Everyone Here Is A Looney

[dstars]

I'm with blacksheeple on this (on another thread: I didn't want to spoil that thread with this rant):

Where the hell are the FSA when we need them?

They're just like the ratings agencies. They simply add to the problems when they finally open their gubs. I know that mostly the FSA and the ratings agencies don't get it for they are a bit short in the brain-cell department, but I know of a bunch of loonies on a web site not a million miles from here who have been raving about this for a very long time.

And the only reason they're (the FSA) even saying anything at all now is the same reason that Swervin Mervin has recently done an about turn.

They want history to think they were right on the job. Hey, Merv thinks the world economy is in grave danger because of a monetary expansion. Well, Merv., you helped to cause it, you should know.

If this guy had declared, the second day on the job, that we were headed for bad times then I would at least know we had a responsible, intelligent, head of the interest rate squishing machine that is our central bank.

He did not and cannot be trusted to understand what measures to take as this economic typhoon evolves.

He will get it wrong again and again, as will the ratings agencies and the FSA. The problem is that these people use the wrong fitness function when divining policy and that's because the wrong fitness function is used when 'we' select these people.

Merv. will squeal like a piglet when it becomes obvious that not only can the Bank of England not fix it, but that they never could. It was all happenstance. The Asian currency crash ate inflation and they got arrogant. Then, after Merv. gets a wad of a pension (from a fund not into CDOs) they will go and hire some other chinless wonder from the City.

Scrap the b astard. Send ‘em all home with a letter to their mommas telling them how bad they've been.

Why is it (apparently) so bloody hard to recognise someone who 'gets' economics? I've worked with people who are supposed to understand economics and got paid huge sums for their supposed understanding. But I never met a single City economist that ever did anything but trot out committee-driven drivel. In a little while they'll all be out there making things even worse than they might otherwise have been (given that it will be very bad anyway).

They will be so far behind the curve that they will extend the grief with constant calls that the bottom is in sight, right up until it is in sight. Then they will call a crash in retrospect. They'll all be heroes shorting the market for market types can almost never call anything but a steadily rising and mildly friendly market.

Yet where do I find minds that can fathom the bigger picture?

On a looney web site with a name fit for mounting above the gates of economic hell?

We need proper regulation. We need regulators with brains and teeth.

This is not rocket surgery. It's not so hard to see that self-certification and expansive multiples is simply banks shitting money upon us.

These people make my blood boil.

I know that certain people here consider my comments arrogant, as I have a penchant for calling people nitwits.

But I only cry nitwit when nitwittery is about.

The guy down the pub gets to be stupid. It's not his fault.

These people do not. As economies keel over we must hold these people to public account.

How do we do that? If we keep coming up with snappy metaphors will BBC editors not only steal the metaphors might they also start talking about the reality outside of vested-interest land?

Estate agents and city types should be either banned from commenting on the markets, or each and every one of them must be faced with the opposite view. Only academics should be used as sources. Anyone working in a bank or for a fund or brokerage is forever and only a propogandist for their masters.

There are perhaps hundreds of idiot companies calling themselves hedge funds that are zombies hovering in the sky. They're dead funds walking.

They are dead dead dead and neither Christ nor Muhammad nor the Buddha nor the Bank of England or a host of angels can breathe life into them. They are about to fall from the sky and we are about to find out what the high street banks do with our money: They underwrite the worst paper ever invented. It's so illiquid it is solid.

It's all coming down yet we have to wait for all the pundits who work for companies with enough triple-barreled names to make it seem as if they know what they're talking about to tell us that prices have come down 0.2% then 1.1% then 3.4% then 9% then 25% then 40% then 55%.

Of course, real prices will be down 9% when they're telling us they're down 3.4%.

How can they not be getting this?

I expect, when the next pensions scandal hits, then the BBC will worry about alienating its viewers? Maybe when we eventually get to find out how many of our high street banks and pension funds have underwritten this absolute madness and sorry but your pension is up the Khyber, maybe then we will introduce ACTUAL LAWS to govern these things. Both the things themselves AND the reporting of those things.

Pension funds should be banned. All any of us needs is a little tax-free bucket to plop our hard-earned money into. That only sounds silly until it becomes clear that almost nobody, outside of a governement department, will ever recoup their pensions from these monsters.

It's an open joke that pension fund managers, with their 'risk-control' strategies written like Moses' commandments will buy anything from anyone as long as the agencies give it the okay. And the agencies have to get paid by someone. It's not like an agency can call your bonds toxic without you finding another agency to rate them.

It's a great big collusive money-creation and laundering scheme, and if we do nothing now, our grandchildren will get more of the same.

I've watched banking systems crash from close up. Governments and experts would have us believe that we have to protect our banking system at all costs. We do not. We did not protect any of our defunct industries (except film and the arts) and we should let banking die back to its proper place in the scheme of things. We need to end the banking madness. Twenty-five year-old kids should not be getting huge salaries for not knowing what they're doing

We must learn from this.

[Wario]

"Ye Gods!"

(retreats, cringing, clothes smouldering and all frontal bodyhair singed off)

"Who was that masked man??"

Absolute class rant. #1. You're right, of course. So why oh why oh why &c... isn't this stuff dunned into peoples' skulls in school. I mean our kid has RME, PSE and all sorts of voodoo guff, in compulsory lessons, at skool, hours of time wasted (in his opinion, he'd rather be in chemistry or music practice, so it must be dire ).

But stuff that will determine his life chances? Not a sossij (sorry sossij).

Hang on, what was that? Heads must roll....?

Hmm, I'm already tooled up and could switch to full-bore pointy stick production in a flash.

All I need to do is figure out some sort of clip-on drip tray, and we're away! Discount for bulk and trade.

Ta.

[Furby]

Where the hell are the FSA when we need them?

Under the control of the money lending puppetmasters the same as everybody else.

On a looney web site with a name fit for mounting above the gates of economic hell?

There are perhaps hundreds of idiot companies calling themselves hedge funds that are zombies hovering in the sky. They're dead funds walking.

They are dead dead dead and neither Christ nor Muhammad nor the Buddha nor the Bank of England or a host of angels can breathe life into them. They are about to fall from the sky and we are about to find out what the high street banks do with our money: They underwrite the worst paper ever invented. It's so illiquid it is solid.

Classic.

Pension funds should be banned. All any of us needs is a little tax-free bucket to plop our hard-earned money into. That only sounds silly until it becomes clear that almost nobody, outside of a governement department, will ever recoup their pensions from these monsters.

I agree.

We must learn from this.

I hope so. Forums such as these - the growing movement's around monetary reform offer hope. Thank God for the Internet. Until they ban it of course, or find a way to flood it with vi spin.........

Great rant dstars.

F

[sossij]

What's "rocket surgery"... is it a bit like brain science?

[MarkG]

What's "rocket surgery"... is it a bit like brain science?

Vorlon spaceships are organic, aren't they?

Good rant, otherwise. Sums up the whole financialisation of Western society.

[dirge]

great rant! i actually looked out the window picturing the zombies, made me chuckle

[Guest grumpy-old-man]

I'm with blacksheeple on this (on another thread: I didn't want to spoil that thread with this rant):

Where the hell are the FSA when we need them?

They're just like the ratings agencies. They simply add to the problems when they finally open their gubs. I know that mostly the FSA and the ratings agencies don't get it for they are a bit short in the brain-cell department, but I know of a bunch of loonies on a web site not a million miles from here who have been raving about this for a very long time.

** very good rant snipped **

I've watched banking systems crash from close up. Governments and experts would have us believe that we have to protect our banking system at all costs. We do not. We did not protect any of our defunct industries (except film and the arts) and we should let banking die back to its proper place in the scheme of things. We need to end the banking madness. Twenty-five year-old kids should not be getting huge salaries for not knowing what they're doing

We must learn from this.

I just knew I would enjoy your posts & posting style.

[me me me]

Lots of truth there and the situation is that dire! This is apart from pollution, war, famine and disease

I see trees of green, red roses too

I see them bloom, for me and you

And I think to myself, what a wonderful world

I see skies of blue, and clouds of white

The bright blessed day, the dark sacred night

And I think to myself, what a wonderful world

The colors of the rainbow, so pretty in the sky

Are also on the faces, of people going by

I see friends shaking hands, sayin' "how do you do?"

They're really sayin' "I love you"

I hear babies cryin', I watch them grow

They'll learn much more, than I'll ever know

And I think to myself, what a wonderful world

Yes I think to myself, what a wonderful world

Oh yeah

[RichM]

Yet where do I find minds that can fathom the bigger picture?

On a looney web site with a name fit for mounting above the gates of economic hell?

That was a classic line, in a brilliant rant Welcome to the site sir!

Where do you work, BTW?

[Guest grumpy-old-man]

That was a classic line, in a brilliant rant Welcome to the site sir!

Where do you work, BTW?

he's a leading columist for a grown up paper, apparently.

[LargelyIgnorant]

Great post.

The FSA know full well what is going on: http://www.fsa.gov.uk/pages/Library/Commun...6/1019_dw.shtml

Market abuse / insider trading and manipulation – As we have said, we believe some hedge funds may be testing the boundaries of acceptable practice with respect to insider trading and market manipulation. In addition, given their payment of significant commissions and their close relations with counterparties, they may create incentives for others to commit market abuse. We are supporting and testing these assertions by devising metrics to measure the incidence of unusual price movements.

The politicians' puppetmasters have convinced them to make the economy dependent on paper shuffling, onshore tax havening, etc. Now the paper pushers have turned the UK into a paper junkie, it's going to be painful to quit.

[RichM]

he's a leading columist for a grown up paper, apparently.

well good tohave him on board. as long as he doesn't poach all my ideas ©

[Guest grumpy-old-man]

well good tohave him on board. as long as he doesn't poach all my ideas ©

dstars, how many economists does it take to.........hey, just kidding, you seem to be a real economist, promotion must be a right tw4t, those high up tend not to like really clever people who go against the grain.

[aardvark]

everything you say is true - but why aren't more people who should be reporting it actually reporting it? - stupidity?

[Guest grumpy-old-man]

everything you say is true - but why aren't more people who should be reporting it actually reporting it? - stupidity?

just watching evan davies on bbc news24, he was talking about IR's, housing prices, debt etc.....he was asked if IR were going to go up further, he replied " I don't know". I have to say I am very surprised at that !

I'm not knocking evan as I know he reads this site, just a bit surprised he said that tbh???

Edited July 5, 2007 by grumpy-old-man

[MarkG]

everything you say is true - but why aren't more people who should be reporting it actually reporting it? - stupidity?

They're not paid to report the truth, they're paid to report what people want to hear. Who'd have been buying a newspaper for the last few years which kept telling them that house prices were insane and interest rates had to go up?

[aardvark]

just watching evan davies on bbc news24, he was talking about IR's, housing prices, debt etc.....he was asked if IR were going to go up further, he replied " I don't know". I have to say I am very surprised at that !

I'm not knocking evan as I know he reads this site, just a bit surprised he said that tbh???

i know what you mean - evan must know they are going up but is afraid or not allowed to say - i guess reporters should report the truth and not voice their own opinions (but they do all the time)

[dstars]

i know what you mean - evan must know they are going up but is afraid or not allowed to say - i guess reporters should report the truth and not voice their own opinions (but they do all the time)

What they should do; most especially those who call themselves 'editors' and are paid out of the money stolen from our pockets in the form of the license fee, is stop acting like the Whitehouse Press Corps reporting the US administration.

The BBC reports economics, finance and the markets as if they were hired by the markets and not by us.

The BBC seems to believe that we need to hear from City insiders when they're talking about the complicated stuff and from the man-in-the-street when they're trying to show us the possible effects of the complicated stuff.

I'll say it again: How come a bunch of 'loonies' see this stuff coming for miles but the people that get paid to see this stuff coming almost never do? (There are people who see it and trade it. These are the people who are shorting banking stocks at the moment; and for the last three months. But there's plenty of meat left on the way down. For banking stock prices are truly snookered.)

The whole relationship between the media and the markets has become a circus, a dance. 'Young and eager' reporters know better than to take on heavyweight pundits who'll tie them in knots if they ask questions like; 'Why?' or 'How come you think inflation is going to disappear by year end and rates come down?' That's still what they're getting away with right now on the BBC.

We must never forget that the BBC is still one of the repositories for our upper-middle classes, along with the City. There are people in this world who do not have to fight tooth and nail to survive. Indeed, a path is open into the City or the BBC as long as they went to the right school and studied hard enough to get to the right university (where they can study subjects as ludicrous as economics and still get plum jobs).

When the ratio of people from housing estates going to Cambridge is the same as the ratio of people from public schools; then we'll have a classless society.

These things matter.

I learnt almost everything I know about markets from sneaking into the dog track when I was fourteen. I know gambling when I see it, and I know how to watch for someone feeding the favourite a meat pie before a race. The markets are just about to enter the phase where they pretend everything is fine and dandy, whist they establish short positions on financiers and go long basic commodities. Going long basic commodities seems wild, but only because of bloody China. Prices are about to go to the moon for the basics (including oil).

But I expect we'll still have to listen to wags yawning on about how everything will be fine come year end.

Everything will be a big mess come year end.

If investment banks want the best analysts instead of the sycophantic spew that passes for analysis in the City and the media they should check out a few characters here. (Although one very clever guy here who likes the dollar should maybe have another look at that idea. Simply imagine you're on 100/1 leverage and ask if it still makes sense.)

[South Lorne]

Why is it (apparently) so bloody hard to recognise someone who 'gets' economics? I've worked with people who are supposed to understand economics and got paid huge sums for their supposed understanding. But I never met a single City economist that ever did anything but trot out committee-driven drivel. In a little while they'll all be out there making things even worse than they might otherwise have been (given that it will be very bad anyway).

...re "But I never met a single City economist that ever did anything but trot out committee-driven drivel".....that is why you never find two economists City or otherwise.....agreeing......remember economics is an art .....not a science......although they produce fakes and fiction, respectively ........!

[Benedict]

When the ratio of people from housing estates going to Cambridge is the same as the ratio of people from public schools; then we'll have a classless society.

Then we'll have a god awful fvcking mess of political correctness that'll cripple society.

Intelligent, academically minded people are more likely to have intelligent, academically minded children. They're also more likely to be rich enough to send their children to public school rather than poor enough that they live in a housing estate. Therefore the proportion of children from public school with the natural gifts necessary to truly benefit from a cambridge education is and always will be higher than the proportion of children from housing estates.

I'm not saying there's not inequality in the system still. Just that once true meritocracy is achieved the proportions won't be equal, and striving to make those proportions equal is utterly misguided and horribly damaging to society. But thank god it's all being done, with the smug self righteousness of someone striving for "equality". Nature deals us unequal hands at conception, you can socially engineer things as much as you like but until you start fvcking with dna you won't get rid of inequality.

[Benedict]

deleted - double posted on me there, sorry.

Edited July 5, 2007 by Benedict

[Guest grumpy-old-man]

What they should do; most especially those who call themselves 'editors' and are paid out of the money stolen from our pockets in the form of the license fee, is stop acting like the Whitehouse Press Corps reporting the US administration.

The BBC reports economics, finance and the markets as if they were hired by the markets and not by us.

The BBC seems to believe that we need to hear from City insiders when they're talking about the complicated stuff and from the man-in-the-street when they're trying to show us the possible effects of the complicated stuff.

I'll say it again: How come a bunch of 'loonies' see this stuff coming for miles but the people that get paid to see this stuff coming almost never do? (There are people who see it and trade it. These are the people who are shorting banking stocks at the moment; and for the last three months. But there's plenty of meat left on the way down. For banking stock prices are truly snookered.)

The whole relationship between the media and the markets has become a circus, a dance. 'Young and eager' reporters know better than to take on heavyweight pundits who'll tie them in knots if they ask questions like; 'Why?' or 'How come you think inflation is going to disappear by year end and rates come down?' That's still what they're getting away with right now on the BBC.

We must never forget that the BBC is still one of the repositories for our upper-middle classes, along with the City. There are people in this world who do not have to fight tooth and nail to survive. Indeed, a path is open into the City or the BBC as long as they went to the right school and studied hard enough to get to the right university (where they can study subjects as ludicrous as economics and still get plum jobs).

When the ratio of people from housing estates going to Cambridge is the same as the ratio of people from public schools; then we'll have a classless society.

These things matter.

I learnt almost everything I know about markets from sneaking into the dog track when I was fourteen. I know gambling when I see it, and I know how to watch for someone feeding the favourite a meat pie before a race. The markets are just about to enter the phase where they pretend everything is fine and dandy, whist they establish short positions on financiers and go long basic commodities. Going long basic commodities seems wild, but only because of bloody China. Prices are about to go to the moon for the basics (including oil).

But I expect we'll still have to listen to wags yawning on about how everything will be fine come year end.

Everything will be a big mess come year end.

If investment banks want the best analysts instead of the sycophantic spew that passes for analysis in the City and the media they should check out a few characters here. (Although one very clever guy here who likes the dollar should maybe have another look at that idea. Simply imagine you're on 100/1 leverage and ask if it still makes sense.)

do you think we will have a bad recession or depression ?

I would really appreciate an answer to this one if poss.

[sossij]

When the ratio of people from housing estates going to Cambridge is the same as the ratio of people from public schools; then we'll have a classless society.

And very large class sizes...

[aardvark]

do you think we will have a bad recession or depression ?

I would really appreciate an answer to this one if poss.

isn't a depression simply a severe recession?

[dstars]

...re "But I never met a single City economist that ever did anything but trot out committee-driven drivel".....that is why you never find two economists City or otherwise.....agreeing......remember economics is an art .....not a science......although they produce fakes and fiction, respectively ........!

That's a good point but my point is that if there ever were any such 'artists' in the City, then they all got fired.

The job (punditry) is mostly to find justifications that suggest modest growth. Where is the art in buying CDOs? For I understand that many artists indeed went down that road.

I can guarantee if anyone at The Royal Bank of Scotland (for example) had suggested that underwriting such products bordered on madness s/he would have been shown the door.

How difficult was that? But who cares? As long as everyone does it and the money supply keeps expanding... and here we are. Still having to listen to them tell Cbeebies that all will be well next year, when inflation abates.

Of course, after stagflation's been killing us for a while they'll tell us that stagflation will disappear by the end of next year.

We need a written constitution. We need proper market regulation. We need to license estate agents (although such things didn't help the US, it might help at least a little next time). We need the government to get out of the beds of pension funds and we need a body to oversee ALL bond sales.

We simply must start licensing these debt products. If a product cannot survive within a variety of market conditions it must not be allowed to trade.

We need a free market but it must be policed. Anyone in their right minds can see that CDOs or CDS's (thanks to Paul Tustain for reminding me of the name in his article: Investment Landfill) are lunacy.

You don't need a master's in economics to see that underwriting packaged personal debt that can conceivably contain great swathes of self-certified trash is to assume uber-risk.

I used to analyse exotic options but these things had a very specialized and massively liquid market.

These new products are very clever in their mathematical structures but completely insane as investments. Just as LTCM's Black-Scholes model looked scary enough on a blackboard to convince a bunch of fuddlebutts on the Nobel Prize committee to believe it had some fundamental value, these things (CDOs et al) are complex but can only exist within two states or environments:

1. They are held until maturity. And the holder gets to enjoy Cletis and the gang paying back all their debts.

2. The environment must remain forever low interest, and pretend money must be pumped in from the bottom to justify the pretend money being pumped in from the top.

Nobody cared. Nobody was there to take care of us when they perpetrated this heinous crime.

If we allow them to simply carry on it will happen again and again.

Right now, they still say that this kind of comment is crazy.

By next year they'll all be shipping-in shitloads of cash for saying the same thing.

I expect Gordo might even create a few quangos where pastured City slickers might earn a few hundred thousand crusts a year for reading the archives on this site.