bostonbubble.com

[balor123]

I think if the US loses it's 'AAA' rating then the rating agencies will either be charged with treason or an act of financial terrorism. If the government can force banks to merge, then I think they are not above forcing agencies to give them whatever rating they desire (and they will because the short term ends always justify the means).

[Boston ITer]

[balor123]

That's correct - less and less wealth equality. You can take solace in that while a few will have a lot of money they'll have so much that no one else will be able to do anything interesting with what's left so their money won't buy them much.

[john p]

The Case for Doom and Gloom
John Judas, the New Republic

http://www.tnr.com/article/politics/the-case-economic-doom-and-gloom

Bonus Squabble Obscures Real G-20 Issues
Giles Wilkes

http://www.forbes.com/2009/09/07/g20-finance-ministers-markets-equities-giles-wilkes.html

What you guys are talking about is globalization.

The problem is that each nation have their own rules governing fiscal policy yet we're trying to merge currency like the euro and expand the US Dollar and we all compete for global products. Now when Greece buys and buys and buys, sure it is irresponsible, but do you think that Germany didn't benefit from all these countries spending money they didn't have? Germany was like second behind China for exports, they were loving the spending bubble. It's kind of like if people started to spend on their credit cards, all the stores would love it because they could reap the benefits, but when the credit cards run out, is it fair for those that benefited from the spending spree to wag their finger at the people who handed them their money?

What we needed in the G-20 Summit in Pittsburg wasn't political posturing about CEO's salaries, that nonsense was economic populism. What we needed was global standards on DEBT CAPS. If one nation allows their banks to leverage significantly greater than others then for a period that nation will bid up global products because they have more money which hurts other nations and it will create a false sense of size in the market so other nations will over produce when the debtor nation runs out of money.

It was the same with the housing bubble. When people who were responsible were bidding on houses that were 3 times their salary, they were losing bids to those that were bidding 5 times their salary. It was called loose credit. Now in a global market, loose credit in some nations will cause spikes in global products like oil. What we needed in the G20 were these global standards and to prevent regulatory arbitrage which gives one nation an unfair advantage in important financial issues. What we got was economic populism to please the masses.

Now the death spiral is when the economic brakes don't work for a Nation. For example, when the US Dollar got too strong, it was great because we could buy foreign goods cheaply, but it killed exports. I've been commuting to NYC and D.C. on the Acela and you see hundreds of empty manufacturing buildings along the way. Now when China had their currency low we drained all our wealth to them and they bought Treasuries which kept mortgage rates low which helped create the Housing Bubble. If we were in a national economy we would have seen higher interest rates but that didn't happen because of the hot money, or money being pumped back in a manner which not only veiled the sinking of our Nation' economy, but did it in a way which amplified it, meaning it created a negative wealth effect, we actually thought we were rich when in fact we were losing all our jobs. It was absurd.

Now what bothers me most is the hypocrisy. All the people who went out and bought flat screen t.v.'s made in China with their Stimulus money. How about how may of the same people claiming that we need financial reform i.e. separate investment banks and commercial banks also allowed Pension Funds to be invested in the stock market (the casino). Now what the hell were these Pension funds doing in the equities market to begin with? Why were public pensions investing in mortgage back securities? Why do Senators wag their fingers at Goldman Sachs telling them that they are corrupt for investing in the same thing that our own Government was guaranteeing? These same Senators got political donations from Goldman Sachs. It's absurd. On top of that, the surcharge of these huge pension funds that should have never been in the risky investment they were actually DROVE UP THE PRICES OF THESE RISKY INVESTMENTS MAKING THEM MORE RISKY. So when the Pension Funds bought mortgage back securities, guess what it did? It created a market for them, a market that consumed more than our economy needed.

How about the hypocrisy in Greece? Greece had too much socialism and they invested in risky stuff. The socialistic government is feeding them a line that the corrupt investment banks stole their money. The question is what the hell was their pension money doing in those types of investments to begin with? So just like the G20, these people aren't getting the truth about what needs to be done, the socialists are giving them a capitalistic scapegoat. And the people over there are pissed.

Now Deval Patrick gave $1 Billion to Biotech. So I'm starting to understand why my critics who I find out work in Biotech get pissed when I criticize Deval Patrick (particularly when I'm making a point about government intervention....)

http://www.masslifesciences.com/clips/clip_06_16_08globe.html

So we piss away all that money to an industry that serves less than 1% of the population and now we are dealing with massive layoffs.

http://www.boston.com/news/education/k_12/articles/2010/05/15/brockton_lays_off_480_school_teachers/

Brockton laid off more than 1/3 of its teachers. So let's see here, the Governor "of the people" pisses away $1B and the poorest communities are losing 1/3 of their teachers. Now do you think that the people enjoying that money would want to live in Brockton? No, that yuppie is looking for a house in Lexington.

This doom and gloom will end when people get a clue.

[Kaidran]

Welcome back John. I guess politics is pretty depressing so fits with this thread.

Frankly I'd love it if DP stopped pushing biotech. My company is set to relocate so will be receiving 50+ enticement packages right now. It is really unlikely that they would move out of state but if Mass began to look less welcoming then who knows, maybe I'd get relocated somewhere that I could afford a house.