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John Kopke

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Re: We're All But Done
« Reply #1455 on: December 06, 2012, 08:56:37 PM »

My checking account does not pay me nothing, but it does pay me next to nothing. Maybe Forsythia would have the answer to this predicament.

Sammy:
Are you earning 3% interest, the "official rate" of inflation? I assume not.  I said you earned no interest and you said you earned a little. I stand corrected. But after inflation, take my numbers, or yours, you still end up in a hole either way. Kinda sucks doesn't it?
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John Kopke

livewire

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Re: We're All But Done
« Reply #1456 on: December 07, 2012, 08:04:25 AM »

Best investment I have found is to convert your cash into one dollar bills, and keep a stack of them next to the toilet when needed.  Saves a lot of money on toilet paper.
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John Kopke

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Re: We're All But Done
« Reply #1457 on: December 12, 2012, 08:38:06 PM »

Some things I want to address from a Sept 13 Bloomberg article entitled:

Fed Undertakes QE3 with $ 40 Billion MBS Purchase

Essentially what it says is the Fed is going to indefinitely buy $ 40 billion a month in mortgage backed securities (MBS). They refer to this as the Fed increasing it’s balance sheet.

Increasing their balance sheet they say. Yes the Fed has more than tripled it’s balance sheet from $ 900 billion in 2007 to $ 2.9 trillion today. Now to translate this so us simple folks can understand it, it means the Fed will be purchasing $ 40 billion in MBS from the big banks a month. It is a wonderful thing. Banks get paid face value for  MBS worth considerably less than they’d get in the marketplace.  The Fed supposedly adds $ 40 billion a month in MBS assets to their balance sheet. Now, as I said, in reality these MBS aren’t worth anything near their face value, but the really, really wonderful thing is it doesn‘t matter. The Fed purchased these "assets" with money they created out of thin air. The difference between the actual value, and the Feds "balance sheet" value will be made up by the devaluation of the “ simple folks” dollar.   
« Last Edit: December 12, 2012, 09:30:53 PM by John Kopke »
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John Kopke

John Kopke

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Re: We're All But Done
« Reply #1458 on: December 13, 2012, 09:42:46 PM »

I was wrong when I wrote the difference between the balance sheet value for the Fed, and the actual (lower) asset value will be made up by the devaluation of the "simple folks" dollars. Since the Fed created the money out of thin air the whole amount printed gets charged to the folks. The big banks on the ther hand receive a windfall because they were able to unload devalued MBS at the price they paid for them. It's wonderful world we live in.

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John Kopke

John Kopke

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Re: We're All But Done
« Reply #1459 on: December 14, 2012, 07:59:55 PM »

Wonder what other folks are thinking about what is going on in the ole USA today. Seems like there is a general gloom over the country. Nothing I see going on the national scene gives me encouragement. Government loves us so much that they will print whatever it takes to provide for us.
« Last Edit: December 14, 2012, 08:14:07 PM by John Kopke »
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John Kopke

Will Sweat

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Re: We're All But Done
« Reply #1460 on: December 14, 2012, 08:14:19 PM »

John, I think you will enjoy this . . .

Quantitative Easing Explained: 

http://youtu.be/PTUY16CkS-k
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"While we try to teach our childern about life, our childern teach us what life is about"  - Angela Schmidt

John Kopke

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Re: We're All But Done
« Reply #1461 on: December 14, 2012, 08:28:13 PM »

Thanks Will I'll take a look. But then again, wouldn' t that just be piling on?

What I'd like to hear is you, or anybody,  disect what I wrote in post number 1459.
« Last Edit: December 14, 2012, 09:09:54 PM by John Kopke »
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John Kopke

Will Sweat

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Re: We're All But Done
« Reply #1462 on: December 14, 2012, 09:38:42 PM »

John, the video does a pretty good overview of my thoughts and feelings.  I can't explain the QE (what number are we on now?).  I also think that long term this is going to be one hell of a train wreck. 
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"While we try to teach our childern about life, our childern teach us what life is about"  - Angela Schmidt

John Kopke

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Re: We're All But Done
« Reply #1463 on: December 14, 2012, 09:59:41 PM »

Well Will, I don't think it is a stretch to say we are both in the rather gloomy column.
Got to stop looking into this stuff. It is depressing. Plus "Dancing With the Stars"
is on TV!!
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John Kopke

Will Sweat

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Re: We're All But Done
« Reply #1464 on: December 14, 2012, 10:39:41 PM »

"Dancing with the Stars" . . . come on . . . gotta get you onto "Moonshiners" or "American Horror Story" . . . :-). . . I will concede that I feel more "gloomy" now than say six months ago. 
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"While we try to teach our childern about life, our childern teach us what life is about"  - Angela Schmidt

John Kopke

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Re: We're All But Done
« Reply #1465 on: December 15, 2012, 08:51:01 PM »

"Dancing with the Stars" . . . come on . . . gotta get you onto "Moonshiners" or "American Horror Story" . . . :-). . . I will concede that I feel more "gloomy" now than say six months ago. 

Will:

Don't be feeling gloomy now. Look on the bright side. It is going to be worse in a year,  and even worse than that
2 to 3 years out. 
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John Kopke

Will Sweat

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Re: We're All But Done
« Reply #1466 on: December 16, 2012, 09:58:24 AM »

Will:

Don't be feeling gloomy now. Look on the bright side. It is going to be worse in a year,  and even worse than that
2 to 3 years out. 

lol . . . . man, I hope you are wrong.  You know what . . . I actually have hope that the House, Senate and President will work together and get something done, soon.  I believe that.  Then again, I believe in the Easter Bunny ;-) . .
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ducksoup

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Re: We're All But Done
« Reply #1467 on: December 16, 2012, 09:59:17 AM »

Capitalism is the best system of moving goods, producing wealth, and supporting a vibrant economy that we've yet devised. It's not just that the ability to earn direct personal benefit from work is more closely aligned with basic human psychology than other systems, the competitiveness inherent in capitalism leads to more innovation, more opportunity, more capacity to support growth. Socialism might be an ideal economic system for angels, but capitalism works very well for human beings, thank you very much.
 It just doesn't seem to work for very long.
 
The rules that drive economics are not nearly so inviolable as the second law of thermodynamics (which itself has far more limitations than most people realize). In economics, you don't need Maxwell's Demon to provide "hot spots" of wealth. Such accumulations occur naturally, and arise spontaneously from the rules of the game. For example, resource monopolies pop up with regularity and once built are often easy to maintain. In an ideal world, these monopolies are situated so that they in turn are dependent on resources that limit their sway. We don't live in that world.
 
Unless an outside force (let's call it... government) steps in with regularity, market economies don't just become ugly. They become failures.
 
In capitalism, the wealthy tend to get wealthier. Like gravity wells in space, they distort the system, allowing them to suck in more and more capital, building accumulations from which less and less escapes. Only by implementing hard rules on the system can you reverse that trend. Most governments and pretty well all economists (including Adam Smith) have understood that perfectly well.
 
But thirty years ago, we started playing a different game. Whether you call it Chicago School, supply side, voodoo, or simply awful, we began instituting rules that didn't just fail to thwart these distortions in the market, we encouraged them. We swallowed a philosophy that said staggering piles of wealth were necessary to the health of the system. That rewarding the few would benefit the many.
 
There was never any evidence to support this contention. Not every theory in supply side economics was written on the back of a napkin, but even those that were not were scribbled on great mounds of conjecture. Altogether the ideas behind this school of economics carry less weight than a gravy stain.
 
Unfortunately, that's not true in Washington, where the wealthy have been able to use their accumulated power to see that the system encourages rather than corrects, the increasingly out of balance system. Because of this, thirty years of supply side economics has done more damage to our nation than every socialist, communist, or anarchist who ever lived. It's done what none of them could ever do. It's brought capitalism to the brink of failure.
 
That's where we are, on the brink. The wealthy have made a meal of the nation's economy. They've raided the larder. They've devoured the seed crop. Now they are searching for crumbs.
 
Take housing. The collapse brought on by speculative trading of mortgage derivatives left many Americans unable to afford their homes and flooded the market with foreclosures. However, in many of those areas where the foreclosures were most common, would-be home buyers have observed a strange phenomenon. Despite what should be a glut of houses on the market, prices on the homes actually put up for sale remain high. Real estate agents in many of the same markets complain that they are actually seeing a shortage of homes greater than when home sales were at their highest. Also, banks are forcing homebuyers to jump so many hurdles in the name of security, that they are often unable to make an offer in time to win a home. As a result, many Americans who are employed and have good credit, are still not able to find a house after months or years of searching. That might not be what you would expect from a perusal of classic economics texts, but it is what you would expect in our current system.
 
How can this be possible? It's possible because the same banks that homeowners must depend on to secure a loan are in direct competition with them. Hedge fund managers in the investment arms of banks are snatching up homes indiscriminately, buying them in bulk lots that swallow up potential homes by the hundreds and simply take them off the market. Why do this? Because, as institutions empowered to make money through almost any form of speculation, investment banks can optimize the availability of homes to maximize what they can bring in from rentals, sales, and long term holding. Not selling you a home is often a better bet. Bulk buys of homes allow banks to manipulate the housing market to their benefit across whole cities for a span of years. Why should they do anything else? It's not as if there's a barrier in place to separate banks that provide loans from banks that create speculative instruments. We took care of that.
 
What's happening with banks is just a part of the wealth shift that's taken place over the last thirty years. A shift that's allowed a fraction of a fraction of a percent of the population to control so much capital, that this financial black hole stands a very good chance of simply ripping the system apart.
 
It's a monopoly on everything.
 
In this monopoly, you have nothing that they want. You own nothing that they value. You make nothing they desire. Your knowledge, your experience, your willingness to work... mean nothing. There are cheaper hands available. They see no issue with holding out until you give up on a decent wage, on decent working conditions, on a decent life. You want financial institutions to think long term? They are. They're thinking that, long term, you'll give them anything they want in exchange for almost nothing at all.
 
Supply-side economics doesn't grow the economy, it concentrates it. We knew that from the start. Actually, so did Republicans. They just figured they could distract everyone long enough to vacuum the crumbs.
 
Sadly, they may be right. One thing is sure, we won't stay on the brink. The system as it is now is not sustainable, not even in the short term.
http://www.dailykos.com/story/2012/12/16/1164505/-Crumbs-much-too-small-for-the-other-Whos-mouses#comments
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John Kopke

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Re: We're All But Done
« Reply #1468 on: December 19, 2012, 07:48:04 PM »

So some guy named Mark Sumner wrote an article and it was published, and so that makes him an authority on capaitalism? And the publisher was the Dailey Kos for heavens sake! This is your argument? Face it Duck, you don't yourself have an understanding of Capitalism so you paste some dubious article from a left wing source to make the case for you.
« Last Edit: December 19, 2012, 07:55:10 PM by John Kopke »
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John Kopke

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Re: We're All But Done
« Reply #1469 on: December 20, 2012, 07:43:33 AM »

lol . . . . man, I hope you are wrong.  You know what . . . I actually have hope that the House, Senate and President will work together and get something done, soon.  I believe that.  Then again, I believe in the Easter Bunny ;-) . .

I believe that World Peace will break out, and Muslims and Christians will all hold hands and sing spirituals together.....

What could possibly make you think they are going to work together Will?  Does it look like Boehner, Reid, and Obama want to get anything done?
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