Page 4 of 4 FirstFirst ... 234
Results 31 to 39 of 39

Thread: Greece A Sideshow To China Meltdown,' Ex-BMO Chief Economist Says

  1. #31
    Sage

    Join Date
    Nov 2014
    Location
    Pennsylvania, USA
    Last Seen
    05-28-16 @ 11:08 AM
    Gender
    Lean
    Other
    Posts
    6,639

    Re: Greece A Sideshow To China Meltdown,' Ex-BMO Chief Economist Says

    Quote Originally Posted by jmotivator View Post
    So in trying to save your argument you have chosen to ignore the value of goods in wealth determination?

    That is like saying the garden is devoid of yellow flowers... if you don't count the sun flowers.

    No, I'm simply explaining to you that until you realize a gain on an asset, you haven't done anything with its wealth, nor it with yours.


    You have a bank account with $101 dollars in it.
    Feeling lucky, you withdraw $1

    You invest that $1 in a stock. It goes up to $200. You are greedy and don't sell. It falls to $100. You relent and sell.

    You place your proceeds in your bank account.

    What is the value of your bank account now, ceteris paribus (and ignoring commissions/fees for the trade)

    Has your net wealth increased?

    Would you be in favor of having yearly capital gains taxed on UNREALIZED asset appreciation?
    Last edited by SlevinKelevra; 07-08-15 at 10:50 AM.

  2. #32
    Banned
    Join Date
    Dec 2011
    Location
    The anals of history
    Last Seen
    07-25-15 @ 12:05 PM
    Gender
    Lean
    Progressive
    Posts
    10,348

    Re: Greece A Sideshow To China Meltdown,' Ex-BMO Chief Economist Says

    Quote Originally Posted by Andalublue View Post
    Well, for everyone's sake, I hope you are right. Trouble is, it would appear that the stock markets don't appear to have rectified the regulation of high risk practices that brought about the 2008 crash. Why should we be confident that history won't repeat itself?
    We shouldn't. You're absolutely right that China is repeating a lot of the mistakes the US made leading up to the 2008 crash. There are some diffrences as well, though.

    In the 2008 crash: The American government gave incentives to mortgage lenders to make home loans to people with bad credit. Good intentions, bad idea. The mortgage lenders "packaged" those loans and sold them on the open market, as is commonplace with most loans. The packaged loans were insured by companies like AIG, given the stamp of approval by ratings agencies like Moody's, and they were bought by investors all over the world.

    When the junk loans ended up being worthless becuase they were made to people who had no money, and who had no business being in houses they couldn't afford, all those people who made that bad investment lost money.

    Yes, leverage also played a part. If you think about it in plain terms... minus all the fancy economic language... it's really amazing how the managers of pension funds around the world would borrow money (in some cases, more money than they had), in order to use that money to buy shares in the poorest people's mortgages.... people who normal mortgage lenders would NEVER have lended money to... if not for the government stepping in and giving them incentives to do so. Nobody ever stopped and said "hey wait, what if these loans never get paid back?"

    Incredible.


    In China, they also have a bubble brought about by overconfidence, but the underlying fundamentals are different. We could talk all day about that. They have problems as well, but certainly their own, unique brand of problems.

    I still think China will be fine.

  3. #33
    Banned
    Join Date
    Dec 2011
    Location
    The anals of history
    Last Seen
    07-25-15 @ 12:05 PM
    Gender
    Lean
    Progressive
    Posts
    10,348

    Re: Greece A Sideshow To China Meltdown,' Ex-BMO Chief Economist Says

    Quote Originally Posted by jmotivator View Post
    Butthurt alert!

    It's no secret that the Chinese economy has been driven for years by foreign investment. They have dumped all this money into building ghost cities the size of large US cities that are less than 25% occupied.

    The song has stopped and everyone has turned in a frenzy to grab a chair only to find that most of the chairs were imaginary.
    Nah. The Chinese economy is driven by the fact that they manufacture knick-knacks for most of the developed world. As long as people are buying $2 hammers and $10 golf gloves, they will be fine, fundamentally.

    I don't think this crash has anything to do with empty real estate.

  4. #34
    Sage

    gdgyva's Avatar
    Join Date
    Jun 2014
    Location
    near Washington DC
    Last Seen
    Today @ 05:41 PM
    Gender
    Lean
    Undisclosed
    Posts
    5,501

    Re: Greece A Sideshow To China Meltdown,' Ex-BMO Chief Economist Says

    prefacing this with my expertise on the chinese market is near nonexistent

    my take is that their market seems like the nasdaq before the nasdaq crash

    too many companies flying way above their true market value

    when the average stock is selling at 85x earnings compared to our 20x earnings, it might give you pause

    some companies will come out of it bruised and battered....others may be down for a great while

    market exuberance is a killer at times.....and this one got way ahead of itself
    Most of the shadows of this life are caused by standing in one's own sunshine.

    Ralph Waldo Emerson

  5. #35
    Sage
    jmotivator's Avatar
    Join Date
    Feb 2013
    Location
    Virginia
    Last Seen
    Today @ 06:58 PM
    Gender
    Lean
    Conservative
    Posts
    13,374

    Re: Greece A Sideshow To China Meltdown,' Ex-BMO Chief Economist Says

    Quote Originally Posted by SlevinKelevra View Post
    No, I'm simply explaining to you that until you realize a gain on an asset, you haven't done anything with its wealth, nor it with yours.
    Of course it is yours, and your wealth at any given moment is determined by what those assets are worth at the time, not by what they might be worth tomorrow. The vaulation of the asset at any given time is what that can be exchanged for in currency. That you don't choose to excvhange it for currency on a given day doesn't mean it isn't mine.


    You have a bank account with $101 dollars in it.
    Feeling lucky, you withdraw $1

    You invest that $1 in a stock. It goes up to $200. You are greedy and don't sell. It falls to $100. You relent and sell.

    You place your proceeds in your bank account.

    What is the value of your bank account now, ceteris paribus (and ignoring commissions/fees for the trade)

    Has your net wealth increased?
    My bank account has $200.00. What was my net worth when the stock was at $200?

    Would you be in favor of having yearly capital gains taxed on UNREALIZED asset appreciation?
    What you assets you are taxed on is a matter of policy, not wealth. If I took my $200 out of the bank and stuffed it in my mattress what is it worth? Would I be taxed on the money in my mattress?
    Give a man a fish and he eats for a day. Teach a man to fish and he stops voting for the Free Fish party.

  6. #36
    Sage

    Join Date
    Nov 2014
    Location
    Pennsylvania, USA
    Last Seen
    05-28-16 @ 11:08 AM
    Gender
    Lean
    Other
    Posts
    6,639

    Re: Greece A Sideshow To China Meltdown,' Ex-BMO Chief Economist Says

    Quote Originally Posted by jmotivator View Post
    That you don't choose to excvhange it for currency on a given day doesn't mean it isn't mine.
    No, it just means it isn't real wealth (yet)



    My bank account has $200.00. What was my net worth when the stock was at $200?
    $100


    What you assets you are taxed on is a matter of policy, not wealth. If I took my $200 out of the bank and stuffed it in my mattress what is it worth? Would I be taxed on the money in my mattress?
    Are you currently taxed on the money in your bank account?

  7. #37
    Sage
    jmotivator's Avatar
    Join Date
    Feb 2013
    Location
    Virginia
    Last Seen
    Today @ 06:58 PM
    Gender
    Lean
    Conservative
    Posts
    13,374

    Re: Greece A Sideshow To China Meltdown,' Ex-BMO Chief Economist Says

    Quote Originally Posted by SlevinKelevra View Post
    No, it just means it isn't real wealth (yet)
    Sure it is. Are you saying that a person's net worth does not count the value of their investments? If you count only the cash on hand then most millionaires... wouldn't be millionaires.

    $100
    Wrong.

    Are you currently taxed on the money in your bank account?
    I'm taxed on the interest. If my account isn't taxed does it not count as wealth?
    Give a man a fish and he eats for a day. Teach a man to fish and he stops voting for the Free Fish party.

  8. #38
    Banned
    Join Date
    Dec 2011
    Location
    The anals of history
    Last Seen
    07-25-15 @ 12:05 PM
    Gender
    Lean
    Progressive
    Posts
    10,348

    Re: Greece A Sideshow To China Meltdown,' Ex-BMO Chief Economist Says

    Quote Originally Posted by SlevinKelevra View Post
    No, I'm simply explaining to you that until you realize a gain on an asset, you haven't done anything with its wealth, nor it with yours.


    You have a bank account with $101 dollars in it.
    Feeling lucky, you withdraw $1

    You invest that $1 in a stock. It goes up to $200. You are greedy and don't sell. It falls to $100. You relent and sell.

    You place your proceeds in your bank account.

    What is the value of your bank account now, ceteris paribus (and ignoring commissions/fees for the trade)

    Has your net wealth increased?

    Would you be in favor of having yearly capital gains taxed on UNREALIZED asset appreciation?
    Actually, it's not as simple as you make it out to be. Cash itself is nothing but an unrealized federal reserve note. Cash is an asset just as a stock is an asset. Whether you hold dollars, gold, stocks, real estate, foreign currency, or whatever.... the only difference is the relative value of that asset to other asset classes, and the liquidity of that asset to be exchanged for other things.

    So in a sense you're right... assuming no appreciation $100 cash is better than $100 stocks because you can go to a grocery store and buy stuff with cash, but the stock is not purely "unrealized" as one can use his stocks as a form of currency if one wishes.

    Gold is even more murky, because one conceivably could buy milk and cigarettes with gold rather than dollars.

  9. #39
    Guru
    SenorXm/Sirius's Avatar
    Join Date
    Feb 2015
    Location
    Northeast US
    Last Seen
    Today @ 06:08 PM
    Gender
    Lean
    Moderate
    Posts
    4,862

    Re: Greece A Sideshow To China Meltdown,' Ex-BMO Chief Economist Says

    Quote Originally Posted by jmotivator View Post
    Real estate prices are in collapse and have years of over stock, the markets have lost 30% of their value and show no sign of slowing. I'm not sure what you see as positive in the Chinese economy at this point.
    Seeing 'positive' no, but that doesn't mean the whole thing is going to collapse either.

    There's a HUGE middle between not positive and collapsing.
    "The school is the last expenditure upon which America should be willing to economize."~F.D.R.
    "Every time you stop a school, you will have to build a jail. What you gain at one end you lose at the other."~Mark Twain

Page 4 of 4 FirstFirst ... 234

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •