Stubble any one?

Generali

bernard_shaw wrote: »

I can see that you're intent on reading between the lines and jumping to conclusions, so I'll be a bit more specific and see if I can leave no room for you to foam at the mouth raving about genocide.

You should read what I've written carefully before jerking your knees so violently.

Where have I advocated state control of business? I've advocated that the state capital which is already under the control of the nationalised banks be directed away from financial speculation and towards production and innovation.

However much distaste you feel for state capital being lodged in a bank, this is where we find ourselves. To allow the laissez-faire dogma still prevailing within the boards and trading rooms of these (largely state-owned) institutions is clearly a paradoxical contradiction.

To further allow the continued adherents of this dogma and the investment bankers who are it's high-priests to risk these state funds on a further spin of the wheel in what it turns out was actually a casino is clearly reckless - that's my money! (and yours).

Indeed, investing funds in the performance of other funds, exotic derivatives and other financial instruments, while without doubt being a free market, is not capitalism. It is a common enough misapprehension, to mistake markets for capitalism. Capitalism does not require free markets; it merely requires capital to be placed at the disposal of capitalists.

Indeed, that's exactly what I'm proposing, using state funds to invest on commercial terms in innovation and production (that is, capital formation rather than speculation). This is, in fact, capitalism (granted, it's Keynesian in flavour - remember - Keynes was the man who "saved capitalism from itself"). I don't know where you get the idea that it's socialist. Perhaps you can explain to me why you think it is.

Well thanks for all the insults first of all. I find they don't help move an argument along and make the insulter look like a pratt. Clearly you feel otherwise.

Socialism implies a state control of business (actually I think that it's is really fascism, a sub set of socialism but fascism is an emotive word I try to avoid for the most part).

Apart from that, your argument seems to be changing so quickly I can't keep up. Perhaps you could clarify what you are trying to say and we can take things from there. Or you could just carry on slagging me off. Whatever floats your boat really.

bernard_shaw

Generali wrote: »

Well thanks for all the insults first of all. I find they don't help move an argument along and make the insulter look like a pratt. Clearly you feel otherwise.

I'm very sorry if you feel insulted - it certainly wasn't my intention to insult you personally and I'm very happy to apologise. However, I feel it's necessary to point out that you, yourself, have used words like "dumb" and "pratt". I haven't. In the spirit of quid pro quo, I would appreciate an apology from you.

Generali wrote: »

Socialism implies a state control of business (actually I think that it's is really fascism, a sub set of socialism but fascism is an emotive word I try to avoid for the most part).

Godwins Law! ICMFP

But I think you're actually trying to refer to Corporatism, which has worked well in the Scandinavian countries since the year dot, and has delivered post-colonial India to its current eminence in less than 50 years. It is also the system currently being operated in Brasil. You wouldn't call any of these polities 'fascist', or would you? (Edit: Actually, I have my doubts about Norway - its a quite heavy-handed police state. Edit edit: they are also the richest 'normal' country in the world per PPP per capita.) You seem to be a bit confused about the distinction between political systems and economic systems. Wikipedia has some articles which you could read.

Generali wrote: »

Apart from that, your argument seems to be changing so quickly I can't keep up.

No it isn't.

Generali wrote: »

Perhaps you could clarify what you are trying to say and we can take things from there. Or you could just carry on slagging me off. Whatever floats your boat really.

I can't make complicated things any simpler. I'd suggest you re-read post 21 above which makes my position perfectly clear, and doesn't contradict anything else I've said on this thread.

Generali

Godwin's Law only applies to an invocation of Nazism or a reference to Hitler.

Generali

I don't really see what the point you're trying to make is. What is an 'exotic derivative' for example, and what differentiates it from a common or garden derivative? Why would it be possible to use anything other than price signals from a free market for money to lend on 'commercial terms'?

If you made a bit more sense it would be easier to respond to you.

BTW terms like 'frothing at the mouth' and 'knee jerk' are often seen as insults IMO. Presumably you feel otherwise.

bernard_shaw

Generali wrote: »

Godwin's Law only applies to an invocation of Nazism or a reference to Hitler.

OK. I'll settle for £2.50.

Generali wrote: »

I don't really see what the point you're trying to make is. What is an 'exotic derivative' for example, and what differentiates it from a common or garden derivative?

LMGTFY...
Exotic derivatives refers to a specific type of financial asset.
Derivatives are assets whose value depends on another underlying asset.
Exotic as opposed to vanilla refers to the fact that the payoff is not standard, as is the case for a regular call option.
More here: http://en.wikipedia.org/wiki/Exotic_option

Generali wrote: »

Why would it be possible to use anything other than price signals from a free market for money to lend on 'commercial terms'?

If you made a bit more sense it would be easier to respond to you.

I'm sorry, I've tried very hard to help you understand. Let's see if I can try again...
Wookster asked:

Wookster wrote: »

How do governments go about trying to encourage cash from speculating in shares (non productive) to innovation and production? Perhaps this really is what the economy needs...

I agree with Wookster. I think our government should use their shareholding in our largest banks to direct flows of (what is actually state) funds away from speculation (which we now know is fraught with danger) and into forming actual capital, which history shows is probably the best way of generating wealth.

At present, and as pointed out by Pesto in the OP article, we are seeing the return of 'animal spirits' in financial markets and irrational exuberance for speculation in them.

It is my simple and easy to understand position that state funds should not be risked in the 'Stubble'. Rather, per Keynes, they should be invested in actual capital formation.

While I put forward this perfectly reasonable suggestion, you have implied that I'm a bit like Stalin or Mao. This is clearly ridiculous. I am not advocating the collectivisation of farming or any 'great leap forward'. Next you say that what I'm advocating is fascist. It isn't.

Wookster wrote: »

BTW terms like 'frothing at the mouth' and 'knee jerk' are often seen as insults IMO. Presumably you feel otherwise.

Fair enough. I've already apologised to you. However, terms like "dumb" and "pratt" are unequivocally insulting, and you have implied that I advocate a form of fascism for the UK - I do not. I have yet to read your apology.

Generali

bernard_shaw wrote: »

OK. I'll settle for £2.50.


LMGTFY...
Exotic derivatives refers to a specific type of financial asset.
Derivatives are assets whose value depends on another underlying asset.
Exotic as opposed to vanilla refers to the fact that the payoff is not standard, as is the case for a regular call option.
More here: http://en.wikipedia.org/wiki/Exotic_option

Ok, so you mean an OTC option. You can call it an exotic option if you like. In 12 years as an investment banker and a year running a hedge fund I heard the former term used regularly to describe this sort of product, never the latter. Perhaps it's just me.

Why do you then think an OTC option is highly risky? It's hard to value on the books because by definition it isn't traded on a market but something being hard to value isn't the same as it being high risk.

bernard_shaw wrote: »

Fair enough. I've already apologised to you.

Where?

I'm sorry for implying you're a pratt (if you read my post I didn't actually call you a pratt but hey, I'll play your game).

Anyway, I'm off to bed (I live in Australia) so I'll respond or not in the am.

Toddle pip and have a lovely day, all of you!

bernard_shaw

Generali wrote: »

Where?

Here:

bernard_shaw wrote: »

I'm very sorry if you feel insulted - it certainly wasn't my intention to insult you personally and I'm very happy to apologise.

I'm surprised you missed that - I would have thought that attention to detail was a prerequisite of your job (pedantry seems to be), details of which you provided:

Generali wrote: »

12 years as an investment banker and a year running a hedge fund

I'm supposed to be impressed by a punter turned croupier? You seem to be making a big pedantic deal out of the labeling of 'exotic derivatives' or, alternatively 'OTC options'. I don't care if you call it Blackjack or Pontoon.

However, now that you've shown your hand (as it were), I can see why you're so upset that I might suggest that our government should order the (now state-owned) banks about a bit, on our behalf and in the public interest. As Upton Sinclair said: "It is difficult to get a man to understand something when his salary depends upon him not understanding it". Indeed.

To quote our UK City Minister, Lord Myners, speaking on 'casino' bankers continued irresponsibility and reckless speculation: "many people are dismayed by the continuing ‘tin ears’ of those who seem to operate with ‘a heads I win, tails you lose’ mentality."
He's gone on to say that they "need to come back into the real world".

Harriet Harman, deputy leader of the governing UK Labour party said: "I'm happy to condemn those who simply have no recognition of the fact that people expect the banks to play a part in the economy and lend out to businesses, pay back the money they've needed – because they've nearly fallen off the edge of a cliff because of recklessness and irresponsibility"

These are the sentiments I'm echoing and to which you have taken such self-interested exception.

To paraphrase Atlee:
I can assure you there is widespread resentment at your activities - a period of silence on your part would be welcome.

StevieJ

Generali wrote: »

No I don't. History shows us that state control of businesses is at best ruinous (eg 1970s UK) or at worst ends in genocide or starvation (eg USSR, PRC, North Korea).

Socialism has failed repeatedly and never succeeded. I'm not sure why anyone would be dumb enough to try it again when it has been shown to be such a massive and comprehensive failure.

You may as well add Hitler to that list, he called himself one and is about as Socialist as the others :eek: