Obama's Redistribution of Wealth, Simplified

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Nov 5, 2008 7:23 pm

Yesterday on my way to lunch I passed a homeless guy with a sign that read "Vote Obama, I need the money." I laughed.

Once
in the restaurant my server had on a "Obama 08" tie, again I laughed as
he had given away his political preference--just imagine the
coincidence.

When the bill came I decided not to tip the server
and explained to him that I was exploring the Obama redistribution of
wealth concept. He stood there in disbelief while I told him that I was
going to redistribute his tip to someone who I deemed more in need--the
homeless guy outside. The server angrily stormed from my sight.

I
went outside, gave the homeless guy $10 and told him to thank the
server inside as I've decided he could use the money more. The homeless
guy was grateful.

At the end of my rather unscientific
redistribution experiment I realized the homeless guy was grateful for
the money he did not earn, but the waiter was pretty angry that I gave
away the money he did earn even though the actual recipient deserved
the money more.

I guess redistribution of wealth is an easier thing to swallow in concept than in practical application. (ask the waiter)

OR IS IT REDISTRIBUTION OF SOMEONE ELSE'S WEALTH IS A GREAT IDEA..

or just a fools game !!

Nov 5, 2008 7:45 pm

Redistribution of wealth = Giving the banks $750 billion to cover their losses in bad real estate bets.

Nov 5, 2008 7:57 pm
buyandhold:

Redistribution of wealth = Giving the banks $750 billion to cover their losses in bad real estate bets.

 
I hope you're not twisting the facst like that when you discuss the issue with clients.
Nov 5, 2008 8:02 pm
greyhairedbrker:
buyandhold:

Redistribution of wealth = Giving the banks $750 billion to cover their losses in bad real estate bets.

 
I hope you're not twisting the facst like that when you discuss the issue with clients.



Usually the number I quote is $1 trillion (and counting.)
One of many sources: http://www.edge.org/3rd_culture/taleb08/taleb08_index.html


Nov 5, 2008 8:25 pm
buyandhold:
greyhairedbrker:
buyandhold:

Redistribution of wealth = Giving the banks $750 billion to cover their losses in bad real estate bets.

 
I hope you're not twisting the facst like that when you discuss the issue with clients.



Usually the number I quote is $1 trillion (and counting.)
One of many sources: http://www.edge.org/3rd_culture/taleb08/taleb08_index.html


 
It isn't the dollar figure you have wrong, it's the basic premise.
Nov 5, 2008 8:38 pm

Greyhaired broker, I'm really not trying to flip or argumentative here. But these firms made ridiculously bad investments, got the mother of all margin calls and would have gone under if they hadn't run to Washington for billions.
Maybe that was the best thing, maybe not, but at least the financial services industry ought to acknowledge that it screwed up big time and has no beef with wealth being passed around to other people in the wake of this disaster.


Nov 5, 2008 11:03 pm
buyandhold:

Greyhaired broker, I'm really not trying to flip or argumentative here. But these firms made ridiculously bad investments, got the mother of all margin calls and would have gone under if they hadn't run to Washington for billions.
Maybe that was the best thing, maybe not, but at least the financial services industry ought to acknowledge that it screwed up big time and has no beef with wealth being passed around to other people in the wake of this disaster.


 

You grossly simplify the circumstances, then distort the solutions. This problem was in no small part the result of government intervention and as to the solution, you talk as those money was just given, no strings attached, no payments expected, as is the case with the wealth transfers our president elect has called for.

Nov 6, 2008 8:51 am

I love it, everybody's all about the redistribution... until its their money.  All these "pro Obamas" can't wait to "stick it to the rich!"  Before I was a broker I used to think about how I could advance and make money in this world.  Ways to better myself and my career, ways to better my life.  Apparently these people would rather do nothing for a little more, than work for a  lot more... I guess I just don't get it.

Nov 6, 2008 9:22 am

I love the waiter game.  I will employ this the next time I get the chance, my wife will get a big laugh out of it. 

Nov 6, 2008 9:57 am
greyhairedbrker:
buyandhold:

Greyhaired broker, I'm really not trying to flip or argumentative here. But these firms made ridiculously bad investments, got the mother of all margin calls and would have gone under if they hadn't run to Washington for billions.
Maybe that was the best thing, maybe not, but at least the financial services industry ought to acknowledge that it screwed up big time and has no beef with wealth being passed around to other people in the wake of this disaster.

You grossly simplify the circumstances, then distort the solutions. This problem was in no small part the result of government intervention and as to the solution, you talk as those money was just given, no strings attached, no payments expected, as is the case with the wealth transfers our president elect has called for.
 
Isn't this the chicken and the egg argument?  Jimmy Carter decides decades ago that he wants everyone to live the American dream and passes the Community Reinvestment Act which, for the first time in history, forces a bank to lend money to people who really aren't a good risk.   Non compliance with this act brought down the scorn of groups like ACORN and crippled some banks ability to function as they would like.  It would cost the banks money to comply and to be non compliant, so they were pretty much screwed.  But that was just the seed that was planted.  Fastforward 15-20 years and you have Clinton reviving the same concept and creating even more liberal loaning rules, thus pouring fertilizer on that little seed that Carter planted years ago. 
 
Couple this with a booming housing market, artificially inflated because any Joe six pack could get a loan (especially if that six pack was a 40 oz Colt 45), and you have tons of people thinking they can flip houses, own several homes, etc because money was cheap and easy.  Why pay principle?  Interest only is the way to go. 
 
Of course anytime Wall Street can make money, they can and will.  So, the creation of MBS and other similar investments became the way to go.  So, now you have Wall Street making money on an loans that banks were basically strong armed to make to people who really couldn't afford to own the things they do. 
 
So, who's to blame?  Wall Street for making money?  Carter for wanting everyone to be able to own a home?  Clinton for picking up where Carter left off?  President Bush because he didn't put a stop to it?  Or is it Joe Six Pack who borrowed more than he could afford to  pay using a lending instrument he didn't really understand? 
 
So why shouldn't Wall Street be bailed out by the Feds?  Aren't the Feds the ones who got them there to begin with?   
Nov 6, 2008 10:31 am

Its insane what smart people will be talked into doing....example.  I had a client pass away...left a 400k IRA which wife gets.  She is a very nice lady, but clueless. In the meeting following death, she brings in a brother, VP of a company, son in law, an engineer and her son who is a sales exec.  We discuss the IRA and her other stuff.  We have another 100k in a single acct.  They ask me about a variable mortgage on her house and..this being 2004..the rates are real low.  I made the comment..if you rates at 40 year lows, their bound to go up, so the variable will obviously move up.  I suggested a fixed rate, allows for you mother to know what her mortgage payment will be every month, for the life of the loan. My wife and I had just refinanced at 4.75% on our home.  I felt the meeting went well...a couple of years later...she calls and says her mortgage payments keep going up and wants 80k to payoff.  She was lucky she had her kids to advise her or maybe she was lucky she had cash on hand to payoff the debt. 

Nov 6, 2008 10:42 am

The guys at Lehman and Merrill are supposed to be the smartest guys in the class. They were supposed to be free market cowboys. But their mortgage investments turned out to be stupid -- no, they were stupid from the beginning -- and when they got caught they went to Washinton for money like the homeless guy begging for 20 bucks. It's comical watching them try to blame everybody else for their mistakes. .... The banks who did traditional mortgage lending are fine; it's the ones who got greedy and tried to be creative that got burned.


Joe Six Pack will take his losses. He bought a house for 200k that he can't sell. Or he bought a house and had to foreclose and now has no credit. Or he built a house he couldn't sell and went out of business. In each of those cases, nobody is going to make him whole.  ... The same should apply to the banks, imo.








Nov 6, 2008 12:17 pm

Not tipping the waiter? This story is bullshit.  Planted by a troll! Similar stories abound on the net. Are you guys really this gullible?

 
And for any of the moron class thinking of pulling this stunt, words of warning: Food service staff has a long memory and has their own unique and special ways of dealing with jerks. I guarantee you won't like it. So, if you are a small enough person to try this, go someplace you'll never go again. Because on your return trip i can assure you your serving will have the special sauce, reserved just for people like you.
 
I'm not Bill gates wealthy, but i've got a few bucks put away. Many of my friends are wealthy, and none of us, dem or repub thinks this way. We would never short a service worker, for any reason.  You've got to be a small thinker to even consider it.
 
As  for your Obama tax angst, be real, most of you aren't affected. So get over it. Or at least give Barak a chance. Midterms are in two years and you get a chance to change things at the top again in four years. Channel that anger and work for change. Give those you consider the underclass a break.
Nov 6, 2008 2:14 pm

...let me guess, you were a waiter in college?

Nov 6, 2008 2:15 pm
bspears:

I love the waiter game.  I will employ this the next time I get the chance, my wife will get a big laugh out of it. 

 
Good luck with that... unlesss your waiter has an Obama tie I think you will just cause confusion and then hopefully you'll get punched in the face.
 
 
Nov 6, 2008 2:26 pm

You know, if I were a guy like you, and I heard that speech Obama gave the other night, basically backpedaling on all the promises he made during the campaign, I'd be really pissed.  Nothing like voting for a guy because you agree with what he's proposing to do with this country, then finding out he really can't do anything. 

 
Actually on the tax angst issue, you couldn't be more wrong.  All he has to do is what he has always done and my taxes will go up.  Nothing.  If he just simply does nothing, my taxes will go up by when the Bush tax cuts expire.  Not to mention cap gains, AMT, and some others that may not affect me now, but probably will by then. 
 
I'd also be concerned about an organization like moveon.org calling the shots in this country.  $88 million they gave to Obama's campaign and I'm sure there are no strings attached (wink, wink).  Those people WORSHIP him.  It goes beyond admiration, or devotion.  Talk about your kool-aid drinkers.  Here are some quotes from their "Wall of Hope" that I thought were interesting.  These are people who have posted responses to the question "What does Obama's victory mean to you?":
 
For the first time I have faith in a politician. I voted for the first time this year and when I voted Obama I was voting for every one who could not vote due to inequality and injustice and for every one who could not vote because they were too young. Obama is the people's president. - I had to chuckle at the "too young" comment.  The voting age is 18.  There's no inequality there.  Just the rules.  I really don't want my 6 year old picking our president.  Although, in her class election at school, she voted for McCain, so I guess I'm raising her right.  I'm curious who in this country who can legally vote didn't get to because of some injustice or inequality.  Heck, ACORN even figured out a way for a lot of dead people to vote.   I'm sure my grandma who passed away this year is really pissed that she didn't get to vote.    
 
This victory means we will have universal health care, quality education, clean energy jobs, and thoughtful relations around the world. We did it!!!  - You'd have thought that the last great president (Bill Clinton according to these folks), who had 8 years in the White House would have at least tackled a couple of these.  Hmmm...I hope there's not a pattern evolving.
 
Obama's victory means that I can walk out of the political wilderness that our Republic has existed in for the past 8, long years. Perhaps we can regain our stature on the world stage and we can repair our torn and tattered reputation. His victory also signals a return to honoring the constitution, instead of trashing/shredding it.  - Really?  I didn't know that Obama was such a fundamentalist when it came to the constitution.  Hey, there's a positive for Obama.   
 
i'm an agnostic and not prone to hero worship...but i have to admit that barack has changed my life - I'm glad he decided not to capitalize barack, cause if he had, I'd have to wonder if he had suddenly become un agnostic.  And to think I scoffed at my wife when she said Barack is the antichrist.   
 
This morning was the first morning of my son's life that I woke up and did not fear for what his future will hold. WE DID IT!  -   Wow, that's huge.  Just because the man gets to be president for the next four years, her son's life is going to be perfect.  I'll go home and tell my wife to stop working so hard to raise our kids right.  Obama's evidently going to make everything OK. 
  
So, now that you have your glorious president, put up or shut up. 
Nov 6, 2008 3:15 pm

Never been punched in the face and would love the thought of giving a beat down to a dumbass dem who's wearing an obama pin. 

 
So tell me Bondguy, exactly why did you vote for Obama. What exactly did he run on that made you want to vote for the socialist. Its not a matter of IF you fall into his RICH category, but the premise of redistribution as he put it.  IF YOU WANT TO REDISTRIBUTE YOUR MONEY TO OTHERS, THAN BY ALL MEANS DO IT.  BUT DON"T TAKE FROM ME AND MY FAMILY TO GIVE TO SOME LAZY ASS WHO WON'T GO OUT AND MAKE IT ON HIS OWN.
Nov 6, 2008 3:40 pm

Has the market ever been down by 10% the (2) days following a presidential election?  There will be no wealth to distribute at this rate!   

Nov 6, 2008 3:44 pm

Well, in my younger days, college and military, lets just say there were many hairy moments that could have become ugly.   But, as they used to say, noone wanted to step up to the plate and play ball.  Those days are gone and now I just go out and drink and have a great time with my wife and friends.  Have some great photos at the HardRock in Biloxi two weeks ago.  Grey Goose and Cranberry were my friends...along with Joe and Jose who were there to make sure the glass never got empty.  Anyone else have the pleasure of staying at a HardRock hotel and party at the bar??  Great to blow off some steam in these ugly markets.  I'm waiting for the obama effect...everything is great and the market will go to the moon....

Nov 7, 2008 9:17 am
bspears:

Never been punched in the face and would love the thought of giving a beat down to a dumbass dem who's wearing an obama pin. 

 
So tell me Bondguy, exactly why did you vote for Obama.
 
To end the hate I see on threads such as this.
 
It's time to end divisiveness and come together.
 
Work for change not against it.
 
One line from a song ' The future was yesterday we're already late."
 
It's time to move forward away from hate.