Financial News

[Y2HH]

Once you accept that premise, then the logic that they're not investing because Obama wasn't nice enough to them becomes the object of ridicule that we keep treating it as.

 

That's not why they're not investing, though. You can keep saying it, but it will never be true.

[StrangeSox]

That's not why they're not investing, though. You can keep saying it, but it will never be true.

 

Another great idea is to quit threatening and villianizing job creators.

 

 

[southsider2k5]

Once you accept that premise, then the logic that they're not investing because Obama wasn't nice enough to them becomes the object of ridicule that we keep treating it as.

 

Do you have any idea what a Wall Street firm's compliance looks like or costs? Heck forget even wall street, as a public firm, do you have any idea what compliance does to a firm? A firm I am running a compliance examination on right now told me that we were one of eighteen examinations going on for them right now. Do you understand what more rules and regulations would do to them?

 

I know your response to uncertainty is to run out, spend your savings, and then open up a few credit cards to max out, but that isn't how it works in the real world, at all.

[Y2HH]

They're not investing because of economic uncertainty, and the current administration, despite trying, has not done much successfully to restore that faith long term.

[southsider2k5]

They're not investing because of economic uncertainty, and the current administration, despite trying, has not done much successfully to restore that faith long term.

 

I'd contend they have not only not fixed the uncertainty, they have added to it and created more of it with their own actions and speeches.

[Y2HH]

I know your response to uncertainty is to run out, spend your savings, and then open up a few credit cards to max out, but that isn't how it works in the real world, at all.

 

This is an understatement. Unfortunately, it's exactly what the government has done the last 30 years, regardless of who was/is in office, be it D or R.

[StrangeSox]

Do you have any idea what a Wall Street firm's compliance looks like or costs? Heck forget even wall street, as a public firm, do you have any idea what compliance does to a firm? A firm I am running a compliance examination on right now told me that we were one of eighteen examinations going on for them right now. Do you understand what more rules and regulations would do to them?

 

I know your response to uncertainty is to run out, spend your savings, and then open up a few credit cards to max out, but that isn't how it works in the real world, at all.

 

Remember when supply-side economics worked?

 

 

Me either!

[StrangeSox]

I'd contend they have not only not fixed the uncertainty, they have added to it and created more of it with their own actions and speeches.

 

If only we elected the right people, businesses would just be so confident right now. They'd be expanding like gang-busters to meet demand that doesn't exist.

[Y2HH]

If only we elected the right people, businesses would just be so confident right now. They'd be expanding like gang-busters to meet demand that doesn't exist.

 

How do you know the demand wouldn't exist if difference choices were made? I'd like to see this fantastical peer into an alternative timeline device you have. Is your name Walter Bishop?

[Balta1701]

Do you have any idea what a Wall Street firm's compliance looks like or costs? Heck forget even wall street, as a public firm, do you have any idea what compliance does to a firm? A firm I am running a compliance examination on right now told me that we were one of eighteen examinations going on for them right now. Do you understand what more rules and regulations would do to them?

 

I know your response to uncertainty is to run out, spend your savings, and then open up a few credit cards to max out, but that isn't how it works in the real world, at all.

You already know that you'll get me to agree that the current rules aren't working, but you disagree with my case that they don't work because Wall Street loves it this way. They are happy to hire people like you to do compliance work as long as the rules aren't actually strong enough to affect anything.

 

There's actually a remarkable example of this happening right now. Dodd Frank included over 25 deadlines to finish writing 180 rules supposedly to try to fix the mess from 2008. It was set up this way because if the rules were just passed by Congress, lobbyists couldn't work to rewrite them. Not a single one of those deadlines has been met, and only about 30 of the rules have actually been written, most after, you guessed it, an intense lobbying period.

 

No one cares about uncertainty in regulation when compared with regulations that might actually require things like safety in the financial system or an element of control to risks that are taken. They're more than happy to drag out the uncertainty for years if they can lobby on it a little bit harder.

 

The worst thing a Wall Street firm can conceive of is a simple rule that constrains their ability to take home as much money as possible when times are good as a safety measure. That's where this mess comes from. That's where your compliance complaints come from. We see it every time there's a consideration of anything. Deregulation is easy and wonderful until 1998, 2001, or 2008 hits and it turns out we could have used the simple rule. Instead, we get a complicated, lobbyist written rule with enough holes in it that a few extra compliance jobs are treated as a writeoff.

[southsider2k5]

If you are writing this off as "a few extra compliance jobs", you really need to spend a day at any firm and see what they waste because of duplicitous compliance costs. 18 different examinations at the same time isn't a few extra jobs.

[StrangeSox]

Businesses are still sitting on record piles of cash. Your argument would only work if they were barely making a profit and had no room to hire additional people or invest in expansion.

 

Instead they're making money hand-over-fist but there's still no demand out there.

[Balta1701]

But it's a lot less profitable than having the simple Glass Steagell wall between deposit banks and investment banks, for example.

[Balta1701]

Businesses are still sitting on record piles of cash. Your argument would only work if they were barely making a profit and had no room to hire additional people or invest in expansion.

 

Instead they're making money hand-over-fist but there's still no demand out there.

if we write more and more complicated rules, they'll have to spend more and more of that money they're sitting on paying people to do compliance. That's a job creation strategy!

[Y2HH]

Businesses are still sitting on record piles of cash. Your argument would only work if they were barely making a profit and had no room to hire additional people or invest in expansion.

 

Instead they're making money hand-over-fist but there's still no demand out there.

 

If there was no demand, they wouldn't be making any money. What you're saying and reality aren't meshing. There is obvious demand, because people are giving them money for what it is they do.

 

I think the time has come for all -- including those of us on this board -- to stop bickering about our relatively minor differences of opinion and to start wondering what it is we will be doing when they bring the system (and the world) down around us.

[Balta1701]

If there was no demand, they wouldn't be making any money. What you're saying and reality aren't meshing. There is obvious demand, because people are giving them money for what it is they do.

 

I think the time has come for all -- including those of us on this board -- to stop bickering about our relatively minor differences of opinion and to start wondering what it is we will be doing when they bring the system (and the world) down around us.

I can still remember posting somewhere here in 2008 that if the world is destroyed because of Credit Default Swaps, I'll be pretty annoyed.

[Y2HH]

I can still remember posting somewhere here in 2008 that if the world is destroyed because of Credit Default Swaps, I'll be pretty annoyed.

 

I think we all would be pretty annoyed, but in all honesty, that's just ONE of many things they've done to bring this down.

[southsider2k5]

Businesses are still sitting on record piles of cash. Your argument would only work if they were barely making a profit and had no room to hire additional people or invest in expansion.

 

Instead they're making money hand-over-fist but there's still no demand out there.

 

The fact that they are sitting on record piles of cash is the whole point. They could be doing something with it, but they aren't because of the uncertainty created by this administration. The lack of demand is a product of that uncertainty. I know the federal government is a different creature, but when you are in a situation where you know your job is either tenuous or temporary, you aren't going out and spending lots of money. You also don't spend lots of money when your biggest asset is upside down and isn't going to be going anywhere for a while because the housing system is a needlessly landlocked mess.

[StrangeSox]

If there was no demand, they wouldn't be making any money. What you're saying and reality aren't meshing. There is obvious demand, because people are giving them money for what it is they do.

 

There's not growth in demand. Thank you for correcting that.

 

[Y2HH]

The fact that they are sitting on record piles of cash is the whole point. They could be doing something with it, but they aren't because of the uncertainty created by this administration. The lack of demand is a product of that uncertainty. I know the federal government is a different creature, but when you are in a situation where you know your job is either tenuous or temporary, you aren't going out and spending lots of money. You also don't spend lots of money when your biggest asset is upside down and isn't going to be going anywhere for a while because the housing system is a needlessly landlocked mess.

 

They're not just sitting on record piles of cash, they're actively MAKING record piles of cash.

[Balta1701]

The fact that they are sitting on record piles of cash is the whole point. They could be doing something with it, but they aren't because of the uncertainty created by this administration. The lack of demand is a product of that uncertainty. I know the federal government is a different creature, but when you are in a situation where you know your job is either tenuous or temporary, you aren't going out and spending lots of money. You also don't spend lots of money when your biggest asset is upside down and isn't going to be going anywhere for a while because the housing system is a needlessly landlocked mess.

The lack of demand is a product of the fact that we have 9% unemployment and policy makers think that's not high enough.

 

They are sitting on that money because if they did invest it, they'd be likely to lose money on the investment because there wouldn't be customers for new products. You can see that throughout the data. Factories are idled, the construction industry is a fraction of where it was a few years ago (not just in housing), companies that actually make or do things have way more capacity than they can use because all their customers lost their jobs.

 

That's why some of us keep pushing stimulus. If people are able to buy things, that brings that capacity to do things back online, and furthermore, if that happens by printing T-Bills, then that makes Treasuries a worse investment.

 

Even if you got rid of rules for wall street through another round of deregulation, that wouldn't change the underlying lack of demand.

[Y2HH]

There's not growth in demand. Thank you for correcting that.

 

See, they've successfully created an atmosphere where while they live lavish lives on our backs, but they have us arguing amongst each other as to how/why it happened.

 

I don't care how it happened, other than for a history lesson and learning from our mistakes, what's done is done. What I care about now is fixing it. They've shown they have little to no interest in fixing it.

 

While I sympathize with both sides, cutting spending (while necessary), this isn't the right time. It's also, on the flip side, not the time to raise taxes. They're stuck between a rock and a hard place, of their own creation, because the way the system is SUPPOSED to work, is counter to how they've worked it for decades.

 

In good times, the government is supposed to draw back, cut spending, and save -- and pay down debts, etc.

 

In bad times, the government is supposed to do the opposite.

 

The problem is, they only do one -- and we all know which it is -- whether times are good or bad. The entire system wasn't designed to work this way...the fact that they've worked it that way for so long, it's become broken beyond the state of being fixable. Sadly, the only way out of this IMO is to tear it down and build it back up...meaning everyone gets to suffer unfairly.

 

What they will do, however, is prop it up for as long as possible, until (IF) it collapses around them. IF that happens, they'll have no choice but to scrap it, and start over. IF they can keep it propped up, good for us.

[Y2HH]

The lack of demand is a product of the fact that we have 9% unemployment and policy makers think that's not high enough.

 

They are sitting on that money because if they did invest it, they'd be likely to lose money on the investment because there wouldn't be customers for new products. You can see that throughout the data. Factories are idled, the construction industry is a fraction of where it was a few years ago (not just in housing), companies that actually make or do things have way more capacity than they can use because all their customers lost their jobs.

 

That's why some of us keep pushing stimulus. If people are able to buy things, that brings that capacity to do things back online, and furthermore, if that happens by printing T-Bills, then that makes Treasuries a worse investment.

 

Even if you got rid of rules for wall street through another round of deregulation, that wouldn't change the underlying lack of demand.

 

Tell that to Apple. A consumer driven business that seems to be having no problems with demand.

[Balta1701]

Tell that to Apple. A consumer driven business that seems to be having no problems with demand.

Citing a single business that is performing well doesn't mean that there is not a significant lack of demand within the economy.

[Y2HH]

Citing a single business that is performing well doesn't mean that there is not a significant lack of demand within the economy.

 

There are a megaton of highly profitable companies I could cite right now.

 

Microsoft.

 

IBM.

 

Apple.

 

Pfizer.

 

Any company in the tobacco industry.

 

Any company in the petrol industry.

 

Conagra.

 

Kraft.

 

I can keep going. All are raking massive profits despite all of this. Demand still exists...somehow. So much of this is smoke and mirrors I don't know what's real and what's not anymore.

 

I do know this...it's not adding up.