171–180 of 214 posts
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See also: Dutch Disease http://en.wikipedia.org/wiki/Dutch_disease (Also from The Economist initially)
see also: the present Australian economy. Our future is not bright...
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Totally agree. When the finance sector grows, demands for return interest on capital investment intensifies, acting as a gravity-well for capital away from development. Firms like Goldman make every investment require higher and higher returns at a greater and greater scale. Money chasing money. Casino economy. Instead of opening a new line of business, your profits must be funneled into paying back on that loan at h…
The finance sector does more than lend/invest capital themselves. Large investment banks provide a wide range of services for companies (e.g. bond issues, IPOs, secondary offerings, working out M&A deals, brokerage services, ...). The biggest problem with the finance sector is that it is extremely opaque and almost no one outside the industry understands what financial institutions actually do. Yet, everyone seems to…
The bright graduate working at the biotech company, of course.
You know, not that biotech companies actually train or hire permanent professional employees these days (source: fiancee is a biologist).
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It is kind of surprising actually. Scientists create more wealth than managers. Creation of wealth only plays a role in salaries in the sense that you can't pay someone more than the value created overall. Supply and demand is really what drives salary.
Supply and demand sets the price of everything. You're just restating the fact that scientists don't make a lot of money. The interesting question is why there isn't more demand for scientific research when the returns are so high. Clearly it isn't that the market and society have no desire for additional scientific progress.
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see also: the present Australian economy. Our future is not bright...
Seems an odd statement. Australian economy is awesome, transitioning from resource to service long before it needs to... Which part of the future isn't bright?
Australia went through the entire commodities boom without posting a current account surplus. Australia has been a net debtor every year since 1973. Australia has no money to invest in itself because its population is too busy borrowing money from overseas to speculate in real estate such that shitty brick veneer houses built in the 1960s are worth 1 million dollars.
Our economy is so dependent on borrowing from overseas for "growth", that if we stopped borrowing and started paying back, then our economy would shrink, due to all the interest going overseas. Unlike Japan, for instance, Australian private debt is ultimately owed overseas, in another currency.
If that borrowing had been directed towards productivity rather than real estate speculation things might be better.
As it stands, the really expensive real estate is nothing more than a massive overhead for the economy. I challenge someone to argue how it aids Australia's productivity and competitiveness.
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I'm sure you can find enough anecdata of predatory lenders to get your dudgeon up, but the reality is that they were a cause of the crisis only at the far margins. Th bulk of the crisis was caused by banks and borrowers making foolish decisions in good faith. The crisis, like virtually all financial crises, was caused by leverage. Home buyers want it (they'd rather put 3% down than 20%); home lenders should be averse…
> People (and bankers) did not somehow become more greedy, more evil and more shortsighted in the lead up to the crisis. Actually, by most accounts, they did. The problem was that when 90+% of your financial colleagues are betting that the market will go a certain way, it doesn't pay to fight that. That self-reinforces and things get worse and worse. Look at the game theory: 1) I'm right about the economy going bust…
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Can't say I agree with these statements. I would wager that the scale of money a rapidly growing finance sector is using is more important than an unsubstantiated claim of industry brain-drain.
Totally agree. When the finance sector grows, demands for return interest on capital investment intensifies, acting as a gravity-well for capital away from development. Firms like Goldman make every investment require higher and higher returns at a greater and greater scale. Money chasing money. Casino economy. Instead of opening a new line of business, your profits must be funneled into paying back on that loan at h…
I can't even begin to comprehend what our economy/world would look like if interest rates and inflation weren't controlled/manipulated by state governments. Sustainable companies? Ones that don't chase every tiny increase in short-term profit/gain? I don't know.
Would we even have such a huge equity market? Most of everyone's money is in the equity market, and I have no idea why. Everyone is trying to leverage what little they have to "beat inflation" that they only thing they can do is either a risky business venture, or play the equity market.
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Sounds like the ABCT to me. http://en.wikipedia.org/wiki/Austrian_business_cycle_theory Sounds to me like printing money and pumping it into finance leads to an unsustainible economy.
Since there is an obvious political slant to the message, it should be pointed out that it is the finance industry itself that is "printing money". So take that into account while thinking through the political implications, if skylan_q's premise is actually true.
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The patent system is actually highly problematic because it a) provides no reward for research leading to negative results (which is extremely important to scientific progress) and b) provides the money after the fact rather than while the research is being conducted, requiring scientists to solicit investors up front (and possibly not be able to find any) and then gives the fruits to investors who may or may not rei…
>The patent system is actually highly problematic because it a) provides no reward for research leading to negative results (which is extremely important to scientific progress)... And how is that different from absolutely any known system for managing science? You don't get publications for failed results either. FWIW I dedicated a whole quarter of my Master's thesis to a failed approach, just because I also thought…
A negative result, which has scientific value but no patent value, would be something like, "We have conclusively shown that blood-letting by leeches is not an effective treatment for fever."
A failed result, on the other hand, would read more like "We were unable to conclusively determine one way or the other, but here's the method we used"
You could certainly publish the former (back in a time where that wasn't already accepted fact in the scientific/medical community), but it's unclear how you'd apply that to the patent (or even market) realm. You can't patent "stopping doing something".
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Totally agree. When the finance sector grows, demands for return interest on capital investment intensifies, acting as a gravity-well for capital away from development. Firms like Goldman make every investment require higher and higher returns at a greater and greater scale. Money chasing money. Casino economy. Instead of opening a new line of business, your profits must be funneled into paying back on that loan at h…
I've often held the opinion (and someone argue/correct me if I'm wrong here), that a lot of this artificial demand for growth is a problem due to inflation. I.e. Government keeps devaluing the currency and lowering natural interest rates, causing individuals (and banks) to seek riskier returns. This effect is pervasive in the economy. I can't even begin to comprehend what our economy/world would look like if interest…
In short it seems like they've created a system where the only way to truly be successful is to work in high finance, where you collect 2% of everyone's money as a fee no matter what.
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Spot on. Other responses are naive. They speak of "the banks". There are two entities here: 1. companies 2. individuals working for companies who get commission for selling loans whether they get paid or not Plus there are many many other problems with banking other than sub-prime which boil down to the above. That's why we need to start putting individuals in jail.
This is ludicrous and ill informed. To put someone in jail, typically they need to commit a crime. If someone lies about their income, and borrows money based on that information, the borrower has committed fraud, not the lender. I'll grant that it is immoral to steer someone into a loan which they probably won't be able to repay. However, unless the lender's agent materially misrepresented the loan, it is not illega…