KingBingo Posted January 16, 2009 Author Share Posted January 16, 2009 I'm concern that in this thread I'm seeing plenty of well reasoned, well explained points being made that genuinely add to an interesting discussion from poster like hourkid, opobear, chefdave and several others (they were just the first that popped into my head). Yet against that there seems to be a lot of tremendously arrogant individuals who essentially assert that because they personally cannot understand how the modern economy works that it is all an utter fabrication. Yet any attempted by better versed people to explain simply results in name calling. Is the point of this board not to engage in a discussion that raises all our levels of understanding. Not simply shouting out anyone that doesn't agree with you whilst refusing to stop to consider another point of view. Quote Link to comment Share on other sites More sharing options...
threesixty Posted January 16, 2009 Share Posted January 16, 2009 What absolute nonesense. What does the housebuilder or houseseller get - thin air? The money exists. Entries on a ledger when in the bank - cash when they take it out. http://en.wikipedia.org/wiki/Fractional_reserve Fractional-reserve banking is the banking practice in which banks keep only a fraction of their deposits in reserve (as cash and other highly liquid assets) and lend out the remainder, while maintaining the simultaneous obligation to redeem all deposits immediately upon demand. This practice is universal in modern banking.[1] Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted January 16, 2009 Share Posted January 16, 2009 Ive had no shortage of credit offers. People i know have had no trouble getting credit. folks on here tell of how easy it is to get credit. I'm beggining to think the whole 'shortage of credit' is a load of media engineered BS. Quote Link to comment Share on other sites More sharing options...
Injin Posted January 16, 2009 Share Posted January 16, 2009 If when you bought your pants they also included wonderful sea views and access to the local conveniences then you would have had to take a mortgage out on them Selling what you didn't create is costly and the antithesis of capitalism. You mean like when singers sell thier voices or craftsmen sell their skills? Do behave. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted January 16, 2009 Share Posted January 16, 2009 Isn't Chapter 11 a restructure of debts, not that you'll never pay them? I thought it just changes the debt schedule to something more manageable. A bankruptcy tends to mean that no one can get money from you, ever. In this country RBS could have taken their assets and resold them and so on. I'll bet the assets sold separately for a company that big are worth far more than their debts. Win, win IMO. I'd be more worried if the debtor was just another huge finanical institution preteding to worth a lot but with no real assets... Chapter 11 is a US protection from creditors vehicle, probably similar to Administration here, but I am not up with Chapter 11, it being foreign et al. Bankruptcy protects an entity from its creditors by removing the debts from the entity, except some things like student loans and other things. Quote Link to comment Share on other sites More sharing options...
Injin Posted January 16, 2009 Share Posted January 16, 2009 What absolute nonesense. What does the housebuilder or houseseller get - thin air? The money exists. Entries on a ledger when in the bank - cash when they take it out. He gets convinced that money has changed hands when it hasn't. All banking is fraud. Don't believe me and have a "loan" or mortgage? Ask what denomination it was paid in. For more fun make your "repayment" dependant on getting a signed cashiers reciept or a list of the banknote serial numbers involved. Quote Link to comment Share on other sites More sharing options...
Injin Posted January 16, 2009 Share Posted January 16, 2009 (edited) I'm concern that in this thread I'm seeing plenty of well reasoned, well explained points being made that genuinely add to an interesting discussion from poster like hourkid, opobear, chefdave and several others (they were just the first that popped into my head).Yet against that there seems to be a lot of tremendously arrogant individuals who essentially assert that because they personally cannot understand how the modern economy works that it is all an utter fabrication. Yet any attempted by better versed people to explain simply results in name calling. Is the point of this board not to engage in a discussion that raises all our levels of understanding. Not simply shouting out anyone that doesn't agree with you whilst refusing to stop to consider another point of view. It doesn't make any sense and people believe in it. That's whay these things are called manias and bubbles. Just like the housing bubble, there are a set of completely flawed premises that the supporters of the banking system as it is hold which cannot be rationally explained or even in some cases defined. Paper money is a dream and at some point enough peple will wake up to make it no longer feasible. Pretty soon after (people being what they are) most will be looking back at the whole affair and wondering how on earth is happened. You might notice that every time I've asked for facts the supporters of the scam don't provide any, they just go ad hominem. Just like supporters of the "house prices only go up" argument used to when inconvenient facts were presented. Edited January 16, 2009 by Injin Quote Link to comment Share on other sites More sharing options...
hourkid Posted January 16, 2009 Share Posted January 16, 2009 Chapter 11 is a US protection from creditors vehicle, probably similar to Administration here, but I am not up with Chapter 11, it being foreign et al.Bankruptcy protects an entity from its creditors by removing the debts from the entity, except some things like student loans and other things. The process attempts to keep useful businesses operating by restructuring the debts. This is a simplified overview. Court decides what debt quantum the business can support (tad more complex than this); the quantum is usually considerably less than at the point of entry. Working backwards from the equity upwards, the equity and subordinated debt holders get wiped out. Outstanding senior debt holders may get subordinated by new debt that comes into the business. This could be from banks that already lend to the business or new banks/hedge funds. By providing this new debt, equity in the restructured organisation may be achieved (so transference of ownership can occur). Original equity and sub debt holders take big hits. Original senior debt providers may see the value of their debt devalued because the new debt takes super-priority. As such, for most participants, there is nothing but pain; they take punishment for making bad investment and lending decisions. Either an original participants equity/debt gets wiped out or revalued downwards. New money takes precedent. Quote Link to comment Share on other sites More sharing options...
threesixty Posted January 16, 2009 Share Posted January 16, 2009 Chapter 11 is a US protection from creditors vehicle, probably similar to Administration here, but I am not up with Chapter 11, it being foreign et al.Bankruptcy protects an entity from its creditors by removing the debts from the entity, except some things like student loans and other things. http://en.wikipedia.org/wiki/Chapter_11 Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to any business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most prominently used by corporate entities. In contrast, Chapter 7 governs the process of a liquidation bankruptcy, while Chapter 13 provides a reorganization process for the majority of private individuals with unsecured debts of less than $336,900.00 and secured debts of less than $1,010,650.00 as of April 1, 2007 It seems that chapter 11 keeps the company intact and offers protection from creditors (vultures ..). Whereas chapter 7 is more what the UK does, i.e. liquidation and dissolving the company is quickly as possible (i.e. Woolworths). i read somewhere that the US attitude to bankruptcy is far healthier than what we have, thats why they are naturally more entrepreneurial than us.. makes sense to me. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted January 16, 2009 Share Posted January 16, 2009 http://en.wikipedia.org/wiki/Chapter_11Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to any business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most prominently used by corporate entities. In contrast, Chapter 7 governs the process of a liquidation bankruptcy, while Chapter 13 provides a reorganization process for the majority of private individuals with unsecured debts of less than $336,900.00 and secured debts of less than $1,010,650.00 as of April 1, 2007 It seems that chapter 11 keeps the company intact and offers protection from creditors (vultures ..). Whereas chapter 7 is more what the UK does, i.e. liquidation and dissolving the company is quickly as possible (i.e. Woolworths). i read somewhere that the US attitude to bankruptcy is far healthier than what we have, thats why they are naturally more entrepreneurial than us.. makes sense to me. well of course, banks are allowed to fail at an alarming rate in the US, so it would be a bit rich of them to transmit the "shame of bankruptcy" as Uk banks do. Bankruptcy was something you went to prison for here until fairly recently. ( no, not last year!) Quote Link to comment Share on other sites More sharing options...
hourkid Posted January 16, 2009 Share Posted January 16, 2009 (edited) http://en.wikipedia.org/wiki/Chapter_11Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to any business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most prominently used by corporate entities. In contrast, Chapter 7 governs the process of a liquidation bankruptcy, while Chapter 13 provides a reorganization process for the majority of private individuals with unsecured debts of less than $336,900.00 and secured debts of less than $1,010,650.00 as of April 1, 2007 It seems that chapter 11 keeps the company intact and offers protection from creditors (vultures ..). Whereas chapter 7 is more what the UK does, i.e. liquidation and dissolving the company is quickly as possible (i.e. Woolworths). i read somewhere that the US attitude to bankruptcy is far healthier than what we have, thats why they are naturally more entrepreneurial than us.. makes sense to me. The US attitude is: so you screwed-up. We are not going to hold it against you. Get back out there and try again. That's how you build an entrepreneurial spirit; one that says success will be the product of repeated trying. edit: spelling Edited January 16, 2009 by hourkid Quote Link to comment Share on other sites More sharing options...
Injin Posted January 16, 2009 Share Posted January 16, 2009 The US attitude is: so you screwed-up. We are not going to hold it against you. Get back out there and try again. That's how you build an entrepreneurial spirit; one that says success will be the product of repeated trying.edit: spelling It's mainly a vehicle to walk away from what they owe and leave the debts with an entirely fictional corporate entity. The ability to not be personally responsible for ones actions is a major reason why things are so utterly ******ed up right now. Cash out early, close the company, retire, point at brand logo. Quote Link to comment Share on other sites More sharing options...
KingBingo Posted January 16, 2009 Author Share Posted January 16, 2009 The US attitude is: so you screwed-up. We are not going to hold it against you. Get back out there and try again. That's how you build an entrepreneurial spirit; one that says success will be the product of repeated trying.edit: spelling While still be strict enough as you mentioned before with the re-valuation of debt to avoid any moral hazard problems. Quote Link to comment Share on other sites More sharing options...
why me Posted January 16, 2009 Share Posted January 16, 2009 Don't believe me and have a "loan" or mortgage? I get a loan with northern rock and on the loan agreement I give the details of my natwest savings account for it to paid into. Nothing changes hand between NR and natwest? Okaaaaay...... Their central-bank bank-accounts say otherwise. Quote Link to comment Share on other sites More sharing options...
Injin Posted January 16, 2009 Share Posted January 16, 2009 I get a loan with northern rock and on the loan agreement I give the details of my natwest savings account for it to paid into. Nothing changes hand between NR and natwest? Okaaaaay......Their central-bank bank-accounts say otherwise. The accounts are a fiction. Asked themwhat happened in reality. Did you get £20 notes, £10 notes? - ask them what you factually got. "I typed some numbers into a PC" and your answeer should be "Then I'll email you what I owe you. £100,000,000 Keep the change." Quote Link to comment Share on other sites More sharing options...
why me Posted January 16, 2009 Share Posted January 16, 2009 The accounts are a fiction. Asked themwhat happened in reality. Did you get £20 notes, £10 notes? - ask them what you factually got. "I typed some numbers into a PC" and your answeer should be "Then I'll email you what I owe you. £100,000,000 Keep the change." Okay, so lets tomorrow they move away from an electronic system and use all pen and paper instead. Would you have the same problem even though the net effect is exactly the same? Quote Link to comment Share on other sites More sharing options...
hourkid Posted January 16, 2009 Share Posted January 16, 2009 It's mainly a vehicle to walk away from what they owe and leave the debts with an entirely fictional corporate entity. The ability to not be personally responsible for ones actions is a major reason why things are so utterly ******ed up right now. Cash out early, close the company, retire, point at brand logo. I'll discuss this. The debts are left with the banks that originally provided the capital. Equity losses are left with the owners who may also be management who may also get fired. The losses from debt write-downs are real losses that impact earnings and the capital base of the original lending banks. The business entity is not fictional, it continues in some form with new debt and equity from new providers at levels that are thought to be more appropriate. People get hurt, some should but don't ; I would not argue that with you. Yes, cash has been taken out but it is replaced by more debt from banks who get punished when that debt gets revalued upon realisation that they have provided too much capital. So the banks get punished. Quote Link to comment Share on other sites More sharing options...
Injin Posted January 16, 2009 Share Posted January 16, 2009 Okay, so lets tomorrow they move away from an electronic system and use all pen and paper instead. Would you have the same problem even though the net effect is exactly the same? You'd need to show why me not just handing the BoE (ot whoever) the printing cost and not the face value was valid. I got some paperand ink from you? Ok, heres the replacement cost. Me typing into a PC screen is the same as anyone else doing it. Me writing on a piece of paper is the same as anyone else doing it. Me printing up some paper with brendas head on it is the same as anyone else doing it. The reason this is a mania and the trick of it is to imagine that "bankers" or "central bankers" are special people with special abilities that the rest of humanity doesn't share. And that is, of course, complete rubbish. Anyone can print up banknotes. Anyone can write an account. Anyone can type numbers into a PC. All people are equal. Quote Link to comment Share on other sites More sharing options...
Injin Posted January 16, 2009 Share Posted January 16, 2009 I'll discuss this. The debts are left with the banks that originally provided the capital. Equity losses are left with the owners who may also be management who may also get fired. The losses from debt write-downs are real losses that impact earnings and the capital base of the original lending banks. The business entity is not fictional, it continues in some form with new debt and equity from new providers at levels that are thought to be more appropriate. People get hurt, some should but don't ; I would not argue that with you. Yes, cash has been taken out but it is replaced by more debt from banks who get punished when that debt gets revalued upon realisation that they have provided too much capital. So the banks get punished. What I mean by fictional is that Tim, bob and Dave start a firm- lets call it Shittygroup. It gets into trouble. Ahead of time Tim, Dave and Bob cash out in a greater or smaller manner, then the receiver steps in and takes over the name of the company. Now Jim, John and Sally run Shittygroup and Tim, Dave and Bob all sit on the beach with their personal cash safe and sound. Some woud say that shittygroup has suffered. I wouldn't. Quote Link to comment Share on other sites More sharing options...
why me Posted January 16, 2009 Share Posted January 16, 2009 The reason this is a mania and the trick of it is to imagine that "bankers" or "central bankers" are special people with special abilities that the rest of humanity doesn't share. They are special people. Theyre the only ones allowed to print brendas for which they are liable. They have the law and subsequent power of the judiciary behind them to make it so. Would you argue with fat tony if he told you not to do something. Print you own and see what happens. You're a slave get used it. Quote Link to comment Share on other sites More sharing options...
hourkid Posted January 16, 2009 Share Posted January 16, 2009 What I mean by fictional is that Tim, bob and Dave start a firm- lets call it Shittygroup.It gets into trouble. Ahead of time Tim, Dave and Bob cash out in a greater or smaller manner, then the receiver steps in and takes over the name of the company. Now Jim, John and Sally run Shittygroup and Tim, Dave and Bob all sit on the beach with their personal cash safe and sound. Some woud say that shittygroup has suffered. I wouldn't. Tim, Dave and Bob sold at an opportune time to less informed buyers. They took advantage of information asymmetry. Cash-outs have to be funded; either with debt and/or equity. Whoever put the cash-out finance in then gets hurt in the reorganisation. The less smart get hurt. Quote Link to comment Share on other sites More sharing options...
Injin Posted January 16, 2009 Share Posted January 16, 2009 Tim, Dave and Bob sold at an opportune time to less informed buyers. They took advantage of information asymmetry. Cash-outs have to be funded; either with debt and/or equity. Whoever put the cash-out finance in then gets hurt in the reorganisation. The less smart get hurt. Right. But this is only possible under the corporate fiction model. You don't get to do this in organised crime, for instance. Try and tell Fat Tony that you aren't responsible for the debts but some idea called "the mafia" is and he'll break your legs anyway, and probably with more force than normal for dicking him around. People shouldn't get to walk away from their personal responsibilities until they've done all they can to repair them. There are good arguments for bankrupcy for individuals, but they suck when you add the corporation. Quote Link to comment Share on other sites More sharing options...
Injin Posted January 16, 2009 Share Posted January 16, 2009 They are special people. Theyre the only ones allowed to print brendas for which they are liable. They have the law and subsequent power of the judiciary behind them to make it so. Would you argue with fat tony if he told you not to do something. If he told me that black was white I'd ask him how he knew. Then I'd ask for proof. (you also need to provide some proof that the judiciary are special peopel with special powers for this to work. Anyone can write down that their opinion and say it's a fact. it's not difficult, all people can do it!) You don't think that they can really answer "because i'll put a gun to your head" in public, do you? Besides, I am covered in scars from arguments already, a few more won't make much difference. I'd rather take the pain than be wrong. Unusual choice I know. Print you own and see what happens.You're a slave get used it. I'm free and so is everyone else and there is nothing you can do about it but con them out of their power, get used to it! Quote Link to comment Share on other sites More sharing options...
why me Posted January 17, 2009 Share Posted January 17, 2009 If he told me that black was white I'd ask him how he knew. Then I'd ask for proof. (you also need to provide some proof that the judiciary are special peopel with special powers for this to work. Anyone can write down that their opinion and say it's a fact. it's not difficult, all people can do it!) Youre a tit. Theyre special 'cause they have the guns. Stop trolling prat. Quote Link to comment Share on other sites More sharing options...
Injin Posted January 17, 2009 Share Posted January 17, 2009 Youre a tit. Theyre special 'cause they have the guns. Stop trolling prat. So there is no factual basis for what you are saying then? Quote Link to comment Share on other sites More sharing options...
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