Of course most of us [...] start out with high opinions of themselves--for a child thinks he is the most important person in the world! What gives us a truer notion is not failure, but our first successes, however trifling. When other people begin to show they value us, then, by discovering our real worth, rather than our imagined one, we learn humility. – Joan Aiken
Mother tongue: English Joined: March 28, 2004 Location: Malaysia
RE: Farmers are financial wizards too
Originally written by Derek Thornton on September 17, 2009 9:08 PM
Originally written by Nanna Mercer on September 17, 2009 9:18 AM Farmers in Belgium have dumped 3 million litres of fresh milk right back onto the green pastures that cows graze on to underscore that European producers can't make a living from current rock-bottom milk prices. Milk farmers' co-operatives said Wednesday world prices had gone so low that they had to sell at half the production cost, leaving ever more farmers unable to pay their bills.
My heart bleeds for them. Then why don't they try overproducing something else that the EU might be more willing to pay them not to produce, then pay again to store the stuff that nobody within distribution range wants, then pay again to have it all destroyed?
You need not teach them. With big agricultural protectors US and Japan not budging, it is unlikely that the WTO would rule that agricultural subsidies are out. Here in Malaysia, 4000 chickens were dumped recently in front of the Veterinary Services Department because big farmers (in excess of 20,000 chickens) are not eligible for subsidies, while others simply resorted to splitting the whole lot into smaller lots to ask for the subsidy. http://www.nst.com.my/Current_News/NST/articles/20090724011448/Article
Interestingly, the convenience stores in Japan flourished (until they even took over 7-Eleven of US) because of laws restricting big stores (to protect the mama-and-papa stores) which were also a cause of trade friction between US and Japan in the late 80s and early 90s.
When the river is obstructed, it would just create a new distorted channel by itself.
Mother tongue: Polish Joined: February 18, 2003 Location: Poland
RE: Understanding the Financial Crisis
Originally written by Jacek K. on August 21, 2009 8:14 AM
Remember: for every single stock and option, and in some places they are already not 50% but 80% up from where they were 5 months ago, brokers charge commissions. There is no increase or decrease in stock value without buy/sell orders and for each and every one of them people pay. Not once but twice and more. The first time when they buy (because they compulsively have to buy), the second time when they sell (because to realize profits they have to), the third time when they buy again because it's time to buy after the slump...
So some will always be ahead of others no matter what.
If stocks double but the dollar loses half its value, who beyond Wall Street are the winners and losers? There's been a clear demonstration this decade. The S&P nearly doubled from 2003 through 2007. Those who borrowed to buy won big-time. Rich people got richer, seeing their equity bottom line double. At the same time, the dollar's value was cut nearly in half versus the euro and other stable measures. Capital fled, undercutting job growth. Rent, gasoline and food prices rose more than wages. http://online.wsj.com/article/SB10001424052748703298004574458923186941870.html?mod=djemEditorialPage
Expert Mother tongue: English Posts: 1807 Joined: February 1, 2008 Location: United States
RE: Understanding the Financial Crisis
Over 50 % of Americans own stock, so to answer your question, most Americans benefit, if stocks rise. A rising stock market also means that companies are flush with cash and they hire more. So everyone benefits.
Who benefits from a weak dollar ? Well, I do, for one. I export translations to Europe mostly, so a weak dollar helps me and all U.S. exporters of goods are services. It hurts European exporters and Asian exporters.
[Edited by John Bunch on October 8, 2009 12:09 PM]
Mother tongue: English Joined: March 28, 2004 Location: Malaysia
RE: Heave-ho!
Originally written by Derek Thornton on October 1, 2009 7:00 PM
The US is bankrupt but everybody knows that and they are just carrying on as usual anyway as if nothing has changed.
This is the Mother of All Bubbles!
Derek
They don't seem to be bursting soon, as long as US remains a very major market.
The Asian central banks led by South Korea and Taiwan (but included many others) were reported to have intervened massively today (Thursday) to prop up the falling dollar.
that researchers now envision are meant to foresee crises in financial systems that have become impossibly complicated. "You want to see the build-up to a crash," Markus Brunnermeier, a professor of economics at Princeton, told me in a recent interview. "You want to see it coming on." Brunnermeier has met with Treasury Secretary Timothy Geithner on several occasions and has collaborated with researchers at the Federal Reserve Bank of New York, the chief implementer of American monetary policy.
Brunnermeier's method for seeing it coming would begin with the data that the Fed already collects. Every quarter, 26 big bank holding companies report a number to the Fed called "value-at-risk," which is an estimate of the maximum money they might lose in the near future with a given probability. But, while banks can calculate their own value-at-risk, they can only guess how stable other banks are--which makes them vulnerable to the ill fortunes of those with whom they share thousands of financial ties.
This is where Brunnermeier had his insight: What if I knew the relationship between one bank's value-at-risk and the value-at-risk of the entire industry? ...
But, while Brunnermeier's solution would require collecting new data from thousands of firms, many of which currently report nothing to the Fed, some of his colleagues say his solution--looking at a few key numbers for each institution--does not go far enough. Andrew Lo, a professor and director of the Laboratory for Financial Engineering at the Massachusetts Institute of Technology, sees the global financial system as the universe, where each financial center is a galaxy: a collection of stars, planets and other celestial objects held close to each other by their own gravity--in this case, the trades and contracts that tie them together. If you could chart the entire universe and measure all the forces connecting every object inside it, you would have what economists and other scientists call a network map. To Lo, fully understanding what's going on in the markets requires the entire map--not just one value-at-risk number, but every major transaction that connects one entity to another, reported daily. ...
Yet, even if the United States balks, other countries may go ahead with network mapping. In February, Otmar Issing and Jan Krahnen, members of a commission advising the German government, wrote in the Financial Times that a global network map was "a vital element" for preventing future crises. And the main consultative document prepared for the European Union also recommended a map of global risks. But, without cooperation from the United States, any supposedly global map will be woefully incomplete. In the end, the question may be whether Washington is finally willing to stand up to the industry ... for its own sake.
Daniel Altman is president of North Yard Economics, a nonprofit consulting firm serving developing countries. He is writing a book on the future of the global economy.
Mother tongue: Polish Joined: February 18, 2003 Location: Poland
RE: Understanding the Financial Crisis
WITH economic pressures affecting millions of Americans, dentists may have noticed a drop in patients opting for a brighter smile, but they are seeing another phenomenon: a rise in the number of teeth grinders.
Mother tongue: English Joined: March 28, 2004 Location: Malaysia
RE: They forecast the weather with supercomputers
Originally written by Jacek K. on October 9, 2009 6:56 PM
Now man needs computers to control computers...
They use (at least in the developed countries) supercomputers to do real-time weather forecasting, and can they say with a fair degree of certainty that it is going to rain in AAA town in 12 hours's time?
Or, are the financial parameters that need to be taken into consideration so much fewer and so much less complicated and intertwined?
[Edited by Shiong-Fong Lew on October 9, 2009 10:06 AM]
Mother tongue: Polish Joined: February 18, 2003 Location: Poland
RE: They forecast the weather with supercomputers
Originally written by Shiong-Fong Lew on October 9, 2009 4:04 PM
Or, are the financial parameters that need to be taken into consideration so much fewer and so much less complicated and intertwined?
What struck me there was the argument about the geographic confidentiality of the required input data. I don't think the world will be prepared to act in unison anytime soon...
Expert Mother tongue: English Posts: 1807 Joined: February 1, 2008 Location: United States
RE: They forecast the weather with supercomputers
Some questions I would love to ask a Democrat:
1. Charlie Rangel has been accused of tax evasion (or at least, not
paying his taxes); and yet, he heads a powerful tax-writing committee.
Is that appropriate ? (seems to me like putting Enron execs in charge
of the Energy committee).
2. 47 % of senior citizens are now "strongly against" "ObamaCare" (and
only 27 % are strongly for it). Would it be wise for Democrats push it
through, given this fact ? And what implications does it have for the
2010 Congressional elections, given that in mid-term elections,
seniors vote disproportionately ? (side issue: Americans hated HMOs
with a passion; and yet, ObamaCare would turn the entire system into
one big HMO, without any competition. What makes one think that
Americans would not also hate that "HMO" and then blame Democrats for
it ?
3. Obama gave up on the Eastern Europe missile defense shield
(unilaterally calling the Czech premier in the middle of the night to
tell him about it). What did he get from Russia in return ? Anything
(!) ?
4. Was it wise to add a 35 % import duty on Chinese tires ? Who
benefits from that ?
5. The so-called "stimulus package" has yet to add the promised "3
million new jobs" (the unemployment rate is now 9.8 %). When can we
expect that to work and for unemployment to decline ? And if Obama
wants a "second stimulus", does that mean he concedes that the first
one did not work ?
6. The U.S. has the highest corporate tax rate in the world (35 %).
Why not reduce it ? Please explain why we should not, in order to
reduce unemployment, for example.
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