Posts by Squander Two

Re: crash was caused primarily by bad mortgages. @ Tom 13

> We've played around the edges trying to shore up the banking system. But the fundamental problem still hasn't been repealed: The US Congress still requires banks to make loans to people who can't afford them or face being charged with racial discrimination.

Well said, sir. You are going to get so many downvotes.

That aside, though the US was the source of the major part of the crash, I believe the British retail banks did a certain amount of bad lending too, for different reasons. The funny thing about all this is that the problems are rooted in what politicians and regulators made retail banks do, and as a result the public are demanding more legislation and regulation, and the politicians and media are calling for the "safe" retail banks to be separated from the investment banks which "caused" the crash. Funny old world.

Re: bit of insider trading would tip off the market

> Where is the incentive for *ANYONE* to "alert the public" ... You *don't* alert anyone

When you trade based on information, you place the pricing elements of that information into the market, by definition. The market may not know the rest of the information, but then it doesn't need to.

Apart from that, I don't need to defend insider trading, as I didn't say I supported it. I was just pointing out that there's a reasonable debate about its legality and morality, and that therefore saying that it may or may not be important is hardly as rabid a thing to say as whoever-it-was-up-there screeched.

Re: @Tim Worstal @ BlueGreen @Squander Two

> First quote is *They* should be given 'credit' for lying to cover up the continent sized turd *they* created?.

Yes, and tracing back up the conversation for context, the first "They" refers to the guys who fixed Libor and the second "they" refers to the people who created the banking crash, which you acknowledge weren't the same people.

Have you never worked somewhere where some people fix or alleviate the errors of others? Quite a normal line of work, in my experience. Doesn't deserve a medal, but doesn't deserve demonisation either.

> And you've avoided my questions

No, I just saw that you don't even understand what you yourself are writing and decided that the chances of you understanding what anyone else is writing are even lower, so decided not to bother. But OK, then.

> how badly does one have to fuck up before one is judged unfit for a post?

Are you suggesting that no-one in banking lost their jobs over the '08 crash? Since I personally opposed the bail-outs and have said so many times, I simply have no case to defend here: had I had my way, far more bankers would have lost their jobs, being judged unfit for their posts by the market itself, as they should be. (My preference, if anyone cares, would have been to let failing banks fail but then, if necessary, to bail out the non-failing banks affected by the knock-on effects.) For the record, banks are still restructuring now as a result of the crash, which includes job reductions, while the economy as a whole is apparently now picking up and unemployment beginning to fall. This isn't a sob story, just a counterexample to your claim that no-one has been judged unfit: entire departments have been judged unfit for purpose and are being got rid of.

> Do you detect a pattern? (viz. of large scale incompetence and/or deceit)

No, I think there was some incompetence and some deceit, with large-scale effects. Large-scale deceit sounds nice to conspiracy theorists, but the truth is more mundane: banks are comprised of humans, with all the good and bad that entails. Which, really, was all I was saying, in response to your insistence that every single employee of every single bank is directly guilty of causing the crash.

Re: @Tim Worstal @ BlueGreen

The first quote is you doing exactly what you claim in the second quote you're not doing.

Re: @Tim Worstal @ BlueGreen

> *They* should be given 'credit' for lying to cover up the continent sized turd *they* created?

> I did not suggest that the libor guys necessarily had anything to do with the mortgage guys.

Are you even reading what you're writing?

Re: Read the 1-star reviews on Amazon.com

Thanks for that. Those reviews are brilliant. Well informed stuff from knowledgeable experts. Worth reading.

Re: Feedback

> I think what he meant was that valuable economic activity takes place outwith the realm of milliseconds, not that slowness is inherently good.

OK, so we have an interesting academic point for Allan George Dyer to answer here. If doing the same thing faster than it used to be done makes it more economically valuable but doing things in milliseconds is inherently economically unvaluable, there must be some cut-off time under which economic activity ceases. What is that time, please?

This being an IT site, I shoud also ask about microchippery. The entire IT revolution is built on being able to do in tiny fractions of a second things that used to take at least seconds, mostly minutes, sometimes hours. Do computers decrease the value of economic activity because their speeds fall under the cut-off time (whatever it be)?

Re: @Tim Worstal @ BlueGreen

Poor choice of context for using the word "credit", I admit. Mea culpa.

Re: @Tim Worstal @ BlueGreen

> Right, so the banks didn't predict the collapse they in large part led us into so when it when it blew up in their faces they had to lie to avert a likely disaster?

There are two problems with this argument. The first is that you seem to be suggesting that, if someone does something wrong, they may never ever be allowed any credit for trying to alleviate the problem. I'm a grumpy judgemental unforgiving curmudgeon myself, but I still don't treat other people quite that harshly.

The more serious problem, though, is your use of the phrase "the banks" to describe one entity with one set of opinions and actions. That is simply not the case. The crash was caused primarily by bad mortgages. The guys responsible for the Libor fixing had sod all to do with that. Most investment bank employees have been spending the time since the crash working their arses off trying to fix and improve the system. Should we give "the banks" credit for alleviating their mistakes? Arguably not; it's what we expect anyone to do. But should we give credit to sections within banks for trying to fix the mistakes other sections made? Well, why the hell not?

Re: @ Steve Knox

> Ah yes, "governments", that self same group of people who both abolished slavery and sent Jews to death camps.

Oo, thanks. Wish I'd thought of that example now.

> those who wield HFT are the exact same people who wield all the other tools of stock market manipulation.

No, they're really not.

The comparison of banks to governments is a fairly reasonable one, I think. Massive sprawling organisations, containing factions with a mind of their own. They have a handful of people at the top who try to control the whole thing but have only a limited effect. Certain things change beyond recognition with a change of leadership while other parts of the culture stay the same no matter how much the leadership try to change it. Various of the different parts of what is ostensibly the same organisation end up in effective competition with each other. You get the picture.

I have plenty of time for the idea that leadership comes with responsibiliy and so the CEO of the bank or the Prime Minister should take the fall when their underlings do something bad, even if they knew nothing about it or did know about it and had tried to stop it. Fine by me, and I think the salaries reflect that risk. But to argue that two things must be morally identical because they were perpetrated by people within the same organisation is nonsense.

If you don't like the example of two different governments, fine. Plenty of totally unrelated stuff comes from the same government. How about the Affordable Care Act and the Christmas tree tax? Or the invasion of Iraq and the creation of the Ministry of Justice? Or sending Jews to death camps and building a really effective network of motorways?

Re: the same group of people @ Uffish

> which is why, for the group of people in your example, we hold elections and throw out those we really can't stand.

Yes, but I think you missed the point, so I'll backtrack.

This article is about HFT. Steve Knox criticised HFT by bringing up a load of things none of which have anything whatsoever to do with HFT. When asked what they had in common, he said they came from the same group of people. By which he can only mean bankers in general, because it's not as if all the things he mentioned come from the same departments or trading markets or anything more specific like that. So his argument is: A is bad; the people who did A and the people who did B work for the same type of organisation: therefore B is bad.

My counterargument was to point out that exactly the same reasoning can be used to conclude that (for instance) the founding of the NHS and the privatisation of the Royal Mail are morally identical. Which, whatever you think of either act, is obvious bollocks.

Re: Feedback

> Valuable economic activity takes place on slow timescales; days to build a car, months to grow a crop, decades to grow a tree.

Seriously? You're claiming that Henry Ford made building a car less economically valuable because he sped the process up? That agricultural techniques that enable us to grow crops faster decrease the economic value of growing those crops?

Re: Why do we have stock markets? @ Pen-y-gors

I like the way your response to a peer-reviewed paper and a thorough study by the EU (who, remember, are for the FTT, so hardly biased against it) is to say "really should be" and "I would think".

Incidentally, you've got the wrong answer to your original rhetorical question. "Why do we have stock markets?" is not the same question as "Why were stock markets originally invented?" It's like saying "Why do we have computers? To break Nazi codes. So all this silly word processing stuff can be stopped -- no-one needs it anyway."

@ BlueGreen

> 'naughty'? whether illegal trading is 'important'?

Well, there are some completely sane arguments that insider trading should not be illegal because (a) no-one's yet been able to properly define it and (b) it actually does some good. For instance, when a big company is crashing secretly and its senior managers are shoring up its share price by lying through their teeth while they get their money the hell out, a bit of insider trading would tip off the market and therefore the public and allow ordinary people to lose less money. Yes, it would also allow people to profit in other situations. Maybe the pros outweight the cons and maybe not. My point is that "Whether this is important is another matter" is a perfectly reasonable thing to say about insider trading.

@ Steve Knox

> all of those things were perpetrated by the same group of people who are running HFT systems.

The founding of the NHS and the privatisation of the Royal Mail were perpetrated by the same group of people too: governments. And?

Re: Coin clippers

> Forget all the other arguments, which may be true; the markets are denied to the small players and so the big banks and hedge funds achieve a de facto monopoly on trading.

I really don't see this. The only point of HFT is arbitrage. Arbitrage has always involved profits of tiny tiny subpercentages -- such that the only way to make real money out of it is to do it with staggering amounts of money. Arbitrage has never been any real use to anyone wanting to invest an amount as measly as, say, £100k. That was true in 1900 and it's true now.

Meanwhile, for more normal investments, the big banks all have customers. That's where they get their money from, in fact. They don't want to lock anyone out of the market; they want to use their size and power to make it easier for their customers to access the market. Which is hardly unique to banking: it's what wholesalers and retailers do as well.

Re: Transaction Tax?

Er, do you honestly not see that the first paragraph is indeed a complaint about the iniquities of the proposed financial transactions tax?

Re: Product != CEO @ NomNomNom

> Imagine if some CEO said it was their opinion that people of different races should not be allowed to marry. And paid towards a campaign to prevent it.

No, not quite. How about:

Imagine if some CEO had said in 1750 that it was their opinion that people of different races should not be allowed to marry. And paid towards a campaign to prevent it.

The analogy doesn't hold up all that well because human lifespans, but still. What we're talking about here is a man who held what was at the time an unremarkable and mainstream opinion held by, among others, Barack Obama, who is only rarely accused of being a hateful right-wing bigot.

How to avoid pressure to have kids.

Whenever anyone brings the subject up, the woman should immediately leave the room, looking tearful, while the man goes very stony-faced and keeps responding to people's anxious enquiries after her that "It's fine. Don't worry about it. She'll be fine. No need to apologise. Let's just talk about something else." You should not need to do this many times before people stop asking.

Timing @ Mark 85

> what if it were the other way.. that he had come out for LBGT rights ... Ten or twenty years ago, he would have been crucified for that.

Precisely. The gay marriage debate (and most other aspects of gay rights activism) are absolute miracles of marketing. If you want to sell a viewpoint, hire some gay men. To change society's attitudes so completely and successfully in such a short time is an incredible feat.

But, if you're going to change people's views that fast, you can't then fairly attack them for what their views were a few years ago. This isn't an example of a man who still believes some bigotted nonsense that most decent thinking people abandoned in the 1850s. He had a belief six years ago which was at the time completely mainstream.

> he and his company should be shunned for something he did 6 years ago when he wasn't the CEO?

The six-year timeframe is interesting. How long ago did Barack Obama oppose the legalisation of gay marriage? Was it six years or seven? Maybe even eight. I lose track. Is he going to face a negative campaign from OKCupid, or did his appallingly bigotted hateful opinion manage to fall just outside their cut-off?

Re: OkStupid.

There is nothing remotely racist about opposing gay marriage. Unless, of course, you claim that Barrack Obama was racist until a few years ago.

Re: Rehabilitation

> If a CEO declares a certain race is inferior to another race

This is not even analagous to what happened. Certainly, "Them gays aren't proper humans" is one argument against gay marriage, but it is far from the only one. Very obviously so, since Proposition 8 actually passed in California. Is anyone sane claiming that the majority of the electorate in California -- California! -- believe gay people to be sub-human?

Re: Product != CEO

> To be denied this on the say-so of others is tough, as every excluded group understands.

Yes it is, but that doesn't make it wrong. I hate to break this to you, but, unless you are advocating for the legalisation of incest, brothers and sisters who fall in love with each other are being denied the right to marry on your say-so. Or maybe you do want incest legalised, in which case I'm sure there are some other groups of people you don't think should be allowed to marry. Forty-year-olds to eight-year-olds; one man to twenty women; humans to cats, perhaps. Whatever; you get the point.

The laws and rules and norms of any society are entirely built on being allowed or not allowed to do things on the basis of other people's say-so. That's fundamentally what a society is. Some of those things are bad and some are good and some are controversial, but we can't discount any simply on the grounds that people are being disallowed from doing stuff on other people's say-so, because that's all of them.

Personally, I think gay marriage should be legalised not because we should not discriminate against gay people but because we should discriminate for them. It's an important distinction, and means that I still have an argument left when the next group start demanding "marriage equality". Those of you who have insisted on couching the entire debate purely in terms of equality and discrimination and human rights have left yourself no non-hypocritical retort to NAMBLA or the polygamists or whoever demands marriage rights next. But I can say "Gay people deserve this change in the law to be made especially for them, and you don't."

Re: Parenthood

Yes. And?

Re: No real Dipsticks here?

It's the same basic methodological flaw as almost every psychological study: We studied these students in their early twenties because they were conveniently near our psychology department buildings and willing to volunteer, and discovered this interesting result about everyone on Earth.

Parenthood

No, people become far less selfish when they have kids; they have to. They only appear to you to become more selfish because the person whose needs they always put ahead of their own isn't you.

Re: There are different definitions of homepathy

Look, homeopathy is bollocks, but so is that argument. Endocrinology can't cure any of those ailments, either. Doesn't mean it doesn't work.

You really don't need to put all this extra effort into coming up with convoluted criticisms of homeopathy when "It's just water" works so well.

Re: What do we do for those for whom it works?

There is a distressing tendency amongst rationalists to confuse modern medicine with the scientific method. Dara O'Briain's line about testing alternative medicine, finding the stuff that works, and calling it "medicine" is a great bit of stand-up comedy, but, in the interests of snappiness, misses out the real-world stages where doctors whose pet theories are challenged put their fingers in their ears, dig their heels in, and denounce anyone they outrank. I'm a migraine sufferer, and have spoken to plenty of doctors over the years who either prescribe the drug known as "eat less cheese" or simply refuse to believe the condition even exists.

To paraphrase another great man: Evidence-based medicine sounds like a superb idea. When it's available, please sign me up. Meanwhile, while doctors continue to pedal their peculiar mixture of science, guesswork, received wisdom, old wives' tales, condescension, and prejudice, I'll reserve the right to shop around a bit without being accused of being anti-science, thanks.

That being said, homeopathy is bollocks.

Value vs price.

> A loan to buy a laptop is a bad debt. A laptop depreciates in value the moment you buy it, in 12 months it is worth almost nothing.

This assumes that the laptop's only value is in its resale price. But that's not true: the value of my laptop lies in its ability to do stuff.

I used to need my own laptop for work, if I wanted to work from home (which I did). I was able to use an ancient laptop that would barely have fetched a tenner on Ebay, because all it needed to do was connect to a virtual PC on my work's servers, where all the actual CPU grunt work took place. That laptop was certainly not worthless: it allowed me to spend two years at home with my young daughter and saved me a fortune in petrol and car maintenance and insurance. Eventually, it broke down, so I immediately replaced it. As it happens, I had the cash at the time, but, had a loan been required, that would have been interest well spent.

Re: Not necessarily @Tom Welsh

> And they lie when they say "interest free". That just means they've calculated the cost of the loan, including the interest and profit on the loan and moved it to the retail price of the good.

This is a very simplistic and inaccurate view of pricing. There are lots of ways to make money out of interest-free loans, of which that is just one. The more common direct one is to insist that people set up a direct debit at the time of taking out the loan and rely on their not paying off the full amount at the end of the interest-free period. The loan is also a useful method of price segmentation, so doesn't need to make any money directly as it allows for greater sales and thereby makes money indirectly.

The last laptop I bought, I got on an interest-free loan. It was the same price with or without credit and a better price from the place I bought it than anywhere else -- which disproves your idea.

And I can't believe some eejit downvoted me for saying that money decreases in value over time. Honestly, some people.

Re: Not necessarily @Tom Welsh

> Aren't you making an assumption there?

Yes, that money decreases in value over time. Which is a correct assumption.

Re: 15 years

How the hell did it take fifteen years to settle a principle that is already so clearly set out in law? If a seller misrepresents a product, that is misselling, which is illegal, and they have to accept the product back and provide a full refund. The Consumer Credit Act says you've got 6 days to pull out of any credit agreement. And your contract as a buyer is always with the store who sell you the product.

I'm trying to think of a way to drag those three sentences out over fifteen years.

Always take an interest-free loan when offered. It's effectively a discount.

Re: Saucer

October '87, wasn't it?

Tunstall Forest in Suffolk was the same: looked like a giant's footsteps.

Re: Data

> Surely there's plenty of data out there

A neat summation of the Mediaeval attitude to the Renaissance there. Have you heard of science?

Re: @ smurfette @codejunky @Tim

> even though my property may have decreased in value, and although I have mahoosive credit card debt and bridging loans, I also have various investment portfolios that are performing well and substantial capital reserves.

But the point Tim was making in the article was clearly that you have to count all wealth when comparing wealth. So how do you think you're disagreeing with him here, exactly? You're making the same point he was: here is some more wealth you need to count.

Someone with a tenner and no debt definitely has more wealth than someone in negative equity. As long as the person in negative equity can keep paying the mortgage, we don't see the extent of their problem -- but then the same can be said of the person with no mortgage as long as they can keep paying the rent. If the debt-free rent-payer misses their rent and gets chucked out by the landlord, they end up homeless. If the mortgage-payer fails to make their payments and the bank chucks them out and sells their house, they end up both homeless and in massive debt, with no asset against that debt.

Re: Capitalist pigs

> Get together with a few like minded souls ...

Form a buying group with enough wealth to achieve your objectives.

> ... buy a bit of land ...

Use your wealth to buy capital.

> ... farm it ...

Produce.

> ...and achieve self sufficiency.

Consume.

> Make music, art and love together.

Spend your surplus on things you enjoy.

Death to Capitalism!

Re: More from ..... @ EssEll

> if I run a charity I'm damn well going to make sure I get my money from as many different sources as possible.

Then you're a fool.

Money comes with strings. Charities have taken the Government's money only to find that that Government starts to dictate policy at some point down the line. Charities are being slowly put out of business because the Government are now actively competing with them via their funding of a rival charity -- and have indeed created the poisonous concept of a rival charity in the first place. In some sectors (social work), there's so much state money sloshing around now that charities are effectively faced with a choice between becoming a branch of the state or going under.