All about Investments!

[Wade1865]

Spockydog -- your response disappeared! It was exactly the kind of perspective I wanted. Talking about it would be enlightening, and inform my own principles.

My impression was that you're deeply sympathetic to people exploited, equating the practice with evil. It seemed emotionally personal to you, suggesting you had been exploited yourself. In that case, you have my deepest sympathies. Everyone on earth has been exploited, though. And I think most everyone feels sympathy.

But, greed!

On your central, enlightening point, you brought up misery as a condition of exploitation. Three common investments today include stocks, bonds, and real eastate. You don't even have to bring up anything obviously evil to highlight that these three, which most people consider good or harmless, are actually some of the most exploitative things ever invented. Have you owned any of them? What about a 401K? Savings account? Ever bought a pair of shoes? Cell phone? Big Mac Value Meal? US savings bond?

1) Stocks and dividends. NKE, one of the most profitable corporations, exploited low-wage labor in the form of sweatshops, taking surplus value from workers paid just enough to survive. Additionally, on the sell side, NKE practices what looks to me to be taking advantage of poor minorities by selling them Air Jordans and all the associated faux-aspirations that go with it. Modern slavery.

2) Bonds and interest. I think they go back to the beginning of civilization. It's core utility involves usury to some degree, which is un-Christian, un-Jewish, and un-Muslim. Most notably, it was used as a means to fund mass, organized warfare since the 17th century, and hasn't. stopped. since. Modern warfare.

3) Real estate and rents. Used by rentiers, to profit off people who can't afford their own homes. Although government taxes and corporate insurances exploit rentiers, one-home owners and tenants are exploited just the same (and tenants don't even own the property!). But at least it's a step up from the old days where the royalty and nobility owned the land. Landlords then, landlords now. Modern serfdom.

[Larry of the Lake]

20 minutes ago, Wade1865 said:

Spockydog -- your response disappeared! It was exactly the kind of perspective I wanted. Talking about it would be enlightening, and inform my own principles.

My impression was that you're deeply sympathetic to people exploited, equating the practice with evil. It seemed emotionally personal to you, suggesting you had been exploited yourself. In that case, you have my deepest sympathies. Everyone on earth has been exploited, though. And I think most everyone feels sympathy.

But, greed!

On your central, enlightening point, you brought up misery as a condition of exploitation. Three common investments today include stocks, bonds, and real eastate. You don't even have to bring up anything obviously evil to highlight that these three, which most people consider good or harmless, are actually some of the most exploitative things ever invented. Have you owned any of them? What about a 401K? Savings account? Ever bought a pair of shoes? Cell phone? Big Mac Value Meal? US savings bond?

1) Stocks and dividends. NKE, one of the most profitable corporations, exploited low-wage labor in the form of sweatshops, taking surplus value from workers paid just enough to survive. Additionally, on the sell side, NKE practices what looks to me to be taking advantage of poor minorities by selling them Air Jordans and all the associated faux-aspirations that go with it. Modern slavery.

2) Bonds and interest. I think they go back to the beginning of civilization. It's core utility involves usury to some degree, which is un-Christian, un-Jewish, and un-Muslim. Most notably, it was used as a means to fund mass, organized warfare since the 17th century, and hasn't. stopped. since. Modern warfare.

3) Real estate and rents. Used by rentiers, to profit off people who can't afford their own homes. Although government taxes and corporate insurances exploit rentiers, one-home owners and tenants are exploited just the same (and tenants don't even own the property!). But at least it's a step up from the old days where the royalty and nobility owned the land. Landlords then, landlords now. Modern serfdom.

All excellent points and analysis of the suffering and exploitation inherent in market participation! 

I'd argue that if you recognize that there is no ethical consumption/ market participation under capitalism you need not submit to the nihilism of "if you can't beat em, join em", but instead limit your participation in any of the slings and arrows you mentioned above, where possible.  Obviously this will vary from person to person and situation.  Maybe you go about barefoot or on home made shoes.  Maybe you don't buy quite so many Nikes.  Maybe you live an ascetic life in all things except sneakers, and have 300 pairs of Air Jordans lining the wall of the cave at your carbon-net-negative organic farm.

This is getting a bit of topic from the OP, but universal suffering and exploitation need not be embraced.

[Wade1865]

18 minutes ago, Larry of the Lake said:

All excellent points and analysis of the suffering and exploitation inherent in market participation! 

I'd argue that if you recognize that there is no ethical consumption/ market participation under capitalism you need not submit to the nihilism of "if you can't beat em, join em", but instead limit your participation in any of the slings and arrows you mentioned above, where possible.  Obviously this will vary from person to person and situation.  Maybe you go about barefoot or on home made shoes.  Maybe you don't buy quite so many Nikes.  Maybe you live an ascetic life in all things except sneakers, and have 300 pairs of Air Jordans lining the wall of the cave at your carbon-net-negative organic farm.

This is getting a bit of topic from the OP, but universal suffering and exploitation need not be embraced.

Larry of the Lake -- to clarify, I didn't try to beat the monolithic Capitalist, I actively (then, as a member of the poor masses) supported it as an imperialist running dog. Support could be argued as submission, but one that I could have walked away from at will; technically, I've been a practicing Capitalist myself for some time now. Although it was luck that I didn't die or get mangled, all consequential gains were a matter of skill (and worthwhile), hahaha. I didn't see this effort as nihilistic, but a hopeful attempt towards financial success (i.e. freedom to live as I want). Not everyone has the will or capacity to win, though, not even in the US -- sympathies for all!

On suffering and exploitation, the communists made a lot of great observations, theoretically true in many ways but rarely in practice.

On free markets, all participants must be exploited, to some degree, at some point. Risks are always owed, rewards never guaranteed. The best we can do is minimize the effects of exploitation and its associated misery, but only by way of thoughtful participation. Any alternative, including the ideas you put out, sound like a coupling of rebellion- and submission-lite. Another alternative, which seems to be an increasingly more active mob in response to rising inequality, involves ropes, guillotines, and cannibalism -- no, thank you!

[Madame deVenoge]

8 hours ago, Wade1865 said:

I vaguely recall coming across a good point made about investing and thermodynamics. It sounded reasonable, but I don't remember the details. It did, however, remind me to consider the primacy of how governments feel about certain investments. For example, with the Fed raising rates, buying real estate now would be going against the grain. Moreover, crytpos always seem like a threat to any government.

No, cryptos are not a “threat to any government”…unless your government is a banana republic.

It is simply laughable to think that Bitcoin (used here as an example as one of the most “legitimate” cryptos) would ever be a threat to the US dollar.

Also, buying real estate *now* is not “going against the grain”. Buying real estate *with a lot of debt* would maybe not be the best move, perhaps.

But, I am a young girl and know little of the ways of markets and money 

Edited August 7, 2022 by Chataya de Fleury

[Rippounet]

5 hours ago, Wade1865 said:

Any alternative, including the ideas you put out, sound like a coupling of rebellion- and submission-lite. Another alternative, which seems to be an increasingly more active mob in response to rising inequality, involves ropes, guillotines, and cannibalism -- no, thank you!

Given the state of the world (the environmental crisis), we will either find yet another alternative, or an alternative will find us. Point is, it kinda takes an effort to imagine a future where humanity still believes in "free markets."

Assuming one actually believes in them now btw. Funnily enough, I've just re-read some Ha-Joon Chang, and "There is no such thing as a free market" is literally the first point he makes in 23 things they don't tell you about capitalism.

[Wade1865]

3 minutes ago, Chataya de Fleury said:

No, cryptos are not a “threat to any government”…unless your government is a banana republic.

It is simply laughable to think that Bitcoin (used here as an example as one of the most “legitimate” cryptos) would ever be a threat to the US dollar.

Also, buying real estate *now* is not “going against the grain”. Buying real estate *with a lot of debt* would maybe not be the best move, perhaps.

But, I am a young girl and know little of the ways of markets and money 

Chataya -- my second most favorite woman on this board.

Interesting, but surprising, you don't think governments would view Bitcoin as a threat. Maybe they shouldn't, but I think they should. If I was King, I'd be doing everything to undermine it so as to maintain my ability to devalue currency in order to inflate my (war, women, and luxury) debts away. Adopting it like the CAR and El Salvador -- and losing billions -- sounds awfully painful, leaving those in power vulnerable. And I think China banned the trading and mining of it -- for the sake of climate, or maintaining power?

Few people buy houses without a mortgage, which is a little more difficult to do nowadays due to the Fed -- sailing into headwinds, but only for now. It'll pick up in a year or so. But I favor the buyers. I hope they keep buying. I'm selling all of mine.

You may be a young girl, but I don't doubt women despite being a sexist. The best company-grade commander I knew was a woman. On the other hand, the worst company-grade commander I ever ran across was also a woman.

[Wade1865]

26 minutes ago, Rippounet said:

Given the state of the world (the environmental crisis), we will either find yet another alternative, or an alternative will find us. Point is, it kinda takes an effort to imagine a future where humanity still believes in "free markets."

Assuming one actually believes in them now btw. Funnily enough, I've just re-read some Ha-Joon Chang, and "There is no such thing as a free market" is literally the first point he makes in 23 things they don't tell you about capitalism.

Rippounet -- I appreciate you putting your thoughts on this out there. The "alternative" question is the most important one I've been thinking about lately.

When it comes to nation-states (and in this case not just the free West, but also the impoverished South Asia and communist East Asia) and all its bureaucracy and inertia, I don't think an alternative will be sought. There's 1) no motivation for the power-holders to want to change things; 2) they tend to be risk averse; 3) and the human need for state-sponsored war. But I agree with you -- and it is exciting to anticipate the chaos, fear, and blood -- that an alternative will find us.

Just before I retired, I jumped into a BLM march just to observe, and I wasn't disappointed. The marchers were mostly young white kids; twenty-somethings; energized; organized; radicalized. Of course, they seemed irrational to me, but they were focused, and not in a good way from my point of view. Their effort wasn't just about American black people, it was about a lot of other things including the environment and wealth inequality. It's those people who (inevitably) will find us.

I think they have a good shot at making an impact, but I also think they'll fuck it all up before their alternative is either absorbed into the status quo (i.e. a marginally evolved free market) or collapses like Occupy Wall Street or the Capitol Hill Autonomous Zone. Also, I'll say that they won't find me.

[Rippounet]

27 minutes ago, Wade1865 said:

When it comes to nation-states (and in this case not just the free West, but also the impoverished South Asia and communist East Asia) and all its bureaucracy and inertia, I don't think an alternative will be sought. There's 1) no motivation for the power-holders to want to change things; 2) they tend to be risk averse; 3) and the human need for state-sponsored war. But I agree with you -- and it is exciting to anticipate the chaos, fear, and blood -- that an alternative will find us.

Your answer is quite confusing to me, so allow me to stick to generalities. All markets have boundaries and rules that restrict freedom of choice. To quote Chang, "A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them." Ergo, if a "free" market is unable to yield satisfying outcomes, more boundaries and rules will be set. If that doesn't happen, the market may disappear. For example, if we're talking about natural resources, a resource may be depleted and/or an alternative to it must be found to maintain production/consumption. If we're talking about a financial market, we can safely say that a lack of regulation will cause a crisis hurting its operation (I think it's now widely admitted that unregulated finance ends in disaster). If we're talking about markets for consumption/production, the lack of regulation is likely to result in cartels or monopolies (or even nationalisation, if things get dire).
Point is, when it comes to markets the choice isn't merely between exploitation and revolution, but between regulation and disappearance. BTW, as historian Fernand Braudel pointed out, it's perfectly possible to think of capitalism as antithetical to "free markets," because the concentration entailed by capitalism runs contrary to competition and freedom of choice.
All other things aside, the end of "free markets" as we know them does not mean "chaos, fear, and blood" but can only mean less choice, whether through regulation or disappearance.
 

[Madame deVenoge]

2 hours ago, Wade1865 said:

Chataya -- my second most favorite woman on this board.

Interesting, but surprising, you don't think governments would view Bitcoin as a threat. Maybe they shouldn't, but I think they should. If I was King, I'd be doing everything to undermine it so as to maintain my ability to devalue currency in order to inflate my (war, women, and luxury) debts away. Adopting it like the CAR and El Salvador -- and losing billions -- sounds awfully painful, leaving those in power vulnerable. And I think China banned the trading and mining of it -- for the sake of climate, or maintaining power?

Few people buy houses without a mortgage, which is a little more difficult to do nowadays due to the Fed -- sailing into headwinds, but only for now. It'll pick up in a year or so. But I favor the buyers. I hope they keep buying. I'm selling all of mine.

You may be a young girl, but I don't doubt women despite being a sexist. The best company-grade commander I knew was a woman. On the other hand, the worst company-grade commander I ever ran across was also a woman.

Compliments are always appreciated, so, thank you.

China banned Bitcoin for stability purposes, which is to your point (but I do not believe is proof of your point; I will get there). The Chinese currency (yuan or remnibi) is really pretty weak. Ostensibly, the “stability purposes” of banning Bitcoin are mostly about fighting financial crimes, because most crypto is used for nefarious purposes (North Korea, drugs, guns, money laundering, and human trafficking, probably in that order). Also, yes, if one does not have a strong currency, limiting crypto is good capital control.

China excels at geopolitics and social control of its population; not so much currency manipulation (however much a certain wing in American politics has tried to sell that theory to the American public). 

China does not WANT to have a particularly strong currency, nor does it wish to have the world’s reserve currency - as much as it tried by suggestion to destabilize the U.S. position of such in 2008 with suggestions of a “basket of currency” as a world reserve currency in the wake of the 2008 financial crisis.

Several reasons why the United States need not worry about being in the position of China et al -

1. We (and I live in the U.S., so I say “we”) a the world’s reserve currency. 

2. the above situation is “sticky,” in economic terms. The closest competitor to the USD is the euro, and the euro is nowhere near as stable as the USD, and despite our recent political instability (ahem, Trump), we are still viewed as Stability with a capital “S”. The eurozone is still viewed as one Grexit away from financial chaos. 

3. The U.S. will be the world’s reserve currency for so long as oil is denominated in dollars, worldwide*, despite the counterparties between which oil is traded. I always personally found this fact to be absolutely fascinating, which I learned on an oil derivatives trading desk in 2013. 
   
* this part is an IMO, as it could be that tomorrow, small handheld nuclear fusion battery devices  are invented and the fact that oil is denominated in USD becomes as useful as being able to get royalties from all buggy whips made, worldwide. 

4. We have the world’s deepest, widest, and most accessible financial markets, worldwide.  And those run on dollars. 

The minute that “crypto” is backed by the full faith and credit of something stronger than the U.S. government will mean that the U.S. is a failed state and the world order is post World War III nuclear holocaust.

Edited August 8, 2022 by Chataya de Fleury

[Wade1865]

25 minutes ago, Rippounet said:

Your answer is quite confusing to me, so allow me to stick to generalities. All markets have boundaries and rules that restrict freedom of choice. To quote Chang, "A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them." Ergo, if a "free" market is unable to yield satisfying outcomes, more boundaries and rules will be set. If that doesn't happen, the market may disappear. For example, if we're talking about natural resources, a resource may be depleted and/or an alternative to it must be found to maintain production/consumption. If we're talking about a financial market, we can safely say that a lack of regulation will cause a crisis hurting its operation (I think it's now widely admitted that unregulated finance ends in disaster). If we're talking about markets for consumption/production, the lack of regulation is likely to result in cartels or monopolies (or even nationalisation, if things get dire).
Point is, when it comes to markets the choice isn't merely between exploitation and revolution, but between regulation and disappearance. BTW, as historian Fernand Braudel pointed out, it's perfectly possible to think of capitalism as antithetical to "free markets," because the concentration entailed by capitalism runs contrary to competition and freedom of choice.
All other things aside, the end of "free markets" as we know them does not mean "chaos, fear, and blood" but can only mean less choice, whether through regulation or disappearance.
 

Rippounet -- If I confused you, it's on me. Your response, though, was clear and mostly understandable. I'm a layman talking economics, whereas you sound like an economist talking economics, hahaha.

Subordinate Markets. Your description of the different (commodity, financial, goods / services) markets was helpful, and I think I'm tracking them as you explained it (e.g. the 2008 US housing crash and its associated financial products resulted in increased regulation including limits put on the number of mortgages a buyer could secure).

Free Market Capitalism. This is my intended point: although exploitation must exist in free, controlled, and hybrid market economies, any transition from a free market capitalist economy to anything else would require a period of general volatility (i.e. chaos, fear, blood). If I read you correct, my point of view is not applicable, while you argue a transition would be limited to less choice -- regulation or disappearance.

Fernand Braudel. I don't know how Fernand justifies his argument, but I'm sure it makes sense if you look at it from an assymetrical or narrow point of view. In a broader sense, I don't see how free markets and Capitalism can be antithetical.

[Wade1865]

1 hour ago, Chataya de Fleury said:

Compliments are always appreciated, so, thank you.

China banned Bitcoin for stability purposes, which is to your point (but I do not believe is proof of your point; I will get there). The Chinese currency (yuan or remnibi) is really pretty weak. Ostensibly, the “stability purposes” of banning Bitcoin are mostly about fighting financial crimes, because most crypto is used for nefarious purposes (North Korea, drugs, guns, money laundering, and human trafficking, probably in that order). Also, yes, if one does not have a strong currency, limiting crypto is good capital control.

China excels at geopolitics and social control of its population; not so much currency manipulation (however much a certain wing in American politics has tried to sell that theory to the American public). 

China does not WANT to have a particularly strong currency, nor does it wish to have the world’s reserve currency - as much as it tried by suggestion to destabilize the U.S. position of such in 2008 with suggestions of a “basket of currency” as a world reserve currency in the wake of the 2008 financial crisis.

Several reasons why the United States need not worry about being in the position of China et al -

1. We (and I live in the U.S., so I say “we”) a the world’s reserve currency. 

2. the above situation is “sticky,” in economic terms. The closest competitor to the USD is the euro, and the euro is nowhere near as stable as the USD, and despite our recent political instability (ahem, Trump), we are still viewed as Stability with a capital “S”. The eurozone is still viewed as one Grexit away from financial chaos. 

3. The U.S. will be the world’s reserve currency for so long as oil is denominated in dollars, worldwide*, despite the counterparties between which oil is traded. I always personally found this fact to be absolutely fascinating, which I learned on an oil derivatives trading desk in 2013. 
   
* this part is an IMO, as it could be that tomorrow, small handheld nuclear fusion battery devices  are invented and the fact that oil is denominated in USD becomes as useful as being able to get royalties from all buggy whips made, worldwide. 

4. We have the world’s deepest, widest, and most accessible financial markets, worldwide.  And those run on dollars. 

The minute that “crypto” is backed by the full faith and credit of something stronger than the U.S. government will mean that the U.S. is a failed state and the world order is post World War III nuclear holocaust.

Chataya de Fleury -- I recall you talking mostly about boys and high fashion. So I'm a bit surprised at your recent posts. I'm liking Chataya, circa 2022. You're promoted to first most favorite woman on this board, probationary.

China. Your points on cryptocurrencies as they relate to the PRC made sense, helpful.

Points 1-4. I loved these. But point 3 was the best, and reflects my thoughts on why we need to maintain the petrodollar and the world's reliance on fossil fuels. And I'm willing to send young American men to war to maintain this. I just don't understand why the USG is pushing for renewabales, unless (as you said) there's a world-changing patent the USG is trying to get ahead of. Until then, driving a hybrid or Tesla is treason!

[Rippounet]

8 minutes ago, Wade1865 said:

Free Market Capitalism. This is my intended point: although exploitation must exist in free, controlled, and hybrid market economies, any transition from a free market capitalist economy to anything else would require a period of general volatility (i.e. chaos, fear, blood). If I read you correct, my point of view is not applicable, while you argue a transition would be limited to less choice -- regulation or disappearance.

Transitions would only create "volatility" if they directly affected the livelihood of people (i.e. drastically raised the prices or created shortages of basic necessities such as food and water and/or prevented people from earning a living).

If history is any guide, the introduction of free market policies are far more likely to create such volatility than the reverse (trade barriers), and (a few counter-examples notwithstanding) their suspension and/or limitation is generally used by governements to keep or restore order in difficult times (i.e. war, financial crises, famines, pandemics, natural disasters... etc).

There is no reason to assume that a move away from free market policies will in itself cause violence and death if it isn't done for purely ideological reasons, in a time of crisis. I would suggest that, on the contrary, defending free market policies in a time of crisis for ideological reasons is what's more likely to result in violence and death.

8 minutes ago, Wade1865 said:

In a broader sense, I don't see how free markets and Capitalism can be antithetical.

For instance, through the contestable market theory.

[Wade1865]

11 hours ago, Rippounet said:

There is no reason to assume that a move away from free market policies will in itself cause violence and death if it isn't done for purely ideological reasons, in a time of crisis. I would suggest that, on the contrary, defending free market policies in a time of crisis for ideological reasons is what's more likely to result in violence and death.

Rippounet -- very thoughtful, value-added. Looking forward to seeing how the youth-driven efforts affect the US market system.

Looking back at your first post to me, and acknowledging there's a lot more (twitter / reddit / et al) traffic on market un-confidence among young people, I don't think what you said was an exaggeration:

"Assuming one actually believes in them now btw."

The future is going to be even more interesting than the past 21 years.

[Starkess]

14 hours ago, Wade1865 said:

Chataya de Fleury -- I recall you talking mostly about boys and high fashion. So I'm a bit surprised at your recent posts. I'm liking Chataya, circa 2022. You're promoted to first most favorite woman on this board, probationary.

Chats is and has been a very high-powered accountant so this is hardly a new development!

[Ran]

16 hours ago, Chataya de Fleury said:

4. We have the world’s deepest, widest, and most accessible financial markets, worldwide.

One Billion Americans to keep it that way!

[Tywin et al.]

21 hours ago, Chataya de Fleury said:

But, I am a young girl and know little of the ways of markets and money 

I mean really, what does a 27 year old accountant know even if she's a VP at a billion dollar firm. You're all high heels and cocktails. 

Edited August 8, 2022 by Tywin et al.

[Wade1865]

3 hours ago, Starkess said:

Chats is and has been a very high-powered accountant so this is hardly a new development!

Starkess -- It's new to me! I really do love to hear about that, makes us all happy I'm sure. In fact, I rate the progress on her financial thoughts in this thread to a solid B minus... So, I spent half the weekend catching up on posts from people I knew and it seems like many have done well since 2005. My points of reference with Chataya spans nearly two decades. And there's a substantial difference between Chataya2005 and Chataya2022; normally, one notices men, manplaining. But you don't often see women, womanslpaining. I appreciated that, hahaha.

I remembered you, too! I vaguely recall you were an Academy graduate and a Naval officer, and now I see you're a dedicated Youtuber (great videos!) and a PhD graduate. Ran seems to have published mutliple books. Iskaral Pust looks like he's mastered management (leadership, what we called it). And even George has printed a new book (still haven't read AFFC). And others...

[Wade1865]

3 hours ago, Tywin et al. said:

I mean really, what does a 27 year old accountant know even if she's a VP at a billion dollar firm. You're all high heels and cocktails. 

Tywin et al. -- I don' know what's more impressive: her ambitious career path or that she seems to get younger and younger everytime you make a new post..

[Wade1865]

Also -- it's great to see so many people have kept their original handles and avatars. I'd have kept my original as-is, too, if it weren't for a few dozen misunderstandings.

[mcbigski]

On 8/7/2022 at 5:28 PM, Rippounet said:

Given the state of the world (the environmental crisis), we will either find yet another alternative, or an alternative will find us. Point is, it kinda takes an effort to imagine a future where humanity still believes in "free markets."

If you're saying there's a future where 700 IQ AI with plenty of processor time and 3 laws makes everything asymptotically efficient then maybe I'd get on board.  But really, if you're top down instead of bottom up then you're straight up immoral, results wise.  The elect always know better, but somehow us regular folks in tennis shoes or the occasional python boot, still get stomped on. 

On 8/7/2022 at 9:58 PM, Wade1865 said:

Chataya de Fleury -- I recall you talking mostly about boys and high fashion. So I'm a bit surprised at your recent posts. I'm liking Chataya, circa 2022. You're promoted to first most favorite woman on this board, probationary.

Probably need better game for that ride than just basic negging.   

9 hours ago, Tywin et al. said:

I mean really, what does a 27 year old accountant know even if she's a VP at a billion dollar firm. You're all high heels and cocktails. 

I'm 29 so that math checks out.

Edited August 9, 2022 by mcbigski