[11Series]

Originally Posted by matthewk

This is a really great description of one aspect of capital investing. My hats off.

Thanks. Now I will attempt to tie this back to Occupy Wall Street.

The thing is that every single one of the Occupy Wall Street protesters don't really need to be able to step through an example of transactions like I did in order to understand that they are among the parties that are getting screwed. They have perfectly valid reason to protest without stepping a reporter through something like this in front of a Cable News camera.

Perhaps some of the Occupy Wall Street protesters only understand the outcomes, and not the process or the details, much less the solution. That's perfectly OK too. Other Occupy Wall Street protesters know so much about narrow areas they've researched, that they could probably teach a thing or two to the folks looking down at them from their office windows. Yet they are for some reason being held to a standard that not only must they understand complex financial issues, but that they must have agreed-upon solutions before they are allowed to protest.

AND they must fit everything they know onto a cardboard sign, or that is somehow proof that they must know nothing. If I had to translate my post onto cardboard, it would probably get cut down to "End Corporate Greed" or "Stop Wall Street Fat-Cats" or something. Because it just ain't all gonna fit on a sign.

[achien]

That's exactly what the problem was/is! A financial instrument used to ensure price stability for manufacturers to accurately forecast their supply costs turned out to be a gambling tool for traders (an unintended consequence).

Originally Posted by achien

A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.[1][2]

One of the oldest derivatives is rice futures, which have been traded on the Dojima Rice Exchange since the eighteenth century.[3] Derivatives are broadly categorized by the relationship between the underlying asset and the derivative (e.g., forward, option, swap); the type of underlying asset (e.g., equity derivatives, foreign exchange derivatives, interest rate derivatives, commodity derivatives, or credit derivatives); the market in which they trade (e.g., exchange-traded or over-the-counter); and their pay-off profile.

Derivatives can be used for speculating purposes ("bets") or to hedge ("insurance"). For example, a speculator may sell deep in-the-money naked calls on a stock, expecting the stock price to plummet, but exposing himself to potentially unlimited losses. Very commonly, companies buy currency forwards in order to limit losses due to fluctuations in the exchange rate of two currencies.

In layman's terms, a derivative is really an insurance contract where the buyer purchase insurance in case something "bad" happens. The seller (a.k.a. insurance company/banks, even government, in Iceland's case) sells the insurance and "hope" something "bad" does not happen (and profit from selling the insurance).

Originally Posted by FwdFtl

Sounds like very informed gambling.

[jpsum]

[11Series]

Originally Posted by m3inwaiting

End yet you deny that fact of massive increase in investment directly attributed to the Tax Reform Act of 1986....

I do have to say you do an extremely good job of proving my points for me.

The Tax Reform Act of 1986 INCREASED the Capital Gains tax from 20% to 28% (the same tax rate as income tax on labor). And yes, we did see a massive increase in investment after we raised Capital Gains taxes to almost double what they are today. That continued through most of the 90's. Reality worked exactly opposite of the tax theory that you guys keep repeating. Investment just isn't a function of Capital Gains tax rates, no matter how many times you guys claim it is.

So if you love what Reagan did in 1986 with Capital Gains taxes, I'm all for doing it again. We should phase out the tax subsidies given to Capital Gains income until these tax handouts are gone and are back to where Reagan put them -- the same as ordinary income tax rates. Or at least back to 20% or 28% if the capital gains actually came from investment, and not from speculation. I think there is some room for compromise somewhere in there.

Heck, we don't even need to compromise for it to return to pre-Bush tax cut rates of 20%. It will happen automatically when the Bush tax cut extension expires.

Thanks again, by the way.

[BMWinNorthdakota]

Originally Posted by jpsum

WOW!!!!! What a laugh.

Originally Posted by 11Series

I do have to say you do an extremely good job of proving my points for me.

The Tax Reform Act of 1986 INCREASED the Capital Gains tax from 20% to 28% (the same tax rate as income tax on labor). And yes, we did see a massive increase in investment after we raised Capital Gains taxes to almost double what they are today. That continued through most of the 90's. Reality worked exactly opposite of the tax theory that you guys keep repeating. Investment just isn't a function of Capital Gains tax rates, no matter how many times you guys claim it is.

So if you love what Reagan did in 1986 with Capital Gains taxes, I'm all for doing it again. We should phase out the tax subsidies given to Capital Gains income until these tax handouts are gone and are back to where Reagan put them -- the same as ordinary income tax rates. Or at least back to 20% or 28% if the capital gains actually came from investment, and not from speculation. I think there is some room for compromise somewhere in there.

Heck, we don't even need to compromise for it to return to pre-Bush tax cut rates of 20%. It will happen automatically when the Bush tax cut extension expires.

Thanks again, by the way.

Excuse me if I didn't catch it/jot it down while reading through you posts these past few days... but could you please reiterate what it is that you exactly want? Higher cap gains tax, specifically taxes on the principle+profit and not just the profit alone every time a profit is exhibited? Additionally, you want general equality and less income division?

sparknotes please

[M3Bahn]

NYPD Cop Disciplined Over Occupy Wall Street Pepper Spray

An internal New York Police Department review has found a senior police officer violated NYPD guidelines when he used pepper spray on Occupy Wall Street protesters last month, ABC confirmed.
According to a person with knowledge of the investigation, Deputy Inspector Anthony Bologna faces discipline of a loss of 10 vacation days as a result of the incident on Sept. 24.
According to officials, after the demonstrators left their base in Zuccotti Park and spilled over into the streets, blocking traffic, Bologna approached a group already corralled by police and sprayed the group with pepper spray.
Clips on the Occupy Wall Street website show the incident, when a group of young women who were penned in by orange netting were approached by Bologna, who then without apparent warning, used pepper spray on them. Two of the women hit by the spray fell to the ground and one screamed.
Bologna has the option to appeal the decision.
“Deputy Inspector Bologna is disappointed at the results of the department investigation,” Roy Richter, president of the NYPD captain’s endowment association, said in a statement. “His actions prevented further injury and escalation of tumultuous conduct. To date, this conduct has not been portrayed in its true context.”

http://abcnews.go.com/blogs/headline...-pepper-spray/

[Undertow]

Originally Posted by 11Series

I do have to say you do an extremely good job of proving my points for me.

The Tax Reform Act of 1986 INCREASED the Capital Gains tax from 20% to 28% (the same tax rate as income tax on labor). And yes, we did see a massive increase in investment after we raised Capital Gains taxes to almost double what they are today. That continued through most of the 90's. Reality worked exactly opposite of the tax theory that you guys keep repeating. Investment just isn't a function of Capital Gains tax rates, no matter how many times you guys claim it is.

So if you love what Reagan did in 1986 with Capital Gains taxes, I'm all for doing it again. We should phase out the tax subsidies given to Capital Gains income until these tax handouts are gone and are back to where Reagan put them -- the same as ordinary income tax rates. Or at least back to 20% or 28% if the capital gains actually came from investment, and not from speculation. I think there is some room for compromise somewhere in there.

Heck, we don't even need to compromise for it to return to pre-Bush tax cut rates of 20%. It will happen automatically when the Bush tax cut extension expires.

Thanks again, by the way.

I jumped the gun by 5 years. Cap gains drop was 81. You are still wrong. http://www.house.gov/jec/fiscal/tx-g...in/capgain.htm

[11Series]

Originally Posted by BMWinNorthdakota

Excuse me if I didn't catch it/jot it down while reading through you posts these past few days... but could you please reiterate what it is that you exactly want? Higher cap gains tax, specifically taxes on the principle+profit and not just the profit alone every time a profit is exhibited? Additionally, you want general equality and less income division?

sparknotes please

I think you may have mistaken me for some sort of Occupy Wall Street spokesman. I'm not. And I don't know where you got most of that stuff, it doesn't resemble anything I've said.

I jumped into this thread to bash people who had made ignorant economic statements, and to make them know that other BMW owners disagree with their jaw-dropping elitism. This could have been in a thread about anything, it really didn't have much to do with Occupy Wall Street. One of those things I've been debunking is the fallacy presented by another member that cutting capital gains taxes will automatically increase investment. The current lack of money going towards investment, despite Capital Gains tax rates that haven't been this low since the Great Depression is one example that makes this clear.


I've made half-ass attempts to tie back to the topic of Occupy Wall Street, but the only point I've had in this thread related to Occupy Wall Street is to make the point that they are a legitimate political voice that cannot be blown off or dismissed off-hand.

[achien]

'Occupy' Protests Around The Globe

http://www.cnbc.com/id/44861987

[scorcherjf]

In this kind of speculative trading example I'm assuming it would be over a relatively short time horizon (i.e. less than 1 year) so their profits would be taxed at their marginal income tax rate, not the 15% rate which only applies to long-term investments (1 year or more).

I would probably classify your example as more of a price manipulation rather than speculative trading. For speculative positions there's usually an opinion on a direction rather than purely manipulating the price for profit which requires massive amounts of collusion and capital. Also this kind of behavior is more likely to get investigated by the SEC.

The VAST majority of the derivatives market are used purely for hedging positions. Yes there's a huge speculative side to it as well but if you want to strip the world of derivative contracts to prevent speculation then it would be a disservice to the majority of companies who use them for hedging purposes. I'm not saying I agree with the current system and I would argue that a failure to sufficiently regulate certain derivatives markets was what lead to the 2008 crash.

Originally Posted by 11Series

Speculators sucked lots of money out of the market and won. Then they paid just 15% capital gains taxes on their profits because of their AWESOME and SELFLESS contribution they made to the economy.....

[11Series]

Originally Posted by scorcherjf

In this kind of speculative trading example I'm assuming it would be over a relatively short time horizon (i.e. less than 1 year) so their profits would be taxed at their marginal income tax rate, not the 15% rate which only applies to long-term investments (1 year or more).

I would probably classify your example as more of a price manipulation rather than speculative trading. For speculative positions there's usually an opinion on a direction rather than purely manipulating the price for profit which requires massive amounts of collusion and capital. Also this kind of behavior is more likely to get investigated by the SEC.

The VAST majority of the derivatives market are used purely for hedging positions. Yes there's a huge speculative side to it as well but if you want to strip the world of derivative contracts to prevent speculation then it would be a disservice to the majority of companies who use them for hedging purposes. I'm not saying I agree with the current system and I would argue that a failure to sufficiently regulate certain derivatives markets was what lead to the 2008 crash.

Regulations used to exist that quite effectively reduced market speculation and manipulation down to acceptable levels. I don't think anyone has suggested throwing out the entire derivatives market and commodity market just to get rid of the bad actors. There is no reason for that.

Rational people (you seem to be one) can certainly negotiate regulations that will still allow for functioning markets, and still allow for liquidity.

Unfortunately the Congress is being blocked by irrational people who are mindlessly opposed to all regulations because of their dogmatic political beliefs that all regulations are bad.


The SEC is wholly "captured". They aren't going to act until you announce your multi-billion dollar ponzi scheme on TV (Madoff).

[Tag]

Unbelievable how the lack of regulations let the housing market run crazy and burst and that's what they are pushing for, more deregulation.

[Tag]

Originally Posted by mact3333

Although I dont trust that Federal Reserve badge carrying Herman Cain, I do like his 9/9/9 plan cause we do need to simplify the tax code and overhaul it...

[Turkeybaster115]

change #occupy to #burn down, then call me.

[M3Bahn]

A Long, Steep Drop for Americans' Standard of Living

Think life is not as good as it used to be, at least in terms of your wallet? You'd be right about that. The standard of living for Americans has fallen longer and more steeply over the past three years than at any time since the US government began recording it five decades ago.

Bottom line: The average individual now has $1,315 less in disposable income than he or she did three years ago at the onset of the Great Recession – even though the recession ended, technically speaking, in mid-2009. That means less money to spend at the spa or the movies, less for vacations, new carpeting for the house, or dinner at a restaurant.

In short, it means a less vibrant economy, with more Americans spending primarily on necessities. The diminished standard of living, moreover, is squeezing the middle class, whose restlessness and discontent are evident in grass-roots movements such as the tea party and "Occupy Wall Street" and who may take out their frustrations on incumbent politicians in next year's election.

What has led to the most dramatic drop in the US standard of living since at least 1960? One factor is stagnant incomes: Real median income is down 9.8 percent since the start of the recession through this June, according to Sentier Research in Annapolis, Md., citing census bureau data. Another is falling net worth – think about the value of your home and, if you have one, your retirement portfolio. A third is rising consumer prices, with inflation eroding people's buying power by 3.25 percent since mid-2008.

"In a dynamic economy, one would expect Americans' disposable income to be growing, but it has flattened out at a low level," says economist Bob Brusca of Fact & Opinion Economics in New York.

http://www.cnbc.com/id/44962589

[achien]

if EU decides using the taxpayers money to bail out the banks' (executive bonuses) again, this may not be too far off.

Originally Posted by Turkeybaster115

change #occupy to #burn down, then call me.

[Undertow]

Occupy Boston protesters are in a war with the homeless people in the area now. Its getting pretty interesting down here. Something very bad is going to happen soon.

[achien]

Make $343,927? YOU are the 1%

I think a lot of people have to vote again...

http://money.cnn.com/2011/10/20/news...come/index.htm

[paullyv]

Originally Posted by Spoolin335

What a fucking retarded thread, 99% of what? People losing money in the market right now?
Sure

Ha! Concur..

[lucas.kent]

Man, there is some weird stuff going on at these things. I walked by the occupy DC camp on Freedom Plaza here in DC yesterday, and there was a giant pile of used shoes. A couple of people were just rifling through them trying them on. I'm not sure what that was about.

I saw this on Drudge this morning too. Gross: Occupy Toronto "This Man Was in my Tent Sniffing my Girlfriend’s Feet”

Video: http://mrctv.org/videos/occupy-toron...-feet%E2%80%9D

[AU335i]

lol.

[BMWinNorthdakota]

Originally Posted by AU335i

lol.

This is excellent, lol.