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Old 03-12-2009, 10:42 PM   #16
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Originally Posted by LJT View Post
It's not really freedom when we seem so chained to the whims of so few, based on something as obtuse as random guesses.

Au contraire, we are chained, if anything, to the madness and popular delusion of crowds!

Extraordinary Popular Delusions and the Madness of Crowds - Wikipedia, the free encyclopedia

Markets have never been more democratic...their rationality is up for debate.
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Old 03-12-2009, 11:10 PM   #17
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It is a relatively small 'crowd' who buy and sell shares, hedge funds and the like, in comparison to the general working population. Markets are a democracy where only a small number get to vote.

Surely as what could be called a true conservative, you've got to think there has to be a better way? A more inspiring and liberty creating method of generating prosperity for all?
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Old 03-12-2009, 11:31 PM   #18
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It is a relatively small 'crowd' who buy and sell shares, hedge funds and the like, in comparison to the general working population.
Markets are a democracy where only a small number get to vote.
That is not really correct. You live in the UK? Well, in that case you yourself can set up a spreadbetting account in the morning, lodge a token hundred pounds, and bet on any market you please. Or, if you had a hundred million, you could do the same on another level. I am not at all advocating that you should do such a thing, I am simply pointing out that it is possible. Plus, anyone that has a pension fund has exposure and involvement in stock markets.


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Surely as what could be called a true conservative, you've got to think there has to be a better way? A more inspiring and liberty creating method of generating prosperity for all?
Apparently we can't talk about 'believing' in free markets () any more (I guess it's ok to talk of 'believing' in social justice, Jesus, Buddha and other such esoteric concepts ()), so I will say that I don't quite see or understand why you think there should be a better way.

You mentioned liberty: well, in my opinion, liberty and free markets are completely related. I guess I don't quite understand why there needs or has to be 'a better way'. (Note, I am not going for the weak response of 'but socialism is even worse', that would be a shoddy and morally cowardly response). In my opinion, innovation and creativity are utterly tied in with a free market system, and arguably even derive from that system.

To be semi-controversial, I would advocate that we should, if anything, make markets much freer than presently. One glaring example of restrictions on markets is the way in which restrictions on free trade and subsidies to farmers in the West impoverish the Third World and deny them access to markets for their produce. Number one cause of poverty in the world to day, in my view.

Edit: I would grant you one thing, and Irvine already hinted at it. There are dangers in putting any ideology forward as the 'One Best Way'. I agree with you on that.
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Old 03-12-2009, 11:42 PM   #19
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It is a relatively small 'crowd' who buy and sell shares, hedge funds and the like, in comparison to the general working population.
I don't think it's a small crowd, it's more that it's a small amount of money by comparison. Like financeguy said, anyone who has any sort of company-sponsored pension plan is actually part of one of the groups which manage immense stores of wealth and have the ability to affect markets in real and recognizable ways (look at the BCE case in Canada, arguably the biggest leveraged buy out in history and who was involved in it).

Hedge funds are a significant problem and there have been very many experts and academics who have been screaming about them for years with most of the market and regulators plugging their ears and screaming "la la la".
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Old 03-12-2009, 11:45 PM   #20
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Hedge funds are a significant problem and there have been very many experts and academics who have been screaming about them for years with most of the market and regulators plugging their ears and screaming "la la la".
Hedge funds are a problem for those who want to keep the bubbles going, I would argue hedge funds have made a remarkable contribution to making markets more efficient. Hedge funds are one of the purest forms of the democratization of markets that I'm arguing in favour of. The regulators and most of the market were screaming "la la la" when some of these hedge funds were pointing out that the emperor had no clothes, that some of these banks were insolvent because of their bad deals, and that property was overvalued. Hedge funds are the convenient scapegoat, IMO.
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Old 03-12-2009, 11:52 PM   #21
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Hedge funds are a problem for those who want to keep the bubbles going, I would argue hedge funds have made a remarkable contribution to making markets more efficient. Hedge funds are one of the purest forms of the democratization of markets that I'm arguing in favour of. The regulators and most of the market were screaming "la la la" when some of these hedge funds were pointing out that the emperor had no clothes, that some of these banks were insolvent because of their bad deals, and that property was overvalued. Hedge funds are the convenient scapegoat, IMO.
I disagree from a legal standpoint.

Changes in corporate law have resulted in minority activist shareholders like hedge funds having expansive powers. However there has not been any corresponding increase in fiduciary duties that are applied to officers, directors and controlling shareholders. This has created huge discrepancies and problems and should have been addressed. If we changed fiduciary duty law, you can bet that you would see incredible and immediate changes in how hedge funds operate. Currently they receive all the benefits under corporate law and bear no responsibilities.
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Old 03-12-2009, 11:56 PM   #22
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I disagree from a legal standpoint.

Changes in corporate law have resulted in minority activist shareholders like hedge funds having expansive powers. However there has not been any corresponding increase in fiduciary duties that are applied to officers, directors and controlling shareholders. This has created huge discrepancies and problems and should have been addressed. If we changed fiduciary duty law, you can bet that you would see incredible and immediate changes in how hedge funds operate. Currently they receive all the benefits under corporate law and bear no responsibilities.
I think this is a good point. I would strongly be opposed to banning of hedge funds, but there should be a level playing field.

But hedge funds never (directly) caused any bank to fail that didn't deserve to fail, IMO.

Some want to scapegoat the hedgies for causing the collapse of our global economic system which I think is a nonsensical viewpoint. I don't remember any hedge funds in the early 1930's.

It's funny to me that people blame 'the markets' for bad financial and bad regulatory decisions. I would argue, nothing has gone wrong with markets. The markets have reacted exactly as one would expect.
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Old 03-13-2009, 07:24 PM   #23
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Bernanke will be doing a little PR on 60 Minutes this Sunday. First tv interview for a Fed Chairman in over 20 years. Too bad Mike Wallace retired.
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