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Old 07-30-2011, 04:28 AM   #201 (permalink)
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Originally Posted by Tully Mars View Post
I've been completely out for weeks. Totally liquid at the moment.
I have moved some to cash, but with the 401k, company stock, and different accounts, I'm not a day trader. Yes, I should have seen this coming...

The big problem is the Tea Party and their ilk have been buying gold and oil. They don't care if the US dollar crumbles or the stock market crashes if you are heavily positioned in that way.
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Old 07-30-2011, 04:49 AM   #202 (permalink)
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Gold, oil and other commodities are just some of the ways the very wealthy are "playing" this situation. Thursday someone placed a futures trade in area of one billion dollars. The trade only pays out if the US loses it's AAA rating.

Quote:
Someone dropped a bomb on the bond market Thursday – a $1 billion Armageddon trade betting the United States will lose its AAA credit rating.

In one moment, an invisible trader placed a single trade that moved the most liquid debt market in the world.

The massive trade wasn’t placed in bonds themselves; it was placed in the futures market.

The trade was for block trades of 5,370 10-year Treasury futures executed at 124-03 and 3,100 Treasury bond futures executed at 125-01.

The value of the trade was about $850 million dollars. In simple terms, if that was a direct bond buy, no one would be talking about it.

However, with the use of futures, you have to have margin capacity behind the trade. That means with a single push of a button someone was willing to commit more than $1 billion of real capital to this trade with expectations of a 10-to-1 return ratio.

You only do this if you see an edge.
Souce

Trades like will have a negative impact simply because it's so large. Much like high roller sport gamblers in Vegas can move point spreads by placing large bets so can investors in the markets. And someone just placed a huge bet that the US is heading down... big time. In fact at this point they're hoping the US tanks, they'll only profit if it does and I can assure you they have no concern for you or any other working class US citizen.
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Old 07-30-2011, 06:37 AM   #203 (permalink)
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Originally Posted by ASU2003 View Post
I have moved some to cash, but with the 401k, company stock, and different accounts, I'm not a day trader. Yes, I should have seen this coming...

The big problem is the Tea Party and their ilk have been buying gold and oil. They don't care if the US dollar crumbles or the stock market crashes if you are heavily positioned in that way.
They do care if the dollar crumbles, Ron Paul has been talking about this for years. They want to stop the spending because the fractional reserve banking that bails out the governments deficits creates the inflation.

If you knew the government was hell bent on destroying the dollar why wouldn't you protect your assets by buying gold and silver?

I use gold as my savings account because I know there's no way my money will keep its value if I keep it in the bank. It's not so much that gold is up, the dollar is plunging. Get out of the dollar before the hyper inflation starts.
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Old 07-30-2011, 07:03 AM   #204 (permalink)
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I severely doubt that Tea Partiers are indifferent or callous about the value of the dollar. Their obsession with gold I'm sure mirrors the obsessions of others with the metal: it's the investment of crisis.

That's why it's possible there's a gold bubble, there are a lot of people worried about crisis.

So what you have is a group of people who are essentially panicking over government spending, debt, and, in turn, the value of the dollar. This doesn't mean they've abandoned the dollar or hope to bank on their gold investment with the dollar's collapse. These people are merely trying to look out for themselves, which is pretty normal in trying times.

That said, I still think the Tea Party is out of touch with the average American.

Compared to the Tea Party, I don't think the average American is as
  • tax adverse;*
  • adverse to Keynesian economics;
  • adverse to the idea of "shared burden";
  • adverse to a balanced long-term deficit-reduction plan;** and
  • keen on deep cuts to entitlement spending.

The Tea Party, despite its size, remains a fringe group. I doubt they represent enough of the American public as a percentage to warrant infusing much of their ideas in fiscal planning.

As Americans pull out of a recession over the next several years, it will get much easier to budget for reduced deficits. A recession is a terrible time to insist on a balanced budget, especially with a recession as deep as this one.

Even Canada---with our balanced budget legislation---have been running deficits during this recession, and we've come out of it reasonably squeaky clean compared to most developed nations. Only now are the Conservatives (yes, that's right, we've had a conservative government for years now) working towards eliminating the deficit.

I've said this before: if you want an actual working example of fiscal conservatism, take a look at the Harper government. Hint: We've run surpluses year over year in the recent past (thanks mainly to the Liberals).

* G.O.P.'s No-Tax Stance Is Outside Political Mainstream - NYTimes.com
** People Support Higher Taxes to Reduce the Deficit by a 2-to-1 Margin | Capital Gains and Games
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Old 07-30-2011, 11:45 AM   #205 (permalink)
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Originally Posted by samcol View Post
They do care if the dollar crumbles, Ron Paul has been talking about this for years. They want to stop the spending because the fractional reserve banking that bails out the governments deficits creates the inflation.

If you knew the government was hell bent on destroying the dollar why wouldn't you protect your assets by buying gold and silver?

I use gold as my savings account because I know there's no way my money will keep its value if I keep it in the bank. It's not so much that gold is up, the dollar is plunging. Get out of the dollar before the hyper inflation starts.
The US is so far from hyperinflation as to be absurd to suggest it. As for the myth of gold being a good investment, since 1975 (when all the pegs on the gold price were removed) the stock market has thoroughly outperformed gold as an investment.

During crises there is a flight to the safety of commodities, but that doesn't last.
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Old 07-30-2011, 01:03 PM   #206 (permalink)
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It's an absolutely terrible time to get into gold right now. Unless you know what you're doing (if you have to stop and think about it and if you're not a professional, you probably don't know), you only stand a high risk of losing money.

The bottom line is that gold right now is viewed as the investment of crisis. That means that if you were to invest in it, you should have done so long ago, before so many people started panicking.

Right now? When was it ever a good time to invest in something everyone is talking about? Almost never.
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Old 07-30-2011, 01:21 PM   #207 (permalink)
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Right now, if you're heavily invested in gold, it would be a good time to encourage an economic crisis and to encourage other people to invest in gold.
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Old 07-30-2011, 01:26 PM   #208 (permalink)
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Quote:
The greater fool theory (also called survivor investing) is the belief held by one who makes a questionable investment, with the assumption that they will be able to sell it later to "a greater fool"; in other words, buying something not because you believe that it is worth the price, but rather because you believe that you will be able to sell it to someone else at an even higher price.
Greater fool theory - Wikipedia, the free encyclopedia

When it comes to big selloffs, unfortunately, it can easily be the case where you can't find enough buyers---i.e., there is a weak buyer's market.
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Old 07-31-2011, 05:22 PM   #209 (permalink)
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Many news sites are reporting a deal has been reached.

Rueters Source

Few details but sounds like it'll pass.
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Old 07-31-2011, 05:41 PM   #210 (permalink)
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No doubt the deal is atrocious. What we have is a moderate conservative that likes to compromise dealing with anarcho-capitalist extremists working as hard as they can to continue our transition into corporate plutocracy. $1t in cuts over 10 years is what's being reported. No doubt these are to vital social programs and are accompanied by little to no tax increases. And all for the debt limit, which is a no-brainer.

The American left is hungry for representation in all of this, for someone who will return tax rates to normal, someone who will try to end the wars, for someone who will fight for successful social programs and who doesn't have the conversation on the terms of the corporate right. We want someone interested in balancing the budget, but who's going to do it right, by stimulating the economy, strengthening the dollar, and going after waste, not cutting blindly. I thought Elliot Spitzer might have been the guy, but he's clearly out now. Kucinich will never be taken seriously enough, Sanders is third party, Grayson went too far and the left turned on him, and Wiener... fucking moron. It remains to be seen whether Franken can work with the funny-man perception while continuing to grow support and respect by being a hard-line, no bullshit Democrat. Jerry Brown's too old. Van Jones might be able to pull it off, but not for maybe another decade. It's a shame Clinton can't run again. I'd run myself, but I don't have the intellectual prowess required for the job and I'd almost certainly end up choking John Boehner if for no other reason than to see if he turns red-orange.

I'm glad we're not going to default, but the cost is almost certainly going to be astronomical in concessions to the extreme right.
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Old 07-31-2011, 05:50 PM   #211 (permalink)
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hahaha one trillion over 10 years, hahaha

oh and will you'd have my vote despite political differences.
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Old 07-31-2011, 05:59 PM   #212 (permalink)
 
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the only truth criterion in this fucking joke of a system is that some idiot has enough money to buy and control a channel for repetition. it's lunacy that this neo-liberal horseshit is still circulating, gumming up stuff, posing ridiculous problems and even more ridiculous fake solutions. idiocy of epic proportions.

the problem, kids, is not spending. the problem is how spending is allocated. over 40% of outlays go to unnecessary wars and other programs associated with this farce called the "war on terror" which is nothing more than a meme that enables a conservative patronage system to continue to get funded. the problem is that tncs can avoid paying taxes by transferring capital across national boundaries. the problem is the transformation of capitalist geography enabled by a bankrupt, stupid ideology that has persuaded people that the only important variable in thinking capitalism is the circulation of capital and the interests of shareholders.

the more local problem is the bush tax cuts.

the problem is the entire policy logic that follows from the economic ideology central to contemporary conservatism.
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Old 07-31-2011, 06:07 PM   #213 (permalink)
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kids, kittens, children... maybe someday we'll be big enough to discuss politics with roach
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Old 07-31-2011, 06:16 PM   #214 (permalink)
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From what I've read no revenue increases, only cuts. Sounds like a compromise.
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Old 07-31-2011, 06:17 PM   #215 (permalink)
 
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abandon this idiotic markets are rational stuff and it'll be easy. so long as you're trapped in a ludicrous ideological frame, you can't help ludicrous conclusions. it doesn't matter how logical you are if the framework is a problem.

edit: the most consistent problem with the obama administration is that over and over they've allowed the right to frame issues. the logic the right imposes when it frames issues is the same that created this mess in the first place.
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Old 07-31-2011, 06:47 PM   #216 (permalink)
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By the sound of it, Obama has capitulated to the right and has alienated many Democrats in the process. I'm not sure how this will fare for him in the future regarding further support from his own party.

Though this won't likely please any Tea Party extremists, this otherwise looks like a major victory for conservatives.

Obama has to tread carefully now, as it's uncertain to me how he will live this down among Democrats.

Oh yeah: the failure of centrism and the myth of the left, and all that rot.

yeah....

---------- Post added at 10:47 PM ---------- Previous post was at 10:38 PM ----------

Quote:
Originally Posted by Willravel View Post
$1t in cuts over 10 years is what's being reported. No doubt these are to vital social programs and are accompanied by little to no tax increases.
I'm sure it's best for details to emerge after it's confirmed to pass, but I gleaned these bits from a couple of articles....

Quote:
[...] Most notably, congressional sources said negotiators were discussing a deal that would raise the debt limit and cut spending in two steps.

The first would combine spending cuts of upward of $1 trillion with a debt limit increase of the same size, which would be enough to let the government pay its bills for about six months. Those cuts would be centered on "discretionary" congressional expenditures on programs such as housing and transportation, and would not touch entitlements such as Medicare.

The second debt ceiling increase, of about $1.2 trillion, would be combined with a second round of spending cuts that would come about in one of two ways.

A special bipartisan committee of lawmakers would be given the responsibility of developing a plan to cut the long-term deficit by $1.8 trillion either through spending cuts -- including entitlement reform -- and a rewrite of the tax code to trim deductions and lower overall rates.

If the committee fails to come to an agreement, or if Congress fails to ratify its suggestions by the end of the year, Congress would have to vote on a constitutional amendment requiring a balanced budget.

And if that fails -- which is likely, because constitutional amendments require two-thirds majorities in Congress to move forward -- an additional $1.2 trillion in automatic cuts would take place, and they would be matched with a similar increase in the debt ceiling.

Those automatic cuts would not affect Medicare or Social Security benefits, but they could reduce payments to doctors and other Medicare providers. [...]
Obama, GOP craft debt ceiling plan - Washington - The Buffalo News

Quote:
[...] The discussion centers on a $3-trillion package that includes cuts in discretionary spending, capping future spending and a vote on a balanced budget amendment. A special joint committee would be formed to consider further cuts and entitlement reforms that could be considered in Congress this fall. [...]
Senate shelves Reid bill as final debt-ceiling plan comes into focus - latimes.com
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Old 07-31-2011, 06:51 PM   #217 (permalink)
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how is this a victory for anyone? granted we dont fully know what's in this bill yet, but cutting 100 billion a year really isn't significant to help reduce the deficit or to hurt whatever programs they are coming from.

it just sounds like a straight forward debt ceiling raise to me.
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Old 07-31-2011, 06:55 PM   #218 (permalink)
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I think Obama is probably just assuming that he can rely on someone appalling like Michelle Bachmann to get the republican nomination and that his base would vote for him as a way of voting against her. Otherwise, if Romney gets it, it will be difficult to convince me, and perhaps a lot of other folk too, that there's any actually difference between each party's nominee.

I'd probably actually vote third party then.
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Old 07-31-2011, 06:59 PM   #219 (permalink)
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Originally Posted by samcol View Post
how is this a victory for anyone? granted we dont fully know what's in this bill yet, but cutting 100 billion a year really isn't significant to help reduce the deficit or to hurt whatever programs they are coming from.

it just sounds like a straight forward debt ceiling raise to me.
It's generally a victory if one side gets more of what they wanted compared to what the other side wanted.

I'm reading that there is no tax reform outside of a bipartisan congressional committee, and we know how that would go now, don't we?

So basically we have a conservative plan that contains "modest" cuts instead of the more ideal cuts they may have wanted.

From a Democrat perspective? Eviscerated.

---------- Post added at 10:59 PM ---------- Previous post was at 10:56 PM ----------

Quote:
Originally Posted by filtherton View Post
I think Obama is probably just assuming that he can rely on someone appalling like Michelle Bachmann to get the republican nomination and that his base would vote for him as a way of voting against her. Otherwise, if Romney gets it, it will be difficult to convince me, and perhaps a lot of other folk too, that there's any actually difference between each party's nominee.

I'd probably actually vote third party then.
At this point, Obama can be considered a de facto conservative, a kind of centre-right moderate that tries his best to govern in a way that pleases enough people to get something done. It just so happens he needed to please more Republicans than Democrats in this instance.
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Old 07-31-2011, 07:01 PM   #220 (permalink)
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so does this bill increase the limit until spring, or does it go to where it won't be an issue for elections?
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Old 07-31-2011, 07:13 PM   #221 (permalink)
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The debt-ceiling increases are a multi-step process based on a number of conditions, as outlined in the above articles.
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Old 07-31-2011, 07:29 PM   #222 (permalink)
 
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As I understand it, the debt ceiling increase of up to $2.1 trillion is ensured through 2013, with the deficit cutting in two phases - nearly $1 trillion now and a guaranteed another $1.5 trillion in the next phase either through Congressional approval of this new super committee or,if that fails, 3% cuts across the board in discretionary spending, both domestic and defense.

As to winners? IMO, the 2012 election will determine that and not just the presidential election. And, I think Democrats will have the upper hand once voters experience these cuts and the Dems keep pushing the fact that there is no shared sacrifice w/o the top taxpayers feeling the pinch.
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