Obama plans to "spend our way out" of recession

[tim290280]

would you have become rich by investing in google or microsoft at there IPO, or investing in them today?

The difference in the profit potential is huge, one is linear the other is exponential. One invests in a bluechip for a few 3-4% dividend payments (pensioners etc) and another would invest in IPO's, distressed assets and those companies with a growing market with huge potential profits in the future (venture capital, hedge funds).

Now go figure how the market works.

Seriously???

Guess the guys in stock brockerage firms and trade floors around the world must just be losing money hand over fist. I guess they don't spend all day buying and selling shares, funds, positions, hedges, or even my favourites the hedges on hedges. Wouldn't have millions of dollars being made every day doing this keeping the economy going, or crashing it like they did last year.

I will answer your first question with a question. If Microsoft and Google are such a crap investment now, and no-one can make money or "get rich" trading in their shares now, then why are they still traded so heavily?

As my rhetorical question illustrates you can stop with the insinuation that my original statement about green industries being able to rely on the free market is somehow wrong. Green industries would eventuate, but only after tipping points for current industries approach, and only after the tipping point would the investment flow to those new industries. The point is that you can't wait for a tipping point to occur in a market place without major consequences, which in this instance is not something the human race can afford to suffer.

 

[pegasus]

Seriously???

Guess the guys in stock brockerage firms and trade floors around the world must just be losing money hand over fist. I guess they don't spend all day buying and selling shares, funds, positions, hedges, or even my favourites the hedges on hedges. Wouldn't have millions of dollars being made every day doing this keeping the economy going, or crashing it like they did last year.

I will answer your first question with a question. If Microsoft and Google are such a crap investment now, and no-one can make money or "get rich" trading in their shares now, then why are they still traded so heavily?

As my rhetorical question illustrates you can stop with the insinuation that my original statement about green industries being able to rely on the free market is somehow wrong. Green industries would eventuate, but only after tipping points for current industries approach, and only after the tipping point would the investment flow to those new industries. The point is that you can't wait for a tipping point to occur in a market place without major consequences, which in this instance is not something the human race can afford to suffer.

Firstly wtf do you start every reply with a stupid comment? whats the point of acting like a smart ass, and thinking that you know it all, when you clearly don't!?

"I guess they don't spend all day buying and selling shares, funds, positions, hedges, or even my favourites the hedges on hedges"

I never said that google or microsoft are crap investments, but the rest of your rant about stock brokers and floor traders in chicago shows how little you understand the difference between market makers, day traders, short term investors and long term investors. The market is there to reward risk. You are not taking much risk by investing in google or exxon today, if you had done so at their inception or primary stages of their growth when it wasn't so obvious that their business model clearly works then you would've been rewarded handsomely but not today. When microsoft first offered its shares in the markets they were valued at $0.01 (taking account of all the stock splits since then) in the year 1986, it then went on to reach a peak of $60. Now since then its been range bound around 30 dollars.

The American economy grew because of its free markets, not central planning. It didn't grow by taxation and wealth redistribution. Also the reason why the markets crash causing such wide spread devastation is because of the fed and government policies, otherwise market corrections would be alot more rare, and the only ones end up being hurt would be those who didn't invest their money properly.

If the market thinks that green industry in its current state has a future then it will allocate capital to it, but rejecting the markets because they won't buy into the shitty man made global warming theory (scam) to the extent you would like it to is simply showing your arrogance.

 

[tim290280]

I'm not going to correct all of your points. I will say that one of the primary functions of the stock markets is to hedge risk. Your reasoning for market crashes is spurious at best, "market corrections" occur due to the overplaying of the market (false valuation of stocks), the correction has little to do with external govt influence and a lot to do with restoration of balance. You may also want to look at your own post to see that you did essentially state that Google et al were crap because you couldn't get rich.

Finally I'll say I'm a little sick of this anit-global warming schtick. You may have heard of the last decade's temp increase confirmed recently from satellite data. Clearly this and all the other temperature increases were imagined.

 

[pegasus]

I'm not going to correct all of your points. I will say that one of the primary functions of the stock markets is to hedge risk. Your reasoning for market crashes is spurious at best, "market corrections" occur due to the overplaying of the market (false valuation of stocks), the correction has little to do with external govt influence and a lot to do with restoration of balance. You may also want to look at your own post to see that you did essentially state that Google et al were crap because you couldn't get rich.

Finally I'll say I'm a little sick of this anit-global warming schtick. You may have heard of the last decade's temp increase confirmed recently from satellite data. Clearly this and all the other temperature increases were imagined.

I don't need you correcting anything for me, thanks.

Stock markets are for raising capital, commodity markets are designed for hedging risk. but you can hedge your position in the stock market by going to the options market and buy puts or calls depending on your positions.

The reason why I state that government and central banks cause bubbles is that by causing people to worry about inflation they force them into taking position in commodities in order to preserve wealth, or by flooding or draining the markets with easy money they cause businesses to flourish at speed much higher than the organic rates, and vanish just as fast when monetary policy changes. This recession isn't even over yet and you seem to have already forgotten that at this very moment the fed is on the verge of causing hyper inflation in the not so distant future, blowing another bubble in the bonds market and making people run to commodities to dodge the inflation coming their way, which is causing gold to make all time highs, and you say government doesn't have anything to do with it!!

Yeah I heard about the data, it sure made me buy into the enviromentalist cult :gaysign:

I mean why would I trust anything that comes from such fascist organizations???

 

[tim290280]

Yeah I heard about the data, it sure made me buy into the enviromentalist cult :gaysign:

It is this sort of statement that encourages me to think poorly of your posts.

Climate Change is one of the most important research topics of the past 20yrs, yet you seem to think it doesn't exist. But feel free to keep sticking your head in the sand. Science and the topics it researches aren't made up to keep people in a job, they are observations and measurements of the world/universe and our understanding of those observations and measurements.

I mean why would I trust anything that comes from such fascist organizations???

Science is fascist?

Way to show ignorance dude.

Stock markets are for raising capital, commodity markets are designed for hedging risk. but you can hedge your position in the stock market by going to the options market and buy puts or calls depending on your positions.

Thanks for agreeing with me

The reason why I state that government and central banks cause bubbles is that by causing people to worry about inflation they force them into taking position in commodities in order to preserve wealth, or by flooding or draining the markets with easy money they cause businesses to flourish at speed much higher than the organic rates, and vanish just as fast when monetary policy changes.

Worry about inflation?

I assume you understand the concept behind the use of inflation and interest rates. Then you would understand that they are a system designed to lessen market over valuation and thus stock crashes. "Organic rates" would follow a normal population cycle i.e. peak and crash. This would be disastrous.

Another point is that most reserve banks and monetary controls are seperate from government control. I can't speak for America, but I do know that America has had artificially low interest rates for a long time. This, if anything, has more of an impact on markets due to market overprcing.

This recession isn't even over yet and you seem to have already forgotten that at this very moment the fed is on the verge of causing hyper inflation in the not so distant future, blowing another bubble in the bonds market and making people run to commodities to dodge the inflation coming their way, which is causing gold to make all time highs, and you say government doesn't have anything to do with it!!

*sigh* Please don't try to put words in my mouth. I never said government doesn't have any influence, it is one of the major spenders in most economies of the world. I said it's influence is minimal when it comes to market corrections as the market, by its very nature, runs in cycles and corrections are from overvalueing. You seem to deliberately miss the points I am making in order to lecture me.

 

[pegasus]

It is this sort of statement that encourages me to think poorly of your posts.

Climate Change is one of the most important research topics of the past 20yrs, yet you seem to think it doesn't exist. But feel free to keep sticking your head in the sand. Science and the topics it researches aren't made up to keep people in a job, they are observations and measurements of the world/universe and our understanding of those observations and measurements.


Science is fascist?

Way to show ignorance dude.


Thanks for agreeing with me


Worry about inflation?

I assume you understand the concept behind the use of inflation and interest rates. Then you would understand that they are a system designed to lessen market over valuation and thus stock crashes. "Organic rates" would follow a normal population cycle i.e. peak and crash. This would be disastrous.

Another point is that most reserve banks and monetary controls are seperate from government control. I can't speak for America, but I do know that America has had artificially low interest rates for a long time. This, if anything, has more of an impact on markets due to market overprcing.

*sigh* Please don't try to put words in my mouth. I never said government doesn't have any influence, it is one of the major spenders in most economies of the world. I said it's influence is minimal when it comes to market corrections as the market, by its very nature, runs in cycles and corrections are from overvalueing. You seem to deliberately miss the points I am making in order to lecture me.

I'm not gonna bother discussing global warming with you. As far as I'm concerned your the one with your head stuck in the sand. With science you can't just declare that the debate is over and either your with us or against us, which is what is happening here.

As for your arguments about economics, you've shown how little you know about how the markets work in the real world, but all you know is some theories you've picked up from here and there. I mean you seem to think the current system used "inflation and interest rates" so well to the extent that it devalued the dollar causing gold to go from $300 to $1200 in a few short years in order to "lessen market over valuation and thus stock crashes". I can see how well that worked in the end

You make statements like:
"Your reasoning for market crashes is spurious at best, "market corrections" occur due to the overplaying of the market (false valuation of stocks), the correction has little to do with external govt influence and a lot to do with restoration of balance."
"I never said government doesn't have any influence, it is one of the major spenders in most economies of the world. I said it's influence is minimal when it comes to market corrections as the market, by its very nature, runs in cycles and corrections are from overvalueing."

I mean does that even make sense? The government is the one causing most of the distortions, and causes things like houses (most recent example) to become overpriced, and thank god there is a market which forces a correction, cause otherwise a crappy house would've cost a few mil in a few years.

Also I didn't agree with you that the stock market is there for hedging purposes, its for new companies to go and raise capital. The commodities markets are the place where farmers or airlines etc go to hedge there future crop, or fuel costs, not the stock markets.

Also when I said google or microsoft were crap investments you seem to think I mean they are crap companies. Thats not the case, what I mean is that your money is not going to increase that much if you invest in a blue chip stock like the ones listed. I mean I'm making money trading currencies everyday, along with alot of other things that I wouldn't call good investments, because I mean how can you grow rich by buying a currency and sitting on it for the rest of your life? they don't pay dividends and are all fiat, but like I said I'm trading them, not investing in them. So when you see msft or goog having high volumes, it mostly short term traders like me trying to buy and sell a little higher, or sell and buy a little lower.

 

[tim290280]

I'm not gonna bother discussing global warming with you. As far as I'm concerned your the one with your head stuck in the sand. With science you can't just declare that the debate is over and either your with us or against us, which is what is happening here.

As for your arguments about economics, you've shown how little you know about how the markets work in the real world, but all you know is some theories you've picked up from here and there. I mean you seem to think the current system used "inflation and interest rates" so well to the extent that it devalued the dollar causing gold to go from $300 to $1200 in a few short years in order to "lessen market over valuation and thus stock crashes". I can see how well that worked in the end

You make statements like:
"Your reasoning for market crashes is spurious at best, "market corrections" occur due to the overplaying of the market (false valuation of stocks), the correction has little to do with external govt influence and a lot to do with restoration of balance."
"I never said government doesn't have any influence, it is one of the major spenders in most economies of the world. I said it's influence is minimal when it comes to market corrections as the market, by its very nature, runs in cycles and corrections are from overvalueing."

I mean does that even make sense? The government is the one causing most of the distortions, and causes things like houses (most recent example) to become overpriced, and thank god there is a market which forces a correction, cause otherwise a crappy house would've cost a few mil in a few years.

Also I didn't agree with you that the stock market is there for hedging purposes, its for new companies to go and raise capital. The commodities markets are the place where farmers or airlines etc go to hedge there future crop, or fuel costs, not the stock markets.

Also when I said google or microsoft were crap investments you seem to think I mean they are crap companies. Thats not the case, what I mean is that your money is not going to increase that much if you invest in a blue chip stock like the ones listed. I mean I'm making money trading currencies everyday, along with alot of other things that I wouldn't call good investments, because I mean how can you grow rich by buying a currency and sitting on it for the rest of your life? they don't pay dividends and are all fiat, but like I said I'm trading them, not investing in them. So when you see msft or goog having high volumes, it mostly short term traders like me trying to buy and sell a little higher, or sell and buy a little lower.

Yes clearly me having a science background and an understanding/awareness of a topic that you display complete ignorance and abhorrence of is clearly a failing on my part.

Same can be said of your posts on economics. I raised basic points because you are clearly missing their importance and role. It is clear that your understanding has come from a very biased viewpoint that can't see the wood for the trees.

I asked you before to go and read up on climate change in some science journals, or science media (like New Scientist) rather than the crap the popularist media carry-on about. Please do. I'm not interested in discussing this further until you do.

 

[Sentinel]

You know...the companies which came out of the great depression standing on their feet and earned a LOT of money over the course of the years had one big thing in common:

They all continued to hire people aggressively during the great depression while other companies were laying off workers.

 

[pegasus]

You know...the companies which came out of the great depression standing on their feet and earned a LOT of money over the course of the years had one big thing in common:

They all continued to hire people aggressively during the great depression while other companies were laying off workers.

Although that is true to a certain extent, these days there are so many new regulations, tax burdens coming down the pipeline that if I, myself was an employer I wouldn't hire either.

 

[Ryeland]

Although that is true to a certain extent, these days there are so many new regulations, tax burdens coming down the pipeline that if I, myself was an employer I wouldn't hire either.

Not hiring new people when the game changes its rules is not a good strategy. New people bring new ideas aren't bogged down in the same paradigms that the company has been entrenched in. In short, new people bring new ideas.

This is in fact an ideal time for employers to hire. With unemployment being so high people are willing to settle for lower salaries (as a recent engineering grad looking for a job, I am all too familiar with this).

The problem with the business world of late is that there are too many finance people in it. When passion for profit outweighs passion for product there will always be a stall in ideas generated. I will use apple in the late 90's when they got rid of Jobs, and GM when they put Wagoner in charge as examples. When people whose only passion is the bottom line take over its bad news for everyone.

 

[pegasus]

Not hiring new people when the game changes its rules is not a good strategy. New people bring new ideas aren't bogged down in the same paradigms that the company has been entrenched in. In short, new people bring new ideas.

This is in fact an ideal time for employers to hire. With unemployment being so high people are willing to settle for lower salaries (as a recent engineering grad looking for a job, I am all too familiar with this).

The problem with the business world of late is that there are too many finance people in it. When passion for profit outweighs passion for product there will always be a stall in ideas generated. I will use apple in the late 90's when they got rid of Jobs, and GM when they put Wagoner in charge as examples. When people whose only passion is the bottom line take over its bad news for everyone.

Yes if America was still a manufacturing based economy like it was in the last depression, hiring would be a good idea to help create new products etc. But now its 75% service based, so when the economy doesn't feel like spending as much money on services and luxuries then they're bound to be hit hard, and profit margins which were already small before will not be sufficient to allow for new people to be recruited. So right now it is a good idea for some to hire, which they are doing but for the majority it isn't. Also add to that the artificial minimum wages the government sets, and that makes it harder to hire new talent.

I my self am a engineering graduate, but I along with other friends couldn't find a job since we graduated in 2007 right when the bubble burst, one of the friends who managed to find a job got laid off a while after because the job was out sourced to India. So I was forced to changed fields and became one of the finance people your referring too lol since that is pretty much one of the few industries left in the UK.

 

[Ryeland]

Yes if America was still a manufacturing based economy like it was in the last depression, hiring would be a good idea to help create new products etc. But now its 75% service based, so when the economy doesn't feel like spending as much money on services and luxuries then they're bound to be hit hard, and profit margins which were already small before will not be sufficient to allow for new people to be recruited. So right now it is a good idea for some to hire, which they are doing but for the majority it isn't. Also add to that the artificial minimum wages the government sets, and that makes it harder to hire new talent.

I my self am a engineering graduate, but I along with other friends couldn't find a job since we graduated in 2007 right when the bubble burst, one of the friends who managed to find a job got laid off a while after because the job was out sourced to India. So I was forced to changed fields and became one of the finance people your referring too lol since that is pretty much one of the few industries left in the UK.

The economy can become manufacturing based again. In the past decade as more and more manufacturing has been outsourced to Mexico and China quality has steadily fallen. As a result of this fall in quality, people turned to the reliable brands such as Toyota and Honda. Effective R&D spending can turn a company around in no time. Look at Ford, they are killing this year. Next year they will do even better as a result of several new technologies being brought out. As fuel prices increase, outsourcing manufacturing will become less and less attractive. As a result of more work in countries like China and India, their minimum wages will rise causing the same effect. It will be attractive in the future to manufacture in north america again.

I wasn't referring to all finance people, lol. Finance minded folks (such as yourself) are certainly needed. What I was remarking on was the passion for product vs passion for profit. While at the root of business profit is the sole goal, there can still be a great passion for great product. When developing an awesome product to earn a profit is the means by which revenue is earned things work well. The industry progresses and society moves forward. When developing ways to squeeze ever increasing profits out of dated and mediocre products out paces developing better product industry stalls and sputters. For example look at the latest generation of consoles. Nintendo suffered complete defeat with the gamecube, so they went back to the drawing board and came out with the Wii, which has been a great example of an innovative risk that paid off.

 

[pegasus]

Well I hope so, but the whether we like it or not, an equilibrium will be established, that means the living standards the developing countries would rise, and the developed would decrease. No way around that.
I post a thread about a Charlie Rose interview with Sir James Goldsmith done back in the 90's: http://www.musclemecca.com/showthread.php/1994-charlie-rose-interview-sir-james-goldsmith-47628.html
I would highly recommend that you watch it.

 

[Ryeland]

Well I hope so, but the whether we like it or not, an equilibrium will be established, that means the living standards the developing countries would rise, and the developed would decrease. No way around that.
I post a thread about a Charlie Rose interview with Sir James Goldsmith done back in the 90's: http://www.musclemecca.com/showthread.php/1994-charlie-rose-interview-sir-james-goldsmith-47628.html
I would highly recommend that you watch it.

Thanks for the recommendation, I will definitely watch as soon as I have the time.

You are quite right about the equilibrium. In this part of the world we have nowhere to go but down. Its just a matter of developing environmentally, financially and socially sustainable economies that ensure people can live decently.