Banking idiocy.

It appears some of us are interested in the business of trading, hopefully for both fun and profit.
Here's a place to talk about that. I suggest two main categories. How to trade (timeless), and what are you trading now, and why, and how it turned out. Those tend to be missing from the pro boards, so pundits can have selective memory....but that's not all that is important. Being wrong is part of the game, and how to handle it and make money anyway is crucial, for just one example.
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The usual. Be nice, be informative, tell it like it is.

Re: Banking idiocy.

Postby Doug Coulter » Fri May 04, 2012 3:38 pm

Nothing is too big to fail, even the human race. Things can get to big to let fail without serious collateral damage, though.

If you had a point - don't introduce it later after your original point's been dashed - that's just revisionism.

This is now the second time you've said "I don't have to learn something in order to design a better one or complain about it". That's two strikes with me. One more, you're outa here.
That's so frigging vain I can't believe it. You think you can design a better system than the most complicated thing on earth withoug learning how the current one works = which it mostly does despite the smartest guys on earth with the strongest motives constantly trying to game it? Excuse me - even Jesus didn't try for that.

How can you know about the thousands of gotchas the current system handles almost effortlessly so you can avoid them in your new design too? You don't, therefore your words are just noise.

I don't claim any moral superiority for playing Robin Hood with the big banks to try to steal my own money back - it's still stealing, taking candy from babies. It's not gambling any more than Kenny Rodgers was in those films = when he started a game with the local rubes - it was NOT a gamble, even though poker has an element of chance.

Yes, A but not the only reason for markets is to loan money to companies. A loan implies a payback somehow, else there would be no reason for a rational being to make one. Do you really know so little as not to know that my trading affects that almost precisely zero? Once I have say, GM stock, I can't take it to the company and demand a screwdriver, a dividend, you name it - the only person who ever loaned them money was the first guy to buy some at the IPO, which is about .000001% of all trading. If I can't sell my stock, and the company doesn't happen to be buying, I'm selling it to a "greater fool" (term of the trade), and it's just some other joe. When he buys it, it has no effect on the company. But if you couldn't sell your stock to get that loan you made paid back from somewhere - there would be no such thing as capitalist markets, no one but idiots would ever enter if there was no way to leave.

No, the money wasn't falsely acquired, at least not the bulk of it. You don't get it. And I'm too tired to teach someone from scratch how it works if they reject the training materials I provide.
Riddle me this. You buy a house for 350k, and then try to sell it, but now the market will only pay you 250. Who unfairly got the 100k? The guy you bought it from sold it for what you agreed it was worth, and presumably you checked the market too so you knew you were right, only now, it's not worth so much as there are more houses than people who want them at high prices. So, claw that back from exactly who, and if you think the guy you bought it from - that's not fair, the deal was fair when made.

These days most companies don't pay dividends unless there's a situation where growth is gone, and it's widely acknowledged. For example, power utilities. Else there would be zero reason to own their stocks ever, and they'd not even sell at IPO. Going from a growth (where the money is made by capital appreciation) to stasis is signaled by starting to pay a divvie. Obviously, no one does on their IPO stock, because in fact they are usually not making much if any money at that point - if they were, why go to the markets to borrow it? Only it's not really borrowing - they never, ever, have to pay it back. Didn't you know that?
Sure, some companies buy their own stock back, especially when they have excess cash and nothing whatever better to do with it (kiss of death). But it's not common. They get more of their company (and voting rights) back, and other investors benefit from the increased demand which drives up the stock price, so they can sell theirs at a profit.

This is why Oracle starting a dividend, and more recently Apple - is the sign it's really over for them as a growth firm. Which is how I make almost 10% shorting them a couple weeks back (And then got paid to write about that trade in the pro newsletters since it was so contrary to common perception - but made money).

So, I'd love to hear how you design a real market system, from scratch, that handles all the things this flawed one handles, and improves on the stuff the current system failed at. And I will instantly tear it to utter pieces and stomp them into the ground - just about any trader could, easily. It's not a simple problem, and it's REALLY not going to be solved by someone who rejects the idea of learning.
Posting as just me, not as the forum owner. Everything I say is "in my opinion" and YMMV -- which should go for everyone without saying.
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Doug Coulter
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