Should I rape my own 401K?

[Seraphim]

So are my common stock holdings suppressed because of the option market? Futures?

This argument (in bold) never gets old. I think it has been repeated 439058093440 times by people who don't understand that "paper" elements exist for practically every market.

For example, the derivatives market has leveraged the value of practically everything to a point where it may be worth as much as $500 trillion. Does that mean that if we got rid of it, that everything on this planet would be worth 10-20 times more? No, obviously not.

And this makes it right?


Derivatives are just bets man. Place a bet with another corporation, and as often is the case, the bet value is worth more then the profits you'll earn from your clients, so bet against your clients and profit from it. That is EXACTLY what Goldman Sachs did (among others). The derivatives also hid debts from current and potential investors. They did NOT supress the value of their companies. THEY INFLATED THEM.

 

[Jordan]

And this makes it right?


Derivatives are just bets man. Place a bet with another corporation, and as often is the case, the bet value is worth more then the profits you'll earn from your clients, so bet against your clients and profit from it. That is EXACTLY what Goldman Sachs did (among others). The derivatives also hid debts from current and potential investors. They did supress the value of their companies. THEY INFLATED THEM.

I don't know why it isn't right for someone to make a contractual bet with someone else.

If I wanted to bet you $10,000 that gold would be worth $1500 or more by December 2010, why couldn't I? Why should that be illegal?

These MBS were not sold to individual investors, they were sold to investment banks and hedge funds that aren't exactly dumb enough to buy whatever crosses their trading desks. All parties new what was in the deal, and didn't have to buy the products being offered.

Derivatives hid debts? They suppressed the value of their companies?

I'd love to hear how this works.

 

[ILUVRP]

I will jump into this to say some derivative's are good , like-- airlines hedgeing oil--miners selling forward their metals-- when i had a farm ( 200a , 160 tillable ) i always sold the crops forward, i knew my costs, waited until the crops were going to be ok , went to the local elevator and sold 75% of what i figgered what the fields would yield in corn, soybeans, wheat, then just delivered the crops to the elevator , they were covering themselfs by selling contracts on the Chicago Board of Trade.

The big banks- headge funds like goldmansucks-jp morgan made a mess of the Derivatives mkt.

I will say i own gold/silver and some small miners. I think of PM'S as a insurance policy.

 

[Seraphim]

I don't know why it isn't right for someone to make a contractual bet with someone else.

If I wanted to bet you $10,000 that gold would be worth $1500 or more by December 2010, why couldn't I? Why should that be illegal?

These MBS were not sold to individual investors, they were sold to investment banks and hedge funds that aren't exactly dumb enough to buy whatever crosses their trading desks. All parties new what was in the deal, and didn't have to buy the products being offered.

Derivatives hid debts? They suppressed the value of their companies?

I'd love to hear how this works.

Dude the derivatives market has many aspects. Why do you think Lehman Brother's almost collpased the system? They were trading virtually valueless assets for their huge debt obligations to hide teh debts on their quarterly reports. This kept their investors from knowing what was going on and NEW investors were not scared off.

And did you seriously just defend a company making bets that go against their own investors? Are you that morally corrupt or did you just not read what I said?

Companies like Goldman Sachs were making bets with other companies that in simplified form was "I'll bet you 300B dollars our investments will drop 200B in the coming weeks". With their gigantic stake in the market, companies like that can and DO cause wild fluctuations in prices. Goldman gets 300B$ and their investors lose. NO PROBLEMS THERE?

Do you not see the conflict of interest or did you just skim over what I said and missed that tid bit?

 

[Jordan]

Dude the derivatives market has many aspects. Why do you think Lehman Brother's almost collpased the system? They were trading virtually valueless assets for their huge debt obligations to hide teh debts on their quarterly reports. This kept their investors from knowing what was going on and NEW investors were not scared off.

They almost collapsed the system because the derivatives market is a highly leveraged marketplace.

Leverage, through the theory of large numbers, allows risk management and arbitrage algorithms to turn tiny (fraction of a percentage point) profits to be large enough to attract interest. A .02% return is a waste of time, leverage it up 100 times and exit within a half year, and (according to the sharpe ratio) it is a suitable investment and an area where capital should be deployed.

And did you seriously just defend a company making bets that go against their own investors? Are you that morally corrupt or did you just not read what I said?

Would it be wrong for a bookie (that's what a market maker is, FYI) to take a bet from someone else and balance it out with another bet from another person, taking the spread as a profit?

Companies like Goldman Sachs were making bets with other companies that in simplified form was "I'll bet you 300B dollars our investments will drop 200B in the coming weeks". With their gigantic stake in the market, companies like that can and DO cause wild fluctuations in prices. Goldman gets 300B$ and their investors lose. NO PROBLEMS THERE?

No, there are no problems there.

The corporations, hedge funds, and investment banks, that bought these MBS packages were bullish on MB securities. Goldman Sachs, at the time these products were sold, was equally bullish.

It wasn't until later that Goldman switched from net long, to market neutral, then eventually net short in its positions. See my comment above. This is an industry standard, it is not inherently immoral, and it is absolutely not fraudulent. Every bet must be met with a counterparty, and that counterparty could be someone else, or if Goldman saw an opportunity for profit, itself.

Do you not see the conflict of interest or did you just skim over what I said and missed that tid bit?

Would it be a conflict of interest for me to make a bet with you, then make the opposite bet with someone else, hoping to profit regardless of the outcome? No, that is the job of a market marker, broker, and in gambling, a bookie.

 

[WaltM]

As of today, my 401k plan through my employer will allow me to withdraw (not borrow) around 60,000 of my total 401k.

I will take a bit of a hit on taxes but I really want to get the hell as much as I can out of my company's 401k plan. I would like to maybe use half to do some home improvements (I know this is not an investment) and invest the rest in overseas markets, commodities, etc...

Thoughts?

home improvements ARE investments if it's a way to avoid higher costs later in repairs, or a way to charge more on rent in the future.

 

[WaltM]

And this makes it right?


Derivatives are just bets man. Place a bet with another corporation, and as often is the case, the bet value is worth more then the profits you'll earn from your clients, so bet against your clients and profit from it. That is EXACTLY what Goldman Sachs did (among others). The derivatives also hid debts from current and potential investors. They did NOT supress the value of their companies. THEY INFLATED THEM.

who cares if it's right?

they exist, and they're enforceable.

sure, you might not be paid if the money source isn't coming, but you can't ignore that they exist and have their properties (and people still depend on them)

 

[WaltM]

And did you seriously just defend a company making bets that go against their own investors? Are you that morally corrupt or did you just not read what I said?

if they did the opposite you'd complain that they selfishly care only of themselves with no regard to other people.

 

[Seraphim]

if they did the opposite you'd complain that they selfishless care only of themselves with no regard to other people.

Lol, what?

 

[RCA]

best...thread...title...EVER

 

[WaltM]

Lol, what?

you say it's somehow wrong to bet against his own investors (or his own funds, if that), as if that's a conflict of interest, when in fact, it's called insurance and covering your bases against odds.

Now, had a company arrogantly and confidently bet only FOR their investors, would that be your ideal management strategy? Had they failed in the bet (all or nothing, in this case, getting nothing), would you not complain that they were short sighted, selfish and irresponsible?

 

[Seraphim]

you say it's somehow wrong to bet against his own investors (or his own funds, if that), as if that's a conflict of interest, when in fact, it's called insurance and covering your bases against odds.

Now, had a company arrogantly and confidently bet only FOR their investors, would that be your ideal management strategy? Had they failed in the bet (all or nothing, in this case, getting nothing), would you not complain that they were short sighted, selfish and irresponsible?

Lol no, because in the case of GS they hedged their bets against their clients, and for their own profit, and profited by HURTING their clients.

 

[WaltM]

Lol no, because in the case of GS they hedged their bets against their clients, and for their own profit, and profited by HURTING their clients.

should they hurt other people just to help their clients instead?

 

[Seraphim]

should they hurt other people just to help their clients instead?

You are serious right now? We're talking about conciously moving against your own clients who have trusted their money with your firm. They (GS) purposely dropped their own investments (ultimately losing their clients money) so that the firm (GS) could profit from a derivatives bet they made with another bank. You are rationalizing this behaviour? WOW. All I'm going to say. I'm done with you if you think that OK.

 

[WaltM]

You are serious right now?

yes.

We're talking about conciously moving against your own clients who have trusted their money with your firm.

is a company's objective not to make money?

They (GS) purposely dropped their own investments (ultimately losing their clients money) so that the firm (GS) could profit from a derivatives bet they made with another bank.

Should the opposite be considered more moral?

That they never turned their backs on their clients and won money by winning it from other people?

You are rationalizing this behaviour? WOW. All I'm going to say. I'm done with you if you think that OK.

 

[Seraphim]

yes.



is a company's objective not to make money?



Should the opposite be considered more moral?

That they never turned their backs on their clients and won money by winning it from other people?

NO INVESTMENT FIRMS ARE SUPPOSED TO MAKE MONEY FOR THEMSELVES AND THEIR INVESTORS. NOT SCREW THE INVESTORS AND PROFIT FROM IT. ARE YOU SOME KIND OF FASCIST PRICK? IS IT OK TO POISON PEOPLE IF IT IS PROFITABLE?

Moron. For real. You suck. That kind of mentality is allowing the world to get raped and pillaged by corporations. Fascism is not free market capitalism. You advocate Corporate Rule, even if only implictly.

Have fun in Auschwitz.

 

[WaltM]

NO INVESTMENT FIRMS ARE SUPPOSED TO MAKE MONEY FOR THEMSELVES AND THEIR INVESTORS.

So if they bet against other people, and won money for their investors, that's moral, correct?

NOT SCREW THE INVESTORS AND PROFIT FROM IT.

So it's OK to screw OTHER PEOPLE and profit from it, and profit their investors?

ARE YOU SOME KIND OF FASCIST PRICK? IS IT OK TO POISON PEOPLE IF IT IS PROFITABLE?

According to you, as long as they don't poison their own investors.

Moron. For real. You suck. That kind of mentality is allowing the world to get raped and pillaged by corporations. Fascism is not free market capitalism.

What happened to "buyer beware" and "why would anybody want to make you money" and "responsibility"?

You advocate Corporate Rule, even if only implictly.

yeah, I do, I'm not a communist.

Have fun in Auschwitz.

?????????? you did NOT just say that!

 

[Jordan]

You are serious right now? We're talking about conciously moving against your own clients who have trusted their money with your firm.

Not true. GS did not use investment capital to buy the MBS. The MBS were sold to other investment banks who wanted to bet on their success.

They (GS) purposely dropped their own investments (ultimately losing their clients money) so that the firm (GS) could profit from a derivatives bet they made with another bank. You are rationalizing this behaviour? WOW. All I'm going to say. I'm done with you if you think that OK.

That, again, is not true.

Look, I hate Goldman Sachs just like everyone else, but there is no need to lie about what they did.

 

[Seraphim]

Communism and Facism are the same thing lol. Corporate and Govt rule with no regard for the individual.

You advocate corporate rule and think that somehow it is defensible by saying YA IM NOT A COMMUNIST. Lol.

Your statements are backward. Free Market Capitalism is NOT corporate rule. It's CORPORATE SERVITUDE. CORPORATIONS, IN A FREE MARKET SERVE US! NOT THE OTHER WAY AROUND.

Auschwitz was set up by a CORPORATE RULED STATE. This was my point. History repeats itself. Give Corporations the reigns, I dare you. We'll see what happens.

 

[WaltM]

Communism and Facism are the same thing lol.

No they are not.

Communism doesn't believe in property. It puts society before individuals.

Corporate and Govt rule with no regard for the individual.

Corporations other than the state cannot exist under communism.

Fascism DOES regard for the individual, in this case, THE CORPORATION.

You advocate corporate rule and think that somehow it is defensible by saying YA IM NOT A COMMUNIST. Lol.

What's wrong with that?

Your statements are backward. Free Market Capitalism is NOT corporate rule.

How can you have corporate rule WITHOUT STARTING WITH FREE MARKET?

It's CORPORATE SERVITUDE. CORPORATIONS, IN A FREE MARKET SERVE US! NOT THE OTHER WAY AROUND.

It's mutual.

Corporations who make money ultimately have to spend it.

Auschwitz was set up by a CORPORATE RULED STATE. This was my point. History repeats itself. Give Corporations the reigns, I dare you. We'll see what happens.

How do you know what side I'm on? You can't even answer me if the reverse of your allegations to GS would be moral.

Auschwitz was originally built for a model city to experiment technology and agriculture (yes, by a company, named IG Farben). So yes, people DID originally intend to have fun at Auschwitz, it later turn into a concentration camp as the war went on.

By the way, Fascism or Nazism produced Volkwagen, benefited IBM, and if US today counts, has a big industry in Oil, and war.
Who has communism helped prosper? Banks?