I don't think so because the Industrial Revolution was basically replacing farm workers who were being replaced by machines to keep up food production. We went from about 80% of the population that was necessary to grow 100% of the food to less than 20% .... because of the use of machines.
What allowed that to happen was the production of "new technology", .... cars, planes, trains, oil refineries, etc. .... that swallowed up the displaced farmers .... so, unlike today, jobs weren't disappearing but instead were increasing.
The big difference today, as I see it, is that most "new production" can be done by computers and machines ... but where are the jobs coming from that require humans in those large numbers.
You seem to assume that the people of that time back then knew, looking forward, that all the jobs that ended up being created were going to be created. Frankly, we have jobs now that were not even remotely imaginable back then...some even not imaginable 20-30 years ago. We can speculate a bit, but the reality is we just don't know...but history has shown us that our imaginations are typically quite lame compared to what really happens and how many new and different jobs are created. Geez, there are probably more people making money by just blogging today than were making money writing at all 200 years ago.
Quote:
Originally Posted by newbee
A disturbing trend, for me, appears to be more humans involved with moving money around via the "investment industry" .... which is nothing more than finding ways to "move money" from our pockets to theirs.
First, it is simply not true that they are just moving money from our pockets to theirs. Second, these jobs shouldn't disturb you. As economies become more and more advanced, these jobs that invest, allocate and efficiently move capital around will increase and become more important. Many...even most of these people are providing valuable services to the economy. They are not just shuffling money around without purpose or value.
Quote:
Originally Posted by newbee
Where we once produced "things" .... we now just produce ideas and schemes on how to make more money. That is why I am such an Apple "fan boy". They are one of the few companies left that focuses on products .... rather than on profits.
I think you've over-simplified things here. Lots and lots of things are made every single day. Many more things that 20, 50 or 100 years ago. Granted some of these things are made in more places in the world than in the past. This is a good thing, not a bad thing. You should be be overly burdened by the worry that "we" (I assume you mean the US) "don't make things anymore." We do...but so do lots of other people. And that's great news!
In the end automation has almost always led to better things...includinghigher* employment! I think we'd all agree that there is far, far more automation in various job functions across the entire economy now than 50 years ago. And yet...in the US...the total civilian labor force in 1960 it was 117M in 2010 it was 154M...about a 32% increase despite the increase in automation during that period of time.
*Lower employment is also an option but not necessarily in a bad way. Capital investment in automation increases labor productivity which leads to higher wages. These higher wages may be deployed in a number of ways including opting to work less in some form or another. For example: There was a time when everyone in the family had to work just for the whole family to survive. Let's say a family of five...mom, dad and three kids. As wages rose as a result of capital investment into productivity-enhancing technology (automation in one form or another) families started choosing to work less by pulling family members (e.g., kids first, wife next, etc.) out of the workforce to the point where there were indeed less people working (as a percentage of the population) but they were adequately (or even more than adequately) supported by the one or two remaining worker (who was working fewer hours than before by the way!) Capital investment in automation is good. It will be good for consumers of those goods, it will be good for the people of China as a whole. It will be good to free human being from doing boring, repetitive and sometimes dangerous work so they can do the creative and innovative things humans are better at.
Until they build the robots that build the robots. And if they create automated maintenance droids (R2-D2!) then the robots can run pretty much everything. They can even file reports. Then if you get more robots to build more factories...que the dramatic squirrel...
A few months ago I posted something asking why robotics couldn't even the worker-salary playing field between China and the U.S. I got smacked down by several regulars who said that this kind of work was much too difficult for robots--that the process was already as mechanized as it could be. Oh well.
First, it is simply not true that they are just moving money from our pockets to theirs. Second, these jobs shouldn't disturb you. As economies become more and more advanced, these jobs that invest, allocate and efficiently move capital around will increase and become more important. Many...even most of these people are providing valuable services to the economy. They are not just shuffling money around without purpose or value.
Show me the "value" in credit default swaps which basically allowed the financial industry to "wrap up" their low value, high risk loans into a pretty new package with a pretty new name and sell it to another "investor" at a discount ... all the while using rating agencies, who relied on this same financial industry for it's profits, thereby literally guaranteeing positive ratings. The only value was the bonuses that were received by the sellers of those "junk bonds".
Quote:
Originally Posted by MJ1970
Many...even most of these people are providing valuable services to the economy. [B]
If their services were so valuable ... why did the taxpayers have to bail them out to the tune of 700 billion or so .... and more importantly ... why do the "rules and lack of regulation" that existed then that allowed/encouraged that behavior still exist today ... thereby almost assuring a repeat performance at some point in the future?
Show me the "value" in credit default swaps which basically allowed the financial industry to "wrap up" their low value, high risk loans into a pretty new package with a pretty new name and sell it to another "investor" at a discount ... all the while using rating agencies, who relied on this same financial industry for it's profits, thereby literally guaranteeing positive ratings. The only value was the bonuses that were received by the sellers of those "junk bonds".
If their services were so valuable ... why did the taxpayers have to bail them out to the tune of 700 billion or so .... and more importantly ... why do the "rules and lack of regulation" that existed then that allowed/encouraged that behavior still exist today ... thereby almost assuring a repeat performance at some point in the future?
First, I'm not an investment expert so I cannot answer your first question.
Second, the taxpayers did not have to bail them out...they were essentially forced to by politicians.
Third, the massive losses that prompted the bailout are an indication that value was not being created in those particular instances. This is what happens in the market. Non value creating activities are exposed by losses. Government then, incorrectly, tries to take on those losses.
Finally, I get that you're trying to take a couple of specific examples and use this to paint a broad brush across the entire investment profession but this does not negate the entire industry and profession and its value to the economy.
Show me the "value" in credit default swaps which basically allowed the financial industry to "wrap up" their low value, high risk loans into a pretty new package with a pretty new name and sell it to another "investor" at a discount ... all the while using rating agencies, who relied on this same financial industry for it's profits, thereby literally guaranteeing positive ratings. The only value was the bonuses that were received by the sellers of those "junk bonds".
You are mixing up Credit Default Swaps with Collateralized Debt Obligations.
A credit default swap is nothing more or less than a form of insurance against an issuer defaulting, as such it's very useful. Suppose you hold a significant amount of corporate debt belonging to GE, and you are concerned that their credit outlook is negative. You could attempt to sell the debt, but selling such a large quantity of debt in the secondary market would prove expensive - instead you enter into a CDS and for a few basis points you have transformed some or all of the GE debt into effectively treasury bonds.
CDSs are also a useful product in terms of price discovery, ie. the CDS market allows for market views of credit risk to be measured, in much the same way that options allow for market views of volatility to be determined.
CDOs, and particularly the AAA senior and super senior tranches are very different - and yes, used correctly they had the potential to provide some value. There were lots of problems that resulted in that meltdown.
Taxypayers didn't bail the banks out to the tune of 700BN, the only part of the bailout on the government's balance sheet was TARP, originally expected to be around 300BN, 2010 estimates put the cost at 25BN or lower. A small price to pay for avoiding the nightmare on wall-street becoming a nightmare on main-street.
The fact is that banks have always been susceptible to bubbles and runs, which is why every remotely developed nation has a central bank that functions as a lender of last resort.
Second, the taxpayers did not have to bail them out...they were essentially forced to by politicians.
have to .... forced to .... what's the difference ..... and are the politicians not "our representatives" and are therefore obligated to do our bidding?
Quote:
Originally Posted by MJ1970
Finally, I get that you're trying to take a couple of specific examples and use this to paint a broad brush across the entire investment profession but this does not negate the entire industry and profession and its value to the economy.
Don't get me wrong. I am sure there are a lot of fine, hardworking and honest people that work in the financial industry ... but I think that the focus of the whole industry has changed in the last 50-75 years or so. I see an industry that was originally formed to help private industry to grow, manufacturing and the like. Now I see an industry that focuses on new and creative ways to create profit out of providing very little benefit to anyone other than themselves. The taxpayer seems to be in the business of paying for the greed and incompetence of the whole industry and I'm not sure of the value in that for anyone except the financial industry as a whole.
have to .... forced to .... what's the difference ..... and are the politicians not "our representatives" and are therefore obligated to do our bidding?
By "have to" I mean to say that is was not necessary. The was another option. Let them go bankrupt and take the losses. Some think this would have been catastrophic. It's not clear that's even remotely true.
Quote:
Originally Posted by newbee
Now I see an industry that focuses on new and creative ways to create profit out of providing very little benefit to anyone other than themselves.
But just because you see it that way, doesn't make it so.
Quote:
Originally Posted by newbee
The taxpayer seems to be in the business of paying for the greed and incompetence of the whole industry
Agreed. This must stop. It should have never happened. Write your Congress person and president. Of course they will reply with a form letter likely lying to you that these bailouts were unquestionably necessary.
I don't think so because the Industrial Revolution was basically replacing farm workers who were being replaced by machines to keep up food production. We went from about 80% of the population that was necessary to grow 100% of the food to less than 20% .... because of the use of machines.
What allowed that to happen was the production of "new technology", .... cars, planes, trains, oil refineries, etc. .... that swallowed up the displaced farmers .... so, unlike today, jobs weren't disappearing but instead were increasing.
The big difference today, as I see it, is that most "new production" can be done by computers and machines ... but where are the jobs coming from that require humans in those large numbers. A disturbing trend, for me, appears to be more humans involved with moving money around via the "investment industry" .... which is nothing more than finding ways to "move money" from our pockets to theirs.
Where we once produced "things" .... we now just produce ideas and schemes on how to make more money. That is why I am such an Apple "fan boy". They are one of the few companies left that focuses on products .... rather than on profits.
The Industrial Revolution, which was actually a series of 'revolutions', occurred first in the United Kingdom in what was largely, though not entirely, an agrairian society and so of course, agriculture was an immediate beneficiary. However, many industries of very limited scope (by later standards), such as the textile, mining, chemical and machine industries exploded in capability and scope and so essentially, agricultural revolution was only a part of the picture. Huge numbers of jobs were created in these other fields and the average standard of living skyrocketed.
Many new industries and opportunities are opening up today as a result of fabulous technologies being developed. The secret to taking advantage of them is education, let's hope that the west wakes up to this. \
You are mixing up Credit Default Swaps with Collateralized Debt Obligations.
My bad for using the wrong terminology (I'm not in the industry) .... but a pig in different makeup ... is still a pig ... is it not?
Quote:
Originally Posted by cloudgazer
A credit default swap is nothing more or less than a form of insurance against an issuer defaulting, as such it's very useful. Suppose you hold a significant amount of corporate debt belonging to GE, and you are concerned that their credit outlook is negative.
In other words ... you are concerned that you made a lousy bet.
Quote:
Originally Posted by cloudgazer
You could attempt to sell the debt, but selling such a large quantity of debt in the secondary market would prove expensive
In other words you would lose money on your lousy bet.
Quote:
Originally Posted by cloudgazer
- instead you enter into a CDS and for a few basis points you have transformed some or all of the GE debt into effectively treasury bonds.
In other words, you have transfered the accountability from the dummy who made the bet to some other unsuspecting sucker .... in this case to the buyer of those "government bonds" that is backed by the taxpayer ... who had no say in the original bad bet. Show me the "value" in that to anyone except the dummy who made the bet, in the first place.
Quote:
Originally Posted by cloudgazer
CDSs are also a useful product in terms of price discovery, ie. the CDS market allows for market views of credit risk to be measured, in much the same way that options allow for market views of volatility to be determined.
I'd be willing to bet that the effectiveness of that ability had some problems showing the "real value" of "credit risk" about 60 days before the meltdown on 2008 .... not much value there, imho.
Quote:
Originally Posted by cloudgazer
The fact is that banks have always been susceptible to bubbles and runs, which is why every remotely developed nation has a central bank that functions as a lender of last resort.
In other words .... the taxpayer.
In any case, as much as I'm enjoying this conversation .... I promised my daughter some "home made chili" today and as most of you know .... chili cannot be properly be made 5 minutes before serving, so duty calls .... thanks for the back and forth.
The Industrial Revolution, which was actually a series of 'revolutions', occurred first in the United Kingdom in what was largely, though not entirely, an agrairian society and so of course, agriculture was an immediate beneficiary. However, many industries of very limited scope (by later standards), such as the textile, mining, chemical and machine industries exploded in capability and scope and so essentially, agricultural revolution was only a part of the picture. Huge numbers of jobs were created in these other fields and the average standard of living skyrocketed.
Many new industries and opportunities are opening up today as a result of fabulous technologies being developed. The secret to taking advantage of them is education, let's hope that the west wakes up to this. \
All the best.
What's more those new industries exploded in employment and then collapsed in employment...in those industries...as automation expanded...but then new industries came about and exploded in employment...and on and on it goes. New industries keep getting created...often industries and jobs that were never even remotely imaginable.
[QUOTE=newbee;1912678]My bad for using the wrong terminology (I'm not in the industry) .... but a pig in different makeup ... is still a pig ... is it not?
Slow down there sparky. He's trying to explain what these instruments can be used for and that they have valid purposes and you're editorializing.
Quote:
Originally Posted by newbee
In other words ... you are concerned that you made a lousy bet.
Yes. Maybe. Perhaps Party A thinks the circumstances with Party B have changed, so Party A looks to see if Party C is willing to take some of that risk (insure these loans). Party C chooses to do so because Party C thinks it is a worthwhile risk for a certain fee/premium. Everyone of these could be guessing wrong. If A was wrong then they forfeited some of their potential profit to C for (in the end) no reason. If C guessed wrong then C will likely lose money covering losses. Both learned something from the overall exchanges.
Quote:
Originally Posted by newbee
In other words you would lose money on your lousy bet.
Yes, A is concerned about losing money on a transaction and so they attempt to share this risk with C who voluntarily agrees to share some risk for a free or premium. Now if there's fraud involved in expressing the risk, this is a different matter. Fraud is basically a form of theft and should be adjudicated through the courts.
Quote:
Originally Posted by newbee
In other words, you have transfered the accountability from the dummy who made the bet to some other unsuspecting sucker .... in this case to the buyer of those "government bonds" that is backed by the taxpayer ... who had no say in the original bad bet. Show me the "value" in that to anyone except the dummy who made the bet, in the first place.
Slow down...again. You're editorializing again ("dummy" and "unsuspecting sucker"). The only real suckers in this were the tax payers whom the politicians sacrificed to the corporatists.
Quote:
Originally Posted by newbee
In other words .... the taxpayer.
This is the one point where you're right. The central bank is a mechanism for monopolizing the monetary system and cartelizing the banking system for the benefit of bankers and at the expense of the taxpayers and average citizen.
It takes time to restructure assembly processes. Time doing research, time to order and buy the robots, time to put the robots in place, time to debug them and start them up, and time to work out quality kinks. It is not uncommon for it to take 6-18 months to install a single new robotic system. Installing 270,000 of them? Takes a little more time.
Plus, of course, there's the simple matter of scale. As I pointed out before. The entire world's installed base of industrial robots is on the order of a million robots. Getting 30% of the entire world's supply installed in a single plant in a single year is just not plausible.
Then, consider the cost. The average cost for a simple robotic arm system is $30 K or so:
can't american robots work as cheap as chinese robots? they can become bilingual.
If this is not a sign! Foxconn concerned about rising labor costs in China?! My notion always was that when the cost difference between offshore manufacturing and local is less than 30 to 40% manufacturing is coming back - in 5 to 10 years - and in the case of Apple - with high utilization of robots. I think I have to correct my time estimate.
I call BS. You don't go from 10,000 robots to 300,000 robots in one year. Or 300,000 to a million in 2 more years.
Not to mention that the entire premise is bizarre. They have 1.2 million humans and will replace them with 1 million robots. However, not ALL the humans can be replaced, so 1 million robots are replacing a similar number of humans. So they're claiming that the robots are no faster than the humans? I don't buy it.
Comments
No, I've offered EXPERIENCE in installing and using industrial robots in a production environment - which no one else here seems to have.
Explain why to me like I'm 4 years old please.
I don't think so because the Industrial Revolution was basically replacing farm workers who were being replaced by machines to keep up food production. We went from about 80% of the population that was necessary to grow 100% of the food to less than 20% .... because of the use of machines.
What allowed that to happen was the production of "new technology", .... cars, planes, trains, oil refineries, etc. .... that swallowed up the displaced farmers .... so, unlike today, jobs weren't disappearing but instead were increasing.
The big difference today, as I see it, is that most "new production" can be done by computers and machines ... but where are the jobs coming from that require humans in those large numbers.
You seem to assume that the people of that time back then knew, looking forward, that all the jobs that ended up being created were going to be created. Frankly, we have jobs now that were not even remotely imaginable back then...some even not imaginable 20-30 years ago. We can speculate a bit, but the reality is we just don't know...but history has shown us that our imaginations are typically quite lame compared to what really happens and how many new and different jobs are created. Geez, there are probably more people making money by just blogging today than were making money writing at all 200 years ago.
A disturbing trend, for me, appears to be more humans involved with moving money around via the "investment industry" .... which is nothing more than finding ways to "move money" from our pockets to theirs.
First, it is simply not true that they are just moving money from our pockets to theirs. Second, these jobs shouldn't disturb you. As economies become more and more advanced, these jobs that invest, allocate and efficiently move capital around will increase and become more important. Many...even most of these people are providing valuable services to the economy. They are not just shuffling money around without purpose or value.
Where we once produced "things" .... we now just produce ideas and schemes on how to make more money. That is why I am such an Apple "fan boy". They are one of the few companies left that focuses on products .... rather than on profits.
I think you've over-simplified things here. Lots and lots of things are made every single day. Many more things that 20, 50 or 100 years ago. Granted some of these things are made in more places in the world than in the past. This is a good thing, not a bad thing. You should be be overly burdened by the worry that "we" (I assume you mean the US) "don't make things anymore." We do...but so do lots of other people. And that's great news!
In the end automation has almost always led to better things...including higher* employment! I think we'd all agree that there is far, far more automation in various job functions across the entire economy now than 50 years ago. And yet...in the US...the total civilian labor force in 1960 it was 117M in 2010 it was 154M...about a 32% increase despite the increase in automation during that period of time.
*Lower employment is also an option but not necessarily in a bad way. Capital investment in automation increases labor productivity which leads to higher wages. These higher wages may be deployed in a number of ways including opting to work less in some form or another. For example: There was a time when everyone in the family had to work just for the whole family to survive. Let's say a family of five...mom, dad and three kids. As wages rose as a result of capital investment into productivity-enhancing technology (automation in one form or another) families started choosing to work less by pulling family members (e.g., kids first, wife next, etc.) out of the workforce to the point where there were indeed less people working (as a percentage of the population) but they were adequately (or even more than adequately) supported by the one or two remaining worker (who was working fewer hours than before by the way!) Capital investment in automation is good. It will be good for consumers of those goods, it will be good for the people of China as a whole. It will be good to free human being from doing boring, repetitive and sometimes dangerous work so they can do the creative and innovative things humans are better at.
Someone is going to have the build the robots
Until they build the robots that build the robots. And if they create automated maintenance droids (R2-D2!) then the robots can run pretty much everything. They can even file reports. Then if you get more robots to build more factories...que the dramatic squirrel...
First, it is simply not true that they are just moving money from our pockets to theirs. Second, these jobs shouldn't disturb you. As economies become more and more advanced, these jobs that invest, allocate and efficiently move capital around will increase and become more important. Many...even most of these people are providing valuable services to the economy. They are not just shuffling money around without purpose or value.
Show me the "value" in credit default swaps which basically allowed the financial industry to "wrap up" their low value, high risk loans into a pretty new package with a pretty new name and sell it to another "investor" at a discount ... all the while using rating agencies, who relied on this same financial industry for it's profits, thereby literally guaranteeing positive ratings. The only value was the bonuses that were received by the sellers of those "junk bonds".
Many...even most of these people are providing valuable services to the economy. [B]
If their services were so valuable ... why did the taxpayers have to bail them out to the tune of 700 billion or so .... and more importantly ... why do the "rules and lack of regulation" that existed then that allowed/encouraged that behavior still exist today ... thereby almost assuring a repeat performance at some point in the future?
Show me the "value" in credit default swaps which basically allowed the financial industry to "wrap up" their low value, high risk loans into a pretty new package with a pretty new name and sell it to another "investor" at a discount ... all the while using rating agencies, who relied on this same financial industry for it's profits, thereby literally guaranteeing positive ratings. The only value was the bonuses that were received by the sellers of those "junk bonds".
If their services were so valuable ... why did the taxpayers have to bail them out to the tune of 700 billion or so .... and more importantly ... why do the "rules and lack of regulation" that existed then that allowed/encouraged that behavior still exist today ... thereby almost assuring a repeat performance at some point in the future?
First, I'm not an investment expert so I cannot answer your first question.
Second, the taxpayers did not have to bail them out...they were essentially forced to by politicians.
Third, the massive losses that prompted the bailout are an indication that value was not being created in those particular instances. This is what happens in the market. Non value creating activities are exposed by losses. Government then, incorrectly, tries to take on those losses.
Finally, I get that you're trying to take a couple of specific examples and use this to paint a broad brush across the entire investment profession but this does not negate the entire industry and profession and its value to the economy.
Show me the "value" in credit default swaps which basically allowed the financial industry to "wrap up" their low value, high risk loans into a pretty new package with a pretty new name and sell it to another "investor" at a discount ... all the while using rating agencies, who relied on this same financial industry for it's profits, thereby literally guaranteeing positive ratings. The only value was the bonuses that were received by the sellers of those "junk bonds".
You are mixing up Credit Default Swaps with Collateralized Debt Obligations.
A credit default swap is nothing more or less than a form of insurance against an issuer defaulting, as such it's very useful. Suppose you hold a significant amount of corporate debt belonging to GE, and you are concerned that their credit outlook is negative. You could attempt to sell the debt, but selling such a large quantity of debt in the secondary market would prove expensive - instead you enter into a CDS and for a few basis points you have transformed some or all of the GE debt into effectively treasury bonds.
CDSs are also a useful product in terms of price discovery, ie. the CDS market allows for market views of credit risk to be measured, in much the same way that options allow for market views of volatility to be determined.
CDOs, and particularly the AAA senior and super senior tranches are very different - and yes, used correctly they had the potential to provide some value. There were lots of problems that resulted in that meltdown.
Taxypayers didn't bail the banks out to the tune of 700BN, the only part of the bailout on the government's balance sheet was TARP, originally expected to be around 300BN, 2010 estimates put the cost at 25BN or lower. A small price to pay for avoiding the nightmare on wall-street becoming a nightmare on main-street.
The fact is that banks have always been susceptible to bubbles and runs, which is why every remotely developed nation has a central bank that functions as a lender of last resort.
can't american robots work as cheap as chinese robots? they can become bilingual.
Land value and environmental impact are two of many factors
does the future have any jobs for humans?
Not to worry. The job of humans will be to buy iPhones. Otherwise there is no point in robots making them.
Second, the taxpayers did not have to bail them out...they were essentially forced to by politicians.
have to .... forced to .... what's the difference ..... and are the politicians not "our representatives" and are therefore obligated to do our bidding?
Finally, I get that you're trying to take a couple of specific examples and use this to paint a broad brush across the entire investment profession but this does not negate the entire industry and profession and its value to the economy.
Don't get me wrong. I am sure there are a lot of fine, hardworking and honest people that work in the financial industry ... but I think that the focus of the whole industry has changed in the last 50-75 years or so. I see an industry that was originally formed to help private industry to grow, manufacturing and the like. Now I see an industry that focuses on new and creative ways to create profit out of providing very little benefit to anyone other than themselves. The taxpayer seems to be in the business of paying for the greed and incompetence of the whole industry and I'm not sure of the value in that for anyone except the financial industry as a whole.
have to .... forced to .... what's the difference ..... and are the politicians not "our representatives" and are therefore obligated to do our bidding?
By "have to" I mean to say that is was not necessary. The was another option. Let them go bankrupt and take the losses. Some think this would have been catastrophic. It's not clear that's even remotely true.
Now I see an industry that focuses on new and creative ways to create profit out of providing very little benefit to anyone other than themselves.
But just because you see it that way, doesn't make it so.
The taxpayer seems to be in the business of paying for the greed and incompetence of the whole industry
Agreed. This must stop. It should have never happened. Write your Congress person and president. Of course they will reply with a form letter likely lying to you that these bailouts were unquestionably necessary.
I don't think so because the Industrial Revolution was basically replacing farm workers who were being replaced by machines to keep up food production. We went from about 80% of the population that was necessary to grow 100% of the food to less than 20% .... because of the use of machines.
What allowed that to happen was the production of "new technology", .... cars, planes, trains, oil refineries, etc. .... that swallowed up the displaced farmers .... so, unlike today, jobs weren't disappearing but instead were increasing.
The big difference today, as I see it, is that most "new production" can be done by computers and machines ... but where are the jobs coming from that require humans in those large numbers. A disturbing trend, for me, appears to be more humans involved with moving money around via the "investment industry" .... which is nothing more than finding ways to "move money" from our pockets to theirs.
Where we once produced "things" .... we now just produce ideas and schemes on how to make more money. That is why I am such an Apple "fan boy". They are one of the few companies left that focuses on products .... rather than on profits.
The Industrial Revolution, which was actually a series of 'revolutions', occurred first in the United Kingdom in what was largely, though not entirely, an agrairian society and so of course, agriculture was an immediate beneficiary. However, many industries of very limited scope (by later standards), such as the textile, mining, chemical and machine industries exploded in capability and scope and so essentially, agricultural revolution was only a part of the picture. Huge numbers of jobs were created in these other fields and the average standard of living skyrocketed.
Many new industries and opportunities are opening up today as a result of fabulous technologies being developed. The secret to taking advantage of them is education, let's hope that the west wakes up to this.
All the best.
You are mixing up Credit Default Swaps with Collateralized Debt Obligations.
My bad for using the wrong terminology (I'm not in the industry) .... but a pig in different makeup ... is still a pig ... is it not?
A credit default swap is nothing more or less than a form of insurance against an issuer defaulting, as such it's very useful. Suppose you hold a significant amount of corporate debt belonging to GE, and you are concerned that their credit outlook is negative.
In other words ... you are concerned that you made a lousy bet.
You could attempt to sell the debt, but selling such a large quantity of debt in the secondary market would prove expensive
In other words you would lose money on your lousy bet.
- instead you enter into a CDS and for a few basis points you have transformed some or all of the GE debt into effectively treasury bonds.
In other words, you have transfered the accountability from the dummy who made the bet to some other unsuspecting sucker .... in this case to the buyer of those "government bonds" that is backed by the taxpayer ... who had no say in the original bad bet. Show me the "value" in that to anyone except the dummy who made the bet, in the first place.
CDSs are also a useful product in terms of price discovery, ie. the CDS market allows for market views of credit risk to be measured, in much the same way that options allow for market views of volatility to be determined.
I'd be willing to bet that the effectiveness of that ability had some problems showing the "real value" of "credit risk" about 60 days before the meltdown on 2008 .... not much value there, imho.
The fact is that banks have always been susceptible to bubbles and runs, which is why every remotely developed nation has a central bank that functions as a lender of last resort.
In other words .... the taxpayer.
In any case, as much as I'm enjoying this conversation .... I promised my daughter some "home made chili" today and as most of you know .... chili cannot be properly be made 5 minutes before serving, so duty calls .... thanks for the back and forth.
The Industrial Revolution, which was actually a series of 'revolutions', occurred first in the United Kingdom in what was largely, though not entirely, an agrairian society and so of course, agriculture was an immediate beneficiary. However, many industries of very limited scope (by later standards), such as the textile, mining, chemical and machine industries exploded in capability and scope and so essentially, agricultural revolution was only a part of the picture. Huge numbers of jobs were created in these other fields and the average standard of living skyrocketed.
Many new industries and opportunities are opening up today as a result of fabulous technologies being developed. The secret to taking advantage of them is education, let's hope that the west wakes up to this.
All the best.
What's more those new industries exploded in employment and then collapsed in employment...in those industries...as automation expanded...but then new industries came about and exploded in employment...and on and on it goes. New industries keep getting created...often industries and jobs that were never even remotely imaginable.
...often industries and jobs that were never even remotely imaginable.
As today.
Slow down there sparky. He's trying to explain what these instruments can be used for and that they have valid purposes and you're editorializing.
In other words ... you are concerned that you made a lousy bet.
Yes. Maybe. Perhaps Party A thinks the circumstances with Party B have changed, so Party A looks to see if Party C is willing to take some of that risk (insure these loans). Party C chooses to do so because Party C thinks it is a worthwhile risk for a certain fee/premium. Everyone of these could be guessing wrong. If A was wrong then they forfeited some of their potential profit to C for (in the end) no reason. If C guessed wrong then C will likely lose money covering losses. Both learned something from the overall exchanges.
In other words you would lose money on your lousy bet.
Yes, A is concerned about losing money on a transaction and so they attempt to share this risk with C who voluntarily agrees to share some risk for a free or premium. Now if there's fraud involved in expressing the risk, this is a different matter. Fraud is basically a form of theft and should be adjudicated through the courts.
In other words, you have transfered the accountability from the dummy who made the bet to some other unsuspecting sucker .... in this case to the buyer of those "government bonds" that is backed by the taxpayer ... who had no say in the original bad bet. Show me the "value" in that to anyone except the dummy who made the bet, in the first place.
Slow down...again. You're editorializing again ("dummy" and "unsuspecting sucker"). The only real suckers in this were the tax payers whom the politicians sacrificed to the corporatists.
In other words .... the taxpayer.
This is the one point where you're right. The central bank is a mechanism for monopolizing the monetary system and cartelizing the banking system for the benefit of bankers and at the expense of the taxpayers and average citizen.
As today.
Exactly.
Explain why to me like I'm 4 years old please.
It takes time to restructure assembly processes. Time doing research, time to order and buy the robots, time to put the robots in place, time to debug them and start them up, and time to work out quality kinks. It is not uncommon for it to take 6-18 months to install a single new robotic system. Installing 270,000 of them? Takes a little more time.
Plus, of course, there's the simple matter of scale. As I pointed out before. The entire world's installed base of industrial robots is on the order of a million robots. Getting 30% of the entire world's supply installed in a single plant in a single year is just not plausible.
Then, consider the cost. The average cost for a simple robotic arm system is $30 K or so:
http://www.robots.com/faq.php?questi...+of+automation
That puts the cost of this at $30 BILLION over the next couple of years. Just not bloody likely.
can't american robots work as cheap as chinese robots? they can become bilingual.
If this is not a sign! Foxconn concerned about rising labor costs in China?! My notion always was that when the cost difference between offshore manufacturing and local is less than 30 to 40% manufacturing is coming back - in 5 to 10 years - and in the case of Apple - with high utilization of robots. I think I have to correct my time estimate.
I call BS. You don't go from 10,000 robots to 300,000 robots in one year. Or 300,000 to a million in 2 more years.
Not to mention that the entire premise is bizarre. They have 1.2 million humans and will replace them with 1 million robots. However, not ALL the humans can be replaced, so 1 million robots are replacing a similar number of humans. So they're claiming that the robots are no faster than the humans? I don't buy it.
Isn't this exactly what Moore's Law predicts?
http://en.wikipedia.org/wiki/Moore's_law