Comments on: Winston Smith and the Bailouts in Oceania: Lessons from the Great Depression Part VII. http://www.doctorhousingbubble.com/winston-smith-and-the-bailouts-in-oceania-lessons-from-the-great-depression-part-vii/ How I Learned to Love Southern California and Forget the Housing Bubble Sat, 30 Aug 2008 05:24:26 +0000 http://wordpress.org/?v=2.2.2 By: GMan http://www.doctorhousingbubble.com/winston-smith-and-the-bailouts-in-oceania-lessons-from-the-great-depression-part-vii/#comment-14879 GMan Sun, 18 May 2008 08:37:09 +0000 http://www.doctorhousingbubble.com/winston-smith-and-the-bailouts-in-oceania-lessons-from-the-great-depression-part-vii/#comment-14879 Hoover didn't cut taxes. Where are you getting this from? According to the link below, the top marginal rate stayed level at 25% until 1932 when Hoover *INCREASED* it to 63% in order to balance the budget. This only helped to kill investment as the larger tax rate encourages saving. http://www.taxfoundation.org/publications/show/151.html Hoover didn’t cut taxes. Where are you getting this from? According to the link below, the top marginal rate stayed level at 25% until 1932 when Hoover *INCREASED* it to 63% in order to balance the budget. This only helped to kill investment as the larger tax rate encourages saving.

http://www.taxfoundation.org/publications/show/151.html

]]> By: Dr B http://www.doctorhousingbubble.com/winston-smith-and-the-bailouts-in-oceania-lessons-from-the-great-depression-part-vii/#comment-11573 Dr B Mon, 21 Apr 2008 20:54:29 +0000 http://www.doctorhousingbubble.com/winston-smith-and-the-bailouts-in-oceania-lessons-from-the-great-depression-part-vii/#comment-11573 A student in one of my finance classes asked me what I was going to do with the $600. I told him "the same thing I did with that last $300... donate it to Al Qaeda." He didn't laugh. No sense of humor, these kids... (I actually bought a really cool handgun with it. That ought to have pleased the guys in the whitehouse, no?) I had another one tell me he had about $1000 and wanted to know what would be a good investment vehicle? $1000. So I gave him the disclaimer: "I am not an attorney, I am not a CPA, I am not Kreskin, etc." and went through the usual song-and-dance about time-horizons and risk-aversion, reviewed the conceptual foundations of the CAPM model, determinants of interest rates, and market efficiency, and regaled him with stories of my own adventures as a real estate broker in SoCal. He politely listened to all of this and then got down to the nut: was I still working on any of my sports forecasting models (not really,) was I planning on publishing my methods (no, and especially not if I had something which actually worked,) and what did I think about the NBA playoffs (I am rooting against Danny Ainge's wholly undeserved charity from Kevin McHale.) Happily, I was at least able to get him momentarily interested in the idea of the vice fund, or perhaps more to the point the potential speculative reward (and dirty thrill) of putting one's money into conventionally "disreputable" ventures. You know, I have an optometrist buddy who's always asking me about getting into the strip club biz. No matter how old and/or respectable they get, it never really changes... the hot action of the waterfront condo market or a suitcase full of coke. Same thing. Chuck Berry said it best-- anything you want they got it right here in the U.S.A. A student in one of my finance classes asked me what I was going to do with the $600. I told him “the same thing I did with that last $300… donate it to Al Qaeda.” He didn’t laugh. No sense of humor, these kids… (I actually bought a really cool handgun with it. That ought to have pleased the guys in the whitehouse, no?)

I had another one tell me he had about $1000 and wanted to know what would be a good investment vehicle? $1000. So I gave him the disclaimer: “I am not an attorney, I am not a CPA, I am not Kreskin, etc.” and went through the usual song-and-dance about time-horizons and risk-aversion, reviewed the conceptual foundations of the CAPM model, determinants of interest rates, and market efficiency, and regaled him with stories of my own adventures as a real estate broker in SoCal. He politely listened to all of this and then got down to the nut: was I still working on any of my sports forecasting models (not really,) was I planning on publishing my methods (no, and especially not if I had something which actually worked,) and what did I think about the NBA playoffs (I am rooting against Danny Ainge’s wholly undeserved charity from Kevin McHale.)

Happily, I was at least able to get him momentarily interested in the idea of the vice fund, or perhaps more to the point the potential speculative reward (and dirty thrill) of putting one’s money into conventionally “disreputable” ventures. You know, I have an optometrist buddy who’s always asking me about getting into the strip club biz. No matter how old and/or respectable they get, it never really changes… the hot action of the waterfront condo market or a suitcase full of coke. Same thing. Chuck Berry said it best– anything you want they got it right here in the U.S.A.

]]> By: Steve http://www.doctorhousingbubble.com/winston-smith-and-the-bailouts-in-oceania-lessons-from-the-great-depression-part-vii/#comment-10780 Steve Sat, 12 Apr 2008 05:03:27 +0000 http://www.doctorhousingbubble.com/winston-smith-and-the-bailouts-in-oceania-lessons-from-the-great-depression-part-vii/#comment-10780 I find it interesting that in times of crisis people must do something they feel is worthwhile. The band plays while the ship sinks into the icy water... IMHO all of the bailouts are meaningless in the grand scheme of things... There simply isn't and never will be enough cash to bail out an economy on the verge of a K-Wave Winter. What does the bailout out accomplish? A few more people wake up every morning, say WTF?! and move their money to safer places... This is a good thing.. these are the people that will rebuild after the Winter is over. I find it interesting that in times of crisis people must do something they feel is worthwhile.

The band plays while the ship sinks into the icy water…

IMHO all of the bailouts are meaningless in the grand scheme of things… There simply isn’t and never will be enough cash to bail out an economy on the verge of a K-Wave Winter.

What does the bailout out accomplish? A few more people wake up every morning, say WTF?! and move their money to safer places… This is a good thing.. these are the people that will rebuild after the Winter is over.

]]> By: js http://www.doctorhousingbubble.com/winston-smith-and-the-bailouts-in-oceania-lessons-from-the-great-depression-part-vii/#comment-10664 js Fri, 11 Apr 2008 16:55:37 +0000 http://www.doctorhousingbubble.com/winston-smith-and-the-bailouts-in-oceania-lessons-from-the-great-depression-part-vii/#comment-10664 Remember if you are getting one of those $600 ‘rebate’ checks the government isn’t giving it to you someother taxpayer ( me for example) is paying for it and or the government is borrowing it from us. Well actually many people getting the $600 are taxpayers too. For instance I pay thousands upon thousands of dollars a year in federal taxes, but I'll get $600 back. So it's as much a reduction of my taxes as it is me borrowing it from anyone else. In fact if I'm borrowing it from anyone it's myself as I'm young enough to have to pay the government debt back in the future. Thus I'm investing it, and paying off a small debt with it. Since I will owe the government the same amount back with interest in the future it's the least I can do to invest in things I think will be income producing after inflation (or at least capital preserving!). I agree the stimulus was a bad idea. Remember if you are getting one of those $600 ‘rebate’ checks the government isn’t giving it to you someother taxpayer ( me for example) is paying for it and or the government is borrowing it from us.

Well actually many people getting the $600 are taxpayers too. For instance I pay thousands upon thousands of dollars a year in federal taxes, but I’ll get $600 back. So it’s as much a reduction of my taxes as it is me borrowing it from anyone else. In fact if I’m borrowing it from anyone it’s myself as I’m young enough to have to pay the government debt back in the future. Thus I’m investing it, and paying off a small debt with it. Since I will owe the government the same amount back with interest in the future it’s the least I can do to invest in things I think will be income producing after inflation (or at least capital preserving!). I agree the stimulus was a bad idea.

]]> By: Matt http://www.doctorhousingbubble.com/winston-smith-and-the-bailouts-in-oceania-lessons-from-the-great-depression-part-vii/#comment-10620 Matt Fri, 11 Apr 2008 06:24:15 +0000 http://www.doctorhousingbubble.com/winston-smith-and-the-bailouts-in-oceania-lessons-from-the-great-depression-part-vii/#comment-10620 Scott - Good point, but I think you forgot one key point. Even in the cartoons the banker takes the "gold coin" and bites into it to make sure that it is malleable, like real gold should be, and not brittle, like Pyrite is. Why did this not happen? Answer that and you have the real answer........ Matt Scott -

Good point, but I think you forgot one key point.

Even in the cartoons the banker takes the “gold coin” and bites into it to make sure that it is malleable, like real gold should be, and not brittle, like Pyrite is.

Why did this not happen?

Answer that and you have the real answer……..

Matt

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