[Rrrainer]

btw portugal's cds are blowing up today. next: probably spain. and that's where things get really difficult.

[Har-Tru]

Originally Posted by prima donna

The motif of proponents of big government seems to be that government has a perpetual duty to interpose itself, whereas the motif of proponents of free enterprise is the vanquishment of any regulatory system. It doesn't take a genius to deduce that a hybrid model of the aforementioned philosophies would suffice.

What's the purpose of engaging one another when the results are predetermined ? If everyone religiously adheres to a certain ideology, is not the very point of discourse undermined ? The notion of a world in which unfettered free markets exist is, well, quixotic. Similarly, the notion of a world in which personal finances and private companies are micromanaged is, well, absurd.

Wall Street is inhabited by wildly intelligent people, yet some are naive enough to regard such individuals as magnanimous and innocuous. Main Street is inhabited by average investors, many of whom enter the market fully aware of the inherent risk involved, yet desirous of wealth. Why should the government reward the cupidity of fools ?

My diatribe has nothing to do with Greece, but I've noticed that each thread pertaining to finance succumbs to a similar fate: simplistic, ideologically based skirmishes.

Excellent post.

[buddyholly]

Originally Posted by prima donna

Wall Street is inhabited by wildly intelligent people, yet some are naive enough to regard such individuals as magnanimous and innocuous. Main Street is inhabited by average investors, many of whom enter the market fully aware of the inherent risk involved, yet desirous of wealth. Why should the government reward the cupidity of fools ?

Not sure who are the fools here - unless maybe you meant ''fully unaware''?

[ibreak4coffee]

Originally Posted by prima donna

The motif of proponents of big government seems to be that government has a perpetual duty to interpose itself, whereas the motif of proponents of free enterprise is the vanquishment of any regulatory system. It doesn't take a genius to deduce that a hybrid model of the aforementioned philosophies would suffice.

What's the purpose of engaging one another when the results are predetermined ? If everyone religiously adheres to a certain ideology, is not the very point of discourse undermined ? The notion of a world in which unfettered free markets exist is, well, quixotic. Similarly, the notion of a world in which personal finances and private companies are micromanaged is, well, absurd.

Wall Street is inhabited by wildly intelligent people, yet some are naive enough to regard such individuals as magnanimous and innocuous. Main Street is inhabited by average investors, many of whom enter the market fully aware of the inherent risk involved, yet desirous of wealth. Why should the government reward the cupidity of fools ?

My diatribe has nothing to do with Greece, but I've noticed that each thread pertaining to finance succumbs to a similar fate: simplistic, ideologically based skirmishes.

[prima donna]

Main Street is inhabited by average investors, many of whom enter the market fully aware of the inherent risk involved, yet desirous of wealth.

Why should the government reward the cupidity of fools ?

average investors;
fully aware of the inherent risk involved;
yet desirous of wealth.
average investors; desirous of wealth; cupidity [eager or excessive desire]; fools [a silly or stupid person; a person who lacks judgment or sense]

Capitulation:
There is no such thing as a free lunch. Investors can't decry the alleged abuses of Wall Street, especially when it is they who decide whether or not to invest. It is foolish to expect others (i.e., government officials) to be held accountable for one's ill-advised decisions. A rational person must accept failure as well as success. The fool is he who endeavors to subsidize failure and privatize success, for such a system is unsustainable.

Regulators exist to protect investors from themselves. Foolishness breeds the illusion that ordinary investors can, under high-risk circumstances, triumph over Ivy League grads (i.e., Wall Street types) boasting IQs in the 130 - 150 range.

[buddyholly]

Maybe we are talking at cross purposes. I was not including the government in the equation and wouldn't even think of demanding compensation for making a mistake. But taking your sentence at face value, I am fully aware of the risks involved, and desire wealth. I don't see the need for ''yet''. Who would enter the market and not desire wealth? Yet I don't consider myself a fool.

Or maybe you are just talking about main street investors who make their own investment decisions. I certainly don't. My advisor has total control of my portfolio and he has been extremely good. On a different level to anything I could do myself. Which is logical, given the hours of research he puts in. I prefer to play tennis.

[prima donna]

High-yielding investments are a trade-off between an absolute profit or an absolute loss; that is, such investments are high-yielding due to the risk involved. On the other hand, pedestrian investments which yield small to moderate profits are, by definition, low-risk. The average investor is desirous of wealth, yet seemingly unwilling to bear the consequences of failure.

The Bellagio is a zero-sum game; Wall Street is a zero-sum game. Financial advisors exert great power over their clients, insofar as they can steer said clients toward bad investments (which aren't so bad from the perspective of the financial advisor who stands to profit from bets against such investments). Such is the nature of high-risk investing -- win or lose.

Thousands of ordinary investors have lost their life savings and, contrary to your claim, wish to be bailed out. And why ? Oh, that's right -- they dislike the consequences of seeking exorbitant yields, as opposed to low-risk, low-yielding investments.

[buddyholly]

Originally Posted by prima donna

Thousands of ordinary investors have lost their life savings and, contrary to your claim, wish to be bailed out. And why ? Oh, that's right -- they dislike the consequences of seeking exorbitant yields, as opposed to low-risk, low-yielding investments.

I never claimed they didn't.

But anyway, I am a main street investor, desirous of wealth. Does that make me a fool?

[prima donna]

Originally Posted by buddyholly

I never claimed they didn't.

But anyway, I am a main street investor, desirous of wealth. Does that make me a fool?

Possibly.

[Jimnik]

Originally Posted by Rrrainer

it's a bit like the question about chicken and egg regarding the greek state and who's to blame. the main reason for government largesse over the last 5 years was the fake boom that made them think economies across the globe were actually doing well. if growth rates had stayed the same there'd be no greek problem whatsoever.

anyways, the guys who come to the rescue are governments nonetheless, not the private sector. governments create a mess, governments bail them out - unlike last time, where the private sector created the mess and governments bailed them out.

It's not just a result of the global recession. Several governments, including Greece, were already running deficits before the markets turned against them. They took advantage of being part of a much stronger harder currency. Never would they have been able to borrow so much in Drachmas.

Asian stocks slide amid Greek debt crisis.
"Greece's economic reforms that led to it abandoning the drachma in favour of the euro in 2002 made it easier for the country to borrow money."

Originally Posted by buddyholly

Christopher Hitchins comes to the defense of Germany in his column today. He says that Germany should not be victimised for the incompetence of the PIGS (Portugal, Ireland, Greece, Spain.)

I think it's Italy not Ireland. Or it could be both: PIIGS.

I've heard suggestions the Euro should be split in two. The Seuro for the Southern PIGS and the Neuro for the Northern FAGS.

[Chip_s_m]

Originally Posted by Jimnik

I think it's Italy not Ireland. Or it could be both. PIIGS.

I've heard suggestions the Euro should be split in two. The Seuro for the Southern PIGS and the Neuro for the Northern FAGS.

I think originally Ireland had been getting lumped into the PIIGS bunch. It seems that ever since passing their austerity measure it's just been PIGS, though, with Italy as the "I".

[Chip_s_m]

I wonder if Konstantinos Economidis had to return to tennis because the Greek retirement age was raised...

[Lopez]

Originally Posted by buddyholly

Or maybe you are just talking about main street investors who make their own investment decisions. I certainly don't. My advisor has total control of my portfolio and he has been extremely good. On a different level to anything I could do myself. Which is logical, given the hours of research he puts in. I prefer to play tennis.

As a Finance student myself, I've learnt to be sceptical towards "professional" portfolio managers.

Studies show that, while professional portfolio managers do make a better ROI than the index, the portfolio management fees push the ROI actually lower than the market. Additionally, there is no statistically significant correlation between the performance years of portfolio managers (i.e. that good years would be followed by good years, suggesting a "talented" investor) save for a few anomalies.

Most, if not all the time, people would be better of by investing to the S&P 500: with no administrative costs, it outperforms portfolio managers.

[buddyholly]

Originally Posted by Lopez

As a Finance student myself, I've learnt to be sceptical towards "professional" portfolio managers.

Studies show that, while professional portfolio managers do make a better ROI than the index, the portfolio management fees push the ROI actually lower than the market. Additionally, there is no statistically significant correlation between the performance years of portfolio managers (i.e. that good years would be followed by good years, suggesting a "talented" investor) save for a few anomalies.

Most, if not all the time, people would be better of by investing to the S&P 500: with no administrative costs, it outperforms portfolio managers.

It helps if your manager is also a friend, who doesn't make unnecessary trades, and who outperforms the S&P by far.

[buddyholly]

Originally Posted by prima donna

Possibly.

But a happy one.