Bill Black: scathing commentary after Geithner 4/25/12 speech

[lakedaemonian]

Re: Bill Black bibliography

[QUOTE=EJ;228369]Remember Ben Stein? Whatevere happened to him anyway./QUOTE]

This was Ben Stein the last time I read his column on Yahoo Finance in the middle of the last decade:

http://www.youtube.com/watch?v=zDAmPIq29ro

Here's a link to the Wiki entry on it:

http://en.wikipedia.org/wiki/Ben_Ste...mic_commentary

It was about that time I went from being a serious skeptic on advertising supported financial news media to believing they were advising me against my best interests.

[lektrode]

Re: What should Black do?

What is Black supposed to do? Strap on a pistol and start shooting?

Black is educating the public, trying to create a constituency for political change.

Problem is, the two party system is bankrupt.

It is 51% take all at the regional level, third parties can't reach critical mass.

+1
why we need some sort of 'open primary'
and a majority of say 60% of the vote to win, with a run-off til get a clear MAJORITY
along with term limits

[lektrode]

Re: Bill Black bibliography

quoting EJ:
Remember Ben Stein? Whatevere happened to him anyway.

This was Ben Stein the last time I read his column on Yahoo Finance in the middle of the last decade:

http://www.youtube.com/watch?v=zDAmPIq29ro

Here's a link to the Wiki entry on it:

http://en.wikipedia.org/wiki/Ben_Ste...mic_commentary

It was about that time I went from being a serious skeptic on advertising supported financial news media to believing they were advising me against my best interests.

+1

so _thats_ "...what happened to ben stein..."

In the period preceding the Late-2000s recession, Stein made frequent and vehement claims that the economy was not in recession, and that the issues in the housing market would not affect the broader economy. On March 18, 2007, in a column for CBS News' online version of CBS News Sunday Morning, Stein famously proclaimed in the beginning of the subprime mortgage crisis that the foreclosure problem would "blow over and the people who buy now, in due time, will be glad they did," the economy was "still very strong," and the "smart money" was "now trying to buy — not sell — as much distressed merchandise" in mortgages as possible.^[24]

In an August 12, 2007 column in the New York Times titled "Chicken Little’s Brethren, on the Trading Floor", Stein, while acknowledging "I don’t know where the bottom is on subprime. I don’t know how bad the problems are at Bear (Bear Stearns)" claimed that "subprime losses are wildly out of all proportion to the likely damage to the economy from the subprime problems," and "(t)his economy is extremely strong. Profits are superb. The world economy is exploding with growth. To be sure, terrible problems lurk in the future: a slow-motion dollar crisis, huge Medicare deficits and energy shortages. But for now, the sell-off seems extreme, not to say nutty. Some smart, brave people will make a fortune buying in these days, and then we’ll all wonder what the scare was about."^[25]

(i'll bet there were quite a few saying same in the summer of 1929 - not to mention 1938...)

On August 18, 2007, on Fox News Channel's Cavuto on Business, Stein appeared with other financial experts dismissing worries of a coming credit crunch.^[26] Thirteen months later, in the Global Financial Crisis of September 2008, global stock markets crashed, Lehman Brothers went bankrupt, Fannie Mae and Freddie Mac were taken over by the US government, AIG was bailed out by the Federal Reserve, Merrill Lynch was sold to Bank of America Corporation, and Morgan Stanley and Goldman Sachs confirmed that they would become traditional bank holding companies.

In a Yahoo! Finance article written on October 17, 2008, Stein explained that his understanding of the debt obligations based on real estate loans was less than the "staggeringly large" amount of obligations that were created through trade in derivatives of those, and so why it wasn't as similar to collapse of junk bond empire in early 1990s as he'd thought it would be: "Where I missed the boat was not realizing how large were the CDS [credit default swaps] based on the junk mortgage bonds."^[27]

Business commentator Henry Blodget wrote a piece for Business Insider in January 2008 entitled "Ben Stein is an Idiot," stating that Stein's criticism of those with bearish views and positions on the market was either "delusional," or a deliberate and "shrewd" attempt to create false controversy and drive up web traffic.^[28]

and leave it to none other than one of The MOst Famous of the dot-bomb (vers1) pump-n-dump media whores to make that charge....

[lakedaemonian]

Re: Bill Black bibliography

+1

so _thats_ "...what happened to ben stein..."



and leave it to none other than one of The MOst Famous of the dot-bomb (vers1) pump-n-dump media whores to make that charge....

I love that irony.....I recall Blodget with great clarity...as I was at Amazon at the time....while his "call" was very much in my personal best interest.....it was amongst the first layers of the rotten onion to leave a distinct impression on me and a really bad taste in my mouth....because most of us at the coalface in Amazon were travelling and working literally non-stop just to keep the place from blowing up like the Death Star. I'm not aware of him having stepped foot in the door....ever...and certainly not in the physical distribution side of the house....where Amazon was spending ridiculous sums of money on "good, fast, cheap pick none" distribution build out. The backend of the business was a horror show....how anyone could make such an aggressively positive call on a business with substantial potential, but HUGE operational and financial issues just seemed so wrong. It wasn't financial advise, it was snake oil salesmanship.

While everyone was jumping up and down about their stock option paper net worth for the day...I kept asking myself what would have happened if he had actually told the truth about us(at the time)?

Ben Stein on the other hand is a person who's situation I JUST can't understand.

He REALLY seemed like a switched on guy(with that TV game show of his back in the day). He always came across as quite intelligent as well as chocker full of common sense. I don't know what's scarier....to think people of his raw intellectual calibre can make such massive, massive mistakes or that he was compromised.

I only wish I could embed that video of a very young Kevin Bacon at the end of Animal House..standing in for Ben Stein in this case.....and being stampeded over while screaming "All is well!"

It's just a minor footnote in the history of the last 15+ years.....but that thing about Ben Stein has always stuck with me.....

[Milton Kuo]

Re: Bill Black bibliography

Ben Stein on the other hand is a person who's situation I JUST can't understand.

He REALLY seemed like a switched on guy(with that TV game show of his back in the day). He always came across as quite intelligent as well as chocker full of common sense. I don't know what's scarier....to think people of his raw intellectual calibre can make such massive, massive mistakes or that he was compromised.

Assuming that Ben Stein is not a paid shill/stooge, then he is one of many useful idiots providing economic advice or, Heaven forbid, driving monetary or fiscal policy who have no earthly idea what it's like to be on the lower rungs of income in the U.S. Stein was well-to-do growing up so I doubt he's ever known what it's like to struggle to earn a dollar. Another dangerous, useful idiot, Ben Bernanke, was not wealthy growing up but he doesn't seem aware that the low-income workers of today have it much more difficult than the low-income workers in his youth.

One thing I've noticed in recent years in conversations with people is that people from Australia, Canada, and the western European nations, when informed of what a typical food service worker or other unskilled laborer earns in the U.S., are always shocked and horrified at how poorly-paid America's underclass is. Many unskilled laborers in the U.S. can barely earn a living wage and are literally one medical disaster away from financial ruin. If I remember correctly, a waitperson in Australia can earn roughly $20/hour and all Australians have health care.

Citizens of wealthy countries outside of the U.S. as well as American useful idiots cannot imagine how difficult life is in the U.S. for the working poor.

It's possible and perhaps likely that people like Stein and Bernanke, who really only associate with wealthy people, assume that everyone is capable of finding work that provides full medical benefits and pays a decent wage for 40 hours of work. Living in that kind of a bubble, they would not realize how badly people were overreaching to buy housing through rotten loans that would ultimately trash the banking system. Bernanke's ignorance of matters, however, is inexcusable: he failed in his job to understand various economic indicators and he failed to even marginally investigate allegations of mortgage fraud stemming from an absence of lending standards. At least Stein can say that he's more of a media personality than an economist/regulator.

I only wish I could embed that video of a very young Kevin Bacon at the end of Animal House..standing in for Ben Stein in this case.....and being stampeded over while screaming "All is well!"

Here you go:

[Polish_Silver]

Re: What should Black do?

We have open primaries in SC. It does not help much. Only the two dominant parties have a chance.

However, if representatives were elected on a statewide proportional basis, that would bring minor parties on
from the get-go.

[Polish_Silver]

Lock up every last one of them!

I argued that 100% prosecution is not practical. By his own estimates, they number in the tens of thousands or even north of 100,000.

The US has over 2 million inmates now--highest incarceration rate in the world, bar none. We can easily kick out some marijuana growers, car thieves, moon shiners, etc to make room for 100k white collar criminals.

Better yet, put them all in Gitmo! They are a much bigger danger to us than terrorists!

[Polish_Silver]

Callousness of the Right!

assume that everyone is capable of finding work that provides full medical benefits and pays a decent wage for 40 hours of work

I have found this attitude very widespread, among people who have never been laid off, fired, broke or what ever. I've been kicked out of so many companies, had trouble finding even marginal employment, etc.

What's the solution?
You mentioned australia. Don't they control immigration a lot more than we do? They used to have a "white australia" policy, which was about restricting immigration from indonesia, etc.
Does Australia have a higher minimum wage?
Health care in this country is exhorbitant. I'm all for having tax paid universal basic health care, but I want it to be cost effective. I also don't want people immigrating here to get on the gravy train. Not an easy problem to solve.

[Polish_Silver]

Re: Bill Black bibliography

.how anyone could make such an aggressively positive call on a business with substantial potential, but HUGE operational and financial issues just seemed so wrong.

Is Amazon profitable even now? Is it's stock price justified? I didn't know it was such a mess.

[shiny!]

Re: Callousness of the Right!

Health care in this country is exhorbitant. I'm all for having tax paid universal basic health care, but I want it to be cost effective.

Government on the federal level is too bloated and inefficient to do anything in a cost-effective manner. For efficiency we need to start thinking of solutions on the local level where citizens have more input and oversight, and less money is used to pay layers of bureaucrats.

I also don't want people immigrating here to get on the gravy train. Not an easy problem to solve.

Just make it so that people immigrating here are ineligible for the gravy train until they've lived here and paid taxes for say, 10 years.

[Milton Kuo]

Re: Callousness of the Right!

What's the solution?

I've always felt that one part of the solution is much stricter enforcement of immigration laws. Reducing illegal immigrant labor would reduce the supply of labor and drive up wages (and prices for goods). The "jobs that Americans won't do" cease to be jobs that Americans won't do if wages are high enough.

You mentioned australia. Don't they control immigration a lot more than we do? They used to have a "white australia" policy, which was about restricting immigration from indonesia, etc.
Does Australia have a higher minimum wage?
Health care in this country is exhorbitant. I'm all for having tax paid universal basic health care, but I want it to be cost effective. I also don't want people immigrating here to get on the gravy train. Not an easy problem to solve.

I have no idea of what Australia's immigration policy is and how restrictive it is for non-Caucasians. As for the minimum wage, it appears to be $15.51/hour according to the Australian Government Fair Work Ombudsman web site. The web site uses terms that I'm not familiar with such as "employees in the national system" so it's not clear to me whether this minimum wage is for government workers or for anyone working in Australia. However, I'm quite certain that an Australian minimum wage is greater than an American minimum wage; the U.S. has one of the lowest minimum wages among nations with a comparable per capita GDP.

[lakedaemonian]

Re: Bill Black bibliography

Is Amazon profitable even now?

Absolutely!

Is it's stock price justified?

Personally, I don't think so at a P/E ratio of 183.

I didn't know it was such a mess.

I don't wish to give a wrong or inaccurate impression.

BUT at that time, 98-99 Amazon was starting to swing for the fences that came with considerable consequences.

When I started with the company there was 1 distribution centre of approximately 50,000 sq ft in Seattle and 1 distribution centre of approximately 200,000 sq ft being put together in Delaware and the only product sold was books with total company headcount at between 100-200. Things were pretty simple.

When I left a few years later the company had increased it's distribution capacity to over 3 million sq. ft(12x) just in the US. Headcount exploded to over 16,000(including silly season temps). Amazon had expanded into the UK, France, Germany, and Japan either through buyout and merger or starting from scratch. Amazon also expanded beyond just books into CD, VHS, DVD, then quickly into pretty much everything else non perishable that can be shipped.

What happened in 98-99 was that the company's very high growth combined with very high expectations from Wall Street resulted in the company spending up like the US in Iraq circa 2003-2008......minus the guns and explodey stuff. Hiring policy quickly shifted from a philosophy of each new hire raising the average for the entire team to simply getting warm bodies in the door.

The development of processes and capabilities to purchase, store, combine, and ship customer orders went from very simple and easy.....to incredibly complex.

We had to moved from essentially a single 7-Eleven(albeit a large one) to global Wal-Mart distribution/logistics capability(with mass customization thrown on top) overnight.

It certainly took more than 1 night. And their capabilities and capacity today are probably something like 4-5X when I left. They are truly world class now.....back then we had to invent world-class while we were trying not to drown in orders.

One funny and surreal anecdote......Amazon had a no questions asked 30 day return policy. We soon learned that on some years the time between Xmas and the Superbowl was a good bit under 30 days. Customers ordered big screen televisions(the old school pallet sized projection TVs) where they arrived at the customer's house just before Xmas(guaranteed by Amazon and free shipping at HUGE expense) and when the Superbowl was over we received a surge of returns where Amazon had to pay for the cost of pickup as well. I remember standing in a warehouse in suburban Atlanta looking at a sea of returned big screen televisions that could not be resold as they were now classified as used/returned goods no longer suitable for sale as new. Liquidators made a killing buying them up for pennies on the dollar.

Great experience though!

[lakedaemonian]

Re: Callousness of the Right!

I've always felt that one part of the solution is much stricter enforcement of immigration laws. Reducing illegal immigrant labor would reduce the supply of labor and drive up wages (and prices for goods). The "jobs that Americans won't do" cease to be jobs that Americans won't do if wages are high enough.

I have no idea of what Australia's immigration policy is and how restrictive it is for non-Caucasians. As for the minimum wage, it appears to be $15.51/hour according to the Australian Government Fair Work Ombudsman web site. The web site uses terms that I'm not familiar with such as "employees in the national system" so it's not clear to me whether this minimum wage is for government workers or for anyone working in Australia. However, I'm quite certain that an Australian minimum wage is greater than an American minimum wage; the U.S. has one of the lowest minimum wages among nations with a comparable per capita GDP.

Minimum wage in Australia is around $15.50 I believe, it's $14 in NZ....both will probably push at least a little higher in the coming year or two to combat inflation and buy votes.

Health care is nationalized in both countries.....and works prety well....NZ has both public and private layers as does Aussie. Australia has mandatory health insurance cover deducted from wages I believe, while in NZ health care is paid out of the general tax fund. Prescription costs in NZ per script just raised from $3 per script to $5, but a maximum of $100 per person per year.

Immigration policy is similiar-ish for both countries.....it is race blind in both countries.....I'm more familiar with NZ's policy which is points based giving more points for youth, higher education, critical needs skillset, $$$, etc.

Folks with education, high demand skillsets, and/or $$$ that are in the high 20's to high 40's age group would probably find it easiest(if not completely easy).

The Aussie mining industry and military are heavily recruiting folks from the US. I know of 2 people personally who I pointed in the right direction to begin the process of emigrating to OZ to serve in the ADF, they're both albout halfway through the pipeline at the moment.

But it is a BIG difference from 10-12 years ago......the US dollar doesn't go nearly as far setting up down here in either country. In 2000 you could buy a decent middle class house in NZ for $60,000USD, the average middle class house in NZ would now be $300,000USD(nationwide average).

[vt]

Re: Callousness of the Right!

Both NZ and Australia have housing bubbles that may be close to busting.

[doom&gloom]

Re: Callousness of the Right!

Minimum wage in Australia is around $15.50 I believe, it's $14 in NZ....both will probably push at least a little higher in the coming year or two to combat inflation and buy votes.

Health care is nationalized in both countries.....and works prety well....NZ has both public and private layers as does Aussie. Australia has mandatory health insurance cover deducted from wages I believe, while in NZ health care is paid out of the general tax fund. Prescription costs in NZ per script just raised from $3 per script to $5, but a maximum of $100 per person per year.

Immigration policy is similiar-ish for both countries.....it is race blind in both countries.....I'm more familiar with NZ's policy which is points based giving more points for youth, higher education, critical needs skillset, $$$, etc.

Folks with education, high demand skillsets, and/or $$$ that are in the high 20's to high 40's age group would probably find it easiest(if not completely easy).

The Aussie mining industry and military are heavily recruiting folks from the US. I know of 2 people personally who I pointed in the right direction to begin the process of emigrating to OZ to serve in the ADF, they're both albout halfway through the pipeline at the moment.

But it is a BIG difference from 10-12 years ago......the US dollar doesn't go nearly as far setting up down here in either country. In 2000 you could buy a decent middle class house in NZ for $60,000USD, the average middle class house in NZ would now be $300,000USD(nationwide average).

Inflation in both countries means that minimu mwage is not all that great.

As to HC, both countries rae still rather small in population size, and thus have a smaller and simpler system to administer.


On a personal note, I would advocate a HC system in the US similar to those you find in some south american countries -- public/private. Everyone gets a bare level of public HC. It isn't great but it is there. Have a major issue they will save you, and then your relatives have to take you home right afterwards. Private supplemental insurance picks up the rest if you have it. Now I know some will call this "unfair", but frankly, not everyone has a "right" to a heart/lung transplant, or a kidney replacement etc. We cannot afford that on a major scale the way the US is set up today, and we certainly do not seem to want to give up being the worlds policeman. Thus, in the end, a basic system to catch many, and a private system to supplemenmt would probably work quite well here. Otherwise we are looking at another Medicare, and this is not gonna work out all so well...