1. Standard memberAThousandYoung
    Shoot the Squatters?
    tinyurl.com/43m7k8bw
    Joined
    23 Aug '04
    Moves
    26660
    10 Aug '13 10:11
    Originally posted by robbie carrobie
    business needs capital to run, i have ten dollars, i put it into a business, the business owes me the value of ten dollars, over time, if the business is profitable, as profits grow (hopefully) I may be owed more than my initial ten dollar investment.

    It appears to me that I am being rewarded not on the basis of merit for my skills or talent or ev ...[text shortened]... ng to take a risk with my ten dollars. I have not produced a single thing. Is it not the case?
    You are correct. But if you are rich enough and skilled enough you can mitigate your risk down to nothing. What it comes down to is that rich people get paid for not working.
  2. Account suspended
    Joined
    26 Aug '07
    Moves
    38239
    10 Aug '13 12:09
    Originally posted by AThousandYoung
    You are correct. But if you are rich enough and skilled enough you can mitigate your risk down to nothing. What it comes down to is that rich people get paid for not working.
    The reason I read the article in the first place was that a contributor to chess.com, International master David Pruess had posted a blog about chess.com in which the owner of the domain name was unwilling to spread out the profits to anyone else but himself despite the fact that he has practically no talent for chess and contributes nothing in the way of chess videos, chess lessons etc all that he has done is taken the risk and supplied the initial capital in order to buy the domain name.

    No you can argue that greed is not a crime and that he should be rewarded for taking a risk but what type of system is it that can reward a greedy and talentless person over other hard-working and talented people? Its ludicrous and unjust, surely?
  3. Donationrwingett
    Ming the Merciless
    Royal Oak, MI
    Joined
    09 Sep '01
    Moves
    27626
    10 Aug '13 12:14
    Originally posted by robbie carrobie
    I agree whole heartedly dude which is one of the reasons i support Linux and open source, but we got to live dude in the satanic system.
    But you DON'T have to. You choose to. The system is only able to propagate itself because of the willing collaboration of you, me, and billions of other people. But there is nothing but inertia that prevents us from altering that system. The Kingdom is all around you, but men do not see it.
  4. Account suspended
    Joined
    26 Aug '07
    Moves
    38239
    10 Aug '13 12:202 edits
    Originally posted by rwingett
    But you DON'T have to. You choose to. The system is only able to propagate itself because of the willing collaboration of you, me, and billions of other people. But there is nothing but inertia that prevents us from altering that system. The Kingdom is all around you, but men do not see it.
    Lol, i love these subtle spiritual references and of course you are correct. Next time my kid asks me for a pair of Voi jeans ill weave him a pair instead! 😀
  5. The Catbird's Seat
    Joined
    21 Oct '06
    Moves
    2598
    10 Aug '13 15:43
    Originally posted by robbie carrobie
    cash is an asset in accounting terms, what i think you mean is that they start to sell off the assets (which take many forms) and hope to realise the value of those assets (it must be understood that assets like plant and machinery depreciate in value over time). Balance sheets are not accounts, they are simply a statement of what is owed to the bus ...[text shortened]... accounts like provisions. All of this makes it difficult to ascertain what is really going on.
    All true, and those are the reasons I quit studying accounting as a very promising student. The goalposts are moved all the time in very capricious ways.

    Thing is that especially during the Greenspan era at the Fed, interest rates became the tool du jour of assuring Wall Street prosperity, and the existence of virtually free borrowing led to massive malinvestment, which never would have happened in a market with interest rates set by supply and demand.

    About 90% of first year accounting students wash out in the very first quarter, way before the muddy part is even begun.

    The tricks of the LBO guys as outlined by David Stockman who was in the business, was to sell assets like buildings, machines, etc. and then lease them from the new owners, creating the impression on the balance sheet of greater cash flow than was actual.

    The tremendous leverage or premium paid, also gave the false picture of prosperity, while the dept to income ration told an entirely different story. Then as the short term debt came due, it was recycled in much the same manner as homeowners taking equity out of the residence with 2nd and 3rd mortgages. The same collateral was used for multiple layers of loans, with the only ones partly protected being the brokers of the deal, who all the time until the eventual collapse or resale were squeezing out cash, while the debt was not being retired, because it never could have been anyway.
  6. The Catbird's Seat
    Joined
    21 Oct '06
    Moves
    2598
    10 Aug '13 15:49
    Originally posted by robbie carrobie
    a free market? are you unwilling to pay the government a share for providing an environment in which your business can flourish? Take a look at a system where government interference is absolutely minimal and what transpires is that business is stifled due to corruption or beset by thievery, for example the recent financial crisis.
    The only "deregulation" was the elimination of Glass Stegal, and that was minor compared to the blatant interference with free markets by the Fed, and the government.

    For example, there never was a trading market of futures in international currencies until Nixon's repudiation of the gold standard in 1971. Speculation would have been a futile waste of time when world currencies were very nearly uninflated for several decades.

    Futures markets became gambling casinos with the floating dollar, and with the advent of nearly zero interest rates forced by the Fed under Greenspan, and put on steroids under Bernanke.
  7. Joined
    12 Jul '08
    Moves
    13814
    10 Aug '13 16:40
    Originally posted by normbenign
    The only "deregulation" was the elimination of Glass Stegal, and that was minor compared to the blatant interference with free markets by the Fed, and the government.

    For example, there never was a trading market of futures in international currencies until Nixon's repudiation of the gold standard in 1971. Speculation would have been a futile waste o ...[text shortened]... ly zero interest rates forced by the Fed under Greenspan, and put on steroids under Bernanke.
    The government needs a very low interest rate. Just imagine what would happen to the national debt if interest rates hit 15% or 20%.
  8. Joined
    29 Mar '09
    Moves
    816
    11 Aug '13 16:00
    Originally posted by robbie carrobie
    The Death Spiral of Capitalism

    July 24th, 2013
    posted by RJ Random

    1) The Declining Rate of Profit

    The early major theorists of capitalism, Adam Smith, David Ricardo, and Karl Marx, all predicted that the rate of profit of capitalist enterprises should fall, as a general trend over time.

    Each reached this conclusion in his own way. A ...[text shortened]... iral-of-capitalism/

    can someone interpret this for me, in essence, what is the writer saying.
    Capitalism has inherent problems, but the death of capitalism will be government interference.
  9. Standard memberAThousandYoung
    Shoot the Squatters?
    tinyurl.com/43m7k8bw
    Joined
    23 Aug '04
    Moves
    26660
    11 Aug '13 17:48
    Originally posted by robbie carrobie
    your equation is confusing in accounting terms, assets can be anything, from money, to machinery, to plant and office furniture, to debtors, for these are all values which are are owed to the business and which the business can utilise to procure profits, liabilities are values which the business owes to others, like those who invested in it or its o ...[text shortened]... stand and which is cloaked in obscure and ill understood language and ill defined inhouse terms.
    http://en.wikipedia.org/wiki/Accounting_equation
  10. The Catbird's Seat
    Joined
    21 Oct '06
    Moves
    2598
    12 Aug '13 00:13
    Originally posted by Eladar
    The government needs a very low interest rate. Just imagine what would happen to the national debt if interest rates hit 15% or 20%.
    Well yeh, but with relatively high rates by comparison, under Eisenhower we almost retired the entire war debt of WWII. Ike left taxes high to fund Korea, refusing to fund a war by borrowing.

    High interest rates would discourage spending and malinvestment. They would also give people a reason to save.
  11. The Catbird's Seat
    Joined
    21 Oct '06
    Moves
    2598
    12 Aug '13 00:15
    Originally posted by joe beyser
    Capitalism has inherent problems, but the death of capitalism will be government interference.
    Most of the criticisms of free market capitalism are really criticisms of government's "management" of capitalism.

    Once it is "managed" it isn't free.
  12. Standard memberDeepThought
    Losing the Thread
    Quarantined World
    Joined
    27 Oct '04
    Moves
    87415
    12 Aug '13 01:28
    Originally posted by normbenign
    Exponential growth and mergers really didn't have much favor in capitalism, until we lost even a pretence of an honest money standard.
    If the financial markets weren't expecting "exponential growth" for the South Sea Bubble, then why did they behave like that? Or in any of the other bubbles that have happened since? What became known as the exponential function was initially studied in the 1680s in the context of compound interest. They've been aware and hoping for it for a good 350 years.
  13. Account suspended
    Joined
    26 Aug '07
    Moves
    38239
    12 Aug '13 01:34
    Originally posted by joe beyser
    Capitalism has inherent problems, but the death of capitalism will be government interference.
    on the contrary the failure of governments to regulate the system is what has produced the present crisis, in fact, i dont think there has been any financial reforms despite what has transpired.
  14. Account suspended
    Joined
    26 Aug '07
    Moves
    38239
    12 Aug '13 01:37
    Originally posted by normbenign
    Most of the criticisms of free market capitalism are really criticisms of government's "management" of capitalism.

    Once it is "managed" it isn't free.
    why do you people have such a problem with government, its government which creates an environment in which markets can flourish, through infrastructure, upholding of laws etc etc, how would you like to carry on business in a state governed by anarchy?
  15. The Catbird's Seat
    Joined
    21 Oct '06
    Moves
    2598
    13 Aug '13 02:31
    Originally posted by DeepThought
    If the financial markets weren't expecting "exponential growth" for the South Sea Bubble, then why did they behave like that? Or in any of the other bubbles that have happened since? What became known as the exponential function was initially studied in the 1680s in the context of compound interest. They've been aware and hoping for it for a good 350 years.
    From 1987 to the present we've had three major bubbles. There were really none to speak of prior to the Fed, and even with the Fed until it lost its way with a floating currency standard, or no standard at all.

    The financial markets adapted quickly to the Nixon/Friedman floating standard, and to a clueless Fed as wholesale money became virtually "free".
Back to Top

Cookies help us deliver our Services. By using our Services or clicking I agree, you agree to our use of cookies. Learn More.I Agree