Stocks soar on Larry Summers withdrawal [W:48]

[FederalRepublic]

I just read up on her. I have a serious problem with her. She has NO business experience whatsoever, nor has she worked that I can tell in ANY privately funded non educational organization. In fact I would hazard to say her background is almost exclusively educational. She's all theory no real world. I am definitely not sold on her.

But that makes her a perfect fit for Obama. Pretty much a shoe-in.

 

[imagep]

The nature of the job requires an economist (which is what she is, just like Bernanke, Greenspan, Volcker, ...) not a business executive.

The nature of the job is also being what is essentially the CEO of a bank, that the Chief Monetary Policy Maker of the Entire USA. I would think those positions would take some executive experience.

Anyhow, as long as she can lead, has a strong economic background, and understands business behavior, I'm OK with her not having any business experience.

Many executives in large corporations actually have no business experience. They don't know what it takes to meet a payroll, they don't have to deal with legal issues, they aren't involved in marketing, etc. Most business executives are only in charge of one department of a multidepartmental business.

I once had a competitor to tell one of my employees that he has going to put everone else in town out of business, because he had so much business experience. The guy had formerly been a VP of IT for a major corporation, and he thought that meant something. Thats not really business experience, and his business was out of business is just a little over a year. Seemed like he went out of the way to make bad business decisions.

 

[imagep]

When measured for inflation, food and gas aren't usually included in the basket of goods because of their high volatility. But you're right that does seem rather deceiving not to include them.

Has gas been going up? Seems to me that it is cheaper now than it was during the summer of '08 when it was hitting $4 a gallon.

 

[Artevelde]

The nature of the job is also being what is essentially the CEO of a bank, that the Chief Monetary Policy Maker of the Entire USA.

Being Chair of the FED is completely and totally different from being CEO of a bank.

 

[Moot]

It extends to other items I've had to purchase lately like tires and a battery. I have a friend who recently moved to CA. and it's more ridiculous there.

My friend has a small business in San Diego and she said the economy is horrible in California. In fact, she's talking about moving back to SLC. I'm sure glad I did. Prices are going up here too but it's still more affordable than a lot of places and the economy is more stable than most states, even during the height of the recession. For some reason, Mormons have always been good with money and planning ahead. lol

This economy is resting on a precipice. No one is fessing up to how it got that way.

So I've heard. I"m so tired of waiting for this economy to turn around, I could puke. How it got this way? I dunno, I mostly blame the big banks...and Greenspan. How about you?

 

[Moot]

Has gas been going up? Seems to me that it is cheaper now than it was during the summer of '08 when it was hitting $4 a gallon.

I think it might depend on where you live, too. Utah doesn't have a lot of oil refinerys and so the gas is higher here than a lot of places where the gas doesn't have to be imported in. And too, theres the seasonal fluxuation and the threat of war with Syria. So what is the price of gas where you live? Here it's about $3.55 a gallon...which is about what it was in 2008. It's too much.

 

[WCH]

My friend has a small business in San Diego and she said the economy is horrible in California. In fact, she's talking about moving back to SLC. I'm sure glad I did. Prices are going up here too but it's still more affordable than a lot of places and the economy is more stable than most states, even during the height of the recession. For some reason, Mormons have always been good with money and planning ahead. lol



So I've heard. I"m so tired of waiting for this economy to turn around, I could puke. How it got this way? I dunno, I mostly blame the big banks...and Greenspan. How about you?

I blame globalization to a large part....biggest redistribution of wealth ever.

 

[Moot]

I blame globalization to a large part....biggest redistribution of wealth ever.

I can't argue with that.

 

[WCH]

I can't argue with that.

Of course there's always corruption and faulty politics...policies that are extremely wrong-headed and disastrous.

Like this one for example: New study confirms economy was destroyed by Democrat policies - National Conservative | Examiner.com

 

[head of joaquin]

Summers is a brilliant economist, but by all accounts something of an arrogant jerk given to saying insensitive things for no particular reason (like his women and math comment). Nor did he seem to be in touch with average Americans. Yellen is a much better choice.

 

[head of joaquin]

Of course there's always corruption and faulty politics...policies that are extremely wrong-headed and disastrous.

Like this one for example: New study confirms economy was destroyed by Democrat policies - National Conservative | Examiner.com

BWHAHAHHAHH! Look at all those discredited rightwing memes all in one place.

Bush deregulates CDSs, gives tax cuts to billionaires to pump up a housing bubble, and pays for two vanity wars on credit, and conservative blame democrats.

BHWHAHHAHHAHAH! Like clockwork.

 

[Moot]

What she teaches is out of date and crap.

Here's why.How Modern Economics Is Built On 'The World's Dumbest Idea' - Forbes

That was a most excellent article. I was really interested in what the author had to say about Jack Welch.....

"...Back in the real world, however, even some true-believers in the shareholder value theory have seen the light, including its leading exemplar, Jack Welch. On March 12, 2009, he gave an interview with the Financial Times and said, “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… your main constituencies are your employees, your customers and your products. Managers and investors should not set share price increases as their overarching goal… Short-term profits should be allied with an increase in the long-term value of a company.”

Why haven’t these eminent professors in managerial economics cottoned on to Mr. Welch’s insight? The professors are as intelligent and educated and as analytically sharp as any human beings on the planet. And yet here they are, teaching principles that are consistently leading to business disaster for the firms pursuing them and catastrophe for society as a whole. Why?

One of the reasons is that they are teaching principles that used to work in a fashion. Much of this thinking dates from a period at least sixty years ago when the American economy enjoyed a period of global domination and oligopolies ruled the marketplace....."

I remember when Jack Welch was going around the country giving speeches to corporate management and telling them they needed to outsource to be competitive and that share holder value was the way to go. He was also preaching his "rank and yank" policy. One of his more famous quotes from that time was....

Ideally, you'd have every plant you own on a barge to move with currencies and changes in the economy.

Anyway, not long after Welch gave a speech to managament at the corporation that I worked for...they became more share holder oriented and started outsourcing and bringing in H1B visa employees and trying to bust the union. Then, just like the article said, the company failed to keep up with new technology and innovation in real time in the very industry that they were the original innovators and had made it a success. They stopped creating value and quality products and went for the short term profits and share holder value, instead. As a result, they've had to lay off 99% of the entire division and no longer produce what they used to do better than anyone else in the world. Lucky for them they still have their theme parks and a failing tv network. But they are nowhere near the innovative and booming company they were before Jack Welch spoke to their management.

Anyway, I thought it was interesting that Jack Welch is now preaching the opposite of what he preached just a few years ago.....

“On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… your main constituencies are your employees, your customers and your products. Managers and investors should not set share price increases as their overarching goal… Short-term profits should be allied with an increase in the long-term value of a company.”

So when the article asks "why"..I don't think it's so much about the priniciples they were teaching sixty or so years ago....it's what the business leaders were preaching in the 1980s and 1990s and Jack Welch was at the fore front. So even though the damage has been done, it's nice to know that "even some true-believers in the shareholder value theory have seen the light".

 

[Moot]

Of course there's always corruption and faulty politics...policies that are extremely wrong-headed and disastrous.

Like this one for example: New study confirms economy was destroyed by Democrat policies - National Conservative | Examiner.com

Sorry but the article looked more like a political hit piece than an objective article about the economic recession. The NBER that wrote the "new study" are the same people that declared the recession was over in 2009. LOL I think even you would agree that it didn't end in 2009 but is still lingering on and on and on. No?


"In September 2010, after a conference call with its Business Cycle Dating Committee, the NBER declared that the Great Recession in the United States had officially ended in 2009 and lasted from December 2007 to June 2009..."

CNN Poll: Nearly three-fourths say recession not over – CNN Political Ticker - CNN.com Blogs


Another report says that Fannie Mae and Freddie Mac couldn't have caused the housing bubble because they were losing market share and because of accounting irregularities earlier in the decade they were being forced to rein in growth by their regulator. It doesn't make sense that a company thats losng market share could be the cause of a financial bubble.....

Fannie and Freddie don?t deserve blame for bubble - Washington Post

 

[Bob N]

Yeah, she's just a professor of business and economics, so what does she know about business, eh? lol :roll:

"...Yellen is Professor Emeritus at the University of California, Berkeley's Haas School of Business, where she was named Eugene E. and Catherine M. Trefethen Professor of Business and Professor of Economics. Twice she has been awarded the Haas School's outstanding teaching award...."

I like Janet. We need a good watchdog that can keep an eye on those bankers.

 

[WCH]

BWHAHAHHAHH! Look at all those discredited rightwing memes all in one place.

Bush deregulates CDSs, gives tax cuts to billionaires to pump up a housing bubble, and pays for two vanity wars on credit, and conservative blame democrats.



BHWHAHHAHHAHAH! Like clockwork.

I only gave one example, feel free to gives others. There more then enough blame to go around.

 

[WCH]

Sorry but the article looked more like a political hit piece than an objective article about the economic recession. The NBER that wrote the "new study" are the same people that declared the recession was over in 2009. LOL I think even you would agree that it didn't end in 2009 but is still lingering on and on and on. No?


"In September 2010, after a conference call with its Business Cycle Dating Committee, the NBER declared that the Great Recession in the United States had officially ended in 2009 and lasted from December 2007 to June 2009..."

CNN Poll: Nearly three-fourths say recession not over – CNN Political Ticker - CNN.com Blogs


Another report says that Fannie Mae and Freddie Mac couldn't have caused the housing bubble because they were losing market share and because of accounting irregularities earlier in the decade they were being forced to rein in growth by their regulator. It doesn't make sense that a company thats losng market share could be the cause of a financial bubble.....

Fannie and Freddie don?t deserve blame for bubble - Washington Post

That's funny cause a couple of years ago, when we refinanced our home, the mortgage was immediately
bought by Fannie. (an probably sent to the derivative market shortly afterwards)

We're talking about FedGov reports on FedGov entities. Not only aren't these reports generally accurate, they may well be out and out lies to cover past indiscretions.

 

[Moot]

That's funny cause a couple of years ago, when we refinanced our home, the mortgage was immediately
bought by Fannie. (an probably sent to the derivative market shortly afterwards)...

Fannie and Freddie don't finance mortgages directly....instead they buy loans from private banks and mortgage lenders. I seriously doubt it went to the derivitive market.

We're talking about FedGov reports on FedGov entities. Not only aren't these reports generally accurate, they may well be out and out lies to cover past indiscretions.

Hard to say.

 

[WCH]

Fannie and Freddie don't finance mortgages directly....instead they buy loans from private banks and mortgage lenders. I seriously doubt it went to the derivitive market.





Hard to say.

Did Fannie and Freddie Cause Mortgage Crisis

Derivatives Helped Cause Fannie's Downfall

As GSEs, Fannie and Freddie weren't required to offset the size of their loan portfolio with enough capital from stock sales to cover it. This was a result of both their lobbying efforts and the fact that their loans were insured, so they felt they didn't need to. Instead, they used derivatives to hedge the interest-rate risk of their portfolios. When the value of the derivatives fell, so did their ability to insure loans. (Source: NYT, Fannie, Freddie and You, July 14, 2008)
This exposure to derivatives proved their downfall, as it did for most banks. As housing prices fell, even qualified borrowers ended up owing more than the home was worth. If they needed to sell the house for any reason, there would lose less money by allowing the bank to foreclose. Borrowers in negative amortization and interest-only loans were in even worse shape. Even though subprime and Alt-A loans only made up 17% of Fannie and Freddie's portfolio, they were responsible for over half of their losses in 2007.