You've missed
"all of society who have any investments or pensions or any non-property based financial provision for the future who demand dividend profits on PLCs, therefore fueling the whole risk/reward financial strategy"

You can't win. you don't want people investing in property for their future (I don't necessarily agree but I can see your point there) and now you can't have people having shares or pensions either in case it encourages companies to try and make a profit?
( the mighty badger Aphrodite, on a bar stool, by your side, Tue 15 Jun 2010, 17:39, 1 reply)

I don't want to live in a society which is obsessed
with the idea that everything can be payed back later, but that the only way to "get ahead" with "real investment" is to buy three houses and rent them out, selling them later at a profit. If you do this, there are three fewer houses available to buy and the rest go up in price. This particular example is a huge bugbear of mine, as you probably guessed.

But with your bit about investments, you're trying to put words in my mouth. I never said I was against pensions, shares, buying and selling, general bartering...these are things that our economy is built on and it kinda works.

What doesn't work is where a loan shark sells the debt to a bailiff before the debt is due, who sells it to another who sells it again. Then when the bailiff goes knocking on the door, he finds a frail old lady. And this is basically what happened a couple of years ago.

There's two things you both need to watch: A series on YouTube called, "Money as debt" and Michael Moore's "Capitalism: A love story".

In fact, everyone should watch the first one, as it proves quite well that money is a figment of its own imagination.

Apologies for carrying this on so late, been a long trip back from work... :-)
(MrOli is ugly, but in the morning you will be sober, Tue 15 Jun 2010, 20:47, closed)

The idea that debt can be paid later
is a cornerstone of modern capitalism. Unless you want to live in China or Cuba, good luck avoiding that ;)

I'll check out that YouTube thing, but I'm not sure you're not slightly missing the point. You've ascribed human characteristics again (a frail old lady) to a system of corporations which can have no such properties. I'm not saying that the issues with the banks are either good or desirable. Only that they are an difficult-to-avoid byproduct of a system which rewards short-termism. And we (the public) want a system that does that, because we want pensions and savings and to be comfortable later in life. Divends=short-termism. It's like spending years and years training a dog to attack intruders, and then blaming the dog when it bites you.

As an aside, for the love of god, fucking don't pay any attention to Michael Moore. He's an attention seeking, lying, scheming arsehole with no more morals or integrity than the things he seeks to attack. Almost all his writing and proclomations are also wrong and very easy to show as wrong.
( the mighty badger Aphrodite, on a bar stool, by your side, Wed 16 Jun 2010, 9:06, closed)

That's the trouble with these debates...
we both think the other is missing the point.

The "old lady" in my analogy was the person who owed the original debt, not the corporation.

The corporations in this case, forgot that the person who owed the original debt was a real person who can have real problems repaying that debt, and forgot that the debt wasn't an asset, and saw repayment of that debt as a "revenue stream".

The more times the debt is sold on for a profit, the smaller that "revenue stream" gets. Then it is so small, that only when thousands of these sold debts are consolodated do they give any return - but that return could be big if enough are consolodated.

This consolodated debt then gets bought and sold on the open market, the same as other stocks, shares and bonds.

But if the economy doesn't grow, and, instead, doubt grows, lots of people get affected by certain news, the original "revenue streams" disappear in people's bankrupcy, and pretty soon you have institutions which have come to rely on these streams as sources of large revenue in a lot of trouble. What should be a "blip" becomes absolutely critical, as the economy has been taken right to the wire.

I'm not attributing human emotions to large corporations, I'm attributing absolute stupidity in over optimism and a complete removal of their view of reality - they could only see the numbers. "woods" and "trees" spring to mind.

But there is another view, that those large corporations are made up of individuals who each (should) have their share of sense, decency and responsibility and who should have each realised and made each other aware of the utter naivity and insanity of what they were doing.
(MrOli is ugly, but in the morning you will be sober, Wed 16 Jun 2010, 11:28, closed)

fair comment
but in companies that big, it's in reality impossible to easily judge on a case-by-case basis. And individuals don't really effect the way things are run. And in any case, from the "company model" kind of thing, it's not naive and insane. This is exactly how it's supposed to work. Of course from an individual human point of view, it's not.

Mind you, at the risk of sounding like (even more of) a cunt here, why does it matter if it's a little old lady that owes the money? Still a debt. And a debt is a revenue stream. To consider it otherwise is a bit foolish. A bank doesn't lend money through the good of it's heart. Maybe smaller, more "personal" banks might judge situations on a more individual basis. But then they don't make as much money, and we don't get as big a pension, yadayada.

All of the stuff you're saying I basically agree would be better, from a "nicer life" kind of view. I'm jut trying to explain why reality isn't like this, and why it's largely down to us that it isn't.
( the mighty badger Aphrodite, on a bar stool, by your side, Wed 16 Jun 2010, 11:51, closed)

But that's exactly my point
At the end of that "revenue stream" is a little old lady who could die, get her pension cut, be forced into greater poverty by inflation, lose her husband. She defaults, no more revenue stream. It's the extreme example, but one which was repeated enough times with other debts and cirumstances to bring down all these "Investments".

To consider it as a revenue stream is fine - that's what it is. To consider it as an asset which can be sold at a profit, then consolodated and resold, then bartered for on the open market is madness.

Picture it not as a set of loans, picture it as a bet on the economy increasing in size at a rate of, say 3% a year. And picture it so close to the wire because of the continual bartering that a growth of only 2% can shake it.

Picture those loans as secured against houses, where if the bank forcloses it can sell the house - except it can't, because no one can afford them. But then again, if you default on a debt which has been sold, broken, joined, resold, buried in soft peat for 5 years and resold as firelighters, who sells the house, who gets the money from the sale and does it cover the debt?
(MrOli is ugly, but in the morning you will be sober, Wed 16 Jun 2010, 12:24, closed)

I shouldn't be doing this today
I'm far, far too busy.

Seriously, go watch "Money as Debt".

Been fun though :-)
(MrOli is ugly, but in the morning you will be sober, Wed 16 Jun 2010, 12:26, closed)