry because it was the path of least resistance between themselves and a fortune? That's obviously true for virtually all of them.
Because their compensation is a function of how much of other people's money they invest. If they manage that money in such a way as to make short term profits, they lock in massive compensation for themselves. If things go badly, the worst that happens to them is that they no longer get to live under the money spigot. Heads they win, tails we lose. It's a broken compensation model and one that encourages antisocial behavior, for people who are likely to be predisposed to selfishness and greed already. I have never seen anything approaching a convincing defense of compensation rates in the financial industry. Only obfuscation and hackneyed nonsense like "who are you to say how much anybody is worth?". I actually don't think anything resembling a reasonable defense of that compensation could be crafted. |
| As a good person, I implore you to do as I, a good person, do. Be good. Do NOT be bad. If you see bad, end bad. End it in yourself, and end it in others. By any means necessary, the good must conquer the bad. Good people know this. Do you know this? Are you good? | |
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| Mikhailoh | Mar 25 2009, 06:37 PM Post #36 |
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If you want trouble, find yourself a redhead
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Which they only did because they could not figure out a way to invalidate the contracts after the fact. It amounts to the same thing. |
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Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball | |
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| Mikhailoh | Mar 25 2009, 06:48 PM Post #37 |
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If you want trouble, find yourself a redhead
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So what's your point? Surgeons get paid a lot too, as do some attorneys, salesmen, researchers and CEOs. They prepared themselves for a lucrative career. You had the option too.
Based on what? You're jealous of it? Many good financial managers make a lot of money for a lot of other people and are very well paid for it. Mine have so far limited my losses to a better than market performance. They've earned their money. No one is forced to use their services. Why does anyone in any industry have to justify what they make? That hardly sounds like a free market to me. The only one spouting obfuscation and hackneyed nonsense is you and your whining about how unfair it all is. |
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Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball | |
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| Horace | Mar 25 2009, 07:01 PM Post #38 |
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HOLY CARP!!!
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Only in the financial industry is early retirement a widespread part of the culture. They do it for as long as they need to and get out after their goal is accomplished. The information about the real differences is there if you'd care to put two and two together.
Based on what I just said, and what you didn't respond to. The part about heads they win, tails we lose, the part about their compensation being a function of how much of other people's money they invest. Then there's short term investmetn gains equalling locked in compensation for themselves without regard to the future performance, the part about that compensation being enough so that they don't have to worry about anything anymore anyway. Bubbles become their friend, and they work to facilitate them. Hey don't take my word for it, look ariound. |
| As a good person, I implore you to do as I, a good person, do. Be good. Do NOT be bad. If you see bad, end bad. End it in yourself, and end it in others. By any means necessary, the good must conquer the bad. Good people know this. Do you know this? Are you good? | |
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| Mikhailoh | Mar 25 2009, 07:08 PM Post #39 |
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If you want trouble, find yourself a redhead
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Not everyone in the financial industry lives on bubbles. Some of them work for a living. I understand that there were a good number of unethical people promoting unsound instruments and loans for personal gain. I get it. But that happens in a lot of industries - people trying to take your money for their gain. But there were just as many people buying the bad securities to try to cash in on it themselves. What is required is more stringent regulation of the creation and content of securities, not government intervention in how much money people can charge for services. |
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Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball | |
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| Horace | Mar 25 2009, 08:00 PM Post #40 |
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HOLY CARP!!!
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Whatever works. Better regulation, ok, sounds good to me. The difficulty of regulating will always scale with the compensation levels though. More compensation for engaging in legal unethical behavior means more smart people trying to outsmart the regulators, and maybe more importantly it means more money flowing into Washington to sculpt the regulations. I reject the notion that limiting compensation in the financial industry is fundamentally wrong. I believe it makes everything else fall into place much more easily. |
| As a good person, I implore you to do as I, a good person, do. Be good. Do NOT be bad. If you see bad, end bad. End it in yourself, and end it in others. By any means necessary, the good must conquer the bad. Good people know this. Do you know this? Are you good? | |
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| Red Rice | Mar 25 2009, 08:40 PM Post #41 |
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HOLY CARP!!!
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Couldn't have said it better myself. ![]() |
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Civilisation, I vaguely realized then - and subsequent observation has confirmed the view - could not progress that way. It must have a greater guiding principle to survive. To treat it as a carcase off which each man tears as much as he can for himself, is to stand convicted a brute, fit for nothing better than a jungle existence, which is a death-struggle, leading nowhither. I did not believe that was the human destiny, for Man individually was sane and reasonable, only collectively a fool. I hope the gunner of that Hun two-seater shot him clean, bullet to heart, and that his plane, on fire, fell like a meteor through the sky he loved. Since he had to end, I hope he ended so. But, oh, the waste! The loss! - Cecil Lewis | |
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| Horace | Mar 25 2009, 09:20 PM Post #42 |
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HOLY CARP!!!
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Ah, thanks friend. ![]() Hey by the way I've been devoting 8 hours a day for the past year to trying to beat Corbett. But you guys have a great machine.
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| As a good person, I implore you to do as I, a good person, do. Be good. Do NOT be bad. If you see bad, end bad. End it in yourself, and end it in others. By any means necessary, the good must conquer the bad. Good people know this. Do you know this? Are you good? | |
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| QuirtEvans | Mar 25 2009, 10:07 PM Post #43 |
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I Owe It All To John D'Oh
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That IPO or secondary offering won't happen ... or, at the very least, won't happen at anywhere near the same price ... without a secondary market for trading in those instruments afterwards. The secondary market offers liquidity ... an opportunity to get out easily and cheaply ... and that reduces risk. This is very easily proven in the real world. There are plenty of examples where an issuer has two separate kinds of securities in the market ... one set registered, and thus freely tradeable, and the other set unregistered, and thus not freely tradeable. The two sets of securities are otherwise identical, the only difference being whether they can be resold freely in the secondary market. The securities that cannot be freely resold are valued at a substantial haircut from the freely tradeable securities. So, we know with an empirical certainty that liquidity has a value to investors. Take away that liquidity, their risk increases, and they demand a greater return (or a lower price) to compensate them for that increased risk. That's why the "buy low, sell high" secondary market trading is in fact a bedrock of the capitalist system. Without it, risks increase, and the entire capitalist system is less efficient and more costly to operate. |
| It would be unwise to underestimate what large groups of ill-informed people acting together can achieve. -- John D'Oh, January 14, 2010. | |
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| QuirtEvans | Mar 25 2009, 10:09 PM Post #44 |
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I Owe It All To John D'Oh
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It isn't the same thing, even if it winds up having a very similar practical effect. |
| It would be unwise to underestimate what large groups of ill-informed people acting together can achieve. -- John D'Oh, January 14, 2010. | |
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| ivorythumper | Mar 26 2009, 12:36 AM Post #45 |
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I am so adjective that I verb nouns!
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Q: I see your point about liquidity, but the notion of secondary markets per se seems to suggest it is not a bedrock system. Civilization traded capitalistically for thousands of years without secondary markets. That sort of sophistication (and again, I am not saying it is wrong) suggests that, while it certainly allows for massive infusion of capital into the investment market, it is not foundational. Business can take place without it although at a slower pace and probably without the possibility for the rampant development that such capitalization has allowed to occur, although that progress might well have occurred by other means. |
| The dogma lives loudly within me. | |
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| Mikhailoh | Mar 26 2009, 02:03 AM Post #46 |
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If you want trouble, find yourself a redhead
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Only from a technical perspective. The goal was the same. How they went about circumventing the contracts speaks only to how cowardly congress is. |
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Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball | |
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| Copper | Mar 26 2009, 04:04 AM Post #47 |
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Shortstop
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People are willing to pay. No other defense needed. |
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The Confederate soldier was peculiar in that he was ever ready to fight, but never ready to submit to the routine duty and discipline of the camp or the march. The soldiers were determined to be soldiers after their own notions, and do their duty, for the love of it, as they thought best. Carlton McCarthy | |
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| QuirtEvans | Mar 26 2009, 04:11 AM Post #48 |
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I Owe It All To John D'Oh
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People are willing to pay, for sure. OPM. Other People's Money. That's a big problem in America today. The people who are fiduciaries ... the corporate executives ... don't act like stewards for the shareholders' money. They act like it's a personal piggybank. And the board members and compensation committees don't stop them. No shareholder vote is ever taken on CEO compensation. In part, because shareholders would never approve these insane compensation packages. So, when you say "people are willing to pay", the people who are willing to pay ... the board members ... are paying with Other People's Money. Just like Congress is playing with Other People's Money. |
| It would be unwise to underestimate what large groups of ill-informed people acting together can achieve. -- John D'Oh, January 14, 2010. | |
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| Copper | Mar 26 2009, 04:15 AM Post #49 |
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Shortstop
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It comes from people who are willing. You know that. |
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The Confederate soldier was peculiar in that he was ever ready to fight, but never ready to submit to the routine duty and discipline of the camp or the march. The soldiers were determined to be soldiers after their own notions, and do their duty, for the love of it, as they thought best. Carlton McCarthy | |
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| QuirtEvans | Mar 26 2009, 04:19 AM Post #50 |
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I Owe It All To John D'Oh
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Depends on what you mean by "willing". Someone who is blackmailed "willingly" pays the blackmailer. Of course, that's an extreme example, but I think you get the point. |
| It would be unwise to underestimate what large groups of ill-informed people acting together can achieve. -- John D'Oh, January 14, 2010. | |
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