patrick.net

tatupu70 says

You need to look harder then. SS can run indefinitely with a stable birth rate. Ponzi requires ever increasing numbers of investors.

I suggest it is you who needs to look harder. Ponzi promised a positive rate of return. If he were a bank he could even pull it off in a Keynesian system. In that light, today's banking system is a Ponzi scheme.

However, Social Security doesn't promise a positive rate of return. In fact - at least at the outset - it promised a negative rate of return. Some people would end up ahead, but most people would pay in more over their lifetimes then they would get in return. For people born in 1930 the life expectancy in the U.S. was 59 for men and 63 for women. By the time you were able to retire there was a good chance you'd already been dead for quite a few years. (To be fair, if you were ~40 you'd probably live to ~70.)

And as you stated, it does require a constant influx of money. Just because you call it "birth rate" doesn't make the requirement for constant additional input in amounts greater than the expenditures anything different. Instead of Ponzi's scheme being designed for constantly increasing "investors", SS is designed for a constantly increasing population of investors. Both are unsustainable on a finite planet.

But that's really trivial compared to Medicare. Under that program, even if you're a two income couple earning $178,300/yr you end up about $140,000 ahead in benefit payouts over your lifetime.

http://money.usnews.com/money/blogs/the-best-life/2011/01/05/social-security-medicare-a-bargain-for-many

bgamall4 says

If you are only for voluntary associations and apply that to public facilities, not private clubs, you are racist.

Libertarians by definition must be racist because they believe in public exclusivity.

As I said, Libertarians are a whole bunch of people, and assert that most of them believe that a government (public facility) must not unjustly discriminate against any of its own citizens. It's well accepted that justice be blind, and justice is a government service.

However, you do suffer from some seriously flawed logic circuits. Your first statement is that all voluntary associations naturally result in racist behavior. I disagree with that, and think you show much about your true nature.

"bgamall4 says

PockyClipsNow says

He at least is saying 'let the foreclosures rip and dont delay em'.

Two problems with Romney. 1. the foreclosures could be illegal. He doesn't care. 2. he has hired the Bush economic advisors. Their economic policy was supply side easy money toxic lending and war.

Those would likely be Romney's economic policy as well.

Gary Anderson strategicdefaultbooks.com

Come on man, illegal foreclosures? Basically no one is foreclosed who is current on payments. This robo signing issue is gonna be over soon (10 years probably! ha)

Also I would like to point out that "supply side easy money toxic lending and war. " is the Obama policy and the policy of probably anyone who could possibly have any chance to win. The bankers would be ok with 12 month foreclosures - under obama its now 24 months average. Really. Thats a big deal.

PockyClipsNow says

Part of the 'hope' of Obama admin is hope they can reinflate the housing bubble.

No, it's really not. It makes a nice strawman though...

cc0 says

I suggest it is you who needs to look harder. Ponzi promised a positive rate of return. If he were a bank he could even pull it off in a Keynesian system. In that light, today's banking system is a Ponzi scheme.

What the heck are you talking about? Yes, banks offer a positive rate of return on deposits. That has nothing to do with Keynes or a Ponzi scheme.

cc0 says

And as you stated, it does require a constant influx of money. Just because you call it "birth rate" doesn't make the requirement for constant additional input in amounts greater than the expenditures anything different. Instead of Ponzi's scheme being designed for constantly increasing "investors", SS is designed for a constantly increasing population of investors. Both are unsustainable on a finite planet.

You obviously didn't understand. SS isn't designed for constantly increasing population, nor does it have to be. It is designed for a steady state of population. Unfortunately, science is allowing people to live longer which makes it tricky to balance the inflows and outflows. But it most definitely does NOT require a increasing population. That's why it is completely different than a Ponzi.

cc0 says

But that's really trivial compared to Medicare. Under that program, even if you're a two income couple earning $178,300/yr you end up about $140,000 ahead in benefit payouts over your lifetime.

And changes need to be made as lifespans and medical costs have increased out of control. A single payer system ala Canada or Europe would be the obvious solution, but people here aren't smart enough to do the obvious.

bgamall4 says

I know a lot of companies are practicing off balance sheet banking,

Again what is this fabled "off balance sheet banking" ?

bgamall4 says

I don't know if Netflix is or is not upfront. I do know that lots of people were afraid to invest in the company because it did off balance sheet accounting.

As I have pointed already.. it isnt off Balance Sheet accounting. They made a commitement to purchase some movies in the future. The same goes for their operating leases which are not capitalized.

The stock tanked because it was viewed by the market Netflix overpaid for future film rights. These purchases for future movie titles have not yet been released nor has their been any liabilties incurred on Netflix part. For all purposed it was propertly disclosed and not hidden.

bgamall4 says

Netflix is much different than the banks. Read this about Basel 2 and conduits and sivs:
http://www.crmpolicygroup.org/docs/CRMPG-III-Sec-II.pdf

So far you havent given any examples of off balance sheet banking. IFRS, isnt the savior the link indicates. Our current US Gaap is heavily based on rules and governed by PACOB/SEC. IFRS principles are very loose in applying standards and may wouldl not be regulated by the US government or agency, but by a foreign agency.

Second, if you have problems reading US Financials, IFRS isnt going to make it any easier.

Netflix's problem was the people it got involved with. They put the Starz and other things on there and got their asses burnt. Not the recorded Starz but the Live Starz. They do that if you pay attention they have cable on there. They did that in the beginning of the online. Paid way to much. For way to little and it keeps getting smaller. What really should be done more and if they want more. Hey no problem I would do that for more current stuff. WTF do I have to pay the post office? The post office is obviously doing greece no fucking good at all.

So Xfinity comes along and says greece your sucking wind now. Which probably means they have postal hoarding syndrome.

The big question is whats the difference if it's cable or online movies? Cable just might dissapear the way of broadcast if that ever occured.

Look lets just forget postal fee's. Put it online. You can send flashbangs and smoke grenades to greece. Then we can get BLOCKBUSTER online. Everyone goes ooooooh aaaaaaaaaaw. Thats what we really want. Sorry to many long term leases wait your turn. Not to mention franchise fees, lawsuits etc. Hey we could all pay at the store closest to us! Now that might work. Cause downloading movies that are ripped I don't like doing. Tell you why many aren't defragged and have junk in them and screw up your computer. Not to mention the blu ray stuff that well travels at blazing speeds of well 500k or some other megabyte. I still can't figure it out it says really fast it just dosen't seem to work that way. Someones on the backbone it sure ain't the common guy. Well get internet download manager nothing will screw your computer quicker than that.

Enough about computers. What we need are current within 3 to 4 years movies online. Not ripped. But on something like Netflix or something else similar. Guys to tell you the truth it's really stupid in most cases to wait for the post office to deliver a movie. There are some that don't have Ripoffband. However it does move fast enough to deliver a movie. You can really thank however the apple OS for that one. IE it says it goes 50 mb a second but it sure don't look that way to me.

Here's a quick snapshot of what's on the market in my area right now.

Not sure what typical HH income is around here, if I had to guess it's probably around $100k/year.

Want prices to come down? Make buyers put 20% down.

20% of $200k is $40k
20% of $300k is $60k
20% of $400k is $80k

Tell people they need to bring that much cash to the table, and prices will drop real quick.

This government supported 3.5% down policy is helping keeping prices high.

EastCoastBubbleBoy says

This government supported 3.5% down policy is helping keeping prices high.

to a great extent, yes, but since people qualify for loans based on the principal, higher down payments will over time result in higher home prices.

$300,000 at 3.5% down has a monthly payment of ~$1750. At 20% down, that monthly payment can buy a $400,000 house. In theory, home prices will just inflate the amount of the down payment.

If we were serious about lowering the cost of housing, we'd eject the parasitical specuvestors from the market. Let them put their money towards actual productive enterprise, not the naked rent-seeking of a landlord.

cc0 says

However, Social Security doesn't promise a positive rate of return.

Absolutely false. Here is an analysis of the rate of return from Social Security. You get the best return if you are married:

http://www.angrybearblog.com/2009/03/social-security-return-on-investment.html

I suspect you aren't familiar with the input and output formulas for Social Security.

tatupu70 says

You obviously didn't understand. SS isn't designed for constantly increasing population, nor does it have to be. It is designed for a steady state of population. Unfortunately, science is allowing people to live longer which makes it tricky to balance the inflows and outflows. But it most definitely does NOT require a increasing population. That's why it is completely different than a Ponzi.

Exactly.

ArtimusMaxtor says

Netflix's problem was the people it got involved with. They put the Starz and other things on there and got their asses burnt. Not the recorded Starz but the Live Starz. They do that if you pay attention they have cable on there. They did that in the beginning of the online. Paid way to much.

I think you have this exactly wrong -- it's the opposite of this. Netflix didn't pay enough for Starz, so Starz didn't make much off the deal. However, it was a good start for Netflix's streaming business, which started collecting steam and more and more people joined because Netflix started getting more and more streaming content. Then Starz and other content producers realized they weren't making enough and raised the fees for Netflix. That's why Netflix raised the fees on users. Now, some of the content producers have either pulled their content, charged more for it, or only put limited amounts up (e.g. only library content, but not current season or last season or two).

corntrollio says

cc0 says

However, Social Security doesn't promise a positive rate of return.

Absolutely false.

Well, gee. SS was sold as a form of insurance. I did not realize that the system promised that every investor would earn more than they paid in. If that's the case, then it is more like a Ponzi Scheme than I thought.

tatupu70 says

You obviously didn't understand. SS isn't designed for constantly increasing population, nor does it have to be.

Actually, I do understand. I just got carried away at the end. The first half of my statement still applies.

tatupu70 says

What the heck are you talking about? Yes, banks offer a positive rate of return on deposits. That has nothing to do with Keynes or a Ponzi scheme.

It's really quite simple. In order for everyone to make money above their deposits, more money has to constantly flow into the system. Eventually, all the world's money is "invested" and the program can no longer maintain that promise. The only system that can pull off that feat is our banking system, but only because it gets to print its own money.

cc0 says

Actually, I do understand. I just got carried away at the end. The first half of my statement still applies.

No it doesn't.

cc0 says

It's really quite simple. In order for everyone to make money above their deposits, more money has to constantly flow into the system. Eventually, all the world's money is "invested" and the program can no longer maintain that promise. The only system that can pull off that feat is our banking system, but only because it gets to print its own money.

There are so many things wrong with that statement, I don't know where to begin.

cc0 says

Well, gee. SS was sold as a form of insurance. I did not realize that the system promised that every investor would earn more than they paid in. If that's the case, then it is more like a Ponzi Scheme than I thought.

That makes no sense. When I buy an annuity, it pays more than I paid in too. Does that mean insurance is all a Ponzi?

corntrollio says

That makes no sense. When I buy an annuity, it pays more than I paid in too. Does that mean insurance is all a Ponzi?

Maybe. It's certainly a fraud. And I've said "like Ponzi", not "is Ponzi".

My finance guy somewhat recently told me about some financial product - I think it was an annuity - with some ridiculously high guaranteed return. I forget the exact details but I asked him how such a guarantee was possible and he said he had no idea, and admitted that it sounded shady.

In the U.S. you couldn't even buy annuities before 1912 and from a brief read about them they started out as government devices, backed by the power of tax. Insurance annuities have the pricing power of the premiums, but they are nonetheless voluntary.

It also looks like if you die any survivors only get either (a) the amount invested or (b) the amount invested plus interest, depending on the annuity type. Neither is guaranteeing/promising that all participants will actuarially receive more than they paid in.

Did AIG sell annuities? What would have happened to those holders had the company been allowed to go bankrupt and receive no government bailout?

cc0 says

My finance guy somewhat recently told me about some financial product - I think it was an annuity - with some ridiculously high guaranteed return. I forget the exact details but I asked him how such a guarantee was possible and he said he had no idea, and admitted that it sounded shady.

That's because you were talking to a salesman probably. If someone can't explain what a product is to you in terms where you can understand it, you probably shouldn't be buying it. It probably also has high fees.

But if you want to find out how, say, a variable universal life policy works, I did a write-up about it: http://patrick.net/?p=816374

But that doesn't mean an annuity is a Ponzi scheme or that it's fraudulent. You either don't know what "Ponzi scheme" means, don't know what "insurance" means, or something else is awry here if you're saying that. I'm also not sure if you understand how Social Security works -- you aren't saying anything substantive that's wrong with it, but rather repeating Rick Perry's talking points.

cc0 says

n the U.S. you couldn't even buy annuities before 1912

The fact that you probably Googled "annuity" before making this post (and found a savewealth.com article) says a lot...

corntrollio says

If someone can't explain what a product is to you in terms where you can understand it, you probably shouldn't be buying it. It probably also has high fees.

I certainly didn't buy it. I didn't even ask for more details. Someone tells me I can get a guaranteed 18% YoY and I say "only in Zimbabwe".

corntrollio says

But that doesn't mean an annuity is a Ponzi scheme or that it's fraudulent.

I said that insurance was a fraud.

http://dd.pangyre.org/i/insurance.html

corntrollio says

[...] Social Security works -- you aren't saying anything substantive that's wrong with it

I've also said that Social Security isn't the problem, but Medicare is. Social Security, despite being called an insurance program or an entitlement, is just a tax. Get rid of it and replace it with welfare.

corntrollio says

Googled "annuity" before making this post (and found a savewealth.com article)

I didn't research it much, but I prefer to understand the history behind something more than its immediate market impact. That article appears to have the date wrong - 1812 is correct, if this site is to be believed:

http://www.annuity-insurers.org/Resources/History/History-of-annuities.aspx

The primary benefits I've seen of annuities are their tax savings, and yes, aside from listening to Ed Slott, I've not any experience with them.

cc0 says

Social Security, despite being called an insurance program or an entitlement, is just a tax.

It is an insurance program. It is neither structured as an entitlement nor a straight tax. There are technical definitions for each of these things.

cc0 says

I said that insurance was a fraud.

That would be a minority position not supported by the law.

cc0 says

I certainly didn't buy it. I didn't even ask for more details. Someone tells me I can get a guaranteed 18% YoY and I say "only in Zimbabwe".

If someone told you 18% (I doubt they did), you should probably report them to some authority. However, insurance plans can be structured in a variety of ways. I explained variable universal life, which at first glance can look appealing to many people, but it tends to have very high fees in most forms.

corntrollio says

If someone told you 18%, you should probably report them to some authority.

Why would I do that? Maybe the number was 16%. Maybe it was 12%.

Why would it make a difference if the guarantee was 4% or 400%?

cc0 says

Why would I do that? Maybe the number was 16%. Maybe it was 12%.

Because if they are guaranteeing you 12% YOY, they are probably a crook. It's not even close to plausible.

I was listening to the radio and I noticed someone (the Feds I think) was advertising "Having trouble making your mortgage payments? Help is available! Visit http://www.makinghomeaffordable.gov

So if you check out that link they want to keep everyone in thier home at taxpayer expense.

Who should we thank more for 'making home UNaffordable'? the D or the R?

They are even spending millions in your taxes to reach out to deadbeats to HELP THEM stay in homes they cant afford via Radio Ads.

Everyone at every level of the government/democrats are trying to re inflate house prices on taxpayer dime. IM REALLY TIRED OF THIS. We know its to bailout BANKS and they stupid loan owners are on the hook for a recourse mortgage on an underwater house if they actually Refi. Then they are screwed for sure until the BK. The banks sure do own the gov