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Random health and exercise thoughts - Page 3418

post #51256 of 57262
Quote:
Originally Posted by skeen7908 View Post

If private banks weren't afforded the ability to create money out of thin air (a privelege that should be reserved for the sovereign), we wouldn't be in the huge mess we are today (distorted malinvestment bubble) and they wouldnt have the huge profits that they do.

But I don't have a problem with other parts of the finance industry

Private banks can't create money out of thin air brah. Only the government can create/destroy money through spending/taxation.
post #51257 of 57262
Quote:
Originally Posted by Coldsnap View Post

30g of carbs, are you like 95lbs? Up that shit up to a substantial number
I was trying to keep it light while I was bulking. It probably would make sense to do a little more though. FWIW I realized I underate like 700kcal yesterday on top of my deficit. Killing a box of Nilla wafers and then heading in for legs. Feeling better already
post #51258 of 57262
Quote:
Originally Posted by KingJulien View Post

Pretty excited to try surfing in a few days. Especially since we still have huge snowbanks here.

Where are you learning to surf? It's pretty frustrating to learn at first (at least it was for me) but once you get the hang of it, tons of fun. Surf culture can be pretty terrible tho, so your experience may depend on where you learn.
post #51259 of 57262
Quote:
Originally Posted by Khayembii Communique View Post

Quote:
Originally Posted by skeen7908 View Post

If private banks weren't afforded the ability to create money out of thin air (a privelege that should be reserved for the sovereign), we wouldn't be in the huge mess we are today (distorted malinvestment bubble) and they wouldnt have the huge profits that they do.

But I don't have a problem with other parts of the finance industry

Private banks can't create money out of thin air brah. Only the government can create/destroy money through spending/taxation.

wat

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

pretty well accepted now that they do create money out of thin air

Every new loan creates new money. That money is not destroyed unless the loan is paid-off or written-off. This is why deflation is such a problem now - private debt carrying capacity is maxed out around the world. Brb ZIRP, BRB govt has to run deficits to compensate for fall in aggregate demand

I thought you were in business school
post #51260 of 57262
Thread Starter 
Quote:
Originally Posted by Coldsnap View Post

What do you dudes think about work environment? I'm interviewing at a lot of places and work environment is one of the biggest deciding factors. I don't really enjoy being crammed into a cubicle and being under bright fluorescent lights all day, some really negative health effects as a result. Some offices are really nice while other seem to be stuck in the 90s call center vibe.

Really fucking important. The requirements are higher and higher the more time you need to spend in it.
post #51261 of 57262
Quote:
Originally Posted by skeen7908 View Post

wat

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

pretty well accepted now that they do create money out of thin air

Every new loan creates new money. That money is not destroyed unless the loan is paid-off or written-off. This is why deflation is such a problem now - private debt carrying capacity is maxed out around the world. Brb ZIRP, BRB govt has to run deficits to compensate for fall in aggregate demand

I thought you were in business school

Banks can't really "create money" in the economy because the increase in bank deposits is offset by a corresponding asset - the loan. When a bank loans money, they "create money out of thin air" by increasing the depository account liability of the debtor, but they also receive an offsetting loan asset. No new net financial assets are created. The only way net financial assets are created in the private sector is by the government adding or removing money through fiscal policy.

Fitness related shit: currently skipping the gym as we speak. Drinking a beer and doing my taxes instead. I never skip upper days but leg days suck.
post #51262 of 57262
Quote:
Originally Posted by Khayembii Communique View Post

Quote:
Originally Posted by skeen7908 View Post

wat

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

pretty well accepted now that they do create money out of thin air

Every new loan creates new money. That money is not destroyed unless the loan is paid-off or written-off. This is why deflation is such a problem now - private debt carrying capacity is maxed out around the world. Brb ZIRP, BRB govt has to run deficits to compensate for fall in aggregate demand

I thought you were in business school

Banks can't really "create money" in the economy because the increase in bank deposits is offset by a corresponding asset - the loan. When a bank loans money, they "create money out of thin air" by increasing the depository account liability of the debtor, but they also receive an offsetting loan asset. No new net financial assets are created. The only way net financial assets are created in the private sector is by the government adding or removing money through fiscal policy.

Fitness related shit: currently skipping the gym as we speak. Drinking a beer and doing my taxes instead. I never skip upper days but leg days suck.

Yes there is a liability and a corresponding deposit...that's still money creation.
Then they take the interest payable as cream...all for doing nothing other than having access to the Fed's discount window

One might argue that they deserve profits because they provide a prudential regulation of who gets access to loans, and bear the risks associated with them, but we saw in 2008 that they failed at that and had to be bailed out anyway

So, yes, banking is a completely parasitic industry that provides no added value, and instead sucks wealth out of the real economy and distorts the prices of assets.
post #51263 of 57262
Quote:
Originally Posted by skeen7908 View Post

Yes there is a liability and a corresponding deposit...that's still money creation.

Not really. Depository account's aren't actually money. They're just agreements between the bank and the depositor that the depositor has a claim on the value of the deposit account in "base money" i.e. bank reserves and currency. So money in an account isn't actually money but a contractual agreement, in other words it's basically the depositor lending the bank the money at near-zero interest for the advantage of having it secured in a highly liquid asset.

When a customer writes a check on their depository account, the recipient deposits it in their depository account and the two banks clear the transaction. The clearing process requires no exchange of "base money" but rather the first bank decreases its liability to the payer while the second bank increases its liability to the payee. All that has changed is an exchange of liability, essentially of IOU.

When a bank loans money out to a customer, the process is similar but reversed (and more complicated of course). The bank deposits the loaned funds in the debtor's account; the balance sheet adjustments would be an increase in the loan asset account and a corresponding increase in the depository account liability. When the debtor writes a check to another person, the same situation as above happens.

So where did the money come from? That's the big question, right? Well, first off it isn't actually money. It's an increase in the depository account liability. In that sense, the liability did come out of "thin air" in a way, but in a rigorous sense that isn't really true because capital can't be willed into existence. The loan amount is a claim on real money, but isn't money itself.

This sounds silly because if I go to the bank and take out a $100 loan, and withdraw it as cash, it most certainly is real money in my hand. It seems like splitting hairs to define whether or not deposits are "actually" money. This however isn't true if you look at the entire economy.

If one thinks about the entire economy, it's fairly obvious that depository accounts can't be actual money ("base money"), because they are claims on the same pot of money. Bank lending expands the circulation of "base money" but does not actually "create" money. So it is leveraging the base supply but this isn't actually creating new money because, in aggregate, there is one person on each side of the loan in the economy.

As an example, let's say there's $1,000 "base money" in existence, and two banks which each have $500 cash in the vault. I open an account at JPMC and borrow $100. JPMC deposits a $100 into my account at 0% interest. Its balance sheet expands on the asset side by $100 for the loan, and $100 on the liability side for my depository account. Was money actually created? No, JPMC just owes me $100 whenever I request it. There is still only $1,000 in base money in existence. If I withdraw the $100, JPMC's cash goes down to $400, as does its corresponding depository account liability. I have $100 base money, JPMC has $400 and BOA has $500. If I use this money to pay a friend $100, he goes and deposits it in his BOA account. BOA's base money increases to $600, and its depository account for my friend increases by $100.

The situation is the same for if I just wrote a check instead of taking the cash out. I borrow $100 which is deposited into my account. JPMC's balance sheet expands by $100 because of the loan asset/deposit liability, but its base money remains the same at $500. I write a check to my friend who deposits it at BOA. BOA and JPMC clear the transaction, removing the $100 in my account and depositing it in my friend's. However no base money has been exchanged. At the end of the day the total base money is still $1,000.

Yes, at some point in this process JPMC had $1,000 in the vault and I had $100 in my account, but the $100 doesn't count towards actual money because if I withdraw those funds, it comes out of JPMC's $1,000 cash. It's a claim on a portion of JPMC's cash.

That is how the entire banking system works. The actual base money supply can't be expanded by bank lending because it is a system of claims on the same base monetary value. A depository account isn't money because it was issued by a bank. I can't take my depository account and use it to pay for my groceries without either converting it into currency or going through the bank clearing process.
Quote:
Then they take the interest payable as cream...all for doing nothing other than having access to the Fed's discount window

One might argue that they deserve profits because they provide a prudential regulation of who gets access to loans, and bear the risks associated with them, but we saw in 2008 that they failed at that and had to be bailed out anyway

So, yes, banking is a completely parasitic industry that provides no added value, and instead sucks wealth out of the real economy and distorts the prices of assets.

I don't see how your last sentence follows from anything else that you've said.
post #51264 of 57262
Ignoring the first part of your post for the moment (it will take me a while to answer), I will deal with the last part

"I don't see how your last sentence follows from anything else that you've said."

Its pretty clear isn't it? Banks take interest payments (which is actual real money, earned by the debtor for providing actual real services or goods) in excess of what they pay at "market" (which is essentially controlled by the reserve bank). This is the basis of their profits, which in my mind are completely unearned as they did nothing of any particular value; their whole existence is reliant on the privilege of loan creation and access to the fed.

I guess my point is: why do we need them as middle men at all, when a publically owned bank could provide loans to businesses and individuals, with all "profits" effectively recycled?



EDIT: as to the rest of your post. It was very long and complicated, as most explanations of the banking system necessarily are to hide the unpleasant truth of what is actually happening when loans are made.

The bankofengland link explains it better than you or I could and is well worth reading if you haven't

"Of the two types of broad money, bank deposits
make up the vast majority — 97% of the amount currently in
circulation.(6) And in the modern economy, those bank
deposits are mostly created by commercial banks
themselves.

Commercial banks create money, in the form of bank deposits,
by making new loans. When a bank makes a loan, for example
to someone taking out a mortgage to buy a house, it does not
typically do so by giving them thousands of pounds worth of
banknotes. Instead, it credits their bank account with a bank
deposit of the size of the mortgage. At that moment, new
money is created."



Person A (from bank X) borrows 1,000,000 to buy a house from person B.

Bank X does in fact create that money (broad money M3) from thin air
Person B now has 1,000,000 in their account at bank Y.
Person A has a house and a 1,000,000 debt with bank X.
Bank X has a 1 million dollar "liability" on their balance sheet.

Sure you might say that the "broad money M3" in person B's account and the liability of Bank X balance each other out overall. Except that this liability only exists on paper. Meanwhile the 1,000,000 in person B's account is getting spent and moving around in the real economy
Edited by skeen7908 - 2/25/15 at 5:09pm
post #51265 of 57262
Fitness related:

My nipples are small as fuck right now. Ive lost some mass though, as Ive only been able to train infrequently due to work commitments still pretty low BF tho so looks alright


(Hotel room and no homo please)

post #51266 of 57262
Can't be fucked to read this because it all sounds like retail,commercial or whatever that in-between thing is banking scum, but M&A, capital raising, IPOs, issues new securities and market making is the shit. DGAF about mortgages and people taking out loans to start their shoe shop.

I'm not doing any of this, just going to be generating alpha for rich as fuck investors who don't mind paying 2 and 20 making money for rich people.
post #51267 of 57262
Yeah that's what I said - not all finance industry are criminal.

They don't contribute to bettering society as a whole though unlike industrialists or scientists or whatever. But meh

Still, does anyone actually generate alpha these days since hedge funds etc actually underperform the index
post #51268 of 57262
Quote:
Originally Posted by skeen7908 View Post

Yeah that's what I said - not all finance industry are criminal.

They don't contribute to bettering society as a whole though unlike industrialists or scientists or whatever. But meh

Still, does anyone actually generate alpha these days since hedge funds etc actually underperform the index


renaissance technologies has been on like 40% returns for decades, guy who runs it invented signal processing. Entirely quant fund charging something like 4 and 46.Whilst they dont contribute in the same was as say science they do allow it to happen. Got a friend who works got a tiny boutique investment bank. Oculus rift isnt happening for shit without him. To be honest I wouldn't go into finance if not for the money, but fuck academy or being a government statistician when i can make like 1.5x what my dad raised and put 2 kids though university through on after working for the government for 30 years in my first year out of uni. I know this is beyond shallow but fuck it feels good to go out with a really good looking girl take her to a nice restaurant\ then go to a club and just throw money around. I know the moneys not there yet, but ill start and it will be.

Im so benzo tolerant now a days hundreds of mg of valium wont put me down, i dont want to take more in case i seize, but fuck going back to opiates.


edit: renaissance has averaged 35% returns after frees since 1988.
Edited by fuji - 2/25/15 at 8:11pm
post #51269 of 57262
Quote:
Originally Posted by skeen7908 View Post

Yeah that's what I said - not all finance industry are criminal.

They don't contribute to bettering society as a whole though unlike industrialists or scientists or whatever. But meh

Facilitation is incredibly important but I do agree that the remuneration in the finance industry is ridiculous when it's so much greater than the actual contributors. Highly motivated people are in every field but I do think the finance sector is attracting too many at the expense of productive industries.

But yeah, meh.
post #51270 of 57262

Looks like I'm pulling an all nighter at work tonight.

 

Will hopefully be done 'early' enough to go to the gym and shower before showing up to work.

FML.

I'm going to talk to my practice manager to see if I can get part or most of the day off to sleep and maybe come back in the evening to finish the work (or just do it during the day friday).


Edited by ridethecliche - 2/25/15 at 9:55pm
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