USD $1.10 to 1AUD

[Squeak 17]

the Yank economy is dying FAST.
and it's NOT Obamas fault.

With some (i know this is SC so it will be limited) intelligent thought, what do you think are the chain of events that has lead to the USofA finanical downfall?

You are not now, nor will you ever be, good enough to not die in this sport (Sparky)
My Life ROCKS!
How's yours doing?

[kallend 1,623]

Quote

the Yank economy is dying FAST.
and it's NOT Obamas fault.

With some (i know this is SC so it will be limited) intelligent thought, what do you think are the chain of events that has lead to the USofA finanical downfall?

"Voodoo Economics" (Copyright 1980, G.H.W. Bush)

...

The only sure way to survive a canopy collision is not to have one.

[mnealtx 0]

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the Yank economy is dying FAST.
and it's NOT Obamas fault.

With some (i know this is SC so it will be limited) intelligent thought, what do you think are the chain of events that has lead to the USofA finanical downfall?

Trillion dollar deficits and business-stifling regulation and taxes. (Copyright 2009, B. Obama)

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[Amazon 7]

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Quote

the Yank economy is dying FAST.
and it's NOT Obamas fault.

With some (i know this is SC so it will be limited) intelligent thought, what do you think are the chain of events that has lead to the USofA finanical downfall?

Trillion dollar deficits and business-stifling regulation and taxes. (Copyright 2009, B. Obama)

Gee for an old guy.. you sure the fuck have not been paying attention for the last 30 years when the deficit was at 700 BILLION.. you guys with the VOO DOO DOO econ model butt fucked the USA... and want to perpetuate it for what.. another 50 fucking years????

[mnealtx 0]

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Quote

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the Yank economy is dying FAST.
and it's NOT Obamas fault.

With some (i know this is SC so it will be limited) intelligent thought, what do you think are the chain of events that has lead to the USofA finanical downfall?

Trillion dollar deficits and business-stifling regulation and taxes. (Copyright 2009, B. Obama)

Gee for an old guy.. you sure the fuck have not been paying attention for the last 30 years when the deficit was at 700 BILLION.. you guys with the VOO DOO DOO econ model butt fucked the USA... and want to perpetuate it for what.. another 50 fucking years????

Gee, for an even older chick, you must not have noticed that for 18 of those 30 years, the DEMOCRATS held the House - you know, the place where spending originates?

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[Andrewwhyte 1]

I think the above sums up the problem quite adequately.

[grimmie 173]

The first time I went to Oz, it was 1usd to 2.04 Aud, 1999.

[quade 3]

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With some (i know this is SC so it will be limited) intelligent thought, what do you think are the chain of events that has lead to the USofA finanical downfall?

It's "fun" to point a finger at a guy or an event and say "There! That's the thing!" However, I think you're right in calling it a chain of events.

Parts of this were in the control of the US and parts were not.
Parts of this can be traced to specific people and events, but in the grand shame of things you'd have to look at it as a whole going back at least until the end of WWII.

I personally think a big chunk of the reason the US likes to think of itself as being hugely successful really had to do with what happened at the end of WWII. The rest of the world was in ruins and while the US did have to fight the war, it was largely untouched on its own shores. This gave the US a HUGE advantage in taking over the economy of the world and we rode that up to about the 1970s. Honest to god, things were going AWESOME even with with very high taxes on the rich and LOTS of union labor. The middle class was BOOMING!

However, it was a false advantage because eventually other countries would dig themselves out and begin to manufacture again.

So now we had a lot of countries that were able to build competitive products and the US started to see a dip.

Along comes Reagan in the 1980s and he starts busting out deregulation and opening the way for union busting. We also see a bunch of companies starting up the "global economy" and this again creates a HUGE wave of money because companies that can take manufacturing jobs overseas are seeing a bigger profit.

Again, it's boom time, but just as before it's unsustainable because it's a false boom due to exploitation of the shifting economy. Things begin to snowball and eventually more and more companies ship jobs over seas to keep up with the competition that's doing it. Meanwhile companies also start busting unions right and left because they also claim they can't compete with non-union workers and they're right -- because other companies are also doing the same thing.

The whole thing snowballs.

However, people still remember the good old days of being able to buy houses and stuff. Also, houses and stuff is where people think the economy is at. It's a major indicator of standard of living and whatnot.

So . . . and this is where it starts getting really bad . . . in order to allow people to buy houses interest rates start doing funny things. What's driving this is that there are some very clever people that have figured out that it's possible to make money by insuring other people's mortgages. This isn't just true of normal people's mortgages, but also a sort of insurance against companies going bankrupt.

This is way complicated and well beyond the scope of what I can possibly write tonight, but what you're looking for is a thing called a "credit default swap."

The insidious thing about all of that is, it promotes giving people loans at almost no interest and with almost no oversight because, and this is the important part, you want them to default. That's right, you're betting against the market and attempting to ensure it fails.

READ THAT LAST LINE AGAIN.

In short, some greedy fucks figured out a way to make money on other people defaulting on their loans AND had the power to make loans that would be guaranteed to go bust.

I know this sounds crazy, but it's absolutely true.

AND . . . that's not the only reason the US is in bad financial straights . . . it's just ONE reason.

Wars also cost a LOT of money and while I could go all conspiracy theory on how the wars started, the truth is a crazy rich fucker living in a cave decided he'd finance some other even crazier fuckers to run airplanes into buildings.

Here's the stupid part.

While war sucks ass, for some people it's highly profitable.

So, that's another reason; a LOT of money is going from the government to people that profit from war.

Like I said, I think you've hit the nail on the head by calling it a chain of events.

quade -
The World's Most Boring Skydiver

[Amazon 7]

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the Yank economy is dying FAST.
and it's NOT Obamas fault.

With some (i know this is SC so it will be limited) intelligent thought, what do you think are the chain of events that has lead to the USofA finanical downfall?

Trillion dollar deficits and business-stifling regulation and taxes. (Copyright 2009, B. Obama)

Gee for an old guy.. you sure the fuck have not been paying attention for the last 30 years when the deficit was at 700 BILLION.. you guys with the VOO DOO DOO econ model butt fucked the USA... and want to perpetuate it for what.. another 50 fucking years????

Gee, for an even older chick, you must not have noticed that for 18 of those 30 years, the DEMOCRATS held the House - you know, the place where spending originates?

Try again M ikee.... I know you can do better than that..

[SivaGanesha 2]

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the Yank economy is dying FAST.
and it's NOT Obamas fault.

With some (i know this is SC so it will be limited) intelligent thought, what do you think are the chain of events that has lead to the USofA finanical downfall?

Sometimes monarchy has its advantages. When Australia faced the same situation, Sir John Kerr (Her Majesty's representative) fired the prime minister's ass. It was controversial but it worked.

There doesn't seem to be a similar fallback mechanism in the US system. Some have said that the 14th amendment gives Obama the right to invoke similarly autocratic powers in an emergency, but so far he seems reluctant to go that route.

"It's hard to have fun at 4-way unless your whole team gets down to the ground safely to do it again!"--Northern California Skydiving League re USPA Safety Day, March 8, 2014

[Frankyspanky 0]

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With some (i know this is SC so it will be limited) intelligent thought, what do you think are the chain of events that has lead to the USofA finanical downfall?

Fiat currency in the form of Federal Reseve Dollar notes with no association to any tangible worth other than it's own face value.

Watch this for a limp edition to the WHY and HOW questions...

http://www.youtube.com/watch?v=z3eXMCi3pQE

Check it out, it is humorous too.

The one question everyone fails to ask is, who the fuck do we owe 14 Trillion$ to...

The Banksters just rub their hands together and hide in the shadows...

Time for some accountability

Back a hundred years ago, especially around Woodrow Wilson, what happened in this country is we took freedom and we chopped it into pieces.
Ron Paul

[Squeak 17]

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The one question everyone fails to ask is, who the fuck do we owe 14 Trillion$ to...

You owe it to ME ya bastards, now pay up, I'll take tunnel time in lieu, and the balance can be paid in motorbikes and Motorhomes

You are not now, nor will you ever be, good enough to not die in this sport (Sparky)
My Life ROCKS!
How's yours doing?

[nigel99 143]

Thanks Quade,

Interesting post.

Nigel

Experienced jumper - someone who has made mistakes more often than I have and lived.

[DougH 270]

I used to buy truck parts for one of my offroad trucks from Australia. At the time the exchange rate was great, and they had some awesome parts for my truck that just weren't made stateside.

"The restraining order says you're only allowed to touch me in freefall"
=P

[weekender 0]

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With some (i know this is SC so it will be limited) intelligent thought, what do you think are the chain of events that has lead to the USofA finanical downfall?

It's "fun" to point a finger at a guy or an event and say "There! That's the thing!" However, I think you're right in calling it a chain of events.

Parts of this were in the control of the US and parts were not.
Parts of this can be traced to specific people and events, but in the grand shame of things you'd have to look at it as a whole going back at least until the end of WWII.

I personally think a big chunk of the reason the US likes to think of itself as being hugely successful really had to do with what happened at the end of WWII. The rest of the world was in ruins and while the US did have to fight the war, it was largely untouched on its own shores. This gave the US a HUGE advantage in taking over the economy of the world and we rode that up to about the 1970s. Honest to god, things were going AWESOME even with with very high taxes on the rich and LOTS of union labor. The middle class was BOOMING!

However, it was a false advantage because eventually other countries would dig themselves out and begin to manufacture again.

So now we had a lot of countries that were able to build competitive products and the US started to see a dip.

Along comes Reagan in the 1980s and he starts busting out deregulation and opening the way for union busting. We also see a bunch of companies starting up the "global economy" and this again creates a HUGE wave of money because companies that can take manufacturing jobs overseas are seeing a bigger profit.

Again, it's boom time, but just as before it's unsustainable because it's a false boom due to exploitation of the shifting economy. Things begin to snowball and eventually more and more companies ship jobs over seas to keep up with the competition that's doing it. Meanwhile companies also start busting unions right and left because they also claim they can't compete with non-union workers and they're right -- because other companies are also doing the same thing.

The whole thing snowballs.

However, people still remember the good old days of being able to buy houses and stuff. Also, houses and stuff is where people think the economy is at. It's a major indicator of standard of living and whatnot.

So . . . and this is where it starts getting really bad . . . in order to allow people to buy houses interest rates start doing funny things. What's driving this is that there are some very clever people that have figured out that it's possible to make money by insuring other people's mortgages. This isn't just true of normal people's mortgages, but also a sort of insurance against companies going bankrupt.

This is way complicated and well beyond the scope of what I can possibly write tonight, but what you're looking for is a thing called a "credit default swap."

The insidious thing about all of that is, it promotes giving people loans at almost no interest and with almost no oversight because, and this is the important part, you want them to default. That's right, you're betting against the market and attempting to ensure it fails.

READ THAT LAST LINE AGAIN.

In short, some greedy fucks figured out a way to make money on other people defaulting on their loans AND had the power to make loans that would be guaranteed to go bust.

I know this sounds crazy, but it's absolutely true.

AND . . . that's not the only reason the US is in bad financial straights . . . it's just ONE reason.

Wars also cost a LOT of money and while I could go all conspiracy theory on how the wars started, the truth is a crazy rich fucker living in a cave decided he'd finance some other even crazier fuckers to run airplanes into buildings.

Here's the stupid part.

While war sucks ass, for some people it's highly profitable.

So, that's another reason; a LOT of money is going from the government to people that profit from war.

Like I said, I think you've hit the nail on the head by calling it a chain of events.

Taking the other side of a trade, such as in a credit default swap is common and normal in the financial world. unlike equities, many transactions are zero sum. meaning for each winner their is a loser. Futures and options trade this way. They are used to hedge and the loser normally factors this loss into the cost of hedging a larger position. Nothing new or insidious about it.

credit default swaps were created recently, early 90's due to the demand for such a derivative to help PM's hedge their mortgage portfolios. The buyer bought them to hedge and seller sold them for the return. It might sound odd to a layman but this type of transaction is common accross multiple markets and sectors.

you seem to be shocked and outraged at a very common type of product. No comment on your anger just that its missdirected. right now people are doing the exact same thing and have been since the inception of the modern world. this is nothing new, nor unique as you seem to think

"The point is, I'm weird, but I never felt weird."
John Frusciante

[quade 3]

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you seem to be shocked and outraged at a very common type of product. No comment on your anger just that its missdirected. right now people are doing the exact same thing and have been since the inception of the modern world. this is nothing new, nor unique as you seem to think

Not "angry," simply explaining the facts and yes, some of this is new when it comes to credit default swaps. Before the Reagan era of deregulation, they could not have existed in the economy they way the did as pertaining to the housing market.

This is not to place blame at the feet of any one individual, but rather to attempt to explain that the US economy is extremely complex and actions taken in one area that sound "good" can have huge unintended consequences later. The current problems in the US are a result of dozens upon dozens of these unintended consequences.

Here are a couple out of several awesome podcasts that attempt to explain part of the problem;
http://www.thisamericanlife.org/radio-archives/episode/355/the-giant-pool-of-money
http://www.thisamericanlife.org/radio-archives/episode/365/another-frightening-show-about-the-economy

Well worth the listen for those attempting to figure out some of the bits and pieces.

quade -
The World's Most Boring Skydiver

[weekender 0]

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you seem to be shocked and outraged at a very common type of product. No comment on your anger just that its missdirected. right now people are doing the exact same thing and have been since the inception of the modern world. this is nothing new, nor unique as you seem to think

Not "angry," simply explaining the facts and yes, some of this is new when it comes to credit default swaps. Before the Reagan era of deregulation, they could not have existed in the economy they way the did as pertaining to the housing market.

This is not to place blame at the feet of any one individual, but rather to attempt to explain that the US economy is extremely complex and actions taken in one area that sound "good" can have huge unintended consequences later. The current problems in the US are a result of dozens upon dozens of these unintended consequences.

I dont understand your point about Reagen and deregegulation. Not saying your wrong or right, do not understand what your trying to explain.

credit default swaps have nothing to do with deregulation. These derivatives are not regulated. never have been and probably never will.

this is because they are not traded in an open markets like stocks, futures and commodities. they are transacted institution to institution and by contracts. there are no exchanges and clearing agents. one party asks another to create the instrument so he can hedge his portfolio or increase his return. the other party obliges so he can profit from the sale. If they trade in an unregulated arena how are they effected by regulations?

"The point is, I'm weird, but I never felt weird."
John Frusciante

[quade 3]

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I dont understand your point about Reagen and deregegulation. Not saying your wrong or right, do not understand what your trying to explain.

credit default swaps have nothing to do with deregulation.

That's simply not true, because it allowed banks to trade in them.

Here's another article that can explain it in more detail than I have time to type.
http://seekingalpha.com/article/71265-the-credit-bubble-deregulation-gone-wild

quade -
The World's Most Boring Skydiver

[weekender 0]

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I dont understand your point about Reagen and deregegulation. Not saying your wrong or right, do not understand what your trying to explain.

credit default swaps have nothing to do with deregulation.

That's simply not true, because it allowed banks to trade in them.

Here's another article that can explain it in more detail that I have time to type.
http://seekingalpha.com/article/71265-the-credit-bubble-deregulation-gone-wild

i understand your point now. you are saying that the banks would not have been permitted to transact in this type of derivative pre Reagen. I guess thats true because banks were not permitted to transact in any number of transactions reserved for broker dealers.

who is to say the broker dealers would not have just created them on their own? operating away from the commercial banks. if the demand and profit were there i think they would have. and it would have been a mess just with different people.

we are getting into "what ifs" not productive. thanks for clearing your point up

"The point is, I'm weird, but I never felt weird."
John Frusciante

[kelpdiver 2]

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the Yank economy is dying FAST.
and it's NOT Obamas fault.

uh, why are you excusing Obama? The deficits in his tern are markedly (the word exponential isn't that inappropriate) higher and looks like an out of control snowball. Of course the currency will be harmed. And of course right now it's really about the standoff in Washington about paying our debts - another big hit to the exchange rate that will remain until it's resolved.

Rhys used to post often about the exchange rate with the Aussie dollar, which seemed to have a much higher beta than the Euro or pound. There was a year where the AUS$ rose and then fell at twice the value of the others, suggesting that was a combination of both nations' activities.

worth noting also that Reagan devalued the dollar throughout the 80s and the economy was doing fine. It still represents ? 25% of the world economy despite having only 5% of the world's population.

[quade 3]

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uh, why are you excusing Obama? The deficits in his tern are markedly (the word exponential isn't that inappropriate) higher and looks like an out of control snowball.

What is responsible for the size of a snowball; the thing that initially launched it down the hill, all the snow it accumulated along the way or the guy at the bottom of the hill who just happens to be the unfortunate guy standing in its path as it rolls over him and everything else?

Like I said previously in an earlier post, "It's 'fun' to point a finger at a guy or an event and say 'There! That's the thing!'" However, in this case it's completely unhelpful in understanding the real causes, of which, there are many.

quade -
The World's Most Boring Skydiver

[kelpdiver 2]

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uh, why are you excusing Obama? The deficits in his tern are markedly (the word exponential isn't that inappropriate) higher and looks like an out of control snowball.

What is responsible for the size of a snowball; the thing that initially launched it down the hill, all the snow it accumulated along the way or the guy at the bottom of the hill who just happens to be the unfortunate guy standing in its path as it rolls over him and everything else?

Like I said previously in an earlier post, "It's 'fun' to point a finger at a guy or an event and say 'There! That's the thing!'" However, in this case it's completely unhelpful in understanding the real causes, of which, there are many.

oh, the blame can certainly be spread around. I just don't see a justification to declare him innocent of it. Not when he immediately proposes ways to spend returned TARP money when it was never money (rather was debt all along).

He is solving the problem exactly the way that Reagan did - with a crapload of spending. It's 2011 now - can no longer blame Bush for trillion dollar deficits for the rest of the decade.

[quade 3]

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It's 2011 now - can no longer blame Bush for trillion dollar deficits for the rest of the decade.

Right, just maybe like 8 out of the last 10 years.

quade -
The World's Most Boring Skydiver

[nanook 1]

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with no association to any tangible worth other than it's own face value.

Sounds like gold. It's the faith in gold that keeps people wanting it. Nothing tangible. Value created by those who want it. So shiny.

_____________________________

"The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln

[freethefly 6]

Anyone miss the Clinton years?
I know I do.
I know I'm not the only one.

"...And once you're gone, you can't come back
When you're out of the blue and into the black."
Neil Young