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Comment Re:I guess /. still approves this crap (Score 1) 270

The Fed is a hybrid system, both public and private.

The Fed is owned by its member banks. They get to elect board members to the regional boards. Profits accrue the banks, kind of. The Fed doesn't pay a dividend so those profits never get monetized. So de facto profits go the Treasury.

However the Board of Governors is appointed by the president. This limits the amount of control the banks have over the institution. So what is ownership without access to profits or control?

A analogy would be the local co-op grocery store. The more you buy the more of the store you own. However this comes back as store rebates and the insiders still have control.

Comment Re:Big Fucking Deal (Score 1) 56

We are wandering a bit off topic, but... It is not a Middle Age thing. For most of history the best guess is that investments have returned around 1 to 2%. It may not even be a stagnation thing. Remember that returns are set by supply and demand. One could have a high growth rate and a high savings rate which would result in a low return on investments. A good example here would be the 19th century Europe. High wealth inequities probably pushed down investment returns here.

Comment Re:Big Fucking Deal (Score 1) 56

Perhaps the market is expecting the low-yield regime to last that long... no major expansions or growth opportunities in sight---unless something really great comes along (e.g. fusion power, self driving cars, automation, etc.,) the next 40 years will be pretty much like the last decade as far as growth is concerned.

Maybe. The rate is determined by supply and demand. There is surplus savings sloshing around the market right now. Pension and banking regulations, surplus savings from Asia, demographic imbalances. etc.

Even if there is a great leap forward this may not solve the imbalance. Take self driving cars. We could see a huge fleet of personally owned cars replaced by a smaller fleet of self driving taxis. Car production could fall by 70% in 20 years. So less investments would be needed. Most of the technological advancement over the past 20 years has reduced the amount of capital needed. No magic bullet here.

Comment Re:Big Fucking Deal (Score 3, Interesting) 56

In short, there is a fire sale of debt going on and Microsoft is selling. This has more to do with the debt market than with MSFT.

I will slightly disagree with this. I see Microsoft more of a "Value" company (steady profits) instead of a "Growth" company (skyrocketing sales). However the issuing of new debt says little. To oversimplify, debt is good. If equity is expected to yield 10% and debt is expected to yield 2% then one should issue debt and do a stock buy back. A little financial leverage, a little debt shield. All is good as long as the company can support the debt.

As a side note, the market is desperate for high quality debt. Regulations favor debt purchases over stock. Think pension funds. Since the 2008 financial crisis things have gotten worse. 40 years at 4.5%? One would have to be desperate to take on 40 years worth of inflation risk at such a miserly rate. Yet pension funds are pilling in.

Comment Re:Long term debt (Score 1) 56

Nonsense. The US had greater debt obligations as a % of GDP at the end of WWII and dealt with them without printing money. They just raised taxes and lowered spending to an appropriate level rather than pretending that we can borrow endlessly and somehow magically bring in more tax revenue by collecting less taxes.

Nope. The US engaged in "Financial Repression" during the 1950s. Financial repression is when inflation is higher than the yield on a 10 year government bond. IIRC, the 10 years were selling around 2% while inflation was at 4%. 2 take away from this. First, you don't need double digit inflation. Second, the US was able to pull this off in the 1950s because investors had lived through the Great Depression and were very risk adverse. Not sure if the US could pull this off again.

Comment Re:Which expenses have also surged? (Score 1) 87

I can think of quite a few.

Their employees (singers, producers, writers) might demand higher salaries, such as getting a bigger cut of the revenue. Marketing expenses might be higher. If I recall, Apple charged a pretty penny to have albums pop up on iTunes front page. I have heard anecdotal evidence on both sides. I know that enough things have changed over the last 10 years and one can't make an easy comparison between the two time periods.

Comment Re:a deal is not always a deal (Score 1) 77

Mashiki, while that is true I don't think that is the case here. Yahoo misrepresented nothing. I am assuming Yahoo did not know about the data breach when they signed the deal.

That being said, most merger agreements have a materiality clause allowing termination of the merger is something significance comes up. It is a bit of a weasel clause and is rarely used but it almost always in the merger agreement. I am not sure I would call this data breach material in the financial sense but it does give Verizon leverage.

Comment Re:Why not do an end-run around the laws? (Score 1) 261

You can’t do it that way.

Franchise laws exist to balance the power of the large parent company and the small independent owner. If not, the parent company could bully the independent franchise. You can’t have weak puppet proxies. While I don’t think Tesla should be forced to franchise, in order for franchising to work you need decent franchising laws.

At this point I really want to find a film clip from Glengarry Glen Ross about steak knives.

Comment Re:Now for regulation (Score 1) 87

The Constitution clearly states any powers/rights not delegated to the government are thus the powers/rights of the people and/or states. Since the government has the power to mint money granted to it, the people by constitutional decree do not have that right.

What can I say? For over 100 years almost every US bank issued their own bank notes. Even railroads issued their own money. This practice never made it way to the Supreme Court as a issue. Here is a interesting link.

http://www.npr.org/sections/mo...

Comment Re:Tax? They can't have it both ways (Score 1) 87

The tax rules around currency trading are complex. Each time you convert your currency you have to calculate your gain / loss from FX rate movements and pay taxes on that. If you are a currency traded you must "mark to market" you currency positions at the end of each year and pay short term capital gains on your unrealized gains. One of the measures of being a currency trader are the number of transaction you do each year, so I could see a casual Bitcoin user falling into this category.

Comment Re:Now for regulation (Score 1) 87

No, it was not put there to avoid that problem. For the first 100 years of the US most of the money issued was private. Bank notes issued by private banks. It was not until the Civil War that the Federal Government got into the money business issuing Greenbacks.

The clause in the Constitution grants the government to right to mint money. It does not precluded anybody else from doing so.

Comment Re: Auction of bitcoin? (Score 1) 67

I would like to extend on this - The Justice Department does have rules around this. When stocks (Google, MSFT, etc.) are sized they are sold on a exchange that meets minimum liquidity and transparency. Liquidity should be obvious - you don't want to crush the market by dumping a big block all at once. Transparency because you don't want a inside cartel depressing prices.

Comment Re:Jet is like a middleman to the cheapest price. (Score 1) 98

"Sold by and shipped by Amazon.com" means that Amazon is the retailer, has purchased the inventory, and they bear the risk and cost of holding that inventory.

Third party sells have 2 options. They can list on Amazon and ship from their warehouse. The other option is that they can rent warehouse space from Amazon. Amazon will then ship the goods for them. The 3rd party has to stock the warehouse and bears the risk and cost of inventory.

Comment Re:Where did the money come from? (Score 3, Insightful) 160

Laws have to factor in both actions and intent. If one relied on only one or the other abuses could occur. I suspect that you are having issues with the nebulas nature of intent.

Most fraud and white collar rely more highly on this than other crimes. Partly this is because criminals are more inventive and imaginative then legislators. Partly this is because the western legal system is designed to ban actions, not proscribe actions. i.e., if a law says you can't do something than you can do it.

I share some of your unease on overreaching laws but I think intent has to a important factor.

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