G.W.B. Jr. & Co. Strikeout Again - by the_grip
the_grip on 9/12/2007 at 11:12
Quote:
Go back and re-read your wikipedia entry
Allow me to offer it back:
Quote:
Ad hominem abusive
Ad hominem abusive (also called argumentum ad personam) usually and
most notoriously involves insulting or belittling one's opponent, but can also involve pointing out factual but ostensibly damning character flaws or actions which are irrelevant to the opponent's argument. This tactic is logically fallacious because insults and even true negative facts about the opponent's personal character have nothing to do with the logical merits of the opponent's arguments or assertions.
a.k.a. You are wrong because these are not price controls and you are obviously a blathering idiot who doesn't know shit.
Back to the topic at hand - if you want to get literal about what composes a price control, then let me point this out:
Quote Posted by Rug Burn Junky
It's the banks coming together,
with a little armtwisting from the government, and setting standards to agree how to handle these loans.
i would elaborate by saying Paulson probably came along and said, "Guys, if you think it is tough now, the legislation is going to get a lot more shitty fast. Thus, fix the prices." GWB then looks like he is doing something (even though the plan is minimal and flacid at best). The write-downs for these bad bets will be coming in a big way early next year (Citi alone announced what, like 12 billion dollars?), and GWB's veto pen still has some ink to run for these guys. This is not to mention that the problem escalates rapidly in terms of who is involved worldwide.
Thus, you have your enforced price measures if you are still demanding that be a part of this in order to make this a price control. It ain't legislation, but that doesn't matter. The government is still flexing a muscle to get it through. i think it doesn't make a difference if it is legislated or not because the net effect of a price control doesn't come from legislation. That is typically the means, but it ain't the ends.
Regardless, this big snowball of mortgage shit has rounded the corner and is headed straight for the economy whether or not we try to start tampering with the prices. Not only that, but the rumor mills are talking about the "safe" bets on this (i.e. the prime mortgages you referred to above) going kaput. The answer is not going to be freezing the rates (a.k.a. price controls). The answer is to get this shit done and over ASAP and offer relief where it helps. Take it on the chin like a pro and move on.
These big groups made a bunch of bets by buying bonds in anticipation of rate cuts that never came. That's how investing works - it is risk taking, and these were bad risks. Bailing folks out does not undo the bad decisions or their consequences... it's only gonna make it more broadly painful when it hits the fan. As i referred to in a previous post, this is the result of the bubble of aggressive rate cuts to tide off the recession earlier this decade. If we try to tamper with the natural way things go again, then we are only buying time for the whole thing to get quite a bit more shitty.
To top it off, most economic policies akin to price controls tend to hurt the little guys they are supposedly aiming to protect in the long run (in this case, the truly poor folks who bought in over their heads). i'm sure this case will be no different.
Myoldnamebroke on 9/12/2007 at 13:41
Quote Posted by the_grip
You are wrong because these are not price controls
and you are obviously a blathering idiot who doesn't know shit.
that's just an insult tagged on the end.
Quote Posted by actual ad hominem
You are wrong, these are not price controls
because you are obviously a blathering idiot who doesn't know shit.
Rug Burn Junky on 9/12/2007 at 14:41
grip, just fucking quit.
You're regurgitating shit you read two days ago, and don't fully understand. I do this shit for a living. I've tried to simplify the basics for you to explain why you're wrong, I'm not going to continue to humor your blathering on the subject.
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PS Thanks MONB, I was beginning to think I was in crazyland where nobody understood that distinction.
Turtle on 9/12/2007 at 15:09
I love this thread.
Tocky on 9/12/2007 at 17:07
I could have done without all the footstomping and hairpulling but even that wasn't without some insight. What I found most important to note was what Bushs suggestion brought out of the woodwork and how certain folks on Wall street want the taxpayer chips that are not on the table as yet. Nice to know exactly what politicians are in what pockets too.
THIS and where the links lead.
Whether you agree or disagree about a suggestion being made there is some serious shit being contemplated by Paulson and Bernake.
HybridVision on 9/12/2007 at 17:58
Have we found the next Gordon Ramsey here?
the_grip on 9/12/2007 at 21:36
A big part of what i do is trading and investing, and i study this kind of shit religiously... not just how all this shit plays out with investment banks, but the overall broader picture as well. i also run in circles of other traders and investors, ranging from part time folks to guys who run private equity funds, and we discuss this stuff all the time. Regurgitating? Hardly. You don't have to be an advisor for structured mortgage investments to know how things work - despite how proud you are about what you do.
This whole issue has been known for at least a year in coming, and, when the Fed opted to hold rates this summer, it was a neon sign reading: SHORT THE FINANCIAL SECTOR - aka the finacial firms weren't going to get what they were banking on because the larger problem of inflation was still unknown. Of course, you just assumed i'm stupid, and i should be glad for my "piece of shit i call home" because of what you do for a living. Contrarily, if folks like me managing entrepreneurial small cap companies either stop borrowing or are not able to borrow money, then you can bet the business cycle is rolling over. It ain't just financial firms that make the economy tick. Financial firms exist because people borrow money.
So no, i didn't just regurgitate some article i read two days ago. This topic has been floating around for months and has been the main point of discussion for weeks.
This whole rate freeze thing is flawed economic policy. It sets a precedence and will potentially open a whole Pandora's box of trouble for the future. The Fed is doing what they should to help the situation, but Washington is more than happy to get in the way. The folks in Washington (both Bush and Democrats) tout this as helping out folks whose loans will default. In truth, neither they nor financial firms give a shit about the little folks who made bad choices. The populist bantering will continue, and now we're looking at price controls as a viable option. That shit never works - you live in NYC (or so i gather), and i'm sure you see that shit first hand with rent controls. It ends up hurting most the folks that those in "the know" claim to be trying to help - in other words, populist politicians posture to make themselves look good at the expense of the folks they claim to be helping. With the credit crisis going on, we are bound to drag this shit out as long as possible and make it hard for everyone instead of dealing with it appropriately. And why? Because financial institutions have been making stupid decisions since 2000. Of course, i can't understand this because i can't "afford" you, yes?
You have not shown where i'm wrong - you have simply disagreed, said i'm an idiot because i don't work for investment banks, and thrown a tantrum in the process. You are looking strictly at the internal pain rolling up the ladder in these financial institutions, and these little attempts at price controls - setting a paradigm for future controls that will be much more invasive - aren't gonna help. They just slow the process and add fuel to the fire.
i'm all for quitting this discussion because i'm tired of talking to a temper tantrum... and i don't mean that as an ad hominem. You a sharp guy (obviously or you wouldn't be doing what you are doing) but your delivery and opinions of yourself in light of other folks leaves miles to be desired when it comes to any semblance of productive discussion. If i'm going to spend any time talking about this with someone, i'd prefer it to be not only worth both our times but a true discussion with give and take instead of me trying to present my opinion on the subject to someone who is convinced i'm stupid because i'm not employed by an investment bank.
Have a great day.
Rug Burn Junky on 10/12/2007 at 00:02
Fucking christ, shut up. Nobody's even reading your bullshit.
BrokenArts on 10/12/2007 at 00:08
Well, he is right, if there's a cliff notes version, I'll be happy to read it.
the_grip on 10/12/2007 at 14:51
BrokenArts, the cliff notes of where I'm going with this would go something like this.
Firstly, the moral of the story is this: why is the government involved?
The problem: there are a bunch of subprime mortgage holders out there who can currently make their payments but will probably not be able to once their rates reset to higher prices. There is also a whole bunch other people out there that can't make their payments even now and are defaulting.
In comes G.W.B. & Co. (Paulson) recommending that the current rates be extended for the folks that are making payments but that probably won't be able to in the future. They outline criteria for targeting these people as well. This means that these people will probably still be able to make their loan payments going forward if there rates don't reset higher (note - this would not be the only way this could be handled, but it is a reasonable way to handle it).
Hunky dory, right? Well, there are further wrinkles here.
As RBJ mentioned, the financial groups behind these mortgages can and already do what the government is recommending. They could also let such loans go into default, or they could bring in alternative ways to handle it.
So why does the government need to come out and say anything? Ding ding!
Say, for example, the government came out and said, “Apple should sell their new iMacs for $2000. No pressure, we're just saying.” You would naturally scratch your head and say, “Why is the government involved in this?” When it comes to money and finance, the issue is more complex, but the same fundamental question can arise. Why is the Bush administration offering any suggestions here, especially because investment banks can and, in some cases, do, exactly what they are proposing?
That's why I (and some other folks) call foul on the issue. These financial institutions can handle their own messes themselves - there is no reason for the government to get involved and “recommend” what a price should be.
The whole situation leaves several issues as to what the hell is going on:
1. Bush is trying to salvage something in terms of the legacy of his presidency by cashing in on an issue that is all over the news and that most home owners at least have a tertiary understanding of. In other words, it is meaningless populist bantering. If it was just that, I'd just laugh and move on. However, as a free market advocate, it really pisses me off when the government starts thinking they should handle prices when the economy knows how to do it much better on its own. Financial groups know far better how to handle their businesses individually.
2. If it is more than #1, then it could be the government *NUDGE NUDGE* “recommending” prices for these groups. Sure, they are voluntary, but we only see what the talking heads on the TV tell us. That's why I've said it doesn't matter if they are nominally “voluntary” or not... if the government is getting involved on what prices should be, it stinks of price controls to me. That does not mean that it is necessarily price controls, but, if they aren't, the moral of the story begs the question: “why is the government involved here?”
3. This move sets the precedence that the government should be involved in how these financial firms do business. If such measures ever become legislation, then they indeed become full-fledged price controls. What is wrong with such a scenario? Tons of stuff that you can measure and can't measure, and likely many things that you won't see until they bite your ass off. But, at the very least, it prevents shit from flowing out of the system. When business deals go bad, some folks suffer, but they roll over and new business comes in and is able to capitalize on the situation. It's the normal way things work.
Thus, the moral of the story (to me) is this: why is the government involved? That shit always stinks when it comes to interfering with prices. If something illegal was going on, then yes, the government should be involved. That's not the case here.
Okay,not quite cliff notes, but that's a recap of the story on my end.
