Forum Replies Created
-
AuthorPosts
-
drunkle
Participantyeah, home price increases based on debt increases isn’t “inflation”, it’s a bubble.
“inflation” as measured by price indexes of goods that are imported from countries with price controls is utterly retarded.
currency and population… as the population increases, the physical volume of money has to increases proportionally. otherwise, you’ll have currency inflation; less relative supply vs increased demand. at the same time, with more people comes more labor which results in wage deflation; while each dollar is worth more, you get less and less of it for a given job.
and “controlling” inflation via interest rates is senseless. inflation for who? for what? the banks still get their money, (as you know the effect increased mortgage rate has on home prices; total dollar amount for the buyer is the same, but the seller gets the shaft with deflated sale price) and everyone else pays; more expensive credit = less spending = less profit = less wages.
Participantyeah, home price increases based on debt increases isn’t “inflation”, it’s a bubble.
“inflation” as measured by price indexes of goods that are imported from countries with price controls is utterly retarded.
currency and population… as the population increases, the physical volume of money has to increases proportionally. otherwise, you’ll have currency inflation; less relative supply vs increased demand. at the same time, with more people comes more labor which results in wage deflation; while each dollar is worth more, you get less and less of it for a given job.
and “controlling” inflation via interest rates is senseless. inflation for who? for what? the banks still get their money, (as you know the effect increased mortgage rate has on home prices; total dollar amount for the buyer is the same, but the seller gets the shaft with deflated sale price) and everyone else pays; more expensive credit = less spending = less profit = less wages.
Participant“Politics aside, I think that our free market has caused serious mis-allocation of resources. When money is cheap, it’s easy to spend other people’s money on pie-in-the-sky projects. High tech is mostly fluff. ”
i dunno. i’d like to think of human knowledge as being the sum of pie in the sky projects. otherwise, we’d all still be digging for grubs and picking wild berries.
Participant“Politics aside, I think that our free market has caused serious mis-allocation of resources. When money is cheap, it’s easy to spend other people’s money on pie-in-the-sky projects. High tech is mostly fluff. ”
i dunno. i’d like to think of human knowledge as being the sum of pie in the sky projects. otherwise, we’d all still be digging for grubs and picking wild berries.
Participanti just went through most of the linked munger transcription and i have a couple thoughts.
he doesn’t say (or maybe i missed, i’ll be going back to reread it) anything about judgement. he gives a laundry list of psychological ticks and after reading them, recognizing them and trying to stop them, you can end up in a mental paralysis where everything causes pause. at the end of the day, you have to make decisions and that requires judgement, judgement that comes from knowledge. the ticks themselves are insights, knowledge that can help in preventing manipulations, but don’t in themselves give you anything else.
maybe that’s self evident, but i think it’s important enough to note… i read the thing, i’m impervious to salesmen, what now? i still need to buy a car. well… more learning. learning, learning, and more learning.
as for the jeeman, who posted the link and is apparently doing a presentation on it… i’m sure you know that munger’s attitude towards psychological manipulation is derogatory. as well, you may want to reconsider your use of biased language and attitude, particularly when posting a link to a lecture that specifically warns against such.
not meaning to be rude, i certainly appreciated your enlightening posts on how bonds work. but the irony can’t be ignored…
Participanti just went through most of the linked munger transcription and i have a couple thoughts.
he doesn’t say (or maybe i missed, i’ll be going back to reread it) anything about judgement. he gives a laundry list of psychological ticks and after reading them, recognizing them and trying to stop them, you can end up in a mental paralysis where everything causes pause. at the end of the day, you have to make decisions and that requires judgement, judgement that comes from knowledge. the ticks themselves are insights, knowledge that can help in preventing manipulations, but don’t in themselves give you anything else.
maybe that’s self evident, but i think it’s important enough to note… i read the thing, i’m impervious to salesmen, what now? i still need to buy a car. well… more learning. learning, learning, and more learning.
as for the jeeman, who posted the link and is apparently doing a presentation on it… i’m sure you know that munger’s attitude towards psychological manipulation is derogatory. as well, you may want to reconsider your use of biased language and attitude, particularly when posting a link to a lecture that specifically warns against such.
not meaning to be rude, i certainly appreciated your enlightening posts on how bonds work. but the irony can’t be ignored…
Participantit’s probably high time in the course of us history for economic upheaval and the resultant political calamity. the ‘free market’ running its course since reagan has no choice but to experience social/political “blowback” (word of moment).
high interest rates and economic recession/depression killing the little guy. the little guy is what most of america is made of. when the little guy stands up to the big guy, there’s gonna be some interesting television. it’ll be better than a fox reality show, although hell’s kitchen is pretty damn entertaining.
then again, under homeland security, guantanamo may become home to some 70 million people.
Participantit’s probably high time in the course of us history for economic upheaval and the resultant political calamity. the ‘free market’ running its course since reagan has no choice but to experience social/political “blowback” (word of moment).
high interest rates and economic recession/depression killing the little guy. the little guy is what most of america is made of. when the little guy stands up to the big guy, there’s gonna be some interesting television. it’ll be better than a fox reality show, although hell’s kitchen is pretty damn entertaining.
then again, under homeland security, guantanamo may become home to some 70 million people.
ParticipantStill, Greenspan said the reason such a withdrawal was unlikely was that China would not have anyone to sell the securities to, hardly the sort of comfort jittery bond investors were seeking.
here’s an interesting point: if no one is buying, why are rates going up anyway? that is, if you were trying to sell, no one was buying, you offer a higher yield (by discounting appropriately), would that also drive up the current yield?
who sets the yield, anyway? it had to start from somewhere… and do “they” still have influence? the fed, in particular…
ParticipantStill, Greenspan said the reason such a withdrawal was unlikely was that China would not have anyone to sell the securities to, hardly the sort of comfort jittery bond investors were seeking.
here’s an interesting point: if no one is buying, why are rates going up anyway? that is, if you were trying to sell, no one was buying, you offer a higher yield (by discounting appropriately), would that also drive up the current yield?
who sets the yield, anyway? it had to start from somewhere… and do “they” still have influence? the fed, in particular…
Participant“Same reason why you would sell a stock that has dropped a bit and seems undervalued. Look at GE….sales and earnings have gone up and the stock has essentially flat lined. You could have made better money somewhere else for the past 5 years.
Why settle for the 2% bond that you bought in 2003 that continues to drop in value? Now, it’s 5.25%, but you might sell if you think it will hit 7. Cash out, wait for yields to hit 7%, and buy back in.”
i think at this point, it would be useful to see a graph of some sort charting the value of your existing bond vs change in yield. maybe if showed some inflection point at which your loss in value will be made up with higher yield…
without that it just seems like a shell game, taking money out of one pocket to fill the other.
maybe i just dont understand asset trading in general…
Participant“Same reason why you would sell a stock that has dropped a bit and seems undervalued. Look at GE….sales and earnings have gone up and the stock has essentially flat lined. You could have made better money somewhere else for the past 5 years.
Why settle for the 2% bond that you bought in 2003 that continues to drop in value? Now, it’s 5.25%, but you might sell if you think it will hit 7. Cash out, wait for yields to hit 7%, and buy back in.”
i think at this point, it would be useful to see a graph of some sort charting the value of your existing bond vs change in yield. maybe if showed some inflection point at which your loss in value will be made up with higher yield…
without that it just seems like a shell game, taking money out of one pocket to fill the other.
maybe i just dont understand asset trading in general…
Participantok, i see how prices change as yields change. but why would you sell at all when yield is increasing? are you not taking a loss? you already have a guaranteed fixed income from it…
Participantok, i see how prices change as yields change. but why would you sell at all when yield is increasing? are you not taking a loss? you already have a guaranteed fixed income from it…
-
AuthorPosts