On 2008-10-10 11:19:22 -0700, Morgan <lianci...@gmail.com> said:

Either we're screwing up the works in capitalism with the "too big to
fail" idealogy.

Or we're heading to a "alternative capitalist" system which may or may
not lead to an economic deadlock?

I'm aware people have very strong opinions on this issue, but I assure
you I'm not here to cause a flame war, just want to know your
perspectives.

I had a vague feeling today I'm in some kind of time warp, but that
can't be. The free market will make it all work out. President Hoover
has told us we will get through it just fine. The Democrat
scare-mongers are claiming that after the years of Harding and Coolidge
it is no surprise that the economy is bad off, but those liberal types
who want to raise taxes and bring about Socialism are just sounding
off. The market will take care of everything. Stay cool and pray;
that's the solution.

Hi,

I posted before in this forum, like a million (2) years ago for some
advice, so hi to ed, flasherly, herb and the rest of you guys.

I was curious about your opinions on the way the governments of
england and america are lending support to the various financial
systems.

What I'm saying is completely my opinion, I'm not claiming any special
knowledge, just trying to get my head around what seems to be
happening right now. I'm politically neutral, I try pragmatism over
ideology.

Now, I know a bank collapse is a bad thing, shares plummet, people get
laid off in droves etc.

But surely there is a more serious problem if any government (or
company) tries to hold up the victims of the credit crunch.

Let us say the victims are rescued by the taxpayer. The government
buys the bank out. They live on, more or less as a public service,
just like the various civil services eg: welfare in some countries.

Ok, now let's speed this situation, "too big to fail" philsophy a few
years or decades.

The taxpayer's money is continually wrapped up in (progressively more)
inefficient, uncompetitive institutions. Another crisis happens, the
technology companies get shaky as per the dot com bubble + bust. The
government buys up more and more of the market. Eventually there IS no
money to support any more failing institutions in any sector.

Capitalism relies on competition, a level of freedom from monopolies
so that new ideas can emerge.

So what I'm saying is, isn't this philosophy of "too big to fail"
leading us down a potentially dangerous rabbit hole?

Unless there is a way, that really works, of getting government owed
systems to be in competition with each other, then this is a problem.
I've no experience of seeing this, I'm in Ireland, and our public
service system is a hydra, a awful bureaucracy that sucks money and
delivers just about enough results to still work.

On the other hand, the chinese are running a furiously expanding
economy, and they sure as hell aren't pure-blooded capitalists. I
don't call a party member in every company a capitalism system. It may
be qasi-capitalist system, but certainly not of the american stripe of
capitalism.

It is only me who thinks we're gotten a tad closer to the chinese
system of capitalism?

Is this system (government control over companies) going to be
inherently unstable in the long term?

Or is a governmental monopoly a good thing sometimes?

What are your opinions?

The way I see it, either one of two things is happening.

Either we're screwing up the works in capitalism with the "too big to
fail" idealogy.

Or we're heading to a "alternative capitalist" system which may or may
not lead to an economic deadlock?

I'm aware people have very strong opinions on this issue, but I assure
you I'm not here to cause a flame war, just want to know your
perspectives.

Either we're screwing up the works in capitalism with the "too big to
fail" idealogy.

Or we're heading to a "alternative capitalist" system which may or may
not lead to an economic deadlock?

I'm aware people have very strong opinions on this issue, but I assure
you I'm not here to cause a flame war, just want to know your
perspectives.

You've lost me. Are you taking the piss or are you serious? What's
your position?

On 2008-10-10 16:14:45 -0700, Morgan <lianci...@gmail.com> said:

You've lost me. Are you taking the piss or are you serious? What's
your position?

I am out of the time warp now. I have to confess to lack of knowledge
of how the Chinese system works, but the last I heard it was running
full speed ahead while the US economy is going downhill. A reasonable
person might decide it would be a good idea to take a look and see what
the Chinese might have to teach us. And also take a look at how other
nations like Canada, UK, many European nations, and all the rest
regulate credit markets and manage their economies. They might have
something to teach too.

This might be completely wrong, but it is worth considering the idea
of having a member of the American government in each American
company. It might avoid all the time-consuming regulations made for
companies and it might make the capitalist system less cannibalistic.

I guess what I'm saying is, laws and regulations are great, but they
are too slow to counteract stupid widespread practices. But if you
have a *human* representing the broader interests in society, then
those laws re regulations don't need to be explicit, they can be
implicit. Because we're making the rules up as we go along. As usual.

That might not be a bad idea. Maybe it would work, maybe not, but at
least it is the kind of out-of-the-box thinking that is needed in the
current situation. When new and unexpected things happen, new and
unexpected plans and strategies are welcome, as the USA discovered
during the great depression in the 1930s. That period brought about all
kinds of controls and regulations that were not in existence before but
nowadays are taken for granted. Something similar may happen as result
of the present crisis.

It might be instructive to have a closer look at the financial
situation in Canada. No major Canadian financial instution has failed
or is anywhere near failure despite the current world-wide troubles.
One reason no doubt is that banking regulations are tougher in Canads,
so the banks were not able to engage in the sort of risky lending done
in the USA. I can recall a couple of years back that Canadian banks
were complaining to high heaven about being hamstrung by regulations
and not able to participate in the more volatile and more profitabe
markets south of the border. But today it is becoming clear that those
tough regulations and the inability to get into subprime lending has in
fact saved them from disaster.

On 2008-10-11 12:41:28 -0700, Morgan <lianci...@gmail.com> said:

That's interesting, exactly what regulations do the Canadians use?

In Canada you need a downpayment of at least 5% to get a mortgage loan
anywhere, and the mortgage has to be renegotiated after 5 years.
Canadian banks are not caught up in the subprime crtisis, simply
because they have not been allowed to make subprime loans. Canadian
banks by and large hold their own mortgages, rather than selling them
on a secondary market. Incidentally, you may be familiar with the sad
state of the Canadian securities industry, but don't judge the
stability of Canadian banks by that mess. The difference is that banks
are federally regulated, while securities are provincially regulated.
It is as if the USA had 50 different securities and exchange
commissions, one for each state. If that were true, American investors
would probably be paying 1% to 3% yearly management fees for mutual
funds like Canadian investors in Canadian mutual funds.

That's interesting, exactly what regulations do the Canadians use?

I rang/wrote to Vanguard and Fidelity, all about whether an Irish
person can invest through them,
and the long and short of it was NO. But it took them ages to tell me
that. An expensive phone bill arrived.

And when I rang T.Rowe Price, some dude started talking to me as if I
was from the freaking CIA or something, so I hung up.
Weird experience.

It's annoying, because the Irish funds (we just call them funds, not
mutual funds) are very expensive to get into.

That 2 % - 3 % management fee you were talking about, and that was for
INDEX FUNDS!!! Those ****s

On 2008-10-11 19:41:41 -0700, Morgan <lianci...@gmail.com> said:

I rang/wrote to Vanguard and Fidelity, all about whether an Irish
person can invest through them,
and the long and short of it was NO. But it took them ages to tell me
that. An expensive phone bill arrived.

And when I rang T.Rowe Price, some dude started talking to me as if I
was from the freaking CIA or something, so I hung up.
Weird experience.

It's annoying, because the Irish funds (we just call them funds, not
mutual funds) are very expensive to get into.

That 2 % - 3 % management fee you were talking about, and that was for
INDEX FUNDS!!! Those ****s

I too have found it difficult to get information about just who can buy
US mutual funds and who cannot. I believe it is largely a matter of
business decisions on the part of the companies rather than a legal
matter. For example, some US funds that have subsidiaries in Canada
will not sell directly to Canadian investors because they would be
essentially competing with themselves. Have you looked at whether or
not T. Rowe Price and others who interest you have some arrangement
with companies in Ireland? Just a hunch. By the way, if someone has a
mailing address in the USA and sends a check in US funds from that
adldress, it is highy unlikely that further inquiries would be made as
to their citizenship or country of residence. A US social security
number might be needed in some cases. I am not sure about that.

"Morgan" <lianci...@gmail.com> wrote in message

news:b463de7c-f345-4063-a409-d7d37ad6474c@d1g2000hsg.googlegroups.com...

I rang/wrote to Vanguard and Fidelity, all about whether an Irish
person can invest through them,
and the long and short of it was NO. But it took them ages to tell me
that. An expensive phone bill arrived.

It's also not quite true.  It is true that you cannot invest in what people
normally think of as Vanguard mutual funds unless you have a USA Social
Security Number or Taxpayer ID Numbe (for a corporate account).  However,
Vanguard does have a branch that manages investments outside the USA, namely
global.vanguard.com.  

They do not appear to do retail investing, but I
imagine there are financial advisers in Europe who make their investments
available.

(btw: Vanguard told me no Irish are allowed to invest through them,
only american-irish citizens, but I know for a fact they are lying. I
know a guy who seems to have managed it. Wonder what's going on
there?)

Maybe he owns part of a US business or has (or has had) US residency.

On 2008-10-12 07:14:07 -0700, Morgan <lianci...@gmail.com> said:

btw: How much are you paying for your funds managment fee right now?

And how much are you being taxed?

Tell me, what investment choices are you eyeing up in the future
(don't tell me gold! lots of buying opportunities out there surely!)

Most of my investments are in rental property in both Canada and the
USA. Although I am retired and at an age when people used to be almost
100% in fixed-income products, I have no plans to shift to anything
else. My stock investments, except for two no-load mutual funds with
low management expenses, are entirely in dividend reinvestment plans
(DRIPs) with blue chip companies that pay good dividends and have a
history of gradualy increasing dividends. I strongly recommend DRIPs;
look into them if you have not done so already.

I file tax returns in
both Canada and the USA. Because of a tax treaty between the two
countries and tax credits, the total amount I have to pay is not a lot
different from what it would be if all my investments were in one
country or the other. Good luck in your plans! You have made a good
start in unconventional thinking. Stay flexible!  

I rang/wrote to Vanguard and Fidelity, all about whether an Irish
person can invest through them,
and the long and short of it was NO. But it took them ages to tell me
that. An expensive phone bill arrived.

(btw: Vanguard told me no Irish are allowed to invest through them,
only american-irish citizens, but I know for a fact they are lying. I
know a guy who seems to have managed it. Wonder what's going on
there?)

btw: How much are you paying for your funds managment fee right now?

And how much are you being taxed?

Tell me, what investment choices are you eyeing up in the future
(don't tell me gold! lots of buying opportunities out there surely!)

I too have found it difficult to get information about just who can buy US
mutual funds and who cannot. I believe it is largely a matter of business
decisions on the part of the companies rather than a legal matter.

However,
Vanguard does have a branch that manages investments outside the USA, namely
global.vanguard.com. They do not appear to do retail investing, but I
imagine there are financial advisers in Europe who make their investments
available.

Hi,

I posted before in this forum, like a million (2) years ago for some
advice, so hi to ed, flasherly, herb and the rest of you guys.

I was curious about your opinions on the way the governments of
england and america are lending support to the various financial
systems.

What I'm saying is completely my opinion, I'm not claiming any special
knowledge, just trying to get my head around what seems to be
happening right now. I'm politically neutral, I try pragmatism over
ideology.

Now, I know a bank collapse is a bad thing, shares plummet, people get
laid off in droves etc.

But surely there is a more serious problem if any government (or
company) tries to hold up the victims of the credit crunch.

Let us say the victims are rescued by the taxpayer. The government
buys the bank out. They live on, more or less as a public service,
just like the various civil services eg: welfare in some countries.

Ok, now let's speed this situation, "too big to fail" philsophy a few
years or decades.

The taxpayer's money is continually wrapped up in (progressively more)
inefficient, uncompetitive institutions. Another crisis happens, the
technology companies get shaky as per the dot com bubble + bust. The
government buys up more and more of the market. Eventually there IS no
money to support any more failing institutions in any sector.

Capitalism relies on competition, a level of freedom from monopolies
so that new ideas can emerge.

So what I'm saying is, isn't this philosophy of "too big to fail"
leading us down a potentially dangerous rabbit hole?

Unless there is a way, that really works, of getting government owed
systems to be in competition with each other, then this is a problem.
I've no experience of seeing this, I'm in Ireland, and our public
service system is a hydra, a awful bureaucracy that sucks money and
delivers just about enough results to still work.

On the other hand, the chinese are running a furiously expanding
economy, and they sure as hell aren't pure-blooded capitalists. I
don't call a party member in every company a capitalism system. It may
be qasi-capitalist system, but certainly not of the american stripe of
capitalism.

It is only me who thinks we're gotten a tad closer to the chinese
system of capitalism?

Is this system (government control over companies) going to be
inherently unstable in the long term?

Or is a governmental monopoly a good thing sometimes?

What are your opinions?

The way I see it, either one of two things is happening.

Either we're screwing up the works in capitalism with the "too big to
fail" idealogy.

Or we're heading to a "alternative capitalist" system which may or may
not lead to an economic deadlock?

I'm aware people have very strong opinions on this issue, but I assure
you I'm not here to cause a flame war, just want to know your
perspectives.

Morgan:

Welcome back.

I think everyone agrees that we have to do something but no one really
claims to know what to do.  They're winging it hoping something they do will
restore equilibrium to the financial markets.  There is really no need for a
global recession.  Things were going fine until the underegulation of the
securities markets caused the resulting house of cards to collapse on us.

Two ideas I like is 1) Taking an equity position in otherwise healthy banks
and 2) writing down people's mortgages in exchange for a share in the future
sales proceeds.  In both cases the taxpayers have a chance to get their
money back if not a profit and they address the problems directly.

It seems everyone trys to divide us into either socialists or laissez fair
conservatives.  The truth is that the genius of the American system is that
it borrows from both (and all) sides.  We all watched as communism collapsed
as a viable ideology now we are watching laizzez fair ideology collapse.
The answer lies in the right mix of keeping people honest, society orderly
then letting the marketplace decide.

-herb