catsidhe: (Default)
The only solution to the Economic Crisis is to give literally unimaginable amounts of money to precisely those people and organisations who have proved that they will piss it up against a wall.

Bailout costs more than Marshall Plan, Louisiana Purchase, moonshot, S&L bailout, Korean War, New Deal, Iraq war, Vietnam war, and NASA's lifetime budget -- combined!

We must keep going with the Money Hole... It's the only possible solution our highly trained economists have come up with.

But there's nothing fundamentally wrong with neo-liberal economics, as has been running the place for forty years or so...

As far as I can tell,
  liberal economic theory is that governments should regulate the market as little as is needed (which amounts to “everyone is responsible for their own screw-ups, but crooks are crooks and need stomping in a timeframe which the market can't always keep to”), and
  socialist economics (as opposed to Marxist or any other strawman) is that government regulation and programs are a vital part of the market, in order to prevent the impersonal nature of the market from crushing people beneath it for no fault of their own, then
  neo-liberal economic theory seems to be that the government should not interfere in the market at all, ever. Except to keep unions in their place, and wages low, and tariffs favourable, and subsidise industries and near monopoly corporations for the very inefficiencies and bureaucratic stupidity which the neo-liberals keep accusing governments of, and generally bail out rich people when they fuck up, but otherwise keep poor muck firmly at the bottom, with the chimerical hope that they too can make billions of dollars by emulating the sociopaths* at the golf club sufficiently well.

[*] I remember an article, not long ago, about how Bear Stearns employees were making fun of Bank of America employees for not wearing as expensive suits as they do, even though it was BoA who saved BS' arse from abject bankruptcy, demonstrating that arrogance will not be slowed by demonstrations of incompetence. Damned if I can find it now.
catsidhe: (Default)
I've been meaning to post this thought for a while, but kept getting sidetracked. Now that people who get paid to know this sort of thing are coming to similar conclusions, I may as well get it out.

The media has been laying on the bullshit well thick with their commentary on the state of the stock markets, not just now, but for years — decades, even.

“Markets today were bouyed with the news that [blah blah blah], and finished up 2 points.”
“Markets today were spooked when [gabba-gabba-hey], and were down 17 points, before rallying”

As if such a complicated, intricate, non-linear system could be explained so trivially. No, the markets went up and down because that's what markets do: it's what they're for. That at the end of nondeterministically oscillating it ended slightly higher or slightly lower than it started is utterly irrelevant as typically presented. What you are looking for is trends on the prices over time, taking into account maxima and minima, rolling averages, polynomial trend lines, many many many other statistical characteristics that “twelve points up at close” simply doesn't cover.

But yet, you can sometimes see enough. And since banks started floating belly up at the top of the tank, there has been a pattern in the stock reports.

“Markets surged today, based on something, buggered if we know what, maybe the market is optimistic about something, but surged to a new record of umpty million points, a 17% increase on yesterday's close” ... then, the next day ...
“Markets fell drastically today, we think it has something to do with people in Washington arguing over whether or not to spend seven tenths of a TRILLION FUCKING DOLLARS, or maybe the market just needs a hug, and it closed at eleventy thousand points down...”

After a (relatively) long period of compound growth, the error bars, the difference between maxima and minima as a proportion of the absolute size of the price, started increasing. A lot. People didn't seem to notice, even as the market volatility began to go critical. And then, the final straw, when the accountants looked at the books and realised that they'd been burning money for decades, at that Holy Fuck moment The Market realised that it wasn't in control of itself any more. The swings got extreme, and worse.

Now, anyone who has studied feedback systems, deterministic or not, will recognise this behaviour. It is the same as when the magnetic poles shift around wildly before reversing. It is the same as when your heart stops going lub-dub, and starts tapping out something in syncopated 17/5 ... until it stops.

This, ladies and gentlemen, is a phase state change in a dynamic system, and it is far, far too late to do anything except try to influence what the result will be when it settles down again. Only one thing is certain about the outcome: it is guaranteed not to be the same as what went before. The markets are going into fibrillation. Whether $US700e9 is enough CPR, enough of a shock to restart something like a functioning system, is an interesting question. I would have preferred to see the shock of some of the people (natural and legal), getting fired, sued, shut down. If we're stuck with an act of legal fiat saying that a corporation is a ‘person’, then why shouldn't they bear some of the consequence of their actions for a change? But no-one's listening to me. (Except you, dear reader, and odds are that you can't do anything about it either.)

But anyway. Enjoy the ride, folks. Hope that someone in a position to do so knows what they're doing (or makes the right guesses), because it's far too late to stop, and far too big for any of us to influence.

I would be curious if Lazyweb could source for me data on, say, NASDAQ prices for the last decade or so. Complete data would be nice, but daily closing, max and min would do. I'd like to see if I can actually back any of the above up with actual numbers.

Shorter Catsidhe: “Where are we going, and why are we in this handbasket?”
catsidhe: (Default)
So, the Great American Capitalism Meltdown. How about those crazy bankers, eh?

Now, it seems to me — a simple man, uneducated in such lofty matters — that these things are very complicated. Very complicated. And when I investigate reports on how this happened, there is a very good reason for this: because those who set up this whole house of cards made it as complicated as they could deliberately, so that they wouldn't be pulled up by auditors asking pesky questions like "is this a good idea?", or "is this moral?". or "is this legal?", or "could this undermine the very foundations of the money markets which are vital to the rest of the economy?"

And now that it looks like the answers to those questions are "no", "no", "technically" and "yes", the US government has come out with a Solution. Well, I say ‘US Government’, when really it is ‘a guy who made millions out of one of the companies now going broke, and sees his own worth disappearing if he can't give them lots of taxpayer money’. Po-tay-to, Po-tah-to.

But something strikes me about all this. This whole mishegas is based around people giving money to people who can't pay the money back, in the form of mortgages. These mortgages are, I would imagine, fungible things. I mean, several people might have invested in shares of a mortgage, and be entitled to a proportionate share of the profit, or someone might have taken out two mortgages, but each mortgage is one thing, especially from the point of view of the shlub paying it.

And now these companies, having done something silly by buying all of these mortgages, have gone bust. Who owns the mortgages? Who gets paid if the person can pay? Who is it who forecloses if they can't? I have no doubt that foreclosures will continue as normal, but is that legal if the person to whom you owe the money is effectively dead? I imagine that estates administrators haven't had time to get installed yet... maybe they have.

Moreover, what happens when the people who they borrowed the cash from to give to the people who couldn't pay it back have themselves gone titsup?

As far as I can tell, the deal with the $840e9 is that the government is effectively nationalising those institutions which can't be allowed to fail. (Who is determining whether they can be allowed to fail or not? Almost universally, people who do, have, or want to work for one or more of them. Conflict of Interest, much?) So, those who haven't already been fired will continue to get their 6- and 7-figure salaries playing roulette with other people's superannuations, and the sorry mess can continue to stand while it gets sorted out.


Sorry, I had to suppress a fit of giggles at that thought. “Sorted out” hahahaaaaa


So of the several ways this could be played out, there are three main tacks which I can think of, which can be summarised as ‘help the bottom’, ‘help the top’ and ‘help the middle’.

what I think... )

Oh, I don't know. I do know, though, that if the people who used to work for an industry and who now run the organisation which ‘oversees’ that organisation, ask for hundreds of billions of dollars to keep individual companies fat and happy functioning in the same way that caused the fuckups in the first place, then it is almost guaranteed to be a bad idea for everyone except for those companies.

And now I see on the news that it's gone through the House, gone up from the original 700e9 to 840e9.

I am not surprised.
catsidhe: (Default)
It's amazing, really. John Ratbastard Howard opens his mouth, and pure shit dribbles out.

Out with the scalpel again: “PM says AWA study wrong” )

For gods' sake, John, call the damned election so I can vote you the hell out of my life.


catsidhe: (Default)
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