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Sat Oct 11, 2008 1:31 pm
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bodylogic



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Post subject: so where did all the money go? Reply with quote

there was never any "money" to start with...

just potential money

the public will soon get it. bring on cold fusion, bob!

http://news.yahoo.com/s/ap/20081011/ap_on_bi_ge/where_s_the_money

[By ERIC CARVIN, Associated Press Writer
1 hour, 42 minutes ago
NEW YORK - Trillions in stock market value — gone. Trillions in retirement savings — gone. A huge chunk of the money you paid for your house, the money you're saving for college, the money your boss needs to make payroll — gone, gone, gone.

ADVERTISEMENT

Whether you're a stock broker or Joe Six-pack, if you have a 401(k), a mutual fund or a college savings plan, tumbling stock markets and sagging home prices mean you've lost a whole lot of the money that was right there on your account statements just a few months ago.

But if you no longer have that money, who does? The fat cats on Wall Street? Some oil baron in Saudi Arabia? The government of China?

Or is it just — gone?

If you're looking to track down your missing money — figure out who has it now, maybe ask to have it back — you might be disappointed to learn that is was never really money in the first place.

Robert Shiller, an economist at Yale, puts it bluntly: The notion that you lose a pile of money whenever the stock market tanks is a "fallacy." He says the price of a stock has never been the same thing as money — it's simply the "best guess" of what the stock is worth.

"It's in people's minds," Shiller explains. "We're just recording a measure of what people think the stock market is worth. What the people who are willing to trade today — who are very, very few people — are actually trading at. So we're just extrapolating that and thinking, well, maybe that's what everyone thinks it's worth."

Shiller uses the example of an appraiser who values a house at $350,000, a week after saying it was worth $400,000.

"In a sense, $50,000 just disappeared when he said that," he said. "But it's all in the mind."

Though something, of course, is disappearing as markets and real estate values tumble. Even if a share of stock you own isn't a wad of bills in your wallet, even if the value of your home isn't something you can redeem at will, surely you can lose potential money — that is, the money that would be yours to spend if you sold your house or emptied out your mutual funds right now.

And if you're a few months away from retirement, or hoping to sell your house and buy a smaller one to help pay for your kid's college tuition, this "potential money" is something you're counting on to get by. For people who need cash and need it now, this is as real as money gets, whether or not it meets the technical definition of the word.

Still, you run into trouble when you think of that potential money as being the same thing as the cash in your purse or your checking account.

"That's a big mistake," says Dale Jorgenson, an economics professor at Harvard.

There's a key distinction here: While the money in your pocket is unlikely to just vanish into thin air, the money you could have had, if only you'd sold your house or drained your stock-heavy mutual funds a year ago, most certainly can.

"You can't enjoy the benefits of your 401(k) if it's disappeared," Jorgenson explains. "If you had it all in financial stocks and they've all gone down by 80 percent — sorry! That is a permanent loss because those folks aren't coming back. We're gonna have a huge shrinkage in the financial sector."

There was a time when nobody had to wonder what happened to the money they used to have. Until paper money was developed in China around the ninth century, money was something solid that had actual value — like a gold coin that was worth whatever that amount of gold was worth, according to Douglas Mudd, curator of the American Numismatic Association's Money Museum in Denver.

Back then, if the money you once had was suddenly gone, there was a simple reason — you spent it, someone stole it, you dropped it in a field somewhere, or maybe a tornado or some other disaster struck wherever you last put it down.

But these days, a lot of things that have monetary value can't be held in your hand.

If you choose, you can pour most of your money into stocks and track their value in real time on a computer screen, confident that you'll get good money for them when you decide to sell. And you won't be alone — staring at millions of computer screens are other investors who share your confidence that the value of their portfolios will hold up.

But that collective confidence, Jorgenson says, is gone. And when confidence is drained out of a financial system, a lot of investors will decide to sell at any price, and a big chunk of that money you thought your investments were worth simply goes away.

If you once thought your investment portfolio was as good as a suitcase full of twenties, you might suddenly suspect that it's not.

In the process, of course, you're losing wealth. But does that mean someone else must be gaining it? Does the world have some fixed amount of wealth that shifts between people, nations and institutions with the ebb and flow of the economy?

Jorgenson says no — the amount of wealth in the world "simply decreases in a situation like this." And he cautions against assuming that your investment losses mean a gain for someone else — like wealthy stock speculators who try to make money by betting that the market will drop.

"Those folks in general have been losing their shirts at a prodigious rate," he said. "They took a big risk and now they're suffering from the consequences."

"Of course, they had a great life, as long as it lasted."]



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Sun Oct 12, 2008 9:41 pm
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monsquaz



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Post subject: Reply with quote

http://williamirwinthompson.com/

The handmaidens of despair meet in their webs of intrigue.

Scissor ears with Ipods clip the news and BlackBerries

go picking themselves through the NSA traces

but the server is down and the market is skittish

as unemployment goes north and futures sell short.

The beggars of description roll the credits in the streets.
 
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Mon Oct 13, 2008 1:21 am
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sixbodied
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Post subject: Reply with quote

monsquaz wrote:
http://williamirwinthompson.com/

The handmaidens of despair meet in their webs of intrigue.

Scissor ears with Ipods clip the news and BlackBerries

go picking themselves through the NSA traces

but the server is down and the market is skittish

as unemployment goes north and futures sell short.

The beggars of description roll the credits in the streets.



http://it.slashdot.org/article.pl?sid=08/10/10/1539246


Bob Dobbs
 
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Mon Oct 13, 2008 1:07 pm
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justfive



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Post subject: Reply with quote

zietgiest 2
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Tue Oct 14, 2008 12:41 pm
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Conditional_ID



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Post subject: It's just fascinating Reply with quote

To watch them scramble over imaginary values. Talk about being born and dying in the shadows.

The net worth of the nation, since 1873, has been exactly zero.

I think people just like the notion they are sold into slavery. Gives them some sort of reason to keep living. Finnish sisu by any other name.
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Tue Oct 14, 2008 1:06 pm
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Conditional_ID



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Post subject: I just published the short version Reply with quote

in a diary over at dkos. I'll leave it to serendipitous chance that the right people will see it. Usually works well for me. I entitled it "Money for Nuthin' and the Chicks for Free". Under my dkos user name LRLine.
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Tue Oct 14, 2008 1:35 pm
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~Foo Fighter~



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Post subject: Reply with quote

Conditional_ID wrote:
in a diary over at dkos. I'll leave it to serendipitous chance that the right people will see it. Usually works well for me. I entitled it "Money for Nuthin' and the Chicks for Free". Under my dkos user name LRLine.


LINK to your diary.

http://www.dailykos.com/story/2008/10/14/134950/79/242/630292

Retirement is here for some, getting closer for others. So it's not really that people don't exactly understand the stock market...it's just that retirement, and subsequently, the future, is hitched to the stock market for many people through 401k's, and some pension plans.

A downturn in the stock market is a downturn in future happiness. An upturn is happy days into the sunset. Silly but it can affect people that way.

Couple that with the niggling concern people have in-general that when the bulk of the baby-boomers hit social security it is going to go bust and won't be there for those that follow. Also somewhat silly...but a collective anxiety that's been out there for some time.

I had to admitt here on 5B a week or two ago that I wasn't able to avoid stressing over the events. Not that I was actually out any real money, just what it meant for the future of me, my wife, kids, college funds, etc.

Ultimatly I feel Bob is approximatly correct...it's just hard to relax on this economic issue.

~Foo Fighter~
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Tue Oct 14, 2008 9:39 pm
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Conditional_ID



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Post subject: Your points are well taken, Foo fighter. Reply with quote

The "market", in this case, the large caps of the DJIA, really should never have been linked to people's welfare. I've always been a staunch believer in the old pyramid idea, where you have money on the bottom in safer vehicles, then work your way to the top of the pyramid to the stock market. With the advent of these opportunities for 401k's et al. to be tied to broad based mutuals (mostly) that "spread the risk around" suddenly everyone's life depends on the most unpredictable thing: a market, measured by an index such as the DJIA -- and things like happiness and sadness become tied to it. These are not stable constructs. They shift and move. People don't realize they are on quicksand. And, it's marketed to them accordingly.

You are also right about the "collective anxiety" feature surrounding social security. The ultimate fear is that one will wind up starving under a bridge.
If I believed in a collective unconscious, which I'm not entirely sure I do, I'd have to say it's in overdrive at the moment.

About the only "place in space" I really feel comfortable is here under Bob's protective wing...I am not even that comfortable posting at dkos most of the time due to the high concentration of bottom feeders, but I do have a few points to make there now and again.

Mostly I lurk here, learning. Bob is an excellent teacher -- I am not much for posting or talking, being the quintessential INTJ personality -- but I do read and listen to his words, and try to integrate them as I can.
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Wed Oct 15, 2008 8:54 am
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~Foo Fighter~



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Post subject: Reply with quote

Bob is a TERRIBLE teacher...for my way of learning. But that's good! At least for me...an aspect of my job is learning things quickly and completely...it's a chore I don't NEED to "learn" any of this stuff. But I like absorbing it.

I approach Bob's stuff as perceptual tools. I'm trying to use them just to percieve things in a different way. I'm trying, unsuccesfully, to avoid the impulse to process what I percieve...or what Bob says he percieves.

My favorite author, James Branch Cabell said the two great truths are that "we copulate, and we die." These are the two things we know for sure. If you think about it in terms of death and love there is a great deal that falls into the two catagories.

Death/fear/pain Love/happiness/pleasure ... from a recent post you can add Horus to the death column and Isis to the love column...etc. etc. So I return to that touchstone from time to time when things are complicated and confusing. I like Bob's very elaborate accounting...but if it gets to be too much I can return to some simpiler philosophical book-keeping and reminde myself that there are two things I know for SURE.

Take a ride with Bill Hicks while he echos the Copulate/Die, love/death meme.

[youtube]http://www.youtube.com/watch?v=Z1RQmnSJoRg[/youtube]

~Foo Fighter~
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Wed Oct 15, 2008 11:55 am
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Conditional_ID



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Post subject: glad you're the one on my wing Reply with quote

Yeah, I'm kind of a slow learner, in some respects. Ultimately it just comes down to spiritual osmosis for me, I guess. Part of the price for being an introverted intuitive thinker.

BOB's stuff, for me, is instantaneous preception/process. It just takes it a while to filter down through the cognitive wetware to where I can articulate sets of thoughts about it. He's my channel, I guess, to Mac and Frank, to where it is I live. Oh, I get there on my own well-enough, but Bob is the lube on my transmission's driving wheel, no doubt.

Death and love...ah yeah. Well, that sums up one way of looking at it all. I just hit Sekhmet, and ride it out from there. Kind of combines Horus and Isis for me.

Thanks for the Bill Hicks. That was great.

Fuzzy Lint commentary from Our Lady of Studies up on dkos now at http://www.dailykos.com/story/2008/10/15/12534/291/369/631182, LRLine

I listed it here too under another thread. For the last week I've been feeling Mac pushing at me, when BOB put the BuzzCoastin' list out this am I was drawn there like the proverbial moth to a flame.

Ain't it all grand?
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Thu Oct 16, 2008 2:14 am
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COVER: "GET READY FOR A WORLD CURRENCY"
Title of article: Get Ready for the Phoenix
Source: Economist; 01/9/88, Vol. 306, pp 9-10

THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let's say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today's national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.

At the beginning of 1988 this appears an outlandish prediction. Proposals for eventual monetary union proliferated five and ten years ago, but they hardly envisaged the setbacks of 1987. The governments of the big economies tried to move an inch or two towards a more managed system of exchange rates - a logical preliminary, it might seem, to radical monetary reform. For lack of co-operation in their underlying economic policies they bungled it horribly, and provoked the rise in interest rates that brought on the stock market crash of October. These events have chastened exchange-rate reformers. The market crash taught them that the pretence of policy co-operation can be worse than nothing, and that until real co-operation is feasible (i.e., until governments surrender some economic sovereignty) further attempts to peg currencies will flounder.

But in spite of all the trouble governments have in reaching and (harder still) sticking to international agreements about macroeconomic policy, the conviction is growing that exchange rates cannot be left to themselves. Remember that the Louvre accord and its predecessor, the Plaza agreement of September 1985, were emergency measures to deal with a crisis of currency instability. Between 1983 and 1985 the dollar rose by 34% against the currencies of America's trading partners; since then it has fallen by 42%. Such changes have skewed the pattern of international comparative advantage more drastically in four years than underlying economic forces might do in a whole generation.

In the past few days the world's main central banks, fearing another dollar collapse, have again jointly intervened in the currency markets (see page 62). Market-loving ministers such as Britain's Mr. Nigel Lawson have been converted to the cause of exchange-rate stability. Japanese officials take seriously he idea of EMS-like schemes for the main industrial economies. Regardless of the Louvre's embarrassing failure, the conviction remains that something must be done about exchange rates.

Something will be, almost certainly in the course of 1988. And not long after the next currency agreement is signed it will go the same way as the last one. It will collapse. Governments are far from ready to subordinate their domestic objectives to the goal of international stability. Several more big exchange-rate upsets, a few more stockmarket crashes and probably a slump or two will be needed before politicians are willing to face squarely up to that choice. This points to a muddled sequence of emergency followed by a patch-up followed by emergency, stretching out far beyond 2018 - except for two things. As time passes, the damage caused by currency instability is gradually going to mount; and the very tends that will make it mount are making the utopia of monetary union feasible.

The new world economy

The biggest change in the world economy since the early 1970's is that flows of money have replaced trade in goods as the force that drives exchange rates. as a result of the relentless integration of the world's financial markets, differences in national economic policies can disturb interest rates (or expectations of future interest rates) only slightly, yet still call forth huge transfers of financial assets from one country to another. These transfers swamp the flow of trade revenues in their effect on the demand and supply for different currencies, and hence in their effect on exchange rates. As telecommunications technology continues to advance, these transactions will be cheaper and faster still. With unco-ordinated economic policies, currencies can get only more volatile.

Alongside that trend is another - of ever-expanding opportunities for international trade. This too is the gift of advancing technology. Falling transport costs will make it easier for countries thousands of miles apart to compete in each others' markets. The law of one price (that a good should cost the same everywhere, once prices are converted into a single currency) will increasingly assert itself. Politicians permitting, national economies will follow their financial markets - becoming ever more open to the outside world. This will apply to labour as much as to goods, partly thorough migration but also through technology's ability to separate the worker form the point at which he delivers his labour. Indian computer operators will be processing New Yorkers' paychecks.

In all these ways national economic boundaries are slowly dissolving. As the trend continues, the appeal of a currency union across at least the main industrial countries will seem irresistible to everybody except foreign-exchange traders and governments. In the phoenix zone, economic adjustment to shifts in relative prices would happen smoothly and automatically, rather as it does today between different regions within large economies (a brief on pages 74-75 explains how.) The absence of all currency risk would spur trade, investment and employment.

The phoenix zone would impose tight constraints on national governments. There would be no such thing, for instance, as a national monetary policy. The world phoenix supply would be fixed by a new central bank, descended perhaps from the IMF. The world inflation rate - and hence, within narrow margins, each national inflation rate- would be in its charge. Each country could use taxes and public spending to offset temporary falls in demand, but it would have to borrow rather than print money to finance its budget deficit. With no recourse to the inflation tax, governments and their creditors would be forced to judge their borrowing and lending plans more carefully than they do today. This means a big loss of economic sovereignty, but the trends that make the phoenix so appealing are taking that sovereignty away in any case. Even in a world of more-or-less floating exchange rates, individual governments have seen their policy independence checked by an unfriendly outside world.

As the next century approaches, the natural forces that are pushing the world towards economic integration will offer governments a broad choice. They can go with the flow, or they can build barricades. Preparing the way for the phoenix will mean fewer pretended agreements on policy and more real ones. It will mean allowing and then actively promoting the private-sector use of an international money alongside existing national monies. That would let people vote with their wallets for the eventual move to full currency union. The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today. In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power.

The alternative - to preserve policymaking autonomy- would involve a new proliferation of truly draconian controls on trade and capital flows. This course offers governments a splendid time. They could manage exchange-rate movements, deploy monetary and fiscal policy without inhibition, and tackle the resulting bursts of inflation with prices and incomes polices. It is a growth-crippling prospect. Pencil in the phoenix for around 2018, and welcome it when it comes.


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Thu Oct 16, 2008 6:18 pm
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Post subject: It's in Bob's Bank! Reply with quote



http://www.999bobfm.com/page.aspx?page_id=271



There's Bob, after he beat the bank with a ratchet and a computer!
 
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Fri Oct 17, 2008 10:21 pm
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convulsionaire



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Post subject: KC and Courtney Reply with quote

Hey Octavian.



How's the TV body doing?


I'm in Courtney. Just passing through. I made it out alive. 3 weeks in Dawsons Landing on a moss covered, stinking barge with crazy people from Cortez Island.

Jesse almost sank the boat. He ran out of fuel came very close to drifting into the tidal Maelstrom at Robert's Arm.



You should've seen the seals and porpoises playing in the waves and whirlpools.


blah blah blah




I'm Haggard.

But to think that as teenagers, both Pamela Anderson and Kim Cattrall walked this very same sidewalk I'm perched beside brings me....something...not hope exactly...


...a renewed belief in the power of the ever impending punchline maybe?



Did I ever mention that i was in Courtney, high on paint fumes when I heard about Kurt Cobains agency assisted suicide?


Anyhow, I have to head to Comox now...might piss on the fence by the airforce base for old times sake.

The Comox AFB produces an absolutely massive, stinking EM maelstrom. A Snowbird shit storm



Let me know if you ever want invade LA or NYC. I know some secret, undetectable routes.



Hang on...Is there any reason to invade LA and NYC?

Was there ever?


Being a savage north of the Empire just isn't as much fun as it used to be.


Today I'm sitting closer to the boredom side of the terror/boredom canyon.




KC Accidental

http://nz.youtube.com/watch?v=ANZR_DaKm0E


That's an exciting tune



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Sat Oct 18, 2008 4:41 pm
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Conditional_ID



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Post subject: KC Accidental Reply with quote

I like, a lot. I listened this morning early on to some very old stuff, Deep Purple. For some reason this had the same visceral punch. Very good cut.
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Sun Oct 19, 2008 4:38 pm
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convulsionaire



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Post subject: Reply with quote

Yeah, that tune is money. It gets me out of bed. Weird production techniques.

My friend in Halifax is deep into Deep Purple.
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