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Fed cuts rate by 3/4 point!!!

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Dissipate

Diamond Member
Jan 17, 2004
6,815
0
0
Originally posted by: 3chordcharlie

The best thing I could say is that these companies made decisions maximizing their immediate profits. We all know that the corporate world has a shockingly short view of the future - anything beyond fiscal year end is pretty much ignored.

The reality is that these companies were not looking after their customers, their shareholders, or anyone else by building their financial position on an obvious bubble, and they knew it. So what were they doing? I can't think of an answer other than that the little guys were pursuing commissions, and the big guys were chasing quarterly earnings statements and bonuses big enough to last a lifetime. This can be 'highly profitable' in a sense, for some people, but it is not good business.
If you were working for those firms you would be going right along with it, and don't even try to deny that for a second. The Fed created this opportunity for 'bad business,' the firms were just doing what they thought were going to be big profits.

 

3chordcharlie

Diamond Member
Mar 30, 2004
9,859
1
81
Originally posted by: LegendKiller
Originally posted by: smack Down

So in other words everything required for a higher standard of living.

LK won't be happy until we are all heating our houses with dollars.
And you won't be happy until you're done using hyperbole and teaching everybody to be a moron who believes that a plane won't take off from a treadmill. Yeah, we all should listen to you!
Does it take off? Or does it only .9999999999.... take off? :p
 

smack Down

Diamond Member
Sep 10, 2005
4,507
0
0
Originally posted by: blackangst1
Originally posted by: smack Down
Originally posted by: blackangst1
Originally posted by: 3chordcharlie
Originally posted by: Dissipate
Originally posted by: LegendKiller

How did the Fed orchastrate BSC losing every piece of liquidity it had?
You are joking right? Two words: housing bubble, caused by ridiculously low interest rates.
The housing bubble was like a perfect storm - low rates, fraudulent applications, no due diligence...

Why, it would have taken almost half a brain to see the bubble only 4 years ago!

Oh wait... many of us did;)
Including those in the financial services industry. However, it's a not a company's job to do what in the best interest of the consumer-thats what non profits are for. It's their job to make a profit legally, by providing a product or a service the public will buy.
Just as it isn't in the consumer best interest to bail out the short sighted banks.
Oh but it is. the alternative will hurt the consumer ALOT more than the tax increase.
Bullshit the loses are the same either way. The only difference is who pays.
 

3chordcharlie

Diamond Member
Mar 30, 2004
9,859
1
81
Originally posted by: Dissipate
Originally posted by: 3chordcharlie

The best thing I could say is that these companies made decisions maximizing their immediate profits. We all know that the corporate world has a shockingly short view of the future - anything beyond fiscal year end is pretty much ignored.

The reality is that these companies were not looking after their customers, their shareholders, or anyone else by building their financial position on an obvious bubble, and they knew it. So what were they doing? I can't think of an answer other than that the little guys were pursuing commissions, and the big guys were chasing quarterly earnings statements and bonuses big enough to last a lifetime. This can be 'highly profitable' in a sense, for some people, but it is not good business.
If you were working for those firms you would be going right along with it, and don't even try to deny that for a second. The Fed created this opportunity for 'bad business,' the firms were just doing what they thought were going to be big profits.
That's like me taking a project at work for a client that I *know* will have trouble paying, just so I can get paid for the hours.

I wouldn't - and don't - do that, because I'm concerned about the company as well as my immediate benefit.

In my case though, if I put a call in, my boss will make the same call - it's bad for the company, because in the long run we'll likely 'not get paid'. The difference here is that everyone was out for the quick buck, and no one was looking after the company or the shareholders.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: Dissipate
Originally posted by: 3chordcharlie

The best thing I could say is that these companies made decisions maximizing their immediate profits. We all know that the corporate world has a shockingly short view of the future - anything beyond fiscal year end is pretty much ignored.

The reality is that these companies were not looking after their customers, their shareholders, or anyone else by building their financial position on an obvious bubble, and they knew it. So what were they doing? I can't think of an answer other than that the little guys were pursuing commissions, and the big guys were chasing quarterly earnings statements and bonuses big enough to last a lifetime. This can be 'highly profitable' in a sense, for some people, but it is not good business.
If you were working for those firms you would be going right along with it, and don't even try to deny that for a second. The Fed created this opportunity for 'bad business,' the firms were just doing what they thought were going to be big profits.
The Fed created a situation where 11 trillion in capital flooded into the credit market?

How's that?
 

3chordcharlie

Diamond Member
Mar 30, 2004
9,859
1
81
Originally posted by: smack Down
Originally posted by: blackangst1
Oh but it is. the alternative will hurt the consumer ALOT more than the tax increase.
Bullshit the loses are the same either way. The only difference is who pays.
No, they aren't. Collapsing credit and the liquidity of the entire economy will create a much larger loss.

Bailing out these companies sucks, and I think heads should roll all around, but it's still the 'better' bad alternative.
 

senseamp

Lifer
Feb 5, 2006
35,035
5,121
126
Originally posted by: LegendKiller
Originally posted by: senseamp

Fine, then let the Fed socialize failing banks.
So you want to be socialist? Why does it have to be all or none?
Because if losses are socialized, then so should be the banks.
You don't get to retain your equity if you want the Fed to bail you out.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: 3chordcharlie
Originally posted by: smack Down
Originally posted by: blackangst1
Oh but it is. the alternative will hurt the consumer ALOT more than the tax increase.
Bullshit the loses are the same either way. The only difference is who pays.
No, they aren't. Collapsing credit and the liquidity of the entire economy will create a much larger loss.

Bailing out these companies sucks, and I think heads should roll all around, but it's still the 'better' bad alternative.
Trying to convince him about that is like convincing him that physics is true. He can't understand either.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: senseamp
Originally posted by: LegendKiller
Originally posted by: senseamp

Fine, then let the Fed socialize failing banks.
So you want to be socialist? Why does it have to be all or none?
Because if losses are socialized, then so should be the banks.
You don't get to retain your equity if you want the Fed to bail you out.
Not all of the downside is being socialized.
 

3chordcharlie

Diamond Member
Mar 30, 2004
9,859
1
81
Originally posted by: LegendKiller
Originally posted by: 3chordcharlie
Originally posted by: smack Down
Originally posted by: blackangst1
Oh but it is. the alternative will hurt the consumer ALOT more than the tax increase.
Bullshit the loses are the same either way. The only difference is who pays.
No, they aren't. Collapsing credit and the liquidity of the entire economy will create a much larger loss.

Bailing out these companies sucks, and I think heads should roll all around, but it's still the 'better' bad alternative.
Trying to convince him about that is like convincing him that physics is true. He can't understand either.
Interest rate manipulation aside, wasn't the reason for the fed to be a 'lender of last resort' and prevent a private banking system from crashing an entire economy with the fallout of this exact type of failure?
 

senseamp

Lifer
Feb 5, 2006
35,035
5,121
126
Originally posted by: LegendKiller
Originally posted by: senseamp
Originally posted by: LegendKiller
Originally posted by: senseamp

Fine, then let the Fed socialize failing banks.
So you want to be socialist? Why does it have to be all or none?
Because if losses are socialized, then so should be the banks.
You don't get to retain your equity if you want the Fed to bail you out.
Not all of the downside is being socialized.
Fine, then not all of the equity should be socialized either, but if you want a Fed bail out, you should have to sell your shares in exchange or put them up as collateral for a loan. There should be no giveaways or Fed assumed downside risk without it getting something in return.
 

smack Down

Diamond Member
Sep 10, 2005
4,507
0
0
Originally posted by: LegendKiller
Originally posted by: 3chordcharlie
Originally posted by: smack Down
Originally posted by: blackangst1
Oh but it is. the alternative will hurt the consumer ALOT more than the tax increase.
Bullshit the loses are the same either way. The only difference is who pays.
No, they aren't. Collapsing credit and the liquidity of the entire economy will create a much larger loss.

Bailing out these companies sucks, and I think heads should roll all around, but it's still the 'better' bad alternative.
Trying to convince him about that is like convincing him that physics is true. He can't understand either.
You won't know angular momentum if it rolled over you.

Yea the loses would be immediate and felt by the banks if they where not bailed out. Instead it is felt by everyone and will be for the next 20 years like Japan.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: 3chordcharlie
Originally posted by: LegendKiller
Originally posted by: 3chordcharlie
Originally posted by: smack Down
Originally posted by: blackangst1
Oh but it is. the alternative will hurt the consumer ALOT more than the tax increase.
Bullshit the loses are the same either way. The only difference is who pays.
No, they aren't. Collapsing credit and the liquidity of the entire economy will create a much larger loss.

Bailing out these companies sucks, and I think heads should roll all around, but it's still the 'better' bad alternative.
Trying to convince him about that is like convincing him that physics is true. He can't understand either.
Interest rate manipulation aside, wasn't the reason for the fed to be a 'lender of last resort' and prevent a private banking system from crashing an entire economy with the fallout of this exact type of failure?
Yes, part of the mandate was to provide liquidity to the system to prevent runs and panics.
 

Capt Caveman

Lifer
Jan 30, 2005
34,547
651
126
Originally posted by: smack Down
Originally posted by: LegendKiller
Originally posted by: 3chordcharlie
Originally posted by: smack Down
Originally posted by: blackangst1
Oh but it is. the alternative will hurt the consumer ALOT more than the tax increase.
Bullshit the loses are the same either way. The only difference is who pays.
No, they aren't. Collapsing credit and the liquidity of the entire economy will create a much larger loss.

Bailing out these companies sucks, and I think heads should roll all around, but it's still the 'better' bad alternative.
Trying to convince him about that is like convincing him that physics is true. He can't understand either.
You won't know angular momentum if it rolled over you.

Yea the loses would be immediate and felt by the banks if they where not bailed out. Instead it is felt by everyone and will be for the next 20 years like Japan.
:confused:
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: smack Down
Originally posted by: LegendKiller
Originally posted by: 3chordcharlie
Originally posted by: smack Down
Originally posted by: blackangst1
Oh but it is. the alternative will hurt the consumer ALOT more than the tax increase.
Bullshit the loses are the same either way. The only difference is who pays.
No, they aren't. Collapsing credit and the liquidity of the entire economy will create a much larger loss.

Bailing out these companies sucks, and I think heads should roll all around, but it's still the 'better' bad alternative.
Trying to convince him about that is like convincing him that physics is true. He can't understand either.
You won't know angular momentum if it rolled over you.

Yea the loses would be immediate and felt by the banks if they where not bailed out. Instead it is felt by everyone and will be for the next 20 years like Japan.
You wouldn't know reality and true physics if it smacked you down, much like me and finance.

First, this situation is unlike Japan in many ways and an educated person would know that. Even if it was like Japan, do you realize what the alternative would do for 20 years? Naw, you can't even see past your nose.
 

senseamp

Lifer
Feb 5, 2006
35,035
5,121
126
Originally posted by: smack Down
Originally posted by: LegendKiller
Originally posted by: 3chordcharlie
Originally posted by: smack Down
Originally posted by: blackangst1
Oh but it is. the alternative will hurt the consumer ALOT more than the tax increase.
Bullshit the loses are the same either way. The only difference is who pays.
No, they aren't. Collapsing credit and the liquidity of the entire economy will create a much larger loss.

Bailing out these companies sucks, and I think heads should roll all around, but it's still the 'better' bad alternative.
Trying to convince him about that is like convincing him that physics is true. He can't understand either.
You won't know angular momentum if it rolled over you.

Yea the loses would be immediate and felt by the banks if they where not bailed out. Instead it is felt by everyone and will be for the next 20 years like Japan.
Exactly. Japan cut their interest rates to zero, and their housing still went in the toilet, plus their economy has gone nowhere in almost two decades. In the meantime, emerging countries went through defaults and bank collapses and are now growing like gangbusters.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: senseamp
Originally posted by: smack Down
Originally posted by: LegendKiller
Originally posted by: 3chordcharlie
Originally posted by: smack Down
Originally posted by: blackangst1
Oh but it is. the alternative will hurt the consumer ALOT more than the tax increase.
Bullshit the loses are the same either way. The only difference is who pays.
No, they aren't. Collapsing credit and the liquidity of the entire economy will create a much larger loss.

Bailing out these companies sucks, and I think heads should roll all around, but it's still the 'better' bad alternative.
Trying to convince him about that is like convincing him that physics is true. He can't understand either.
You won't know angular momentum if it rolled over you.

Yea the loses would be immediate and felt by the banks if they where not bailed out. Instead it is felt by everyone and will be for the next 20 years like Japan.
Exactly. Japan cut their interest rates to zero, and their housing still went in the toilet, plus their economy has gone nowhere in almost two decades. In the meantime, emerging countries went through defaults and bank collapses and are now growing like gangbusters.
And Japan is still one of the most advanced and productive country's in the world, despite their problems. The alternative was that they completely trash their country, economy, banking system, major corporations, and consumers, and start all over again.

Great alternative! Sign me the fuck up!
 

senseamp

Lifer
Feb 5, 2006
35,035
5,121
126
Originally posted by: LegendKiller
Originally posted by: senseamp
Originally posted by: smack Down
Originally posted by: LegendKiller
Originally posted by: 3chordcharlie
Originally posted by: smack Down
Originally posted by: blackangst1
Oh but it is. the alternative will hurt the consumer ALOT more than the tax increase.
Bullshit the loses are the same either way. The only difference is who pays.
No, they aren't. Collapsing credit and the liquidity of the entire economy will create a much larger loss.

Bailing out these companies sucks, and I think heads should roll all around, but it's still the 'better' bad alternative.
Trying to convince him about that is like convincing him that physics is true. He can't understand either.
You won't know angular momentum if it rolled over you.

Yea the loses would be immediate and felt by the banks if they where not bailed out. Instead it is felt by everyone and will be for the next 20 years like Japan.
Exactly. Japan cut their interest rates to zero, and their housing still went in the toilet, plus their economy has gone nowhere in almost two decades. In the meantime, emerging countries went through defaults and bank collapses and are now growing like gangbusters.
And Japan is still one of the most advanced and productive country's in the world, despite their problems. The alternative was that they completely trash their country, economy, banking system, major corporations, and consumers, and start all over again.

Great alternative! Sign me the fuck up!
Capitalism = creative destruction.
You want never ending government bailouts for rogue and stupid players, you are signing up for a permanently dysfunctional system. You want long term malaise over short term pain, sounds like a great plan.
 

blackangst1

Lifer
Feb 23, 2005
20,990
853
126
Originally posted by: Dissipate
Originally posted by: 3chordcharlie

The best thing I could say is that these companies made decisions maximizing their immediate profits. We all know that the corporate world has a shockingly short view of the future - anything beyond fiscal year end is pretty much ignored.

The reality is that these companies were not looking after their customers, their shareholders, or anyone else by building their financial position on an obvious bubble, and they knew it. So what were they doing? I can't think of an answer other than that the little guys were pursuing commissions, and the big guys were chasing quarterly earnings statements and bonuses big enough to last a lifetime. This can be 'highly profitable' in a sense, for some people, but it is not good business.
If you were working for those firms you would be going right along with it, and don't even try to deny that for a second. The Fed created this opportunity for 'bad business,' the firms were just doing what they thought were going to be big profits.
Wait...so the sub prime collapse is the Fed's scheme?
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: senseamp


Capitalism = creative destruction.
You want never ending government bailouts for rogue and stupid players, you are signing up for a permanently dysfunctional system. You want long term malaise over short term pain, sounds like a great plan.
Whoa, we have somebody that loves Alan Greenspan and Ayn Rand. Yay!

There are some destructions that are worse for society as a whole.
 

blackangst1

Lifer
Feb 23, 2005
20,990
853
126
Originally posted by: smack Down
Originally posted by: blackangst1
Originally posted by: smack Down
Originally posted by: blackangst1
Originally posted by: 3chordcharlie
Originally posted by: Dissipate
Originally posted by: LegendKiller

How did the Fed orchastrate BSC losing every piece of liquidity it had?
You are joking right? Two words: housing bubble, caused by ridiculously low interest rates.
The housing bubble was like a perfect storm - low rates, fraudulent applications, no due diligence...

Why, it would have taken almost half a brain to see the bubble only 4 years ago!

Oh wait... many of us did;)
Including those in the financial services industry. However, it's a not a company's job to do what in the best interest of the consumer-thats what non profits are for. It's their job to make a profit legally, by providing a product or a service the public will buy.
Just as it isn't in the consumer best interest to bail out the short sighted banks.
Oh but it is. the alternative will hurt the consumer ALOT more than the tax increase.
Bullshit the loses are the same either way. The only difference is who pays.
huh? Do you honestly believe if you let all these major lenders go under the damage would be around 120 bill (estimates of the bailout)? Are you fucking crazy? The COST to the consumers would be double digit TRILLIONS.
 

blackangst1

Lifer
Feb 23, 2005
20,990
853
126
Originally posted by: 3chordcharlie
Originally posted by: Dissipate
Originally posted by: 3chordcharlie

The best thing I could say is that these companies made decisions maximizing their immediate profits. We all know that the corporate world has a shockingly short view of the future - anything beyond fiscal year end is pretty much ignored.

The reality is that these companies were not looking after their customers, their shareholders, or anyone else by building their financial position on an obvious bubble, and they knew it. So what were they doing? I can't think of an answer other than that the little guys were pursuing commissions, and the big guys were chasing quarterly earnings statements and bonuses big enough to last a lifetime. This can be 'highly profitable' in a sense, for some people, but it is not good business.
If you were working for those firms you would be going right along with it, and don't even try to deny that for a second. The Fed created this opportunity for 'bad business,' the firms were just doing what they thought were going to be big profits.
That's like me taking a project at work for a client that I *know* will have trouble paying, just so I can get paid for the hours.

I wouldn't - and don't - do that, because I'm concerned about the company as well as my immediate benefit.

In my case though, if I put a call in, my boss will make the same call - it's bad for the company, because in the long run we'll likely 'not get paid'. The difference here is that everyone was out for the quick buck, and no one was looking after the company or the shareholders.
Wrong. Thats exactly who they were looking out for. The group they WERENT looking out for was the consumer-again, not their job to make decisions for the public.
 

3chordcharlie

Diamond Member
Mar 30, 2004
9,859
1
81
Originally posted by: blackangst1
Originally posted by: 3chordcharlie
Originally posted by: Dissipate
Originally posted by: 3chordcharlie

The best thing I could say is that these companies made decisions maximizing their immediate profits. We all know that the corporate world has a shockingly short view of the future - anything beyond fiscal year end is pretty much ignored.

The reality is that these companies were not looking after their customers, their shareholders, or anyone else by building their financial position on an obvious bubble, and they knew it. So what were they doing? I can't think of an answer other than that the little guys were pursuing commissions, and the big guys were chasing quarterly earnings statements and bonuses big enough to last a lifetime. This can be 'highly profitable' in a sense, for some people, but it is not good business.
If you were working for those firms you would be going right along with it, and don't even try to deny that for a second. The Fed created this opportunity for 'bad business,' the firms were just doing what they thought were going to be big profits.
That's like me taking a project at work for a client that I *know* will have trouble paying, just so I can get paid for the hours.

I wouldn't - and don't - do that, because I'm concerned about the company as well as my immediate benefit.

In my case though, if I put a call in, my boss will make the same call - it's bad for the company, because in the long run we'll likely 'not get paid'. The difference here is that everyone was out for the quick buck, and no one was looking after the company or the shareholders.
Wrong. Thats exactly who they were looking out for. The group they WERENT looking out for was the consumer-again, not their job to make decisions for the public.
Looking out for your company doesn't mean selling it down the river to make a buck today.
 

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