The New York banking regulator's accusation that Standard Chartered Plc hid $250 billion in transactions tied to Iran may bring fresh scrutiny on the outsourcing of sensitive functions by global financial institutions, especially to India.

Standard Chartered lost $16 billion in market value on Tuesday as its shares plunged after the New York State Department of Financial Services (DFS) threatened to cancel the British bank's state banking licence.

As part of its report, the regulator said the bank's failures included "outsourcing of the entire OFAC compliance process for the New York branch to Chennai, India, with no evidence of any oversight or communication between the Chennai and the New York offices."

The bank CEO used the 'f' word when asked about the US regulator's accusation... "who are they to tell us we can't trade with Iran?"

So banks can do whatever they want, regardless of the government?

Surely less regulation would solve this problem, but maybe the problem is not with regulations.

Maybe the problem is that this bank broke the law. 

They lost $16 billion in market value? Wow.

Someone's pocket will be emptied, but I suspect it will not be anyone involved with the crime.

24 minutes ago, JohnAskew wrote

 

The bank CEO used the 'f' word when asked about the US regulator's accusation... "who are they to tell us we can't trade with Iran?"

It's a British bank. So who is the US to tell a company which isn't American what to do?

Who is to tell the UK to tell the US to tell a company which isn't American what to do?

That's right. You've been told. USA!! USA!!

3 minutes ago, blowdart wrote

*snip*

It's a British bank. So who is the US to tell a company which isn't American what to do?

Firstly: If you have a US banking licence, then the US absolutely can tell you what you can and cannot do (under penalty of having your US banking licence revoked). US banks can't do business with other banks that don't have one, and so on recursively, so if they lose their US licence then not only can JP Morgan Chase (a US bank) not do business with them, but neither can HSBC (a british bank), because if they do, then HSBC also loses their US banking licence. In practice, doing business with the closure of all US banks and any other bank that wants to do business with those banks is a huge percentage of all banks.

And secondly, there's an EU-wide trade ban on doing business with Iran's financial institutions (like Central Bank of Iran and Bank Saderat), so they were breaking EU (and hence UK) law as well.

To be honest, stuff like this and the HSBC debacle over money laundering in Mexico and the Barclays crisis caused by fixing the LIBOR lending rate, as well as stuff like the Payment Protection Insurance fiasco is increasingly leading me to feel like the entire British Banking system is just completely corrupt from the ground up.

You might be able to blame the global financial crisis on bad luck and poor judgement, but this collection of disasters is entirely the fault of corruption in the British banking industry. Frankly it makes me feel ashamed to be British to know that we've had this all going on to the tune of trillions of dollars overall with our government happily sitting on the sidelines twiddling its thumbs and letting it happen.

It shouldn't be up to the US Congress to stomp on the outright illegality and corruption that is going on in London. The UK government should start putting these folk in jail, and pronto. We've had zero arrests or convictions of bankers relating to the financial crash or corruption. It's about time we started.

There have also been a number of American banks in scandals recently (including one fined $400 million for Mexican drug cartel laundering same as HSBC was fined for) but strangely the American regulators don't make as much of a noise about those.

Generally speaking -- storm in a teacup.  If I had gone with my initial thought to buy Standard Chartered shares this mid-morning after the slump, I'd be almost 10% in profit already. I still might buy some tomorrow.

Herbie

15 minutes ago, evildictaitor wrote

It shouldn't be up to the US Congress to stomp on the outright illegality and corruption that is going on in London. The UK government should start putting these folk in jail, and pronto. We've had zero arrests or convictions of bankers relating to the financial crash or corruption. It's about time we started.

Well the FSA (Financially Supine Authority) was pretty much gutted by the previous Government under their "light touch" guidance, and the current one doesn't seem to be putting much effort into fixing that (aside from replacing it with a brand new quango).

I think the US banks are just jealous the UK banks got away with something they didn't

The banking block on Iran includes having Iran taken off the banking trading network (which is located somewhere in Belgium).

This is not only the US government's decision. The British have sanctions against Iran banks too: http://www.bbc.co.uk/news/uk-politics-15823622

Mr Osborne said: "We have ceased all contact between the UK's financial system and the Iranian financial system.

"We're doing this because of international evidence that Iran's banks are involved in the development of Iran's weaponised military nuclear weapon programme.

Fancy pants, the lot of them. Above the law.

Why are we so complacent with such selfish action? Are profits our only authority?

To be honest, stuff like this and the HSBC debacle over money laundering in Mexico and the Barclays crisis caused by fixing the LIBOR lending rate, as well as stuff like the Payment Protection Insurance fiasco is increasingly leading me to feel like the entire British Banking system is just completely corrupt from the ground up.

Banks are so out of control they don't even trust each other anymore. And we keep looking away...

21 minutes ago, JohnAskew wrote

Why are we so complacent with such selfish action? Are profits our only authority?

Where do you think the money for campaigning comes from?

Weeeeeeeeee more regulations!

Let's regulate the entire banking sector! It's a market failure!!1!!1one!, Government has to step in, since we've had zero government failures (ok, ok, two world wars, several mass murders, a cold war to see who has the biggest *, several great crisis, the EU, a couple of other dictorial regimes, but they know what's best, really, they do, really, trust me)!

Because you know, politicians know waaaaaaaaaaaaaaaaaaay better then bankers how stuff in the banking industry works. Making it near impossible for bankers to do normal business, so they operate in the grey areas.

I still stand by my original standpoint; it's the government and only the government we have to blame for the shithole we are in now. Lending money on behalf of unborn citizens to spend on futile endevours to change the weather and all kinds of other crap.

And why not trade with Iran? Because they are dicks? Let me bring you up to speed; the world is full of dicks. Don't let those dicks ruin the world. There is only one system and one system only that demonstrated that it is capable of bringing peace and prosperity to everyone, and it's not government, it's the free market.

Trade with Iran, let them evolve out of the shitty situation they are in. Keeping em poor is only adding to their hatred.

</rant>

Iran is not poor. The attempt is to take away Iran's ability to wage war, especially nuclear. They hate their own corrupt government more than the west already. Be patient and use the economic means available to paint their leaders as wholly inept.

Why not trade with Iran? Because it's illegal. Not optional.

Bankers left scat in their beds. Time for them to lie in it and get to know themselves honestly, and I'd love for you to rub their noses in it, Maddie.

5 hours ago, JohnAskew wrote

So banks can do whatever they want, regardless of the government?

Surely less regulation would solve this problem, but maybe the problem is not with regulations.

Maybe the problem is that this bank broke the law. 

They lost $16 billion in market value? Wow.

Someone's pocket will be emptied, but I suspect it will not be anyone involved with the crime.

Depends on how well you've bought off members that government.

At this point... little I read about corruption, ignoring, stonewalling, gun trafficking, or politically aimed investigations/suits at the Holder DoJ surprises me... it's been going on for years (see new black panther voter intimidation case, or even Holder's involvement with pardons (Rich & FALN most notably) under Clinton).

So how's that Hope'n'Change thing working out?

10 hours ago, JohnAskew wrote

@Maddus Mattus: Law is law, not up for debate. Bankers get no pass.

Iran is not poor. The attempt is to take away Iran's ability to wage war, especially nuclear. They hate their own corrupt government more than the west already. Be patient and use the economic means available to paint their leaders as wholly inept.

Why not trade with Iran? Because it's illegal. Not optional.

Bankers left scat in their beds. Time for them to lie in it and get to know themselves honestly, and I'd love for you to rub their noses in it, Maddie.

Exactly my point. These laws are stupid. They are put in place with good intentions, but have disasterous effects in the real world.

I'm not going to trade with you, because well maybe, just maybe, you will wage war with me.

If you trade with them, they become dependent on you. If they are dependent on you, they cannot wage war with you.

Now Iran is not dependent on anybody, so they can afford to be dicks.

It's these stupid laws that force bankers to more and more grey areas of trade to make a decent living. It's these stupid laws that they use as an excuse for ripping off consumers. If the program exists, why not use it? None of these bankers feel the consequence of their actions, that's why they make these poor decisions, they don't care one way or another. More regulations is not going to make them act more responsibly, like I said before, the less responsibility you have the more irresponsible you act.

If you really care about these things and want to make our system healthy again, the only way is back to a truly free market and not let government run it all. We've tried overregulating here in Europe, it's not working, the failures are bigger, not smaller.

But you are free to repeat our mistakes.

hmmmm....... too much regulation is not good, but,.............. what you are implying, is to remove FDIC insurance government involvement.......... isn't that what you are implying?

And USA wants to stop trading with its enemy and enforce its foreign policy.......... hmmm....... you think that's wrong?????? hmmmm........ okayyyyyyyy............

===

I dislike a lot of wasteful regulations. But, there are tons of important regulations out there. And enforcing foreign policy is pretty much a federal national matter that I would not take it lightly.

I agree with you sometimes, but, you are taking it to the extreme.

If a regulation has a negative outcome, it's costing us more then it's benefiting us, it should be canned.

There are plenty of very good and very useful regulations, that have provided safety nets and safe guards, these are the gems we need to keep. I'm not against all forms of government, regulation and taxes. I just think the system is too big, too heavy and is now collapsing in on itself.

And USA wants to stop trading with its enemy and enforce its foreign policy..........

Let's judge this regulation on it's outcome.

Do you believe that;

a) it has brought Iran and the USA closer together

or

b) it has driven them further apart

The beauty of free trade is that it doesn't matter if you hate each other or not, you have something they want and they have something you want. Both are willing to put aside their differences for their own interests.

Make em rich, make em educated, make em think for themselves and make a buck in the process.

That's exactly how India and China are doing it and they are not making enemies, but friends.

Iran is in the grips of fundamentalist conservative religious old men who are not in touch with the very young population there. The government is rife with corruption. It is my opinion that Iran will enjoy Syria's fate soon enough. Iranians deserve better than what they have today, imho.

12 minutes ago, JohnAskew wrote

@Maddus Mattus: The tactic is to remove the enemy's ability to wage war - sanctions (and Iran's removal from the international banking clearinghouse) work extremely well ...

I beg to differ. I cannot think of a single time in history where sanctions actually worked as intended. Sanctions affect the poor, not the elite, and make for perfect propaganda about evil foreigners starving the nation and its children. Not to mention that there's always a few "rogue" nations willing to make a grateful friend (and a profit).

Just think of Iraq and how much good those 13 years of sanctions did.

Sanctions foment unrest in the culture. It is putting enormous pressure on the Iranian government. They could "Arab Spring" anytime, though be clear that Iranians are not Arabs!

Sanctions work better than invasion. Go read a book. http://en.wikipedia.org/wiki/The_Art_of_War

Oh wait,.. they are!

And they can't "Arab Spring" because they already have Muslim leadership.

I feel like you are only considering two options and both options require you to use force. My third option requires no force and we stand to make profit.

When they rise out of the shitty situation they are in now, maybe they will open up to us. Keeping them poor and miserable, pointing the finger at the west for blame, isn't helping the situation at all.

We need to stop telling other countries what to do, it's having adverse affects on us.

I see "Arab Spring" as regime change, not anything to do with Muslim leadership. Who's right?

Iran has promised (officially) to use nuclear weapons preemptively against Israel to destroy it.

With luck, Iran will implode and clean up its own mess, starting with a secular elected government.

25 minutes ago, Maddus Mattus wrote

I feel like you are only considering two options and both options require you to use force. My third option requires no force and we stand to make profit.

Just out of interest, in your option do you keep trading with Iran after they put a 20-mile crater in Tel Aviv, or just up until then?

And if they are not poor and not miserable, what good did those sanctions do? Isn't it supposed to make them poor and miserable, forcing them to change their way?

I promise to drive 200 mph on the way back to home, should I be banned from driving? It's all talk, we're buying into their game.

I'm not convinced Iran will ever implode, they have been making amuck in the middle east for as long as I can remember.

I would have to say yes to that.

I don't think it's wise to condone violence now, to prevent the possibility of violence in the future. The only prudent course is a reactionary one. Get the armies ready, but never deal the first blow.

Iran is an isolated country around nuclear powers. They can't launch any without being wiped from the map. It's a game of bluff poker and currently they are winning the bluff.

Hmmmmmm............. You are telling me to make friend with who I hate because he is a useful tool and I am also a useful tool? And you are telling me to ignore all the obvious reactions from my existing friends and families who hated him? For example, shaking hands with a devil? Devil is more appealing IMO.

56 minutes ago, Maddus Mattus wrote

The only prudent course is a reactionary one.

Consider you are a soldier in Afghanistan.

A man runs up to your convoy in Afghanistan. It isn't clear from a distance whether he has a bomb strapped to their chest - but you're pretty sure he does and but he is shouting "God is great" as running towards you. He doesn't speak English and doesn't stop when you shout "stop" to him.

In your opinion, should you open fire to kill him? Getting it wrong could kill you and your six friends in the van.

Now change some of the words.

Consider you are the Prime Minister of Israel.

Your intelligence services brief you on clear and imminent threat that a man in the middle east is building a nuclear weapon. It isn't clear from a distance when the bomb will be ready, or if it will be used preemptively - but you're pretty sure he intends to. He routinely shouts "God is great" and is pushing huge resources into his nuclear programme. He doesn't stop when you shout "stop" to him.

In your opinion should you intervene to stop him? Getting it wrong could kill 200,000 of your citizens.

Not everyone responds to causality. A suicide bomber is not afraid of reprisals. Neither is Ahmadinejad.

And yes, I would probably shoot him on sight. IF I was a soldier in Afghanistan, in a war situation.

Where your comparison is faulty, IMO, is that there have been experiences with suicide bombers. Our experience has taught us to be careful with people yelling 'God is great' in large crowds. There are no similar experiences with nuclear warfare.

If history teaches us anything, it is that the USA doesn't seem to be afraid to either; a. make the threat of nuclear warfare and b. make nuclear warfare. So, until then, I suggest a more reactionary course of action.

You'd think that Iraq and Afghanistan would have taught the Americans their lesson by now, but they seem to be hell bent on playing the world's police. Don't get me wrong, I owe them my liberty, but we've asked to be rescued from the Germans (azi-n is a bad word?), the east did no such thing. 

And if you say intelligence agencies, are those the same that 'found' the nuclear weapons in Iraq?

@magicalclick: You probably are already. There are millions of people involved in making your daily life happen, some of them may hate your very guts. But they are always willing to trade, because it serves their interests as well as yours.

You don't.

So your are telling me to embrace devil and continue to do business with him, because I probably already doing it? 

And are you telling me USA businesses should have do more business with Germany during WWII because British had no right to interfere free market between USA and Germany?

Did you tease the dog chained to the tree? Shame on you... Chains break, maybe, ...probably not.

3 hours ago, JohnAskew wrote

Well, I think the sanctions worked well, in fact. I don't know how any of us can support our opinions, though...

Sanctions foment unrest in the culture. It is putting enormous pressure on the Iranian government. They could "Arab Spring" anytime, though be clear that Iranians are not Arabs!

Sanctions work better than invasion. Go read a book. http://en.wikipedia.org/wiki/The_Art_of_War

Sanctions do work in countries where civil liberties are not completely suppressed, where the monopoly of law enforcement, military power and information is not absolute. There you can hope for civil unrest and rioting, otherwise you obtain nothing but rallying with the leader and resentment and hatred towards those who are enforcing the sanctions. There are countless examples in modern history, ranging from Italy in the 30's to Iraq in the 90's, passing through Rhodesia, Libya (in the 90's), Serbia, take your pick.

Back to the Iraq example, thirteen years of sanctions deeply affected the population as testified by FAO, UNICEF and pretty much any NGO who was allowed to visit the country. And yet, Saddam kept his place until overturned (surprise) by an invasion.

Incidentally, I've read that book, and quite a few others, during my military training. It's an amazing read, albeit utterly out of date. At any rate, I honestly didn't remember it advocates that sanctions work better than invasion, are you sure about your quote?

7 minutes ago, Blue Ink wrote

*snip*

Sanctions do work in countries where civil liberties are not completely suppressed, where the monopoly of law enforcement, military power and information is not absolute. There you can hope for civil unrest and rioting, otherwise you obtain nothing but rallying with the leader and resentment and hatred towards those who are enforcing the sanctions. There are countless examples in modern history, ranging from Italy in the 30's to Iraq in the 90's, passing through Rhodesia, Libya (in the 90's), Serbia, take your pick.

Back to the Iraq example, thirteen years of sanctions deeply affected the population as testified by FAO, UNICEF and pretty much any NGO who was allowed to visit the country. And yet, Saddam kept his place until overturned (surprise) by an invasion.

Incidentally, I've read that book, and quite a few others, during my military training. It's an amazing read, albeit utterly out of date. At any rate, I honestly didn't remember it advocates that sanctions work better than invasion, are you sure about your quote?

The wealthy class is who is usually first to turn on the sanctioned government, not the poor.  The wealthy are who change things, and they will always change things to suit themselves. Maybe the poor riot, hopefully they don't starve - international humanitarian aide (e.g. dropping bags of rice) is pretty savvy these days... Plus there is always the assertion that a sanctioned government whose people are suffering is a government that requires change - the whole point of sanctions. 

Sanctions make change more suitable for the decision-makers (Oligarchy) than doing nothing. Sanctions work or they would not be used. Of course the poor suffer first and most, that's always the case in peace or war, right or wrong.

I would speculate that the oligarchy (Sunnis) of Saddam's era were not 'sanctioned' enough to confront him during those 13 years.

(It was incorrect for the USA to leave Iraq during the first invasion 20 years ago at the UN's behest. The Bush family had to regain the Presidency to right that wrong. They had death threats from the Shiites that were abandoned in the South of Iraq because WE left them to Saddam. Aweful 13 years of suffering and murdering. I don't wonder why Bush Jr. lied in order to attack Saddam, its obvious to me. Back to topic...)

Know that I have not been to Iraq and cannot speak from first hand experience.

Art of War states that removing an enemies capability to wage war is plan #1, and %100 more effective than the always ill-fated occupation of enemy territory. It's just about the first thing stated in the book; (we call it passive aggression these days).

Did you go to Iraq during the invasions?

4 hours ago, Maddus Mattus wrote

And if you say intelligence agencies, are those the same that 'found' the nuclear weapons in Iraq?

The intelligence agencies found no such thing. The German equivilent of the CIA had one source, and the Whitehouse turned that into a reason to invade.

And even the Whitehouse only said chemical weapons (which Saddam had, in fact, used against the Kurds in the first gulf war). Nobody ever suggested Iraq had nuclear weapons.

The thing that gets me about the banking industry, is when I look at them I find it very hard to see how they contribute much of anything of substence. Farmers produce raw food, cooks process the food, truck drivers transport food and other stuff. Teachers teach people new skills, engineers engineer new technology and infrastructure, scientists advance the state of science, doctors and nurses heal people or keep them healthy. Mechanics fix cars. It's all pretty obvious value. Sorry if I missed someone's occupation.

But I can't really put my finger on what bankers are doing for us, especially nothing worthy of the amount of money they seem to produce for themselves (which seems to be higher than all the above quoted occupations in general). Can we replace them with a small shell script and be done with this whole "financial industry" already? That would be a worthy goal. 

27 minutes ago, JohnAskew wrote

*snip*

Sanctions work or they would not be used.

Seriously,..

Can you honoustly claim that either Iran or the west is better off due to the sanctions?

4 hours ago, Bass wrote

The thing that gets me about the banking industry, is when I look at them I find it very hard to see how they contribute much of anything of substence. 

They employ a large share of the world's a$$holes, thus relieving the rest of us from needing to work with them on a day-to-day basis.

55 minutes ago, Maddus Mattus wrote

Seriously,..

Can you honoustly claim that either Iran or the west is better off due to the sanctions?

Yes. Iran would have had nuclear weapons years ago if it wasn't for financial sanctions against the organisations funding their nuclear program, personal and travel sanctions against those helping it and material sanctions preventing them from buying parts. Even Iran admits it's been delayed by years because of the west's intervention.

And since this is a country that actively funds terrorism like Hezbollah who fire rockets into Israel every day, and the Iranian leader has said on many occasions that the holocaust didn't happen and that it is a Muslim's duty to wipe Israel off the map, I'm pretty sure that them having nuclear weapons would be a bad thing for Israel.

4 hours ago, Bass wrote

@JohnAskew:

But I can't really put my finger on what bankers are doing for us

So traditionally, bankers provided a service by allowing people starting out to borrow money (e.g. mortgages, small business loans) from people who had liquid assets available but not in use (e.g. millionaires, pension funds, other people's savings etc). This is an important function because it increases the value of liquid assets that aren't doing something useful (because now they are doing something useful in the economy - i.e. helping people start out).

Investment banking is the same, but in this case those large pots of cash are being "invested" into companies by buying shares of companies that the bank thinks have good ideas, helping them to grow and be useful in society. When the company matures, the company can sell its shares and use the money made to invest into more smaller companies and help them to grow too.

You've absolutely hit the nail on the head when you point out that these two laudible (and necessary) jobs have been corrupted into "modern banking". Day trading provides no benefit to society as a whole because the shares are not being traded with the company but amongst the share-holders. Lending 100% mortgages was stupid, as is the status quo of lending almost nothing. And shorting stocks causes companies to collapse rather than encouraging them to grow.

The standard argument for why bankers get paid so much is that they make a lot of money. If you make $5m for your company today, shouldn't you be allowed to take $50000 home with you?

My response is this: A checkout assistant at Wal-Mart probably takes nearly $5k from customers in an eight hour shift, and yet he earns minimum wage. Why do we not pay him $500 for his brilliant achievement of earning so much for Wal-Mart? Because Wal-Mart would have made the same with anyone else in his place. The amount earned is independent of him and a consequence of Wal-Mart's back-room staff like deliveries and supply-management.

Similarly, a day-trader might have taken $5m today. But that's not because he's super-clever. It's because he put $1bn on "facebook shares go down" today and came up lucky. To be honest - he didn't even choose to put $1bn on that - the computer told him to and he obeyed.

Our bankers do provide a service to the economy, along with lawyers, journalists, doctors and other professions. But they don't provide a service that is 10x more difficult, or 10x more skilled, and therefore they shouldn't be paid 10x as much. Unless and until the bankers start putting their own money on the stock market, they don't deserve to be making so much by putting other people's money at risk.

I find it hard to understand the justification for million dollar salaries for any occupation.  Certainly it can't be justified that when compared with someone making $40k a year.  Or minimum wage.

Investment Banking believes itself to be the lone profitary machine for the world economy.

They fall in the "too big to fail" / "above the law" category; historically reserved for deities.

7 hours ago, Maddus Mattus wrote

*snip*

Seriously,..

Can you honoustly claim that either Iran or the west is better off due to the sanctions?

That there has not yet been a bombing run to destroy Iranian nuclear weapons labs?

That no one has foolishly tried to militarily invade and occupy Iran?

All are better off...

We have set limits (in Holland) on bonuses on bailed out banks, but they go ahead and raise their salary by 20% anyway.

So, bailing them out is the worst mistake,.. EVER!

I won't forget that, at the end of the day, humans are animals. Not that greed is good, but that human nature is predictable. Communism was a spectacular failure because of this, as, too, Capitalism must morph into a regulated market economy.

We cannot turn our backs on the cookie jar!  

When bankers gave themselves millions in bonuses during and after their bailouts - that's the sort of abuse they believe they have entitlements to practice which enrages me.

Bank is bank. It is a giant fire proof vault that you put your money in. And if they got robbed, you don't lose your money unless the bank bankrupts. and instead of charging us vault fee, we agreed them to lend those money to people in need, and in term, get a small cut from it.

FYI, we have done that before WWII. That didn't workout too well.

It's not working out well right now,..

And the great depression was due to USA protectionism combined with the fact that the federal reserve didn't provide enough cash for the banks.

@JohnAskew:

Regulated capitalism? Lol, that's the system we have now,.. It's not working,..

The people regulating are the same people that are being regulated,..

I believe the only way to regulate the financial industry, is to let the consumer decide,..

The regulation we have documented many times before is what was removed to enable bankers today to recreate the problem that led to the great depression. Remember those facts?

Maddus, who is the consumer? The bank shareholder or the guy who has his savings in the bank?

5 hours ago, Maddus Mattus wrote

So, bailing them out is the worst mistake,.. EVER!

I'm not convinced you'd be entirely happy to lose your life savings just by the misfortune of having to have chosen the wrong bank to keep them in. The victims of a failed bank are not those bankers doing the investments, it's those whose money they're supposedly looking after.

6 hours ago, Maddus Mattus wrote

@ScanIAm: As do I, but what do we do when they screw up? Bail em out!

We have set limits (in Holland) on bonuses on bailed out banks, but they go ahead and raise their salary by 20% anyway.

So, bailing them out is the worst mistake,.. EVER!

Which do you prefer:

A) Government regulations to prevent a bank being too big, so that when it does fail, it doesn't need to be bailed out.

B) Government regulations to make sure that when banks are too big to fail that they don't fail in the first place.

C) Let banks get too big to fail, and then don't bother to bail them out and to hell with the pensions and savings of normal working people. If you like this option, consider that it's your pension and savings that went missing and then re-evaluate.

1 day ago, JohnAskew wrote

*snip*

The wealthy class is who is usually first to turn on the sanctioned government, not the poor.  The wealthy are who change things, and they will always change things to suit themselves. Maybe the poor riot, hopefully they don't starve - international humanitarian aide (e.g. dropping bags of rice) is pretty savvy these days... Plus there is always the assertion that a sanctioned government whose people are suffering is a government that requires change - the whole point of sanctions. 

Sanctions make change more suitable for the decision-makers (Oligarchy) than doing nothing. Sanctions work or they would not be used. Of course the poor suffer first and most, that's always the case in peace or war, right or wrong.

I would speculate that the oligarchy (Sunnis) of Saddam's era were not 'sanctioned' enough to confront him during those 13 years.

(It was incorrect for the USA to leave Iraq during the first invasion 20 years ago at the UN's behest. The Bush family had to regain the Presidency to right that wrong. They had death threats from the Shiites that were abandoned in the South of Iraq because WE left them to Saddam. Aweful 13 years of suffering and murdering. I don't wonder why Bush Jr. lied in order to attack Saddam, its obvious to me. Back to topic...)

Know that I have not been to Iraq and cannot speak from first hand experience.

Art of War states that removing an enemies capability to wage war is plan #1, and %100 more effective than the always ill-fated occupation of enemy territory. It's just about the first thing stated in the book; (we call it passive aggression these days).

Did you go to Iraq during the invasions?

No,I didn't go to Iraq. I was still a civilian in 1990 and was already on permanent leave the second time around (and since my squadron was eventually deployed elsewhere, that wouldn't have happened anyway); which means I don't have any first hand experience on the matter either.

I'm just basing my observations on history and documentation which, as I mentioned, don't support sanctions as being effective. I believe the reason why they are used is just that they are as far as the UN can manage to go. And since their effect is only captured in abstract statistics, they are considered morally more acceptable. Numbers are always elusive and controversial, but are still unsettling, regardless of which ones you believe and how you apportion blame.

As for the rest, I'll have to reread the Art of War, but I believe our disagreement is due to the fact that you seem to consider invasion and occupation like interchangeable terms, while I don't.

I'll leave it at that before I drag this further out of topic.

8 hours ago, Maddus Mattus wrote

@magicalclick:

 

 combined with the fact that the federal reserve didn't provide enough cash for the banks.

So now you blame they didn't do enough bailout? Did I missed something here?

23 hours ago, evildictait​or wrote

*snip*

So traditionally, bankers provided a service by allowing people starting out to borrow money (e.g. mortgages, small business loans) from people who had liquid assets available but not in use (e.g. millionaires, pension funds, other people's savings etc). ......

For this post, and this post alone, they should introduce the HTML <applause/> tag.

1 day ago, evildictait​or wrote

*snip*

The standard argument for why bankers get paid so much is that they make a lot of money. If you make $5m for your company today, shouldn't you be allowed to take $50000 home with you?

My response is this: A checkout assistant at Wal-Mart probably takes nearly $5k from customers in an eight hour shift, and yet he earns minimum wage. Why do we not pay him $500 for his brilliant achievement of earning so much for Wal-Mart? Because Wal-Mart would have made the same with anyone else in his place. The amount earned is independent of him and a consequence of Wal-Mart's back-room staff like deliveries and supply-management.

Similarly, a day-trader might have taken $5m today. But that's not because he's super-clever. It's because he put $1bn on "facebook shares go down" today and came up lucky. To be honest - he didn't even choose to put $1bn on that - the computer told him to and he obeyed.

Coming back to this a little late (been busy).

I disagree with your comparison to bankers versus supermarket checkouts:  a supermarket employee might sell $5K of goods, but that isn't $5K of profit, its $5K of turnover.  I don't know what the profit is, but say it's a generous 10%, so we have $500 in profit.  With the same %1 bonus basis as the banker example you gave above, that an extra $5 for the employee. If you're on minimum wage, that might be a nice present, but it's not going to drive you to a career at the checkout.

However, you are correct in that the employee doesn't drive the sale of the $5K of goods -- in fact I've seen supermarkets where some checkouts are busy, but the ones furthest from the door are empty -- so the employee at the checkout is in s kind of lottery in how busy they are (and I don't think they get to choose their posts either!). 

I didn't think bankers got daily bonuses -- I thought they got annual bonuses, based on their performance over the whole year.  So a lucky punt on shorting Facebook isn't going to get a bonus unless they can replicate that kind of 'luck' over the whole year.

The problem isn't really the fact that bankers get bonuses, it's that the period for which the bonus is earned is too short -- if you make the bank $5million in a year, but you've ignored the impact on profit the following year, then that leads to the kind of short-termism that gets banks into trouble three years down the line (like the sub-prime mortgage schemes did). Perhaps bonuses (or a large proportion of the bonuses) should be held in trust for a year or two, to ensure that there is no backfire from the profits earned; then investment bankers would be a bit more careful of the long-term consequences.

Herbie

The great depression is a series of events that led to the global downfall of the stock markets.

To point to a single event and say; see, this is what caused the depression is, in my opinion, not justified (or something, don't know a better word).

http://en.wikipedia.org/wiki/Great_Depression

There is a series of events is what lead to the great depression, not just a simple stock market crash.

It's the same pattern we are seeing with our current economic crisis, the more you're trying to prevent a decline, the harder the decline will be. Because you have to pay for the original decline plus any measures that you have taken to prevent the decline.

@AndyC:

Ah, but who pays the bailout?

If it's not me, then who?

I do think it is me that's paying the bailout. My government has increased it's debt in order to bail them out. So taxes go up to pay for the added debt of my government, either through VAT or inflation, reducing the value of my life savings. Currently my pension is losing value, so is my house and so are my investments.

So the difference is that with the bailout, I get to keep my money, but I lose on money on all else and the bank doesn't feel the need to change anything, because they are not motivated to in any way.

I'd much rather have the choice of where to put my lifesavings. Then me and me alone would be responsible for finding a place for my money, with either a) high risk, high yield or b) low risk, low yield bank.

A perfect example is the ICE Save debacle. People took enormous risk, but hardly lost any money. And who gets to pay for the loss? People who didn't put their money at ICE Save and for the largest part the Icelandic citizens. Did they have a choice, is that just? I don't think so.

@evildictaitor:

Ask yourself the question, why would any bank be to big to fail?

I think it's a myth, banks are not to big to fail. Freddy and Fanny failed, the world didn't end. So why would that apply to other banks? 

Sure, we would have a situation if a big bank collapses. But I think trying to prevent banks from collapsing, only makes matters worse. The impact is still there and the root problem only gets bigger (bankers give themselves bigger raises, take larger risks, feel like they are above the law, etc. etc.).

Nearly every computer in the world runs Windows. Is Microsoft now to big to fail? Should we bail them out as well, if the need arises? What about Apple, Google, Boeing, GM (oh wait)? Where does it stop?

It shouldn't even start to begin with.

If you do not feel the consequences of your decisions, you make them poorly.

@magicalclick:

Providing a bank with $100 billion in guarantees, a bailout, is something entirely different then turning on the printing press.

A bank run is a panic attack. In order to overcome it, you need to give people the impression that the money is there and that it's safe. So you give people their money as fast as you can. So when people come to the banks, they see it's business as usual.

When you don't provide enough cash, word will get around that the banks are running out of cash and the run will get worse.

With our current high speed access to banks, it's an entirely different story. I'm still thinking about what I think is the best course of action there

51 minutes ago, Maddus Mattus wrote

Ask yourself the question, why would any bank be to big to fail?

Let me rephrase.

You get a bank account with JP Morgan Chase when you are 16. Your salary is paid into this account, and you are responsible and put lots of money away for a rainy day.

You get a pension with Global Pension Corp. Part of your salary is paid to them in return for a pension when you retire.

You reach the grand old age of 60 - nearly ready for retirement and you've built up $400k of pension and have $50k in the bank.

You receive a letter in the post. Global Pension Corp made a bad business decision and have gone bust. Unfortunately for you, JP Morgan Chase made the same bad decision and has also gone bust.

You're $450k poorer than you were yesterday. Should you have any recourse, or does it just suck to be you, being as you're old, have no savings and no pension?

The bailout was because the federal government said that letting hundreds of thousands of citizens receive a letter telling them that their pension and savings had vanished through no fault of their own was too unfair. No other institution can punish people to the tune of hundreds of thousands of dollars each because of their bad business decisions.

And I totally agree with you on the short sightedness of the bankers. But I don't blame them. They don't bare the consequences for their actions, so why should they care?

Let's look at the bigger picture, those targets originate from somewhere, they trickle down from the top. The top gets their order from the shareholders. These shareholders can vote at a shareholders meeting on the course of a company. Those votes get turned into a course of action, and to get the noses in the same direction, translated into bonuses. When it's the right course, bank grows. When it's the wrong course, customers leave, banks shrinks and it turns to government for a bailout.

Now, where do I think the blame lies?

When things go good, customers benefit, bank employees benefit and stockholders benefit. When things go bad, taxpayer gets forwarded a big bill. Instead of; customers pay, bank employees pay and stockholders pay.

How is it possible that tax payers get a bill for something they had no take in? Who has the power to take money from them?

The situation gets even more complicated when you consider that not only shareholders can dictate the course of a bank, but government can as well. And this is also adding to the problem, because when you can slap your customers around with a law book, you spend considerable resources of getting involved in writing that book.

So when people use government to play their dirty games, it sends the society in a downwards spiral. That's why nearly all governments are corrupt, in one form or another. All the more reason to limit their power, if left to government, everything would be run by it.

That's a trick question. Anybody would go for the option that government pays the $450k.

To answer your question; I would go for the option that government pays all, but I'd like to live in a society that doesn't.

Allow me to explain;

Let's say government paid me the $450k, because I've been such a law abiding citizen. The government doesn't have any money, so it gets added to the national debt and tax increases to pay for this debt. In this scenario I might have kept my $450k, but at the expense of the tax payer. The bank that made this mistake in the first place is still there, continuing to making even worse business decisions, they didn't feel pain so they will learn no lessons.

Let's say I had to take the loss. Then I would add my claim of $450k to the rest of the claims against the bank. Profitable bank assets would be sold to other banks and maybe I would see a little of that money back, people responsible for the bad management fired and branded for life. Then I would join the class action lawsuit against them and maybe see some money back there as well. And I've learned a valuable lesson; never bet on one horse.

I don't think it's very social to make someone else pay for other people's bad decisions, no matter how hard you may fall. 

That's only logical. First government forced them to sell mortgages to people who couldn't afford it, because you know everybody should be able to own a home. And that is not capitalism, but socialism. If I was GS, I would want to get rid of these as fast as possible, Uncle Sam just has to look the other way when I resell the turd as alt-A.

Then when these loans go down the rat hole, you ask government for a contribution;

http://www.usatoday.com/money/industries/banking/2010-07-24-goldman-bailout-cash_N.htm

They passed the law, so they should pay,.. Oh,.. wait,.. Uncle Sam signs the check, but the tax payers pay the check.

Are you beginning to see a pattern here?

And before you think Goldman Sachs is the problem, see who put them into trouble and saved their behind!

32 minutes ago, Maddus Mattus wrote

Then I would add my claim of $450k to the rest of the claims against the bank. ... and maybe I would see a little of that money back.

Fine. After two years of waiting, the administrators post you a check for $17 after winding up the business because you're a non-secured asset holder and the bank had lots of customers.

... people responsible for the bad management fired and branded for life.

 

I'm sure that'll be a great consolation when you're freezing in your tiny house wishing you had money when you're too old to work or pay for the care you need.

Then I would join the class action lawsuit against them and maybe see some money back there as well.

Which you promptly lose. The company didn't do anything illegal - it just went bankrupt because of bad investment decisions. It's a PLC so you don't get any come-back on the people who ran the business.

And for the record, they'll get to keep their mansion, their pension and will promptly get a job running a big company somewhere like Saudi Arabia. It still sucks to be you - you're too old to get another job and all of your savings and pension went missing, and hiring a hitman is illegal.

And I've learned a valuable lesson; never bet on one horse.

I'm sure that'll keep you a warm fuzzy feeling inside when you're shivering at night time, still furious that the guy who screwed you out of your pension and savings is sitting in his nice warm massive house.

I don't think it's very social to make someone else pay for other people's bad decisions, no matter how hard you may fall.

Then who should pay for the bad decisions? The customers of the bank or the taxpayers? Because the bank is bankrupt and can't pay. The staff are just pawns and the management are running a PLC to protect them from bankruptcy. You could screw over the shareholders, but then they go bankrupt too, and since they're mainly big pension companies, you lose your pension and your savings.

Government didn't bail out the banks because they love banks or wanted to abolish capitalism. They bailed them out because the alternative is having to call in the army to protect against the riots caused by everyone losing their pensions and savings.

13 minutes ago, evildictait​or wrote

*snip*

Government didn't bail out the banks because they love banks or wanted to abolish capitalism. They bailed them out because the alternative is having to call in the army to protect against the riots caused by everyone losing their pensions and savings.

+1

This is how private corporations hold their national treasuries hostage.

And then laugh, at the middle-class conservatives' compliance and struggle to retire, while in flight to the Cayman Islands...

11 minutes ago, evildictait​or wrote

Then who should pay for the bad decisions? The customers of the bank or the taxpayers? Because the bank is bankrupt and can't pay. The staff are just pawns and the management are running a PLC to protect them from bankruptcy. You could screw over the shareholders, but then they go bankrupt too, and since they're mainly big pension companies, you lose your pension and your savings.

Government didn't bail out the banks because they love banks or wanted to abolish capitalism. They bailed them out because the alternative is having to call in the army to protect against the riots caused by everyone losing their pensions and savings.

As it was the owners of the bank, together with the employees and the customers that decided the course of the bank, they should pay. The owners lose their ownership as the bank gets sold, the employees lose their job and the customer loses his money. They went into business voluntarily they reap the benefits, they should also take the blows.

It does not compute to me, that other people have to pay for mistakes in business they had no part in. If that is the solution for failures, we are all winners, regardless of what we do succeeds. This can only happen at the expense of other people and is pure socialism.

So, government bailed them out, because bankers losing money causes riots? Now you are just making threats of violence. If you need that to sustain the argument, the argument is lost. And if some people riot when they lose money, don't you think it would be worse if the loss of some people gets put on everybody? Again, think about it, clearly, without the emotion. For you to have your savings, other people have to suffer, mostly those at the bottom of society, how can anyone live with that?

You make thread after thread ranting against banks and how they are lawless crooks, yet you are OK with this practice?

I would love speed camera's that pay out instead of fine when I cross the speed limit, but it doesn't work that way.

** The US Justice Dept. is going after Standard Chartered for lying and falsifying records and covering up their trade with Iran, which is more prosecutable than for illegally trading with Iran...

http://www.reuters.com/article/2012/08/10/us-standardchartered-iran-falserecords-idUSBRE87905520120810

** Looks like Goldman Sachs gets another free pass from the US government.

A Senate subcommittee chaired by  Sen. Carl Levin, D-Mich., in April 2011 found that Goldman marketed four  sets of complex mortgage securities to banks and other investors but  that the firm failed to tell clients that the securities were very  risky. The Senate panel said Goldman secretly bet against the investors'  positions and deceived the investors about its own positions to shift  risk from its balance sheet to theirs.

The  Justice Department's decision capped a good day for Goldman as the  Securities and Exchange Commission decided not to file charges against  the firm over a $1.3 billion subprime mortgage portfolio. At the same  time, the Justice Department's decision ensured that the Obama  administration will continue to feel political heat, particularly from  the liberal wing of the president's own party, for not having brought  more prosecutions in the financial crisis.

** Finally, there is movement on the front for better trading software, because, you know, programmers are to blame for Knight's $440 million mistake...

http://www.upi.com/Science_News/Technology/2012/08/03/Trading-vulnerable-to-glitches-some-say/UPI-17661344010621/?rel=29701344525821

A former chairman of the U.S. Securities and Exchange Commission said the  digital culture leaves the financial system vulnerable to a major glitch.

"The larger question is whether our markets are adequate to deal with the  technology that is out there,"...

Several major players in the financial world are now calling for stricter  regulations on computerized trading, including vigorous tests for new programs....

Although some say the SEC is not doing enough in response to previous  computer glitches that shocked the system, the commission is scheduled to  install next year its own market override called "limit up, limit down."

It forces a stall in trading if a stock price behaves erratically.

And to answer your underlying question, yes, I do trust government over bankers and traders.

Would I like to see more prosecution of individuals at the banks and investment houses? Yes!

So you make no point. But you are from Holland, isn't that vierd? (Goldmember reference)

33 minutes ago, Maddus Mattus wrote

*snip*

As it was the owners of the bank, together with the employees and the customers that decided the course of the bank, they should pay.

As I said, the bank is a PLC. The employees and the executives lose their job (since the bank goes bust) but they don't lose their houses or any money they had in other banks. That's what a PLC means.

The executives probably have their assets abroad, so you couldn't sieze them even if you wanted to - and the employees largely didn't do anything wrong - why should a janitor in a bank have his house taken just because someone else in the bank screwed up and lost loads of money? That's not how businesses work.

And the customers didn't decide anything. They thought their money was safe in a bank - hell the government actively encourages people to put their money in banks because money in banks is lent back out to the rest of society to help the economy. Under your system, everyone would hide their money under the bed and nobody would be able to get a loan or a mortgage at all.

So, government bailed them out, because bankers losing money causes riots? Now you are just making threats of violence.

That's a completely retarded thing to say, even for you.

Your trust in someone that has the power to dominate you is misplaced. It's a big power hungry, favor granting and self interest serving entity. It's full of people with good intensions paving a road to hell.

I'd much rather trust someone I can choose, but that's my opinion.

@evildictaitor:

The executives probably have their assets abroad.

So what? They can still be made to pay hefty fines if you can prove mismanagement, file a civil claim!

and the employees largely didn't do anything wrong

They have the moral obligation to do the right thing, if they didn't, tough. Makes you ponder twice before going to work for a firm. See how free markets operate? Bad companies wouldnt even exist, no one would want to work there.

You would think twice before working or doing business with a bank wich CEO has all of his own investments some place else. But since the rest of the country has your back, who cares!

Raise debt ceiling anyone?

And the customers didn't decide anything. They thought their money was safe in a bank

And we thought that government bonds was a sure investment as well, GUESS WHAT?

None of the arguments you made are valid points for bailing banks out, NONE.

They went into business together, they got the benefits together, now let them pay the price together. And if either of these parties resorts to violence, it will be dealt with accordingly, with more violence.

16 minutes ago, Maddus Mattus wr0ote

@evildictaitor:

So what? They can still be made to pay hefty fines if you can prove mismanagement, file a civil claim!

The bank is a PLC. You can't sue the directors unless their mismanagement was negligent or malicious.

They have the moral obligation to do the right thing, if they didn't, tough. Makes you ponder twice before going to work for a firm. See how free markets operate? Bad companies wouldnt even exist, no one would want to work there.

What on earth makes you think that CEOs do anything based on moral obligation?

You would think twice before working or doing business with a bank wich CEO has all of his own investments some place else.

They wouldn't tell you, so you wouldn't know.

And we thought that government bonds was a sure investment as well, GUESS WHAT?

I presume that based on this knowledge of how unsafe banks are, that you store all of your money in cash under your bed.

it will be dealt with accordingly, with more violence.

Yeah, that's right. Let's set the police on the grannies protesting outside parliament for complaining that the banks made off with all of her savings and pension. What a socialist she is for expecting her savings and pension to not be stolen by our wonderful capitalist bankers.

Feudalism Rulez.

Honestly, though, it is disingenuous for conservatives to argue for less regulation to end looting. I can only suspect they have ill intent for pushing such a strategy...

I am confused. Are you telling me that , with our current high speed access to banks, somehow government no longer need to bailout to stop the panic? How does that even work? I just click transfer button before you do? I am confused.

21 hours ago, Maddus Mattus wrote

@AndyC:

I'd much rather have the choice of where to put my lifesavings. Then me and me alone would be responsible for finding a place for my money, with either a) high risk, high yield or b) low risk, low yield bank.

Except you don't really have that choice, you only have the illusion of that choice, because the banks weren't strictly regulated enough. So you may put all your money in the low risk, low yield account only to have the bank go bust because a different arm was taking more risk than it should.

The only way to get what you want is regulations along the lines of Glass-Steagall. Then you can allow those high risk banks to go bust and argue the investers knew what they were getting into. And, at worse, you'd only ever have to worry about bailing out the low risk banks (which are far, far less likely to ever get into a similar situation anyway)

It clearly demonstrates the lack of needs for bills like the one you describe.

A bank which has both an investment bank and a banking arm, is then not a safe place to put your money. So you would be damned to run such a high risk, for such a small yield.

If you want safety, you should search for a bank that only has a banking arm and does not have an investment arm. If you and many others like you do this, it would create demand for such banks and they would appear.

It might take some time, some 'market failures', but eventually the system will evolve into being. Government will never get this system right, because it simply lacks the self correcting mechanism.

2 days ago, evildictait​or wrote

The bank is a PLC. You can't sue the directors unless their mismanagement was negligent or malicious.

Even if all banks are PLC's, it's the responsibility of the employees, stockholders and customers to keep the bank away from harm. Everyone should have an equal voice, right now they don't. Employees are sock puppets, stockholders rule and are only interested in making profit with their shares and the customers don't care they are protected by government. As long as you keep this way of doing business in place, nothing will ever change, regardless of the amount of regulations you put in place.

People should be held responsible and accountable for their actions, as long as you cover their behind they will act irresponsible.

What on earth makes you think that CEOs do anything based on moral obligation?

See above.

They wouldn't tell you, so you wouldn't know.

And that's why we need to have free press. They can do all this kinds of investigate reporting stuff and blow the cover on this vermin!

Imagine the headlines; "Goldman Sachs CEO doesn't trust his own company!". PR nightmare, aaaarrrgghhhh!

I presume that based on this knowledge of how unsafe banks are, that you store all of your money in cash under your bed.

Actually, I built my investment around my bed, it keeps me dry when it rains and warm when it's cold.

Yeah, that's right. Let's set the police on the grannies protesting outside parliament for complaining that the banks made off with all of her savings and pension. What a socialist she is for expecting her savings and pension to not be stolen by our wonderful capitalist bankers.

As heartbreaking as that may sound, the grannies are barking up the wrong tree. A government should provide courts of law to deal with these things. The grannies should not protest against parliament, but sue the banks!

Right now capitalist bankers (all bankers are capitalists, nothing wrong with greed or capitalism) get away with almost anything, because government steps in and protects them at my expense.

If the grannies want a freebee from government at my expense, government should say no.

If you continue this line of thought, you end up with the system we have today. Customers not caring about which pension they have, government will pick up the tab. Banks don't care how reckless they invest, government will pick up the tab. Stockholders don't care about the wellbeing of their bank, government will pick up the tab. And a bankrupt government, because it has to pay for all the mistakes. How social is that?!

2 days ago, magicalclick wrote

@Maddus Mattus:

I am confused. Are you telling me that , with our current high speed access to banks, somehow government no longer need to bailout to stop the panic? How does that even work? I just click transfer button before you do? I am confused.

It's governments responsibility to provide the banks with cash, because the banks can't print that. It's not the governments responsibility to bail them out.

As we do less and less with cash and more and more with internet banking, nearly all money is virtual. It becomes more and more difficult for banks to manage panic, I don't think government can do anything about these types of bank runs. Bankers could turn of their internet, like the stockbrokers sometimes hide in the toilet,...

1 hour ago, Maddus Mattus wrote

@AndyC: Good example!

If you want safety, you should search for a bank that only has a banking arm and does not have an investment arm. If you and many others like you do this, it would create demand for such banks and they would appear.

It might take some time, some 'market failures', but eventually the system will evolve into being. Government will never get this system right, because it simply lacks the self correcting mechanism.

And in the mean time? Do you honestly expect people to keep their savings under the mattress and insist on being paid in cash?

What you are suggesting is simply impractical. And even if you did find such a bank, what's to stop them getting involved in some high risk activities some time later without your knowledge?

54 minutes ago, AndyC wrote

And in the mean time? Do you honestly expect people to keep their savings under the mattress and insist on being paid in cash?

That's an excellent question. I really don't know, all I do know is, that continuing down the current path will only get us into bigger trouble. Covering bad debt, with even more debt, cannot be upheld, so much is clear.

First thing we need to do, is to get government spending under control. Then we need to look at how we can get rid of competition limiting regulations. I think the solution is moving to a more free society, with a small government and more responsibilities for citizens.

What you are suggesting is simply impractical. And even if you did find such a bank, what's to stop them getting involved in some high risk activities some time later without your knowledge?

They would be prevented to undertake such risky activities because their customers would be on them like hawks.

There have been banks that required no bailouts from government, because they invested their money wisely. I wish I was free to move my pension and my savings to one of these more safe banks, but the system I'm in now prevents me, due to regulations.

Herbie

No, you can hire a guy to do all the things you mention for you.

I can guarantee you;

1. He will do a better job
2. Do it more cheaply

And if you don't agree with your guy, you have the option to say: 'no'.

This is why we have bakers, software companies, etc. etc. you benefit, the guy benefits, everybody happy!

The critical error in your thinking is that it may benefit you, but it might not benefit someone else. If you arrange these things by law, the someone else cannot opt out, it's the law.

(Cbea will say I sound like a broken record) This force you use to make others comply is where things get very scary, very fast.

So when you put programs like the ones you mention into place, some benefit at the expense of others, and this I am fundamentally against.

@Dr Herbie:

No, you can hire a guy to do all the things you mention for you.

I can guarantee you;

1. He will do a better job
2. Do it more cheaply

And if you don't agree with your guy, you have the option to say: 'no'.

[/quote]

In my experience:

1. No, he will be pushing the products he gets the biggest commission on, not the best products for me.  Given that he has specialist knowledge that I don't have, it is often difficult to tell that this is the case, but I have found it to be the case with financial advisers in the past; my wife and I both have university educations, including statistics and maths, and it took us a lot of thought to realise we should ignore one particular adviser.  I don't see how anyone with less numerical acumen would cope.

2. No, he will charge "what the market will support" and not the cheapest possible price.  I have often found that 'private sector' works out more expensive that government run; the 'free market' doesn't work unless everyone is open about costs and profits, in many cases all the competitors are gaining unrealistic profits because they don't want to undercut the competition to too much because they all want to keep their prices high in an implicit, unspoken price-rigging scheme.

And I do indeed have the option to say 'no', but then that would mean I was wasting my time if I knew better than the experts.

Herbie

In my experience:

1. No, he will be pushing the products he gets the biggest commission on, not the best products for me.  Given that he has specialist knowledge that I don't have, it is often difficult to tell that this is the case, but I have found it to be the case with financial advisers in the past; my wife and I both have university educations, including statistics and maths, and it took us a lot of thought to realise we should ignore one particular adviser.  I don't see how anyone with less numerical acumen would cope.

2. No, he will charge "what the market will support" and not the cheapest possible price.  I have often found that 'private sector' works out more expensive that government run; the 'free market' doesn't work unless everyone is open about costs and profits, in many cases all the competitors are gaining unrealistic profits because they don't want to undercut the competition to too much because they all want to keep their prices high in an implicit, unspoken price-rigging scheme.

And I do indeed have the option to say 'no', but then that would mean I was wasting my time if I knew better than the experts.

Herbie

1. This breaks the; "When two people do business and it effects a third non participant, there is a role for government to play." rule. He is intentionally misleading you in order to get a better deal with someone else, this is at your expense and should be illegal.

You will always have bad apples, but I am not willing to surrender the liberties of others in order to hunt down some bad apples. You just have to weed them out.

2. If government does it more cheaply it means that someone else is paying the bill. There is no such thing as a free lunch.

The problem with these financial products is, that you don't have the option to move them around freely (at least, I don't). My current mortgage is your situation 1, which I didn't do the math, but trusted the expert. Now I know better and have made alternative arrangements, but the current system prohibits me to get out of the contract. Also I've joined with other consumers and the insurer has come up with a compensation plan, no government intervention was required.

34 minutes ago, Maddus Mattus wrote

*snip*

1. This breaks the; "When two people do business and it effects a third non participant, there is a role for government to play." rule. He is intentionally misleading you in order to get a better deal with someone else, this is at your expense and should be illegal.

You will always have bad apples, but I am not willing to surrender the liberties of others in order to hunt down some bad apples. You just have to weed them out.

Which is exactly the same argument that can be put forward with the actions of the banks -- banks collude to make more money from each other -- therefore government regulation is required to stop them harming the people who save and invest with them.  You're just moving the focus from banks to financial advisers.

34 minutes ago, Maddus Mattus wrote

*snip*

2. If government does it more cheaply it means that someone else is paying the bill. There is no such thing as a free lunch.

No, I completely disagree -- if the government is doing more cheaply it means that the private business are price gouging because they're doing it purely for profit.

You don't trust government, I don't trust private companies. There is no middle-ground, so there's no point in continuing yet another in a long list of pointless threads here. 

Herbie

4 minutes ago, Dr Herbie wrote

Which is exactly the same argument that can be put forward with the actions of the banks -- banks collude to make more money from each other -- therefore government regulation is required to stop them harming the people who save and invest with them.  You're just moving the focus from banks to financial advisers.

If they gang up, government should step in, I completely agree. But for the rest, they should be free to compete and innovate the way they want to.

You brought up financial advisors, not me.

No, I completely disagree -- if the government is doing more cheaply it means that the private business are price gouging because they're doing it purely for profit.

You don't trust government, I don't trust private companies. There is no middle-ground, so there's no point in continuing yet another in a long list of pointless threads here. 

Herbie

Let's assume a service has the labor costs of $10.000,- (100 hours * $100/hour) to provide a service to you. Let's look at he two options; 

The private market costs $15.000,-, the guy has to eat so there is a $5.000,- take in it for him. It's your responsibility and the guy's to make sure the work gets done to your satisfaction. 

Let's say the government provides the same service. It first has to asses if you qualify for getting the service, it has to setup the specifications for the service, then it has to take the money through taxes, that system costs money, then it has to transfer the money out of the pile of tax money and have that audited, that system costs money, then it has to provide the $10.000,- worth of raw costs of the service, then it has to check if the $10.000,- was spent the way it should have been spent and finally another guy has to check if the work was done according to specifications,..

You can clearly see it will costs us more then $15.000,- to provide the initial service. Hell, even if the guy made a 100% profit, he would still provide a cheaper service. So if a government can do it more cheaply then the markets, someone else is paying,.. heavily,..

You are absolutely correct that I don't trust governments to provide me with a service or a product. That's not their primary concern. Their primary concern is to get reelected. So they are in a game of politics, they want to win votes, they do this by providing favors at the expense of others. I've seldom met a politician that does not want to get reelected.

I don't think it's pointless, threads like these make me discover where I need to fine tune my position and I discover new things constantly.

3 hours ago, Maddus Mattus wrote

*snip*

They would be prevented to undertake such risky activities because their customers would be on them like hawks.

So I am the banking regulator? Really? Your solutions are nonsensical. I have to admonish you now. <admonish>Maddus</admonish>

You try really hard, though, I will acknowledge that...

And you know, the funny thing is, the only solution that works is a free market. Check the history books. We will get there eventually, you cannot plan people, they will do whatever they think is right, if there is a law or not, everyone has their own moral compass.

You try really hard, though, I will acknowledge that...

Thanks! I really want what's best for you guys

Trust me, I am from the internets.

Government's responsibility to provide the banks with cash when banks didn't have savings in government? And that is not bailout? Wuut? I am really confused. 

2 hours ago, Maddus Mattus wrote

@JohnAskew: Not just you and me, all their customers. Right now, we are cattle, powerless, voiceless. We are basically taken out of the equation, because they have the law on their side.

And you know, the funny thing is, the only solution that works is a free market. Check the history books. We will get there eventually, you cannot plan people, they will do whatever they think is right, if there is a law or not, everyone has their own moral compass.

Let me correct you: I get to vote, so I'm not cattle or powerless or voiceless, I am in the equation, I have the law on my side (and jurors if necessary, imho).

Now let me tell you that your panacea of "free market" is only viable when building nations and infrastructure. Once wealth is accumulated, naturally is becomes concentrated in few hands (this is human nature at work which no one can change), then the "free market" is no longer free.

Anti-Trust law is supposed to be how the "free market" shakes off the special interest of a tycoon mogul billionaire type. Unfortunately the "free market" proponents fail to prohibit laws designed for profit and instead take the mogul's contributions. The Justice Department doesn't attempt to enforce the laws on the books addressing Anti-Trust entities, I would imagine for the same reason: profit. Somehow they are drawn into the billionaires' strategy though the US government Justice Department is supposedly constructed to prevent this type of influence.

So at the end of the day, we deal with OLIGARCHIES. Maddus, that is not a "free market". I know that neither Maddus nor anyone else can take our current economy and restore is as a "free market". If you could, you would have already started.

I challange proponents of "free market" to lay out the map to take us there. I say it is not feasible. The rich would not let you finish your ideas anyway because it's not in their interest. This leaves working with the current system as the only option. Pining for "free market" is a red herring.

Those of us who subscribe to the Austrian school of economics, have predicted this (Ron Paul, Peter schiff, etcetra). 

In fact, in 2001 ( that's right...not a misprint), Ron Paul gave his excellent predictions in his address to the US Congress. In that speech, he predicted the coming trajectory of interest rates, housing prices, derivatives, commodities, GSEs, etcetra.   All of speeches on the house floor are part of the congressional record and can be accessed on www.house.gov.

By the way, his speeches are not some vague utterances that other economically challenged pundits ( Krugman and other such assorteds) make from time to time. But rather, his speeches are detailed logical explanations of how and why of things.

27 minutes ago, Srikanth_t wrote

Austrian school lays the majority of the blame on the Government.

As they should, but look at the Government, it is doing the bidding of the wealthy Wall Street investment banks. The wealthy banks and their lobbyists have deregulated their industry through the Government so that they could steal without penalty.

The theives are not an institution, they are people. And they should be jailed.

EDIT: ...and they are consistently violating the law anytime it profits them. Despicable!

 Barclays Plc, Credit Suisse Group, Lloyds Banking Group, J.P. Morgan Chase & Co. and ING Bank NV had agreed in prior years to settlements totaling nearly $2 billion into how those banks allegedly processed money or assets tied to sanctioned countries.

http://www.reuters.com/article/2012/08/13/us-standardcharted-probe-idUSBRE87C04O20120813

41 minutes ago, JohnAskew wrote

Let me correct you: I get to vote, so I'm not cattle or powerless or voiceless, I am in the equation, I have the law on my side (and jurors if necessary, imho).

I'm not talking about cattle in the political sense, but in the sense of what we are to a bank.

Now let me tell you that your panacea of "free market" is only viable when building nations and infrastructure. Once wealth is accumulated, naturally is becomes concentrated in few hands (this is human nature at work which no one can change), then the "free market" is no longer free.

Ah, the robber baron myth,.

The myth is indeed true, only it's not the baron doing the robbing.

There is but one entity who can take my money by force without any questions asked.

Anti-Trust law is supposed to be how the "free market" shakes off the special interest of a tycoon mogul billionaire type. Unfortunately the "free market" proponents fail to prohibit laws designed for profit and instead take the mogul's contributions. The Justice Department doesn't attempt to enforce the laws on the books addressing Anti-Trust entities, I would imagine for the same reason: profit. Somehow they are drawn into the billionaires' strategy though the US government Justice Department is supposedly constructed to prevent this type of influence.

Money buys influence, thefore these billionaires pressure government not to prosecute. I agree with you it's dispicable. But if you are a crook and have billions of dollars, wouldnt you do the same? And who is to blame? The billionaire trying to protect his interests or a government official who is actively protecting his interests?

So at the end of the day, we deal with OLIGARCHIES. Maddus, that is not a "free market". I know that neither Maddus nor anyone else can take our current economy and restore is as a "free market". If you could, you would have already started.

I agree with you, that's the system we have ended up with. I've no choice in many facets of my life. I wish the government would pick up the slack and do what they are supposed to do, defend my freedom to choose. Instead of creating government programs that throw cash around and protect the interests of special groups.

I challange proponents of "free market" to lay out the map to take us there. I say it is not feasible. The rich would not let you finish your ideas anyway because it's not in their interest. This leaves working with the current system as the only option. Pining for "free market" is a red herring.

For starters; strike all laws that have a negative impact on peoples freedom (as long as it doesnt hurt anyone else), regardless of the spirit they are written in. Give government a clear mandate what it can and can't do. Demand from government that they cannot borrow money, government need not play investment banker.

@Maddus: Stop agreeing with me!  

I find it absolutely terrific when we agree. The Selfish Rich Corrupt Governments.

I believe that much we can 'bank' on...

4 hours ago, Maddus Mattus wrote

There is but one entity who can take my money by force without any questions asked.

And apparently they work on Wall Street.

All I'm asking for is for bankers who broke the law to go to jail.

If you lie to your retail customers (PPI) or investment customers (sub-prime mortgages), commit direct fraud (LIBOR fixing), aid money laundering (HSBC) or terrorism (UBS) or undermine UN-sanctions (Standard Chartered) or steal public sector money given to you on the strict mandate that it be lent out to small businesses and instead siphon it off into your own bonus then frankly I don't see why we shouldn't just round the lot up and put 'em in front of a judge.

And all this BS about them leaving the country, or us needing to pay through the nose to get the best man for the job? Fine. We'll deport them after they've finished their sentences. And in the meantime we'll let someone who doesn't charge $200k a year +$60k bonus run a business that does work and is necessary, i.e. taking savings and lending them out to businesses, rather than plundering the stock market for personal gain. That's the best man for the job. Not someone with a history of demanding a 10x average salary and a record of crippling their own bank and the economy with their selfish actions.

Both you and Dr Herbie are right, although you are both appearing to blame one or other of the partners in crime.

Dr Herbie is right that the bankers sold us all down the river to make a fast buck, and were lobbying government to turn a blind eye to them eroding the integrity of the financial system for their own short term bonuses.

But you are also right - the government was outright wrong to let them get away with this basic criminality - they failed at one of the key jobs of government which is to uphold law and order and to ensure that society is run for the betterment of society at large. You, of course, are right to say that given their current record the current government cannot be trusted to sort things out because they were instrumental in the failures that got us here.

But one thing you do have to realise is that Dr Herbie is right to state that nobody outside of government is in a position to sort it out - defeating criminality is one of the core jobs of government and is not something that can be outsourced. Everyone must be equal under the law, and that cannot happen if a banker can pay off a private-sector judge to let him off scott-free.

Sadly the only answer I can think of is that someone outside of our current criminal cartel in government should be the ones to impose change, because when the bankers were plundering our nation, the politicians in government were either maliciously or negligently turning a blind eye.

My points is this; if it's so obvious that its not working out, why continue down the same path?

Stimulus packages aren't working, bailouts aren't working and there are many more examples where government is pushing for something and it ends up costing us dearly. I believe it's why we are in this crisis. Unlimited government spending, I frowned at that when I wasonly 12, when my dad told me; "son, you have a f20.000,- debt. We all have.".

Nothing will change, the people that get elected seldom do things that's in the best interest of the country, they serve their voters, their financers and their political friends.

13 hours ago, JohnAskew wrote

@Maddus: Stop agreeing with me!  

Rule of acquisition 76; Every once in a while, declare peace. It confuses the hell out of your enemies.

11 hours ago, Maddus Mattus wrote

@evildictaitor: as you so rightly conclude, government is not up to the task of creating and enforcing complex regulations in the financial sector.

I concluded that the current government was not up to the task of regulating the financial sector. That's not quite the same thing.

My points is this; if it's so obvious that its not working out, why continue down the same path?

[quote]

Nothing will change, the people that get elected seldom do things that's in the best interest of the country, they serve their voters, their financers and their political friends.

If they served their voters I wouldn't mind so much.

21 hours ago, evildictait​or wrote

*snip*

And apparently they work on Wall Street.

All I'm asking for is for bankers who broke the law to go to jail.

And they have friends in Washington who are protecting them:

In the report, GAI details how the George W. Bush and Bill Clinton administrations both actually took down financial criminals — unlike the Obama administration. Between 2002 and 2008, for instance, GAI points out how a Bush administration task force "obtained over 1,300 corporate fraud convictions, including those of over 130 corporate vice presidents and over 200 CEOs and corporate presidents."

"Clinton's DOJ prosecuted over 1,800 S&L [savings and loans] executives, senior officials, and directors, and over 1,000 of them were sent to jail," GAI adds.

But, despite having "promised more of the same," especially in the wake of the 2008 financial crisis, the Obama administration's DOJ has not brought criminal charges against a single major Wall Street executive.

And we still don't have an intependant investigation into Jon Corzine (major Obama bundler) and MF Global... I wonder why?

10 minutes ago, dahat wrote

*snip*

And they have friends in Washington who are protecting them:

*snip*

And we still don't have an intependant investigation into Jon Corzine (major Obama bundler) and MF Global... I wonder why?

http://www.breitbart.com/Big-Government/2012/07/26/REVEALED-Corzine-s-MF-Global-Was-a-Client-of-Eric%20Holder-s-Law-Firm

That is exactly the problem.

Romney is clean?

34 minutes ago, JohnAskew wrote

*snip*

http://www.breitbart.com/Big-Government/2012/07/26/REVEALED-Corzine-s-MF-Global-Was-a-Client-of-Eric%20Holder-s-Law-Firm

That is exactly the problem.

Romney is clean?

Given the charges against him thus far of perjury, tax evasion, murder (ok, that one is satire, but this one isn't) and now being pro-slavery... Either Mitt Romney is even better than Barack Obama at hiding those parts of his past which make him look bad... or there is far less to substantively attack him on.

I mean... isn't it odd that we still haven't encountered the Romney version of the following:

• Hate-filled, anti-semetic, anti-American preacher who he attended for 20 years
• Domestic terrorist whose livingroom he got his political start in
• Communist who educated him from a young age
• Close friend who happens to be PLO spokesperson.
• Ficticious memours

Thus far... Romney seems pretty clean to me, even though he was not my first or second choice this time around.

25 minutes ago, dahat wrote

*snip*

Given the charges against him thus far of perjury, tax evasion, murder (ok, that one is satire, but this one isn't) and now being pro-slavery... 

... Romney seems pretty clean to me, even though he was not my first or second choice this time around.

Why does having lots of allegations of wrongdoing make you "pretty clean" in your books?

55 minutes ago, evildictait​or wrote

*snip*

Why does having lots of allegations of wrongdoing make you "pretty clean" in your books?

Anyone can make accusations of wrongdoing (and many do)... but thus far the majority of the ones against Romney don't hold up very well... while many of those made against Obama during the 07/08 cycle were not only far more substantive, but largely ignored by the MSM.

Where is the Romney version of Tony Rezko? Rashid Khalidi? Frank Marshall Davis? Reverend Wright? Bill Ayres? Bernardine Dohrn? Rod Blagojevich? Jodie Evans? Derrick Bell? Carl Davidson?

Obviously Romney successfully bribed or disappeared all of those who could tell accurate bad stories about him from long ago... shame they forgot about the first rule of Seamus the Dog... don't talk about Seamus the Dog!

So yes... Romney thus far seems "pretty clean" as those attacks on him don't have much/any substance... and I assume that the Obama Campaign and it's surrogates have been working tirelessly to find something that is irrefutably damning... and yet it keeps sounding like bold faced lies based on minimal accuracy is their only weapon... unless they are keeping their lips tight on something so damning that it will be the October surprise to end all other October surprises.

I'd rather not force at all.

That's why Obama and Romney are exactly the same to me. Both will use the law, force, to coerce the other 49%.

Why don't we stick to substantive issues instead. That benefits me.

With regard to Wall Street influence, the two candidates are the same to me too. Disgusting.

http://www.csmonitor.com/Business/Latest-News-Wires/2012/0815/Wells-Fargo-settlement-for-risky-investments-6.6-million

Peanuts compared to other shills, but yet more unprosecuted fraud gets 'settled'.

Banks are on a roll... go banks go

As Britain loses faith in its banks and feels shockwaves from the euro crisis, one city is trying to keep local wealth in local pockets with the launch of its own currency.

The Bristol pound...

"The perception of banking and money is that it's a very ruthless system: people are out for what they can get," co-founder Ciaran Mundy told AFP.

"This is about saying yes to something new. It's tapping into a different set of values about money."

The scheme has "captured people's imaginations", he added, in a recession-hit year when British banks have been beset by scandals and ministers talked openly of a possible euro collapse.

Wow. I've never heard of local currencies, but I like the reason for taking action well enough...

His model is the Chiemgauer, a German complementary currency of which millions of euros' worth is traded yearly.

Online database complementarycurrency.org lists more than 225 such minority currencies worldwide, of which 102 are in Europe.

Fascinating...

"If we're not doing a good job they won't use the system. Consumers will decide."

Is this a way to re-introduce the vaunted mythical "free market" that causes conservatives' knees to flex involuntarily?

The problem with currency in general is that it doesn't hold any intrinsic value - it's a "promissory note" that the note can be changed into something of a particular value backed up by a sovereign bank (such as the Bank of England) and laws that make it illegal for traders to refuse sovereign currency as a form of payment.

The problem of local currencies is that they have neither. If you buy 20 "bristol pounds" (costing 20 british pounds) and nobody takes your cash in bristol or elsewhere, you've just got some bits of paper. The bank of england won't accept them, and traders aren't obliged to exchange them for goods.

The fact that bristol pounds are therefore more restrictive and higher risk than british pounds means that (in economic terms) they are less valuable - since converting your british pounds into bristol pounds adds risk to your portfolio.

What this ultimately means is that people trading in bristol pounds are getting a worse deal, unless items priced in bristol pounds are priced lower - in which case traders are getting a doubly bad deal (they get bristol pounds and fewer of them).

Lots of local currencies exist, but all of them are just drops in the ocean compared with real currency because nobody really wants to use them because they're not backed by the guarantees that real currency is, and are therefore less useful to the consumer.

Fines levied in the last few years for violating sanctions against trading with Iran:

Standard Chartered Bank = $340M, Lloyds Bank = $350M, Credit Suisse = $536M, ABN Amro = $500M, Barclays = $298M, ING = $619M.

No bank official has been criminally prosecuted and punished. [Though] they violated numerous federal laws, including the International Emergency Economic Powers Act, and the wire fraud, bank fraud, money laundering, and RICO statutes.

Why aren't bank officials being held criminally accountable? Perhaps cases such as these are too expensive, time-consuming and difficult to prove for prosecutors. Or maybe the reason we're not seeing mass indictments of senior bank officials has to do with a fear that such action could result in the target bank suffering devastating economic losses, which would be passed on to innocent shareholders.
 
Does this mean that the potential economic consequences resulting from criminal action could make certain banks "too big to prosecute"? Could criminal prosecution of senior bank officials result in the ultimate collapse of the bank?

We are held hostage by these institutions and the persons who run them. They flaunt their contempt for the law by actually planning for fines as a cost of doing business with Iran and Cuba and other sanctioned trading partners.

Who else gets a free pass?

http://fullcomment.nationalpost.com/2012/08/17/pierre-poilievre-escaping-big-government-in-order-to-escape-the-recession/

http://edition.cnn.com/2012/08/18/business/money-libor-report/index.html

The report said the source of the scandal was a "deeply flawed culture" by Barclays and not just actions "small group of rogue traders."

"There was something deeply wrong with the culture of Barclays. Such behavior would only be possible if the management of the bank turned a blind eye to the culture of the trading floor," the report said.

The report regarded Barclays" "incentives and control systems" as "so defective" that they served to reward traders themselves, not matter what "the impact of shareholders and the bank's overall performance" would be.

Entitlements.

Bankers and traders' culture is one entitled to profit. No law can stop them.

16 hours ago, JohnAskew wrote

No law can stop them.

Hang on to your hat; I agree with you!

Ask yourself this, why do they care only about profit?

Is it really it's rotten culture?

No doubt, but how did this rotten culture came to be?

In a market, you as a bank, have three sets of people to serve;

1. Employees
2. Owners
3. Customers

Right now, the incentive of the bank is to provide value for group 1 and 2. More profit for bank, more wage for employees, higher market value for the bank's owners; group 1 and 2 happy. Group 3, as you clearly demonstrated in this thread, is just a source of money, to be plundered when things go good and to be plundered when things go bad (in the role of taxpayers).

Somebody has to pay for the higher wages and stock rating, it can only be people from group 1, 2 and 3. So we can see group 1 and 2 benefit at the expense of group 3.

Now why is this?

Why shouldnt the bank want to care for it's customers?

After all, no customers, no money, no bank,..

It's the government (law), by providing a safety nets and the guarantee of bailouts.

As stated earlyer in this thread, those systems are supposed to be for our benefit, but the facts clearly show they work against us. The systems took the customer out of the equation, they took away our voice.

So the bank looks after the people that have the biggest voice, group 1 and 2.

The solution is to ease government off, not to increase it. Increasing it, will only give us less control, as paying customer.

And all this nonsense about too big to fail is marketing created by banks.

Not bursting bubbles, but inflating them further, is only going to make the pain greater. Markets should fail, it's part of their design. You win some, you lose some. From the ashes a more healthy market will arise, when that fails an even more healthy market will take it's place,..... etc etc

http://georgereismansblog.blogspot.nl/2008/10/myth-that-laissez-faire-is-responsible.html

Put fingers in your ears from time to time,.. Some of these 99%-ers are..... weird.....

3 hours ago, JohnAskew wrote

I hold no contempt for the common man.

Then why call him that? I kid, I kid,.

But I dont know what you mean by that,..

16 hours ago, Maddus Mattus wrote

It's the government (law), by providing a safety nets and the guarantee of bailouts.

Rather than asking the question "were the bailouts justified", which is an interesting question, but probably one for the history books because the bailouts happened regardless of whether you wanted them or not, a much better question is "how can be make sure that we never bailout banks again".

I think the most important observation here is that savings and current accounts are immensely important in the modern world:

1)  They provide an electronic payment system reducing the need to physically transport currency e.g. from your employer to you, or from company X to company Y.

2) They provide a convenient way for the government to do data-analysis to look for tax-evasion and money-laundering, helping to tackle crime.

3) They provide a safe place to keep money, centralising the physical security needed to look after currency, and reducing the risk of burglary/mugging etc against ordinary citizens.

4) They provide a mechanism by which your idle money can be reinvested in the wider economy, encouraging growth (e.g. by lending the $1000 in your account as part of a $50000 loan to a small business)

The reason I'm bringing this up, is that it is:

A) In the interests of individuals to hold their money in a bank - even if the bank offers no interest on those savings.

B) Accruing interest - i.e. getting a high ROI on a savings account is a minor consideration for people getting a bank account. This can be seen by how rarely people move banks and the fact that most savings accounts are currently less than inflation. People that care about ROI typically get real investments rather than leave their money in a savings/current account.

C) It is much better for economic growth if people store their money in current and savings accounts than to store it at home as cash.

D) Most people would consider a minor risk of their savings vanishing - even if their savings are relatively small - as a deal breaker with most banks. This can be seen by the large number of people who don't invest anything at all, and by the queues around the block when a run-on-the-bank happens.

Now we come to the fun part - how do we avoid ever paying another bailout - i.e. how do we make banks accountable for their own business mistakes going forward (let's ignore the current bailout for now) so that if they gamble and lose, they go out of business.

Well, we have a few options:

1) We can tell customers that their savings are at risk. This is the pure-capitalist approach, but it will lead to large numbers of people opting out of using savings accounts at all, since a 0.1% interest rate doesn't look very attractive if it's coupled with a 0.5% risk of losing all your savings in a given year.

2) We can make it illegal for banks to put savings at risk - but this negates (4) above.

3) We can force banks to pay insurance on all savings to another private firm - but then we're just transferring the risk to insurance companies, who are typically backed by big banks (so you end up with incestuous insurance). 

4) We can force banks to pay insurance on all savings to the government in return for underwriting the savings - but this encourages the bank to obfuscate their risk and run rings round the government. It also makes the rate of insurance more a decision of politics than of risk.

5) We can try and force banks to take less risk overall (i.e. improve capital-asset to risk ratios) - but this reduces the amount of lending that happens in the short term as banks build up their capital ratios rather than lending out to small businesses.

You get to choose one of these five options, but none of them are all that great - but your suggestion of (1) is probably the worst option, since it would immediately lead to a run on the banks, leading to a total collapse of most lending institutions, leading to massive closures of businesses.

The government is currently opting for something between suggestion (4) and suggestion (5) by imposing higher banking taxes and introducing new banking regulations respectively.

There is not really much a "free market" in banking actually offers. In fact, the free market encourages banks to take risks in lending to make a quick buck and hurt the country in the long term. This will not go away. Giving away money is how banks make money. It is core to their business model. The thing is, the effects of giving away money irresponsibly are delayed. But who cares about that. They have every interest in giving as much money away as possible even if will blow up in their (already retired) faces 10-20 years later.

And the system is already quazi-nationalized at least in the important parts (in the USA), eg. rules and regulations from a variety of different government agencies like HUD, FDIC, Federal Reserve, and more. Banks got the government all in their business for quite some time. Despite cries of deregulation, one of the most regulated industries short of maybe the nuclear power plant industry.

Basically just kill the * thing and replace it with a series of small shell scripts. With credit reports and software that determines credit worthiness and electronic transfers/online, computers have been handling most of the hard stuff already. Just open source the algorithms, put everything online, and nationalize it all and I think we'd have a much better situation today.

2 minutes ago, Bass wrote

I'm actually a reverse Maddus, I think nationalizing the entire banking system is the best idea. 

To me, it seems obvious. Decide what your end-goal is (not what the symptom is), and then tax-incentivise it. Then let capitalism drive towards the best (i.e. cheapest) way to achieve your end-goal rather than legislating how it must occur.

In this case, the problem is that savings and current accounts will always need to be underwritten by the government in some form or another, because society depends too much on normal people (i.e. the 99 percent that Maddus rightly notes are a largely simple folk many of whom aren't all that great at thinking) not being terrified of putting their spare pennies in banks.

For this reason, if I were in charge, I'd compel banks to insure their savings deposits through the government, so that at least the government gets a return on it's inevitable need to absorb some of the risk of the savings vanishing, rather than the status quo of underwriting an arbitrary amount of it (£50,000 per account) but getting no reward for absorbing the bank's risk to the tune of £50,000 per account.

Then, I'd basically charge them linearly proportional to the total amount of money that I'm underwriting (i.e. banks with lots of savings that would need a big bailout if they go titsup should pay more) and exponentially proportional to government's view of the in-year risk of those assets.

If you do that, suddenly banks see that putting savings at risk is expensive, and would find ways of de-risking the savings that they're having to hold. Investment banks would then naturally separate from retail banks because savings accounts would become a burden to investment banks, and retail banks would buy the savings accounts because the savings accounts hold less risk for them, and hence they'd pay a lower fee.

The great thing about this is that, so long as the government judges the charged-risk at or above the actual risk and punished obfuscated transactions by judging them to be exceptionally risk (and hence expensive), then capitalism just sorts out the rest. You end up with savings naturally migrating to institutions that are by definition less likely to need a bailout in future, and you end up with high-profit high-risk institutions needing less bailout when they go bust because they hold fewer underwritten savings. And finally, you end up with the extra risk getting passed down to the individual saver, who can then either choose to have an account like now, with say 0.1% interest and and 0.5% risk of default with Golden Investments PLC, or an account with Standard Banking Ltd with a rate of -0.3% with a 0% risk of losing them - and let the customers decide their own risk profile.

That way when Golden Investments PLC makes a dumb investment decision and their savings vanish, the customers can't say the government didn't warn them, and no bailout of those savings is needed, and when Standard Banking Ltd goes bust and their savers get bailed out, everyone can nod their head and agree that it's only fair since SB were paying insurance to the government, weren't engaging in risky activities and their customers got their money back, but frankly weren't getting that great a deal on their interest over the years, so it all seems a bit fairer.

Unfortunately government also has its own list of disadvantages. And it doesn't stop congressmen removing safety net from the government bank as well.

That's true, government has its own problems. But those problems are caused by the humans that run the government. Humans are greedy, self-serving, and lazy. And government employment seems to amplify these qualities for some reason.

The more decision authority you take away from humanity and the more you put into deterministic algorithms, the better. So I don't think it's good enough to say "here government, have total control over banking and do whatever the * you want", but rather, "here government, put _this specific_, peer reviewed software system in place to replace large portions of the banking industry".

Banking is one of those things that you don't need a ton of humans running around doing stuff. You need a place to CRUD operations (with simple business rules) on some Number types in a computer system (also known as currency).

The most complex business rule is determining credit worthiness, but that's been done with computers for god knows how long. If the computer likes you enough, you can get a $50k/$0 down car loan and walk out with the car in 15 minutes. I promise you no human was inspecting your chest hair to decide the chances of paying it back. It's all plugged into some magical probability formula and out comes out "here is $50k bruh" or "fu, go away".

So really, what the * is the point of the bank here? To be some kind of gatekeeper hangeron to a computer program?

But ofcourse, you will point out that they did it wrong, and that our governments are much better, they will learn from their mistakes, yadda yadda yadaa.

All governments are the same, once they start expanding they don't stop till the whole mess comes falling down. And the mess will fall down, that's a guarantee.

There is not really much a "free market" in banking actually offers. In fact, the free market encourages banks to take risks in lending to make a quick buck and hurt the country in the long term. This will not go away. Giving away money is how banks make money. It is core to their business model. The thing is, the effects of giving away money irresponsibly are delayed. But who cares about that. They have every interest in giving as much money away as possible even if will blow up in their (already retired) faces 10-20 years later.

Where does it do that?

Don't point to the free market, when it's actually the government that puts your country at risk.

The banks give away their money irresponsibly because government insures it. Therefore the laws of the free market no longer apply and they can invest in the most profitable most risky ventures, because they dont stand to lose any money.

Let me tell you how this works in the real life;

These people will act irresponsible with their savings and the banks with their money, we've allready concluded in this thread that law has little meaning to bankers.

You, have huge unlimited power, will be the focal point of attention. You will have 100.000 facebook friends overnight, 10.000 recommendations on linkedin. Powerfull people will want to have lunch with you because you are holding power. You will be washed over with expensive gifts, continually tried to be perseuded into doing something for the sick and the poor (or the dumb).

Every man has it's price. I don't think anyone has the energy to repel wave afther wave of people constantly.

So you implement some of these laws, because you think it's a good idea, and they are honost people.

And you are back to the system we have in the first place, debt covered by debt covered by government Insurance.

Regulations have never ever worked, never!

So while you say you want to fight simptoms, you are taking down one bad system and replacing it with a brand new copy.

If you want to kill the snake, cut off his head.

You should not have the power to force other people what to do, no one should have,.

2 hours ago, Bass wrote

@magicalclick:

That's true, government has its own problems. But those problems are caused by the humans that run the government. Humans are greedy, self-serving, and lazy. And government employment seems to amplify these qualities for some reason.

Let me tell you the some reason.

The reasons are;

1. it's not their money they are spending, so they don't care how it's spent
2. they are not the customer of the service or the product, so they don't care about it's quality

The four ways to spend money, remember?

EU burocrats make more wages after tax then before tax, that should be a warning flag.

It really boggles my mind that you think so highly of government and so lowly of bankers while the bankers are the arm of the body that is government.

2 hours ago, Maddus Mattus wrote

*snip*

Let me tell you the some reason.

The reasons are;

1. it's not their money they are spending, so they don't care how it's spent
2. they are not the customer of the service or the product, so they don't care about it's quality

The four ways to spend money, remember?

Those two reasons can be said of employees of banks, or indeed of any large organisation.

EU burocrats make more wages after tax then before tax, that should be a warning flag.

That statement simply doesn't make sense.

It really boggles my mind that you think so highly of government and so lowly of bankers while the bankers are the arm of the body that is government.

I think it astonishes a lot of people that you think the best way to avoid a repeat bailout is to do exactly what we were doing before 2008 with even less oversight of regulators.

46 minutes ago, evildictait​or wrote

Those two reasons can be said of employees of banks, or indeed of any large organisation.

That's why you have management keeping tabs of the individual departments. Making sure that doesnt happen.

That statement simply doesn't make sense.

An EU burocrat makes €3600,- a month before tax, but get's paid +€4000,- a month after tax (not counting expenses and other perks).

Point is, it's not their money so they spend it irresponsible. Same with banks.

EU doesnt fear voters, because it has none, and banks dont fear the customers because it has only one to deal with and they control it. Guess who that one customer is?

I think it astonishes a lot of people that you think the best way to avoid a repeat bailout is to do exactly what we were doing before 2008 with even less oversight of regulators.

If you take the case of the US; Since 1970, 20.000 pages of regulations have been added to the 53.000 pages that where in place then. There are now a whopping total of 73.000 pages of regulations on the financial sector. How does that fit in with the myth of deregulation?

Let me ask you this then, how many pages of regulations would it take to create a sound financial system?

My answer is; zero.

We had a healthy system before regulations, we have a sick system with regulations, do the math.

The FED has been keeping money cheap, by keeping interest rates low.

By keeping interest rates low, Wall Street has an endless source of cheap money.

With an endless source of cheap money, you can afford to loan to people who have bad credit rating.

By lending people with bad credit lots of money, you drive up the prices of homes.

The debt just increases and increases, till someone asks you to pay the bill. Then the whole stinkpile winds down,. Then you see the security behind the loan, the house, is not what it is worth on in a real market, but it's value is based on the availibility of cheap money, since that's no longer availible the value of the security is less, so you have to get even more cash (bailout) to cover the loss.

And also because Wall Street has endless sources of cheap money, savings are not the primairy source of money because they are too expensive. They do not reinvest it into the economy, that would be way to risky, they invest it into derivates based on the FED's cheap money.

Do you not wonder why you get such low interest rates from your savings account or on your investments? Banks don't want your money, they want the FED's (same thing basically, but the FED's is cheaper). You see the same thing happening here in the EU, where the ECB is handing out money for free. The backlash of the markets is going to be so HUGE, that it will takes us decades to recover.

So you see, it's regulations (the interest rate of the FED is a regulation) that has been keeping us poor.

You can't simply point to 2008 and say; I didnt experience any symptoms then, so I was not ill. It wasnt till I got to the hospital that I was sick.

32 minutes ago, Maddus Mattus wrote

That's why you have management keeping tabs of the individual departments. Making sure that doesnt happen.

That same solution applies to government departments.

An EU burocrat makes €3600,- a month before tax, but get's paid +€4000,- a month after tax (not counting expenses and other perks).

Citation needed.

EU doesnt fear voters, because it has none, and banks dont fear the customers because it has only one to deal with and they control it. Guess who that one customer is?

Why have you turned this into a discussion about the EU?

If you take the case of the US; Since 1970, 20.000 pages of regulations have been added to the 53.000 pages that where in place then. There are now a whopping total of 73.000 pages of regulations on the financial sector. How does that fit in with the myth of deregulation?

I wish you'd post numbers that were real, rather than just made up.

We had a healthy system before regulations, we have a sick system with regulations, do the math.

There was never a time before regulations. This magical period when unicorns danced on rainbows and bankers gave all of their customers a hug when they visited for a chat over a cup of tea exists only in your head.

The closest you'll find to a country where the government doesn't impose any meaningful regulations on any industry and generally tries to keep out of people's way is Somalia. And there's not many people queuing up to emigrate there.

You can't simply point to 2008 and say; I didnt experience any symptoms then, so I was not ill. It wasnt till I got to the hospital that I was sick.

Nobody in their right mind thinks that the banking system wasn't ill in 2008. The fact was it wasn't ill at some point before 2008, it became ill and we need to stop it getting ill again.

Although there are different opinions across different groups as to whether the bailout was necessary, nobody thinks that the bailout wasn't unfortunate and that society needs to do everything in its power to prevent another bailout being needed, say in 2030 if we just keep doing business as usual.

7 minutes ago, evildictait​or wrote

That same solution applies to government departments.

Not really, they are there to make sure they spend more then their budget so they can ask for more next budget round. I've worked for government, I know how the operate.

Citation needed.

It's in Dutch; http://www.canvas.be/programmas/terzake/server135811c22%3A1382dd68823%3A-77e8#panel-epi

Why have you turned this into a discussion about the EU?

As an example about government and how they wreak havoc among the financial market. It's not the bakers we should blame, they are just the instrument.

I wish you'd post numbers that were real, rather than just made up.

Wich numbers did I make up?

There was never a time before regulations. This magical period when unicorns danced on rainbows and bankers gave all of their customers a hug when they visited for a chat over a cup of tea exists only in your head.

The closest you'll find to a country where the government doesn't impose any meaningful regulations on any industry and generally tries to keep out of people's way is Somalia. And there's not many people queuing up to emigrate there.

Now you are just being silly.

There are plenty of examples of less regulated countries doing better then the US and the EU. Why do you think all the jobs go to those countries?

Our workers are too expensive because of all the regulations and the taxations.

Nobody in their right mind thinks that the banking system wasn't ill in 2008. The fact was it wasn't ill at some point before 2008, it became ill and we need to stop it getting ill again.

Although there are different opinions across different groups as to whether the bailout was necessary, nobody thinks that the bailout wasn't unfortunate and that society needs to do everything in its power to prevent another bailout being needed, say in 2030 if we just keep doing business as usual.

You can't prevent markets from collapsing. They collapse because there is a better market to invest your money in. Trying to keep the old market alive by bailing them out, is only going to make it crash harder.

I'm still waiting for an answer to my question on how many pages of regulations we need in order to have a sane financial sector.

22 minutes ago, Maddus Mattus wrote

Not really, they are there to make sure they spend more then their budget so they can ask for more next budget round. I've worked for government, I know how the operate.

So do big businesses. I should know - I've worked as a contractor for most big banks you could name, several UK and US government departments as well as a splattering of different technology groups. Case in point - Microsoft does this.

In my experience, the only companies that don't go out of their way to spend money in-year are small businesses where they know that money is money.

The only really big difference I've noticed between government and big businesses is that the employees of big business tend to be more accurately remunerated based on their ability and empowered by their bosses to work more effectively.

Government is sadly run by politicians who are run by the Daily Mail, and that means that giving people who made an outstanding contribution to saving the taxpayer money can't have a bonus, because then the Daily Mail will headline with "ZOMG GOVERMENT SPENDS £4.50 ON BONUSES! ZOMGOMGOMG".

A consequence of this is that crap workers get a great deal from the Government - if they left to the private sector they'd take a big paycut. But good workers get a crap deal from the Government, and routinely leave to the private sector for a massive payrise. Often those private sector companies now stuffed full of good workers run rings around the crap workers left in the government.

If I were boss of the government, I'd make it much easier for government to fire crap people and make the civil service pay market rates for staff. Then you'd get good people coming back.

It's in Dutch; http://www.canvas.be/programmas/terzake/server135811c22%3A1382dd68823%3A-77e8#panel-epi

I think you are mistaking expenses and allowances for "negative taxes". Eurocrats earn a salary which they pay income tax on. But regardless, we're not talking about the EU here. I'm not sure why you brought it up.

As an example about government and how they wreak havoc among the financial market. It's not the bakers we should blame, they are just the instrument.

The EU doesn't have a government. So your point is moot. Also I'm not sure what bakers have to do with anything.

Wich numbers did I make up?

In that quote, the numbers 20,000 and 53,000, and their sum 73,000.

There are plenty of examples of less regulated countries doing better then the US and the EU. Why do you think all the jobs go to those countries?

Our workers are too expensive because of all the regulations and the taxations.

And now you are mistaking employment regulations with banking regulations. We need less of the former and more of the latter. Banking regulations as a condition of future bailouts on banks that hold UK/US savings accounts doesn't even require a new law. It's a straightforward contract. So you can be happy knowing that I'm not even suggesting giving new powers to the government. Institutions that don't want to obey the regulations wouldn't have their savings underwritten by the taxpayer for even $1 (so yes, you can put your money in China Inc for a great interest rate, but you might not get it back).

You can't prevent markets from collapsing. They collapse because there is a better market to invest your money in. Trying to keep the old market alive by bailing them out, is only going to make it crash harder.

We're not talking about stopping any particular market from collapsing. We're talking about preventing retail banks from collapsing at cost to the taxpayer. If an investor wants to excessively burden their company with risk or make bad trades, then frankly they should go out of business.

I just want us to move from the status-quo of having a defacto free government-backed-insurance scheme for savings accounts, and I think this is best achieved by stopping it being free.

I'm still waiting for an answer to my question on how many pages of regulations we need in order to have a sane financial sector.

1, if the page contains sensible regulations (like, pay the government money if you want to offload the risk of your bank collapsing and needing to have the savings bailed out).

Banks are indeed run as governments, in my opinion do not count as businesses.

I've worked for insurers, banks, governments, industry, retail and service providers. Only place I've seen departments trying to vigorously spend their budget is banks and government, the rest wants to stay under budget or else they have some explaining to do.

I'm not mistaken allowences, they get a negative income tax. There is an excel sheet in the video, where they clearly show it.

In that quote, the numbers 20,000 and 53,000, and their sum 73,000.

Citation;

4) To complete this catalog of government interference and its trampling of any
vestige of laissez faire, as of the end of 2007, the last full year for which
data are available, the Federal Register contained fully
seventy-three thousand pages of detailed government regulations. This
is an increase of more than ten thousand pages since 1978, the very years during
which our system, according to one of The New York Times articles
quoted above, has been "tilted in favor of business deregulation and against new
rules." Under laissez-faire capitalism, there would be no Federal
Register. The activities of the remaining government departments and their
subdivisions would be controlled exclusively by duly enacted legislation, not
the rule-making of unelected government officials.

Last data Wikipedia show me in 2010 it was around 80.000 pages, http://en.wikipedia.org/wiki/Federal_Register, so I was a bit conservative.

I've made a few errors, it's not just financial legislation, but more. The 20.000 needed to be 10.000 in order to comply with the article I got it from, but 20.000 is somewhat accurate if you take the Wikipedia entry into account.

I would love to put my money in a bank that has no safety net. That means that I, as a customer, have a say in what the bank can and can't do with my money. Otherwise it's the government's decision, not mine.

1, if the page contains sensible regulations (like, pay the government money if you want to offload the risk of your bank collapsing and needing to have the savings bailed out).

Sensible is open to interpretation, what might be sensible to you, might not be sensible for me.

So therefore by definition you would benefit from this legislation at the expense of others.

See how this works? With each regulation government is picking winners and losers, best do away with them and let people decide how and where to spend their money.

20 minutes ago, Maddus Mattus wrote

@evildictaitor:

Banks are indeed run as governments, in my opinion do not count as businesses.

That doesn't really make any sense. Bankers don't get to set the law, and they don't get voted in. They don't decide foreign policy, don't have involable embassies or a private military. They don't have a voice at the UN, have the right to set their own constitution or tax rate and they don't have citizens who live inside their sovereign territory.

So no, banks aren't really like governments. I think you are using the word "government" as a synomym for "thing I don't like":

Eugh - this oatmeal tastes like government. Some guy pushed me on the way to work. What a government he must be. I'm not best friends with you any more - you're a total government.

If you're going to redefine english as we know it to fit around your argument, then no wonder you're going to ignore any counterarguments you might come across.

I don't think governments are run by unicorns dancing over rainbows, but I don't think they're run by a secret society of evil warlocks who will stop at nothing to destroy the world - and who would have gotten away with it if it wasn't for those pesky kids at the Daily Mail - either.

I've worked for insurers, banks, governments, industry, retail and service providers. Only place I've seen departments trying to vigorously spend their budget is banks and government, the rest wants to stay under budget or else they have some explaining to do.

I recently worked for a big private PLC who (and I quote) stated that the contract "must not exceed $999,999.99" because "at $1m we need executive approval".

Microsoft also routinely play these games - "The contract must be fulfilled before <date> because that is our internal end-of-year, and we only have the money to spend on this side of the year".

This isn't a government thing - it's a big business thing.

I'm not mistaken allowences, they get a negative income tax. There is an excel sheet in the video, where they clearly show it.

The link you posted doesn't work as a video for me.

Citation;

Last data Wikipedia show me in 2010 it was around 80.000 pages, http://en.wikipedia.org/wiki/Federal_Register, so I was a bit conservative.

A) The federal register isn't anything to do with regulations - it's basically a newspaper that asks the public for their opinion on various issues that the government is considering. Here is today's FR relating to the treasury: http://www.gpo.gov/fdsys/pkg/FR-2012-08-22/pdf/2012-20689.pdf

B) The federal register isn't about banking regulations it's about the entirety of all US federal regulations. It basically details everything that the government is considering across all departments and all areas of life.

C) The FR doesn't contain laws or regulations - it basically contains government RFCs. You can run a bank - or indeed any business - without ever consulting it. It's mainly for lobbyists.

D) The FR journal (from which the 81000 figure comes) is the total backlog of all RFCs that the government has ever issued since 1930whenever when the FR started. It's not the number of pages of regulation of anything.

I would love to put my money in a bank that has no safety net. That means that I, as a customer, have a say in what the bank can and can't do with my money. Otherwise it's the government's decision, not mine.

Then do so. Put your money on the stock market. There's no safety net there.

So therefore by definition you would benefit from this legislation at the expense of others.

Personally I wouldn't benefit at all. In fact, I'd probably get a worse rate on my savings under the scheme I proposed. My suggestion wasn't about giving me more money - it was about making banks pay for the risk that they are implicitly getting for free from the government underwriting them.

See how this works? With each regulation government is picking winners and losers, best do away with them and let people decide how and where to spend their money.

Then feel free to set up Maddus' Bank of Somalia - no regulations or taxes. See how well that works out for you.

Alternatively, take out all of your money from the bank, use it to buy gold and store the gold under your bed. The government can't devalue your gold, and you won't get bailed out if you get robbed.

I'll give you the point that merely counting pages of the current register is not a good indication of total amount of legislation in place.

You can however count the pages of new rules introduced with each volume of the register. That's what I think the author of the blogpost did. So I think that the initial point that if deregulation has been taken place, as many in this thread have claimed, we should see less pages in the register, is a valid one.

Bankers don't get to set the law

In the most strict sence, you are correct. But when you look at the bigger picture, you will see that it's not true. Politicians owe bankers favors, therefore they can be pressured into passing laws.

The link you posted doesn't work as a video for me.

I'll try and dig up a differnt source. For the mean time, you will just have to trust me on this one.

it was about making banks pay for the risk that they are implicitly getting for free from the government underwriting them.

Banks can't pay anything. It's either their owners, employees or customers who have to pay. They can't pay tax aswel, they collect it. So pick who has to pay for the insurance.

About your Somalia strawman;

The reason Somalia is in such a poor state, is again, the fault of our own governments. Our governments take away the democratic rights of the Somalians, by providing money directly to the Somalian government.

As long as we give the Somalian government money for free, they will do our bidding and not the bidding of the Somalian people. Same rules apply with banks, as long as government gives banks money, they listen to government and not their customers.

It's basic economics, he who pays, plays.

Maddus seems to be in denial of reality and pines for rebirth versus dealing with this life. I sympathize but do not agree philosophically, his is simple idealism. Imho, 'free market' is an oxymoron.

Bankers and investors believe they are entitled to ALWAYS profit, government and reality aside... What is contemptible and prosecutable is that they will break law intentionally to find their profit.

And no one is being prosecuted. Both Democrats and Republicans are owned by Wall Street. We're screwed; pitchfork, anyone? I may join the Occupy Wall Street dufuses...

The common man (read: interview this guy and you will reveal his low IQ) is who is Occupy WS.

They are embarrassingly ignorant but they 'know' that corruption has got to be reformed -- if you want these guys to have solutions and cogent analysis you're up to no good -- as the FOX and conservative networks love to do -- paint the common man's protest as an embarrassing ignorance, shame the common man away from his 1st Amendment right. No, I will state again, these guys have no answers, nor do I, but the shame is with the lawless greedy rich bankers and traders and their friends in TV, not the disinfranchised victims who constitute Occupy WS. 

Alternatively, take out all of your money from the bank, use it to buy gold and store the gold under your bed. The government can't devalue your gold, and you won't get bailed out if you get robbed.

Wrong again.

Government has to power to seize any assets, sections 106 and 806 of the USA Patriot Act and you don't even need to be convicted.

Federal government can also seize all assets used in a crime, but you have to be convicted for that.

Also during the great despression Roosevelt seized gold by executive order.

So, by no means is gold under your matress safe.

It's a good investment, as the dollar is only going to lose value, since it's based on thin air. You can also buy a car with it, it's just a bit of hassle paying for a bread.

Roosevelt did not take gold away from people, he pulled gold from currency and stated that citizens cannot hoard gold bullion (at the expense of gold-backed US currency). The French were doing an end run with currency conversions taking enormous profits demanding gold for US paper. There was no "hey gimme your gold so I can party or build war machines", which you imply.

Gold is safer than any cash as you know, and you cannot find my mattress, so it is safe there.

Far out edge cases are insufficient basis for logical and pertinent analysis -- Gov't steals my gold...

4 minutes ago, JohnAskew wrote

From my perspective, evildictaitor has got a clear understanding of the problem and realistic solutions to the Banking culture of corruption. +1

Maddus seems to be in denial of reality and pines for rebirth versus dealing with this life. I sympathize but do not agree philosophically, his is simple idealism. Imho, 'free market' is an oxymoron.

By all means then, let's continue down this path!

I'll grant you the fact that my solutions are less realistic then evil's. But I'm convinced that evil's solutions will just create more of the same problems.

The fundamental problem of the crisis we are in today, is government regulations. With government regulations comes government spending. If you want to cut your deficit, you have to cut your spending and you have to cut your regulations. It's that simple.

It's been done before, we can do it again. Nothing unrealistic about it.

All I'm doing here, is taking the case to the extreme to prove my point.

Give me back my voice and my freedom, dammit!

Bankers and investors believe they are entitled to ALWAYS profit, government and reality aside... What is contemptible and prosecutable is that they will break law intentionally to find their profit.

If you have so many laws, you are bound to break some. It's nearly impossible to do business without breaking a law. Why do you think jobs are leaving your country and mine? It's a minefield!

And no one is being prosecuted. Both Democrats and Republicans are owned by Wall Street. We're screwed; pitchfork, anyone? I may join the Occupy Wall Street dufuses...

How's that working out for you, these realistic solutions?

Realisticly, the only way these bankers will ever serve their customers is when these customers have power. As long as the customers are powerless, bankers will extort them because there is no need to fear them.

The common man (read: interview this guy and you will reveal his low IQ) is who is Occupy WS.

Some in the video, obviously have a low IQ, but the majority I found to be intelligent, they just have their facts wrong. I respect Peter Schiff for telling them the truth. Shame they cant come off their mantra; Wallstreet bad, government good!

They are embarrassingly ignorant but they 'know' that corruption has got to be reformed -- if you want these guys to have solutions and cogent analysis you're up to no good -- as the FOX and conservative networks love to do -- paint the common man's protest as an embarrassing ignorance, shame the common man away from his 1st Amendment right. No, I will state again, these guys have no answers, nor do I, but the shame is with the lawless greedy rich bankers and traders and their friends in TV, not the disinfranchised victims who constitute Occupy WS. 

Ofcourse we are not greedy. Always somebody else is greedy. Wake up! You are greedy too!

You might want to feed your kids, so you are greedy for food.

If I see easy money I would go for it! Let's say Microsoft offers me the oppertunity to be the sole application provider for Windows 8, should I pass on that oppertunity? Hell NO! Bankers are no different! The solution is not to point at them and condem them for taking the easy money! It's the provider of the easy money you have to speak shame off!

As long as you do not see the government as the root of the problem, we will not depart from this crisis.

28 minutes ago, Maddus Mattus wrote

@evildictaitor:

Government has to power to seize any assets, sections 106 and 806 of the USA Patriot Act and you don't even need to be convicted.

...

So, by no means is gold under your matress safe.

If you're really that paranoid that the US government is out to rob you of your assets, I suggest you withdraw your money in cash, buy gold and hide it under your bed in the Ecuadorian Embassy in London (http://www.bbc.co.uk/news/world-europe-11893104)

Because I haven't see anyone who blames the faulty progrom that follows whacky relaxed laws and whacky banking industry trend.. Thus, my initial reaction is, banks serves as a more tangible entity to get blamed on.

We certainly need to fix the problem to regain confidence in the system. But, it is important to remember. We are not entitled to anything. 

22 minutes ago, Maddus Mattus wrote

Ofcourse we are not greedy. Always somebody else is greedy. Wake up! You are greedy too!

You might want to feed your kids, so you are greedy for food.

If I see easy money I would go for it! Let's say Microsoft offers me the oppertunity to be the sole application provider for Windows 8, should I pass on that oppertunity? Hell NO! Bankers are no different! The solution is not to point at them and condem them for taking the easy money! It's the provider of the easy money you have to speak shame off!

As long as you do not see the government as the root of the problem, we will not depart from this crisis.

The notion that capitalism encourages you to be greedy is a no-brainer. The goal of Capitalism is to optimise for personal wealth creation, and the reason why Capitalism is such a good system is because it ties personal wealth creation to wider wealth creation. The fact that Capitalism encourages greed is not a bad thing. For example, if you can get a 10% ROI on your $100m by opening a factory, that's great for you, but it's also great for the people you'll employ.

What you have to be careful with is that there are some cases where capitalism is at odds with society's values - and not in a way that can be simply brushed aside.

For example, kidnapping children and making them work in your factory is probably cheaper than paying the wages of willing adults to work in your factory. But society disagrees that this is the course of action you should take.

Government regulations are designed to try and make use of capitalism's ability to be tailored to society's values by allowing government (on behalf of society) to set taxation rates. For example, cigarettes are cheap to make, but society generally doesn't want people to smoke them. So it bans the sale of them to minors and taxes them heavily. The taxation means that when someone is faced with a choice between taking up smoking or not, the taxes sway the decision towards the "not" category.

My suggestion really isn't about saying "oh capitalism, you have failed. Here is your punishment", or "oh gosh, isn't capitalism unfair. Quick let's take money from rich people and give it to poor people". It's about recognising that, for society, the collapse of current accounts is unacceptable - it is too important that common folk trust putting their money in current accounts, interest rates be damned - but we can't make it illegal to go bust because investments can go sour for all sorts of entirely benign reasons.

So my suggestion is that since we can't make it illegal for banks to go bust, taking out normal current and savings accounts with it, we need to have a mechanism so that when banks go bust, someone other than the taxpayer ends up taking the bill. In practice, when banks go titsup the whole economy is going titsup, and that means you can't trust private sector insurers (who are backed by banks) to underwrite this, so the only real course of action is to formalize the government's implicit underwriting of current accounts by turning it into a service that the government charges for - sort of a publically backed insurance scheme.

Banks don't need to subscribe to that insurance scheme if they don't want to. But their customers won't be protected. This means that a current account with Casino Investments PLC might have a great rate of interest, but it'll also not be backed by the government if Casino Investments goes bust. Retail Banks R Us on the other hand will be paying insurance to the government so that its current account are safe leading to a lower rate of profit on those account for RBRU and hence a lower rate of interest.

The point of this is that the risk in the system is paid for by the people that generate the risk. If you don't hold savings accounts, the government doesn't care if you go bust. If you have savings accounts and your customers know they're not underwritten, the government doesn't care if you go bust. If you have savings accounts and your customers expect to be underwritten, the government shouldn't just stand there and take the risk for free - the bank should pay for the risk that it's offloading, and the price that they pay is proportional to the risk. An investment bank's savings accounts are more likely to go bust than a Retail Banks, and so they'll ringfence their own savings from their retail accounts without the need for government to write laws compelling them to.

Note that such a scheme has other benefits too. Most people care more that their pension actually materializes at the end of the day than that the pension grows by 5% rather than 4%. So pension funds could use the publically funded insurance scheme too to insure against the possibility that the pension fund goes bust when you're 63 and looking forward to your last day at work.

What this eventually leads to is a way for government to earn money by charging for the risk that it already has, whilst enabling companies like banks to provide their current level of guarantees without the taxpayer taking the cost that it entails. It also means that generating risk to the bank is now a working expense because that risk gets factored into the insurance premiums. This means that banks with lots of underwritten accounts will be penalized for taking risky business decisions in the short term - leading to bankers who take high risks getting less profit for doing so, leading to them getting smaller bonuses for enrisking the bank.

And most importantly, it means that they'll never be a bailout again in future - because banks that fail won't get bailed out, and current accounts will only be saved by the taxpayer if the current account holder was paying the taxpayer insurance against it in the first place.

And you know the crazy thing? Other than setting up the public insurance company in the first place - there's no reason why the entire scheme couldn't be done without a single act of legislation - and none of it needs to be mandatory, for the simple reason that Capitalism drives the behaviour you want if you know how to tax what you don't want properly.

No regulations taken to the extreme enables murder for profit. Government is necessary.

I love the idea of Public Insurance that Banks can enroll in to gain the FDIC protections. Is this current solution proposal or do we have a certifiable genius on board? Does either political party have positions or are they so far in the pocket of Wall Street they dare not speak?

I think politicians dare not speak or think about corrections for Banking and Wall Street. If so, who?

Show me how a kidnapped child provides more value for a factory owner, then a paid worker.

Then show me a case in history where capatalism has forced the children to work.

Then you have a point, otherwise you're whole point is moot.

In a true capitalist system NO ONE is FORCED to do ANYTHING (maybe pay small tax for police, army and courts).

How on earth can a child who is forced at the end of a whip outperform a paid and educated worker? That's so far out there it's on Mars!

With this slavery argument, you are just grasping at straws. You will not scare me into surrendering my freedom, just so you can turn me into your slave.

The whole point of capitalism is that it adheres to the wishes of society. You don't have to put any laws into place. You vote with your money. If you don't like a company, stop spending money with them, they will go away.

If you dont like Nike making shoes in sweatshops in Korea stop buying their damn shoes! But don't come whining when child prostitution is rampant after Nike closes it's shops!

Laws are a slippery slope, once you create a law for problem A, then another problem arises, then you need a law for that, more problems arise,.. Now you've got so much red tape, the costs of obeying the law outweigh the benefits, so people take their chances and pay fines whenever government is amazed that people break the law.

Why do you think Seal is being seud for tax evasion? He cant make heads or tails out of it, neither can the IRS!

You cant prevent banks from going bust, you cant prevent markets from collapsing, it's a fact of nature that systems fall and arise. Look at Darwin's theory, full of dead ends. Eventually the best system will survive, just like the best species will survive.

If one bank goes titsup not all banks go titsup, otherwise America would have zero banks.

And why not make the customer lose it's money? It's their risk, it's their job to keep tabs on the bank. If the bank does a shitty job, take your money to a different bank! We did it in Holland and brought down the DSB bank, that's the real consumer power! You just want more of the same, just done slightly different.

I think you have the wrong idea of what it takes to create a healthy economy and I have this current mess we are in to prove it to you. If government and regulation was the key to healthy economy, why the flying F are we in the sheissehole!?

You seem to forget that it was legal to own slaves,..

As it was illegal for African Americans to sit in front of the bus,..

It was law,..

Law written by?

You got it!

20 minutes ago, Maddus Mattus wrote

@evildictaitor:

Show me how a kidnapped child provides more value for a factory owner, then a paid worker.

You don't have to pay them $6 an hour, if they're tied to a chain and told they'll be shot if they try and run away.

Then show me a case in history where capatalism has forced the children to work.

http://en.wikipedia.org/wiki/Workhouse

The workhouse is an inconvenient building, with small windows, low rooms and dark staircases. It is surrounded by a high wall, that gives it the appearance of a prison, and prevents free circulation of air. There are 8 or 10 beds in each room, chiefly of flocks, and consequently retentive of all scents and very productive of vermin. The passages are in great want of whitewashing. No regular account is kept of births and deaths, but when smallpox, measles or malignant fevers make their appearance in the house, the mortality is very great. Of 131 inmates in the house, 60 are children.

52 minutes ago, Maddus Mattus wrote

@JohnAskew:

Law written by?

Rich white men who cared more about having slaves for free instead of servants who cost money, I shouldn't doubt.

20 minutes ago, evildictait​or wrote

*snip*

Rich white men who cared more about having slaves for free instead of servants who cost money, I shouldn't doubt.

Or capitalists, for short.

1 hour ago, evildictait​or wrote

You don't have to pay them $6 an hour, if they're tied to a chain and told they'll be shot if they try and run away.

http://en.wikipedia.org/wiki/Workhouse

The workhouse is an inconvenient building, with small windows, low rooms and dark staircases. It is surrounded by a high wall, that gives it the appearance of a prison, and prevents free circulation of air. There are 8 or 10 beds in each room, chiefly of flocks, and consequently retentive of all scents and very productive of vermin. The passages are in great want of whitewashing. No regular account is kept of births and deaths, but when smallpox, measles or malignant fevers make their appearance in the house, the mortality is very great. Of 131 inmates in the house, 60 are children.

Workhouses are a government instrument, not created by the market, try again.

Pure capitalism says nothing of the sort. It merely says that the goal of everybody should be to maximise their personal wealth.

In the case of the slave-owner, kidnapping people and putting them into slavery is a good way of generating income (since the slaves can be sold for money). In the case of the slave, they're busy trying not to be beaten or killed by their owner by working as hard as they can.

kidnapped people tend not to do a very good job, regardless if they are shot or not.

You are grasping at straws.

I don't know. Ask Nike (http://www1.american.edu/ted/nike.htm). I presume they weren't using child labour for any reason other than money.

I've worked at Nike, they said they didnt know, it was a subcontractor.

That's besides the point, it provided income for those kids, now they starve to death, huurah for our superior morals!

I think you've gone completely off the rails if you think this discussion is about me somehow enslaving you.

That's what you propose, that I work 12 months, 6 of wich for myself and 6 of wich I am forced to work for you. How is that not slavery?

No it isn't. The point of capitalism is to maximise personal wealth. It makes no claim to do anything in the interests of society.

No, the point of capitalism is to chase my own rainbow, if my customers and employees let me. Money is not an end, but a means.

This is a ridiculous argument kind of on-par with "blacks don't know any better than slavery. If we gave them freedom, they simply wouldn't know what to do". Or "By jove! If a woman were allowed in the boardroom her ovaries would cause her to destroy the company and she'd probably go mad"

You brought up slavery as a argument against capitalism. Now it turns out that it is a product of government, you prohibit me from playing the card?

Really.

The rule of law is the basis of the freedoms you're accusing me of taking away from you. Laws are what give you a legal comeback when your next door neighbour kills your wife and runs away. Laws are what give you rights to your own property, rather than needing to surrender all of your property and women to the strongest guy in the village.

I have no beef with the constitution, I wish we had such a thing here in Europe, I have beef with the over regulated system that we have in place today.

Who? Also you seem to have jumped topic again to tax-evasion. Can you keep on-topic for one post?

Regulation is regulation, regardless,.. It's just an example and I made an error, should by Wesley Snipes

1) I'm not advocating preventing banks from going bust.

2) I'm not advocating preventing markets from collapsing

3) Nature != Market economy

4) Darwin != Capitalism.

Yes you are. You want an insurance system in place, so you want to make sure banks do not go bust. So people will bring their money to banks that take the most risk, they are insured anyway. Your system is the same as the current, the bill will get passed to people who made the correct decisions, so the bad benefit. Kudos for being original, not.

Market systems are natural systems, the fact that you dont see that and try and plan the market (read plan people) is at the hart of the problem. People do what comes to them naturally, not was comes to them from government.

You really have this force thing nailed down.

In 2008 that very nearly happened. 

And instead of a crisis in only the USA, we now have a world crisis, good job!

Seems like every generation needs to learn this lesson over and over.

History tought you nothing.

Because

1) Most customers of banks aren't good at managing risks.

2) Most customers of banks only use them out of convenience, not as an investment.

3) Society saves craptons of money by persuading joe average to use banks and not needing to pay them in cash or post them checks that they cash at post-offices.

4) Whenever you tell people that their money isn't safe in the bank, it triggers a run on the bank, that leads to the banks collapsing (http://news.bbc.co.uk/1/hi/business/7086473.stm). Since the bank owes money to other banks, it's collapse makes all of the banks around it look shaky. Which leads to a run on those banks, so they collapse. And when the dust settles, all the banks are gone and people are wondering where all of their savings have gone.

1) no excuse

2) no excuse, find a bank that gives 0% interest

3) they could have said no, if they promised but did not deliver the government should provide courts of law to settle these things in, nothing more

4) So? Money is nothing. People is everything. We can rebuild, no problem. West Germany recoverd very quickly from World War II, among the fastest in Europe. Because of their mentality, not because of their money.

I'll leave that one to the expert panel set up to ask exactly that question http://www.publications.parliament.uk/pa/cm200809/cmselect/cmtreasy/767/767.pdf

But safe to say, if you think the banking regulations after the crash are the cause of the crash, you've got some seriously messed up sense of cause-and-effect going on in your head.

Yeah, really helpfull the 'experts' have been so far, with their Keynesian approach.

Instead of exploiting children, they are exploiting the unburn.

Kudos!

I'm done, obviously you are very happy with the system that we have in place. As you continue to, advocate together with John, for more of the same. I hope you will be spared the full wrath of the markets when the correction finally hits and I hope that someday you will look past of what experts have told you and see for yourself that the things you want, cannot work.

Peace.

41 minutes ago, Maddus Mattus wrote

kidnapped people tend not to do a very good job, regardless if they are shot or not.

Sometimes I wonder what planet you're living on. People didn't keep slaves out of the kindness of their hearts, or invite black africans to come and visit the sunny south of the USA to have fun dancing with unicorns on the farms. They were kidnapped and brought to America in order that the slave owners might make a profit by having labour for free. It wasn't the government doing this. It was businessmen.

http://en.wikipedia.org/wiki/Slavery

In pre-industrial societies, slaves and their labour were economically extremely important. Slaves and serfs made up around three-quarters of the world's population at the beginning of the 19th century.

That's besides the point, it provided income for those kids, now they starve to death, huurah for our superior morals!

Yeah! Go Nike! Helping those kids! Just like those slave-owners in the south of the USA, who so graciously allowed those savage black africans the opportunity to work on their grand estates for the betterment of the slave-owner's profits. Why wouldn't they be rejoicing in the streets? USA! USA!

That's what you propose, that I work 12 months, 6 of wich for myself and 6 of wich I am forced to work for you. How is that not slavery?

What? Where did I suggest that? Or are you misunderstanding how insurance works? If you are offloading risk onto me, you pay for it. That's why your house and car insurance isn't free. Stamping your little feet and saying "but paying for things is slavery - I want stuff to be free" is just communism in disguise.

No, the point of capitalism is to chase my own rainbow, if my customers and employees let me. Money is not an end, but a means.

No, the point of capitalism is to allow you to rank a set of decisions in front of you from best to worst, where "best" is the one that gives you the most profit.

You brought up slavery as a argument against capitalism. Now it turns out that it is a product of government, you prohibit me from playing the card?

I brought it up because it shows you that you're wrong. Defending it by saying slavery's not that bad, or that child labour is really a positive experience for the children compared with, say, getting an education is a bad choice of defence and wilfully ignores the facts.

Also Slavery pre-dates modern government http://en.wikipedia.org/wiki/Slavery (Slavery predates written records and has existed in many cultures) and co-evolved with Capitalism http://en.wikipedia.org/wiki/Capitalism (capitalism ... is the default economic system and it has its roots tracing back to the beginning of recorded history.)

I have no beef with the constitution, I wish we had such a thing here in Europe, I have beef with the over regulated system that we have in place today.

The constitution is just a special type of law that is difficult to amend. It is a series of regulations (for example, regulating that Slavery is bad, unless you're a bad person http://en.wikipedia.org/wiki/Thirteenth_Amendment_to_the_United_States_Constitution) a regulation allowing the US to collect taxes (http://en.wikipedia.org/wiki/Sixteenth_Amendment_to_the_United_States_Constitution), regulating the alcohol industry (http://en.wikipedia.org/wiki/Eighteenth_Amendment_to_the_United_States_Constitution)

Regulation is regulation, regardless,.. It's just an example and I made an error, should by Wesley Snipes

I don't really want to get bogged down in the financial (mis)doings of individuals. The world is a big enough place that you'd be able to find anybody to use an an example of any argument. For example, I could cite Bernie Madoff about how capitalism can go wrong (note that capitalism has no objection in principle to ponzi schemes - the investors just lose out. It's only the US government that objects to it on legal grounds).

Yes you are. You want an insurance system in place, so you want to make sure banks do not go bust. So people will bring their money to banks that take the most risk, they are insured anyway. Your system is the same as the current, the bill will get passed to people who made the correct decisions, so the bad benefit. Kudos for being original, not.

An insurance scheme that banks pay for, rather than the status quo of one that they get for free (paid for by joe taxpayer).

You seem to be advocating that the government either screw over the public every time the banks screw up (i.e. taking from people who didn't do anything wrong to give to those who did something wrong), or allowing them to offload the risk for free. You know what stealing and giving money for free are? Communism. So stop advocating it.

At the moment, banks don't really care about taking on risk, because they don't pay for that risk - the taxpayer does. Under my scheme, banks that take on extra risk pay for it there and then by paying higher insurance premiums. Kind of like if you decided to drive a much faster and more expensive car your insurance company would require you to pay more to insure it against damage.

Or are you claiming that insurance in general is a bad thing (in which case I'd suggest you never buy a house).

Market systems are natural systems, the fact that you dont see that and try and plan the market (read plan people) is at the hart of the problem. People do what comes to them naturally, not was comes to them from government.

Market systems are no more natural systems than suspension bridges are. They are both convenient structures built by people to make life easier. But don't go giving me BS about markets being made by God on the eighth day after he made Adam, Eve and dinosaurs.

And instead of a crisis in only the USA, we now have a world crisis, good job!

It was always a world crisis because banks are interconnected.

2) no excuse, find a bank that gives 0% interest

http://www.hsbc.co.uk/1/PA_1_1_S5/content/pws/content/personal/pdfs/gen-price-list.pdf

3) they could have said no, if they promised but did not deliver the government should provide courts of law to settle these things in, nothing more

I'm not sure you understand how bank insolvency happens.

Also I saw you advocating government intervention there - you sneaky rascal. I though government regulations and taxes should be abolished and all civil courts closed, right comrade?

4) So? Money is nothing. People is everything. We can rebuild, no problem. West Germany recoverd very quickly from World War II, among the fastest in Europe. Because of their mentality, not because of their money.

Money is nothing. Isn't that a Lenin quote or something?

Yeah, really helpfull the 'experts' have been so far, with their Keynesian approach.

I presume you prefer your economists to be more along the lines of Marx than Keynes, given your determination to ensure that taxpayers uphold our noble banking system regardless of how much money is siphoned off through corruption and mismanagement. Kind of like how the Soviets underwrote tyre factories when you think about it... I'm starting to see a pattern with your defences Maddus. And it might mean you have to surrender your republican party bumper sticker.

I'm done, obviously you are very happy with the system that we have in place. As you continue to, advocate together with John, for more of the same. I hope you will be spared the full wrath of the markets when the correction finally hits and I hope that someday you will look past of what experts have told you and see for yourself that the things you want, cannot work.

If you read anything I wrote, I'm not sure how you came to the belief that I'm happy with the status quo. I'm trying to think of ways that we can avoid ever having a bailout again. Whilst you're trying to guarantee that we have one every ten years or so by doing precisely nothing to change the status-quo, and trying to make sure that the ones who pay for the mistakes of bankers are the small businesses and blue-collar workers who put their money in banks for safe-keeping rather than the investors and managers who screwed up and lost the money in the first place.

Under my system, banks that screw up go bust, and the bankers get fired without the general population being hurt. Under your system, banks never go bust, because the political pain of allowing them to go bust will always be too difficult to bear politically (like in 2008), so bankers will always get away scott free. I was advocating hiving off the political dynamite of underwritten current/savings accounts (which exist anyway under the current system - I'm just suggesting that customers should pay for having their savings underwritten, rather than taxpayers paying for it) and letting the rest of the bank work under real capitalism with fewer regulations.

It seems bizzare that you disagree with me so strongly, given your hated of government, regulations and bailouts and the fact that my idea allows you to avoid introducing any mandatory regulations or future bailouts and provides a way for government to make profit rather than simply taxing it out of citizens and allows citizens to choose whether they would prefer their savings to be safe or they'd prefer it to be profitable, and allows the cost of that risk to be borne by the bank and hence the saver, rather than the taxpayer.

But sadly it seems you are so blinded by pseudo-republican-BS that you're unable to see a solution that actually reduces the risk, increases the capitalism and removes the political and excessive regulation in the banking sector when it's put in front of you for fear of the word "government" that might exist somewhere in the paragraph - even if it's in the context of getting the government to back-off from the banking sector.

But anyway, it's clear we're not going to get anywhere on this discussion, so I'll give this thread a rest for now.

Where you go utterly utterly wrong, is here;

that banks pay for

Banks can't pay anything, they are not a person. Only people pay. The CEO of the bank will sign the check, but ultimately it has to come from;

1. Employees (through their wages)
2. Shareholders (price of stock, wether they are traded or not)
3. Customers (cost of the product)

This is the basics of economics, the very start of it. Companies are fictitious, they are not entities you can touch, they exist only on paper. Therefore they cannot pay, only people can pay.

I've explained this in this thread over and over and over, but you really don't seem to learn anything from what I write.

So, when you say you propose an insurance scheme, you want to make us all pay for the failures of others. That's exactly the same as the system we have now, exactly.

If you take away the safety net, banks and their customers will finally start acting responsibly.

5 hours ago, Maddus Mattus wrote

@evildictaitor:

Banks can't pay anything, they are not a person. Only people pay. The CEO of the bank will sign the check, but ultimately it has to come from;

1. Employees (through their wages)
2. Shareholders (price of stock, wether they are traded or not)
3. Customers (cost of the product)

I think I answered that multiple times when I said that the cost would be passed down to the customers through decreased interest rates on their accounts.

* The customers are getting value from the taxpayer by having implicit underwriting of their accounts.

* It is politically impossible to remove that implicit underwriting of their accounts.

* Banks abuse this fact by noticing that putting money in accounts at risk is free - since if the risk materializes (i.e. the bank collapses) the bank will be bailed out.

I say, put the cost on to the customer through charging for the underwriting, rather than your suggestion of removing the underwriting which I've explained several times can't and won't happen.

So, when you say you propose an insurance scheme, you want to make us all pay for the failures of others. That's exactly the same as the system we have now, exactly.

No - the insurance scheme is capital backed by the taxpayer, but not paid for by the taxpayer. The insurance scheme runs for profit. The revenue of the insurance scheme is put away to pay for the case when the risk materializes - i.e. the next "bailouts" are pre-paid for by the people who need to be bailed-out - so the bailout is paid for by the profits of banks in the good years rather than the taxpayer in the bad years. The people who pay for the insurance are the bank in the first instance (who now notice that future risk costs money because the insurance premiums go up).

The banks needs to get that money from somewhere, and the where is lower interest rates on the accounts. This means that banks who are very risky will cost more to hold savings - so they'll either take on less risk to have more attractive accounts, or their customers will get worse interest rates, and those customers will migrate (through capitalism) to other banks who have better interest rates, i.e. those with less risk.

Overall what this scheme does is it allows customers the choice to move their accounts to safe accounts without finger-in-the-air numbers like "underwritten to £50,000" - it's underwritten to whatever you feel like underwriting it to - you're just insuring yourself against the bank going bust with a provider that won't go bust when the bank does. You're giving the banks the incentive to de-risk, and you're letting capitalism do all of the heavy lifting - i.e. giving both banks and savers the choice of whether they prefer big profits today and potentially no money tomorrow, or whether what they really want is a rubbish interest rate and confidence that their money/pension will still be there tomorrow, whatever the weather.

If you take away the safety net, banks and their customers will finally start acting responsibly.

I'm not sure why you think Insurance is communism. Insurance is insurance. Insurance companies exist all over the place and the vast majority of them make lots of money and have no government anywhere close to them.

This insurance you talk about allready exists, it's how solvable banks are.

The less solvable they are, the more risk they take, the higher the interest rate on your account is.

The more solvable they are, the less risk they take, the lower the interest rate on your account is.

These are laws of the market, risk vs reward. It cannot be possible that for running fewer risk, you get a higher interest rate. Otherwise I would run 0% risk and have endless profits.

Now, why do we always move our accounts to the banks who run the most risk? Because the government provides insurance against bank collapse.

We would use our money more wisely if that net was removed.

Why did people move their entire life savings to ICE Save at 5% interest? Why did they not check to see how solvable the bank really was?

1. The bank does not disclose this information
2. The government provided a €50.000 later €100.000 safety net

What happened? Citizens of Iceland got the shaft and we got the shaft. The only people that benefitted where the people who gave their money to that bank, does that seem fair?

And what is stopping you from insuring yourself against the collapse of a bank with another firm?

Why do you need a regulation in place for that?

Arguing for support of child labor is inhumane. Do you know of starvation or is that rhetoric?

0% risk and endless profits? Isn't that already a given? Am I not told that I will have a steady gain from investments which is always above both inflation and savings account interest? The Treasury will make sure that this happens, I mean Wall Street, no, I mean the Treasury, now I'm confused.

The insurance evildictaitor talks about most certainly does not exist, Maddus.

Then why do banks need to be solvable, if not for insurance?

Arguing for support of child labor is inhumane

Where did I argue for it? I merely stated facts.

I think child labor is dispicable. A child should be free to play and learn. But I'd much rather employ them, if I am given the choice between employment and starvation.

You seem to forget, that it's not our place to project our moral values onto others. They are free for themselves to figure out what their own moral values are. We can show them the door, but they have to walk through it.

0% risk and endless profits? Isn't that already a given?

Exactly my point.

In order for you to capitalize these profits, you turn to society to take the risk. That's exactly what these bankers are doing right now.

Remove the net, let's see how they manage to dance on the cord then.

47 minutes ago, Maddus Mattus wrote

@evildictaitor:

This insurance you talk about allready exists, it's how solvable banks are.

It doesn't exist. Also I'm pretty sure "solvable" isn't the word you want there.

These are laws of the market, risk vs reward. It cannot be possible that for running fewer risk, you get a higher interest rate. Otherwise I would run 0% risk and have endless profits.

I'm not suggesting that you get a higher interest rate for having less risk. When (not if) your bank goes bust, someone has to pay for all of the accounts that lost money. Either

(A) The government pays out of its own pocket (the current system) - i.e. the taxpayers pick up the bill

(B) The current account holder pays for it

(C) An insurance company that is paid to insure against this outcome pays for it.

I have pointed out that (A) is really bad - that's the bailout option. (B) is politically unacceptable - if (B) were possible we wouldn't have bailed out the banks in the first place. The only option left is (C). I'm not sure how you are struggling so much with the concept of insurance. It's not rocket surgery.

Now, why do we always move our accounts to the banks who run the most risk? Because the government provides insurance against bank collapse.

The government isn't providing insurance against bank collapse. It's providing bailouts in the event of collapse. Insurance differs from bailouts by the fact that the risk-owner pays for the insurance before the payout.

Why did people move their entire life savings to ICE Save at 5% interest? Why did they not check to see how solvable the bank really was?

1. The bank does not disclose this information
2. The government provided a €50.000 later €100.000 safety net

I don't really care whether other governments choose to bailout their banks. I mainly care that mine doesn't. Under my scheme the government wouldn't provide a 50000 safety net. If you think your bank might go titsup you'd get insurance on your money against the possibility of the bank collapsing - and that would cost you say $40 a month with a payout of the value of your account when the bank goes wrong.

In practice, the bank would get the insurance on your behalf, so you'd get a HSBC Guarranteed Account with a 0.1% interest rate, rather than a HSBC Standard Current Account with 0.3%, and HSBC would pay the government (or frankly any insurer big enough to survive another financial collapse) the $40 a month so that when HSBC winds up, then the money in the Guarranteed Accounts are paid back to the current account holders. The government wouldn't pay 50000 for money in normal current accounts under my scheme.

And what is stopping you from insuring yourself against the collapse of a bank with another firm?

The fact that all insurance companies are backed by banks - so when the bank goes bust, the insurance companies go bust too. Also, I'm not saying that you can't get private insurance against your bank collapsing - I'm merely stating that public insurance should be an option. So for example, if you insure your Lloyds account with Scottish Widows, then when Lloyds goes bust your money still isn't there. That's why you need someone bigger than the financial sector to offer insurance - but they needn't do it cheaply and certainly not for free.

Why do you need a regulation in place for that?

You. Don't. Need. Any. Regulation. Or. Laws. To. Implement. My. Idea. Geez. It's a private contract that you can CHOOSE to have with the government (like buying government bonds). If you want the status-quo, you get to keep it. But it means that your account won't be bailed out when your bank collapses. And it means your taxes won't have to bailout anyone else, because the "payout" for other people when their bank collapses will already have been paid for by the people who were paying for the insurance.

I frankly can't believe that I'm having to explain how insurance works, or that when insurance pays out that doesn't constitute a bailout! If insurance was a massive scam, why would so many private companies be insurance companies? For heaven's sake. It's not complicated Maddus. It's just taking the risk AWAY from government WITHOUT reducing the choice of customers WITHOUT adding regulation WITHOUT ever needing a future bailout from taxpayers.

As a constitution lovin' gun totin' liberal hatin' government bashin' regulation abolishin' pseudo-republican, I'm really struggling to see why you think the status quo of stealing from the public to pay for bailouts is preferable.

Capitalism is a profit and loss system, it cannot function without the loss part.

I know perfectly well what insuring you against risks does, it makes people reckless.

You should only insure risks you cannot take yourself. So if you can't afford to lose your savings, don't put them in a risky bank or insure the money yourself!

What you are proposing is no more then a bank tax.

No thank you, I'm TEA!

51 seconds ago, Maddus Mattus wrote

@evildictaitor: Option B is the only fair example. Option A and C are the same, other people pick up the bill.

I'm not sure you understand insurance very well. Insurance companies don't insure your stuff out of the kindness of their hearts, they insure you to make money.

Since you don't seem able to get around the word government or the fact that this a current account, let's change some of the nouns in my previous paragraph and see if you get it.

When (not if) someone's house burns down, someone has to pay for all the stuff that went up in smoke. Either

(A) The government pays out of its own pocket (the current system) - i.e. the taxpayers pick up the bill

(B) The house owner pays for it

(C) An insurance company that is paid (by the home owner) to insure against this outcome pays for it.

Note that option (A) doesn't happen in this case (the government doesn't care if your house burns down - you deal with it). Option (B) is unaffordable for most home-owners - they can barely afford one house, never mind paying a mortgage for a house that is now missing. So most home owners go with option (C).

Option (C) is not socialism. It's insurance. It's not government doing anything. It's not regulations getting in the way. It's not theft. It's not communism. It's a private arrangement between a home owner and their insurance company, and the insurance company makes lots of money from it.

I know perfectly well what insuring you against risks does, it makes people reckless.

Yeah, my health insurance is so great, I don't even bother putting a seatbelt on in cars any more. I only drive my car at 150mph down motorways because my insurance is so good, it won't matter if I total the car. And I use petrol to light my barbecues because - hell - I have home insurance - so it doesn't even matter if I burn my house down.

Or maybe you're just wrong. Insurance isn't about being reckless. It's about protecting yourself from low-probability high-impact events. Like your house burning down, or needing urgent expensive medical treatment.

You should only insure risks you cannot take yourself. So if you can't afford to lose your savings, don't put them in a risky bank or insure the money yourself!

Which is exactly what I'm suggesting. Heaven's above. Talking with you is like shouting at a wall sometimes. 

You CANT privately insure against a bank going bankrupt, because most insurance companies ARE THE SAME BANKS. Insuring with them against their own bankruptcy is just throwing money away, because the bank will go bust, making the insurance company go bust, and you'll not get your money back despite paying for private insurance.

What you are proposing is no more then a bank tax.

No - I'm suggesting making a government backed insurance company that runs for profit, and that people can pay money to to insure their assets against company defaults.

Under. My. Scheme. Banks. Would. Not. Be. Compelled. To. Take. Out. Insurance. They would do so only if their customers wanted it, and only for those customers who wanted it. Customers who get the federal protection would be paying the federal government premiums (via their bank) to pay for a future payout of the value of their current accounts in the event that the bank goes bust. Customers who don't want to pay the premiums wouldn't be protected.

I can't choose to live in this house and then suddenly in another, so you take insurance for the risk of fire, because I cant afford it.

I can choose where to store my money, so I can choose not to run the risk. So I don't need insurance, because I have the option not to run the risk.

This is how insurance works. You insure risks you must take, not risks you can afford or avoid.

27 minutes ago, Maddus Mattus wrote

I can't choose to live in this house and then suddenly in another

Uh - yes you can. http://lmgtfy.com/?q=buy%20a%20house

I can choose where to store my money, so I can choose not to run the risk. So I don't need insurance, because I have the option not to run the risk.

But you can't choose to store your money somewhere safe, because during a financial crisis, no bank is safe.

This is how insurance works. You insure risks you must take, not risks you can afford or avoid.

Most people cannot afford to lose all of their life savings. So we somewhere where we can insure against all of our savings going bust. And the only institutions we can't trust to insure it are the banks (and they own all of the insurance companies)

A bank without deposit insurance can be opened. But only ignorant fools would buy their service.

FDIC is too cheap, the US Central Bank's insurance. It was recently raised from 100k to 250k for individual bank accounts. I believe this model is close to what evildictaitor promotes, but with larger protections and with more buy-in participation from member banks.

The circular reference of bankers <=> insurance providers makes me nervous. FDIC is not private. I would imagine a public insurance is the only way to keep the fox out of the hen house. A bank that insures itself is not insured at all.

3,.. 2,.. 1,.. go!

I'm done, how far along are you?

Most people cannot afford to lose all of their life savings. So we somewhere where we can insure against all of our savings going bust. And the only institutions we can't trust to insure it are the banks (and they own all of the insurance companies)

Then they should invest it wisely. Part in your home, part in a savings account and part in a pension and do some stock trading on the side.

If people act reckless with their money, it's not the government's responsibility to help them out. It's also not the governments responsibility to bailout banks either.

You want a capatalist system, but without the loss part. That's not capitalism, that's socialism, everybody wins, nobody pays,..

I agree, it's more the same, no, it's exactly the same.

Pass the cost of the insurance to the customer and the tax payer, so bankers can pull all kinds of risky stunts.

On and on you post about how reckless and lawless these bankers are. Then when I point you to the root cause, you don't want to do anything about it, because it might put you at risk.

It's one way or the other, you can't have it both ways.

Either;

a) We keep the insurance up to 100k (250K), bankers act reckless and lawless and you stop posting about it.

or

b) We agree to vote for the guy that removes the security and we keep on posting, keeping each other notified when banks make lousy decisions, so we can move our money away.

42 minutes ago, Maddus Mattus wrote

@evildictaitor: I challenge you to move into another house, faster then I transfer my money to a different bank,..

Why is the speed of transfer an issue? The point is you can change house. The reason you get house insurance isn't because you can't transfer your house. It's because you can't afford buying a second house once your first one burned down.

Then they should invest it wisely. Part in your home, part in a savings account and part in a pension and do some stock trading on the side.

All of these collapsed at pretty much the same time, Maddus, because they are related. The housing market crash caused the banks to collapse (the savings accounts survived only because of the bailout, which both of us think should never happen again). The bank collapse caused a stock market crash and because pension companies are the biggest investors on the stock market, it caused them to go bust too.

If you had wisely invested your money in a pension, a home, a savings account and the stock market under the current system you would have been very disappointed in 2008 when the stock market crashed, your savings in ICE_SAVE vanished, your pension company went bust and your home went into negative equity - and all of the insurance companies that you gave premiums to as insurance against this eventuality went bust as well.

In fact, the only way under the current system that you can be completely protected from your money vanishing (other than via government bailout, which is the status quo both of us are trying to abolish) is to hold the money yourself, ie. put it under the mattress. And as I've said before, it is in society's best interests to dissuade people with money from storing it in The Bank of Mattress.

Under your scheme, government's won't have to bailout the banks or savers, but people will stop using banks. Under my scheme governments won't have to bailout the banks or savers, but people will be able to continue using banks.

http://en.wikipedia.org/wiki/Negative_equity

http://en.wikipedia.org/wiki/Icesave_dispute

http://www.bbc.co.uk/news/business-16385381

http://en.wikipedia.org/wiki/Stock_market_crash

If people act reckless with their money, it's not the government's responsibility to help them out. It's also not the governments responsibility to bailout banks either.

I'm not sure that a 63 old with a $200,000 pension and $50,000 in savings, all of which vanish because bankers were acting recklessly lending is really her fault.

You want a capatalist system, but without the loss part. That's not capitalism, that's socialism, everybody wins, nobody pays,..

No - I want a capitalist system without the bailout part. Insurance doesn't remove loss. It allows you to plan for it.

17 minutes ago, Maddus Mattus wrote

Pass the cost of the insurance to the customer and the tax payer, so bankers can pull all kinds of risky stunts.

Insurance costs differently depending on how much risk is there. That is why a 17year old male costs more to insure (for the same vehicle) than a 40 year mother of two with twenty years of driving experience.

Under my scheme, bankers can still do risky business, but if they do so, the cost of insuring their activities goes up. This makes having a guaranteed account with a risky bank a worse deal for the customer. So customers that want guaranteed accounts will get up and go (of their own accord - no government regulations here) to a bank with a better deal - i.e. a less risky one.

You want a guarranteed account for $50,000 with High Frequency Trading And Savings PLC? Sure. That'll be $10,000 a year in premiums (equivalent to a 20% reduction in interest rate, because it is very risky) - or you can have their normal unguarranteed account if you can afford to lose it.

You want a guaranteed account for $20,000 with The Mutual Savings And Mortgages? Why, that's only $1,000 a year (numbers here are representivive. In practice they'll be decided by fornulas not politicians, similar to how insurance rates are decided in the private sector)

You don't need to pay for a guaranteed account if you don't want to, but if you don't and the bank goes bust, the money in the account vanishes. If you, Maddus, believe that you can afford to lose $100,000 in your current account, then you keep in in your current account at the same rate of interest that it is today, and you don't have to worry about the government interfering with regulations now or a bailout later. You also won't have to pay to bailout someone else's current account when their bank goes bust, so more money for you in the short term.

If you think you can't lose any of that money, well, you pay for the insurance by getting a guaranteed account at a much worse (and possibly negative) rate of interest. That costs you money proportional to how much risk your money is at - so companies like Ice-save will have dreadful rates on their guaranteed accounts - particularly as they start to go south, leading Ice-save guaranteed account holders to rapidly move their money to safer locations (again - this is of their own accord and to get a better deal - no government regulations mandating anything here). Then, when Ice-save does go bust, it'll take out only savings that don't need to be bailed out, plus a small number of guaranteed accounts that were left at the end, paid for by the extortionate rates of interest that those guaranteed account holders were paying to have their guaranteed accounts in such a risky institution.

And here's the thing - you can choose how much you want to be guarranteed - it's just a straightforward insurance. You want to insure $20,000? That's just $1,000 a year. Prefer to insure up to $10,000 in the event of collapse? That's only $500 a year. Want to insure it all? That's $5,000 a year. You get to scale how much money you want to make in interest against your own preferred risk profile.

Either;

a) We keep the insurance up to 100k (250K), bankers act reckless and lawless and you stop posting about it.

or

b) We agree to vote for the guy that removes the security and we keep on posting, keeping each other notified when banks make lousy decisions, so we can move our money away.

Ah - I'm beginning to see why you're not understanding what I'm saying. You think the current system is insurance. It's not. It's a bailout and a tax. Insurance requires you to pay before the payout if and only if premiums are paid and proportional to the risk and proportional to the size of the payout.

The current system is little more than a pre-agreed "we'll bail you out if this happens again" combined with a finger-in-the-air tax in order to "punish" bankers. The tax doesn't even distinguish between banks that were acting well and those that weren't. I don't agree with this system.

I am not suggesting this system. I am suggesting we abolish the bailout, abolish the £50,000 current account protection limit and abolish the banking tax. We don't need any of them. But we do need to give savers an option whereby they can store their money safely. And once you've done that, there's nothing left in the financial system that is "too big to fail", because everything that under the current system needs to be bailed out is being paid for by insurance. So next time a bank goes bust, the bank goes bust. No more bailout shenanigans.

2 hours ago, Maddus Mattus wrote

@JohnAskew:

I agree, it's more the same, no, it's exactly the same.

Pass the cost of the insurance to the customer and the tax payer, so bankers can pull all kinds of risky stunts.

On and on you post about how reckless and lawless these bankers are. Then when I point you to the root cause, you don't want to do anything about it, because it might put you at risk.

It's one way or the other, you can't have it both ways.

Either;

a) We keep the insurance up to 100k (250K), bankers act reckless and lawless and you stop posting about it.

or

b) We agree to vote for the guy that removes the security and we keep on posting, keeping each other notified when banks make lousy decisions, so we can move our money away.

a) maybe they should show customers their insurance goes up to $$$ so that it isn't limited to a fixed amount and larger depositors don't have to spread their wealth around multiple banks. There's how a bank can vastly increase deposits -- appeal to their existing customers and show they can handle the larger $$$ replete with insurance.

b) the timing required here is not feasible. Ok, bank made bad trades last night and I'm here to withdraw all my $$, what?, you won't let me withdraw any?, closing the bank? And later I find the bank has 0 cash and 0 assets, the bankers moved to Brazigentina and you have 0. Bad plan. Terrible plan. No plan.

If I understand you correctly, "the root cause" for lawless investment banking is the Treasury insuring the deposits. Since the Treasury facilitates theft and dishonesty and violating national sanctions against foreign entities, it is not the fault of the individuals who commit the crimes.

You're wrong. Institutions are abstractions. They cannot cause squat.

Incentivized theft is what you are trying to pin on the Treasury and the FDIC. They make it ok to steal depositors $ because the Treasury will print more to make up for the theft.

People are to blame.

Rape is never the woman's fault, never ever her fault (unless she's the rapist). She can stand naked...

3 hours ago, evildictait​or wrote

Why is the speed of transfer an issue? The point is you can change house. The reason you get house insurance isn't because you can't transfer your house. It's because you can't afford buying a second house once your first one burned down.

The longer I stay in the house, the more I risk it catching fire.

The faster I can get out, the less risk I take.

I've a plan for my house that spans several decades, so I want to insure that the house survives for that long. I don't have that for my bankaccount, if someone offers me more interest tommorow, I'm there!

So, if you know anything about Insurance, you know that risk is a factor of time and propebility.

I'll respond to the rest later.

38 minutes ago, JohnAskew wrote

People are to blame.

Now we are getting somewhere!

People are indeed to blame!

People voting what is best for them, at the expense of others!

And who can blame them?

So, the root cause of all the mess we are in today, is that government has the power, to exploit a certain set of people by popular vote. And people are to blame, because they think this is just and the 'democratic' way. It's not. It's just a different form of tyranny.

If you want to truly live in a free society, government should be cut down by atleast 99% and the way to do that, is to start striking laws.

16 minutes ago, Maddus Mattus wrote

*snip*

The longer I stay in the house, the more I risk it catching fire.

The faster I can get out, the less risk I take.

I've a plan for my house that spans several decades, so I want to insure that the house survives for that long. I don't have that for my bankaccount, if someone offers me more interest tommorow, I'm there!

So, if you know anything about Insurance, you know that risk is a factor of time and propebility.

I'll respond to the rest later.

I'm not really getting what you're grasping at - the regularity of your premiums for insurance isn't set down in some hidden law of capitalism that I've missed. 

For example, car/house/life insurance is typically paid annually, whereas holiday insurance is typically a single payment before the holiday that lasts for the duration of the holiday. Payment Protection Insurance and Health insurance premiums are typically paid monthly, and pawn-shops will take insurance weekly if you want them too. In fact, banks already do variable term insurance within investment banking (it's called "hedging") - with some insurance schemes lasting for seconds or even fractions of a second.

The cost of an R percent risk requiring a $P payout is (P*R/100) and is measured in $/s. If you want to insure your $100,000 car for 1 year and they judge you to have a 2% chance of needing a $100,000 payout, you'll be charged $2000+administration fee to insure it that year, which you can pay as $38 a week, $166 a month, or a lump sum of $2000. And if you have a crash January 1st the following year, you're on your own because your insurance is time-limited to when you're paying the premiums.

So I'm not really getting what you're getting at.

Insurance already copes with people trying to defraud them, with continuous risk happening in between premiums and over longer term periods. It can cope with premiums being paid regularly or infrequently, with risks being large or small, with payouts being large or small and can even cope with hard-to-quantize risks (like the risk that your oil-rig sinks, or the risk that the stock market goes down).

It seems that your main objection to my idea is that you don't understand how insurance works, and seem convinced that insurance companies are part of a wider Stalinist plot to undermine America.

You keep talking about reducing government involvement and striking off arbitrary laws, but seem dead-set against the only idea on this thread that could do just that! Hypocrisy much?

Strike laws? Many, perhaps, but not the ones we need for a civil society (which are not few).

Simplify laws? Now we're getting somewhere.

Ask Dahat about the flat tax idea he encouraged me to read about a couple of years ago. I'm all in favor of striking complexity from laws.

Anarchy is no substitute for any stable form of government (including blatant oligarchies like evildictaitors).

1 minute ago, JohnAskew wrote

Anarchy is no substitute for any stable form of government (including blatant oligarchies like evildictaitors).

Why is my idea that of an oligarchy? My idea was simply to let capitalism sort out the financial crisis without introducing new laws or regulations -- indeed trying to remove lots of laws and regulations at the same time.

As I have pointed out several times already, a government would not need to introduce any law or regulation, or curb any currently ongoing activity to implement my idea. The insurance would be a private contract between the government and the guarranteed account holder, who would pay premiums every year to protect themselves against their money vanishing. The premiums would be proportionate to the level of risk and the size of the payout - exactly like insurance in the private sector.

Under my scheme, you can confidently state that banks that go bust stay bust. There are no bailouts for banks anymore. You can remove the £50,000 protection limit on accounts. If you want a £50,000 protection from your bank going bust you can get insurance on your £50,000. Otherwise it's not protected. Under my scheme banks can do as they please because they can't harm society any more. Want to pay huge bonuses? Go right ahead. Choose whether you lend to small businesses sure. Don't like regulation X? We'll remove it.

My scheme is more capitalist than now. And unlike anything Maddus has said so far, there's a possibility that it could work.

Aren't all governments ultimately oligarchies? (Unfortunately) Aren't they the most stable govt's?

USA can't get trains or decent wireless infrastructure because we aren't all investing together to create them. China has a huge advantage over the USA regarding infrastructure construction -- there is continuity of vision, not a 4-8 year thrashing of vision. China, then, is orders of magnitude more oligarchic than the USA, with some benefits to China though little rights are enjoyed by the Chinese herd.

Good governments do attempt to limit the Entitlements their oligarchs enjoy, when they are at the expense of the rest of the herd.

Bad governments allow the oligarchs to rule unchecked, which foments events such as the Arab Spring and Occupy WS...

Maddus seems intent on having bad government so that oligarchs rule unchecked, all in the name of an over-simplified 'free market' mantra. I am much too worldly and realistic to believe less is more with regard to protection of the herd from their powerful self-centered rulers. Less regulation is license to abuse. A 'free market' is not possible, so striving for it is very counter-productive, and in fact dangerous.

I only want to insure risks that I must take, but can't afford. The longer you have to take the risk, the higher the premium is. That's why you have to make anual payments. That's why if you are 80 and want a life insurance, it costs so much.

So if I spread the risk of my savings accounts, I would need no insurance scheme. If I bet everything on one risky horse, I still wouldnt need one, because I could easily avoid the risk. And you propose to make it manditory for everyone.

Go work a couple of months at a lease company and see what allrisk does to the drivers of the lease cars. It makes them irresponsible pigs.

@JohnAskew: I'm not advocating anarchy, I'm advocating personal freedom to choose.

We need laws to protect that freedom, not laws to protect interests of minorities.

@evildictaitor: Your idea will not work.

In Holland we have plenty experience with these types of semi governmental companies. They are still run by government. Do not care about their customers, make heaps of money and they do a piss poor job when they need to execute their function.

We've put a private company in charge for collecting all air rights of songs played. It currently has milions and millions of euros. Only they are not sure how to distribute it, to the rightfull owners, so they don't distribute it. They have luxury offices and are paid astronomous wages.

You need capitalism and free enterprises to compete for the customer. Then and only then will prices drop and all parties will act responsible. They all gain, or there is no deal.

1 day ago, evildictait​or wrote

You know what stealing and giving money for free are? Communism. So stop advocating it.
...
"but paying for things is slavery - I want stuff to be free" is just communism in disguise.

I have not read much in this thread, but what exactly do you mean with these quotes?

1 day ago, Maddus Mattus wrote

...

You need capitalism and free enterprises to compete for the customer. Then and only then will prices drop and all parties will act responsible. They all gain, or there is no deal.

What about the "robber baron" of capitalism? He who grows to own the entire supply chain from raw material to retail product?

Who in Holland has ever accrued such? Many in the USA have, so perhaps we here have more experience and a refined perspective with which we can help identify where unfettered capitalism and free markets are vulnerable.

Robber Baron of capitalism is a myth.

Got any examples of a Robber Baron?

There is but one robber,. And he operates within the law,.

2 hours ago, Maddus Mattus wrote

There is but one robber,. And he operates within the law,.

And works on Wall Street.

I really feel we are getting somewhere

4 hours ago, Maddus Mattus wrote

@JohnAskew:

Robber Baron of capitalism is a myth.

Got any examples of a Robber Baron?

There is but one robber,. And he operates within the law,.

Cornelius Vanderbilt

Charles Schwab.

There were loads of robber barons during the building of railroads across the USA... steel, etc...

Today these guys don't exactly wear suits with targets painted on their backs, but they are around.

Bankers who act outside of the law, fixing interest rates, trading with sanctioned countries like Iran, misplacing 1.6 billion US dollars, these guys are also acting against the public trust.

It is not healthy to allow the rich and powerful to break laws without consequence, regardless.

There is a point where the greed that conservatives champion is not simply the driver for a market economy, a point where the public trust is compromised. It is the responsibility of Government to enforce law and to limit the reach of those who can negatively affect the public trust.

Cornelius Vanderbilt who became a Robber Baron by getting exclusivity from government,.. Not by creating a monopoly through the ways of capitalism.

Andrew Carnegie and Andrew Mellon.

Andrew Carnegie devoted all his life for the advancement of his workers. Didnt leave anything for his offspring, created a steel empire and employing thousands, how is he a "Robber Baron"?

Andrew Mellon was a businessman who also employed thousands.

Charles Swab innovated a lot of new business ideas and became very succsesfull in the process.

The one "Robber Baron" if you can even call him that is Vanderbilt. But he is not a product of capitalism, but of government.

If these are your Robber Barons, who are your Nation's true heroes? They must be angels sent down straight from heaven. I think you are judging these people the wrong way.

I wish we had that many daring entrepreneurs like that here in Holland, we would propebly be a super power by now.

Why on earth would you label these heroes Robber Barons? Is it the notion that their gain must be someone else's loss?

They all created something from nothing. All of these people created value, for it's workers and for it's customers. Therefore these companies cannot be compared to Wallstreet. Wallstreet like government, doesnt create anything. They merely redistribute money. Difference between Wallstreet and government is, that Wallstreet does it for profit and government for votes.

41 minutes ago, Maddus Mattus wrote

They all created something from nothing. All of these people created value, for it's workers and for it's customers. Therefore these companies cannot be compared to Wallstreet. Wallstreet like government, doesnt create anything. They merely redistribute money. Difference between Wallstreet and government is, that Wallstreet does it for profit and government for votes.

I think I'm missing your point. Wall Street is the ultimate aim of the capitalist. If you argue you want a purely free market approach, you have to 100% support the actions of those on Wall Street who'd happily send their grandparents into destitution simply to make a few bucks for themselves.

I have no problem with today's Bill Gates. Warren Buffett seems ok sometimes, but I know he's a wolf in sheep's clothing, he's THE Goldman-Sachs Wall Street mogul, so I will not rest easy about what he does on a daily basis.

FED loaning out money at nearly 0% interest to Wallstreet is NOT, I repeat, NOT capitalism. I don't know what you might call it, but it really isnt capitalism. John Maynard Keynes-ism maybe (I think he would turn in his grave if he saw what's being done in his name), but not capitalism.

You can't run a country or a household on debt, sooner or later somebody has to pay the bill.

You can't outspend a crisis, you need to cut your cost, develop a new plan and start from there.

@JohnAskew:

People are to blame only

I agree, I blame them for letting government run their lives!

I blame government for providing favors for 51% of the people, at the expense of 49% of the people.

Wallstreet has turned into one gigantic Vanderbelt.

From the lack of response to the point of my post, that there is no capitalist Robber Baron, but only a government created Robber Baron, can I conclude that you agree we should limit the power of government, so it cannot create more Robber Barons?

And if you agree, would you also agree that the best way of limiting their power is to strike laws?

Shall we annoint Wall Street as the only governmental authority? Seems to be your slant.

Robber Barons of today are hidden behind corporate entities. Their influence is via lobbyists and cash. The government does not annoint or create Robber Barons, that is ludicrous. Robber Barons buy government officials -- something that can be monitored well today and eliminated (were we to decide to do so).

Maddus, I don't think you understand the role of government, especially representative governments. It is not evil. Government does not withhold from us what we have conceived to do.

EDIT: I point out that Robber Baron is not a product of government, and name names. How is that in any way a lack of response? Government does not create anything, it is an institution, wake up.

50 minutes ago, Maddus Mattus wrote

And if you agree, would you also agree that the best way of limiting their power is to strike laws?

It is a non-sensical argument to claim that laws are an attempt by the government to reserve powers for themselves.

Indeed, there are a number of laws specifically to limit the power of government. For example, the US constitution itself was made by politicians to limit the power of politicians (i.e. to limit their own power).

Another (controversial) example is the Lisbon Treaty. It was widely unpopular in member states precisely because it took powers away from the member parliaments that signed it into force and gave the powers to a different power (i.e. the EU parliament).

The law that trial should be by jury is a law that limits the power of government.

The law in the US that a president can only serve two terms limits his power.

The wiretapping act in the US limits what government can do to its own citizens, even if it really wants to.

The laws against bribery are there to limit the ability of governments to sell their citizens down the river to the highest private bidder. These laws were made by the same politicians who are being limited by them.

I think, perhaps, Maddus, you need to realize that whilst governments and politicians aren't all rainbows and unicorns, they're not all evil trolls out to make a fast buck by screwing over their population for personal gain either.

Over-simplification only works in theory.

32 minutes ago, evildictait​or wrote

Another (controversial) example is the Lisbon Treaty. It was widely unpopular in member states precisely because it took powers away from the member parliaments that signed it into force and gave the powers to a different power (i.e. the EU parliament).

Well not just that. It put more power into the commissioners / Council of Ministers hands, who are appointed, never elected, and can override the decision of the elected members of the EU parliament. Oh, added bonus, the commission meets in secret and doesn't publish workings. The EUP can in theory revise the laws that come down from the Commission. In practice they rubber stamp.

7 minutes ago, JohnAskew wrote

@cbae: Noted. Isn't Ghandi quoted to say something like "the worst thing the British did to India was to take away their weapons". Guns insure we can revolt, and the US guarantees that right... of course, government soldiers are going to fire back... meh.  

Over-simplification only works in theory.

I'm not saying the idea for the 2nd Amendment works in the modern era when the US military has weapons no citizenry could ever match. I'm just pointing out the intent of the Constitution to limit the power of government.

@blowdart: My kids tell me that England is the best place on earth to live. Are they wrong?

I'd imagine lots more Askew's there than here.

It is disconcerting to see your post. So Hogwarts is run by the Slytherin House these days...

Outrageous they don't at least disguise it. Hmph.

10 minutes ago, JohnAskew wrote

@blowdart: My kids tell me that England is the best place on earth to live. Are they wrong?

Depends what you want from where you live I guess.

42 minutes ago, blowdart wrote

*snip*

Well not just that. It put more power into the commissioners / Council of Ministers hands, who are appointed, never elected, and can override the decision of the elected members of the EU parliament. Oh, added bonus, the commission meets in secret and doesn't publish workings. The EUP can in theory revise the laws that come down from the Commission. In practice they rubber stamp.

I stated the Lisbon Treaty only because it is an example of where politicians have introduced laws that limit their own powers. It wasn't intended to be an example of a good law.

So the more laws, the more government. It's really that simple.

Some laws prohibit the power of government (mostly the unpopular ones), but the majority extends it.

So you have to choose wisely, wich laws to implement and wich laws to ditch. But overall, we have too many laws.

I've posted the lemonade stand youtube video as an example and I have heaps more examples.

And John, I've stated a gazillion times, I am not in favor of anarchy. I'm in favor of a small government, with very limited power. If you want stuff run in a certain way, go join a community wich does it like you want, you a free to do that.

But don't force your values down my throat, as I promise I will not force mine onto you.

How does that limit the power of government?

25 minutes ago, Maddus Mattus wrote

For every law, you need a guy checking it. That guy needs to be checked aswell. Those guys need funding, wich have to be collected, redistributed and audited. The red tape just grows and grows.

*snip*

Your premise is laughable.

Yeah, let's just turn our country into Somalia. We won't have to worry about any laws then.

*rolls eyes*

35 minutes ago, Maddus Mattus wrote

For every law, you need a guy checking it. That guy needs to be checked aswell. Those guys need funding, wich have to be collected, redistributed and audited. The red tape just grows and grows.

Yeah. Let's ditch all of those crappy laws, starting with the constitution. Is that what you really want Maddus?

4 minutes ago, evildictait​or wrote

*snip*

Yeah. Let's ditch all of those crappy laws, starting with the constitution. Is that what you really want Maddus?

I find it odd that he's so concerned about going down the slippery slope in one direction yet has absolutely no problem jumping off the cliff in the other direction. That's about as well as I can describe his mentality.

Pit bulls will hang from low hanging tree branches on command, too, I've seen it!

EDIT: by their teeth!

12 hours ago, cbae wrote

*snip*

Your premise is laughable.

Yeah, let's just turn our country into Somalia. We won't have to worry about any laws then.

*rolls eyes*

I've dealt with the Somalian ad hominem earlier in this thread.

I'm glad you are *roll eyes* at me, means you have nothing constructive to bring to the argument and can only act like a spoiled brat. It also means you are have a closed mind about alternative solutions, therefore anything you bring to the table will be more of the same that got us into this mess.

@evildictaitor:

I've explained time again, I'm not an anarchist. I'm pro personal freedom. So there should be laws guarding those. The constitution is all about personal freedom, so I wish we had that here in the Netherlands. We have no laws determining the limit of government power, so it does everything, taxes everything, regulates everything.

Where I draw the line is where special interest groups (Wall street) pressure government into creating laws that benefit them at the expense of others.

But hey, if you want to continue syphoning responsibilities over to your government, creating more insurances (taxes, same thing according to the high court) and government, creating more irresponsible people, be my guest! 

@JohnAskew:

More ad hominems!

Have anything constructive to add?

Or shall we call it quits?

57 minutes ago, Maddus Mattus wrote

... I'm pro personal freedom. So there should be laws guarding those....

One man's law protecting personal freedom is another man's excessive government regulation. For example,

"I think the government should de-regulate and allow me to smoke drugs - why are government laws and regulations getting in the way?"

"My pharmaceutical company spends buckets of cash on testing these drugs before market. I would have waay more profit if I could test them for free - by just selling them and seeing what happens to the public who use them. Why does the government insist on regulating my industry?"

"I think the government should de-regulate from making it hard for criminals and mentally unstable people from purchasing guns. Those regulations are excessive!"

"I don't really like my neighbour. Why can't I kill him, have my way with his wife and take his children as slaves? The Romans could do that, why can't I? Stupid government regulations"

"All of these 'so-called' heath-and-safety laws cost me an arm-and-a-leg. Why can't I send my staff down into the mine with one headlamp-between-two? I'd save 50% on lighting and I could take that home in profit. Stupid government regulations getting in the way."

The constitution is all about personal freedom, so I wish we had that here in the Netherlands. We have no laws determining the limit of government power, so it does everything, taxes everything, regulates everything.

Clearly you haven't read the US constitution. It's not about personal freedom, it's about establishing the government of the United States and providing a legal framework and agreement by which the original states could work together.

In fact, it establishes exactly the thing you hate so much - government.

If you don't like the Netherlands, you are free to leave. That is your final recourse from all western nations. If you think taxes are too high, the government is too corrupt or the laws too unfair, you are always able to pack up your things and go.

Think China really is the best thing since sliced-bread? Then grab your nearest mandarin dictionary and hop on the nearest flight to Beijing. Want to not have to pay taxes? Grab some sun-cream and off to Dubai! Don't want all of those stupid laws preventing you from doing exactly what you want, when you want, without the government getting in the way? Well, I'm sure the Democratic Republic of the Congo still has room.

Happy travels!

9 minutes ago, evildictait​or wrote

One man's law protecting personal freedom is another man's excessive government regulation. For example,

When the actions of an individual limits the freedom of another, then it's time for the government to step in. And these freedoms are not open for interpretation.

Let's take the case of smoking. Is smoking bad for you? Yes. Is smoking bad for people around you? Yes. Should government ban smoking? No!

The establishment can perfectly judge for itself whether or not to allow smoking. You as a person can perfectly well establish if you want to be in a smoking environment.

Let's take another example, where government ought to step in;

You buy a very cheap car, that has very bad brakes. You drive on the highway. Now you are endangering others that had no part in you buying the cheap car with the cheap brakes. Government should step in and determine the minimal stopping distance of your car.

But it should not tell you, you should wear your seatbelt or that the car should have airbags or not.

"I think the government should de-regulate and allow me to smoke drugs - why are government laws and regulations getting in the way?"

Exactly, why should government prohibit what I do with my body?

Make drugs legal, earn a buck for uncle sam and stop drug crime dead in it's path. No more need for the DEA, no more Mexican cartels shoving drugs into pregnant women, etc. etc. win-win-win

Does it also have the right to harvest my organs? I have two lungs and could do without one, why shouldn't someone with no healthy lungs suffer when I have so much health?

In Holland there is already a debate going on, that everybody should automatically be an organ donor, when clearly the only way to more organs is to allow them to be traded for money, which is now highly illegal.

"My pharmaceutical company spends buckets of cash on testing these drugs before market. I would have waay more profit if I could test them for free - by just selling them and seeing what happens to the public who use them. Why does the government insist on regulating my industry?"

Government has laws in place which dictates how much testing you should do, then it hands out patents covering the medicine. So it's expensive to research new drugs and expensive to protect the drug when it's in the market. Meanwhile, lives are lost due to the long time to market and the high price. How very social of government to protect us from that.

And before you go off ranting about how many lives are saved due to the program, they dwarf the figures that could have been saved.

"I think the government should de-regulate from making it hard for criminals and mentally unstable people from purchasing guns. Those regulations are excessive!"

Yeah, because if they can't get any guns legally, they wont buy them, so there are no gun crimes, problem solved. In Washington violent crimes at gunpoint are on the rise and it's one of the most gun control, go figure.

And what is against the right to defend myself and my home? If someone comes at my family with an axe, what I'm I supposed to do? Tell him violence is illegal and call the cops? Or, do I point a gun at him and ask him politely to reconsider his actions?

"I don't really like my neighbour. Why can't I kill him, have my way with his wife and take his children as slaves? The Romans could do that, why can't I? Stupid government regulations"

A clear example that one person is interfering with the liberty of another, so yes, government should step in, that's why we have cops for domestic issues and an army for international, I'm all for those.

And if you have a dispute with your neighbor, you can settle it in a court of law provided by the government, so you can make him respect your personal liberty.

"All of these 'so-called' heath-and-safety laws cost me an arm-and-a-leg. Why can't I send my staff down into the mine with one headlamp-between-two? I'd save 50% on lighting and I could take that home in profit. Stupid government regulations getting in the way."

If the staff is willing to put itself into harms way for the pay you are giving them, it's their free choice, they have the option to say no. Why should I force someone to pay for two headlamps? That's interfering with their liberties.

 

Clearly you haven't read the US constitution. It's not about personal freedom, it's about establishing the government of the United States and providing a legal framework and agreement by which the original states could work together.

In fact, it establishes exactly the thing you hate so much - government.

Again, read my posts! I'm not against government, I'm against government interfering with my right of choice. The declaration guards personal liberty by telling what government can't and can do.

If you don't like the Netherlands, you are free to leave. That is your final recourse from all western nations. If you think taxes are too high, the government is too corrupt or the laws too unfair, you are always able to pack up your things and go.

I like the people in the Netherlands very much. We are hard working people. I love the country to bits. What I don't like is the outcome of what the Dutch government is creating. It creates selfish and irresponsible people by taking liberties and responsibilities away from it's citizens. The economy is in shambles, debt is flooding over the dykes. 

I'm fighting to create a better Netherlands, one that treats others with respect and dignity and not with contempt and belittlement.

Think China really is the best thing since sliced-bread? Then grab your nearest mandarin dictionary and hop on the nearest flight to Beijing. Want to not have to pay taxes? Grab some sun-cream and off to Dubai! Don't want all of those stupid laws preventing you from doing exactly what you want, when you want, without the government getting in the way? Well, I'm sure the Democratic Republic of the Congo still has room.

I've been to China, let me bring you up to speed; they are going to run the world.

China doesn't impose it's values on the nations it trades with, it just does trade. We as a western society think our society is so superior and we are willing to force anybody onto our chosen path of enlightenment. That in itself is not very enlightened. If people choose to run their society differently, so be it.

China already owns half of the USA, through hard work and not through leeching off other people by forcing them into paying and loaning on their behalf. Once this crisis here in the EU subsides, attention will shift to the US and it's debt problems.

Happy travels!

You should do some traveling yourself, broaden your horizon.

48 minutes ago, Maddus Mattus wrote

[quote]

I like the people in the Netherlands very much. We are hard working people. I love the country to bits. What I don't like is the outcome of what the Dutch government is creating. It creates selfish and irresponsible people by taking liberties and responsibilities away from it's citizens. The economy is in shambles, debt is flooding over the dykes. 

I'm fighting to create a better Netherlands, one that treats others with respect and dignity and not with contempt and belittlement.

The world is a free-market of countries. If you don't like it, you're free to choose another country.

You seem to want your cake and eat it. You want government to get out of the way, but still want to have the land of liberty that the government enables you to enjoy. You want to dismantle the laws that protect you from selfish people out to make a fast buck in the name of defeating the selfish government, and you blame your government for all of your troubles and credit them with none of your blessings.

Living in a country is an all-or-nothing experience Maddus. If you want a country that allows you to fire your gun in the air whilst shouting yee-hah and not paying any taxes, move to Saudi Arabia. There are downsides to doing so as well - but it's a trade-off. If you want the societal benefits that being in the Netherlands grants you, you have to take the bad with the good, and recognise that some of the stuff you hate might be there for reasons you don't understand, just like how there is good in your country that you'll never see or hear about that makes your life tangibly better at someone else's expense.

If you really want to make a difference, become a politician. By definition, those are the only guys who set government policy. Who knows? If you become prime minister you can dismantle all of the laws that "get in the way" and take ownership of the crisis or utopia that will create.

I've been to China, let me bring you up to speed; they are going to run the world.

China doesn't impose it's values on the nations it trades with, it just does trade. We as a western society think our society is so superior and we are willing to force anybody onto our chosen path of enlightenment. That in itself is not very enlightened. If people choose to run their society differently, so be it.

If you love China so much, why don't you move there? It's not all unicorns and rainbows though. If you're poor, you're really poor. There's huge amounts of corruption - particularly at the state and district level, and the entire judicial and media system answer to politicians, not some liberal constitution that you've been benefiting from all your life.

9 minutes ago, evildictait​or wrote

The world is a free-market of countries. If you don't like it, you're free to choose another country.

Cool, so I can trade oil with Iran?

Oh wait,..

Not so free then is it?

You seem to want your cake and eat it. You want government to get out of the way, but still want to have the land of liberty that the government enables you to enjoy. You want to dismantle the laws that protect you from selfish people out to make a fast buck in the name of defeating the selfish government, and you blame your government for all of your troubles and credit them with none of your blessings.

Indeed I want government out of the way. Why is it even in my way to begin with?

And I want government to keep other people out of my way as well and I want government to exactly the same for everybody else. Keeping people out of the way of bad men trying to limit my right to choose.

I agree, government should protect me from selfish people trying to impose their will onto me, if I want to have dealings with somebody it should be out of mutual interest.

So the government should basically protect me from individuals like yourself! Which want to use government to force their values onto others! You are beginning to see the light.

Living in a country is an all-or-nothing experience Maddus. If you want a country that allows you to fire your gun in the air whilst shouting yee-hah and not paying any taxes, move to Saudi Arabia. There are downsides to doing so as well - but it's a trade-off. If you want the societal benefits that being in the Netherlands grants you, you have to take the bad with the good, and recognise that some of the stuff you hate might be there for reasons you don't understand, just like how there is good in your country that you'll never see or hear about that makes your life tangibly better at someone else's expense.

I wish I could move that easy. There are language, cultural, family and law barriers to be taken. It's not so easy peasy as you paint. Also, I'm not advocating for a Wild Wild West like you constantly say I am. I'm for the right to defend my home, which now I don't have. The police wont come when there is a burglar in my home, they say to help him in any way possible and to claim the losses with my insurance. And that was even in an add on TV!

If you really want to make a difference, become a politician. By definition, those are the only guys who set government policy. Who knows? If you become prime minister you can dismantle all of the laws that "get in the way" and take ownership of the crisis or utopia that will create.

More and more people in my vicinity are advising me to become politically active. But that would mean I would have responsibility, I'd rather not have that responsibility and motivate others to vote for people who do want to carry that responsibility.

Political reality is something entirely different then actual reality, you have a valid point there.

I am seriously considering in becoming politically active in the libertarian movement, I've already taken my first baby steps the only way I know how, I wrote an wp7 app

If you love China so much, why don't you move there? It's not all unicorns and rainbows though. If you're poor, you're really poor. There's huge amounts of corruption - particularly at the state and district level, and the entire judicial and media system answer to politicians, not some liberal constitution that you've been benefiting from all your life.

So the best thing about China is it's free market system, the worst thing about China is it's government, couldn't agree more.

I don't speak Mandarin, I don't understand the culture, my family is here, so moving to China is not really an option for me. All I'm saying is that they do certain stuff right, not that I want to move there.

And quite frankly I've become rather tired of the counter argument that I should move there, when I point out that they are doing stuff the most beneficial way. When I design a piece of software, I don't move to the USA because they have the best software patterns, I learn from those patterns and apply them to my project.

41 minutes ago, Maddus Mattus wrote

Cool, so I can trade oil with Iran?

Yes you can. You just can't also live in the Netherlands. In fact, Chinese citizens trade oil with Iran day-in-day-out. Feel free to emigrate. Indeed, even people born in the US and EU routinely trade oil with Iran. They just have to renounce their citizenship and emigrate to a country that doesn't have diplomatic sanctions on Iran first.

Indeed I want government out of the way. Why is it even in my way to begin with?

And I want government to keep other people out of my way as well and I want government to exactly the same for everybody else. Keeping people out of the way of bad men trying to limit my right to choose.

I agree, government should protect me from selfish people trying to impose their will onto me, if I want to have dealings with somebody it should be out of mutual interest.

So the government should basically protect me from individuals like yourself! Which want to use government to force their values onto others! You are beginning to see the light.

Sometimes the regulations are there precisely to keep self-interested people from getting in your way. For example, some people's freedom of religious expression is curtailed in order to preserve the freedom of others (e.g. Scientologsts aren't allowed to opt out of paying income tax, despite it being against their religion, and fundamentalists aren't allowed to go round burning schools and libraries down).

For example, if you commit a crime, the government can restrict your right to movement whilst they detain you for questioning and to serve out the punishment under your sentence. They can also detain you to stop you spreading a contagious disease. These are about protecting other people's rights at the expense of your rights. If you've got a contagious disease but would rather run around infecting people than getting the hospital treatment you need, that doesn't mean the government has to sit and watch you run around the country handing out death sentences to ordinary citizens that you meet.

They can also say that if you want to sell pharmaceuticals to their citizens, that you need to do drugs-testing first. You can pass that cost on to your customers if you want to, but this is to protect their rights to not be used as guinea pigs that might leave them disabled or killed.

The government might also restrict your right to have a gun because the gun might be used to deny someone else their right to life. It's not about denying you your right to the gun - if you want to shoot things, visit a shooting range (they exist even in the UK and the Netherlands) - it's about protecting the rights of the other citizens.

And finally, the government might restrict your right, as a bank, to add arbitrary additional risk to people's current accounts knowing that the risk will be bourne by the taxpayer, not to limit your rights, but to protect the citizen's right to have a way of storing money that isn't subject to embezzlement by bankers.

I wish I could move that easy. There are language, cultural, family and law barriers to be taken. It's not so easy peasy as you paint.

Yeah. It's not easy to stop buying biscuits from WalMart either. There are brand differences, loyalty-card differences and the baskets are smaller.

Capitalism and the free-market doesn't give you the right to change single aspects of a product you don't like - if you want Windows8 to ship with a start-menu for instance, you're going to be sorely disappointed. What the free-market does give you is the opportunity to dump Windows8 entirely for Linux or Mac. There'll be differences, sure, but that's the trade off you make.

Similarly, you can't choose to have the Netherlands but without law X, Y or Z. But you can leave the Netherlands entirely for China, or Saudi Arabia. There'll be differences, but that's just how life is.

Whilst you are enjoying the benefits of living in the Netherlands, you'll obey their laws. If you don't want to obey their laws, you can leave. The west isn't like China. You can leave if you want to (http://totallyexpat.com/news/china-prc-steps-up-exit-requirements-for-chinese-nationals-visa-for-foreign-destination-could-be-required/)

Also, I'm not advocating for a Wild Wild West like you constantly say I am. I'm for the right to defend my home, which now I don't have. The police wont come when there is a burglar in my home, they say to help him in any way possible and to claim the losses with my insurance. And that was even in an add on TV!

I think perhaps you're living in some parallel fantasy land if you think that the police don't want to catch criminals.

More and more people in my vicinity are advising me to become politically active. But that would mean I would have responsibility, I'd rather not have that responsibility and motivate others to vote for people who do want to carry that responsibility.

And there we have it. You'd rather be an armchair dictator than a constructive member of society. You'd rather just criticise everything from the sidelines than make a positive impact, and you'd rather shout that we need to demolish society to fix the made-up problems in your head than recognise that the lifestyle you lead is so infinitely improved by being part of a liberal democratic society that you live in.

So the best thing about China is it's free market system, the worst thing about China is it's government, couldn't agree more.

I suggest you exercise your freedom to protest and ask for a more liberal democracy outside the palace in Beijing. Oh wait, I forgot, that's illegal. So much for your utopian society, Maddus. China isn't perfect after all.

I don't speak Mandarin, I don't understand the culture, my family is here, so moving to China is not really an option for me. All I'm saying is that they do certain stuff right, not that I want to move there.

I like the biscuits from Walmart. I don't understand the culture of Safeways. My family is near Walmart, so moving to buying biscuits from Safeways is not really an option for me. All I'm saying is that they do certain stuff right, not that I want to shop there.

Just because you don't want to move, doesn't mean that it's not a free-market system. You can hop on a plane to China tomorrow, since you clearly hate the society that gave you the right to personal possessions, safety from attack, an army to defend your borders, an education system to educate your children, a local authority to collect your rubbish, a highways agency to maintain your streets, a local authority to build and protect local parks, a free media to keep you informed, a capitalist system to promote free trade and a regulatory system to ensure that one company doesn't swamp the market and stomp out all competition.

Happy travels in China.

Ad hominem? OCD is not insulting, it is what it is, so I reject your complaint.

1 hour ago, evildictait​or wrote

Yes you can. You just can't also live in the Netherlands. In fact, Chinese citizens trade oil with Iran day-in-day-out. Feel free to emigrate. Indeed, even people born in the US and EU routinely trade oil with Iran. They just have to renounce their citizenship and emigrate to a country that doesn't have diplomatic sanctions on Iran first.

Now that's not really freedom, now is it? Denounce ones citizenship in order to do trade?

Sometimes the regulations are there precisely to keep self-interested people from getting in your way. For example, some people's freedom of religious expression is curtailed in order to preserve the freedom of others (e.g. Scientologsts aren't allowed to opt out of paying income tax, despite it being against their religion, and fundamentalists aren't allowed to go round burning schools and libraries down).

For example, if you commit a crime, the government can restrict your right to movement whilst they detain you for questioning and to serve out the punishment under your sentence. They can also detain you to stop you spreading a contagious disease. These are about protecting other people's rights at the expense of your rights. If you've got a contagious disease but would rather run around infecting people than getting the hospital treatment you need, that doesn't mean the government has to sit and watch you run around the country handing out death sentences to ordinary citizens that you meet.

I'm all for that, like I've stated many times.

They can also say that if you want to sell pharmaceuticals to their citizens, that you need to do drugs-testing first. You can pass that cost on to your customers if you want to, but this is to protect their rights to not be used as guinea pigs that might leave them disabled or killed.

And this is where you jump into the deep end. In my view government cannot force the pharmaceutical companies to do testing. They can force them to put a label on it saying; "We did not test this properly to make it more cheaply", but they do not have the right to withhold life saving drugs from the public just because they have not filled in form X.

The government might also restrict your right to have a gun because the gun might be used to deny someone else their right to life. It's not about denying you your right to the gun - if you want to shoot things, visit a shooting range (they exist even in the UK and the Netherlands) - it's about protecting the rights of the other citizens.

And the slope becomes even more slippery.

If I can be prohibited to even carry a weapon, I can be prohibited to walk the streets because I might step on someone's toes.

Now you can argue that you cannot carry a concealed weapon, but you cannot argue that if a device can take a life it will take a life and therefore should be banned.

By that reasoning you cannot be allowed to drive a car, because cars kill more people then guns.

The monopoly of violence should not be solely in the hands of the law or the lawless, it puts me at a disadvantage.

And finally, the government might restrict your right, as a bank, to add arbitrary additional risk to people's current accounts knowing that the risk will be bourne by the taxpayer, not to limit your rights, but to protect the citizen's right to have a way of storing money that isn't subject to embezzlement by bankers.

The risk cannot be borne by the taxpayer. Because government cannot intervene in voluntary trades. I full well know that banks are going to take risks, where do you think the interest comes from?

Government has the right to force banks to be upfront about their dealings and make banks pay hefty fines when they mislead the public, but control where they invest? No, sorry.

This government meddling you propose is what has gotten us into this pickle, it's not the way out.

Yeah. It's not easy to stop buying biscuits from WalMart either. There are brand differences, loyalty-card differences and the baskets are smaller.

Capitalism and the free-market doesn't give you the right to change single aspects of a product you don't like - if you want Windows8 to ship with a start-menu for instance, you're going to be sorely disappointed. What the free-market does give you is the opportunity to dump Windows8 entirely for Linux or Mac. There'll be differences, sure, but that's the trade off you make.

And you see Windows shifting towards Mac, because the free market demands it.

Similarly, you can't choose to have the Netherlands but without law X, Y or Z. But you can leave the Netherlands entirely for China, or Saudi Arabia. There'll be differences, but that's just how life is.

I can still plead my case to why I think law X, Y and Z should be stricken. And if enough people agree with me, we can make it happen.

Whilst you are enjoying the benefits of living in the Netherlands, you'll obey their laws. If you don't want to obey their laws, you can leave. The west isn't like China. You can leave if you want to (http://totallyexpat.com/news/china-prc-steps-up-exit-requirements-for-chinese-nationals-visa-for-foreign-destination-could-be-required/)

I'm currently just paying for benefits I might enjoy later. I say might, because at the rate we are lending to keep it all up to par, there is a good chance these benefits are not there when I would like to make use of them.

This is also the heart of the problem. People looking towards government for benefits. For each benefit the government hands out, it has to take from somebody else. That cycle has got to stop for us to move forward.

I think perhaps you're living in some parallel fantasy land if you think that the police don't want to catch criminals.

I argue that a lot of these people aren't criminals in the strictest sense of the word. They are merely put into a situation where there is no alternative.

And there we have it. You'd rather be an armchair dictator than a constructive member of society. You'd rather just criticise everything from the sidelines than make a positive impact, and you'd rather shout that we need to demolish society to fix the made-up problems in your head than recognise that the lifestyle you lead is so infinitely improved by being part of a liberal democratic society that you live in.

Yeah, pleading for freedom is really what is destroying our society. Continue planning society the way you like, see how it's working out?

I suggest you exercise your freedom to protest and ask for a more liberal democracy outside the palace in Beijing. Oh wait, I forgot, that's illegal. So much for your utopian society, Maddus. China isn't perfect after all.

I agree whole heartily with you, China isn't a fun place to be.

But to not see that they are doing something right, is a bridge to far for me.

Do you believe accelerated human rights and fair wages are side effects of unregulated business today in China's socialist market economy?

Chinese infrastructure building is admirable, the growth of their economy is laudable, when considered in isolation.

I believe that when you strive for equality, you end up with neither freedom nor equality.

At the heart of this, is a free market. Where order will grow out of chaos, due to the price system.

Selfish people and despicable market practices will be dealt with by the way the consumer votes with his money. No planning by a super power is neccesairy, property and liberty rights can solve almost all differences. And the imperfections can be dealt with in a court of law.

Power corrupts, so don't give anyone power. It really is that simple.

Now that's not really freedom, now is it? Denounce ones citizenship in order to do trade?

You don't have to denounce your citizenship to trade. You have to denounce your citizenship to do trade with Iran. If you want to live and work in the Netherlands you have to abide by their rules. This is no different to capitalism in all other walks of life.

If you want to buy a packet of biscuits from Walmart, you have to agree to their terms and conditions (e.g. needing to pay, perhaps needing to buy something else at the same time). If you want to use Microsoft software you have to agree to the EULA.

You're not compelled to buy the biscuits or use the software. But if you do you are compelled to follow the conditions or suffer the penalty.

You're not compelled to live in the Netherlands. But if you do, you're not allowed to trade with Iran.

And this is where you jump into the deep end. In my view government cannot force the pharmaceutical companies to do testing. They can force them to put a label on it saying; "We did not test this properly to make it more cheaply", but they do not have the right to withhold life saving drugs from the public just because they have not filled in form X.

I suppose you're also in favour of an untrained surgeon giving you treatment as well when you turn up to the hospital after a car accident? Or would you prefer that the government mandate some kind of minimum level of skill before they get the cheapest available help to wield the knife to save your unconscious body in the nearest hospital? Do you want that hospital to be using non-medically tested medicenes on you as well? You're unconcious and it's an emergency so they get to make the decision, not you or your family.

Unless there's some kind of regulatory framework and minimum standards of care required, there's a good chance they'll shave years off your life to save $20 from their bills - because it's you who pays the years - and them that reaps the profits. Why would they pay $20 for a few extra years of some bozo who came in as an emergency when he might not even be able to pay? Nope. Instead, let's use the cheap stuff and the surgeon who can barely see straight. It'll be cheaper and we can laugh all the way to the bank. Thanks comrade Maddus! No more regulations getting in the way of our new, improved, more profitable hospital!

Now you can argue that you cannot carry a concealed weapon, but you cannot argue that if a device can take a life it will take a life and therefore should be banned.

A car can take a life. A gun is designed to take lives. That's the difference.

And before you claim that when you have a gun, you're more likely to be safe, let's not forget that LA has more gun-related deaths than the WHOLE of EUROPE.

The monopoly of violence should not be solely in the hands of the law or the lawless, it puts me at a disadvantage.

If someone wants to kill you in London, chances are they don't have a gun. And chances are you'll survive. If someone wants to kill you in LA, chances are they have a gun. And chances are you'll die.

The risk cannot be borne by the taxpayer. Because government cannot intervene in voluntary trades. I full well know that banks are going to take risks, where do you think the interest comes from?

The risk IS bourne by the taxpayer. Because current accounts CANNOT default because current accounts are NOT AN INVESTMENT. That is why ALL current accounts receive less interest than the rate of inflation.

Government has the right to force banks to be upfront about their dealings and make banks pay hefty fines when they mislead the public, but control where they invest? No, sorry.

To quote a certain Maddus from C9: The bank is a fictitious entity. The fines will be paid by the customers. And to make another quote from that same Maddus, why should the government have the right to FORCE anything? Surely that's like, totally, communism dude or something.

And you see Windows shifting towards Mac, because the free market demands it.

And people emigrate from the Netherlands to China and Saudi Arabia all the time too. I don't really see your point here. If you don't like the Netherlands, move to China. If you don't like Walmart's biscuits or Microsoft's EULA or the Netherland's tax arrangements, you're free to change.

Also the change towards Mac isn't because the market demands it. It's because the market allows it. The free-market only demands that you choose the cheapest item, all other things being equal. Mac and Windows are not fungible equivalents, so the market demands nothing.

This is also the heart of the problem. People looking towards government for benefits. For each benefit the government hands out, it has to take from somebody else. That cycle has got to stop for us to move forward.

I agree. But most regulations aren't about giving freebies to the masses. They're about protecting their rights to not be abused for the narrow gains of a few executives. That's why it's illegal to show subliminal messaging on television, to take part in cartel or monopolistic practices or sell people into slavery.

Yeah, pleading for freedom is really what is destroying our society. Continue planning society the way you like, see how it's working out?

You're not pleading for freedom. You're just busy blaming all of your problems on the government.

Until you learn to stop seeing things as black and white - you know "bankers good, government bad" - you'll never be able to understand quite how good you've got it.

The Netherlands could be a better place. Nobody's suggesting otherwise. But if you think that turning it into Somalia is the way to make it great, you're completely deluded.

bankers good, government bad

Now where in this 12 page thread did I say that?

I blame government for a lot of things, as well I should, seeing that they are responsible for a lot. But to extend my argument to the fact that government can do no good, is a poor way of debating.

I've also never claimed all bankers are good, I've claimed that they are trapped by the system in which they have no choice but to act the way they do.

Somalia is the way to make it great

Argumentum ad absurdum, that's all you have, repeatedly you continue to appeal to ridicule, painting me as a gun slinging, anarchist that wants to put my country back into the dark ages.

Let me bring you up to speed; The facts stack against you. A planned society, has never worked and will never work. By all means, continue to vote for people who make laws and how you should run your lives. I just hope someday you will come to your senses.

1 hour ago, Maddus Mattus wrote

@JohnAskew: I believe that if you strive for the freedom to choose, you will get equality as a result.

I believe that when you strive for equality, you end up with neither freedom nor equality.

At the heart of this, is a free market. Where order will grow out of chaos, due to the price system.

Selfish people and despicable market practices will be dealt with by the way the consumer votes with his money. No planning by a super power is neccesairy, property and liberty rights can solve almost all differences. And the imperfections can be dealt with in a court of law.

Power corrupts, so don't give anyone power. It really is that simple.

What if I own the entire supply chain and means of production to feed and keep a population segment alive and I decide to price them out of the market? Then you'll have starvation resulting from my profiteering attitude, which the market supports, because I'm still selling my wares to others who have the extra revenue.

Do you suggest taking my power away? Do you suggest the starving folks start eating tree bark? Maybe not in the USA or EU so much, but people die every day from starvation. Who cares?

Free market is not a shining beacon at the top of a hill that purifies human life as it draws us in.

"Power corrupts, so don't give anyone power" is inconsistent with "the heart of this, is a free market". You contradict yourself wholesale and completely; what a mess.

Government you want limit to merely the Justice system? Government policy meted only through Court verdicts? You'll stagnate every market with lawsuits. The Courts' judges'll become all powerful; they're already unelected and lifetime appointed. No thanks. 

Occam's Razor is a principle I must call you out on. Your model is far too simplified, it makes so many assumptions that it's no longer viable, and you must evolve it. Start with consistency and push past the rainbow and butterfly feeling you associate with 'free market' - define it concisely. Platitudes will not suffice.

EDIT: and place the definition in another thread, this one's needing to be done.

[quote]

Argumentum ad absurdum, that's all you have, repeatedly you continue to appeal to ridicule, painting me as a gun slinging, anarchist that wants to put my country back into the dark ages.

The fact that you've decided to ignore all of the other arguments on this thread is more of a reflection on you than on the lack of other arguments, Maddus.

Anyway, it's pretty clear that once again you have latched onto an idea in your mind, and though Heaven and Hell themselves may move, nothing will swing you from your previously held position.

So I'm not sure there's much more to do on this thread. It was amusing whilst it lasted, but it's gotten kind of boring now.

Me /out.

Famous last words? 

I happened to catch an episode last night, by chance, (honest).

The 4 part series in the link above describes and details the fiasco, where Treasury Sec. Tim Giethner & co. were running the show non-stop during both Bush and Obama administrations - he owns them both.

http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/money-power-wall-street/deadlines-loom-to-bring-financial-crisis-cases/

This link shows that the Justice Dept. will fail to prosecute inidividuals criminally as time expires to do so. Fantastic, they're planning to not prosecute armed robbers... next year... when there is no money left.

  EDIT: I watched the Republican national convention last night too, you worrisome conservatives.

43 minutes ago, Bass wrote

"We had a healthy system before regulations."

Famous last words? 

Bitcoins were invented to teach libertarians what an unregulated market is like.

Suspected multi-million dollar Bitcoin pyramid scheme shuts down, investors revolt

EDIT: No, wait, I can feel it... "the market pushed the criminal away and victims learned their lesson. No regulations, no problems!"

The REAL problem here is that the USA is hostage to T. Giethner & friends. Obama was too intimidated to trade horses from Bush's Wall Street muscle. T. Giethner p0wns any US President. Happy Now?

What regulation could have prevented pirateat40 to rip people off?

Bad guys exist in every system. Treating everyone as a bad guy because there might be a couple, is a slippery slope that we went down with over regulation. It has gotten us nowhere, but deeper down the rabbit hole.

@JohnAskew: Does this mr. Giethner own Obama and Bush or is he just a puppet of your government?

20 minutes ago, Maddus Mattus wrote

@blowdart: Do tell,..

What regulation could have prevented pirateat40 to rip people off?

The same regulation that put Bernie Madoff and Charles Ponzi into jail.

Bad guys exist in every system. Treating everyone as a bad guy because there might be a couple, is a slippery slope that we went down with over regulation.

Capitalism encourages people to do things in the best interests of their wallets (that's kindof the definition of Capitalism and it's greatest strength).

Unfortunately there are sometimes occasions where letting people do what is in the best interests of their wallet is against the interests of society. Examples being:

• Kidnapping for the purposes of selling people into slavery (including prostitution)
• Coercive employment practises (e.g. beating workers to force them to stay at work, use of slavery etc).
• Fraud (including Ponzi Schemes)
• Theft
• The murder, extortion, intimidation or other unlawful violence against competitors
• Monopolistic and anti-competitive practises (including violation of patents and copyright)
• Choosing to not pay taxes.
• Trade of socially unacceptable materials (including drug trafficing, sale of arms, trading biological/chemical/nuclear parts, trade of human organs, sale of children etc) or selling prohibited goods to socially unacceptable individuals (e.g. selling lockpicks to criminals and nuclear bombs to terrorists)

If you abolish all regulations, and move to pure, unadulterated capitalism, all of those become acceptable business practices. I do not want to live in such a society - and neither do most people in the west.

Regulations do not stop these practices from happening - these practises occur in all western states. The regulations stop these practises from being normal. Bernie Madoff screwed over loads of investors. Those investors are currently learning their lesson by having to live with a thinner wallet. But Bernie Madoff doesn't get off scott free either. He is serving time both to stop him screwing people over again, and to warn other people that ponzi-schemes are not a legitimate tool for making money.

I don't see why you're so unable to see this other than in black-and-white. Some regulations are good. Some regulations are bad. A society without any regulations is a lawless land ruled by the guy with the biggest private army. A society with regulations on everything is stifled and unable to move.

Calling for the abolition of all regulations, or blaming all badness in the world on "the government" is a frankly bizarre and indefensible viewpoint that shows that you are completely detached from the reality of how the world works.

http://dealbook.nytimes.com/2012/08/30/a-third-option-for-regulators-in-the-money-market-fund-fight/?asid=142d26ef

As you can see the fierce determination on US Treasury Secretary Tim Giethner's face and the submissive downward glance of the SEC chairperson (sarcasm intended), Wall Street said "no" to new regulations on money market funds and went back to business as usual. TG looks a bit like an angry beaver, no?

The article describes how ineffective TG is, and how strong Wall Street is, in reality. Given the fact that TG is from the Wall Street elite circle, the scars from being thrown under the bus by the SEC only show as a few wrinkles of fiegned consternation between his eyes (see photo above).

SEC = Security Exchange Commission - overseer of Wall Street

TG = Tim Giethner, US Treasury Secretary and the ONE consistent player between Presidents during the financial crisis, or as I like to say "The Great Theft by Wall Street 2008".

I don't see TG as a puppet of the government. Government has no hands, no arms. If TG is a puppet, he is controlled by the investment banks on Wall Street and is their messenger for the standing US President, regardless who that may be, Bush, Obama, it doesn't matter because Presidents are incidental for him.

Wall Street makes their own rules. They own the government.

3 hours ago, Maddus Mattus wrote

@blowdart: Do tell,..

What regulation could have prevented pirateat40 to rip people off?

Bad guys exist in every system. Treating everyone as a bad guy because there might be a couple, is a slippery slope that we went down with over regulation. It has gotten us nowhere, but deeper down the rabbit hole.

Actually what I'm finding hilarious about it all is those folks who were using bitcoins as a libertarian dream of a private currency are rapidly running to the courts for help. Which is rather, umm, two-faced

That's just an association fallacy.

We have exploitation, therefore capitalism sucks. The one has nothing to do with the other. People will always exploit others. What we need to do, is make it hard for them to find markets to exploit other people in. And that means legalizing a lot of things you might not agree with.

Want to take out the Taliban and FARC? Legalize drugs. Take away their source of income.

Worried about forced prostitution? Make it legal to prostitute. Bring it under your control.

And where did I ever state that I want to abolish ALL laws? I've said that I'm against laws that force me to do something and limit my personal freedom.

I've explained over twenty times in this thread now, that I want government protect you from people who are trying to force you to do something. But I'm also for protection from the government!

As of now, I'm forced to work four months of the year, for somebody that has demonstrated time and time again to act irresponsible with the money and power they have been granted. I don't want to continue working for him, I'll spend my own money on charities that I agree with or give it to people who have demonstrated that they can spend money responsibly.

How is being forced to work for somebody at zero pay any different from the situation you paint capitalism is responsible for?

19 minutes ago, Maddus Mattus wrote

@evildictaitor: 

That's just an association fallacy.

We have exploitation, therefore capitalism sucks. 

Capitalism is great. It's just unregulated capitalism that sucks.

Want to take out the Taliban and FARC? Legalize drugs. Take away their source of income.

Worried about forced prostitution? Make it legal to prostitute. Bring it under your control.

Solving the problem of "capitalism doesn't always work in societies interests" by simply saying "society should drop those principles" doesn't work in more extreme cases.

For example, I could argue the same about assinations. Worried that criminals are killing each other for money? Let's legalize and tax it. Worried that terrorists might be buying nuclear material to blow the crap out of New York? Well at least this way the terrorists will have to pay VAT on that nuclear bomb.

Some activities are just too extreme for society to just bring within the confines of capitalism. Sometimes things must be illegal - whether it be as extreme as flying planes into buildings and setting off bombs in market places, to slavery, forced prostitution and selling children.

I would argue that if you have a magic box that whenever you press the red button you get a bonus, and that bonus is paid by the taxpayer, then it should be illegal to press that button. Whether it be embezzlement by an official, or applying risk to non-invested ordinary accounts, it should not be legal to deliberately and fraudulently bring the nation to its knees by paying yourself bonuses that you know will eventually be paid by the taxpayer in the form of a bailout.

Rather than making the bonuses illegal (as some would like), or taking the magic box away (i.e. forced splitting of the banks as others would like), I think that they simply shouldn't be allowed to profit from applying risk to non-invested guaranteed ordinary accounts.

If you leave them alone with the magic box and tell them to continue as usual, they'll keep pressing the magic button, and sooner or later we'll have to bail them out again.

I've explained over twenty times in this thread now, that I want government protect you from people who are trying to force you to do something. But I'm also for protection from the government!

And as I've said over twenty times in this thread now, the things the government are regulating (that you see as the government stopping you doing something) can also be seen as the government protecting the person you're going to do it against.

In order to stop someone forcing you into a grave by shooting you in the face, they have to legislate against someone else's "right" to do so.

In order to stop someone blowing a 20-mile crater into New York, they have to legislate against a jihadist's "right" to buy nuclear weapons.

In order to protect the public's right to not pay $20,000 in bailout money each to Wall Street, perhaps we should legislate to prevent another bailout (note: NOT legislate to prevent them going bust. Just legislate so that when they go bust, we won't have to bail them out).

As of now, I'm forced to work four months of the year, for somebody that has demonstrated time and time again to act irresponsible with the money and power they have been granted. I don't want to continue working for him, I'll spend my own money on charities that I agree with or give it to people who have demonstrated that they can spend money responsibly.

How is being forced to work for somebody at zero pay any different from the situation you paint capitalism is responsible for?

I suppose we could just state this another way. Because the bankers were allowed to apply risk to ordinary citizen's non-invested savings accounts, yielding massive profits for the bankers which they paid to each other in bonuses, you, Maddus, must pay $20,000 to the financial sector in bailouts.

You might pay this money TO the government, but it goes immediately TO the bankers via the bailout. Money is fungible, so this is EXACTLY EQUIVALENT to you just writing them a cheque directly.

So far from working for 4 months for the government, you're actually working for 2 months in return for the government building roads and policing your streets, defending borders, managing visa applications and educating your children and stopping someone from robbing your house.

And then you work the next two months for free to pay off all of the debt to pay for all of the banker's bonuses and share options that they've been paying themselves for the last decade. You get nothing in return for those two months.

It seems to me that what you're arguing is that the government should, rather than mistakenly looking the wrong way when banks are doing misdeeds (which is the kindest thing you could say about the current bailout), DELIBERATELY looking the wrong way when it comes to the next one.

Money that isn't spend regulating the market is money spent bailing it out next time it goes bust. Because unless the non-invested savings and income of ordinary citizens are put out of reach of bankers, they will screw us over time-and-time-again and the government will have to just keep bailing them out.

10 hours ago, evildictait​or wrote

Capitalism is great. It's just unregulated capitalism that sucks.

You can't have capitalism with regulations, protecting some at the expense of others. What you end up with is a socialist system run by government. Forcing bankers to loan to non credit worthy people, FED lending money for free, politicians thinking they should 'save' the economy, etc. etc. etc.

But keep pretending we have capitalism and that all the problems we have do not arise from government, but from the failure of capitalism.

The only regulation you need is protecting ones freedom.

Solving the problem of "capitalism doesn't always work in societies interests" by simply saying "society should drop those principles" doesn't work in more extreme cases.

What problem of capitalism?

If society doesn't want a thing, they should stop buying it!

It's the ultimate democracy, you get a vote with each dollar and not once every four years.

For example, I could argue the same about assinations. Worried that criminals are killing each other for money? Let's legalize and tax it. Worried that terrorists might be buying nuclear material to blow the crap out of New York? Well at least this way the terrorists will have to pay VAT on that nuclear bomb.

That's another appeal to ridicule. I'm for a set of basic rights. You do not have the right to kill, never.

You keep making up these ridiculous scenario's, don't you have normal examples to prove your case?

Some activities are just too extreme for society to just bring within the confines of capitalism. Sometimes things must be illegal - whether it be as extreme as flying planes into buildings and setting off bombs in market places, to slavery, forced prostitution and selling children.

What does terrorists building bombs have to do with capitalism?

They will build bombs, rape women and kill people if we have communism, capitalism, or any kind of ism.

This is another guilt by association fallacy. The one has nothing to do with the other.

I would argue that if you have a magic box that whenever you press the red button you get a bonus, and that bonus is paid by the taxpayer, then it should be illegal to press that button. Whether it be embezzlement by an official, or applying risk to non-invested ordinary accounts, it should not be legal to deliberately and fraudulently bring the nation to its knees by paying yourself bonuses that you know will eventually be paid by the taxpayer in the form of a bailout.

Yeah, write a law that prohibits you from pressing that button.

Clearly the better solution is to take away the box.

But you go ahead, place a sign next to the button saying, don't press.

Rather than making the bonuses illegal (as some would like), or taking the magic box away (i.e. forced splitting of the banks as others would like), I think that they simply shouldn't be allowed to profit from applying risk to non-invested guaranteed ordinary accounts.

If you leave them alone with the magic box and tell them to continue as usual, they'll keep pressing the magic button, and sooner or later we'll have to bail them out again.

Like I said, remove the power from government to create the box in the first place.

People will press that button, regardless of the signs or warning labels. You can't plan people, it's time you realized that.

And as I've said over twenty times in this thread now, the things the government are regulating (that you see as the government stopping you doing something) can also be seen as the government protecting the person you're going to do it against.

I'm not forced to trade with the bank, so it's my own free choice. I'm not hurting anyone else then myself if things go wrong, so no need for the government to step in at all.

But if you want a safety net because you think people are to dumb, then that's exactly what you end up with. Risky investments, customers not caring, banks not caring and tax payers bailing the system out.

All the facts say that people will press that button, regardless of how many signs you put next to them.

Again, you can't plan people.

In order to stop someone forcing you into a grave by shooting you in the face, they have to legislate against someone else's "right" to do so.

Again, nonsense. Where I am arguing that I have the right to shoot anyone in the face?

In order to stop someone blowing a 20-mile crater into New York, they have to legislate against a jihadist's "right" to buy nuclear weapons.

In order to protect the public's right to not pay $20,000 in bailout money each to Wall Street, perhaps we should legislate to prevent another bailout (note: NOT legislate to prevent them going bust. Just legislate so that when they go bust, we won't have to bail them out).

Yeah nuclear arsenal solely in the hands of government, good idea!

Go ask the people in Hiroshima and Nagasaki how they feel about that!

Again, you want to prevent symptoms rather then create a better system.

I suppose we could just state this another way. Because the bankers were allowed to apply risk to ordinary citizen's non-invested savings accounts, yielding massive profits for the bankers which they paid to each other in bonuses, you, Maddus, must pay $20,000 to the financial sector in bailouts.

I wish they only risked the consumer savings. Then we could solve this mess.

The problem is, that the FED lent out money covered by bonds at 0.5% to Wall street.

Normal savings are way to expensive to invest so risky,.

Of course the reap massive profits, we gave them money for free!

You might pay this money TO the government, but it goes immediately TO the bankers via the bailout. Money is fungible, so this is EXACTLY EQUIVALENT to you just writing them a cheque directly.

Exactly my point! Why pay the man, if he does stupid things with it!

So far from working for 4 months for the government, you're actually working for 2 months in return for the government building roads and policing your streets, defending borders, managing visa applications and educating your children and stopping someone from robbing your house.

And people on trains? They are paying for those roads as well, but might never need them.

People should pay for what they use.

And if the private sector was responsible for the roads, I would only have to work one month for them instead of two.

And then you work the next two months for free to pay off all of the debt to pay for all of the banker's bonuses and share options that they've been paying themselves for the last decade. You get nothing in return for those two months.

Oh I agree, I want to stop paying for that. But regulation prohibits me.

It seems to me that what you're arguing is that the government should, rather than mistakenly looking the wrong way when banks are doing misdeeds (which is the kindest thing you could say about the current bailout), DELIBERATELY looking the wrong way when it comes to the next one.

Money that isn't spend regulating the market is money spent bailing it out next time it goes bust. Because unless the non-invested savings and income of ordinary citizens are put out of reach of bankers, they will screw us over time-and-time-again and the government will have to just keep bailing them out.

Not at all.

I'm arguing that no one should pay to save a bank. And that we should not tell the banks how to run their business. That's the trade off.

In order for them to act responsibly, they should have responsibility. If you take away their responsibility, they will act irresponsible. Like we are seeing right now.

The crisis we are in, was not created by banks. It was created by government trying to prevent a market collapse. Which is folly, because markets fail all the time. It's nothing new, nothing to be scared off. Take your losses and build a better market in it's place. This is how we evolve the market.

12 hours ago, Maddus Mattus wrote

@evildictaitor: 

Worried about forced prostitution? Make it legal to prostitute. Bring it under your control.

How does legalizing prostitution prevent people being forced into prostitution? At best it means you're now simply turning a blind eye to the problems those people are facing, because they're not doing anything illegal any more (regardless of whether they're doing it out of choice or not).

It's the same as slavery. Plenty of people were being forced into slavery when slavery was legal. And plenty of other people were profiting from it, because that's how capitalism works.

For someone so pro-capitalism, it's surprising how hard you seem to find it to understand how it works. If you can make more money by exploiting others, then capitalism demands that you go right ahead and exploit them. If it wasn't the "correct" thing to do, it would end up being unprofitable. That's the entire philosophy behind it.

And, like Communism, it entirely doesn't work in practice because it turns out there are a whole bunch of things which are extremely profitable but morally irreprehensible.

You can't have capitalism with regulations, protecting some at the expense of others. What you end up with is a socialist system run by government.

Regulated capitalism has systematically shown itself to be the most economically productive system available. Truly unregulated capitalism exists only in countries that have no effective government. Which means it exists only in countries like Somalia and the Palestinian territories (but you'll need to pay for your own private army to keep your money safe).

Forcing bankers to loan to non credit worthy people, FED lending money for free, politicians thinking they should 'save' the economy, etc. etc. etc.

I don't think we should loan to non-credit worthy people. I don't think the FED should lend money for free (or frankly at all). And I don't think politicians should "save" the economy. I think that politicians should remove from capitalism assets which it cannot allow to be traded (e.g. it should be illegal to trade in slaves, in nuclear weapons) and it should make it unprofitable to do activities that harm society.

For example, if you as a banker can make obfuscated packages to sell for profit (which you take home in bonuses), but doing so costs you more money in insurance-premiums than the profit you'd make, then making packages that have hidden risk is unprofitable. So you won't do it.

Result: Bankers choose freely under capitalism not to sell each other hidden-risk packages. This is infinitely better to telling bankers not to sell each other hidden-risk packages (which they'll work to find ways around), or allowing bankers to keep doing business as usual (the status-quo), or preventing bankers from trading at all.

The only regulation you need is protecting ones freedom.

The only regulations we have are ones protecting ones freedom. They are all "you can't do X, in order to protect Y's right not to have X done to them".

The law restricts MY right to shoot you in the face, in order to protect YOUR right not to be shot in the face.

The law restricts the pharmaceutical company's right to save money by not testing drugs in order to protect YOUR right not to be used as an unwilling drugs guinea-pig.

I say the law should restrict the BANKER's right to make money by pushing the button in order to protect EVERYONE ELSE's right to not have to pay to cleanup the mess.

If society doesn't want a thing, they should stop buying it!

That argument is similar to "If you don't want to get shot in the face, you shouldn't go outdoors.".

Society is able to object to something that certain individuals in society want to trade. For example, Osama Bin Laden was a wealthy man, and would have had no real problem raising the money to purchase a nuclear weapon. Similiarly a black-market dealer who got their hands on one would probably want to sell it. Capitalism says they should be allowed to trade. Society says they shouldn't.

That's another appeal to ridicule. I'm for a set of basic rights. You do not have the right to kill, never.

You should also have the right to expect that your money won't be stolen - either via the bank collapsing and your savings vanishing, or through a bailout.

They will build bombs, rape women and kill people if we have communism, capitalism, or any kind of ism.

But under regulated capitalism, if they do those things they'll go to jail. Under your system they'll be able to keep doing it again and again. And what's more - your neighbour can do it. And he won't have to do it in secret. Because it'll be LEGAL.

Yeah, write a law that prohibits you from pressing that button.

Clearly the better solution is to take away the box.

But you go ahead, place a sign next to the button saying, don't press.

I was just going to say that every time they press the button, they pay an amount of cash strictly greater than the amount of cash that society will have to pay to cleanup the mess.

That way, bankers still get to trade using your savings money, but they'll only do it to buy things that genuinely make them money. It will no longer be profitable to load the company with risk for low returns.

The solution of taking away the box is the solution of forced seperation of investment banks and retail banks. The solution of putting a sign next to the button saying don't press is what your current government is attempting.

What YOU are suggesting is that you take away all of the signs and CCTV and the guard in front of the button, and you run away and hope that the problem vanishes.

Like I said, remove the power from government to create the box in the first place.

The government didn't make the box. The bankers did. Risk-amortized pseudo-assets weren't invented by government. They were invented by bankers who knew that when the asset defaults, society has to pay.

People will press that button, regardless of the signs or warning labels. You can't plan people, it's time you realized that.

I say, charge money strictly greater than the amount of money the magic box pays out in return for pressing the button. Then they can press it as often as they want. But capitalism says they won't.

I'm not forced to trade with the bank, so it's my own free choice. I'm not hurting anyone else then myself if things go wrong, so no need for the government to step in at all.

You're not forced to use Bank X. But you ARE effectively forced to use a bank.

I assume, Maddus, that you do in fact have some savings in a bank. Imagine for a second that all of those savings go *poof* and vanish. Now imagine that the same happens to your pension. Now imagine that the same happens to the capital in your house, you're in negative equity and you lose your job.

Now tell me that this is somehow YOUR fault and that you DESERVE to be punished for it by having to sleep on the streets.

Bankers RIGHT NOW are pushing the magic button of adding risk to your savings to generate money. RIGHT NOW they are paying themselves bonuses based on their massive profits from pressing the magic button. The risk in the bank is growing by the second - every time they press the magic button, the size of the financial explosion that hits us later gets bigger. We need to stop that timebomb before it goes off. And pretending that the explosion won't happen, or saying that the people hit by the bomb when it goes off are the people who should cope with it is the wrong solution. We need to make sure that when (not if) the bomb goes off, the innocent people caught in the blast are compensated by the bank, not by society. 

If there were any set of banks that between them could never default, I'd agree with you, and let people move their money around. But at the time-being in the set of all investment banks and retail banks, there is NOT ONE single group of these that will never default. Consequently the only way to keep your money safe under the status quo is to put your money under the mattress or rely on government bailouts.

I'm in favour of giving customers the choice of paying to have their money safe. You're in favour of giving them no option where their money is safe.

But if you want a safety net because you think people are to dumb, then that's exactly what you end up with. Risky investments, customers not caring, banks not caring and tax payers bailing the system out.

Nah - I think we should scrap the safety net in favour of insurance. You're the only one saying that we need the safety net (hint: the status quo has a safety net, and whilst we're in a democracy, your current accounts are going to be underwritten - regardless of who's in power). At least with my system the banks pay for being risky, and the government gets paid for underwriting risk. In your system, they underwrite the risk for free (read: the taxpayers underwrite the risk for free, so that when the risk explodes, you have to pay $20,000 in bailout money to them again).

All the facts say that people will press that button, regardless of how many signs you put next to them.

So stop putting signs up next to the button. You're the only one who is suggesting that we do that.

Again, nonsense. Where I am arguing that I have the right to shoot anyone in the face?

You're arguing that the bank should be able to write itself a check from you to itself to the tune of $20,000. Economically, that's being shot in the face.

Yeah nuclear arsenal solely in the hands of government, good idea!

I think of all of the things you've said on this thread, this is up there with the most stupid.

I wish they only risked the consumer savings. Then we could solve this mess.

The problem is, that the FED lent out money covered by bonds at 0.5% to Wall street.

Normal savings are way to expensive to invest so risky,.

Of course the reap massive profits, we gave them money for free!

Yep. Under my system the FED wouldn't lend a dime, and the cost of the risk would be paid for by the bankers at the market rate. The current system IS your system, since you're not providing an alternative.

Exactly my point! Why pay the man, if he does stupid things with it!

You voted for him.

I'm arguing that no one should pay to save a bank. And that we should not tell the banks how to run their business. That's the trade off.

In order for them to act responsibly, they should have responsibility. If you take away their responsibility, they will act irresponsible. Like we are seeing right now.

The crisis we are in, was not created by banks. It was created by government trying to prevent a market collapse. Which is folly, because markets fail all the time. It's nothing new, nothing to be scared off. Take your losses and build a better market in it's place. This is how we evolve the market.

The government didn't try to stop a market collapse. It tried to stop a banking collapse. If shares fall, the government doesn't give a crap. If ordinary people's current accounts do, they do give a crap (because the majority of people give a crap, and in a democracy, that's what happens).

Under my system, people that want protection from a bank collapse pay for that protection at market rate. Under every other scheme, they either get the protection for free, or pay a random number decided by a politician. Your scheme is that they get the protection for free, since all of your suggestions are unimplementable by a democratic government, so you're really fighting for the status quo.

12 minutes ago, evildictait​or wrote

*snip*

Under my system, people that want protection from a bank collapse pay for that protection at market rate. Under every other scheme, they either get the protection for free, or pay a random number decided by a politician. Your scheme is that they get the protection for free, since all of your suggestions are unimplementable by a democratic government, so you're really fighting for the status quo.

In fairness, he isn't. He's arguing for a system in which putting money into a bank is effectively replaced by you simply handing over all your money to bankers to do with as they choose, including deciding they don't particularly feel like giving it back. That's not (quite) the status quo, but it's a fairly stupid system to actively want unless you happen to be a banker.

2 minutes ago, AndyC wrote

*snip*

In fairness, he isn't. He's arguing for a system in which putting money into a bank is effectively replaced by you simply handing over all your money to bankers to do with as they choose, including deciding they don't particularly feel like giving it back. That's not (quite) the status quo, but it's a fairly stupid system to actively want unless you happen to be a banker.

We live in a democracy. If a government allows people's savings that are "safely in the bank" vanish overnight, the government will have to bail them out. Because the alternative is that everyone withdraws all of their cash and hides it under the bed. And when they do that, society really is in trouble.

So Maddus is saying that the government should pretend that it won't bail out the banks. But the banks will be smart enough to see that no government could allow people's savings to vanish and will continue as normal (but now with fewer regulations). And eventually the bank will collapse and the government will inevitably bailout the savings, because it's not possible to have a democracy that won't.

i.e. Maddus's system is the same as the status quo - where we bailout the banks - except that in his system he spends the good years telling everyone he's "abolished boom and bust" and that we don't need to regulate the banks because "aren't they jolly brilliant at making all this money". And when the banks inevitably go bust, he'll get out his wallet and give them a bailout - because the alternative of everyone withdrawing all of their money from all banks causing all of the banks to collapse during a recession is even worse than handing over a bailout.

The only way you can stop the bailouts is by either making it illegal to be risky on assets that are politically protected (i.e. break up the banks) or making it unprofitable to be risky on assets that are politically protected (i.e. move to an insurance model).

32 minutes ago, evildictait​or wrote

*snip*

We live in a democracy. If a government allows people's savings that are "safely in the bank" vanish overnight, the government will have to bail them out. Because the alternative is that everyone withdraws all of their cash and hides it under the bed. And when they do that, society really is in trouble.

Yeah, but he actually seems to think that's OK. In his society we all either keep our money under the mattress (or more likely in physical goods we can exchange for other goods) or we simply work effectively for the "banks" by handing them everything we ever earned and hoping that their good and generous nature (or something) will mean we get looked after.

It's a bit like feudal Britain in many respects. And wouldn't that be great?

2 hours ago, AndyC wrote

*snip*

Yeah, but he actually seems to think that's OK. In his society we all either keep our money under the mattress (or more likely in physical goods we can exchange for other goods) or we simply work effectively for the "banks" by handing them everything we ever earned and hoping that their good and generous nature (or something) will mean we get looked after.

It's a bit like feudal Britain in many respects. And wouldn't that be great?

The basis for all of his arguments (about virtually anything) is that things fix tend to fix themselves. He doesn't want to spend any money on preventing AGW because the Earth will eventually heal itself. Never mind that it could take 100,000 years for that happen. In the end, it will all be good, so in the mean time, let's burn as much fossil fuel as possible.

He doesn't want any regulations to prevent global economic meltdown and complete collapses of banking systems. Capitalism will fix itself, and world economies will be restored. Never mind that it may take decades for the world economies to recover. In the end, it will all be good.

It doesn't matter that millions or billions of people have to suffer before the Earth's climate or the world's economies recover.  I'll be damned if I'm one of those that will have to suffer. I'm too * smart to let that happen to me. So lets eliminate all regulations and party like it's 1999! Huzzah!

 . Never mind that it could take 100,000 years for that happen.

It would take 2 orders of magnitude less time than that

"First of all, the CO2 emissions will converge towards zero sometime between 2030 and 2200 because the fossil fuels will (have to) be replaced by other sources of energy: they will get depleted as some point. (Replacements are known already today - they're just uneconomic at the present.) I really don't know the exact year and I don't think it's important for any purpose to speculate about this year. As we will explain in quite some detail, by the year 3000, the CO2 concentration will return towards the value dictated by the external temperature.

The Antarctice ice core data show very clearly that this is what CO2 does, after a 800-year lag (plus minus 600 years). The reason has been discussed almost infinitely many times.



The graphs from the last 400,000-600,000 years show a very tight correlation between CO2 and temperature. However, a closer scrutiny reveals that the CO2 changes are lagging behind the temperature changes by 800 years in average.

We also know why it is so. The relevant layers of the ocean are able to emit/absorb the gases - including CO2 and methan - to/from the atmosphere. However, it takes time for these layers of the ocean to adjust their temperature to the atmosphere around them. After 800 years or so, they do so and emit/absorb the right amount of the trace gases to/from the atmosphere so that the concentration agrees with the temperature.

Because of the human activity, there will be something like 600-1000 ppm of CO2 at the peak level.

However, the CO2 concentration that can be in natural equilibrium with the temperature at that moment is about 300-320 ppm because the greenhouse warming from doubling or quadrupling CO2 relatively to the pre-industrial levels will be just between 2 and 4 °C and the graphs above show that this warming is equivalent to the CO2 increase by 20-40 ppm, it's clear from the historical record that within 800 years, the CO2 concentration will return from 600-1000 ppm to 300 ppm in at most 800 years. Once it happens, the greenhouse effect of the disappeared CO2 will be undone, too.

The time 800 years above is actually likely to be a significant overestimate; CO2 will return close to the pre-industrial levels much more quickly than that. Why? Many people still don't understand the positive and negative contributions to CO2 in the atmosphere, so let's review a few basic facts again.

Well, the total amount of CO2 in the atmosphere is known to be 3,160 gigatons. The civilization annualy emits 29 gigatons of CO2. (Be careful not to confuse this counting with the counting that only includes the mass of the carbon atoms in CO2. In that convention, 29 gigatons is replaced by 8 gigatons, 12/(12+16+16)=12/44 times those 29 gigatons.)

So we annually emit 29/3,160 = 0.92 percent of the existing CO2 in the atmosphere. The concentration should therefore increase by 0.0092 * 388 ppm = 3.56 ppm every year. In reality, it only increases by 1.86 ppm or so: we can measure how quickly the CO2 is actually increasing every year (the Keeling curve). It follows that the difference between Nature's absorption and emission must be approximately 1.7 ppm every year. Nature prefers to absorb CO2."

http://motls.blogspot.ca/2011/01/weather-in-year-3000-once-again.html

38 minutes ago, Proton2 wrote

*snip*

 It would take 2 orders of magnitude less time than that

 

And if you burn a house to the ground, the house will return to atmospheric temperature very quickly after the fire goes out. Great. Everything's back to normal, right?

... though half that warming is due to improperly sited thermometers and improperly adjusted temperature data. Much of this temperature increase is also natural. The world benefits from increased CO2 levels as it is actually plant food. The satellite temperature data, which does not suffer from biases Urban Heat Island effects, shows that there has been no global warming for 15 years. All trends for extreme weather show no change over long time frames. Your alarmism about a possibly warmer world is unwarranted. So is your allarmism about a reduction in the quantity of regulations.

The majority of climate scientists think that the world is heating up due to man-made carbon emissions, and that this is a bad thing for the living things on this big hunk of rock. Consequently it is now the job of sceptics and scientists who wish to question to status quo to do so by providing high quality substantiated evidence in the form of peer-reviewed papers.

Stating things as fact that are clearly opposed to the scientific status quo without citations from peer-reviewed papers in any field is as scientifically credible as announcing that the world is flat.

3 hours ago, evildictait​or wrote

*snip*

The majority of climate scientists think that the world is heating up due to man-made carbon emissions, and that this is a bad thing for the living things on this big hunk of rock.

No, they say that change is bad for humans. For example the sea will rise a few meters and people will have to move. This has very little effect on animals. The earth has been 3 to 4 degrees warmer than today during the medieval warm period. It was actually a good time for humans compared to colder periods of human history.

8 hours ago, Proton2 wrote

*snip*

No, they say that change is bad for humans. For example the sea will rise a few meters and people will have to move. This has very little effect on animals. The earth has been 3 to 4 degrees warmer than today during the medieval warm period. It was actually a good time for humans compared to colder periods of human history.

Stating things as fact that are clearly opposed to the scientific status quo without citations from peer-reviewed papers in any field is as scientifically credible as announcing that the world is flat.

If what you say is true, put it in a peer-reviewed paper.

Thread over.

1 day ago, evildictait​or wrote

Regulated capitalism has systematically shown itself to be the most economically productive system available. Truly unregulated capitalism exists only in countries that have no effective government. Which means it exists only in countries like Somalia and the Palestinian territories (but you'll need to pay for your own private army to keep your money safe).

If you define regulated and non regulated capitalism in that way, I agree with you. What I think we disagree on, is where to draw the line on government's responsibilities. I think people can solve almost all problems on their own and regulating creates more problems then it solves.

I don't think we should loan to non-credit worthy people. I don't think the FED should lend money for free (or frankly at all). And I don't think politicians should "save" the economy. I think that politicians should remove from capitalism assets which it cannot allow to be traded (e.g. it should be illegal to trade in slaves, in nuclear weapons) and it should make it unprofitable to do activities that harm society.

That definition is way to broad. Politicians will take advantage of the 'what is best for society' rule any chance they get, they already are, see regulations against climate change.

For example, if you as a banker can make obfuscated packages to sell for profit (which you take home in bonuses), but doing so costs you more money in insurance-premiums than the profit you'd make, then making packages that have hidden risk is unprofitable. So you won't do it.

Result: Bankers choose freely under capitalism not to sell each other hidden-risk packages. This is infinitely better to telling bankers not to sell each other hidden-risk packages (which they'll work to find ways around), or allowing bankers to keep doing business as usual (the status-quo), or preventing bankers from trading at all.

Exactly my point of view. It's not in their best interest to trade this way with each other. We as a customer should be treated as a full partner in this system, currently we are just cattle to them, because government sticks their nose in.

The only regulations we have are ones protecting ones freedom. They are all "you can't do X, in order to protect Y's right not to have X done to them".

You have to make a distinction between rights you get at the expense of others. Let's take a concrete example;

There is a right to an education. You could consider this a freedom. But what is the cost of this freedom? It means that other people, who don't go to school, have to pay taxes. That means that because you have a freedom, they have less. Therefore it gives you freedom at the expense of someone else's freedom. In my opinion this is a law that could not pass under capitalism.

The law restricts MY right to shoot you in the face, in order to protect YOUR right not to be shot in the face.

You don't have the right to shoot me in the face. I don't have the right to not be shot in the face.

I have the right not to be forced by anybody to do anything, that's freedom and that should be protected under law.

The law restricts the pharmaceutical company's right to save money by not testing drugs in order to protect YOUR right not to be used as an unwilling drugs guinea-pig.

Like I said before, if the drugs contained a label saying; 'we cut corners testing this', I would be OK with it. To make it illegal for drugs to be taken by patients, because form X is not signed, is inhumane.

I say the law should restrict the BANKER's right to make money by pushing the button in order to protect EVERYONE ELSE's right to not have to pay to cleanup the mess.

Again, take away the button. Let the bankers create a normal healthy market to make money in. The current situation is a clear example of how over regulation creates all kinds of crazy products.

You can't make everybody play fair, but don't fall for it to treat everyone as a criminal in order to root a few bad men out. You end up creating armies of criminals.

That argument is similar to "If you don't want to get shot in the face, you shouldn't go outdoors.".

Sheisse happens, deal with it. I take risks all day. But I calculate them and decide which ones to take, which to ensure and which to avoid. Anyone is perfectly capable to do that for themselves. To treat everybody as a toddler, creates armies of toddlers.

Society is able to object to something that certain individuals in society want to trade. For example, Osama Bin Laden was a wealthy man, and would have had no real problem raising the money to purchase a nuclear weapon. Similiarly a black-market dealer who got their hands on one would probably want to sell it. Capitalism says they should be allowed to trade. Society says they shouldn't.

Which society? Ours? Of course ours would prevent theirs to make bombs. That would mean we are on equal footing. Can't have that.

There are two recorded detonations of nuclear weapons on civilian targets, Osama was not there.

You should also have the right to expect that your money won't be stolen - either via the bank collapsing and your savings vanishing, or through a bailout.

A bank collapsing and your money going poof, is not stealing. Profit and loss are a normal part of life. You can't profit all the time.

But under regulated capitalism, if they do those things they'll go to jail. Under your system they'll be able to keep doing it again and again. And what's more - your neighbour can do it. And he won't have to do it in secret. Because it'll be LEGAL.

If the people are stupid enough to give them their money twice without a contract, yes, they should be continued to do business.

Otherwise they should take him to court, provided by a government, to resolve the situation.

I was just going to say that every time they press the button, they pay an amount of cash strictly greater than the amount of cash that society will have to pay to cleanup the mess.

That way, bankers still get to trade using your savings money, but they'll only do it to buy things that genuinely make them money. It will no longer be profitable to load the company with risk for low returns.

That would just make every product cost the same. The reason something yields more is because there is more risk involved.

The solution of taking away the box is the solution of forced seperation of investment banks and retail banks. The solution of putting a sign next to the button saying don't press is what your current government is attempting.

What YOU are suggesting is that you take away all of the signs and CCTV and the guard in front of the button, and you run away and hope that the problem vanishes.

No, I'm saying take away the box, no need for a sign and CCTV.

The government didn't make the box. The bankers did. Risk-amortized pseudo-assets weren't invented by government. They were invented by bankers who knew that when the asset defaults, society has to pay.

Bankers new they could avert the risk to society, so they did. The problem is not that they did, the problem is that government provided the means for them to do it.

No bank in their right mind would have created the box, if they had to bare the risk.

I say, charge money strictly greater than the amount of money the magic box pays out in return for pressing the button. Then they can press it as often as they want. But capitalism says they won't.

I say take away the box. People wont pay your fine, government will not press charges if they don't. You give a enormous amount of trust to such a powerful entity with such a disastrous track record.

You're not forced to use Bank X. But you ARE effectively forced to use a bank.

Ofcourse you are forced to use a bank. You know how hard it is to track all your income and expenditures as a government if you do all transactions in cash?

I assume, Maddus, that you do in fact have some savings in a bank. Imagine for a second that all of those savings go *poof* and vanish. Now imagine that the same happens to your pension. Now imagine that the same happens to the capital in your house, you're in negative equity and you lose your job.

Now tell me that this is somehow YOUR fault and that you DESERVE to be punished for it by having to sleep on the streets.

And now tell me, what right do I have in that situation to take from people that have prepared for this scenario by taking a share of their food at gunpoint.

Bankers RIGHT NOW are pushing the magic button of adding risk to your savings to generate money. RIGHT NOW they are paying themselves bonuses based on their massive profits from pressing the magic button. The risk in the bank is growing by the second - every time they press the magic button, the size of the financial explosion that hits us later gets bigger. We need to stop that timebomb before it goes off. And pretending that the explosion won't happen, or saying that the people hit by the bomb when it goes off are the people who should cope with it is the wrong solution. We need to make sure that when (not if) the bomb goes off, the innocent people caught in the blast are compensated by the bank, not by society. 

Government insures that money, so why should I care?

Banks will be bailed out, my savings are ensured, why should I care what they do with the money?

Why should the banks care? Someone else will pay.

If there were any set of banks that between them could never default, I'd agree with you, and let people move their money around. But at the time-being in the set of all investment banks and retail banks, there is NOT ONE single group of these that will never default. Consequently the only way to keep your money safe under the status quo is to put your money under the mattress or rely on government bailouts.

I'm in favour of giving customers the choice of paying to have their money safe. You're in favour of giving them no option where their money is safe.

The free choice is all the insurance you need that banks will treat your money responsibly.

If government didn't print money like crazy, we wouldn't need these high interest rates. Just a safe place to store money would be nice.

Nah - I think we should scrap the safety net in favour of insurance. You're the only one saying that we need the safety net (hint: the status quo has a safety net, and whilst we're in a democracy, your current accounts are going to be underwritten - regardless of who's in power). At least with my system the banks pay for being risky, and the government gets paid for underwriting risk. In your system, they underwrite the risk for free (read: the taxpayers underwrite the risk for free, so that when the risk explodes, you have to pay $20,000 in bailout money to them again).

Safety net is an insurance.

So stop putting signs up next to the button. You're the only one who is suggesting that we do that.

Remove the box.

You're arguing that the bank should be able to write itself a check from you to itself to the tune of $20,000. Economically, that's being shot in the face.

Where did I argue for that?

I think of all of the things you've said on this thread, this is up there with the most stupid.

They are the only ones EVER to use not one but TWO nuclear devices against CIVILIAN targets. C I V I L I A N S !

I think it's despicable that you so lightly step over that issue. You continue to put trust in to something that has failed us on so many levels.

Yep. Under my system the FED wouldn't lend a dime, and the cost of the risk would be paid for by the bankers at the market rate. The current system IS your system, since you're not providing an alternative.

Bankers can't pay anything, they have to even the balance. So they will take the insurance and pass the cost back to the consumer. And they will continue doing even more dumb stuff, because they now have insurance.

Huzah for regulations!

You voted for him.

That doesn't matter.

The government didn't try to stop a market collapse. It tried to stop a banking collapse. If shares fall, the government doesn't give a crap. If ordinary people's current accounts do, they do give a crap (because the majority of people give a crap, and in a democracy, that's what happens).

Under my system, people that want protection from a bank collapse pay for that protection at market rate. Under every other scheme, they either get the protection for free, or pay a random number decided by a politician. Your scheme is that they get the protection for free, since all of your suggestions are unimplementable by a democratic government, so you're really fighting for the status quo.

Banking is a market. Your bank account is a share. So government shouldn't care regardless.

In a democracy several minorities give a crap, they gang up (till they get 51%+) and make several other minorities (what is left of the 100%) pay. That's how democracy works when government has a large enough pie to hand out. In my view, government should not have a pie. Then, each minority can handle his own problems it's own way.

2 days ago, AndyC wrote

In fairness, he isn't. He's arguing for a system in which putting money into a bank is effectively replaced by you simply handing over all your money to bankers to do with as they choose, including deciding they don't particularly feel like giving it back. That's not (quite) the status quo, but it's a fairly stupid system to actively want unless you happen to be a banker.

Yes, I am arguing exactly for that.

Imagine the amount of trust a banker has to earn to make customers see the added value of that!

Imagine the lengths to which they would have to go, to show the consumer their money is safe.

Right now, they don't. They don't care. They take your money when things go good, take your money via the government when things go bad.

8 hours ago, Maddus Mattus wrote

Oh goodie, cbae used the CC word.

Thread over.

You claim the thread is over, and then post again. Twice.

When do you ever not contradict yourself?

2 hours ago, Maddus Mattus wrote

*snip*

Yes, I am arguing exactly for that.

Imagine the amount of trust a banker has to earn to make customers see the added value of that!

Imagine the lengths to which they would have to go, to show the consumer their money is safe.

I can imagine unicorns and magical fairies too, but I live in reality.

Right now, they don't. They don't care. They take your money when things go good, take your money via the government when things go bad.

Big banks that are part of an oligopoly don't care, just like a monopolies in any industry don't care. Monopolies are prevented by regulations and so should oligopolies. Regulations do change behavior, whether or not you believe that the changes are good or not. They are mechanisms that have an effect in reality--not in some fantasy like you want to believe.

5 hours ago, Maddus Mattus wrote

*snip*

You have to make a distinction between rights you get at the expense of others. Let's take a concrete example;

There is a right to an education. You could consider this a freedom. But what is the cost of this freedom? It means that other people, who don't go to school, have to pay taxes. That means that because you have a freedom, they have less. Therefore it gives you freedom at the expense of someone else's freedom. In my opinion this is a law that could not pass under capitalism.

So you're happy to remove the rights of anyone from a disadvantaged background to have any kind of access to education whatsoever? Those who, through no fault of their own, are born into poverty are simply stripped of any chance of improving their life because they were not in a position to afford any education, thus haven't any chance of getting a reasonable job and will have children who are equally born into a perpetual poverty trap.

Do you not see how it might be beneficial for society as a whole to actually give those children as much access to education as anyone else, thus giving them the chance to become far more valuable members of society. Do you really believe that the world is better if only the rich have access to education, even if they squander the opportunity?

5 hours ago, Maddus Mattus wrote

*snip*

Yes, I am arguing exactly for that.

Imagine the amount of trust a banker has to earn to make customers see the added value of that!

Imagine the lengths to which they would have to go, to show the consumer their money is safe.

Right now, they don't. They don't care. They take your money when things go good, take your money via the government when things go bad.

Imagine what happens if all the bankers get together and decide to say a big screw-you to everyone else. Since all your wages go directly into the bank, the bankers get together and blow it all on a big party with blackjack and hookers. When you want to buy food for you and your family, you just get told you haven't actually got any money and that's your own fault and nobody gives a monkeys. Your family starve to death and it's entirely your fault despite you having absolutely no say in the matter whatsoever.

Of course, that could only happen in a world in which bankers have been demonstrably corrupt and happy to manipulate the system for their own gain at the expense of everyone else. Surely that won't happen? Oh, hang on...

You have to make a distinction between rights you get at the expense of others. Let's take a concrete example;

All laws limit someone's right in order to protect someone else's right. To show you how poor your argument is let's change the nouns in your example:

There is a right to being protected from murder. You could consider this a freedom. But what is the cost of this freedom? It means that other people, who already hire private bodyguards, have to pay taxes. That means that because you have a freedom, they have less. Therefore it gives you freedom at the expense of someone else's freedom. In my opinion this is a law that could not pass under capitalism.

So in reality, you're not making some kind of principled stand against one type of regulation or law versus another one. You're just against regulations that you don't like (like banking-fraud, the abolition of slavery, free education, or preventing terrorists from buying nuclear weapons) and in favour of ones that you think we should keep (like murder, theft and other types of fraud)

Like I said before, if the drugs contained a label saying; 'we cut corners testing this', I would be OK with it. To make it illegal for drugs to be taken by patients, because form X is not signed, is inhumane.

This requires a new regulation to force drugs companies to write labels (aren't you supposed to be against regulations, Maddus?)

... But I calculate [the risks] and decide which ones to ... ensure 

A) you mean insure not ensure

B) This is inconsistent with your other statement that insurance is somehow socialism.

If the people are stupid enough to give them their money twice without a contract, yes, they should be continued to do business.

How does a contract help you when the bank goes bust? Sure you can sue them, but if you win, the money comes from the insolvent mutualized entity (i.e. you'll win the court case and be awarded damages, but they'll be unable to pay the damages because they're insolvent - so your money is still gone).

Bankers new they could avert the risk to society, so they did. The problem is not that they did, the problem is that government provided the means for them to do it.

...

Ofcourse you are forced to use a bank

These two statements are contradictory. So long as ordinary people are compelled to use banks to store their money, it will not be possible for those accounts to collapse.

Either you:

A) have to stop banks being the people who hold ordinary citizen's money e.g. the government rebates, benefits, payroll etc is paid to special accounts in companies that can't go bust. In practice this means nationalizing the banks.

B) or you can say "it is illegal to add that risk to ordinary citizen's accounts". In practice this means breaking-up the banks into retail and insurance as separate companies, or

C) you say "risk that you add to those accounts must be insured against the risk materializing", which in practice means you compel the banks to insure the accounts against their own banks' collapse.

D) do nothing. i.e. bail them out again next time.

No bank in their right mind would have created the box, if they had to bare the risk.

My idea of insurance is just piping the risk from the box from pointing the gun at society to pointing it back onto the bank. Then, as you rightly say, they won't use it.

So my idea of insurance is the same as your idea of neutering the magic money box. I'm not saying the banks can't take risks. I'm just saying they have the insure against that risk materialising when that risk might cause ordinary citizen's money to vanish.

I say take away the box. People wont pay your fine, government will not press charges if they don't. You give a enormous amount of trust to such a powerful entity with such a disastrous track record.

It's not a fine. It's insurance. If ING direct doesn't want to pay the evildictator government any money, it doesn't have to (which is closer to what you want than the status quo). The customers of ING direct will therefore not have any protection against ING direct collapsing (which is closer to what you want than the status quo) and when ING direct collapses, you, the taxpayer, won't have to bailout ING direct or their customers (which is closer to what you want than the status quo).

Which is why I'm struggling to see why you hate my idea so much - it's much more capitalist to go with insurance than any of the ideas being bandied about by any western government.

Let's suppose HSBC decide to open a new type of account - the guarranteed account. Let's suppose HSBC have $10bn in normal accounts, and $100m of savings in guaranteed accounts. Let's suppose HSBC has a risk of 2% of going bust this year.

In this scenario, HSBC pay the government 2% * $100m = $2m this year. If HSBC goes bust, the $100m of savings are refunded - the $10bn are not. If HSBC goes bust, they go bust. No ifs, no buts, no bailouts. The $100m go to the account holders - not to HSBC.

Note also that the bailout is statistically free for the taxpayer. If HSBC has a 2% risk, they'll go bust one year in fifty, so you'd expect them to pay $2m x 50 = $100m + admin fee to get a $100m protection on their assets.

Note that it costs HSBC more customer money in guaranteed accounts compared with normal accounts - in fact it costs 2% more per year. Hence, HSBC might have a 1% current account, but will have a -1% guaranteed account. Also note that as HSBC acquire more risk (e.g. by doing more risky trades), the cost of the insurance goes up. If HSBC get to a 10% risk of default, they're paying $10m a year for those $100m of guaranteed accounts, and to recoup that cost they'll be offering a pretty terrible rate of -9% to their customers. Those customers will then probably move to an account with a better interest rate - either by moving to a non-underwritten (current) account, or will move their guaranteed savings to a safer bank. Both of these options reduces the taxpayer's liability if HSBC defaults.

Joe, who is a customer of ING direct sees that his bank (who is a Maddus Mattus ideal bank - it has no government protection and pays no money to the government) can now choose to move his money to a HSBC guaranteed account. He doesn't have to. If he does he'll probably get a worse rate of interest.

My solution gives Joe and the banks the option of paying to keep their money safe. It also means having your money underwritten in a risky bank is expensive - so customers in risky banks will either move their money to safer banks (to get better interest rates on a guaranteed account) or will choose to have accounts that aren't underwritten (hence sparing the taxpayer the next time the bank collapses). In either case, this encourages customers of risky banks to consider the risk of their bank through the means of cold hard cash.

My idea is all about de-fusing the risk-bomb that bankers have made, by saying quite clearly that the bomb doesn't get put in Times Square, it gets put in your own company headquarters. 

And the best bit is that it's all cold hearted capitalism. My scheme doesn't compel anyone to pay anything. It doesn't force banks or customers to move or change or do anything. It removes artificial regulations (like regulating that banks need to split, lend more, or do less risky trades), it removes artificial limits (like the 80000EUR protection limit). It also completely removes politicians and finger-in-the-air values from the equations entirely, whilst giving customers more choice.

As a regulation hatin', politician loathin', choice lovin', capitalism dealin' pseudo-republican, Maddus, it astonishes me that you're not on the streets telling everyone that my idea is what we should be doing. It's the most capitalist solution.

It gives customers and businesses more choice, removes regulations, reduces government involvement, removes politicians from the equation entirely and makes bankers pay for the risks without dealing out "punishments", fines, regulations or "finger-in-the-air" payments that banks need to make.

14 hours ago, AndyC wrote

So you're happy to remove the rights of anyone from a disadvantaged background to have any kind of access to education whatsoever? Those who, through no fault of their own, are born into poverty are simply stripped of any chance of improving their life because they were not in a position to afford any education, thus haven't any chance of getting a reasonable job and will have children who are equally born into a perpetual poverty trap.

Do you not see how it might be beneficial for society as a whole to actually give those children as much access to education as anyone else, thus giving them the chance to become far more valuable members of society. Do you really believe that the world is better if only the rich have access to education, even if they squander the opportunity?

You make the fallacy of appealing to emotion.

There is, and always will be, care for the poor and the disabled. We have plenty of charities that are willing to do the job. I'm not advocating against that, I'm advocating against the government doing it by law. It should be out of your own free will to help your neighbor, then you build up a bond and a solid community.

That being said, I don't think education is a right. It's something that you as a person should want for yourself and for your offspring. You should not be forced to take an education. The you end up with kids that don't want to be in the classroom, in the classroom. And I have to pay taxes for a student that wants nothing more to learn on the job.

Education will always be available, when you hand it to government, you can be sure that they are taught the wrong skill and taught poorly. Private schools have much better track records then public. Because the students actually want to be there, the teachers actually want to teach. And if you want to learn on the job, go for it!

Imagine what happens if all the bankers get together and decide to say a big screw-you to everyone else. Since all your wages go directly into the bank, the bankers get together and blow it all on a big party with blackjack and hookers. When you want to buy food for you and your family, you just get told you haven't actually got any money and that's your own fault and nobody gives a monkeys. Your family starve to death and it's entirely your fault despite you having absolutely no say in the matter whatsoever.

That would be illegal, even under capitalism.

Dealings between two parties should be free of regulation as long as it affects only those two parties.

Of course, that could only happen in a world in which bankers have been demonstrably corrupt and happy to manipulate the system for their own gain at the expense of everyone else. Surely that won't happen? Oh, hang on...

Two wrongs don't make a right.

First off, we regulated them so much, they can't even tie their own shoe laces without braking the law.

Second, we gave them unlimited cash to play on the markets with.

Third, we did not press charges when they clearly broke the law.

Forth, we gave them bailouts when things went bust.

How on earth can a law abiding banker compete in that market, without turning himself into a criminal? Government broke the system, it's now time for it to back off.

8 hours ago, evildictait​or wrote

All laws limit someone's right in order to protect someone else's right. To show you how poor your argument is let's change the nouns in your example:

There is a right to being protected from murder. You could consider this a freedom. But what is the cost of this freedom? It means that other people, who already hire private bodyguards, have to pay taxes. That means that because you have a freedom, they have less. Therefore it gives you freedom at the expense of someone else's freedom. In my opinion this is a law that could not pass under capitalism.

So in reality, you're not making some kind of principled stand against one type of regulation or law versus another one. You're just against regulations that you don't like (like banking-fraud, the abolition of slavery, free education, or preventing terrorists from buying nuclear weapons) and in favour of ones that you think we should keep (like murder, theft and other types of fraud)

That's just an appeal to ridicule. No one has the right to kill (well, government does, but that's beside the point).

But you do not have the right to be protected from murder. Otherwise we would have to go around with police escorts.

This requires a new regulation to force drugs companies to write labels (aren't you supposed to be against regulations, Maddus?)

Jup, not all government does is bad. There is a good argument for freedom and availability of information about what a product contains. And I think our government does a good job at it. But as soon as it becomes a bit more complicated then labels on products, they botch up.

Therefore I want them to continue to do the things they are good at, and get them out of the big stuff.

A) you mean insure not ensure

B) This is inconsistent with your other statement that insurance is somehow socialism.

A) thanks!

B) forced insurance is a tax and therefore socialism

How does a contract help you when the bank goes bust? Sure you can sue them, but if you win, the money comes from the insolvent mutualized entity (i.e. you'll win the court case and be awarded damages, but they'll be unable to pay the damages because they're insolvent - so your money is still gone).

Sell off their assets, get behind in line with the curator, see if there is anything left, not make the same mistake again.

You'd rather have endless bailouts?

These two statements are contradictory. So long as ordinary people are compelled to use banks to store their money, it will not be possible for those accounts to collapse.

I was being sarcastic, sorry it wasn't obvious enough.

Either you:

A) have to stop banks being the people who hold ordinary citizen's money e.g. the government rebates, benefits, payroll etc is paid to special accounts in companies that can't go bust. In practice this means nationalizing the banks.

B) or you can say "it is illegal to add that risk to ordinary citizen's accounts". In practice this means breaking-up the banks into retail and insurance as separate companies, or

C) you say "risk that you add to those accounts must be insured against the risk materializing", which in practice means you compel the banks to insure the accounts against their own banks' collapse.

D) do nothing. i.e. bail them out again next time.

There are more options then you list. You can buy gold for instance, as a default currency.

My idea of insurance is just piping the risk from the box from pointing the gun at society to pointing it back onto the bank. Then, as you rightly say, they won't use it.

So my idea of insurance is the same as your idea of neutering the magic money box. I'm not saying the banks can't take risks. I'm just saying they have the insure against that risk materialising when that risk might cause ordinary citizen's money to vanish.

Society? A society can't force a bank to do jack. Unless you mean government, they already point a bazooka at the banks, a bazooka that fires cash.

It's not a fine. It's insurance. If ING direct doesn't want to pay the evildictator government any money, it doesn't have to (which is closer to what you want than the status quo). The customers of ING direct will therefore not have any protection against ING direct collapsing (which is closer to what you want than the status quo) and when ING direct collapses, you, the taxpayer, won't have to bailout ING direct or their customers (which is closer to what you want than the status quo).

Which is why I'm struggling to see why you hate my idea so much - it's much more capitalist to go with insurance than any of the ideas being bandied about by any western government.

I actually like the idea, but I don't like that it is run by government.

I think you and I are almost on the same page, you just need to let the idea of government provided insurances slide and we have a deal

B) forced insurance is a tax and therefore socialism

How else do you cope with the case where someone takes a risk that they choose not to insure and cannot absorb the risk when it all goes wrong?

For example, consider a young driver who ploughs into a crowd, causing serious injury to three people. The young driver probably goes to jail for dangerous driving - sure - but who pays the medical bills (if you're in the UK - replace medical bills with replacing their damaged cars). The innocent bystanders shouldn't have to pay for the accident caused by the young driver taking a risk that he neither insured nor could afford, should they?

The solution is to either:

A) Make it illegal to do a risk that you neither insure nor can afford - and example of this is making it illegal to drive without third party insurance

B) Make it your financial responsibility when something bad happens to you due to someone else's malice (i.e. leave the injured people to pay for their own care). Most people would argue that this isn't fair, because you're making the victims pay for the crime.

C) Get society to pay the costs when it goes wrong (this is the case with, say, the NHS). Most people would argue that this is socialism of one form or another.

I actually like the idea, but I don't like that it is run by government.

It wouldn't be run by government. It would be government backed. If it's not, you're just moving the goalposts from hoping and praying that your bank doesn't go bust, to hoping and praying that your bank and your insurer don't go bust at the same time. Since banks underpin insurance companies, insurance companies go bust definitionately at the same time as banks.

My idea would in practice be run by someone like this, who would run it for profit (http://en.wikipedia.org/wiki/China_Investment_Corporation).

I don't like politicians running things, because I don't think they're very good at running things. Unlike you, I'd prefer to assume that they're generally encumbered and incompetent rather than evil and selfish, but in either case, the result is the same. They shouldn't be running things.

All I'm looking for is a way of correctly reapportioning the risk by making it impossible to push your risk onto society. If you want to take big risks - fine. Be my guest. But don't come grovelling to me or other taxpayers when the risk explodes. If you take big risks, and you're holding other people's non-invested savings, then either be clear with them that their money isn't safe, or insure it so it won't need a bailout when you screw up next time.

2 hours ago, evildictait​or wrote

How else do you cope with the case where someone takes a risk that they choose not to insure and cannot absorb the risk when it all goes wrong?

You don't cope, you take it like a man. You didn't want fire insurance, your house burnt down, tough. Next time, get fire insurance!

It's called a life lesson, those can't be forced on to you, you have to learn them yourself, the hard way.

To deny anyone to make mistakes, creates lifeless drones.

For example, consider a young driver who ploughs into a crowd, causing serious injury to three people. The young driver probably goes to jail for dangerous driving - sure - but who pays the medical bills (if you're in the UK - replace medical bills with replacing their damaged cars). The innocent bystanders shouldn't have to pay for the accident caused by the young driver taking a risk that he neither insured nor could afford, should they?

The young driver does! Are you seriously considering I need to pay a share in that debacle that she created? She is responsible and therefore should be held accountable.

First by serving a prison sentence and then by repaying the damages. Maybe she can get a job in the slammer?

The solution is to either:

A) Make it illegal to do a risk that you neither insure nor can afford - and example of this is making it illegal to drive without third party insurance

B) Make it your financial responsibility when something bad happens to you due to someone else's malice (i.e. leave the injured people to pay for their own care). Most people would argue that this isn't fair, because you're making the victims pay for the crime.

C) Get society to pay the costs when it goes wrong (this is the case with, say, the NHS). Most people would argue that this is socialism of one form or another.

Insurance companies pay the bill and go get their cash with the criminal. That's why I have insurance.

NHS is a insurance in the form of a tax. So yes, that's socialism. If the NHS was a private organization with an opt-in it would be capitalism. And there would be dozens of NHS's, competing, doing things efficiently and of course trying not to pay out.

It wouldn't be run by government. It would be government backed. If it's not, you're just moving the goalposts from hoping and praying that your bank doesn't go bust, to hoping and praying that your bank and your insurer don't go bust at the same time. Since banks underpin insurance companies, insurance companies go bust definitionately at the same time as banks.

He who pays, plays. We've seen this in Holland in the past, where our public pensions money was used to cover up a hole in the budget.

My idea would in practice be run by someone like this, who would run it for profit (http://en.wikipedia.org/wiki/China_Investment_Corporation).

I don't like politicians running things, because I don't think they're very good at running things. Unlike you, I'd prefer to assume that they're generally encumbered and incompetent rather than evil and selfish, but in either case, the result is the same. They shouldn't be running things.

I believe they mean well, but the results are bad.

All I'm looking for is a way of correctly reapportioning the risk by making it impossible to push your risk onto society. If you want to take big risks - fine. Be my guest. But don't come grovelling to me or other taxpayers when the risk explodes. If you take big risks, and you're holding other people's non-invested savings, then either be clear with them that their money isn't safe, or insure it so it won't need a bailout when you screw up next time.

Oh I agree, but backing it by government means politics will play a part. And that's where things tend to go wrong.

You don't cope, you take it like a man. You didn't want fire insurance, your house burnt down, tough. Next time, get fire insurance!

That's fine if the risk explodes on YOU. If the risk explodes on someone else, then why should they, the innocent bystander have to absorb the risk?

If you don't insure your own car and you crash into someone else's, then it's your own fault that your car doesn't get replaced. But why should the other guy have to pay for your reckless driving?

If the reckless driver has money, the guy can sue you to make you pay for the damage (and that's fine). But if the reckless driver doesn't have money? You can sue a broke man till you're blue in the face and you won't get money out of him.

If my bank turned around tomorrow and said "haha! all of your money is belong to ME", I'd phone my solicitor and sue it out of them. But if they go bust, suing them doesn't work, because they're bust and they don't have any money to sue from them. Any contract I have with the bank isn't worth the paper it's written on when the bank goes insolvent, so that idea doesn't work either.

The only way to get my money back without some innocent bystander footing the bill (be that me, or the taxpayer or anyone in between), is me to insure against the bank going under. But there IS NO WAY TO DO THIS CURRENTLY. All insurers are banks and all banks are insurers. Without a bailout, the 2008 crisis would have taken out all of the major insurers and banks, and so any insurance you had would also be gone.

So if I want my money to be still there tomorrow, I can't insure privately. I either have to hide my money in cash under the bed and hope that I don't get burgled. But if my money is under my bed, it's not being lent out to businesses by the banks, and that means that growth in the economy vanishes, and that means we go into recession, and then people lose houses, jobs and livelihoods.

Surely it would be better if you could put your money in the bank (and hence society gets economic growth) but also allow customers of the banks to insure their money against the bank going bust? The only criteria for that insurance company is that it won't go bust at the same time as the banks. I don't frankly care whether it's owned by the government, a financial regulator, a sovereign wealth fund, a state-owned bank or some other government than your own. All that matters is that when the dust settles after the banks go bust next time, that there's enough money in the insurance company to pay out to the people who had insurance.

It's called a life lesson, those can't be forced on to you, you have to learn them yourself, the hard way.

That's not a very nice life lesson. That if someone who is poor and criminal smashes up your car, then it's you can't afford the rent or a holiday or your children's education or whatever.

To deny anyone to make mistakes, creates lifeless drones.

That's the great thing about insurance! Let them make mistakes. They pay up-front for the risk to other people, and they can choose whether they want to pay for the risk to themselves.

You must have 3rd party insurance, but you don't need 1st party insurance. You get to choose how much risk you want to expose yourself to. But you don't get to choose how much risk you expose other people to. Because that impacts on their freedom.

He who pays, plays. We've seen this in Holland in the past, where our public pensions money was used to cover up a hole in the budget.

Just because Holland was retarded, doesn't mean governments in general are.

Case in point:

China makes craptons of money through a government owned investment bank: http://en.wikipedia.org/wiki/China_Investment_Corporation.

The government should make a trading entity that is completely hands-off. Profits can be paid to the taxpayer in dividends, but the government can't steal, sell, or mortgage off the trading entity (any more than it can with the Bank of England).

Oh I agree, but backing it by government means politics will play a part. And that's where things tend to go wrong.

Big companies play politics too. And not all of government is political. Case in point: although the police budget is set by government, the police themselves are not politicised. Same is true of doctors, of the military, of the judiciary and of our intelligence services.

So if the Prime Minister told the army to go and kill the opposition, they would say no. If he asked the police to arrest them, they would say no. And if the Prime Minister kills his wife, the police will arrest him.

I think you get too hung up in hatred of government. Given their size, and the complexity of what they're asked to do, I don't think any private sector company would do any better.

You think our police force would be better if it were run by G4S? (http://www.telegraph.co.uk/sport/olympics/news/9394323/Olympic-security-firm-G4S-to-have-payments-docked-as-soldiers-drafted-in-to-fill-gaps.html)

45 minutes ago, evildictait​or wrote

That's fine if the risk explodes on YOU. If the risk explodes on someone else, then why should they, the innocent bystander have to absorb the risk?

If you don't insure your own car and you crash into someone else's, then it's your own fault that your car doesn't get replaced. But why should the other guy have to pay for your reckless driving?

If the reckless driver has money, the guy can sue you to make you pay for the damage (and that's fine). But if the reckless driver doesn't have money? You can sue a broke man till you're blue in the face and you won't get money out of him.

He doesn't have to, the guy who caused the collision has to pay. What you as a driver need to do, is to insure yourself against the possibility that the causer of the collision is uninsured.

If my bank turned around tomorrow and said "haha! all of your money is belong to ME", I'd phone my solicitor and sue it out of them. But if they go bust, suing them doesn't work, because they're bust and they don't have any money to sue from them. Any contract I have with the bank isn't worth the paper it's written on when the bank goes insolvent, so that idea doesn't work either.

All the money does belong to them. You get the option to retrieve it and for that option you get some interest. If the bank goes bust, file a claim and stand in line. If the risk of losing your money isn't there, you act reckless with it and so will the bank. Check the recent history, reckless consumers, reckless banks, paying government.

The only way to get my money back without some innocent bystander footing the bill (be that me, or the taxpayer or anyone in between), is me to insure against the bank going under. But there IS NO WAY TO DO THIS CURRENTLY. All insurers are banks and all banks are insurers. Without a bailout, the 2008 crisis would have taken out all of the major insurers and banks, and so any insurance you had would also be gone.

And with the bailouts the situation stays the same. We need a bit of pain to change.

So if I want my money to be still there tomorrow, I can't insure privately. I either have to hide my money in cash under the bed and hope that I don't get burgled. But if my money is under my bed, it's not being lent out to businesses by the banks, and that means that growth in the economy vanishes, and that means we go into recession, and then people lose houses, jobs and livelihoods.

Really? Is there no way to insure against banks collapsing? Odd,..

Maybe a business opportunity there for you, be sure to get some government backing.

Surely it would be better if you could put your money in the bank (and hence society gets economic growth) but also allow customers of the banks to insure their money against the bank going bust? The only criteria for that insurance company is that it won't go bust at the same time as the banks. I don't frankly care whether it's owned by the government, a financial regulator, a sovereign wealth fund, a state-owned bank or some other government than your own. All that matters is that when the dust settles after the banks go bust next time, that there's enough money in the insurance company to pay out to the people who had insurance.

Again, I have no objections, as long as you do it without government.

That's not a very nice life lesson. That if someone who is poor and criminal smashes up your car, then it's you can't afford the rent or a holiday or your children's education or whatever.

That's why they call them life lessons. Why should I pay you for your smashed up car by some hobo?

If you are my family, I would, but you are a stranger. For all I know you have murdered ten people.

That's the great thing about insurance! Let them make mistakes. They pay up-front for the risk to other people, and they can choose whether they want to pay for the risk to themselves.

You must have 3rd party insurance, but you don't need 1st party insurance. You get to choose how much risk you want to expose yourself to. But you don't get to choose how much risk you expose other people to. Because that impacts on their freedom.

*snip*

Just because Holland was retarded, doesn't mean governments in general are.

This is a hard one. Should someone force me to insure, so that others are more free.

I would say, no. The freedom of the individual is key, because the other guy is an individual as well.

Nearly all governments are retarded, but they never start off that way. People are people, they will always take the easy way out.

Case in point:

China makes craptons of money through a government owned investment bank: http://en.wikipedia.org/wiki/China_Investment_Corporation.

The government should make a trading entity that is completely hands-off. Profits can be paid to the taxpayer in dividends, but the government can't steal, sell, or mortgage off the trading entity (any more than it can with the Bank of England).

I don't believe it's governments place to play investment banker.

Big companies play politics too. And not all of government is political. Case in point: although the police budget is set by government, the police themselves are not politicised. Same is true of doctors, of the military, of the judiciary and of our intelligence services.

Sure they do, but I get to vote each time I want to buy their products. Not once every four years on some vague promise that they will do a good job this term, honest! That again, is freedom!

So if the Prime Minister told the army to go and kill the opposition, they would say no. If he asked the police to arrest them, they would say no. And if the Prime Minister kills his wife, the police will arrest him.

I think you get too hung up in hatred of government. Given their size, and the complexity of what they're asked to do, I don't think any private sector company would do any better.

Exactly my point, they are too big too complex and to politicized. They worry about the interests of their voters rather then the interests of their country. In doing so they provide favors for minorities at the expense of the other minorities, till someone from different minority comes to power. They threaten with war and embargos if you do not play it by their rules. They take our money by force to fund all this and when they come up short they take some more! Meanwhile I've never been robbed on the streets, but get robbed 50% of my income legally each month. They play monetary games for the sake of unity, but spread poverty and violence. I could go on and on. 

I think have good reason to distrust them.

You think our police force would be better if it were run by G4S? (http://www.telegraph.co.uk/sport/olympics/news/9394323/Olympic-security-firm-G4S-to-have-payments-docked-as-soldiers-drafted-in-to-fill-gaps.html)

OMG, market failure!

QUICK, deploy the government!

Indeed this one isolated incident should be used to ban all private security corporations.

Good luck getting into the office tomorrow!

If you want to make exemptions to set the rule, how come we still have a government?

If a company fails, it's gone.

When a government fails, it's just still there,. Faces may have changed, but that's about it.

Really? Is there no way to insure against banks collapsing? Odd,..

Maybe a business opportunity there for you, be sure to get some government backing.

A) There is no point insuring a bank account whilst the government are already underwriting savings, so there is no market until that stops.

B) In order to underwrite (i.e. have someone else insure with you) $X, you need to have $Y, Y>X.

If I were a $1bn business, I could insure your $100m of savings. If you have $100bn of stuff you want me to insure, I can only realistically do that if my company is >$100bn.

In society, our biggest private sector companies are the cartel of banks. All of our insurance companies are banks. They are part of the same cartel.

I could insure against my car crashing, or my house burning down because when that happens, the insurer is still solvent. I can't insure against my bank going bust, because when private sector banks go bust, so do private sector insurance companies.

Since the banks operate as a cartel, they are all interlinked. One fails only when the others are on the verge of going to.

In the UK, our banks hold $12.79 trillion. There is no private sector insurer who can insure that. Even if you only want to protect the non-invested savings part, that's still $400bn, which is larger than any listed private sector organisation.

So in answer to your question - yes. If I were a $400bn company, I would hapilly be a private-sector insurance company against the banks defaulting. But in reality, the only person who is big enough to statistically win from insurance on that scale is the government.

Again, I have no objections, as long as you do it without government.

It is not possible to do without government.

This is a hard one. Should someone force me to insure, so that others are more free.

I would say, no. The freedom of the individual is key, because the other guy is an individual as well.

Freedom of which individual? The one who might crash into your car, or the freedom of you to not have to worry about your car being written off by an uninsured driver?

I don't believe it's governments place to play investment banker.

I'm not asking them to. I'm asking them to charge for the insurance they're currently giving away for free.

Sure they do, but I get to vote each time I want to buy their products. Not once every four years on some vague promise that they will do a good job this term, honest! That again, is freedom!

Do you buy Microsoft products more than once every four years based on some vague promise that they'll do a good job this product, honest?

They take our money by force to fund all this and when they come up short they take some more! Meanwhile I've never been robbed on the streets, but get robbed 50% of my income legally each month. They play monetary games for the sake of unity, but spread poverty and violence. I could go on and on. 

Yeah. They took your money, and all they gave you in return is policing to make sure you're not robbed in the streets, and the streets in the first place. And educated your kids. And gave you free health care and protected your borders from invaders and so on.

If you don't like the tax rate, move somewhere else.

Ultimately you get what you pay for. If you want great social care, move to France. You'll pay huge taxes, but you won't have to pay anything for health,education,policing and so on. Prefer lower tax rates? Move to the UK. We've got a top rate of 45% tax, but you'll not get as many public holidays and ordinary workers have fewer rights than in France.

Want fewer taxes still? Move to the USA. They have famously low tax rates - but you pay for your own health care and pension. Sucks to be poor. Great if you were going to pay for that stuff yourself anyway.

Still too high? How about somewhere nice like Saudi Arabia. Human rights? Not so much. Corruption? You betcha - but with a tax rate right down near zero, it's hard to beat.

But those politicians and regulators still getting in your way too much? Well, have we got the place for you.

Situated on the south coast of Africa, and free from the tyrrany of government, Somalia has zero taxes, zero regulations and zero people "stealing" 50% of your income every month. Want policing? You pay for it yourself. Healthcare? Pay for it yourself. Education? Yourself. Protection from local militias? That's what bodyguards are for.

All in all, you get what you pay for. If you don't like holland's taxes, stop enjoying the benefits that they're giving you and move somewhere else. You'll pay less in taxes, but you probably won't pay less overall.

If the cost of insurance cannot be borne, then there is no need to insure.

If $13 trillion poofs, no amount of insurance can recover you from that.

You would have to need the equivalent of that in gold or something.

But there is no shame in defaulting your nation. Iceland has defaulted, it's doing fine now. There are other examples of countries defaulting, from the ashes something better will arise.

Freedom of which individual? The one who might crash into your car, or the freedom of you to not have to worry about your car being written off by an uninsured driver?

Freedom of all individuals who want to drive cars.

I'm not asking them to. I'm asking them to charge for the insurance they're currently giving away for free.

You can't insure $13 trillion. And they should stop insuring for free, I agree.

Do you buy Microsoft products more than once every four years based on some vague promise that they'll do a good job this product, honest?

I buy Microsoft products because I earn money with them, so I buy them as soon as they hit the market.

Yeah. They took your money, and all they gave you in return is policing to make sure you're not robbed in the streets, and the streets in the first place. And educated your kids. And gave you free health care and protected your borders from invaders and so on.

If they are there for protecting people from robbery, they are doing a lousy job. On collecting my fee for the protection from robbery, they are doing an excellent job.

I'll provide education for my own children or provide them with an education of my choice, thank you. I want mine to be able to do calculus and read properly.

Health care is not free, it's costing us in excess of $70 billion annually. How is that free?

What borders? We have no borders.

If you don't like the tax rate, move somewhere else.