Futures and Oil prices

[GG]

Well stated GG.

 

Oh, dear Lord. I must be wrong.

[Steely Dan]

Oh, dear Lord. I must be wrong.

 

I had to read it three times to make sure I was reading it correctly. I'm just as stunned by that too.

[Sketch Soland]

Think of it as the 100-yr flood. Which is easy when the 100-yr old theories on the socialist Fed are resurrected. If Fed was socialist it would certainly be a lot more proactive in stopping perceived bubbles and slowing run-away growth instead of acting as Mr. Wolf to Vincent & Jules.

 

Managing an economy from a centralized authority is socialist.

 

If you deny that, then you do not understand what "socialist" means.

[DC Tom]

Oh, dear Lord. I must be wrong.

 

Hey, Steely Dan's not a complete idiot. For the most part, he just relies on really sh------- sources.

[GG]

And you draw a distinction to deflect the point that I made.

 

That point is vitally central to the argument, not a mere deflection. A bailout of Bear Stearns would have meant government lending directly to the company, leaving it, its employees and shareholders intact. Did that happen?

 

So what, now, about this act we are both referring to, is NOT an EXECUTION of managing the economy?

 

As is government building roads that benefits the auto/trucking industries, airports that benefit airlines at the expense of railroads. Care to add other areas of "managed" economy? I can think of a thousand in a heartbeat

 

I throw every federal gov't agency not explictly allocated for in the Constitution of the United States into the socialist camp. My preference is to adhere to the document that is the foundation of our country, a document which does not allow for the centralization of power in such manners.

 

Perhaps you should revisit the articles in the Constitution that empower Congress to regulate commerce. Creating the Fed was under that statute.

 

 

You are. "Bear Stearns" vs. "Creditors". An economic bailout from a centralized managing authority was still authored. You deny this?

 

The "bailout" was a shortcut of the bankruptcy process, except it was managed by the Fed and not a bankruptcy court. It achieved the exact same thing BSC's bankruptcy would have, without a potential catastrophe. You may argue that the Fed overstepped its bounds by becoming a bankruptcy judge, while I argue that it acted within its legal authority as established by Congress.

 

O RLY? A lot of Austrians would absolutely laugh at this statement.

 

There's no such thing as a free market in industry today because those who have money/power like to keep money/power and get more of it.

 

Hence, the Federal Reserve and other centralized banks.

 

That's funny, since has been dispersed to a much greater degree in the last 100 years because the financial markets are far more stable. Interesting that you make the argument about central banks keeping money & power among the elite, yet the US financial system needed a massive cash infusion from JP Morgan the man, not the bank to be afloat in 1909. Read up on your history.

 

So let's coin and regulate currency based on something like gold. I'm game.

 

Tired argument and is irrelevant to the Fed's main role of keeping price stability.

 

 

Your definition of "reasonable people" reveals your bias. There are plenty of reasonable people who argue that such managing of the economy is what results in "booms" and "busts".

 

If reasonable includes the tirades of Ron Paul, perhaps you and he can back the claim by showing that the swings have gotten much worse since the Fed was created. btw, the Great Depression was helped by Fed's inaction and letting the market work itself out, which it did... eventually. It really should be easy to back the claims with data.

[DC Tom]

Managing an economy from a centralized authority is socialist.

 

If you deny that, then you do not understand what "socialist" means.

 

The Fed doesn't manage "the economy". They manage the supply of capital. They have sh---all to do with planning or managing production and distribution of products, as you'd see in a socialist economy.

[GG]

The Fed doesn't manage "the economy". They manage the supply of capital. They have sh---all to do with planning or managing production and distribution of products, as you'd see in a socialist economy.

 

Hence the broad side of the barn definition of the Fed.

[DC Tom]

Hence the broad side of the barn definition of the Fed.

 

It's like saying the board is socialist because SDS manages it. Nuh-uh. There's still a free exchange of ideas. Management just allows it to go more smoothly by keeping the idiots who post nothing but "FLIGHTSUIT! HALLIBURTON! GOAT STORY!" from overrunning it.

[erynthered]

It's like saying the board is socialist because SDS manages it. Nuh-uh. There's still a free exchange of ideas. Management just allows it to go more smoothly by keeping the idiots who post nothing but "FLIGHTSUIT! HALLIBURTON! GOAT STORY! NOSE PICKER" from overrunning it.

 

 

Forgot one.

[GG]

It's like saying the board is socialist because SDS manages it. Nuh-uh.

 

But imagine a board that was managed by ghost-of-KRC, then it would be nazi and communist.

[Steely Dan]

Hey, Steely Dan's not a complete idiot. For the most part, he just relies on really sh------- sources.

 

I'm still waiting for you to refute the facts I listed. As I said the one source just put everything together for me rather than me have to look it all up. It's stuff I already knew but hadn't read about in a few years and it just put all of it together for me. Truthout.org is not an unreliable source, especially when they document their sources.

 

But imagine a board that was managed by ghost-of-KRC, then it would be nazi and communist.

 

LSI FOR BOARD MANAGER!!!

[erynthered]

.

 

 

 

LSI FOR BOARD MANAGER!!!

 

 

[Steely Dan]

 

That won't get me banned will it?

[TPS]

Hey, Steely Dan's not a complete idiot. For the most part, he just relies on really sh------- sources.

Congratulations SD, welcome to the "I'm not a complete idiot club!"

[GG]

A bit of quantification of the potential abyss:

 

Default Swaps Face Threat of Dealer Collapse, Moody's Says

Laura Cochrane and Oliver Biggadike

29 May 2008

Bloomberg

 

Derivative markets may lose several hundred million dollars should a ``major'' dealer in default protection collapse, according to Moody's Investors Service.

 

The failure of a credit-default swap broker-dealer, a group that includes Citigroup Inc. and Deutsche Bank AG, would drive up the cost of default protection and deprive its trading partners of income from contracts, Moody's said in a report. The so-called counterparties buy and sell default protection to hedge funds, mutual funds and insurers.

 

``The biggest operational issue of concern to Moody's is the untested nature of the CDS market with respect to major credit events or a major counterparty default,'' analysts in New York led by Alexander Yavorsky wrote yesterday in the report.

 

Global credit-default-swap benchmarks reached record highs in March on speculation banks may face cash shortages because of losses on subprime mortgage securities. A run on Bear Stearns Cos. prompted a Federal Reserve rescue to prevent the failure from rippling through the economy.

 

``There's still plenty of potential for someone else to need a bailout,'' said Mark McCarthy, a credit trader at ABN Amro Holding NV in Sydney. ``Someone will be too big to fail, but they'll also be too big to bail out. That's going to be the problem.''

 

Holders of credit-default swaps with a failed counterparty would have trouble replacing the contracts, the analysts said, estimating this would cost around $2 trillion. Yields on the underlying corporate bonds would also rise, Moody's said.

[Steely Dan]

Congratulations SD, welcome to the "I'm not a complete idiot club!"

 

Is there some kind of party held in my honor? Like at Hooters?

[TPS]

Is there some kind of party held in my honor? Like at Hooters?

I'll have to do a search and see how many of us have been annointed as "not a complete idiot" by my new friend DC. Oh, wait, Darin said he still hates me. Nevermind...

[colin]

A bit of quantification of the potential abyss:

 

2 trill is the notional, not the risk, not even close. after netting the actual risks are small, the opperational aspect would be expensive but that's just because the players are under invested and undermanaged wrt back and middle office.

 

a ccds market could account for and protect all the counterparty credit exposures, and the effect of the fed on this market is people won't adopt them unless the fed makes them, because it's cheaper just to get bailed out.

 

this is an example how the regulator's effect on the market crowds out the self regulation that would otherwise exist.

 

have you ever traded any of these things? reality can be a little different than how tps and dc tom agree it is.

[GG]

2 trill is the notional, not the risk, not even close. after netting the actual risks are small, the opperational aspect would be expensive but that's just because the players are under invested and undermanaged wrt back and middle office.

 

a ccds market could account for and protect all the counterparty credit exposures, and the effect of the fed on this market is people won't adopt them unless the fed makes them, because it's cheaper just to get bailed out.

 

this is an example how the regulator's effect on the market crowds out the self regulation that would otherwise exist.

 

have you ever traded any of these things? reality can be a little different than how tps and dc tom agree it is.

 

You sure about that?

 

Self regulation of CDS? Please stop embarrassing yourself.

[DC Tom]

2 trill is the notional, not the risk, not even close. after netting the actual risks are small, the opperational aspect would be expensive but that's just because the players are under invested and undermanaged wrt back and middle office.

 

a ccds market could account for and protect all the counterparty credit exposures, and the effect of the fed on this market is people won't adopt them unless the fed makes them, because it's cheaper just to get bailed out.

 

this is an example how the regulator's effect on the market crowds out the self regulation that would otherwise exist.

 

have you ever traded any of these things? reality can be a little different than how tps and dc tom agree it is.

 

Uh...what? Did you just say the Fed doesn't regulate markets, and therefore the market's unregulated because if the Fed didn't regulate the market would self-regulate?