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Deano (Member Profile)

Pprt (Member Profile)

Farhad2000 says...

Ratatatatatatata is great

Check out some of their mix CDs, they actually make some mainstream hip hop listenable.

Might want to look into RJD2 as well:
http://www.videosift.com/video/RJD2-1976
http://www.videosift.com/video/RJD2-Work-It-Out
http://www.videosift.com/video/RJD2-Ghostwriter

In reply to this comment by Pprt:
In reply to this comment by Farhad2000:
Wow that is a good mix. Great use of RATATATATATAT (I never know when to stop).


Thanks for turning me on to this band Farhad! The progressions are a bit repetitive, but it's very fair listening.

Kevlar (Member Profile)

schmawy (Member Profile)

jwray (Member Profile)

Farhad2000 says...

Well the gambling occurred simply because all the institutions believed they could get out or arbitrate their risks further down the line and this is the argument that Greenspan put forward that firms essentially got greedy and did not trade honorably within the market and self regulate.

Derivatives like useful in spreading risk around an economy but not when that risk is complied and passed on and on to the point that instead of spreading risk around to several players the the risk takers and issuers become intertwined. This is why regulation is needed in this market. I believe they are useful but not when their value is so overinflated to the value of the underlying assets.

In reply to this comment by jwray:
My point exactly. It's just gambling. It contributes nothing to the economy. So why should banks be allowed to do it?

In reply to this comment by Farhad2000:
There is no tangible production created. Derivatives differ but mostly its betting, you are taking a huge risk for a large pay off, based around performance factors, everything from how well company stock do or not, how currency exchanges do or even how weather will play out, which was part of Enron's strategy when it introduced weather futures.

In reply to this comment by jwray:
to put it another way... what actual, tangible production might derivatives trading promote or facilitate? Can it accomplish anything in the real world that conventional arbitrage cannot, besides sometimes creating the illusion of lower risk?

In reply to this comment by Farhad2000:
Not really since you derive the value from the original financial instrument, so if you are deriving the value off a risky mortgage payment that may or may not complete it stops being a zero sum game. Even more so when toxic debt packages are combined with other debts and financial packages.

In reply to this comment by jwray:
Isn't derivatives trading a zero-sum game?

jwray (Member Profile)

Farhad2000 says...

There is no tangible production created. Derivatives differ but mostly its betting, you are taking a huge risk for a large pay off, based around performance factors, everything from how well company stock do or not, how currency exchanges do or even how weather will play out, which was part of Enron's strategy when it introduced weather futures.

In reply to this comment by jwray:
to put it another way... what actual, tangible production might derivatives trading promote or facilitate? Can it accomplish anything in the real world that conventional arbitrage cannot, besides sometimes creating the illusion of lower risk?

In reply to this comment by Farhad2000:
Not really since you derive the value from the original financial instrument, so if you are deriving the value off a risky mortgage payment that may or may not complete it stops being a zero sum game. Even more so when toxic debt packages are combined with other debts and financial packages.

In reply to this comment by jwray:
Isn't derivatives trading a zero-sum game?

jwray (Member Profile)

Farhad2000 says...

Not really since you derive the value from the original financial instrument, so if you are deriving the value off a risky mortgage payment that may or may not complete it stops being a zero sum game. Even more so when toxic debt packages are combined with other debts and financial packages.

In reply to this comment by jwray:
Isn't derivatives trading a zero-sum game?

jwray (Member Profile)

Deano (Member Profile)

bamdrew (Member Profile)

jonny (Member Profile)

Farhad2000 says...

In reply to this comment by jonny:
It's certainly true that the U.S. economy has been shifting away from making stuff over the last 50 years, but it's still the case that most cities and towns in the U.S. are completely dependent on their local manufacturing base.

Oh yes that is true, that is a factor I forgot about, small scale suppliers providing for larger multinational firms. But I wonder how many of these jobs have started to be outsourced and will eventually be outsourced to places like China?

Do you think that eventually a manufacturing base in the US is sustainable in the long run?

But that doesn't change the fact that hundreds of thousands (millions?) of people in the U.S. are employed in the agricultural business. Again, I was just using it as an example of producing stuff. Perhaps this points out a fundamental flaw of using GDP as a measure of a country's economic strength.

I agree that yes you have a significant population in the agricultural business, I just simply disagree with subsidization of this industry by the government. I mean post 9/11 they wanted to enforce a renamed act called something like Food Security Act that would increase subsidization of the agricultural industry in certain key states. Since most of the voters are part of those, there is large political pressure to sustain them.

Really? I was under the impression it was more the other way around, i.e., the third world nations were begging the west to stop their subsidies and "level the growing field".

Yes third world nations beg but its the first world nations that have the larger political and legal expertise in WTO negotiations, its a form of bureaucracy, so you have nations that have litte understanding of the paths or argument points that need to be made. Not to mention that the first world is always more keen about its own objectives then the development of the third world to which they are more keen to send a few million dollars in USAID. Sorry I have this big thing against western nations, aid and Africa where I lived. But its a whole another topic.

That I just have to disagree with. It is only because of political realities and labor costs, not farming practices or technology (i.e., true efficiencies). There is no way that it is more efficient to grow corn in Zambia than it is in Iowa.

But do the cost benefit analysis, third world nations that are wholly dependent on agricultural industry, have larger real estate and much lower costs of production then America. Efficiencies in the US come from economies of scale and mechanization, something that is simply lacking in other nations. But you look into FDA rules, the lax rules towards food quality, the large penetration of manufactured foods, the chicken farms that stack chickens in cages one after the other. There is a seeming problem in this. Notice how its only the first world that so far has had problems with regards to food contamination problems.

The subsidization I talked about creates further ramifications further down the line, a certain supply level is reached but the subsidization increased keep going on, you have over supply, with over supply you start dumping this production into the global market. The reason that even in Kuwait we get US apples, bananas and other exotic fruit. It's hilarious.

Ultimately, that's how a company should be run, but how many companies do you know of that have that kind of long term vision. (This is really worthy of another conversation on the ethics and ultimate sustainability of commerce. Too much to handle here.)

Oh of course, you can never expect altruistic behavior from companies, but their profit motive is an easy to read incentive. But you have the IMF which already dictates nation policy to nations to allow for better free market behavior, and yes there is exploitative behavior, but there is enormous room for growth and market formation. The reason I pretty much am planning to come back to Kuwait eventually after University, its an untapped market.

I believe that with IMF, ILO and other NGOs giving good solid economic policy advice we could have FDI into developing nations without exploitative behavior taking place that is still cost efficient to foreign companies. We haven't had much of that mostly due to that fact that these NGOs sometimes expect market knowledge and legislation to magically pop out of thin air instead of being advised.

There is already trade exploitation when you can get EU and US products in the developing world, we got Kellogg and OMO and so on. The problem I see in the developing world is that its this no possible development outlook by both citizens and firms, while the reality is that there is not motivation for FDI in these nations. Africa is always seen as this war torn cess pit of corruption, but thats media for you.

It's a complicated issue, but I still believe that there is avenues for large growth, because the more nations that become developed the more benefit is there for world wide trade as a whole. When I was in Zambia it was a perverted picture, alot of companies and NGOs entered and provided highly technological solutions to very basic problems, shock growth I would say instead of embryonic growth. You don't give powered water pumps to a nation that has no electrical power grid. You don't lie down phone lines and so on. The development profile has to be totally different for example mobile market exploded in Africa because deploying mobile towers and phones is cheaper then laying land lines. I worked with a NGO called Engineers without borders that provided basic technological solutions to problems, real bronze age stuff that could be easily built and more importantly kept up by local populace. This transmission of information is very important. But am a idealist here as well. I want to see the developing world progress, especially Africa which has seen GDP decreases since colonization ended.

I have twice personally "bailed out" close friends. I doubt it was complete ignorance, but there was certainly a lack of understanding of just how much it would cost to run up large amounts of debt.

I agree. But there is alot of access to seemingly low credit and very little knowledge being passed on about controlling run away debt. Consumerism is pushed at the American public at far higher rates then anything else, sophisticated marketing and advertising is far more alluring then sensible financial behavior. It's this consumer pressure that I disagree with, the constant psychological pressure that buying something will make you feel good, the buying for the sake of buying not because its a good product that you need. But am an idealist like that.

Of course you're right that true and fair globalization (as opposed to exploitation) is the best solution. How much luck have you had convincing your neighbors? I haven't had much.

Almost none. Its a hard topic to explain because it requires a very wide macroeconomic viewpoint instead of a localized view. I mean would say 90% of the people I knew in University on one hand wanted development in the third world but were against the implications that developing the third world would mean a short term loss of certain industries locally. But its going to happen eventually. We can't all be growing bananas.

jonny (Member Profile)

Farhad2000 says...

Thanks Jonny.

Regarding the points you raise. The companies you mentioned are multinationals, focus on technology and R&D and are in markets that have high costs to entry (being it market capitalization, research or technology). For example Boeing's only other competitor is Airbus and they fulfill demand orders on a international scale. I think overall they constitute a small percentage of US economy because their operations are so spread around the world, problems in the US economy would affect these firms very little.

Agriculture is a thorny issue, since much of it both in the US and EU is sustained via massive subsidization and are controlled by large firms which enjoy massive economies of scale. Their lobbying towards the US government means they have favorable market conditions in the states, they price their products higher then the world market and the US consumer ends up paying for that.

Many of the trade disagreements brought up in the WTO by 1st world nations focus on suppressing 3rd world agricultural markets because the western world cannot compete on price and cost. It's simply cheaper to produce agriculture in the 3rd world. Globalization must be pushed to happened in this sector strongly as right now it penalizes the consumers, sustains an inefficient producer (when looked globally) and suppresses growth in the third world which wholly depends on Agriculture. This is why you have all those "Free Trade" products being sold all over the place, like coffee beans for example. I would love to see a globalization effort on behalf of large US manufacturers through foreign direct investment in third world economies.

I totally agree on personal debt problems, there is too much runaway consumerism while the middle class has been diminishing, you have too many falling down in the lower classes and not many coming into the middle class. Now republican usually state that tax cuts would elevate this but I disagree, there is very little financial advice and a general air get rich quick behavior in the US, especially leverage and bombardment of the consumer through what seem like seductive credit card offers that have huge monthly payment penalties and interest rate increases. I mean you can get a credit card from almost anyone now in the US. There is a lot of predatory lending behavior in the credit card industry and not enough good information on the topic. I think some sort regulation and institutions that normalize run away debt is in order.

But again there are so many layers and layers of complexity with any of these topics and some time your viewpoint really depends on your economic background and beliefs, I am a strong believer in world trade and globalization. I do admit there are lots of growing pains and problems in its implementation. It's easy to say the US economy needs to focus more on services and R&D but its not possible. I remember one woman I debated about agricultural markets got offended when I said that farmers in Canada are inefficient and are holding back agricultural market development in the developing world.

In reply to this comment by jonny:
In reply to this comment by Farhad2000:
the US economy has become ...

Wow, very nice. I was writing a response to Jake's comment along much the same lines, but it was not nearly as coherent or well informed. Thanks. I'm glad I abandoned my response, but I think there are a couple of things you left out.

griefer_queafer (Member Profile)

Farhad2000 says...

I only watched WH actually, I haven't seen much of his stuff mostly because am not a college student anymore and don't often have the time to sit down and watch seriously good foreign films

His stuff is brilliant but deep and requires a certain kind of solitude to enjoy.

In reply to this comment by griefer_queafer:
I see you have a nice WH post. Yeah, his stuff is fascinating. Have you seen Satantango? What an experience!!

13150 (Member Profile)

Deano (Member Profile)

Farhad2000 says...

It is a brilliant film.

I felt the same way the first time I watched it. I couldn't believe this is AFI best director film of all time. Then I watched it years later on a rainy afternoon and totally fell in love with it.

The news reel thing at the start puts alot of people off, because it takes sometime to cover his life and then start the actual film.

I can only imagine how it was watching it when it was made, news reels were always played before the film so it lent an interesting realism at that time.

In reply to this comment by Deano:
That's a great final line. I have watched the film and didn't like it but that was years ago. Time to try again.

*cinema



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