>>Oh lord, spare us
Does it answer when you pray to it?
Posted on 03/10/2008 6:15:48 PM PDT by shrinkermd
Does it answer when you pray to it?
The identity of assets and liabilities is the basis of all accounting, which is called *double entry* bookkeeping for a reason.
The idea of a net asset is a round square and a misunderstanding. That is all.
Ex 32:7-8
7 Then the LORD said to Moses, "Go down, because your people, whom you brought up out of Egypt, have become corrupt. 8 They have been quick to turn away from what I commanded them and have made themselves an idol cast in the shape of a calf. They have bowed down to it and sacrificed to it and have said, 'These are your gods , O Israel, who brought you up out of Egypt.'
Excerpt:
Struggling to save their homes from foreclosure, more Americans are raiding their 401(k) retirement accounts to pay their bills — and getting slammed with taxes and penalties in the process, according to retirement plan administrators.Arrrgggh ! This is beyond stupid, stupid, stupid . . .Rather than borrow money from their 401(k) accounts, which would have to be paid back, a growing number of beleaguered families have been cashing out, plan administrators say.
This is happening even as borrowing from 401(k) accounts remains fairly flat. Fewer still are borrowing from 401(k) plans to buy homes. By contrast, new figures from plan administrators show the number of 401(k) "hardship withdrawals" is up in early 2008 compared with the same period last year.
The main reason? The need to stave off foreclosure or eviction.
The federal reserve just picked the pocket of the average family of 4 about $3200 to pay several million a piece to central bankers in New York who made these bad deals.
"That was the bubble, and it was not based on fraud but on believing the transaction prices could hold" -JasonC
Are you a financial idiot or another on the list of Wall Street shills. Yes, when the federal government creates $200B in currency and gives it to someone else, they just picked the pockets of all of us who are not in line to get any of it.
Actually you sound quite reasonable, and you seem to understand where things went and are going. I am not sure why you have a beef with the folks around here who argue for sound money, be it a gold standard, or just keeping a lock on the Federal Reserve Printing Press.
You have no prior right for any basket of commodities you freely choose to hold, remaining unchanged in value, through all the free actions of other economic actors. There is economically no difference between what happens to the purchasing power of dollars you freely choose to hold and what happens to the value of wheat or the value of DRAM memory chips, as producers and consumers toss them about in their waves of demand.
You are not forced to carry money balances in the form of bank debts in the first place. You can hold commodities, you can hold portfolio investment, you can hold foreign exchange. If instead you choose to hold bank debt, it is because doing so performs real services for you, which outweigh, for the amounts you choose to hold, any loss from dimunition of its value through time. Your demand that in addition to these "externalities" running in your favor, its free market purchasing power also remain unchanged (or increase) is no more legitimate than a workers demand that he should be paid more until his employer's profits disappear.
And the proof is the same, the test of making a market or taking both sides of the transaction condemned. If issuing bank debt is such a great deal that we are fools to stand it and it is all for the benefit of nefarious bankers, then be a nefarious banker. It is easy as pie, just buy bank stock instead of bank debt. You can do so without even paying the slightest commission, these days, and down to infinitessimal amounts, at perfectly fair market prices, etc.
In the long run, it is true that bank stock has returned more than bank debt. But it is also true that it does so while also being vastly riskier. To take a recent headline case, those nefarious bankers holding Citicorp common over the last 9 months have lost not 4% of their purchasing power, but 60% of it. You are free to join them in their game so rigged that it amounts to counterfeiting.
If you don't even after this has been pointed out to you, it is because your pretense that they can pick your pockets is a conscious falsehood on your part. In fact, you are in no way oppressed in the matter.
As for being "in line" for federal handouts, first the Fed isn't simply the government though it works for it, second, last I checked the government was handing out a giant stimulus package to precisely the sorts you pretend aren't in line, and third, you can get in line with Citi et al before the day is out, if you put your money where your mouth is. But you may find the ride in bank *stock* a trifle bumpier than the ride in bank *debt*.
Which you choose to hold being entirely up to you, you are entirely responsible for any changes in purchasing power you may or may not suffer or benefit from, as a result of your choice.
Trying to forbid others from actions that might change the purchasing power of any set of commodities you pick out, on the other hand, requires restricting the economic freedom of others - here, the freedom to engage in credit transactions, because there is no difference between the consequences of the fed creating more money and private banks doing so under a private bank system with credit freedom - and that game isn't worth the candle, for reasons Hayek explained at length in Road.
The economic error of Mises, incidentally, is his belief that it is possible to destroy the effects of gratuitious credit by a government edict or monetary law. The cycle is a permanent result of free action under capitalism and not a result of a specific legal framework for money. It isn't removable without destroying the capital market freedoms that give rise to it.
We can have better and worse monetary policy under the present fiat money system, or under commodity money systems or mixed ones. But we'd still have a cycle, and Mises is simply wrong about the matter. And we'd still have fluctuations in the exchange value of goods held as money. All of the "picking pocket" rhetoric is deeply irresponsible, and unjust to actual financiers. Frankly it is the modern form of jew baiting and denunciations of usury, and no one with either an ounce of respect for capitalism, or a classically liberal bone in their body, should engage in it.
I cannot believe that you are arguing that what has been going on under Greenspan and now Bernanke is "free market" capitalism and what we are seeing is just the effect of markets doing what markets do. Apparently, you are one of those who do not believe that the gratuitous expansion of credit was a deliberate act under the control of the federal reserve.
Fine. Please explain why we even bother with this apprently powerless entity called the Federal Reserve when everything we see is "just" the actions of the markets. If the Federal Reserve is irrelevant, then why does their announcement of $200B in longish term loans cause the market to jump?
The Fed is not creating $200B in currency. They are swapping, on a temporary basis, $200B of Treasury securities (which the Fed did not just create either) for other, less liquid securities. It's not a free giveaway and it doesn't pick your pocket.
To be a "nefarious banker," I need to have my own packed board of directors vote me a $100M pay package when I tank the stock because of bad loans.
LOL!
Yep, let’s just build up that “House of Cards” even higher.
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