The real culprit, the federal reserve and artificially low interest rates as we are witnessing yet again.
Charles Mitchell and the 1929 stock crash
71–80 of 93 posts
Re: Charles Mitchell and the 1929 stock crash
#72Earlier quoted context omitted.
It is hardly a "weird" definition. Economics and "the economy" as a whole fundamentally deal with scarcity. Figuring out the most appropriate use of a good or service given that its scarce and has a multitude of "other" uses is the core problem that capitalism tries to solve.
That's the definition of value storage. The economy works on greeds, realization of greeds, and creation of new greeds. Scarcity would lead to the greed of owning it.
Intro economics class our teacher posed a question "Would economics exist if everyone had a magic wand that could get them whatever they wanted?" I said "ya, cause someone would magic other peoples wands away then there would be an economy to restore peoples wands or grant wishes on behalf of people." Apparently that wasn't the answer they were looking for, but he said I might have some point. I think people just like messing with other people and that is inalienable.
Re: Charles Mitchell and the 1929 stock crash
#73Earlier quoted context omitted.
Property is intrinsically limited. Property in desirably places is especially intrinsically limited. You’re basically lucky if you own any property at all at this point. Just take a gander and how much property in Hong Kong or Amsterdam costs and you’ll start to think it is cheap in the US. It’s only going to get worse. Do you think that people are going to desire living in Santa Monica or Queen Anne less over the ne…
> Do you think that people are going to desire living in Santa Monica or Queen Anne less over the next few hundred years? Milwaukee and Detroit were pretty desirable not that long ago. Cuba was quite nice 80+ years ago. Hong Kong was desirable globally just 10 years ago. What is “desirable” changes from many other factors so property investments absolutely aren’t a given. Land in the middle of nowhere barely beats in…
I doubt arable farmland has generally gone down over the long view.
Re: Charles Mitchell and the 1929 stock crash
#74The crash didn't happen because of 1 banker, but it did happen because of things he, and his contemporaries dreamed up. Basically bankers make money when money flows. It flows only when "there is something better". So to keep making money there always has to be "something better" and ultimately that becomes unsustainable. 1929 was a re-adjustment, where all the bullshit is cleaned away. It was perhaps the first time…
> At least today society is notably, collectively, smarter. There are a lot more naysayers in general, and whole there will be crashes, they tend to be more limited in scope and reach. Is that really true?
No, society is getting less smart. Average IQ is falling and has been for almost half a century, which has been obvious to anyone who has lived through it.
Re: Charles Mitchell and the 1929 stock crash
#75Earlier quoted context omitted.
If you own land you own a piece of the planet. How much is permanent ownership over a given plot of land worth? Millions? Billions? Trillions? Infinite? Why would any sane person even run a business if the government pays massive subsidies (public services) to make your land more valuable? Just buy more land.
Because land is very easily taken away, so very easy to tax
> Because land is very easily taken away
Really? Are you referring to eminent domain? Unless you are going up against a highway, landowners have a ton of protections, in the US anyway.
Re: Charles Mitchell and the 1929 stock crash
#76> "What Is the Glass-Steagall Act? The Glass-Steagall Act, passed in 1933, forced commercial banks to refrain from investment banking activities in order to protect depositors from potential losses caused by bank speculation in stocks. Glass-Steagall was largely repealed in 1999..." https://www.investopedia.com/articles/03/071603.asp As far as this headline, it's the worst kind of nonsense, comparable to "This is the…
Didn’t repealing it make the 2008 financial crisis worse?
A better explanation might be the enactment of the Commodity Futures Modernization Act of 2000 (CFMA) which prevented regulators from treating derivatives as futures under the Commodity Exchange Act or as securities under existing securities laws.
Even with that act, there is an argument that it merely codified the existing situation and the crash would have happened without the law being passed.
Re: Charles Mitchell and the 1929 stock crash
#77Earlier quoted context omitted.
> How much is permanent ownership over a given plot of land worth? > the government pays massive subsidies (public services) to make your land more valuable Most of us have to pay taxes on property we own every year, pay for many of the public services (water, sewer, trash, etc.), and the benefits returned from taxes (like roads and police) are generally not worth the amount paid in a strict sense. If you think a plo…
> Most of us have to pay taxes on property we own every year, pay for many of the public services (water, sewer, trash, etc.), and the benefits returned from taxes (like roads and police) are generally not worth the amount paid in a strict sense. If you don't think the benefits aren't worth it, why do you keep owning the property? Choosing to continue to own the property implies a revealed preference that the benefit…
I think you two are not on the same page about what the cost function is.
Re: Charles Mitchell and the 1929 stock crash
#78Earlier quoted context omitted.
Except why is no one asking the question why so few places are desirable and doing something to alleviate it.
Because housing policy is set up so that homeowners in desirable places are the ones who have control over whether more housing gets built there, and unsurprisingly they vote to enrich themselves at the cost of everyone else. The only way to fix it is to set planning rules strictly at the national level, but who's going to vote for that?
> The only way to fix it is to set planning rules strictly at the national level
You don't even need centralized planning. Just implement a proper land value tax [0] so that the desirability of a plot of land has to be commensurately paid for by the owner.
Re: Charles Mitchell and the 1929 stock crash
#79Earlier quoted context omitted.
> At least today society is notably, collectively, smarter. There are a lot more naysayers in general, and whole there will be crashes, they tend to be more limited in scope and reach. Is that really true?
No, society is getting less smart. Average IQ is falling and has been for almost half a century, which has been obvious to anyone who has lived through it.
AFAIK you have this exactly backwards https://en.wikipedia.org/wiki/Flynn_effect
Re: Charles Mitchell and the 1929 stock crash
#80The crash didn't happen because of 1 banker, but it did happen because of things he, and his contemporaries dreamed up. Basically bankers make money when money flows. It flows only when "there is something better". So to keep making money there always has to be "something better" and ultimately that becomes unsustainable. 1929 was a re-adjustment, where all the bullshit is cleaned away. It was perhaps the first time…
>At least today society is notably, collectively, smarter.
Intelligence has gone up, Wisdom has declined