about being liberal or conservative anymore y'all. That is a hype offered by the fascist whores who want to confuse the people with lies while they turn this country into an aristocratic police state. Some people will say anything to attain power and money. There is no such thing as the Liberal Media, but the Corporate media is very real.
This ad was before they over-leveraged their capital assets and took bad bets on sovereign debts.
If you put a down payment of 10% on a loan, you can essentially get 9 times more money instantly.
Use this money to purchase some security or something marketable, make some money, keep the down
payment, and pay off the loan with whats left plus interest.
For example: with a $10 down payment you get $90 more dollars for $100 total, and must pay 0.25%
weekly interest rate on the $90 at the end of the week. Buy a series of stocks with the $100 that
result in a net gain of 2% and you have $102. Subtract the $90 loan and the 0.25% of $90 (0.225).
You made $11.775 that week on $100. Now in the real world, you actually had $10 million, which is
100,000 more, and you made $1,177,500. A whooping 11.7% gain in funds.
And this is a low-end. Quite often money managers can get more than 2% gain if they are
knowledgeable, have a large supply of funds and ample time, and also lucky. Of course, they lose
two or more percent as well. But losing $1,177,500 for 20 weeks and making $1,177,500 or more the
other 32 weeks is still a minimum of $14,130,000 a year for flipping assets worth $10 million.
That's a 41% increase for the year. The banks will roll-over the loans, no problem, if they are
confident of a 41% yearly gain..
Now consider that the FED begin to limit downpayment requirements to 2% or less. Thus enabling this
skimming of froth to remain profitable longer. The banks and large asset funds like MF Global had
their geniuses flipping assets and marketable paper with hordes of cash reserves chasing these
profits. And the the Price got so far above the actual profitable value of the asset, or the
dividends per share.
Would you want an asset that paid you $1 every 3 months, if the asset was $150? At $4 a year, you
are getting less than 3% a year. Or would you want an asset that had no dividends? What if the
stock tanks or the business goes bankrupt? You might as well buy bonds, which are loans made by
governments and various large businesses. Bonds are safer because governments and large businesses
defaulting on their loans occurs much less often than the general population of various businesses
that sell stock on the various stock exchanges.
Instead of insisting on the down payment regulations, however, they lowered them, because all the
big boys were loving the game, and started to justify their foolish speculative mania, and thereby
threw kerosine on the fire.
A bond is a loan that is sold to various investors who trust that institution receiving the loan
will pay off the debt. Say you need $100 and are willing to pay $5 for the use of the $100 at the
end of the week. This is 5%. So you divide the $100 into 20 bonds at $5 a piece, with a promise
that you will pay a extra quarter at the end of the week, or 5.25. In the real world this is
actually relected against the initial value. Hence a $5 bond is worth $5 when redeemable after a
week, but you only pay $4.75.
A stock is a business's initial method of raising funds to pursue a certain business operation.
Once the business is in operation, the business can obtain loans against capital or against revenue
streams. The business might also sell commercial bonds, rather than getting funding from a bank,
because they might get a favorable interest rate. After the initial offering, the value of a stock
is that it allows you an income stream based upon dividends. Stocks that don't yield dividends are
only valuable if the stock goes up in value over time. In these cases, there might be valid reasons
to believe a stock is solid because the company is solid; but still without dividends, the only
point of owning a stock can be that you expect it will gain in value over time.
Now what if it becomes overly difficult for all of these brokers at computers to generate 1% gains
and more often to get 3% loses. Then it becomes difficult for banks to roll-over loans, because
everyone is doing it. And then all of the inflated assets begin to slide. The whole house of
puffed up assets begins to fall, exacerbated by the vast 35 to 1 loan to asset ratios coexisting
with decreasing asset prices.
Now why did the tax payers bail-out these morons? So they could do it again? Have we learned a
lesson at all?
The lesson : you can only skim the froth from the investment dollars of the nation and misallocate
investment for so long before the system crashes. When the various markets of asset classes and
marketable paper become valued for the price more than their profitability, the market becomes a
time bomb that will burst beyond the containable bounds of man's making.
Saturday, 5 November 2011 at 18h 32m 37s
Government did not cause the Mortgage crisis ...
THE FINANCIAL SECTOR DID !!!
Mayor Bloomberg:“It was not the banks that created the mortgage crisis. It was, plain and
simple, Congress, who forced everybody to go and give mortgages to people who were on the cusp… But
they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if
you will. They were the ones that pushed the banks to loan to everybody.”
It seems there are people who can’t accept that some markets, particularly financial ones, are
disastrous when completely unregulated — and thus find any far-fetched excuse to blame the
government instead. Since this line of argument continues to pop up, how should one respond to the
idea that Congress and Fannie Mae/Freddie Mac caused the housing crisis? Here are six facts to back
[SOURCE:Mike Konczal | BigPicture
blog | 5 November 2011]
The rest of the story is awesome. Click here for the exemplary and irrefutable analysis. (If you go to the link,
make sure you also read the comments. Even the idiots and propagandista of the commentariat are
amusing, and well worth the poignant awesome points made by various other responses.)
In the comments, Barry Ritholtz, proprietor of the Big Picture blog, himself weighs in on the matter:
Some pesky details worth considering:
-The origination of subprime loans came primarily from non bank lenders not covered by the CRA;
-The majority of the underwriting, at least for the first few years of the boom (2001-05), were by
these same non-bank lenders
-When the big banks began chasing subprime, it was due to the profit motive, not any mandate from
the President (a Republican) or the the Congress (Republican controlled) or the GSEs they oversaw.
-Prior to late 2005, nearly all of these sub-prime loans were bought by Wall Street — NOT Fannie &
Freddie. Why? Because prior to 2005, the GSEs were not permitted to purchase non-conforming mortgages.
-After 2005, Fannie & Freddie changed their own rules to start buying these non-conforming mortgages
— in order to maintain market share and compete with Wall Street for profits.
-The change in FNM/FRE conforming mortgage purchases in 2005 was not due to any legislation or
marching orders from the President (a Republican) or the the Congress (Republican controlled). It
was the profit motive that led them to this action.
Saturday, 29 October 2011 at 16h 20m 35s
The Human Assumption about Systems
“The human being, striving for rationality and restricted within the limits of his knowledge, has
developed some working procedures that partially overcome these difficulties. These procedures
consist in assuming that he can isolate from the rest of the world a closed system containing a
limited number of variables and a limited range of consequences.”
[SOURCE:David Cay Johnston | reuters |28
October 2011 ]
In Illinois, many big corporations (Motorola, Chrysler, etc.) are being allowed to keep the state
taxes their workers pay, rather than transmit those taxes to the state government. The idea is to
incentivize the companies to stay in Illinois.
This will probably spread like wildfire across the United States. Workers are going to be taxed by
the companies they work for, no different then the Roman Catholic church used to tax all citizens in
the parishes before the French Revolution.
Friday, 28 October 2011 at 21h 3m 4s
The apostasy of hope
The more I bother to witness this Republican progression towards the official nomination ... the
more I think that it is all just stage show for what has already been determined. No different than
the Democratic party, to be quite honest. That is very sad for me to say, but the establishment has
taken over both parties.
Romney, the corporate patsy and ex-corporate merger/bond salesman, appears to be the set up for the
Rethuglican nomination. Versus Obama the water carrier.
Can I say how excited I am about the coming election? That's a rhetorical question.
Friday, 28 October 2011 at 17h 40m 58s
Wednesday, 26 October 2011 at 21h 34m 12s
Intense exponential regression
Between 2002 and 2007, for instance, the bottom ninety-nine per cent of incomes grew 1.3 per cent a
year in real terms—while the incomes of the top one per cent grew ten per cent a year. That one per
cent accounted for two-thirds of all income growth in those years. People in the ninety-fifth to the
ninety-ninth percentiles of income have represented a fairly constant share of the national income
for twenty-five years now. But in that period the top one per cent has seen its share of national
income double; in 2007, it captured twenty-three per cent of the nation’s total income. Even within
the top one per cent, income is getting more concentrated: the top 0.1 per cent of earners have seen
their share of national income triple over the same period. All by themselves, they now earn as much
as the bottom hundred and twenty million people. So at the same time that the rich have been pulling
away from the middle class, the very rich have been pulling away from the pretty rich, and the very,
very rich have been pulling away from the very rich.
-- James Surowiecki, New Yorker Magazine, 16 August 2010.
Wednesday, 26 October 2011 at 18h 50m 54s
Teachers work a lot of hours per year
A writer in an prior letter to the editor of the Pacifica Tribune made a very misguided statement
concerning teachers still getting paid during the summer. The writer seemed to have an idea that
teachers are getting something for nothing from the tax payers and should therefore be penalized.
This opinion is nonsense. Teachers work 36 to 40 weeks out of the year. For a 36 week year, about
30 of those weeks a teacher works 70 hours per week. The other 6 weeks average 50 hours a week. 30
times 70 plus 6 times 50 equals 2100 + 300 or 2400 work hours per year. A person who works 50 weeks
at 40 hours per week only works 2000 hours per year. A teacher works 400 more hours per year than a
40 hour week worker does for 50 weeks out of the year. That would be another 8 weeks for the 50 week
worker by the way.
Teachers get a salary for the important hard work of teaching children. This salary can be paid
over 12 months, or it can be paid over 10 months. People who propose a negative opinion about
teachers based upon the notion of 2 months of summer vacation need to consult the math before they
Teachers do more for society than bankers and stock brokers but get paid less than a waiter at a 5
star restaurant. And not everyone has the makeup to become a successful teacher, no matter how many
credentials they obtain -- whereas most people can be a good waiter. Not everyone can manage 160 or
more raw emotional children over a 9 month period grading enormous amounts of papers and dealing
with a lot of irrational issues and stressful situations each and every week.
The old saw that says "those who can, do; those who can't, teach" is absolutely, ridiculously false.
Such opinions think people are coming to the profession in droves because they can't make it in the
real world. However, the average duration of new teachers is 3 years. Very few bad teachers can
make it longer than 5 years. Too many new teachers cannot manage the stress-load, and either quit
the profession or move on to college or administration. The new blood comes but it doesn't remain.
Most schools have 80% or more quality teachers, which is no different then any other real world
business or any large bureaucracy of individuals.
Tuesday, 18 October 2011 at 19h 38m 18s
The Civilian Employment to Population Ratio
A 4 to 5 percentage drop in 2 years is incredible, given that the 2010 US Census was 308,745,538.
One percent is 3.087 million, so 4 percent is 12.3 million people. And remember that a lot of
people who went from full-time to part-time jobs are still considered employed. The population
growth per year can be estimated from the rate of increase over the 10 years since 2000, which was
9.7 percent. Taking the 10th root (over 10 years) of the growth factor 1.097 obtains 1.009 or 0.9
percent growth per year. This is about 2.8 million per year.
So 12.3 million were classified as not-employed in 2 years and the population rose probably 5.6
million in those 2 years -- an estimate of new entrants into the work force since 16 years old are
18 years old in 2 year.
Notice the graph stays in between 59 and 58 percent since 2010, and is threatening to drop below 58
percent in the near future. A percentage is basically a fraction, and in this case the numerator is
the number of employed, the denominator is the total population. The only way the value of a
fraction ( or a per 100 number) stays the same when the denominator (total population) increases, is
for the numerator (number of employed) to increase based upon the percentage of the increase. So at
58 percent, if the population increases by 2.8 million, the employed gains for the year between
2010 and 2011 would be 0.58 times 2.8 , or about 1.43 million, or about 115,000 per month.
115,000 per month is an average for the entire nation. If this is divided by 200 to represent the
200 major metropolitan-regional areas of the United States ( a collection of 1,000,000 people), then
this becomes 575 new jobs per region per year. Divide the 2.8 million increase per year by 12 and
then by 200, and you get 1,160 new persons entering the job market per month per region.
Notice the 1,160 is twice as large as 575. This means there are 2 people for every new job
available per region per month.
And the percentage is looking to drop below 58% for the first time in the history of the this statistic.