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Should the "too big to fail" be nationalised?

Should the "too big to fail" be nationalised?


  • Total voters
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If you mean stick to the constitutionally limitted powers granted to the federal gov't, then you are at least 50 years too late. It is now time to try to get that toothpaste back into the tube. ;-)

Well it certainly can't stay smeared all over my mirror, now can it?
 
Not a cop-out at all, you simply refuse to see how we got in the financial mess and choose right wing partisan talking points over a bipartisan overview. Since Reagan, blessed be his psuedo-conservativeliness, the cry to deregulate, cut red tape, let business run business has been the battle cry of the free market mirage chasers. (or the casino capitalist snakeoil salesmen if you are not in love with unfettered capitalism)

Business lobbyists have been working hand in glove to write new laws as well as undo much of the regulations in oh so many areas besides banking.

It is funny you shrug off much that helped drive us over the bridge as 'that never should have been allowed' while ignoring just how it got made into law/regulation/dropped from regulation. Congress, to include Frank didn't act simply because they wanted to, major donors and high priced lobbyists worked long and hard to make sure the congressman who has major financial corporations in his district understood the situation.

Freddie and Fannie are conservative stalking horses, into the mix too late for anything but the sh*tstorm that came.

You can see this the way you like, give corporations and special interests the fig leaf of 'congress writes the laws' but we all know many on the congressman's staff, the heads of many posts in government, have long work histories in the very corporations to be overwatched. Hell's Bells man- at times the lobbyists themselves who write the key portions of a bill.
 
We just signed the papers today on a 7 year old house that sold originally for 175, then 6 months later 265, then a 2nd was taken out (my guess is the second was for another 50 or so, then today it closed at 92. My guess is that an 'investor' bought it originally and made 90 gross. The two banks, actually mortgage companies, took a bath today. The builder got his profit. BTW, the house is constructed better than any I've seen, I've been in the attic for example during inspection. So, what bank came out ahead on this house? The builder did OK. The investor did great. The second buyer completed a short sale with us, and he got to spend the money from his 2nd. His credit will be OK in about 2 years. The mortgage banks, not Freddie or Fannie, and their investors took a bath for about $200,000. So the mortgage banks did well influencing congress? As I posted, successful influence, high bonuses for a couple years; then they need a rescues. All I can say is: Thanks!
 
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If things start to go nasty again and new bailouts are on the way, should the "too big to fail" be nationalised instead? :coffeepap

There is no need for that if we once again erect a firewall between investment banks and commercial banks, we had for the half-century that the Glass-Steagall Act was in effect.
 
So I'm posting on a poll that I haven't voted on. "Should the "too big to fail" be nationalised?" Doesn't give me a choice. They need regulation and it has to be suported by people that think functional regulation is a good thing. That is why I pointed out what Reagan did with the S&Ls. He stopped the regulation. A much smaller problem resulted, but functionally it was the same.
 
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If you don't trust government financial data - and I mean BLS, IRS, etc type data - then you're completely gone as far as talking about ANYTHING financial in this country. Everyone trusts the government numbers because in most cases the government is the only entity that collects that kind of data.
That is definitely wrong.

Just because people have little alternative to government numbers - that doesn't mean they trust them.

I do not for one second 'trust' the government numbers.
 
So I'm posting on a poll that I haven't voted on. "Should the "too big to fail" be nationalised?" Doesn't give me a choice. They need regulation and it has to be suported by people that think functional regulation is a good thing.

Yeah, but fussing around when the patient is in comma is not a good thing. If things come to a bailout again, what would be the best solution - bailout, failure or nationalisation?
 
That is definitely wrong.

Just because people have little alternative to government numbers - that doesn't mean they trust them.

I do not for one second 'trust' the government numbers.
I can understand not trusting the government conclusions, that's called prudence, but not trusting the raw data? Well, there's a Conspiracy Theory section just down the hall ...
 
But the stated INTENT was to help "disadvantaged" (minority?) folks get into the housing market by making "sub-prime" loans that LOOKED affordable (based on rosy assumptions and good intentions) but turned out to not work at all once the actual time to pay any priciple rolled around. Many things came together to make it all collapse at once, but gov't sowed the seeds. Sure the bankers outsmarted the politicians in the end, but was that the fault of smart bankers or dumb politicians?


No it wasnt....this was all a scheme by wall street. No one can tell me that banks whos business is taking risks by lending didnt know if you give someone thats been on a job 6 months and whose earning is 10% or less of his housing cost alone cant possibly pay for that house.
There was a master scheme behind this housing crisis...lenders knew the loans they were handing out like candy could not be repaid.
WE the taxpayers paid for those loans in bailouts....
When I applied for a mortgage on my first house...I had been on my job 4 yrs, it was known steady employment...I had the full 20% downpayment and I WAS TURNED DOWN...because my earnings wasnt 40% of my housing cost. They wanted another 10% down and I provided it and got the loan...How did we fall from those kind of requirements, to on a job 6months no downpayment on a 150,000 house. How can you tell me the banks didnt KNOW what was going to happen..
 
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No it wasnt....this was all a scheme by wall street. No one can tell me that banks whos business is taking risks by lending didnt know if you give someone thats been on a job 6 months and whose earning is 10% or less of his housing cost alone cant possibly pay for that house.
There was a master scheme behind this housing crisis...lenders knew the loans they were handing out like candy could not be repaid.
WE the taxpayers paid for those loans in bailouts....
When I applied for a mortgage on my first house...I had been on my job 4 yrs, it was known steady employment...I had the full 20% downpayment and I WAS TURNED DOWN...because my earnings wasnt 40% of my housing cost. They wanted another 10% down and I provided it and got the loan...How did we fall from those kind of requirements, to on a job 6months no downpayment on a 150,000 house. How can you tell me the banks didnt KNOW what was going to happen..

I never said that the banks did not know, only that the gov't ALLOWED this mess, by changing the lending laws in 1982. Like I said, all was rosy if foreclosure resulted in a small gain or wash for the banks, but once the housing bubble burst the jig was up.
 
I never said that the banks did not know, only that the gov't ALLOWED this mess, by changing the lending laws in 1982. Like I said, all was rosy if foreclosure resulted in a small gain or wash for the banks, but once the housing bubble burst the jig was up.

Ok I can agree with that...but this master plan was by wall street and if it was allowed by govt say hello to GWBush...you cant blame obama for this...this was all in play before he was even in the primary for president.
I remember well the Savings and Loan fiasco that cost taxpayers untold sums of cash to BAIL out banks...and here we do it again....
They have no risk anymore...Taxpayers take all the risks now for the rich...and they still want to take whats left off us.
 
I can understand not trusting the government conclusions, that's called prudence, but not trusting the raw data? Well, there's a Conspiracy Theory section just down the hall ...

Would you call the CPI 'raw data'? The unemployment rate?

That is what I was referring to.


Anyone that completely 'trusts' the government with anything is a fool, imo.

I take every single thing the government produces/says with a grain of salt.

Some I believe more then others. But NONE of it do I believe with no doubt whatsoever.
 
Ok I can agree with that...but this master plan was by wall street and if it was allowed by govt say hello to GWBush...you cant blame obama for this...this was all in play before he was even in the primary for president.
I remember well the Savings and Loan fiasco that cost taxpayers untold sums of cash to BAIL out banks...and here we do it again....
They have no risk anymore...Taxpayers take all the risks now for the rich...and they still want to take whats left off us.

Then tighten up the law and refuse future bailouts and gov't loan guarantees. Simple really.
 
I can understand not trusting the government conclusions, that's called prudence, but not trusting the raw data? Well, there's a Conspiracy Theory section just down the hall ...
I would be skeptical. How they categorize the numbers could have great impact, and could easily be manipulated... either consciously or subconsciously.
 
No it wasnt....this was all a scheme by wall street. No one can tell me that banks whos business is taking risks by lending didnt know if you give someone thats been on a job 6 months and whose earning is 10% or less of his housing cost alone cant possibly pay for that house.
There was a master scheme behind this housing crisis...lenders knew the loans they were handing out like candy could not be repaid.
WE the taxpayers paid for those loans in bailouts.......
What is not understood by most is that the time base for rewards in business, including banks and the ilk, is much shorter than the time it takes for things to go to wrong. And businesses, banks for example, will ask for the rules, regulations, to be changed that will allow for short term performance improvement. A CEO's performance is judged at least as often as quarterly. Marketing and sales staff more often than quarterly. The minimum time it takes for montages to go bad and be 'registered' as bad is a few years. This is the root of the problem with a lot of business and government stuff. Even voters judge the performance of politicians on a time base that is generally shorter that what the systems allow them to operate with.

It's my engineering background, system feedback control etc., that allows me to observe features in systems that cause problems.
 
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Would you call the CPI 'raw data'? The unemployment rate?
That is what I was referring to.
WHICH unemployment rate? The U-3 is the commonly used rate but there are two others that I know of, probably more. I'm not an economist so I don't get into the other rates very often.

The CPI is raw data, yes. IIRC, the there are several different CPI's, though they may not call them that anymore, just as there are several unemployment rates. What those numbers cover and how they are derived is all spelled out - the government is quite specific. In any event, the data is all there to scrutinize however you wish to use it.

I would be skeptical. How they categorize the numbers could have great impact, and could easily be manipulated... either consciously or subconsciously.
All methods of gathering government statistics are very explicitly spelled out - much, much better than anyone else out there. If you doubt the numbers or have some issue with them then I would invite you to further your knowledge by reading exactly what it is they tally and where they get those totals. The government makes no attempts to hide the data or the method(s) used in acquiring the data.



People who don't trust government data either don't understand the data, don't understand the method of gathering the data, or need to visit the Conspiracy section.
 
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WHICH unemployment rate? The U-3 is the commonly used rate but there are two others that I know of, probably more. I'm not an economist so I don't get into the other rates very often.

The CPI is raw data, yes.
With respect, the CPI is not 'raw' data'. It used to be somewhat raw' data' - but not any longer.

The U.S. CPI is only partially derived by the the straight numbers of how much prices went up. Today it is FAR more subjective (then say in 1980).
Today, much of the rate is decided upon subjectively by people on the basis of efficiencies.

For example - if the same model of computer costs 5% more year-over-year BUT the people that tabulate the CPI numbers decide that the new model is 10% more efficient then the old one, then the price of that computer is officially stated to have dropped by 5% - even though it did no such thing.

And that is just one of many, many ways that the CPI is anything but just raw data.

Not only is that a large part of how the CPI is calculated - the powers that be want to make a larger and lager part of the CPI decided upon using that arbitrary process.

Today's CPI by design calculates the inflation rate FAR lower then it did a generation ago.

All methods of gathering government statistics are very explicitly spelled out - much, much better than anyone else out there.
Imo, no they are not 'explicitly spelled out. How can you spell out when you sometimes use subjective opinion to arrive at a statistic? And please show me where in the CPI tabulation that they spell out exactly how each portion of the CPI is calculated? Not just the general areas - but exactly and down to the smallest detail exactly how every single portion of the CPI is arrived at - leaving NOTHING out.

I guarantee you that that kind of detail does not exist.


And why?

The answer should be relatively obvious (imo) - the government wants people to think inflation is far lower then it really is.

All this Keynesian spending and massive deficits and ultra low interest rates to stimulate the economy all are subject to one statistic - inflation.

If inflation rises too much - then the Fed must raise interest rates and that kills all stimuli and huge government deficits.


Now, I am not saying the government is lying about the CPI - they are too smart for that.

But they have decided upon a method of calculating the CPI that makes it seem far lower then the actual year-over-year increase in prices (or for that matter - far lower then the 'old' way of determining the CPI) so that they can maintain their high deficits and low interest rates policy.


Plus, I guarantee you that the vast majority of Americans have no clue that the CPI is not calculated using the same methodology it was say 25-30 years ago.
 
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With respect, the CPI is not 'raw' data'. It used to be somewhat raw' data' - but not any longer.
I mis-spoke. Technically none of it is "raw data" except the actual numbers. In the case of unemployment that would be the number of workers in each sector. The "unemployment rate" is a calculated percentage based on that raw data. If you want to download the raw employment data that information is usually available - often as an XLS file. I'm usually good with the government telling me 50/100 = 50%.

As for the CPI, the way it's calculated is spelled out, including the numbers used for weights and all the other things needed to replicate what the government has done. Here's the link:
http://www.bls.gov/opub/hom/pdf/homch17.pdf

Several examples of adjustments made to the CPI:
http://www.bls.gov/cpi/cpihqaitem.htm

Like I said, I'm no economist --- but if you're not happy with that feel free to use whatever other verifiable published numbers are out there. I'm sure with your opinion of government numbers there must be other reliable sources for this information that are documented better than Uncle Sam's numbers. :)

Plus, I guarantee you that the vast majority of Americans have no clue that the CPI is not calculated using the same methodology it was say 25-30 years ago.
Not my problem that people can't read or don't know. That's why I don't trust reporters, newspapers, mags, networks, etc. to give me the complete picture, either. Do THEY tell us when the method has changed? No. Does Uncle Sam? Yes - if you do the search the information is there.
 
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I mis-spoke. Technically none of it is "raw data" except the actual numbers. In the case of unemployment that would be the number of workers in each sector. The "unemployment rate" is a calculated percentage based on that raw data. If you want to download the raw employment data that information is usually available - often as an XLS file. I'm usually good with the government telling me 50/100 = 50%.

As for the CPI, the way it's calculated is spelled out, including the numbers used for weights and all the other things needed to replicate what the government has done. Here's the link:
http://www.bls.gov/opub/hom/pdf/homch17.pdf

But if you're not happy with that feel free to use whatever other verifiable published numbers are out there. I'm sure with your opinion of government numbers there must be other reliable sources for this information that are documented better than Uncle Sam's numbers. :)

Not my problem that people can't read or don't know. That's why I don't trust reporters, newspapers, mags, networks, etc. to give me the complete picture, either. Do THEY tell us when the method has changed? No. Does Uncle Sam? Yes - if you do the search the information is there.

The CPI was "adjusted" or "recalculated" to help hold down the gov't COLA benefit increases, that it "automatically" triggers, and to help mask inflation. While the unemployment numbers are "there for all to see" only some (U3) are actually reported by the MSM and those are often "adjusted" (very quietly, after the fact); by using the actual (upward adjusted) prior U3 figure and an artificially low current U3 figure one can show "trends" that do not really exist (since they may vanish, or actually reverse, upon the next "adjustment").
 
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The CPI was "adjusted" or "recalculated" to help hold down the gov't COLA benefit increases, that it "automatically" triggers, and to help mask inflation. While the unemployment numbers are "there for all to see" only some (U3) are actually reported by the MSM and those are often "adjusted" (very quietly, after the fact); by using the actual (upward adjusted) prior U3 figure and an artificially low current U3 figure one can show "trends" that do not really exist (since they may vanish, or actually reverse, upon the next "adjustment").
The main change to CPI that I recall was taking gasoline out of the basket.


But, again, all the changes and things you've discussed are published on *.gov - whether people look at that or whether reporters tell the whole story is a different assertion.
 
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I mis-spoke. Technically none of it is "raw data" except the actual numbers. In the case of unemployment that would be the number of workers in each sector. The "unemployment rate" is a calculated percentage based on that raw data. If you want to download the raw employment data that information is usually available - often as an XLS file. I'm usually good with the government telling me 50/100 = 50%.

As for the CPI, the way it's calculated is spelled out, including the numbers used for weights and all the other things needed to replicate what the government has done. Here's the link:
http://www.bls.gov/opub/hom/pdf/homch17.pdf

Several examples of adjustments made to the CPI:
Hedonic Quality Adjustment in the CPI

Like I said, I'm no economist --- but if you're not happy with that feel free to use whatever other verifiable published numbers are out there. I'm sure with your opinion of government numbers there must be other reliable sources for this information that are documented better than Uncle Sam's numbers. :)
Thanks for the info - but you are missing the point.

The CPI rate as it is now tabulated includes a great deal of assumptions (like my above example of assuming a products increase in efficiency and thusly lowering it's CPI-based cost increase accordingly...while ignoring the actual cost increase.

Here is an example from the top of page 11 in your first link:

'Extended the use of hedonic regression to estimate the value of items changing in quality'

This is not 'raw' numbers or data - this is assumptions and guesstimates...which leave the solution open to MASSIVE personal interpretation.


And as for finding other sources for the CPI?

Surely you jest....that is virtually impossible.

The government simply does not release enough data to the public to do it's own CPI.

Look around - even professional economists that doubt the CPI can only guess at it's true number (even with their vast resources in many cases), because they simply do not have access to ALL the data they require to make such a calculation.



The CPI number is NOT the inflation rate of the United States.

It is ONLY the government's interpretation of the inflation rate.

Not maybe - 100% for certain.
 
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The main change to CPI that I recall was taking gasoline out of the basket.


But, again, all the changes and things you've discussed are published on *.gov - whether people look at that or whether reporters tell the whole story is a different assertion.

Exactly. If the gov't wants a number, like the CPI to go down, then it goes down. Since most people must still spend their money on gasoline (for work, doctor visits or shopping), even more of it lately, that makes the official gov't version of reality far different from actual reality.

The U3 rate is also a very tricky thing. Take this simple analogy: Fill a bucket with water (total number of workers), poke a hole in the side, near the bottom and measure the outflow rate (U3). As the bucket empties that outflow rate drops, magically, all by itself, simply because the pressure (total number working) drops, the hole size did not change at all, yet the outflow rate did.
 
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Thanks for the info - but you are missing the point.
The CPI rate as it is now tabulated includes a great deal of assumptions (like my above example of assuming a products increase in efficiency and thusly lowering it's CPI-based cost increase accordingly...while ignoring the actual cost increase.
Here is an example from the top of page 11 in your first link:
'Extended the use of hedonic regression to estimate the value of items changing in quality'
This is not 'raw' numbers or data - this is assumptions and guesstimates...which leave the solution open to MASSIVE personal interpretation.
And as for finding other sources for the CPI?
Surely you jest....that is virtually impossible.
The government simply does not release enough data to the public to do it's own CPI.
Look around - even professional economists that doubt the CPI can only guess at it's true number (even with their vast resources in many cases), because they simply do not have access to ALL the data they require to make such a calculation.
The CPI number is NOT the inflation rate of the United States.
It is ONLY the government's interpretation of the inflation rate.
Not maybe - 100% for certain.
And obviously you just took the information provided - and you could have included even more information in your personal analysis - and you came to your own conclusions. That's exactly what I've been saying. The information of how they got their numbers is there, use it as you see fit or change it and reassess, as you just did. :shrug:

As for other information not being available, anyone could do it if they wanted to do it. There are financial corporations out there with plenty of resources to get it done, so the government numbers can't be too far off or someone else would be making up their own basket and taking their own samples.


As for what the inflation rate is or is not, I'm not an economist and can't make that call. Are you an economist? Do you have a better answer for determining inflation based on some other system?
 
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