How Money Works

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Schneibster
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Re: How Money Works

Post by Schneibster » Thu Nov 17, 2011 10:32 pm

Seraph wrote:You can't have causality without a necessary connection between cause and effect.
That's the mechanism.
Seraph wrote:How do we know there is a necessary connection between sunrise and daylight? Yes, we have observed the correlation billions of times, but at what point - and how - can we prove a necessary connection that would turn a correlation into causality? I put it to you that the observation of a correlation will never prove a necessary connection as such. We are basically sophisticated inductivist turkeys.
The Sun makes light. This is not a correlation, it's an observation.

The difference between night and day is that one is light and one is dark. This is not a correlation, it's a definition.

The Sun's light makes daylight. That's a mechanism.

Now we have both a correlation and a mechanism and we can state that they are cause and effect: when the Sun comes up, it's morning.
Schneibster wrote:When you have repeating phenomena, you can just crank the correlation up
Correct.
Seraph wrote:
Schneibster wrote:When you can show a mechanism by which one causes the other, then a) you're sure you didn't get it wrong way 'round, b) you're sure they're not random unrelated phenomena that coincidentally happened at the same time, and c) you can establish causation without repetition.
A bit circular - as highlighted, but yes, agreed. I am just saying there is no such mechanism.
Actually, the key point in c) is to be able to establish causation without repetition; correlation without repetition is just as likely to be random chance as causation.
Seraph wrote:
Schneibster wrote:So, by what mechanism do you propose that US housing prices influenced some European housing prices but not others? The housing prices fairy?
I would expect local factors to have affected outcomes in the others. The graph indicates they are in the minority. We are not talking about as simple and uniform as the theory of gravity here, are we?
I deliberately left out the case where two correlated events are effects of the same unmentioned cause to see if you'd bring it up.
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Re: How Money Works

Post by Schneibster » Thu Nov 17, 2011 11:58 pm

Calculated Risk sends us to two papers by Amir Sufi and Atif Mian using county-level data to investigate the causes of the recession. Their work strongly supports the balance-sheet view: a fall in demand from highly indebted households is the big story, and you can confirm that by showing that the big declines in nontradable employment — that is, employment in industries that sell locally — is in those countries where debt levels were high.
Source.

Now, knowing that, what do you expect the biggest increase in debt among households is?
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Re: How Money Works

Post by Seth » Fri Nov 18, 2011 12:02 am

Schneibster wrote:
Seraph wrote:You can't have causality without a necessary connection between cause and effect.
That's the mechanism.
Seraph wrote:How do we know there is a necessary connection between sunrise and daylight? Yes, we have observed the correlation billions of times, but at what point - and how - can we prove a necessary connection that would turn a correlation into causality? I put it to you that the observation of a correlation will never prove a necessary connection as such. We are basically sophisticated inductivist turkeys.
The Sun makes light. This is not a correlation, it's an observation.

The difference between night and day is that one is light and one is dark. This is not a correlation, it's a definition.

The Sun's light makes daylight. That's a mechanism.

Now we have both a correlation and a mechanism and we can state that they are cause and effect: when the Sun comes up, it's morning.
Incorrect syllogism.
Hypothesis: An incandescent orb called "the sun" causes light to be visible.
Observation: During period 1 light is visible.
Observation: During period 2, light is not visible.
Observation: During period 1, an incandescent orb is visible.
Observation: During period 2, no incandescent orb is visble.

Correlation: During period 1 an incandescent orb shedding light is visible.
Correlation: During period 2, an incandescent orb shedding light is not visible.

Conclusion: An incandescent orb causes light to be visible during certain periods.

That's correlation and causation.

Hypothesis: Fannie Mae and Freddie Mac did not cause the current recession, it was caused by "Iraq, the Medicare prescription drug program, and the Bush tax cuts."

Observation: In mid to late 2005, housing prices in the US began to decline.
Observation: In 2007, European housing prices began to decline.
Observation: European housing markets are not directly controlled by Fannie or Freddie.
Observation: European housing markets are indirectly affected by the strength of the US and international economies.
Observation: The international economy is strongly affected by declines in the US economy.
Observation: The US economy is strongly affected by the US housing market.
Observation: The policies and practices of Fannie and Freddie strongly affect the US housing market.
Observation: Fannie and Freddie are controlled by the US Government.
Observation: Government social mobility policies under the federal "Community Reinvestment Act" mandated that mortgage lenders significantly ease the criteria used to reject potential unqualifed home mortgage applicants.
Observation: Insuring mortgages using public funds through Fannie and Freddie creates demand for housing.
Observation: Housing construction markets respond to easily-available and government-guaranteed home loans by building houses for sale to consumers who previously could not qualify for home mortgages.
Observation: Excess available housing and easily-available government-guaranteed home loans cause the mortgage origination market to respond by heavily marketing low-cost, easily-obtained mortgages to consumers who failed to qualify for ordinary, non-government-insured home loans as a part of a social mobility program called the "Community Reinvestment Act" and flogged by liberal progressives Barney Frank and Chris Dodd.
Observation: Mortgage lenders, aware of the increased risks of lending (by government order) to unqualified applicants find ways to insure their investment against the inevitable and predictable losses they see through "securitization" of mortgage pools and creation of Credit Default Swaps.
Observation: The SEC failed to properly regulated and oversee mortgage pooling and CDS under existing securities laws.
Observation: Excess available housing and easily-available government-guaranteed home loans induce consumers who fail to qualify for ordinary non-government-insured home loans to fraudulently take on mortgage debt that they could not afford to repay on terms that allow them to make low payments for a short period, but which include balloon payments that such consumers cannot hope to make.
Observation: When the balloon payments on houses that consumers could not afford, but were able to purchase only because Fannie and Freddie, at the behest of Barney Frank and Chris Dodd and their ilk, facilitated it, consumers begin defaulting on mortgages.
Observation: Fannie and Freddie bought up more than 90 percent of all US mortgages and became the prime insurer for toxic mortgages.
Observation: The Federal Reserve, a private corporation, gives Fannie and Freddie an unlimited open line of credit from the Federal Reserve upon which they can call to cover losses in the US housing market caused by default on known toxic mortgages.
Observation: The Federal Reserve prints hundreds of billions of new dollars to give to Fannie and Freddie which the taxpayers will have to eventually repay.
Observation: The federal government bails out mortgage lenders and insurers, transferring more than a trillion dollars from the United States to foreign investors in securitized toxic mortgage pools, making those foreign investors whole and keeping the banks from being liquidated, but leaving the US economy and mortgagees in the lurch.
Observation: Mortgage lenders foreclose on homes not in default due to the declines in property values that make the asset worth less than the loan.
Observation: Government does nothing to protect mortgagees against either predatory lending or predatory foreclosure.

Correlation: Declines in European housing markets followed declines in the US economy.
Correlation: Declines in the US economy followed declines in the US housing market.
Correlation: Federal policies enforced under the CRA, and with the participation of Fannie and Freddie, preceded declines in the US housing market.
Correlation: Federal policies enforced under the CRA cause unqualified borrowers to buy homes they could not afford.
Correlation: Social welfare engineering programs started by Carter and enhanced by Frank and Dodd et. al, give unqualified buyers the ability to obtain home loans over the objections of mortgage lenders.

Conclusion: Federal policies enforced under the CRA, with the participation of Barney Frank, Chris Dodd, Congress, the Oval Office, Fannie Mae and Freddie Mac and the Federal Reserve, created an overheated housing market with easily available credit, which caused people who were unqualified to buy homes they could not afford, and combined with lax enforcement of existing securities laws by the SEC of the derivatives market, created a market bubble ripe for overproduction of housing, fraud and abuse, which eventually resulted in the housing market collapsing, bringing down foreign housing markets (and economies) through both direct and indirect connections to the US economy and the contraction of mortgage lending worldwide driven by fear that the same thing would (and did) happen in Europe.

Causation: Federal and government manipulation of the housing markets purposed to achieve social engineering goals espoused by Carter, Frank, Dodd and other leftist, liberal and progressive politicians and apologists caused the recession.

False causation: The recession was caused by "Iraq, the Medicare prescription drug program, and the Bush tax cuts."
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"All that is required for the triumph of evil is that good men do nothing." Edmund Burke

"Those who support denying anyone the right to keep and bear arms for personal defense are fully complicit in every crime that might have been prevented had the victim been effectively armed." Seth

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Re: How Money Works

Post by Schneibster » Fri Nov 18, 2011 12:05 am

Your last post was about how Occupy is a giant Marxist conspiracy. Snicker.

I should pay attention to this one because...?
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Re: How Money Works

Post by Seth » Fri Nov 18, 2011 1:40 am

Schneibster wrote:Your last post was about how Occupy is a giant Marxist conspiracy. Snicker.

I should pay attention to this one because...?
You probably shouldn't. I wouldn't want you to hurt yourself trying to actually think and reason.
"Seth is Grandmaster Zen Troll who trains his victims to troll themselves every time they think of him" Robert_S

"All that is required for the triumph of evil is that good men do nothing." Edmund Burke

"Those who support denying anyone the right to keep and bear arms for personal defense are fully complicit in every crime that might have been prevented had the victim been effectively armed." Seth

© 2013/2014/2015/2016 Seth, all rights reserved. No reuse, republication, duplication, or derivative work is authorized.

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Re: How Money Works

Post by Schneibster » Fri Nov 18, 2011 1:58 am

Seth wrote:think and reason.
Lie.
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Re: How Money Works

Post by Seth » Fri Nov 18, 2011 7:55 pm

Schneibster wrote:
Seth wrote:think and reason.
Lie.
Yes, you certainly do.
"Seth is Grandmaster Zen Troll who trains his victims to troll themselves every time they think of him" Robert_S

"All that is required for the triumph of evil is that good men do nothing." Edmund Burke

"Those who support denying anyone the right to keep and bear arms for personal defense are fully complicit in every crime that might have been prevented had the victim been effectively armed." Seth

© 2013/2014/2015/2016 Seth, all rights reserved. No reuse, republication, duplication, or derivative work is authorized.

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Re: How Money Works

Post by Schneibster » Fri Nov 18, 2011 8:50 pm

Tell it to the Marxists when they show up in the black helicopters. Snicker.
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Re: How Money Works

Post by Seth » Fri Nov 18, 2011 9:52 pm

Schneibster wrote:Tell it to the Marxists when they show up in the black helicopters. Snicker.
I won't tell them anything, I'll simply shoot them down with my .50 BMG Barrett M107-A1 firing APIT ammunition at ranges out to 2500 meters. And if there are any survivors, I'll shoot them dead with my Sako TRG-42 .338 Lapua with U.S. Optics 3.5-22x50 scope at ranges out to 1600 meters or more, or my new LaRue Tactical .308 OBR with Springfield Armory 6-25x55 scope at ranges out to 1000 meters, or one of my numerous Sig-Sauer 556 CQB rifles inside 300 meters, or my H&K .45 USP Tactical at ranges inside 50 meters, or my Gerber fighting dagger at corps-a-corps range, or my teeth, or one of the many other firearms and weapons that I own for the purpose of defending this nation and my family against Marxist revolutionary traitors and invaders.
"Seth is Grandmaster Zen Troll who trains his victims to troll themselves every time they think of him" Robert_S

"All that is required for the triumph of evil is that good men do nothing." Edmund Burke

"Those who support denying anyone the right to keep and bear arms for personal defense are fully complicit in every crime that might have been prevented had the victim been effectively armed." Seth

© 2013/2014/2015/2016 Seth, all rights reserved. No reuse, republication, duplication, or derivative work is authorized.

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Re: How Money Works

Post by Schneibster » Fri Nov 18, 2011 9:54 pm

Seth wrote:
Schneibster wrote:Tell it to the Marxists when they show up in the black helicopters. Snicker.
I won't tell them anything, I'll simply shoot them down with my .50 BMG Barrett M107-A1 firing APIT ammunition at ranges out to 2500 meters.
They're gonna arrest you if you start having hallucinations and shooting at random traffic choppers, you know.

Just sayin'.
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The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. -Thomas Jefferson
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Re: How Money Works

Post by maiforpeace » Fri Nov 18, 2011 10:14 pm

Seth wrote:
Schneibster wrote:Tell it to the Marxists when they show up in the black helicopters. Snicker.
I won't tell them anything, I'll simply shoot them down with my .50 BMG Barrett M107-A1 firing APIT ammunition at ranges out to 2500 meters. And if there are any survivors, I'll shoot them dead with my Sako TRG-42 .338 Lapua with U.S. Optics 3.5-22x50 scope at ranges out to 1600 meters or more, or my new LaRue Tactical .308 OBR with Springfield Armory 6-25x55 scope at ranges out to 1000 meters, or one of my numerous Sig-Sauer 556 CQB rifles inside 300 meters, or my H&K .45 USP Tactical at ranges inside 50 meters, or my Gerber fighting dagger at corps-a-corps range, or my teeth, or one of the many other firearms and weapons that I own for the purpose of defending this nation and my family against Marxist revolutionary traitors and invaders. paranoid delusions.
:fix:

I bet you have a bunker built on your property, don't you Seth. :hehe:

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Re: How Money Works

Post by Seth » Fri Nov 18, 2011 10:24 pm

maiforpeace wrote:
Seth wrote:
Schneibster wrote:Tell it to the Marxists when they show up in the black helicopters. Snicker.
I won't tell them anything, I'll simply shoot them down with my .50 BMG Barrett M107-A1 firing APIT ammunition at ranges out to 2500 meters. And if there are any survivors, I'll shoot them dead with my Sako TRG-42 .338 Lapua with U.S. Optics 3.5-22x50 scope at ranges out to 1600 meters or more, or my new LaRue Tactical .308 OBR with Springfield Armory 6-25x55 scope at ranges out to 1000 meters, or one of my numerous Sig-Sauer 556 CQB rifles inside 300 meters, or my H&K .45 USP Tactical at ranges inside 50 meters, or my Gerber fighting dagger at corps-a-corps range, or my teeth, or one of the many other firearms and weapons that I own for the purpose of defending this nation and my family against Marxist revolutionary traitors and invaders. paranoid delusions.
:fix:

I bet you have a bunker built on your property, don't you Seth. :hehe:
Not at the moment. Can't get a building permit where I live now and I'm renting anyway. But the one at the "bug out destination" in western Colorado is pretty cool. And well stocked.
"Seth is Grandmaster Zen Troll who trains his victims to troll themselves every time they think of him" Robert_S

"All that is required for the triumph of evil is that good men do nothing." Edmund Burke

"Those who support denying anyone the right to keep and bear arms for personal defense are fully complicit in every crime that might have been prevented had the victim been effectively armed." Seth

© 2013/2014/2015/2016 Seth, all rights reserved. No reuse, republication, duplication, or derivative work is authorized.

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Re: How Money Works

Post by Schneibster » Fri Nov 18, 2011 10:25 pm

And in Colon-rado you'll be among the friendly fundies. How nice. Maybe you guys can secede.
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Re: How Money Works

Post by Seth » Fri Nov 18, 2011 11:10 pm

Schneibster wrote:And in Colon-rado you'll be among the friendly fundies. How nice. Maybe you guys can secede.
Easier to just kill all the Marxists who are attempting to overthrow our government. They're all pussies anyway, and most of them don't know which end of the firearm the bullet comes out of.
"Seth is Grandmaster Zen Troll who trains his victims to troll themselves every time they think of him" Robert_S

"All that is required for the triumph of evil is that good men do nothing." Edmund Burke

"Those who support denying anyone the right to keep and bear arms for personal defense are fully complicit in every crime that might have been prevented had the victim been effectively armed." Seth

© 2013/2014/2015/2016 Seth, all rights reserved. No reuse, republication, duplication, or derivative work is authorized.

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Re: How Money Works

Post by Schneibster » Fri Nov 18, 2011 11:27 pm

Seth wrote:Easier to just kill all the Marxists who are attempting to overthrow our government.
Mass murder as a political tool.

Where have I heard that before?
:hmmm:
Everyone is entitled to his own opinion, but not his own facts. -Daniel Patrick Moynihan
The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. -Thomas Jefferson
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