About mell


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256 threads
San Francisco, CA
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In United States
Registered May 09, 2012

mell's most recent comments:

  • On 21 Apr 2014 in The happiest profession is being independently wealthy, mell said:

    Rin says

    I think the idea is that no HF stays small forever but at the same time, without a legitimate transition into a bigger operation, it'll appear that everyone's bailing which then lowers the book value.

    Most hedge funds are not true hedge funds anymore in the traditional sense and are prone to blow up whenever the next crisis hits, esp. when they become big, because they become harder to manage and they start sticking with certain strategies. A true hedge fund should stay small and split if necessary and be able to always open long and short positions and trade any asset class (from futures, soybeans, currencies, to gold) at any given day with plenty of international exposure. They make less in times like the past 5 years where index funds and dumb hedge funds ramp up on a long only market, but when it turns volatile they shine and the risk is always hedged.

  • On 21 Apr 2014 in Actually Fixing Our Economy, mell said:

    Strategist says

    Restricting lending when an economy is in danger of a depression would have disastrous consequences.

    Nobody restricted lending, the market restricted itself from previously foolish (or calculated by the benefiting middle-men) lending practices. It would have put a lid on prices, rents etc. for quite a while and allowed the return of reasonable price discovery.

    Strategist says

    If they don't fully succeed in mopping it up at that time we could start seeing some serious inflation.

    Has already arrived. Just because there is no hyperinflation (which IMO is hard to encounter in a reserve currency without a brutal currency confidence crisis) doesn't mean there is no inflation. There is stagflation, wages cannot keep up with the significant inflation we have been having (which in the long term may look like deflationary pressure but in contrast to price correcting deflation stagflation is very bad), and a lot of items/services, incl. houses and rents, stocks are overpriced again. Financialization has made these good look cheaper than they are and retail is being screwed over again.

  • On 21 Apr 2014 in Actually Fixing Our Economy, mell said:

    Strategist says

    indigenous says

    Ok but would that handle the state's overspending?

    I think the problem started with the US going off of the gold standard and to a floating exchange rate. The solution seems to me to get rid of the floating exchange rate.

    Going on the gold standard is too restrictive for monetary policy.

    If they were on the gold standard they would not be able to pump the needed $4trillion into the economy to prevent a depression.

    We would be exchanging messages in a soup line.

    Absolutely not. There were plenty of people (throughout all classes) and responsible lenders who had formed capital which is necessary for a sound economy that could and would have benefited from the prices corrections. There is no need to pump anything into the economy, and there is no free lunch, those 4 trillion will have to be paid back by the future taxpayers, which makes this a criminal act of coercion. Sure its doesn't have to be the gold standard, though that would be much better than what we have now, the fiat faith standard, what you need is restricting lending to require that every dollar lent MUST be backed by one dollar of collateral. Once you abolish fractional reserve lending, there will be no runaway debt like there is now.

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