Lies, Damn Lies and LIBOR • Hacker News Board

Re: Lies, Damn Lies and LIBOR

#61

Post by scarmig » Tue, Jul 10, 2012, 11:11 PM UTC

olalonde wrote: post #26

> We need to rethink as a society what banks are for, what exchanges are for, and what clearing houses are for. If they are for the profit of the few at the expense of the many now, that is because it is the business model we have permitted. Is that really true compared to Silicon Valley? Do banks concentrate wealth a lot more than a Google or a Facebook? If not, how would you feel about some random dude commenting o…

"the ultimate purpose of a business is to make money"

No.

The proximate purpose of a business is to make money. It's a means to the end: the ultimate purpose of businesses are to improve human well being.

Re: Lies, Damn Lies and LIBOR

#62

Post by Variance » Tue, Jul 10, 2012, 11:12 PM UTC

SwellJoe wrote: post #36

olalonde wrote: post #26

> We need to rethink as a society what banks are for, what exchanges are for, and what clearing houses are for. If they are for the profit of the few at the expense of the many now, that is because it is the business model we have permitted. Is that really true compared to Silicon Valley? Do banks concentrate wealth a lot more than a Google or a Facebook? If not, how would you feel about some random dude commenting o…

Google organizes the worlds information. Facebook does something that lots of people like (I guess). There is a vast difference between those and the banks in question. Banks should be run by accountants, doing boring accounting things, and being paid a fair wage for it. It should not be a license to extract trillions of dollars from taxpayers, without their consent or knowledge. "Regardless, if banks are "concentrat…

Sounds like you're arguing for the elimination of the Federal Reserve and bailouts--which is what moving from $ to Bitcoins would essentially do. The money supply of currencies like that is fixed.

Re: Lies, Damn Lies and LIBOR

#63

Post by nradov » Tue, Jul 10, 2012, 11:13 PM UTC

olalonde wrote: post #40

SwellJoe wrote: post #36

Earlier quoted context omitted.

Google organizes the worlds information. Facebook does something that lots of people like (I guess). There is a vast difference between those and the banks in question. Banks should be run by accountants, doing boring accounting things, and being paid a fair wage for it. It should not be a license to extract trillions of dollars from taxpayers, without their consent or knowledge. "Regardless, if banks are "concentrat…

I agree with you on most points. Perhaps legalizing the creation and use of alternative currencies would be a step in the right direction.

Alternative currencies are already legal in the US. If I print up a zillion Foobucks and you agree to take them in exchange for goods and services there's nothing illegal about that. But if it's a taxable transaction then taxes will be due in real money.

Re: Lies, Damn Lies and LIBOR

#64

Post by Variance » Tue, Jul 10, 2012, 11:15 PM UTC

scarmig wrote: post #61

olalonde wrote: post #26

> We need to rethink as a society what banks are for, what exchanges are for, and what clearing houses are for. If they are for the profit of the few at the expense of the many now, that is because it is the business model we have permitted. Is that really true compared to Silicon Valley? Do banks concentrate wealth a lot more than a Google or a Facebook? If not, how would you feel about some random dude commenting o…

"the ultimate purpose of a business is to make money" No. The proximate purpose of a business is to make money. It's a means to the end: the ultimate purpose of businesses are to improve human well being.

That's your opinion of it. I can have a contrary opinion that's just as valid, and so opinions of the "ultimate" purpose of business are moot.

Legally, the ultimate purpose of a business is to make money as well as legally possible; specifically, maximize shareholders' stake NPVs.

Re: Lies, Damn Lies and LIBOR

#65

Post by nradov » Tue, Jul 10, 2012, 11:18 PM UTC

olalonde wrote: post #26

> We need to rethink as a society what banks are for, what exchanges are for, and what clearing houses are for. If they are for the profit of the few at the expense of the many now, that is because it is the business model we have permitted. Is that really true compared to Silicon Valley? Do banks concentrate wealth a lot more than a Google or a Facebook? If not, how would you feel about some random dude commenting o…

The fundamental problem is that the FIRE (finance, insurance, and real estate) sector is in aggregate acting as a rentier and — through financial engineering, regulatory manipulation, and outright fraud — sucking up more value than it creates. This is how they manage to concentrate wealth without doing much right.

Re: Lies, Damn Lies and LIBOR

#66

Post by intended » Tue, Jul 10, 2012, 11:18 PM UTC

Tycho wrote: post #43

olefoo wrote: post #31

Earlier quoted context omitted.

It's big news in the very narrow segment of American society that pays attention to hard news. In the sense that we can see the mechanisms by which the general public is being robbed. It is not news in the sense that most anyone who has been paying attention the last 3 decades knows that the both the markets and the regulation of the markets is a rigged game.

This angle seems a bit overplayed to me. The main victims of the fraud are just the counter parties on these large derivative trades that investment banks make between each other. One side was tilting the scales. At least that's what I make of it.

Considering that libor affects mortgage rates, I'd say that's a lot of people affected.

that's like saying the only people affected by oil speculation are the counter parties.

Re: Lies, Damn Lies and LIBOR

#67

Post by intended » Tue, Jul 10, 2012, 11:20 PM UTC

Tycho wrote: post #23

The trouble with articles like this is that they focus entirely on the problems created by 'relaxation' of regulation, but the benefits are not discussed. What we need to know is the net outcome (if it's knowable... But it's definitely worth discussing).

We have the net outcome in front of us? Did you mean to say something other than wealth concentration to financiers, the meltdown of the world economy, the euro crisis...

Sorry, are you saying what the net benefit would be once you remove the calamities it has caused?

Re: Lies, Damn Lies and LIBOR

#68

Post by olalonde » Tue, Jul 10, 2012, 11:37 PM UTC

nradov wrote: post #63

olalonde wrote: post #40

Earlier quoted context omitted.

I agree with you on most points. Perhaps legalizing the creation and use of alternative currencies would be a step in the right direction.

Alternative currencies are already legal in the US. If I print up a zillion Foobucks and you agree to take them in exchange for goods and services there's nothing illegal about that. But if it's a taxable transaction then taxes will be due in real money.

Alternative currencies are legal but with serious limitations that make it almost impossible to compete with the official currency (see http://www.quora.com/Is-Bitcoin-legal).

Re: Lies, Damn Lies and LIBOR

#69

Post by ktizo » Tue, Jul 10, 2012, 11:42 PM UTC

Variance wrote: post #64

scarmig wrote: post #61

Earlier quoted context omitted.

"the ultimate purpose of a business is to make money" No. The proximate purpose of a business is to make money. It's a means to the end: the ultimate purpose of businesses are to improve human well being.

That's your opinion of it. I can have a contrary opinion that's just as valid, and so opinions of the "ultimate" purpose of business are moot. Legally, the ultimate purpose of a business is to make money as well as legally possible; specifically, maximize shareholders' stake NPVs.

It might be just as valid to you, but that does not mean it is necessarily just as valid in a wider sense of the word. In this case we are asking about the ultimate purpose of business, and about whether it is to make money. One easy way to look at this logically is to ask if people would try and do business if money did not exist, is money a defining characteristic of business, or is it just an environmental aspect of the fact the business exists in a monetary society.

Re: Lies, Damn Lies and LIBOR

#70

Post by Tycho » Tue, Jul 10, 2012, 11:59 PM UTC

intended wrote: post #67

Tycho wrote: post #23

The trouble with articles like this is that they focus entirely on the problems created by 'relaxation' of regulation, but the benefits are not discussed. What we need to know is the net outcome (if it's knowable... But it's definitely worth discussing).

We have the net outcome in front of us? Did you mean to say something other than wealth concentration to financiers, the meltdown of the world economy, the euro crisis... Sorry, are you saying what the net benefit would be once you remove the calamities it has caused?

The major problem facing the world economy is excessive sovereign debt, and you cant blame the banks for that. Nor for the many other structural problems in the economy, or for shortage of natural resources, or AIDS, or wars, etc.

What people do is focus on one visible failing of the financial system, then assume everything would be rosy if not for that problem, ergo the banks are a drag on society. And then just devolve into a generic rant about the public being screwed by The Man.

The net outcome is whatever benefits the current banking system (or whatever aspect of it you're discussing) has brought minus whatever problems it caused.