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| Thread: Wallstreet, thieves, the 2008 recession and other scandals | |
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Miru
Supreme Hero
A leaf in the river of time
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posted August 19, 2016 02:34 AM |
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Edited by Miru at 03:22, 19 Aug 2016.
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Wallstreet, thieves, the 2008 recession and other scandals
Before we even begin I need to establish who deserves money -- you can't have a thief without rightful ownership.
As I said before I believe money is supposed to, for the most part, be a measure of your contribution to society. Someone who flips burgers for 40 hours a week deserves to be able to buy more than someone who flips them for 15, all else being equal. Additionally someone who spends 40 hours a week using an advanced skill, say designing suspension for the new Corvette is contributing more than a burger flipper, and thus deserves more.
However not every job or every free market action is beneficial to society. An great example is the now illegal Truck System, as sung about in Sixteen Tons. Manipulative people can exploit others into working for them or paying for things were not as they expect.
If someone does something that earns them money but makes society or an individual worse off then they are no better than someone who stole it. Maybe thief is not quite the correct word, but since I don't know a better one thief is what I shall call them.
The original idea of a bank I think plays a good role in society, however modern banks are far from what they used to be and far from what most people think they are. The idea was some people would deposit their earnings for safe keeping. In exchange for permission to invest the savers money the bank pays the saver a small amount of interest. The bank then loans that money to someone they find credible to pay them back and charges them interest. Originally the banks were liable for their mistakes and so banks only made loans that they honestly expected would pay off.
This is not how banks make the majority of their money today.
For my first post I want to go over the 2008 recession but I am going to explain what a derivative is first. If you already know what they are you can skip ahead. A derivative is a contract that derives its value from the performance of an underlying entity.n In other words something that doesn't have value itself but represents a value, like a bet. An example of a good derivative future. A farmer can sell his crops before they come in by selling a future of them. Then the farmer is guaranteed to get money whether or not the crop fails. Some investor takes on that risk when he buys the future and in exchange he gets some of the profits. The farmer is reverse-selling the risk essentially. Another derivative which has been widely abused is an MBS - mortgage backed security. An MBS represents a piece of a mortgage These MBS would be combined and then divided up into CDOs - Collateralized debt obligation - to obfuscate them. The idea is when you buy an CDO years down the road some people will pay off their mortgages and you get that money.
Now let me go over the 2008 recession. This was not "the business cycle". This was unethical actions which were legalized by people with conflicts of interest i.e. representatives who owed more allegiance to their campaign donors than their constituents. I'll give you the short of it, if you want details I strongly recommend you watch the 2010 documentary Inside Job.
First one of the seven evil banks (Goldman Sachs, Morgan Stanley, Lehman Brothers, Merrill Lynch, Bear Stearns, Citigroup, and JPMorgan Chase) would find someone who wanted a nicer house but wasn't very good with math or investing. They would trick them into signing up for a mortgage that they couldn't afford, this is known as predatory lending. The bank would then bundle these doomed-to-fail mortgages together and divide them up and sell these divisions as MBS.
Then one of the three evil rating agencies (Moody’s, Standard & Poor's and Fitch) would take a look at CDO and despite it being clearly subprime, rate it as A or even AAA, an outright lie.
Then some fund or individual, say a retirement agency with lots of money to invest, would buy this falsely labeled CDO.
Along the way people started to realize there might be a housing crash so three insurance companies (AIG, MBIA, AMBAC) started guaranteeing them. AIG was the worst. You might think that they would take the insurance money they were given in case the MBS failed an hold onto it, so that if the MBS failed they could pay it out. That is how an insurance company works, isn't it? They paid all of the money to their executives, so when the housing crash did happen AIG was bankrupt - they had spent all of the money they were trusted with. Whats even worse is they invented a CDS, credit default swap. Now you can not only buy insurance on your own CDO in case it fails, but you can buy insurance on an asset you don't even own. That't not insurance, that's betting.
This developed a huge conflict of interest - now the bank has no exposure to risk because they are selling their bad loans. Thus it is not in the banks interest to make good loans that they think will be paid back, instead it is in their interest to make as many loans as they can and sell them off. They are creating something from nothing! That is, until it comes time to pay back the loans.
The banks knew that these loans were subprime, they had created them. They began to buy CDS against their own loans. They would create an asset, sell that asset, then bet the asset was going to fail.
It all fell apart, the loans couldn't be paid back. The housing bubble crashed and AIG went bankrupt. Many of CDOs were owned by the very agencies that created the bad assets, but the public was tricked into bailing out AIG so that the banks would make even more money.
No one went to jail or was fined for any of this. In fact not only did they get away with it, they are doing it again in new markets. In 2008 the total notional value of all derivative was between 5 and 600 trillion dollars. That is not a typo, I mean that the notional value of the derivatives was about 9 times higher than global GDP. Now? The notional value is well over a quadrillion. The time bomb is even bigger than it was before. Imagine you went to your local bar and asked "How many bets are on your books?" and the bar tender said "three billion dollars". There aren't three billion dollars in your town. It doesn't matter who wins and who looses.
I've typed enough for now but I know of multiple other sick manipulations of the market which should be illegal. I'll add them in further posts. By the time I'm done I'm sure you will all concede the banks are vile thieves if you aren't vile yourself.
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I wish I were employed by a stupendous paragraph, with capitalized English words and expressions.
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Miru
Supreme Hero
A leaf in the river of time
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posted August 19, 2016 04:14 AM |
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Colonialism never died
So in about the 60's everyone got together and agreed to end colonialism, right? That's the story. Before all of us big first world countries used our military powers to exploit the third world and force them to essentially be our servants on a national level (or in some cases literally slave plantations, but not on american soil and thus not illegal).
The truth is it never did. Colonialism is alive and well, and ironically enough, being perpetrated by the very organizations that purport to help the third world: the WTO - World Trade Organization, and the IMF - International Money Fund.
Lets take Jamaica for example. The WTO and IMF have done this to numerous countries, but I know the details of this one best. There was a great movie about it called Life and Debt which covers this topic. I will go over it in short.
In 1977 Jamaica borrowed $75 Million USD. Jamaica borrowed some more money since then, I don't recall how much but a total of a few hundred million or less.
Jamaica was then brought under the economic control of the IMF. The IMF said the loan was to help them grow economically, and the terms of the loan was that they would have to implement the IMF's policies. The IMF said they were to help them grow and To make a fair market.
Some of their policies include:
Devaluing their currency to increase exports. Sounds great, right? That means that we need to pay less to get more, they pay more to get less, and they need to sell increasing amounts of things to us to pay off their loan.
Setting the interest rates near 20%. Enough said.
Because of this outright USURY today Jamaica owes $2 Trillion, Jamaica's GDP is $14 Billion. I'm having trouble finding the appropriate numbers but they have more than paid back the money they borrowed already. They pay 13% of their GDP as interest.
Forcing them to abandon subsidies. Whats the problem with that? Because of their economic situation and infrastructure Jamaican farmers cannot compete with subsidized (oh the hypocrisy) modernized American farmers. So the Jamaicans are now completely dependent on America for food.
Force Jamaica to create "Free Trade Zones". Laissez-Faire zones. 30$/week minimum wage. No unions. No workers rights. You don't need to imagine the horrors, a bit of research or watching and you'll see.
Force Jamaicans to produce bananas. Whats the problem, they're tropical right? We want more bananas than the third world is currently producing so we made Jamaica step in and produce more for us. Jamaica doesn't have the right soil, rainfall or climate so they are forced into abysmal conditions in order to try to "compete" with other third world countries (which themselves have been forced into similar roles).
It goes on and on. The more I do research the more I find new articles, new topics, new ways Jamaica has been screwed. And that is only this one country. While browsing I saw mention of horrors in other countries. Workers in Columbia striking for higher wages being shot at. When does it become slavery? I think shooting at your workers does not count as a free market.
More to come
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I wish I were employed by a stupendous paragraph, with capitalized English words and expressions.
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Celfious
Promising
Legendary Hero
From earth
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posted August 19, 2016 05:55 AM |
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Quick note for now. It really seems like the DEA is protecting corporate interests.
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What are you up to
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Minion
Legendary Hero
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posted August 19, 2016 11:09 AM |
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The Drug Enforcement Administration is protecting... corporate interests?
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"These friends probably started using condoms after having produced the most optimum amount of offsprings. Kudos to them for showing at least some restraint" - Tsar-ivor
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Celfious
Promising
Legendary Hero
From earth
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posted August 19, 2016 12:08 PM |
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Edited by Celfious at 13:07, 19 Aug 2016.
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That in itself would lead to a whole topic on its own so I'd like to not highjack this topic, this will be the last I say here on the issue but yes it seems the DEA is looking out for a lot of corporations. Maybe my terminology is not the standard but "corporate interests" .
Currently my trash can is half full of plastic where hemp is biodegradable, clean burning fuel, has medicinal purposes as many undeniable studies would show as well as examples of restoration from seizures, cancer, pain, ptsd, etc,
It also is extremely rich in high value protein , etc etc
Currently while meth is a lessor rating, we have meth heads eating the homeless in New York.
Honestly I don't feel there should be a need to elaborate but if hemp once again becomes a primary resource , all non toxic, then many buisnesses and corporations would be SOL.
It goes deeper than the DEA in all actuality. But they are one of the key factors such is preventing this crop from being one of our primes. Simultaneously allowing for the expansion of others, usually environmentally damaging ones at that.
So anyways I wouldn't mind furthering this discussion but unless Miru doesn't care I would feel bad if we continued that here. While it is an example of greed and scandals it's just pretty full topic In itself
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What are you up to
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frostysh
Bad-mannered
Famous Hero
WHY?
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posted August 19, 2016 01:51 PM |
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IMHO - the typo market games of the capitalist folks, in their sandboxes, a nothin' serious or the catastrophic happens. There is a very many examples before 2008 A.D. and will be a very many examples after 2008 A.D. , with almost the same results.
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Miru
Supreme Hero
A leaf in the river of time
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posted August 19, 2016 06:46 PM |
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Edited by Miru at 18:49, 19 Aug 2016.
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I intend for this thread to be examples of the .1% stealing their money and eventually some philosophy on the topic. Although corruption is enabling this, the thread is not about corruption in general.
@Frostysh You have heard of the great depression, right? And as far as I'm concerned many third world countries live in depression like circumstances, not because of a history of worse infrastructure or incompetence or what-have-you, it is because they are being exploited and left out to dry by the world economics. The same could happen to the common folk in the first world, potentially. Again, that is.
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I wish I were employed by a stupendous paragraph, with capitalized English words and expressions.
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markkur
Honorable
Legendary Hero
Once upon a time
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posted August 19, 2016 08:02 PM |
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The guy that made this video is selling a book but I think the info he shares is important for most people to understand how they must not participate in the market as if they have the money to burn. During the housing bubble my mortgage was sold to another company iirc at least twice, maybe thrice.
link
Let me share a short story. At one time I was licensed to sell Securities. I worked my tail off for months selling for a big local firm selling hedge funds. The company wanted me to quit my production career but I began working evenings only and kept my primary job. After a few months I realized that I could not make the "big bucks" promised because I could not sell Securities to people that could not afford them. In my mind, they had to have a financial foundation of Insurance were the family was a risk in case of catastrophe, a SAFE savings for a rainy day and also some secure money in places for the kid's education etc. What I found was that very few people had stable, sound budgets. In the end I had to quit because I could not place my needs above theirs...so I basically worked as a good Samaritan during this months for free.
However, today? I doubt you will find many people like I was 30 years ago. Those people are in survival-mode and greed entirely runs the show.
Remember; "A bird in hand is worth 2 (or 2,000) in the bush"
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Miru
Supreme Hero
A leaf in the river of time
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posted August 19, 2016 08:07 PM |
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Edited by Miru at 20:08, 19 Aug 2016.
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Good for you markkur. We need more people like that. If all the common folk just did what was right and didn't contribute their little part to the problem I think 9/10ths of our problems would be gone. We all need to be the change we want to see.
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I wish I were employed by a stupendous paragraph, with capitalized English words and expressions.
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markkur
Honorable
Legendary Hero
Once upon a time
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posted August 19, 2016 08:11 PM |
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Miru said:
We all need to be the change we want to see.
Absolutely 
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Miru
Supreme Hero
A leaf in the river of time
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posted August 30, 2016 09:00 PM |
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The Plutocracy
Bribery is not only alive and well, not only legal, but it is literally the only way to get elected here. The United States campaign donation system is institutionalized bribery.
Some links about the problem if you care to read up on it:
Corruption at Represent.Us
Testing Theories of American Policies (The definitive Princeton study on corruption)
A critique of Omnibus
The Five Most Corrupt Bills Passed By Congress
Who owns congress?
License to Profit
Basically here's how it works. 91% of the time the candidate with the most money gets elected. To get a seat in the Senate candidates have to raise an average of $14,351 per day. Two-thirds of this money from from .2% of the population. This is why Hillary has about an 75% chance of winning according to fivethirtyeight - she has much more money and is running more TV ads.
The top six corrupt industries by money spent influencing the government are
Agribusiness - $1.21 B
Defense - $1.26 B
Pharmaceutical - $2.16 B
Energy - $2.93 B
Communications - $3.5 B
Finance - $4.29 B
Princeton took data from 1779 policy cases comparing what the people wanted based on public opinion surveys to what congress actually did. They said "The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy". For example, a 2012 study showed that only 23% percent of Americans favored the bank bailouts.
Congress which is literally bought and paid for then gives their donors whatever they want. In the last 5 years alone, the 200 most politically active companies in the U.S. spent $5.8 billion influencing our government with lobbying and campaign contributions. Those same companies got $4.4 trillion in taxpayer support – earning a return of 750 times their investment.
The richest 1% paid an effective federal income tax rate of 24.7% in 2014. Warren Buffet's secretary famously pays a higher tax rate than he does.
Ever heard of a rider? A rider is an additional provision added to a bill or other measure, having little connection with the subject matter of the bill. Riders are usually created as a tactic to pass a controversial provision that would not pass as its own bill. Let me give you an example of a few:
The Cyber Security Information Sharing Act - a law allowing sharing of internet traffic information between the government and technology and manufacturing companies, part of a consolidated spending bill.
The Hyde Amendment - a provision which allows funding for abortions for only rape and incest, part of Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act
The Fighting Hunger Incentive Act of 2015 which passed the senate, was bundled into the America Gives more Act of 2015, went to the house had everything removed from it and retitled the Trade Facilitation and Trade Enforcement Act of 2015 which was about border control and US-Israeli relations (as parodied by John Oliver)
Congress loves to bury things in legislation which makes it very hard to give solid quotes of each time they wrote something corrupt. I could read thousands of pages to find thirty critical paragraphs if I realized their true ramifications. They pass well over 2000 pages a year, most of which is never read by most members of congress except the subcommittee in charge of it. As of 2014 our tax code is 74,608 pages long (I'll do a post about that later but basically it's all loop holes that specific companies wanted for specific reasons). I literally have to find articles written by other people on the topic and snow have they done a good job burying all of the concrete examples. The links at the top were the best I could find this morning, but if those and this isn't enough to convince you bribery is alive and well I don't know what you expect to see.
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I wish I were employed by a stupendous paragraph, with capitalized English words and expressions.
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mvassilev
Responsible
Undefeatable Hero
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posted August 31, 2016 03:54 AM |
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I'll be bowing out of this and the other discussion, but I wanted to make one last comment, regarding the interpretation of the Princeton study.
First, it doesn't follow that because the elites influence policy more heavily that it's tilted in their interests. From what I understand, the scholarly consensus is that voters aren't self-interested - one example of this is that plenty of wealthy people support higher taxes to fund greater redistribution towards the poor. Elites and masses may have different ideas of what "pro-social" policies should look like, and when they conflict, the elites tend to have more pull.
Second, there are a number of plausible mechanisms for the elites to influence policymakers that don't involve them bribing anyone. Just a few off the top of my head:
- I go to an expensive elite college and make friends there. Later, one of my friends is in a position to directly influence policy in a way that's relevant to me, so I call him up and say "Hey, there's this problem, and here's a pro-social explanation of why it's a problem", he listens, thinks that what I'm saying is at least plausible, which influences his decisionmaking in the direction I want.
- I play golf with people who are friends with policymakers, and my views gradually reach them. I also know that these policymakers are domain experts, which would make them decent hires at my company. I don't make any promises or offers - they may not even know that I exist - but they face these incentives and they know it.
- Policymakers are generally close to elite themselves, so it's easier for them to sympathize with the concerns of other members of that class, and it's easier for them to get along well with other elites culturally, which helps with influence. For example, imagine some Stanford graduate who makes $150k a year talking to a state legislator at a neighborhood party to a high-school dropout raised in a rough neighborhood trying to do the same.
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Eccentric Opinion
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Miru
Supreme Hero
A leaf in the river of time
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posted August 31, 2016 04:07 AM |
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It's more than just that. Special interest groups have law written just for them to make the marketplace work in their favor. I'll find more concrete examples next time.
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I wish I were employed by a stupendous paragraph, with capitalized English words and expressions.
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mvassilev
Responsible
Undefeatable Hero
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posted August 31, 2016 04:45 AM |
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That part I already agree with. But "special interest groups" is different from "the rich".
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Eccentric Opinion
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Celfious
Promising
Legendary Hero
From earth
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posted August 31, 2016 05:27 AM |
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If someone said I could have a billion dollars and here is a CEO position but I have to stand with them on issues which destroy the world and further oppress humanity and animal species,
I'd say sure sure then end up on the news looking like bat man. Traitor to the corporations.
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What are you up to
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Miru
Supreme Hero
A leaf in the river of time
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posted September 14, 2016 12:56 AM |
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These posts took quite a while to make. Originally I had a few more topics I planned to cover, but the community doesn't seem very interested. Does anyone want me to write more?
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I wish I were employed by a stupendous paragraph, with capitalized English words and expressions.
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Zenofex
Responsible
Legendary Hero
Kreegan-atheist
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posted September 14, 2016 07:13 AM |
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It's not that such topics are not interesting, just people have a built-in head-in-the-sand behaviour for everything which does not affect them directly or immediately. Perhaps the main reason why atrocities of this kind happen (and these are atrocities no less than sending a bomber squadron to destroy a town) is that nobody will bother with them unless the issues escalate to a boiling point.
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Miru
Supreme Hero
A leaf in the river of time
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posted September 14, 2016 08:06 AM |
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Well of course that's why the population doesn't do anything about them, but the question is do the people at this forum want to read about them?
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I wish I were employed by a stupendous paragraph, with capitalized English words and expressions.
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markkur
Honorable
Legendary Hero
Once upon a time
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posted September 14, 2016 09:31 PM |
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America's Lost Jobs and Exports
If you are not well versed in today's world of "Politics + Globalism + Trade-Deals, you might want to invest the time to listen to the following men. The stated facts of what happened to the Mexican farmers alone should at least rouse some concern and interest about now and the future.
GATT & NAFTA Impacts: Reviewed in 1994.
Part 1
Part 2
Related...we keep hearing the mantra "Free-trade" but does the US need the "version we have had" as Global Corporations continue to plan for more of these...<ahem> deals?
Ian Fletcher - The Case Against "Free" Trade
Free?
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