Miscellaneous And Off Topic Subjects

[Wild Hoss]

Hope anybody in the FL area is OK....

[Dr. Strangelove]

[ame]https://twitter.com/nycsouthpaw/status/783914466379464704[/ame]

[The Oracle]

Shocker.

[entropy]

best tweet of the week:

Clowns terrorizing the streets. A real life billionaire villain running for President. We need you, Batman.

[hack]

LOL!!!

[hack]

This clowns thing is FUCKING WEIRD.

[Panoptes]

Shocker.

What a dolt you are.

You live in California, the breeding ground of deceitful Democrats that take all losing propositions straight to Washington for national scale bufoonary and debt pile driving.

[The Oracle]

What's that got to do with Trump lying again?

[hack]

Well that's at least a nice change from the usual blaming of the East Coast.

[froot loops]

If you are worrying about debt, Trump is not the guy. His proposed plan would add up to 10 trillion and his business career has been nothing but piling up debt. Sad.

[Da Geezer]

I think what's important for me here is that you're talking about a scenario that doesn't happen very much anymore. People with that kind of excess capital don't give it to banks, and they aren't seeking out a <2% return from a savings account.

I don't disagree with that, but my initial point was that existing capital exists someplace, it does not sit under a mattress. I was replying to your post that said:

.....The practical side of me recognizes that we're all better off when capital is spread around. Left in the hands of too few and we get the bullshit we have now. I can think of very few things for which the concept of a balance of power does not apply.

You are correct in saying that capital will seek a return. You are also correct in your analysis of current ways that banks make money.

In the context of our previous discussions, what both of us see is a manifestation of artificially depressed interest rates. When the financial sector can borrow money at a rate of close to zero, there is no way the "market for money" can determine which projects "deserve" funding. In this situation, money flows to existing businesses where there is some ability to project earnings (hence the stock market balloon).

IMO, most central banks (at least in developed countries) have been backed into this situation. It used to be that both fiscal and monetary policy were available to policymakers. Keynes emphasized the fiscal, Friedman the monetary, but everybody recognized they were both policy tools. Since the 2008 recession, which ended in March of 2009, citizens have made it clear to their elected officials that the pain of recession is no longer acceptable. And neither is a reduction in welfare payments, higher taxes, shrinking the government or any of the fiscal tools that once were available. Monetary policy alone has maintained prosperity, but it is starting to show cracks. News like this week's news about Deutsche Bank is troubling because once a "panic" starts, no amount of government intervention will stop it. Panic is, by definition, irrational.

Hack, I told you I would think about investments in a world of long-term negative interest rates. Zero coupon bonds would be one.

[UMStan White]

Jesus Geezer. That made a lot of sense!

[Dr. Strangelove]

This is, apparently, a real thing that happened.

Russia lodges formal complaint at UN to demand the organization cease its criticism of Trump and far right leaders in Europe

http://www.politico.com/story/2016/10/un-criticism-of-trump-prompts-russian-response-229287

[*JD*]

Trump makes history, as in historically bad.

https://www.yahoo.com/news/donald-trump-makes-history-zero-major-newspaper-endorsements-000943174.html

[hack]

Agreed, Stan. Geezer I think we'd have to ask why rates are low. Agree with your starting point as the financial crisis. It happened because we let capital pool to an unhealthy extent. Regular people lacked it and so they relied on home equity, and on the other end, where the capital pooled, and with too much of it out of the hands of people that would spend it in the economy, the shortage of solid investments led to an overreliance on financial engineering to create returns. And then the crisis. Capital kicked out a leg of its own stool. Short-termism brought on by a lack of oversight. So, we now get this. Easy to blame Bernanke or Yellen, but in truth Fed governance is a choice between least-bad options.