Comments on: A Different View Of The Administration http://informedspeculation.com/2006/05/25/a-different-view-of-the-administration/ Refunds Cheerfully Given To All Who Disagree Fri, 10 Feb 2012 06:53:00 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Mark http://informedspeculation.com/2006/05/25/a-different-view-of-the-administration/comment-page-1/#comment-33393 Mark Fri, 26 May 2006 20:05:12 +0000 http://decision08.net/2006/05/25/a-different-view-of-the-administration/#comment-33393 Alright, last little remark and I'll let it go; I just can't help myself! You seem to think owning a stock is like buying a lottery ticket and that there is not a fundamental connection between the stock market and the economy, and this is simply not true. A stock is a certificate of ownership in a tangible enterprise, an enterprise that does produce goods and/or services. Stocks are not 'monopoly money'; they are the epitome of capitalism. When a company issues stock, they sell ownership stakes to the public in order to raise capital. There is indeed an actual, tangible good behind the value of the stock; there is nothing arbitrary about it. All of the shareholders of Microsoft <em>own</em> Microsoft; Bill Gates didn't become the world's richest man because of his salary, but becaus of his large stock holdings, representing his ownership stake of the extremely profitable company. You can truthfully say that there an <em>individual</em> stock can do well or poorly in contradiction of the larger economic trends - but the market as a whole will tend to reflect the macroeconomic picture more often than not... For the most obvious example of the symbiotic relationship between the economy and the market, see <a rel="nofollow" href="http://www.btinternet.com/~dreklind/thecrash.htm">the great crash of 1929</a> and the Great Depression... Alright, last little remark and I’ll let it go; I just can’t help myself! You seem to think owning a stock is like buying a lottery ticket and that there is not a fundamental connection between the stock market and the economy, and this is simply not true.

A stock is a certificate of ownership in a tangible enterprise, an enterprise that does produce goods and/or services. Stocks are not ‘monopoly money’; they are the epitome of capitalism. When a company issues stock, they sell ownership stakes to the public in order to raise capital. There is indeed an actual, tangible good behind the value of the stock; there is nothing arbitrary about it. All of the shareholders of Microsoft own Microsoft; Bill Gates didn’t become the world’s richest man because of his salary, but becaus of his large stock holdings, representing his ownership stake of the extremely profitable company.

You can truthfully say that there an individual stock can do well or poorly in contradiction of the larger economic trends – but the market as a whole will tend to reflect the macroeconomic picture more often than not…

For the most obvious example of the symbiotic relationship between the economy and the market, see the great crash of 1929 and the Great Depression…

]]> By: mikebdot http://informedspeculation.com/2006/05/25/a-different-view-of-the-administration/comment-page-1/#comment-33308 mikebdot Fri, 26 May 2006 19:05:37 +0000 http://decision08.net/2006/05/25/a-different-view-of-the-administration/#comment-33308 Dmac: You're absolutely right, I had no stocks and no 401k as I was in college. I didn't take any economics courses but have learned through reading various and sundry books small things here and there. What I'm trying to say (and not well apparently) is that a stock is not a good or a service, it is an investment. You can pretend it's a good all you want, but in my eyes, it's monopoly money. To claim the "economy" is doing well because the stock market is doing well is foolish. Just as foolish as claiming the "economy" is doing poorly because the stock market is doing poorly (which is what I as trying to say in a nutshell). Hypothetically speaking, the stock market could be booming because companies are making grand predictions/forecasts that are 1000s of times too high and if you looked at the stock market only, you would think everything is just great, but it two years when all the companies fail because they have no business model and aren't making anything, everything will come crashing down and it won't be the CAUSE of the economy going into the toilet, the lack of product and business plan and not meeting predictions is the CAUSE. I was only speaking to the cause of the poor economy. I understand that many people lost quite large sums of money, but the stock market is a crapshoot. Am I seriously making no sense here? If someone pays $150 for the stock, but the company doesn't meet the forecasts (because of whatever reason, market changes, bad economists, bad marketing, poor quality product, whatever) and the value drops to $90, the $60 less value did not effect the economy, all of the causes of the $60 drop in value were the cause. Ok, tired point. Sorry to bore everyone. Evan: I'll continue to speak to the Al Qaeda issue in other threads in the future. I will say that I don't think it is a "quagmire" in that I don't think there is no hope. The hope I have is to tell the Iraqis "look, this is your country, do well, if you need our help, let us know" and then proceed to leave slowly. Permanent bases are a bad idea. I don't think it's like Vietnam because there we were fighting "communism" and while that is an "idea" it was something occurring within the country and Al Qaeda is coming in from everywhwere (and I would argue that it's mostly not Al Qaeda and I'm very afraid of another attack occurring in the near future). I honestly don't think we are more safe because of Iraq. I think we are more safe because our intelligence capabilities have grown. I think we should have spent $200B there. But, I don't want a Big Brother-esqe state as my security is not that important. I'm not going to expect the government to prevent someone from shooting me in the face. If someone wants to do that, I need to seriously reconsider how I treat people, or, accept my fate of bad luck on that particular day. People do go crazy from time to time. In any event. Thank god it's Friday. :) Dmac: You’re absolutely right, I had no stocks and no 401k as I was in college. I didn’t take any economics courses but have learned through reading various and sundry books small things here and there. What I’m trying to say (and not well apparently) is that a stock is not a good or a service, it is an investment. You can pretend it’s a good all you want, but in my eyes, it’s monopoly money. To claim the “economy” is doing well because the stock market is doing well is foolish. Just as foolish as claiming the “economy” is doing poorly because the stock market is doing poorly (which is what I as trying to say in a nutshell). Hypothetically speaking, the stock market could be booming because companies are making grand predictions/forecasts that are 1000s of times too high and if you looked at the stock market only, you would think everything is just great, but it two years when all the companies fail because they have no business model and aren’t making anything, everything will come crashing down and it won’t be the CAUSE of the economy going into the toilet, the lack of product and business plan and not meeting predictions is the CAUSE.

I was only speaking to the cause of the poor economy. I understand that many people lost quite large sums of money, but the stock market is a crapshoot.

Am I seriously making no sense here?

If someone pays $150 for the stock, but the company doesn’t meet the forecasts (because of whatever reason, market changes, bad economists, bad marketing, poor quality product, whatever) and the value drops to $90, the $60 less value did not effect the economy, all of the causes of the $60 drop in value were the cause.

Ok, tired point. Sorry to bore everyone.

Evan: I’ll continue to speak to the Al Qaeda issue in other threads in the future. I will say that I don’t think it is a “quagmire” in that I don’t think there is no hope. The hope I have is to tell the Iraqis “look, this is your country, do well, if you need our help, let us know” and then proceed to leave slowly. Permanent bases are a bad idea. I don’t think it’s like Vietnam because there we were fighting “communism” and while that is an “idea” it was something occurring within the country and Al Qaeda is coming in from everywhwere (and I would argue that it’s mostly not Al Qaeda and I’m very afraid of another attack occurring in the near future). I honestly don’t think we are more safe because of Iraq. I think we are more safe because our intelligence capabilities have grown. I think we should have spent $200B there. But, I don’t want a Big Brother-esqe state as my security is not that important. I’m not going to expect the government to prevent someone from shooting me in the face. If someone wants to do that, I need to seriously reconsider how I treat people, or, accept my fate of bad luck on that particular day. People do go crazy from time to time.

In any event. Thank god it’s Friday. :)

]]> By: peter http://informedspeculation.com/2006/05/25/a-different-view-of-the-administration/comment-page-1/#comment-32696 peter Thu, 25 May 2006 22:40:57 +0000 http://decision08.net/2006/05/25/a-different-view-of-the-administration/#comment-32696 I used to work with a guy who bought his house in the late 90's on margin, and used Qualcomm stock for the margin -- as someone said, you can't fix stupid -- I used to work with a guy who bought his house in the late 90′s on margin, and used Qualcomm stock for the margin — as someone said, you can’t fix stupid –

]]> By: dmac http://informedspeculation.com/2006/05/25/a-different-view-of-the-administration/comment-page-1/#comment-32676 dmac Thu, 25 May 2006 21:41:30 +0000 http://decision08.net/2006/05/25/a-different-view-of-the-administration/#comment-32676 "Retirement investments did indeed decline, but that doesn’t effect the ‘economy’ that much." I'm sorry, but this statement begs the question - did you own a substantial portion of stocks during this time, and did you have a substantial retirement fund as well? You sound like you had neither, and I can tell you from first - hand experience that the NASDAQ implosion was truly life - shattering for many people of modest means. Your economics 101 screeds here indicate someone who hasn't lived through too many (if any) economic disruptions, and has worked only a few years, at best. “Retirement investments did indeed decline, but that doesn’t effect the ‘economy’ that much.”

I’m sorry, but this statement begs the question – did you own a substantial portion of stocks during this time, and did you have a substantial retirement fund as well? You sound like you had neither, and I can tell you from first – hand experience that the NASDAQ implosion was truly life – shattering for many people of modest means.

Your economics 101 screeds here indicate someone who hasn’t lived through too many (if any) economic disruptions, and has worked only a few years, at best.

]]> By: Mark http://informedspeculation.com/2006/05/25/a-different-view-of-the-administration/comment-page-1/#comment-32674 Mark Thu, 25 May 2006 21:05:21 +0000 http://decision08.net/2006/05/25/a-different-view-of-the-administration/#comment-32674 Okay, I know we're in beating a dead horse territory here, but if a company sells for $150 a share today, that's what it's worth today - to somebody. You say the real worth is 'fictitious' - on the contrary; the only worth of any item that matters is what someone is willing to pay for it. Say I have a copy of Action Comics #1 that the Overstreet Price Guide says is worth $75,000 - that is an example of a somewhat 'fictitious' worth, because it's an educated guess and not an offer to buy. However, if I put that comic up at auction, and it sells for $90,000, you can bet it's worth $90,000 - and the $90,000 I will put in my pocket is not some fictional $15,000 on top of an item worth $75,000 - it's $90,000, period. The NASDAQ is not a survey - it is a summary of real transactions. There is nothing artificial about it. The 'real worth' of a company, also, is not static - it changes with earnings outlooks, revenue growth forecasts, macroeconomic factors - and investor expectations. Expectations may be inflated, but at the very moment that I sell an item, by definition the person buying it values it at the price I sold it for. Sorry to be tedious - it's the economics major in me coming out... Okay, I know we’re in beating a dead horse territory here, but if a company sells for $150 a share today, that’s what it’s worth today – to somebody. You say the real worth is ‘fictitious’ – on the contrary; the only worth of any item that matters is what someone is willing to pay for it. Say I have a copy of Action Comics #1 that the Overstreet Price Guide says is worth $75,000 – that is an example of a somewhat ‘fictitious’ worth, because it’s an educated guess and not an offer to buy. However, if I put that comic up at auction, and it sells for $90,000, you can bet it’s worth $90,000 – and the $90,000 I will put in my pocket is not some fictional $15,000 on top of an item worth $75,000 – it’s $90,000, period.

The NASDAQ is not a survey – it is a summary of real transactions. There is nothing artificial about it.

The ‘real worth’ of a company, also, is not static – it changes with earnings outlooks, revenue growth forecasts, macroeconomic factors – and investor expectations. Expectations may be inflated, but at the very moment that I sell an item, by definition the person buying it values it at the price I sold it for.

Sorry to be tedious – it’s the economics major in me coming out…

]]> By: Evan http://informedspeculation.com/2006/05/25/a-different-view-of-the-administration/comment-page-1/#comment-32670 Evan Thu, 25 May 2006 20:24:32 +0000 http://decision08.net/2006/05/25/a-different-view-of-the-administration/#comment-32670 Al Qaeda is fighting us in Iraq, so to answer the question as it is specifically worded - yes, the people we are currently fighting in Iraq (not all of them, but many for sure) are the ones responsible for 9/11. Now, I understand the intent of the question was to ask if Sadaam's regime was responsible for 9/11, and the answer is obviously no. However, as the DOD documents released earlier this year showed, Iraq was linked to Al Qaeda and I think the evidence for a link between them will continue to mount. To what extent, I don't know, but my inclination is that there's more to it than meets the eye. In any case, and I said this in my first comment, putting aside the case for war in Iraq, what the war has done is force Al Qaeda to spend a lot of time and resources fighting our professionals in Iraq rather than utilize their resources for the planning and execution of attacks on American or our allies soil. I supported the war initially because I believed the intelligence that WMD's were in Iraq and I've believed since the first Gulf War that Sadaam needed to go. It appears, for now, that I, and many others, were wrong about the WMD's, but since we are fighting Al Qaeda there and in places like Afghanistan, I will continue to support the war. We initially supported a theory (WMD's) because we were worried about the facts it could produce (attacks on America with them). When the theory was proven wrong, the facts were such, with Al Qaeda pouring resources into killing Americans and Iraqis working with us, that Iraq became an important front for fighting terrorism notwithstanding the motives behind why that front was opened in the first place. I cannot say for certain that had we not gone into Iraq, another 9/11 would have occured, but I'm confident that going into Iraq has made us more secure because Al Qaeda is weaker as a result of the pounding they have taken on the ground there. I will never disagree with your right to dissent on the war, but I will say the "quagmire" and Vietnam comparisons are ridiculous. Read Michael Yon's past work on the success of the elections and rebuilding effort for proof of that. Al Qaeda is fighting us in Iraq, so to answer the question as it is specifically worded – yes, the people we are currently fighting in Iraq (not all of them, but many for sure) are the ones responsible for 9/11. Now, I understand the intent of the question was to ask if Sadaam’s regime was responsible for 9/11, and the answer is obviously no. However, as the DOD documents released earlier this year showed, Iraq was linked to Al Qaeda and I think the evidence for a link between them will continue to mount. To what extent, I don’t know, but my inclination is that there’s more to it than meets the eye.

In any case, and I said this in my first comment, putting aside the case for war in Iraq, what the war has done is force Al Qaeda to spend a lot of time and resources fighting our professionals in Iraq rather than utilize their resources for the planning and execution of attacks on American or our allies soil. I supported the war initially because I believed the intelligence that WMD’s were in Iraq and I’ve believed since the first Gulf War that Sadaam needed to go. It appears, for now, that I, and many others, were wrong about the WMD’s, but since we are fighting Al Qaeda there and in places like Afghanistan, I will continue to support the war. We initially supported a theory (WMD’s) because we were worried about the facts it could produce (attacks on America with them). When the theory was proven wrong, the facts were such, with Al Qaeda pouring resources into killing Americans and Iraqis working with us, that Iraq became an important front for fighting terrorism notwithstanding the motives behind why that front was opened in the first place.

I cannot say for certain that had we not gone into Iraq, another 9/11 would have occured, but I’m confident that going into Iraq has made us more secure because Al Qaeda is weaker as a result of the pounding they have taken on the ground there.

I will never disagree with your right to dissent on the war, but I will say the “quagmire” and Vietnam comparisons are ridiculous. Read Michael Yon’s past work on the success of the elections and rebuilding effort for proof of that.

]]> By: mikebdot http://informedspeculation.com/2006/05/25/a-different-view-of-the-administration/comment-page-1/#comment-32663 mikebdot Thu, 25 May 2006 18:57:25 +0000 http://decision08.net/2006/05/25/a-different-view-of-the-administration/#comment-32663 Mark, probably, just one more point. If I was the sucker who paid $150 and the company didn't meet expectations, I'm out money and the stock returns to say, $90 (I'd probably sell prior to that, but let's say I didn't), then I am out the $60 a year later (or however long it takes), but truth be told, the stock will end up what it is actually worth (on average). If someone overpays, they will end up losing the money that you're saying you gained by selling at $150. The $60 is fictitious until a product/service is actually performed and thus why I think GDP or some other measure would have been much better to cite in this case. I feel the situation is analagous to the federal debt. To overpay for a stock is to borrow money from the future (i.e. the money you gained today will be someone's loss tomorrow). Mark, probably, just one more point. If I was the sucker who paid $150 and the company didn’t meet expectations, I’m out money and the stock returns to say, $90 (I’d probably sell prior to that, but let’s say I didn’t), then I am out the $60 a year later (or however long it takes), but truth be told, the stock will end up what it is actually worth (on average). If someone overpays, they will end up losing the money that you’re saying you gained by selling at $150. The $60 is fictitious until a product/service is actually performed and thus why I think GDP or some other measure would have been much better to cite in this case. I feel the situation is analagous to the federal debt. To overpay for a stock is to borrow money from the future (i.e. the money you gained today will be someone’s loss tomorrow).

]]> By: Mark http://informedspeculation.com/2006/05/25/a-different-view-of-the-administration/comment-page-1/#comment-32660 Mark Thu, 25 May 2006 18:31:33 +0000 http://decision08.net/2006/05/25/a-different-view-of-the-administration/#comment-32660 Well, not to put too fine a point on it (I guess we'll have to agree to disagree again on this topic) - if I could sell JDS Uniphase for $150, and there were buyers, then the stock was worth $150. All it takes is a buyer and a seller to establish the worth of something. Nevertheless, I think we've probably hit a wall here on convincing the other...but thanks for the clarification, I see what you were saying now... Well, not to put too fine a point on it (I guess we’ll have to agree to disagree again on this topic) – if I could sell JDS Uniphase for $150, and there were buyers, then the stock was worth $150. All it takes is a buyer and a seller to establish the worth of something.

Nevertheless, I think we’ve probably hit a wall here on convincing the other…but thanks for the clarification, I see what you were saying now…

]]> By: mikebdot http://informedspeculation.com/2006/05/25/a-different-view-of-the-administration/comment-page-1/#comment-32658 mikebdot Thu, 25 May 2006 18:15:39 +0000 http://decision08.net/2006/05/25/a-different-view-of-the-administration/#comment-32658 Mark, not the owners of the stocks, the people trading them (the brokers, etc.) They had nothing to lose by allowing their clients to pay far too much (besides reputation..insider trading). Sorry I wasn't clear. My argument is, that lost money wasn't real money to begin with anyway, it was money that was used to purchase paper money that they thought was going to increase. It was tied up regardless of how poorly the stocks ended up. It is money that could not eventually be used for other capital investment or some other such activity, but the reason it crashed was because people were paying too much to begin with. My argument is it evens out. Let's say you spent $75 on JDS Uniphase and it went up to $150, but was only ACTUALLY worth $90, that's $60 that does not physically exist, yet was counting towards a great economy. All it did was make the preceeding years look a little better because of the overvalued crap stocks and 2000-2002 a little worse when all the companies died. It evened itself out. The economy of 97, 98, 99 was a farce. Possibly even earlier. That's my general point. GDP is a much better indicator of the economy to settle this problem. Mark, not the owners of the stocks, the people trading them (the brokers, etc.) They had nothing to lose by allowing their clients to pay far too much (besides reputation..insider trading). Sorry I wasn’t clear. My argument is, that lost money wasn’t real money to begin with anyway, it was money that was used to purchase paper money that they thought was going to increase. It was tied up regardless of how poorly the stocks ended up. It is money that could not eventually be used for other capital investment or some other such activity, but the reason it crashed was because people were paying too much to begin with. My argument is it evens out.

Let’s say you spent $75 on JDS Uniphase and it went up to $150, but was only ACTUALLY worth $90, that’s $60 that does not physically exist, yet was counting towards a great economy. All it did was make the preceeding years look a little better because of the overvalued crap stocks and 2000-2002 a little worse when all the companies died. It evened itself out. The economy of 97, 98, 99 was a farce. Possibly even earlier. That’s my general point. GDP is a much better indicator of the economy to settle this problem.

]]> By: mikebdot http://informedspeculation.com/2006/05/25/a-different-view-of-the-administration/comment-page-1/#comment-32656 mikebdot Thu, 25 May 2006 18:07:26 +0000 http://decision08.net/2006/05/25/a-different-view-of-the-administration/#comment-32656 Evan, you think the people we're currently fighting in Iraq are the ones responsible for 9/11? I'm not saying I don't think it was necessary to perform some sort of action. I think Afghanistan was necessary and valuable. I think we could have taken that momentum and done quite a bit more fighting terrorism than going into Iraq and literally wasting billions of dollars and thousand of lives. Damn right I said that. Wasted. That's what I think of George Bush's little excursion. That being said, I will immediately defend myself from you saying that this does not "discredit" their lives in any way. I am discrediting the decision to go to war. The reason I am so vocal about this issue is because I value the lives of these citizens greatly. I see this all the time in righty dialogue and I don't agree that people vocal against the war or claiming this is a "quagmire" are discrediting soldiers, they are trying to prevent more of them from being killed unnecessarily. I think Jesus honestly believed he was dying for my sins, but that doesn't mean I agree that is the case. The soldier's obviously believe they are helping the country and for that I commend them, but I don't agree that is the case. I hope I'm wrong. I honestly do. There is plenty that can be done to secure the borders, working with other countries in a direct manner to prevent further occurrences, being generally vigilant, etc. Do you disagree that our resources could have been deployed in a more efficient manner? Do you really think there would have been another 9/11 (2500+ deaths) had we not gone into Iraq in the past 3 years? That event took us completely by surprise (the general public anyway) and now we continue to remain on guard. As for the economy business, yes, I agree, there are many on the left guilty of the very activity you describe. They say "oh, Bush isn't doing anything" and then claim that the "Clinton economy" was the greatest thing since sliced bread. It's absurd. But, anytime someone mentions a great statistic I can't help but think "this is not any better than Clinton's economy and thus the tax cuts have not proven anything to me yet, especially since we're running enormous deficits right now". I would be perfectly comfortable saying the Bush economy is great had he cut programs to pay for the tax cuts but he did not (or rather, congress did not) and even though we're spending $200B on the war, he made the tax cuts a high priority (one of his only priorities in fact). Evan, you think the people we’re currently fighting in Iraq are the ones responsible for 9/11?

I’m not saying I don’t think it was necessary to perform some sort of action. I think Afghanistan was necessary and valuable. I think we could have taken that momentum and done quite a bit more fighting terrorism than going into Iraq and literally wasting billions of dollars and thousand of lives. Damn right I said that. Wasted. That’s what I think of George Bush’s little excursion.

That being said, I will immediately defend myself from you saying that this does not “discredit” their lives in any way. I am discrediting the decision to go to war. The reason I am so vocal about this issue is because I value the lives of these citizens greatly. I see this all the time in righty dialogue and I don’t agree that people vocal against the war or claiming this is a “quagmire” are discrediting soldiers, they are trying to prevent more of them from being killed unnecessarily. I think Jesus honestly believed he was dying for my sins, but that doesn’t mean I agree that is the case. The soldier’s obviously believe they are helping the country and for that I commend them, but I don’t agree that is the case. I hope I’m wrong. I honestly do.

There is plenty that can be done to secure the borders, working with other countries in a direct manner to prevent further occurrences, being generally vigilant, etc. Do you disagree that our resources could have been deployed in a more efficient manner? Do you really think there would have been another 9/11 (2500+ deaths) had we not gone into Iraq in the past 3 years? That event took us completely by surprise (the general public anyway) and now we continue to remain on guard.

As for the economy business, yes, I agree, there are many on the left guilty of the very activity you describe. They say “oh, Bush isn’t doing anything” and then claim that the “Clinton economy” was the greatest thing since sliced bread. It’s absurd. But, anytime someone mentions a great statistic I can’t help but think “this is not any better than Clinton’s economy and thus the tax cuts have not proven anything to me yet, especially since we’re running enormous deficits right now”. I would be perfectly comfortable saying the Bush economy is great had he cut programs to pay for the tax cuts but he did not (or rather, congress did not) and even though we’re spending $200B on the war, he made the tax cuts a high priority (one of his only priorities in fact).

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