The ISEQ Thread Part I - March 2008 - October 2008 **LOCKED**

Have just started reading "Wall Street - a cultural history" by Steve Fraser - only on page 25 so far - small script - heavy going - but absolutely fascinating.

Essentially the same debate in regard to Banking,speculation and conflicts of interest has been going on for yonks now

Jefferson and Hamilton and their supporters were having exactly the same arguements, doubts, morality debates as we are having now when the Fed was set up over what to do about the American colonies war debts and the establishment of the US's credit worthiness after independence.

very interesting - Im more and more going to the conclusion that its not a zero sum game - if its white therefore the opposite must be black kind of an arguement - ie the system essentially works when it is properly supervised,refereed and regulated. Since the 1970's the financial system has been allowed deregulate to an insane degree and has allowed massive conflicts of interest emerge - the main problem in rectifying this is that the main opponents of the system as it currently stands ,dont want to reform it, they want to smash it and replace it with theoretical solutions that , to the ordinary punter , seem completely insane and totally disregard human nature.

the more and more I look at it - the more I fail to understand why we dont teach proper political,economic and civic education in our schools - these should be compulsory and mandatory to getting your final qualification , not usless shite like Irish and the like (MN Gaelgoirs - sue me and kiss my a..........!) - There is so much that you need to be aware of in the world we live in today - the basic structures are there - but only those who understand them can operate them or manipulate them - time we took the responsibility of citizenship of our planet,species and the systems we put in place to live - seriously.

Went completely off topic there - but what the hell

The best book I know on boom and bust is "The Great Crash, 1929" by J.K. Galbraith. I have been hunting for my old copy for the last week.

The Wikipedia review says

Quote :

The book argues that the 1929 stock market crash was precipitated by rampant speculation in the stock market. Beyond the crash, Galbraith argues that the Great Depression was caused by a mixture of five main weaknesses: First, an imbalance in the income distribution. Galbraith asserts "that the 5 per cent of the population with the highest incomes in that year [1929] received approximately one third of all personal income"; Second, problems in the structure of corporations. Most specifically, he cites newly formed investment entities of the era (such as holding companies and investment trusts) as contributing to a deflationary spiral due in no small part to their high reliance on leverage; Third, the bad banking structure. Bad loans made principally to foreign governments and entities led to a domino effect of bank failures, wiping out the savings of their depositors; Fourth, foreign trade imbalances. During World War I, the US became a creditor nation, exporting more than it imported. High tariffs on imports contributed to this imbalance. Subsequent defaults by foreign governments led to a decline in exports, which was especially hard on farmers; And finally, "the poor state of economic intelligence." Galbraith says that the "economists and those who offered economic counsel in the late twenties and early thirties were almost uniquely perverse." The book, which was one of Galbraith's first bestsellers, written to coincide with the 25th anniversary of the crash, at a time when it and the Great Depression that followed were still raw memories - and stock price levels were only then recovering to pre-crash levels.

http://en.wikipedia.org/wiki/The_Great_Crash,_1929

It took a war to get things going after the Great Crash.

Galbraith remarked on the way in which investors in a booming market always ascribe their gains to their personal acumen and foresight, but in a falling market mark their loss down to bad luck or the sins of others.

Is it your view Edo that the propensity to crashes is not built in to the system, but is the result of avoidable human error?
How could this situation have been avoided?

cactus flower wrote:

1. Everything going to plan, the market picks up in 3-4 years, the lands get developed and the Banks cream off huge interest.
2. Not so favourable to the developer, - prospective cash-rich buyers emerge and the Bank forecloses on the shakiest clients and sells cheap to cut its risk
3. Not so favourable to the Bank - it is asked to repay something it can't repay, whilst the market remains "illiquid".

There is amazing opportunity in this equation. Banks are useless at sizing up the potential value of half finished buildings and sites. Get the timing right, do your homework and it is a turkey shoot.

ISEQ 4371

About 9 months ago there was a court case in the midwest somewhere(Illinois I think) where a judge actually asked the entity foreclosing to prove that they were the owners and they couldn't produce the actuall documentation as they had only bought a bundle of mortages. This case was very complicated but it resulted in a good rattle to the market and a quickly enacted new law that was even more complicated but it protected the big guys from this technicality.

Meanwhile if a bank is bailed out back there the bite will be taken out of the arse of the taxpayer. So bend down Audi and smile while I get my dentures in.

Any sign of that crash that I said was coming. It has been almost 24 hours.

Just skimming above 4000 at the minute as far as I can gather. Looks like it will go through 4000 today.

Still can't find the Galbraith book. I'll have to order a new one.
The Elan story is sad. At least they were trying to bring forward a drug that wasn't a shelf "remedy" for the common cold.

cactus flower wrote:

Still can't find the Galbraith book. I'll have to order a new one.
The Elan story is sad. At least they were trying to bring forward a drug that wasn't a shelf "remedy" for the common cold.

In the meantime, cactusflower, you could read "The Collapse of Globalism (and the Reinvention of the World) by John Ralston Saul. Published first in 2005, it is published by Atlantic Books, London. I have started it and it is absolutely absorbing. Basically he is saying globalisation, as we know it, is dead. Interesting premise.

Slim Buddha wrote:

cactus flower wrote:

Still can't find the Galbraith book. I'll have to order a new one.
The Elan story is sad. At least they were trying to bring forward a drug that wasn't a shelf "remedy" for the common cold.

In the meantime, cactusflower, you could read "The Collapse of Globalism (and the Reinvention of the World) by John Ralston Saul. Published first in 2005, it is published by Atlantic Books, London. I have started it and it is absolutely absorbing. Basically he is saying globalisation, as we know it, is dead. Interesting premise.

So interested am I that I can't wait to know what the premise is based on...

Would a very short summary be possible?

Jaze, it dived this morning. Went below 4K. 3960 I think.

cactus flower wrote:

Slim Buddha wrote:

cactus flower wrote:

Still can't find the Galbraith book. I'll have to order a new one.
The Elan story is sad. At least they were trying to bring forward a drug that wasn't a shelf "remedy" for the common cold.

In the meantime, cactusflower, you could read "The Collapse of Globalism (and the Reinvention of the World) by John Ralston Saul. Published first in 2005, it is published by Atlantic Books, London. I have started it and it is absolutely absorbing. Basically he is saying globalisation, as we know it, is dead. Interesting premise.

So interested am I that I can't wait to know what the premise is based on...

Would a very short summary be possible?

He basically treats economic thinking as a form of religion. Keynesianism was replaced by Friedmans monetarism in the 1970s and this died around the end of the century. In the early 21st century, nationalism has returned and globalism/monetarism is in retreat. The US acts unilaterally, the French and Dutch reject the EU constitution, (we had our own EU-related vote) and Saul suggests that China and India, both states that have benfitted from globalisation, are profoundly nationalistic states.

I believe he is right on a lot of what he says. All attempts to lock-in corporatism, particularly as a right-wing monetarist economic concept, are coming hopelessly unstuck. The WTO is rapidly becoming irrelevant as bi-lateral and multi-lateral RTAs are becoming the norm. Latin America has turned left as Brazil, Ecuador, Venezuela, Bolivia and Uruguay and, remarkably, Chile all have centre-left governments. Even here, though we may not have realised it at the time, we have electorally finished off the PDs as a party leaving, unfortunately, Harney in health to destroy what is left of our health service before the game is up. In New Zealand, they even changed the electoral system to get rid of the monetarist virus.

The pendulum is swinging back again slowly.

Dives followed by weak rallies, but trend seems to be still down. Hard to get a sustained rally with endless gloom doing the rounds and a lot of people on holidays.

Slim Buddha wrote:

cactus flower wrote:

Slim Buddha wrote:

cactus flower wrote:

Still can't find the Galbraith book. I'll have to order a new one.
The Elan story is sad. At least they were trying to bring forward a drug that wasn't a shelf "remedy" for the common cold.

In the meantime, cactusflower, you could read "The Collapse of Globalism (and the Reinvention of the World) by John Ralston Saul. Published first in 2005, it is published by Atlantic Books, London. I have started it and it is absolutely absorbing. Basically he is saying globalisation, as we know it, is dead. Interesting premise.

So interested am I that I can't wait to know what the premise is based on...

Would a very short summary be possible?

He basically treats economic thinking as a form of religion. Keynesianism was replaced by Friedmans monetarism in the 1970s and this died around the end of the century. In the early 21st century, nationalism has returned and globalism/monetarism is in retreat. The US acts unilaterally, the French and Dutch reject the EU constitution, (we had our own EU-related vote) and Saul suggests that China and India, both states that have benfitted from globalisation, are profoundly nationalistic states.

I believe he is right on a lot of what he says. All attempts to lock-in corporatism, particularly as a right-wing monetarist economic concept, are coming hopelessly unstuck. The WTO is rapidly becoming irrelevant as bi-lateral and multi-lateral RTAs are becoming the norm. Latin America has turned left as Brazil, Ecuador, Venezuela, Bolivia and Uruguay and, remarkably, Chile all have centre-left governments. Even here, though we may not have realised it at the time, we have electorally finished off the PDs as a party leaving, unfortunately, Harney in health to destroy what is left of our health service before the game is up. In New Zealand, they even changed the electoral system to get rid of the monetarist virus.

The pendulum is swinging back again slowly.

Very interesting slim buddha. I think I'll read that. Personally I am convinced that both the tendencies you describe and the tendency to globalisation are at work, the world being a very contradictory place. It certainly balances the picture out and in a healthy way goes against the tendency to focus on the Evil Empire as the only significant force in world politics.

When does the ISEQ not trade? I often notice that on 'Labour Day' and other such holidays in the USA that their markets close. However, it always seems that the ISEQ trades on bank holidays - like it seems to today.

johnfás wrote:

When does the ISEQ not trade? I often notice that on 'Labour Day' and other such holidays in the USA that their markets close. However, it always seems that the ISEQ trades on bank holidays - like it seems to today.

Could be that computer trading by those not on holidays is moving the index? I don't know very much about this index. Does it allow computer trading when officially closed?

johnfás wrote:

When does the ISEQ not trade? I often notice that on 'Labour Day' and other such holidays in the USA that their markets close. However, it always seems that the ISEQ trades on bank holidays - like it seems to today.

The ISEQ uses the Xetra trading platform which is run from Germany. I don't think Germany has a bank holiday today so that is why the ISEQ is open to electronic trading. I think the actual physical trading floor is closed today but people can, through their computers, trade the ISEQ today.

cactus flower wrote:

Slim Buddha wrote:

cactus flower wrote:

Slim Buddha wrote:

cactus flower wrote:

Still can't find the Galbraith book. I'll have to order a new one.
The Elan story is sad. At least they were trying to bring forward a drug that wasn't a shelf "remedy" for the common cold.

In the meantime, cactusflower, you could read "The Collapse of Globalism (and the Reinvention of the World) by John Ralston Saul. Published first in 2005, it is published by Atlantic Books, London. I have started it and it is absolutely absorbing. Basically he is saying globalisation, as we know it, is dead. Interesting premise.

So interested am I that I can't wait to know what the premise is based on...

Would a very short summary be possible?

He basically treats economic thinking as a form of religion. Keynesianism was replaced by Friedmans monetarism in the 1970s and this died around the end of the century. In the early 21st century, nationalism has returned and globalism/monetarism is in retreat. The US acts unilaterally, the French and Dutch reject the EU constitution, (we had our own EU-related vote) and Saul suggests that China and India, both states that have benfitted from globalisation, are profoundly nationalistic states.

I believe he is right on a lot of what he says. All attempts to lock-in corporatism, particularly as a right-wing monetarist economic concept, are coming hopelessly unstuck. The WTO is rapidly becoming irrelevant as bi-lateral and multi-lateral RTAs are becoming the norm. Latin America has turned left as Brazil, Ecuador, Venezuela, Bolivia and Uruguay and, remarkably, Chile all have centre-left governments. Even here, though we may not have realised it at the time, we have electorally finished off the PDs as a party leaving, unfortunately, Harney in health to destroy what is left of our health service before the game is up. In New Zealand, they even changed the electoral system to get rid of the monetarist virus.

The pendulum is swinging back again slowly.

Very interesting slim buddha. I think I'll read that. Personally I am convinced that both the tendencies you describe and the tendency to globalisation are at work, the world being a very contradictory place. It certainly balances the picture out and in a healthy way goes against the tendency to focus on the Evil Empire as the only significant force in world politics.

Just reading the Herald Tribune. Signs of the Times that the village shop, that ten years ago stocked only the Indo, the Peoples' Friend and a Man U fanzine now stocks not only the HT but also two Spanish dailies.

Two things caught my eye: one is an article saying that the rising cost of shipping due to oil price rises is pushing relocation of factories closer to consumers in what is being called the "neighbourhood effect". This has lead to a return of factories to Mexico from China and new plants being opened in the US by firms like IKEA, to serve the US market. This will tend to a concentration of production close to the larger and more affluent markets with much shorter supply chains. This is not good for Ireland, with its small population and distance from mass markets.

The other is an editorial on the failure of the Doha Round of the World Trade Organisation talks. It says the "clash between the United States and China and Inda about farm protections underscored how these new economic giants are changing the balance of power". Behind the talks it saw the US backsliding from free trade with massive farm subsidies in this year's farm bill and making preferential trade deals on the quiet. Doha, they say, didn't didn't do much for anyone and in particular not for the developing countries - they were offered reduced tarriffs on 97% of their products, but the existing tarriffs that matter are on the other 3%.

A trend to global retrenchment and reliance on national markets seems to be there, but would this not also mean contraction of the world economy, as protectionism always has in the past? Or are the potential mass markets within China, India and Latin America big enough to keep them going? In any event, US economic global dominance is surely ebbing away?

The concept of free and open markets is one that does not stand close examination.

Squire wrote:

The concept of free and open markets is one that does not stand close examination.

Perhaps. It has also never been truly tested. The world has never experienced free and open markets. Certainly not in the modern period. At least in the macro sense anyway. You could say we have free and open markets within the European Community and that the Union has benefitted from them. They certainly haven't existed much beyond that.

Within the European Union and within any country there are free and open markets. I can trade in Ireland, England, Germany or Bulgaria. I can also invest, live and work in those countries. There are a few glitches in the EU but generally it is heading in the right direction. However even within that structure there are all sorts of tax regimes and currency considerations that distort not to mention the growing resistance to migration of labour.

Between countries and globally it is often very much a case of everyone looking after their own best interest. We have currencies deliberately kept low, production subsidies, and bureaucracy designed to hinder foreign interests. Try setting up a business in India if you want a lesson in form filling.

Squire wrote:

Try setting up a business in India if you want a lesson in form filling.

That is preciely my point.

johnfás wrote:

Squire wrote:

The concept of free and open markets is one that does not stand close examination.

Perhaps. It has also never been truly tested. The world has never experienced free and open markets. Certainly not in the modern period. At least in the macro sense anyway. You could say we have free and open markets within the European Community and that the Union has benefitted from them. They certainly haven't existed much beyond that.

indeed, and any extent to which they have existed is about to be wiped out by the oil price. Small high tech items (mobiles, computer chips, etc) which cost a lot may still be worth trading internationally, however, flying beans in from Kenya is about to die. I am therefore relieved the WTO talks didn't get a chance to scupper our ag sector to the extent they were about to...the oil prices will also probably prevent the West from dumping any food mountains we have left in the third world. This may be counter the current orthodoxy, but I suspect the 3rd world will benefit... Malawi re-introduced tariffs and went from famine to feast in less than 2 years. I also hope the Brazilians can be persuaded (via lack of export market) to stop cutting rainforest for pasture, but that may be a long shot. I'm not sure food should be subject to free trade agreements. The strategic imperative of producing enough of one's own, locally, seems obvious.

Meanwhile, the UK only produces 65% of its own food, and we are right next door

anyone see an opportunity there??? Greenhouses on mothballed building sites in North Co Dublin/Meath??? Solar powered, of course!!! We should grow our own cut flowers etc, rather than flying these luxuries in from Kenya.

As for the Iseq... even if the oil price stabilises, we won't see the credit crunch/inflation induced stresses worked out of the system for another two years or so, plus which there is a lot of change in the air... WTO collapse, new President, new UK PM is looking more likely... it'll take a while to recover. And to figure out how to make money with expensive energy prices. Ingenuity appear to be taking off... anyone see the article on algal crude in the papers on the weekend?? It will take time though.

I'd reckon insulation companies are a good bet right now... in addition to Bord Gas and the ESB's 20% hikes, the rates in the UK are going up by 30-35%....

We are living in a very high risk period but also one potentially of intense change and adaptation.

The thinking now is that agriculture and urbanism came about as a reponse to climate change.

After a long time with very little investment in research and development of alternative energy sources, big money is beginning to go into it now.

Agriculture and urbanism brought some gains and some losses - people had to work much longer hours and at boring and repetitive tasks. Food security improved and writing was developed to record the stores.

I have seen it argued that flying produce in from Africa is currently more environmentally friendly than growing in Europe because of our intensive use of fertiliser and mechanical plant!

Squire wrote:

I have seen it argued that flying produce in from Africa is currently more environmentally friendly than growing in Europe because of our intensive use of fertiliser and mechanical plant!

When we import food we are importing the nutrients out of somewhere else's topsoil. Some agriculture is not much different from quarrying. The Herald Tribune article today about shipping would suggest that there will be a reverse trend towards local production of food. We'll have to bring in expatgirl's horses, or charge up batteries from wind and tidal turbines. And eat less.