One of Largest Financial Players devalued in a day - what is going on?

exactly

let the lazy fall off where they belong and learn to be ambitious

but they'll probably scream for federal government intervention first for any number of reasons

but with no unions..... lawl...... good luck wit dat!

I'm not a expert on the economy like you but it seems to me that you've placed the interests of the businessman completely in front of the worker. It would seem that if the worker is taken care of and paid handsomely enough he will put more of this money into the economy thereby creating a more productive society as a whole. More businesses are capable of being supported and from this more jobs are available to more people. Consumerism is enhanced and the standard of living improves.

Whereas if the interests of the businessman are seen too first (snubbing the worker through things like outsourcing) he is able to make far more money for himself, as the worker - and therefore by extension society - is hung out to dry. Consumerism suffers, the standard of living weakens.

But of course the businessman wins out in the end making his extra money at cost of everyone else but these are the ways of the Sith. Niggas like that die of heart attacks and things of that nature. not enough good karma and omega 3 fatty acids.

If you think thats productive then Ok. I think its funny though how you try to dress up the abrasiveness of this reality by saying something along the lines of its time the people change and learn to become responsible/something citizens basically spinning the blame on them because their boss was greedy.

Actually your strongest point was this:

Either the people must be forced to change, or the investors must be forced to change. Change the people, and holy shit, they might actually learn to be responsible and productive citizens. Change the investors, and you are going to piss off a lot of armed militaries overseas.

I doubt you could actually prove that but I admit it sounds threatening. I wouldn't want India to nuke the united states because we stopped outsourcing.


how does personal debt affects institutional lending; is this mendable?

I'm extrmely busy right now. but I will post up my viewsi n a few days (and answer other threads)
till then, here is an article I found that explains basic concepts well:
http://www.nytimes.com/2008/03/19/b...em&ex=1206072000&en=ab4caf3befa3e1c9&ei=5087

In a few days, i will explain how security (loan bundling) relates to human neccesity and the sort of gamble that went on here and why it failed.

just in short, your all failing to see the bigger picture. US financial firms don't just trade in US securities (bundled debts), they trade worldwide.

the buisnessman employs the worker. there will always be more people than jobs, that's a given. so, the buisnessman will find the best price for materials, rent, machines, resources, energy... why not labor? the money goes in the economy either way. the buisnessman puts his profits into the stock market (which will increase assets to shareholders and increase investment as stock prices go up) or into a bank where it is quickly lent out to those who want loans. so, paying someone more doesn't increase consumer spending, it just redistributes the wealth.

... and yet a worker isn't greedy if he wants 2x the money as the next man for the same job?

LoL @ this convenient dehumanization

Again, why are you moralizing labor?

so an Indian who'll work for less money is less human than an American?

first point outside the scope again. We aren't trying to explain factors that may/may not be the reason for a drop in the american economy as a whole. We want to explain factors that explain why financial institutions that engage in venture capital worldwide have tanked. (not individual businessmen with 6 figure investments whose computers you've fixed lol, think in the billions! The Mergers and Aquisitions world of London/Wallstreet/Tokyo/HongKong)


mortgage point I agree with in principle, overgranting of credit & its concurrent effect on driving prices up created a bubble that was bound to burst eventually.

just in general, we've moved to forms of property that are less secure.
Think of a peice of land or a manufacturerd good v. a copyright (say a videogame).

Imagine 100,000 man hours of labour go into the production of say, a new type of car technology. This is hard to simply steal, becuase we have physical possession of said goods.

Now imagine 100,000 man hours go into the production of say, a computer program. This program is easy to steal, because there is no physicial manifestation of said program. Once its online and cracked, its pretty much free for all to use, except those who can be reached by lawsuits/forced to pay (i.e. american businesses, and western businesses for larger software corporations)

Now imagine that over the last 20 years (or more) our economy has moved from infusing labour from tangibles (like cars, property, land, etc...) into intangibles (like copyrights in music, entiertainment, videogames, etc)

Now, picture other countries simply stealing/replicating said copyrighted property.

From a labour perspective, western society has lost tremendous wealth production here simply by the fact that we invested our labour/time into intangible mediums.

fyi, this is just one thing. I don't think its determinative, but I think its interesting to think about. I'm also not implying any sort of solution (like shifting our labour to different types).


By analogy and on the individual level, think about the amount of time you (or myself) put into learning about computer tech in the past 15 years. Think about how much of that knowledge is now outdated and useless. If this labour/time was invested into learning a skill which retained its value (say, for instance, i became a truly great public speaker or if I had taught myself how to be super-handy) then the labour would not be wasted.

Some forms of property are inherently more secure than others, we've put our eggs into the insecure basket.

um i dont really understand are you talking about TV's from japan and things of that nature IE Americans buying overseas products? or pirating things over the internet cause in a good year i steal close to a thousand $$$ of DVD's, games, albums.


you dont define what you mean by intangibles very clearly. you say like copyrights in music, entiertainment, videogames, etc

and

those are all basically the same thing; entertainment. you even add the etc at the end to make the listing appear longer even though you had to stretch just to add in video games towards the end which is ultimately just another way of saying entertainment again.

sounds like youre was saying that as times have passed our economy has lost big chunks of where it used to make big money. we moved into depending on the intangibles. and because other countries produce these goods the economy takes a hit.

by the way you defined the scope of what these intangibles are it sounds like we couldnt be losing out that much but I dont know I guess we could be. It fits into a greater theme of things - something I was talking about w/ ghetaloin (outsourcing) - that is, spending our money on things overseas.

buying prodcuts from overseas and sending jobs overseas would defintely make a big dent on thins.

I probably misunderstand you/

^
your right to point out all those things are intangible, though to varying degrees.

for example, a musical work is less secure than say a videogame where much of the code is server side and you need a CD key to play online. But, just in general, western economies have moved a large chunk of the collective labour from tangible to intangible resources where its virtually impossible to exercise a right to exclude (a proprietary right...think of preventing someone to go on your land with a shot gun. How will prevent someone from hijacking your beat from China?)

Intangibles means precisely what it sounds like... something thats not tangible... intagible property is not neccesarily entertainment and i'm not rallying against all forms of intangile property either. Only those forms where its difficult or impossible to exercise a property right over (i.e. you CANT exclude people from it)

Since people GAIN property through their Labour, working on something that inherently is badly suited for a proprietary rights mean that people lose their labour. i.e. they are working for nothing/wasting their time.

NOW compared to outsourcing. Outsourcing what is occuring is that labour moves outside the state to other states where labour can be done for cheaper. Generally, this is not complex labour (ex. investment bankers, high level scientists, etc) but extra-hands type work, both in the white and blue collor sectors. For instance in blue collar, it can involve somehting like producing textiles/manufacturing parts of houses, in while collar customer service/computer programming.


so LABOUR here is outsourced; in my example of intangible property the problem is that LAbour is not translating into value, given the medium it passes through.

now im rambling... BUT to continue my ramble, one more point.


Oftne, howver, with outsourcing at the higher levels the owners/their support are still from the west. So you will get chinesse labour - with western-multinational support in terms of lawyers, bankers, consultants, etc, making the big money. This can be a problem for people at the bottom of the labour chain, but for those at the top, and for the value of the economy as a whole (with expanded market, value should increase), this isn't an issue.


really thoug, I don't have an answer. I'm just looking at hte role of various factors.

Industrialized nations have been finance capitalist driven since the late 1800s.

Old World Empires collapse en masse in the 1900s and what happened? American militaries are all -OVER- the place, securing long-term contracts for guaranteed, reliable growth. All territories under the thumb of said empires are treated as new customers to Americans or the Communists. New Empires tried to get in on it (Germany, Japan) and were crushed and occupied, tying them to the empire's growth. Each's investment vehicle grab these nations while they are shit (or turns them into shit) and give them the money they need to grow. They grow. Economies are tied. Growth is shared. Empires flourish.

The current issue is many countries have significantly modernized and traditional finance growth has hit the ceiling in terms of direct investment. The ones that haven't are horrifically unstable, ergo, military investments. Still high from their tremendous post-industrial gains , world players invest in established nations and their finance packages.

See where I'm going with this?

^ no you've started in the 1800s and mentioned one general factor that effects the economy. (opening up/keeping open markets)
The thread is about something that happened in 2007/8 to a specific sector of the global economy (finance) and wondering why.

So no, I don't see where your going with this, other than perhaps trying to steer the thread into topics you're familiar with rather than delving into the unknown. (fyi I'm not disagreeing or agreeing with you, merely I'm saying that your talking about plants in general when the thread is about oranges and a specifc disease that effected them this past summer)

*sigh*

1.) Finance capitalism becomes the norm in the 1800s...
2.) Material backing of currency is phased out.... (no more gold standard)
3.) Floating point currencies are balanced to national/institutional debt...
4.) Credit institutions create their own pseudocurrency, backed by these debts...
5.) Individual debt turns into collective debt, which becomes comparable to institutional debt
6.) Federal entities utilize national debt to resolve BOTH institutional and collective debt (yay socialism!)

The big gamble, in which ALL of this is dependent upon: will these layers of debt result in productivity?

Still don't see the problem?

Here's the hint and why finance capitalism CONTINUES to dominate, even in the face of such debt: Pass the buck long enough and someone will work for it.

^ not quite sure what your takling about. Be clear/explicit isntead of giving hints. Especially if your not an economist AND your using specialized terms that aren't the norm in the field/possible you created for yourself. There is no way for anyone to know what your talking about if you do that nor any way for anyone to look anything up. This is especially true since you often tend to place your own meaning on terms which have different meanings in teh fields they come from.

Just vaguely trying to make sense of your 'argument' or rather list, the last thing you mentioned talks about a federal agency and national debt.

Again, the problem we are discussing here has an international scope.
Third time I mention this, no way to make it any clearer. Financial institutions have proprietary interests all over the world. Explaining their tanking through broad based US policy does not really cut it, except maybe if you include US policies as promoted worldwide actually taken up.

For instance, if you were talking about WTO policy that has led to broad policies throughout the world (as my explanation actually does, as per its policies of copyright worldwide), it may make more sense. But even then you need to mention what specific policies, their hypothetical effect... then we can analyze analytically your argument at the very least and attempt to critisize it on analytical and evidence based grounds.

intangibles is a funny word to use. you're not dumbing things down enough you should talk baseball more. sounds like you're saying economy has shifted to depend on products anybody in the world can produce and this introduction of new players has watered down the american economy.

My only thing is other countries dont seem to be negatively affected by this. Or if they are they have found (or just naturally had) a way around it.

I'd be interetsted to know why canada is doing Ok but the why the US is not since they would both seem to be affected.

I think ILL Rich brought up a similar point where he was arguing that the extra money the top of the labor chain make from saving on outsourcing their labor still goes back into the economy through stocks/banks.

But the only problem here is that the bottom of the labor chain (the guys who lost their J.O to outsourcing) would have given back to the economy too. I would argue to a far greater degree than would the top rank businessmen. but i dont have the numbers to prove that.

It would make sense though, since they would be buying all kinds of various consumer goods and ALSO using banks/stocks. the few businessmen who benefit from outsourcing spend less of that money on various consumer goods than would the worker had he been allowed to make/keep that money. So the economy loses diversity and a smaller number of businesses are capable of being supported.

so where these folks just keep many of those extra millions and let it grow their pile of wealth, the money - in the hands of the worker - would have circulated around more

Sodium:
1-intangible just means things that aren't physysically there. So for instance, water, land, industrial property, textiles from china, food is TANGIBLE. Copyrights, trademarks, legal contracts, etc... are intangible.

2-Its not that other countries are producing these intangibles. Its that they are freely REPRODUCING the intangibles we put large chunks of our economy into creating.

3-Canada has lots and lots of oil to boost the economy . Also the mortgages with the faulty structure were not granted. other factors too exist.

4-I'm arguing that outsourcing FAILS to explain stuff like Bear Sterns drops (since they have international investments), not that outsourcing does/does not effect the US economy in general.

Though, just to quickly give one point on the debate between you and illrich.
It seems to me that the so called trickle down effect that is often talked about as justification for why we should give the upper classes tax breaks no longer apply in a globalized world. There is no reason to assume that the Senior Analysist at Goldman Sach's who makes $500'000/year is spending his money in the US, buying US goods which would in fact contribute to the economy. He is probably vacationing in Europe not Monteray, and his goods probably come Italy not Albany. So where exactly is the trickle down effect, other than say, in white-collar service jobs, getting cofee/being the secretary of the man. (which we don't want to over-encourage anyway as job forms). for hte Car worker in Maine, he probably goes on vacation in Florida (yet still buys chinesse goods, admitably). But still, I can see their being more trickle down to the local economy from 10 people making $50'000 in Maine as auto workers than 1 person making $500'000 at Goldman Sachs in NY.
SO basically i agree with you here.

man I still dont really understand what you mean by that


In any event those intangibles cant be that big of a factor since other countries are skating by fine despite similar conditions. must be something else at the end of the day that has caused and continues to fuel the problem.

w/ things like intangibles only coming to the surface as problems because of that initial flaw.

nobody in this thread has isolated that yet. Ghet tried to say outsourcing. but I still dont think its that um deadly; just another coming-to-the-surface effect like your intangibles theory. in other words, the cough not the cold.

fair enough.

Some general thoughts because I can't be bothered to address people individually:

there is no 'trickle down' effect. The term was coined by a reagan administration official in a ham fisted attempt to explain the administration's supply side policies. The supply side argument for low taxes on high income brackets is that wealthier individuals spend a significant proportion of their income on capital goods(People on lower incomes, by contrast, spend it almost entirely on consumer goods). It is the resultant increase in productivity which supply siders would cite as the 'rising tide which lifts all boats' as the old cliche goes.

Violations of intellectual property rights have little to no role in the current economic crisis.

Im dubious over just how big a deal sub-prime lending has been in this whole mess. It seems as if could just as well be a symptom as a cause. Sub-prime loans are granted to people of a poor credit status, and so in a general downturn you'd expect them to be amongst the first things to turn sour.

Outsourcing is not a new phenomena and in some respects is simply an inevitable consequence of a society growing wealthier. It would be a greater indicator of economic distress were china outsourcing manafacturing jobs to the US rather than vice versa

Something which is often overlooked in discussions of outsourcing is the consumer side. Real term rises in the purchasing power of US workers thanks to the availability of cheaper goods has to be factored into the equation.