Nonsequiturs on economics

[editec]

1950
the percentage of our GDP that came from manufacturing 29.3%
the percentage of our GDP that came from financial services 10.9%

2005
the percentage of our GDP that came from manufacturing 12.0%
the percentage of our GDP that came from financial services 20.4%

What does the above show us?

The change in my lifetime of our economy from an economy based one one that makes stuff to one that makes DEBT and shuffles risk and money from player to player, producing absolutely nothing

US Banks
Mortgage related assets/total earning assets (in percent)​

1955 15%
1965 18%
1975 22%
1985 28%
1995 48%
2005 60%​

What does the above show us?

How drastically banks' asset and income producing structures changed in our lifetimes

Evolution of critical derivitives* 1972 - 2005​

1972 - Foreign currency futures​

1973 - Equity futures​

1975 - T-Bill Futures​

1977 - T-Bond futures​

1979 - Over the counter currency options​

1980 - Currency swaps​

1981 - equity index futures; Options on T-Bond futures; Options of bank CD futures; T-note futures; Eurodollar futures ; Interest rate swaps​

1983 - Interest rate caps and floors; options on T-note futures; options on currency futures; opetions on equity-index futures​

1985 - Eurodollar options; Swaptions; Futures on US Dollar and municipla-bond options​

1987 - ASverage options; Commodity swaps; Bond futures and options compound options​

1989 - three-month euro-DM futures; captions; ECU interest rates futuresl futures on interest rate swaps​

1990 - Equity index swaps​

1991 Portfolio swaps​

1992 Differential swaps​

[/quote]

If you don't know what most of these are, don't worry. Neither does the FED, if you believe Greespan

These are methods of betting on various economic indices or outcomes, mostly. Dpending on your outlook these are either GAMBLES or they are way of spreading the risk around.

The important point is they are "investment opportunities" which compete for investor dollars that might have gone into investments in that make something tangible.
​

Total US financial and non financial Debt outstanding
(billions)​

1974 ............................................................ $2,074
1984 ............................................................ $7,422
1994 ............................................................ $17,205
2004 ............................................................ $37,620
2006 ............................................................ $44,744​

As you can see, Debt seems to be the USA's number one product of late. Total outstanding debt for all sectors was $44 trillion...of course what it is NOW I have no idea.

Leverage
Growth of debt of the US Financial Sector 1969- 2006​

................................... 1969...........1999.................2006
Total outstanding ..............$100 ........ $7,607.............$14,184
(billions)​

Financial sector share............7.5%........ 29.7%............. 31.7%​

Domestic finance debt
as % of US GDP...................12%.............82%..............107%​

Okay..the current debt of the US financial sector is greater than the gross domestic product for a years, folks.

What's my point to showing you all these arcane numbers?

If nothing else to show you what a fiscal house of cards we let our FINANCE COMMUNITY build for us.

They sucked out so much of the investment that might have gone to producing THINGS in favor of creating derivitives that basically paid higher returns on investment...but only so long as nobody actually looked at the REAL RISK associated with these hybrid financial gambles.

 

[RodISHI]

Thank you for putting this information out so people can look at it.

 

[Paulie]

Consumers are just as much to blame for enabling this.

You know Ed, there are a lot of people in this country who refuse to do manufacturing work. There didn't USED to be, but there is now. Because we've gotten lazy, apathetic, and gained some kind of sense of entitlement as the years have gone by.

The banks are merely praying off of our own weakness as a society. It's not just their fault. It's EVERYONE'S fault.

 

[RodISHI]

I think a question that needs to be presented is where did all this money that the financial people loaned come from. That would be a good starting place. Can anyone actually prove that there was cash involved? If a bank is allowed to purchase a failing bank in it's eleventh hour, and twenty four hours later take the deduction and claim the failing banks losses, how can we as lowly citizens prevent this? When that deduction is claimed the loss includes the denied benefits of it's employees. Therefore the assuming bank profits on the loss of the failed banks employees.

 

[editec]

Consumers are just as much to blame for enabling this.

In 2006... (bear in mind things have probably changed CONSIDERABLE in the last few months)

Consumer debt represented $12,873 billion of the total $44,744 billion or about about 28.75% of all debts. (this includes ALL mortgages, car loans and credit cards, BTW)

Federal government accounted for about 11% of all debts.

All State and local governments accounted for about 4.5% of all debts

Domestic financial debts were about 31% of all debts

Foreign financial debts were about 4.5 % of all debts

Total non-financial debts were about 20% of all debts

You know Ed, there are a lot of people in this country who refuse to do manufacturing work.

No, I do not know that, and neither do you.

There didn't USED to be, but there is now. Because we've gotten lazy, apathetic, and gained some kind of sense of entitlement as the years have gone by.

Neocon blather which is completely unsubstantiated by the facts. Where do you get this crap, anyway?

When,a local paper mill is trying to hire here in Maine they get hundreds of applictions (of already qualifed workers) PER JOB.

So now you're just fucking making crap up to support your weak-assed argument, do you know that?

The banks are merely praying off of our own weakness as a society. It's not just their fault. It's EVERYONE'S fault.

Keep telling yourself that if that helps you sleep at night, dude.

Meanwhile, while you're blaming the victims of this goofy economy, the master class you so obviously suck up to has been selling this nation out
for their own personal benefit.

You were sold a bill of goods, amigo.

They lied and lied and lied to you and since it suited your own circumstances to believe thir lies, you bought into their anti-working class bullshit.

I hope you enjoy the real world outcomes of their supply-sider economic rationalizing lies, amigo.

the TRUTH, as it inevitably will, is outing right now.

You cannot send the industry of a nation off shore and expect that nation's economy to thrive.

Adam Smith and I are exactly the same page there, sport.

 

[Paulie]

You're awfully angry lately, Ed. You might want to do something about that. I suffered from that too, until I realized it was literally killing me.

Calling me a neocon for holding a generalized view that society is lazy and apathetic? That doesn't even make sense. I share no opinions with neocons. I disagree with their entire platform.

libertarians and neocons are not even REMOTELY the same. And I'm not even REMOTELY the kind of libertarian that you seem to like chastizing around here. I think you know that, too.

 

[dilloduck]

What does the above show us?

The change in my lifetime of our economy from an economy based one one that makes stuff to one that makes DEBT and shuffles risk and money from player to player, producing absolutely nothing



What does the above show us?

How drastically banks' asset and income producing structures changed in our lifetimes

Evolution of critical derivitives* 1972 - 2005​

1972 - Foreign currency futures​

1973 - Equity futures​

1975 - T-Bill Futures​

1977 - T-Bond futures​

1979 - Over the counter currency options​

1980 - Currency swaps​

1981 - equity index futures; Options on T-Bond futures; Options of bank CD futures; T-note futures; Eurodollar futures ; Interest rate swaps​

1983 - Interest rate caps and floors; options on T-note futures; options on currency futures; opetions on equity-index futures​

1985 - Eurodollar options; Swaptions; Futures on US Dollar and municipla-bond options​

1987 - ASverage options; Commodity swaps; Bond futures and options compound options​

1989 - three-month euro-DM futures; captions; ECU interest rates futuresl futures on interest rate swaps​

1990 - Equity index swaps​

1991 Portfolio swaps​

1992 Differential swaps​

If you don't know what most of these are, don't worry. Neither does the FED, if you believe Greespan

These are methods of betting on various economic indices or outcomes, mostly. Dpending on your outlook these are either GAMBLES or they are way of spreading the risk around.

The important point is they are "investment opportunities" which compete for investor dollars that might have gone into investments in that make something tangible.
​

As you can see, Debt seems to be the USA's number one product of late. Total outstanding debt for all sectors was $44 trillion...of course what it is NOW I have no idea.




Okay..the current debt of the US financial sector is greater than the gross domestic product for a years, folks.

What's my point to showing you all these arcane numbers?

If nothing else to show you what a fiscal house of cards we let our FINANCE COMMUNITY build for us.

They sucked out so much of the investment that might have gone to producing THINGS in favor of creating derivitives that basically paid higher returns on investment...but only so long as nobody actually looked at the REAL RISK associated with these hybrid financial gambles.[/QUOTE]

A story older than God himself----some people work for money and other people use that money to make money for themselves. They produce nothing but numbers.

 

[KittenKoder]

Paulitics is right, it's EVERYONES fault, at least anyone who uses credit more than what they actually earn and, well, by just kicking out the illegal immigrants without having people willing to take the jobs they were doing. *smirks* An "I told you so" is appropriate just not from the loud ones that said they should be welcomed or those who booted them out. No, they were holding us up AND bringing us down, but that's a different topic. Back to the reasoning for this, if everyone borrows money from someone and no one ever pays it back then there is no money.