flipper:


Well, not quite.The code, as it stood, could handle, as of 2000, the
"past 100 years." That was the problem, there was no 'future' to it
after 2000.

There is. Suppose a mortgage has been started in 1993 and finishes in 2013.
It will last for 13-93=-80. It's negative, so you add 100. -80+100=20
years.

Another mortgage starts in 2001 and ends in 2021. 21-1=20, it is positive
so you don't add anything, and that's your mortgage duration.

The only problem is for events lasting more than 100 years (maybe there's
still somebody around born in the XIX century), but in that case the year
would have been 4 digits long anyway.

Economics, as all "social sciences", cannot be
predictive, because it deals with a complex and cahotic universe inherently
unpredictable, like weather.

Then it's useless.

As all "social sciences" and weather forecasting 10 days from now (let
alone global warming).

It all depends on the relative size of the investment and of the company.
And, see Motorola with Iridium, sometimes government steps in.

The point is "it depends." I.E. the generalization is not a
generalization.

I did not mean to generalize, but to show how a sizeable quantity of
companies goes belly up. Not all of the companies that invested, neither
none of them.

The "avalance effect" triggered by the worst companies going belly up and
the consequent need for the banks to recapitalize by asking immediately the
money back from companies that could have done it given some more time does
the rest.

The various industries tend to synchronize pecause the producers are also
consumers, so if widget A sells a lot his producers earn a lot and spend
the earnings buying also widget B.

There is interaction, yes, but the market tends to be anti-synchronous
as capital moves from the lesser to more profitable sectors.

That's exactly how it goes. But the fact that a sector is more profitable
than another means that the demand exceeds the supply. The reason the more
profitable sector requires investments is that it needs to produce more to
earn more, but this will, sooner or later, make the supply exceed the
demand, with the consequent drop in prices below what's needed to run the
factory *and* repay the capital.

But, if the lender has plenty of money that needs to give away to avoid
losing its rank,

Loosing rank? What rank is that?

It's revenues compared to the competitors'.

you can borrow more money and survive longer.

Perhaps but that isn't the purpose of the FED and that screwed up
company will still have problems because the 'cheap interest' will
still want to go to the better performing sectors.

If you are an investor you can sell the shares. But, if you are a bank, you
can't. The only wat to get part of the capital back is get all the money
you can by selling the company assets, if any.

That until the interest rates are below zero.

We've never 'paid' people to take the money.

So why did they take so much money? To invest in the NASDAQ on companies
that did not make a dime of dividends. When there is a lot of demand (money
to be invested because it did cost little and there was plenty), the price
of the good (dotcom shares) is bound to rise, even if it's crap.

The scenario doesn't make sense to me.

Ok. So which scenario makes sense to you?

Your scenario presumes everyone is in the same upside down financial
crisis but that isn't generally the case. You 'lose' some here and
'win' some there.

As I said the economy tends to synchronize. As a matter of fact, prior to
Greenspan there were economic cycles. He removed two downturns (one at the
end of the first mandate of Clinton and another one at the beginning of
GWB's first) and *therefore* now we get a "triple downturn".

And I argue it generally isn't.

So were the economic cycles came from?

But we kow that every time you try to mess with the economy, it will bite
you.

This gets to the matter of whether the underlying theory of the FED
just plain doesn't work.

Right.

On the other hand, there has to be *some* means of handling the money
supply

I'm not sure about that.
I mean that I don't have a definite position on that.

Even if I accept your assertion it's a 'side effect' then so what?
They'll die on the down cycle.

Provided you let the down cycle happen and don't avoid it by injecting tons
of cheap money, otherwise, for instance, the dotcom bubble migrates to
housing.

As I said, though, I don't fully buy the assertion because even 'easy
money' wants to invest in the better return.

When the market is awash with money the best return is already taken and
you still have a lot of cheap (or with negative real rate, factoring in
inflation) money to invest, you turn to riskier investments.

True, in strict terms. But he did it a little too well.

Isn't that the fault of whoever wrote the job description?

Maybe. But, again, even if that really was ouside the scope of his job he
has been a little too much let's say "focused".

I'm surprised (so to speak), after having seen "persona non grata", a
sanctification of one of the worse assasins of last century, Arafat.

I don't know. Haven't seen nor know anything of it.

About Oliver Stone's "documentary" about Arafat?
You don't miss anything, trust me.

Of course, there may be some merit to imagining a politician might
have 'made enemies'.

Right. But, generally, this tends to be overestimated.

What's amazing is how they could think things so diametrically
opposite to what was virtually universal US sentiment at the time.

I told you about my mather being convinced by a "philosopher" on the radio
that the left cares more about the individual then the right.

Ah, I forgot to say that no history book said how many Kulaks and
intellectuals were killed by Stalin and Mao and that the fact that Russians
had to queue for bread was just a capitalistic invention, since the quality
of life in the soviet union was better than in Europe.

Sputnik (1957) scared the living daylights out of everyone because if
they could put that thing up they could send a warhead too and
"THERE'S NO DEFENSE!"

Clearly.

Every school had a 'civil defense' siren that would blare in case of
attack (which never happened). A big ass **LOUD** rotating horn on a
tall pole, it was 'tested' every week, like clockwork, on Friday at
noon

Gosh. I did'nt know that.

and I can remember as a kid thinking, "if I were the Russians
we'd attack on Friday at noon," because everyone ignored the damn
thing on Fridays at noon.

LOL

This is from "Our man in Havana"?

Hehe. You're thinking Cuban Missile Crisis

No, I'm talking about a vacuum cleaners salesman that, for making a few
bucks, sells to the CIA the drawings of a vacuum cleaner sayin that those
are the plans for a secret soviet missile base.

The film taken from Graham Greene's novel was as good as the book.