Financial fuckery thread

[Elder Iptuous]

Chris Morris

This explains oh so very much.  We are living in a real life version of Brass Eye.

woah....
that just crinkled my head thinking about the economic crisis as a global candid camera.

also, they're kicking around measures that would include a 50% write down of Greece's debt?
I was under the impression that, although the Greeks thought it was inevitable, everyone wanted to do anything they could to avoid default because it could fucking the whole thing....
so, a 50% write down seems like it would still be a huge issue, i would think.  have they simply calculated that it wouldn't likely tip the first domino at that level of reneging?

[Faust]

Chris Morris

This explains oh so very much.  We are living in a real life version of Brass Eye.

woah....
that just crinkled my head thinking about the economic crisis as a global candid camera.

also, they're kicking around measures that would include a 50% write down of Greece's debt?
I was under the impression that, although the Greeks thought it was inevitable, everyone wanted to do anything they could to avoid default because it could fucking the whole thing....
so, a 50% write down seems like it would still be a huge issue, i would think.  have they simply calculated that it wouldn't likely tip the first domino at that level of reneging?

If they cancel their debts to the rest of europe but not to the rest of the world?

[Elder Iptuous]

i thought that would fuck some large French banks?  and that that would cascade...

[Triple Zero]

xpost:

A Financial Trader, on the News, telling even a little bit of the ugly truth does not bode well for the rest of us.
http://www.bbc.co.uk/news/business-15078419

Link to the video clip the article talks about:

http://www.bbc.co.uk/news/business-15059135

(for some reason I couldnt find it in your article, but I only just read about it on HN)

WOW I saw the link, hadn't seen the video, that's a fucking hefty elephant dose of TROOF on the BBC right there.



btw I don't really get one thing, he says, "in 12 months people's savings gonna disappear". I have some savings (leftover from insurance money when my apt burnt down 2.5y ago), and they're on my bank account. Not my main every-day paying account, but a sub-account that collects a (tiny) amount of interest (like 2% or so).

How's that going to disappear? They can't just empty out my bank account or anything can they?

Or is it more like that the euros in that account in 12 months will suddenly be able to buy much less than they do now?

In which case I'd need to transform them into assets that do keep their value. Not being a corporation or doing tricky things with stocks and bonds, that would basically mean spending that money to buy physical things, no?

I've been thinking about this and Two "physical" things came to mind, getting my eyes lasered and getting a driver's license (which are kinda expensive in NL, and it's stupid weird that I'm 31 and don't have one). Total that's about EUR 3-4k worth of "thing" to have which is not going to change in value (for me) whether the euro goes up or down or whatever, in fact it's even still exactly as valuable WTSHTF.

Is that the right sort of idea I should be thinking about? Or am I completely looking in the wrong direction? I'm not necessarily wanting to make insane profits or anything, it's just that right now I feel pretty secure and want to keep it that way.


[and I'm still kinda wondering whether I should dump them into paying off my students debt

[Precious Moments Zalgo]

btw I don't really get one thing, he says, "in 12 months people's savings gonna disappear". I have some savings (leftover from insurance money when my apt burnt down 2.5y ago), and they're on my bank account. Not my main every-day paying account, but a sub-account that collects a (tiny) amount of interest (like 2% or so).

How's that going to disappear? They can't just empty out my bank account or anything can they?

It disappears if the bank goes bankrupt and can't repay its depositors.  We have the FDIC in the US, which guarantees deposits up to $100,000 in the event of bank failure.  Do your banks have something similar?

[Cain]

Under EU law, similar rules apply, and they are backed directly by government, not via a third party corporate-government entity.  So long as the goverment has money, basic savings are assured.

I suspect he means pensions, savings related to various stocks etc

[Cain]

Oh, I remember this guy!  I actually saw him live on BBC 24.  On the one hand, he came across as kind of a douchebag.  But on the other, he said a lot of things which are, well, right.  People did make a killing in the Depression.  As did people in the last recession.  And, like he said, "governments don't rule the world, Goldman Sachs rules the world".  That was the part that made me wonder "who is this guy?  He's being remarkably candid about all of this".

[Triple Zero]

btw I don't really get one thing, he says, "in 12 months people's savings gonna disappear". I have some savings (leftover from insurance money when my apt burnt down 2.5y ago), and they're on my bank account. Not my main every-day paying account, but a sub-account that collects a (tiny) amount of interest (like 2% or so).

How's that going to disappear? They can't just empty out my bank account or anything can they?

It disappears if the bank goes bankrupt and can't repay its depositors.  We have the FDIC in the US, which guarantees deposits up to $100,000 in the event of bank failure.  Do your banks have something similar?

yes. It's something similar and my personal savings are much less than that, so I should be fine

[hirley0]

4:20PM http://www.foodista.com/food/X6576LDB/wisteria at 03:21:42 PM

/-/U?charts_pupU?*2
1 1800(+120) 2 1920(+54) 4 1974(+46) 8 2020
http://en.wikipedia.org/wiki/World_population

http://goldprice.org/bob/2006/08/100-and-25-year-gold-price-charts.html

http://www.ritholtz.com/blog/2011/04/case-shiller-100-year-chart-2011-update/

http://www.tuttleassetmanagement.com/100year/Buy_100_Year_Dow_Chart.aspx


As sometime i REMember prices (of comodities {corn cattle copper)
double / ever 20 years THUS in -60 years 150 75 37 18 $/ca some thin like this
it amazes me how Earththings are so laX in the study of the #'$ actually
pop doubles(*2) pr.con 20 40 80 160 (*{2^3} get over it _- ^ $/Au tbd Later

[BabylonHoruv]

Traders more reckless than psychopaths

http://www.spiegel.de/international/zeitgeist/0,1518,788462,00.html

[Disco Pickle]

4:20PM http://www.foodista.com/food/X6576LDB/wisteria at 03:21:42 PM

/-/U?charts_pupU?*2
1 1800(+120) 2 1920(+54) 4 1974(+46) 8 2020
http://en.wikipedia.org/wiki/World_population

http://goldprice.org/bob/2006/08/100-and-25-year-gold-price-charts.html

http://www.ritholtz.com/blog/2011/04/case-shiller-100-year-chart-2011-update/

http://www.tuttleassetmanagement.com/100year/Buy_100_Year_Dow_Chart.aspx


As sometime i REMember prices (of comodities {corn cattle copper)
double / ever 20 years THUS in -60 years 150 75 37 18 $/ca some thin like this
it amazes me how Earththings are so laX in the study of the #'$ actually
pop doubles(*2) pr.con 20 40 80 160 (*{2^3} get over it _- ^ $/Au tbd Later

It took me a few minutes, but I understood all of that post as well, eventually.
I really wish it wasn't so hard to decipher what you have to say, because it's very clear the things you understand and know are on a higher order than my own.

That's your thing. OK.  I get it.

Let me guess, mathematician?  (that was a stretch, right?)

Challenge accepted. 
I am glad you're posting more.  I like a good challenge.

Nice you meat you hir.  I'm just a pickle with a leisure suit.

[Triple Zero]

Financial fuckery:

http://radian.org/notebook/porsche

interesting and entertaining story as Porsche ripped the hedgers several billions of new assholes.

[Cain]

OK, that is pretty funny (barring the suicide thing).

To use a HP&MoR phrase, the hedge funds were playing a level one game, and Porsche were playing a level two game. 

[Disco Pickle]

This comment cleared up some questions I had about this regarding disclosure.  Still, good story.

Volker Hirsch said,

January 10, 2009 @ 1:05 pm

Ivan, this is a very nice account of how shorting works (or, incidentally, does not work). However, you are simplifying things a little: Under German law, a takeover offer has to be made whenever a the shareholding exceeds 30% of the shares of the target. This was the case in late March 2007, and Porsche made a mandatory offer on 28 March 2007 (they also made an offer for all shares in Audi on 16 September 2008). I do believe – and I think this is identical even in the US – that options (not to be confused with executive options) for shares trigger (additional?) mandatory takeover offers or indeed disclosure requirements (unless you are an executive of the company in question), and this is because you can not actually exercise corporate control in any way when you are merely an options holder. It is therefore not nearly as dark and wild-west as you made it appear (although the German public did indeed act very, very surprised over all this).

I also think that some background could have been added: Ferdinand Piech, a member of the Porsche dynasty, used to be VW's CEO and then their non-executive Chairman of the Board. However, there seemed to have been a little bit of a family feud between two strands of the Porsche family...

There are two more aspects that deserve noting, namely:

a) the 20% holding of Lower Saxony. There is a law in place (probably illegal and constantly challenged by the European Commission) whereunder no one can hold more than X% of the voting rights as long as Lower Saxony (the German state where VW's HQ and biggest German plants are based) has a shareholding, effectively preventing the acquisition of full control. Porsche did not like that law but will have impacted short-term corporate control.

b) the history of Porsche and the Porsche family in relation to VW as well as the old-fashioned German industrial culture; for decades, the takeover of large German companies was virtually impossible due to solid cross-shareholding blocks regularly involving Deutsche Bank (Daimler Benz), Allianz Insurance and a number of families and concerns. This was not, however, due to profit maximization or greed, etc but an old-fashioned closed-shop attitude coupled with a sense of entrepreneurial responsibility for the affairs of the state. I doubt that the Porsche board had really been scheming this in order to make a mint through a short squeeze. They were after more! They were after control of the German car industry (Porsche, VW, Audi; bear in mind that the latter two also own Bentley, Lamborghini, Bugatti, etc). Only BMW and Mercedes-Benz are left now that Opel (GM-owned) and Ford are struggling under the woes of their US holding companies.

[hirley0]

U29 Si' (Comprenda' ! & thanks
don't care much for switching languages at an mS rate
however the sequence seams to have been set ?/? Pueblo, ChalkTalk,
& Navaho (probably NOT Salt {read rights to Left 5:30AM B
OK? where was I? {{ Fountain Lobby 1-3PM Tuesday }} it Thursday
& ReBooT week so yeah?no No doubt the Races begin this Month ..
here in town | http://www.portlandmeadows.com/Entries/Entries/

4:20PM http://www.foodista.com/food/X6576LDB/wisteria at 03:21:42 PM

/-/U?charts_pupU?*2
1 1800(+120) 2 1920(+54) 4 1974(+46) 8 2020
http://en.wikipedia.org/wiki/World_population

http://goldprice.org/bob/2006/08/100-and-25-year-gold-price-charts.html

http://www.ritholtz.com/blog/2011/04/case-shiller-100-year-chart-2011-update/

http://www.tuttleassetmanagement.com/100year/Buy_100_Year_Dow_Chart.aspx


As sometime i REMember prices (of comodities {corn cattle copper)
double / ever 20 years THUS in -60 years 150 75 37 18 $/ca some thin like this
it amazes me how Earththings are so laX in the study of the #'$ actually
pop doubles(*2) pr.con 20 40 80 160 (*{2^3} get over it _- ^ $/Au tbd Later

It took me a few minutes, but I understood all of that post as well, eventually.
I really wish it wasn't so hard to decipher what you have to say, because it's very clear the things you understand and know are on a higher order than my own.

That's your thing. OK.  I get it.

Let me guess, mathematician?  (that was a stretch, right?)

Challenge accepted. 
I am glad you're posting more.  I like a good challenge.

Nice you meat you hir.  I'm just a pickle with a leisure suit.