So, essentially, ‘twas ever so.
The titles Kaiser and Czar literally derive from Cæsar. Meanwhile, we still maintain consuls in diplomatic relations between countries who often have Senate houses filled with Senators.
That's not the case for "senator", which turned into a generic word and it's not directly connected to the Senate of the Roman Republic.
I don't know if that has been continuous, though.
Romans at the time were using three names, the given name (Gaius), the family/clan name (Julius) and the cognomen (Caesar), which was originally a nickname that became hereditary to identify a particular branch of a family.
So, the emperor of Russia was called the tsar because Gaius Julius or one of his ancestors was nicknamed "Curly" or maybe "Beardy".
>because Gaius Julius or one of his ancestors
Sextus Julius Caesar is the first Julii Caesares according to wikipedia. I just love that the term for all of them is Julii Caesares.
Maximinus Daza (the eastern Roman emperor during the Tetrarchy) was the last holder of the title Paraoh, and I think he reigned from Nicomedia, in Anatolia.
It’s funny that Pharaoh died out with the rise of christianity, but Pontifex lived on.
“Too big to fail”.
http://evene.lefigaro.fr/citation/tue-homme-assassin-tue-mil...
> To sate the lust of power; more horrid still, The foulest stain and scandal of our nature Became its boast — One Murder made a Villain, Millions a Hero. — Princes were privileg’d To kill, and numbers sanctified the crime. Ah! why will Kings forget that they are Men?
-- Beilby Porteus (1759)
[1] https://quoteinvestigator.com/2010/05/21/death-statistic/
That’s a gorgeous quote! Something Lord Henry in “The picture of Dorian Gray” would say.
We owe everyone billions or trillions. They’d hate to see us (or our dollar) fall.
The assertion was that bond holders would hate for the value of the maturation currency to fall. This is true, regardless of the currency origin.
Beyond that, printing more dollars or defaults, would influence USD value to some degree, but would not guarantee a decline in overall attractiveness.
One of the pillars of US hegemony is OPEC appointing USD as the preferred trading currency, over the last 50 years. Another is the industrial capability that the US exercised in WW2. It demonstrated that the US is capable of incomparable mobilization, growth of production and innovation, when properly motivated.
B.effing.S.
What hyperbole and hubris.
This is American exceptionalism at its "shining" worst. The incredible stupidity of that statement (to use superlatives like incomparable, as you did) would be hard to believe among rational people, if not already seen in writing, as above...
That capability you talk of, could apply to any country, when ”properly motivated".
Example: India. 1947.
Removed the British as the colonizer, non-violently, except for maybe sporadic incidents, and the 1857 rebellion.
Motivations and results in the same ball park as your example, as regards mobilization (of the population to drive out the British).
See:
https://en.m.wikipedia.org/wiki/Colonialism
https://en.m.wikipedia.org/wiki/Colonial_empire
https://en.m.wikipedia.org/wiki/Mahatma_Gandhi
Production and innovation not relevant in this case, except maybe innovation of overthrowing an oppressor non-violently.
Argentina tried doing that, resulting in 100% inflation per month.
The US dollar bit is the problem.
From the perspective of anybody outside the US the US dollar is a bond - a zero percent bearer bond.
Therefore it is nothing more than a bond swap with a change in interest rate and term. The entity “owing” doesn’t change
Exactly, just between a 20 and a 30 percent of our debt is in Argentine pesos. [0]
0: https://www.argentina.gob.ar/economia/finanzas/graficos-deud...
So many "paradoxes" make perfect sense if you flip the causality.
Uhh, where are people compelled to buy bonds? People buy bonds when they think they're a good investment vehicle - not out of obligation.
Campaign contributions, sure.
But the idea that there is any kind of compulsion for citizens to buy government bonds seems false. I don't know, maybe in some dictatorships or something, but certainly not in western democracies.
The idea that Elon Musk or Bill Gates would buy bonds to try to gain influence in the US doesn't make any sense.
Politicians like congressional representatives or the president couldn't care less if someone rich buys bonds. The bond market is enormous, even a rich person is a drop in the bucket.
Government bonds are not an avenue for influence. There are avenues for influences, but bonds aren't one of them.
"Owe Your Banker £1k You are at his mercy; Owe Him £1M the position is reversed; But if everyone owes the banker £1M then its everyone's problem"
Then the government's problem when the insurer melts down.
No, especially as a big client, if anything more so at a small bank than a big one.
Curious. That leverage lies in hope of some repayment, yes? But my very fuzzy recollection (surfed a tome on financing WW2 years ago), is the US "loans" were made without informed hope of repayment - it was just politically unacceptable in the US to say that up front. So while there were assorted small post-war repayments (often non-monetary - leases and such), the bulk was written off. Does the size of an unrepayable debt affect negotiations on the size of a token repayment?
https://www.independent.co.uk/news/business/news/britain-pay...
> Instead, the United States would “lend” the supplies to the British, deferring payment. When payment eventually did take place, the emphasis would not be on payment in dollars. The tensions and instability engendered by inter-allied war debts in the 1920s and 1930s had demonstrated that it was unreasonable to expect that virtually bankrupt European nations would be able to pay for every item they had purchased from the United States. Instead, payment would primarily take the form of a “consideration” granted by Britain to the United States. After many months of negotiation, the United States and Britain agreed, in Article VII of the Lend-Lease agreement they signed, that this consideration would primarily consist of joint action directed towards the creation of a liberalized international economic order in the postwar world.[1]
EDIT: Oops - that article refers to postwar loans. The TFA might be referring to non-lend-lease wartime debt. But that might have been refinanced by... It's late. Edit about to expire. Don't know.
[1] https://history.state.gov/milestones/1937-1945/lend-lease
[1] cite I haven't read: https://history.state.gov/historicaldocuments/frus1947v03/d6....
Owe your banker £1,245.21 you are at his mercy; owe him £1,245,207.25 the position is reversed (August 2024)
source: https://www.bankofengland.co.uk/monetary-policy/inflation/in...
£36,268.59 and £36,268,585.70 according to the calculator you linked.
More than smart-ass quotes, I'm curios about these sorts of flips in risk/value in a general abstract sense. What is this sort of thing called? What are examples on other domains beyond lending?
Anyhow, such a principle typically exists wherever there is an opposing relationship of sorts. In the case of money, for every debtor there is a creditor. Generally, people often equate having lots of money = wealthy, and those with lots of debt = poor. But you can flip this relationship, if those in debt never actually repay (in real terms), and instead simply repay their debts with further debt.
Give a man a fish, and he eats for a day. Teach a man to fish, and he eats for life.
Worked on big telecom billing back in the days. There was the average fish like me whose bills go to a normal flow when unpaid, and the big fish, like government, big companies, etc that not even have to pay their bills (for a time, of course).
https://www.corpwatch.org/article/eurozone-profiteers-how-ge...
Also, economist Mark Blyth has written extensively about this.
- Should the population that voted for a crooked, even criminal, government suffer all the consequences from its actions?
Yes and no. Yes it was a bail out of others.
But Greece was 175% in debt. That's not the fault of the banks who lent money to Greece. FWIW it's widely documented too that, from the start, Greece cheated to get in the EU / Eurozone, with the help of one of the big four accounting firm, by completely cooking its book to hide how bad the economical situation of Greece was.
So, yup, sure, "evil bankers". But somehow the greek government managed to reach a debt of 175% of its GDP. That's not the fault of capitalism / finance: that's the fault of government overspending.
But moving on from moral arguments, the crux is that only some 5% of the bailout money actually stayed in Greece [1].
Furthermore, it takes two to tango: the banks did not diversify their debt portfolio [2], they lent because they wanted to, and, knew Greek debt implied higher risk. After all, that’s why these loans commanded a higher interest compared to other sovereign debt.
[1] https://amp.dw.com/en/most-of-greek-bailout-money-went-to-ba...
[2] https://econreview.studentorg.berkeley.edu/a-tale-of-two-cou...
Wouldn't be nice to fail upward like that?
Conversely during the GFC the Obama administration put a plan together to allow people to get their loan terms adjusted (write down). The plan was very long, bureaucratic, and difficult to follow. Nearly everyone who attempted to use the scheme failed to successfully complete it and receive the write down.
When asked about this, an administration official explained that the plan was never designed to give homeowners relief. Instead the purpose was to dangle a carrot in front of their nose to get them to struggle and sacrifice to continue to make full payments as long as possible so that the banks didn't have to take losses as quickly.
Note though that he is only quoting "off the record" conversations with Treasury Secretary Tim Geithner
I specified it because the comment very clearly lacked a citation due to touching controversial political subjects, and any future reader benefits from such citation if added.
I could have made a lengthy complaint and specified concerns about not attaching supporting references - such as unclear attribution that can obscure possible underlying political agendas - but that itself would add nothing not covered by: citation needed. With a citation, people can judge for themselves.
https://prospect.org/economy/needless-default/
"The cynical view is that HAMP worked exactly to the Treasury's liking. Both Senator Elizabeth Warren and former Special Inspector General for TARP Neil Barofsky revealed that then-Secretary Geithner told them HAMP's purpose was to "foam the runway" for the banks. In other words, it allowed banks to spread out eventual foreclosures and absorb them more slowly. Homeowners are the foam being steamrolled by a jumbo jet in that analogy, squeezed for as many payments as they can manage before losing their homes."
In the UK, if you owe 200k, the bank takes over your house, sells it for say 150k and has 20k of costs you still owe them 70k, and you have to go bankrupt and spend the next decade in financial misery
Credit standards and interest rates will be different on non-recourse loans, and cancelled debt typically has to be reported as income and taxed.
This wording makes it sound like mortgages are required to be non-recourse loans in the 12 states, but that's not the case. 12 states allow non-recourse loans, however they are not common for mortgages, with many lenders not even offering them.
"Importantly, recourse affects default only through lowering borrowers sensitivity to negative equity. Unconditionally, there is no difference between the default rates in recourse and non-recourse states."
"The effect of recourse is significant only for higher-appraised properties."
> Credit standards and interest rates will be different on non-recourse loans
"To the extent that borrowers in recourse states are less likely to default in response to negative equity, and are more likely to default in a lender-friendly way if they do default, lenders are likely to face smaller losses from default in recourse states. Thus, one might expect interest rates to be lower in recourse states. However, we find no evidence that they are; in fact, we find that loans are more expensive in recourse states."
You can read the paper for yourself: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1432437. Note that this paper (and many other sources) classify Texas as recourse but it is not. I'm not certain why that is.
Many recourse states require the bank to credit you the full appraised value, not the actual foreclosure sale value - because banks often bid against themselves at foreclosure auctions and control bid acceptance so they effectively set the foreclosure price. Various things (wages, personal property, retirement accounts) are often excluded from recourse for your primary home. In some states like Minnesota a jury must determine the fair market value of a foreclosed home. Other states have strict requirements (like short filing deadlines) or lengthy procedures (all attorney billable hours!).
This effectively makes non-foreclosure options way more popular - where a bank will ofter to take the deed and cancel the debt. In the end it is more cost-effective for the bank and better for the borrower.
Furthermore even if you get a deficiency judgement the old proverb "You can't squeeze blood from a stone" applies. Someone who can't pay their mortgage is unlikely to have significant assets to draw on. All you get for your trouble is a bankruptcy filing from the borrower. After all that time and trouble your deficiency judgement gets discharged anyway.
In the end recourse states mean more defaults happen through a voluntary non-foreclosure process but lending standards and interest rates are not that different and very few borrowers ever actually have a deficiency judgement let alone pay a dime toward one.
Bank would foreclose, let the family stay there until the house sold again, and some even PAID people to take care of the property / not damage it on the way out.
My neighbors refinanced at a terrible time, they quit paying, foreclosure happened, then they actually worked out a new mortgage with the bank to stay.
It's almost like the banking system was designed by rich people to suit the needs of rich people or something.
And to tax the poor but that's a more recent component.
How would this scenario play out differently?
A bank is underwater on loans to a certain house. If they pull the plug now, the bank takes a loss. If they work with the household to raise the household wealth, then they can recoup their loan amount from the new wealth.
So what's your alternative solution, in the world where banks are designed for the poor?
I ask because I don't see how the personal assets of the people who designed this system come into play, at all
Food for thought: If they didn’t have an investment manager before this, and their primary asset was a big house they couldn’t afford… these people weren’t rich. They were working class, over extended themselves into a house, and got lucky.
Your premise may have some validity but the story in this thread may be an example of a bank making a working class family rich.
Under that logic you get howlers of counter-factuals like "Kings were rich and therefore there was never a war between kings." It is up there with the abject stupidity of System of a Down accidentally going pro-monarchist by asking why don't presidents fight the war.
Apply some actual thought, please. The job of a bank is to accumulate idle money to put to use in investment to generate returns. "Why does money accumulate in the money accumulator that generates more the more money is put inside of it?"
Hold on: in what possible way, by what conceivable metric, are the wealthy a disfavored group? Name for me any way a wealthy person struggles. It is some mad "leave the billionaire alone" cope to try and say the literally most privileged, by definition, class of folks on the planet are somehow oppressed.
> and being literally unable to comprehend that groups are made up of different people.
Of course they are, but as a group of people who share commonalities of experience, priorities, and oftentimes physical location and interaction, they necessarily also have more in common with one another than with people who are far disconnected from them. That is why people like Ellen Degeneres are taking pictures with George Bush: George Bush has far more in common with Ellen than Ellen does to the vast, vast, vast majority of her audience.
This goes double for economic interest. A world that no longer privileges wealth, even putting aside bogeymen like taxation or confiscation, will be unappealing to every wealthy person, because their wealth currently makes the world bend over backwards for them, and that's pretty sweet and nobody apart from the most principled people on the planet would willingly give that up.
> Under that logic you get howlers of counter-factuals like "Kings were rich and therefore there was never a war between kings." It is up there with the abject stupidity of System of a Down accidentally going pro-monarchist by asking why don't presidents fight the war.
I mean if you don't think it makes politicians of any stripe, kingly or otherwise, more ready to declare war if they know full well they themselves will not be expected to take up arms, then you have far more faith in people than I do.
Though I don't know where you got that quote from, if it is indeed a quote. I'm a much bigger fan of "when the rich wage war, it's the poor who die." And I think you'd be hard pressed to find a conflict where, outside some strange exceptional occurrence, that wasn't quite true.
> The job of a bank is to accumulate idle money to put to use in investment to generate returns. "Why does money accumulate in the money accumulator that generates more the more money is put inside of it?"
I don't object to the money accumulator accumulating money, I object to the money accumulator, when it malfunctions, having it's money replenished with tax dollars it did not earn by performing it's function, from which the guy who owns the accumulator draws a substantial salary afterwards, despite overseeing when the accumulator stopped working.
And like, I don't even think that's necessarily wrong? Like I don't know how you would let some of these banks actually die in such a way that wasn't immensely worse for everyone. My only real issue with it is that these are for-profit businesses that funnel absolutely stressful amounts of money up the proverbial chain. If we just as a society want to say that we're comfortable with the notion of supporting banks with public money because ultimately letting them fail is worse for everyone, that's fine. I get that. I just don't think anyone at the top of those banks should be ripping millions of dollars a year out of that institution. At that point, that's not a business, it's more analogous to a utility and it should be owned and operated by the state.
And that's just about what you want, right? You want the depositors protected, both because they didn't make the bad loans, and because wiping them out is going to cause ripple effects that spread the damage. But the stockholders, the ones that profited (temporarily) from the bad loans? Wipe them out. The management? Wipe them out.
£1 in 1945 is ~$25M today and even that value doesn't seem high enough for the quote to apply. I wonder where the cutover is? $100M? $1B?
Also I hope you meant £1M is ~$25 M today and not £1 :D
edit: which I actually just read, was multiple large banks, which is now a great strategy to not being owned by debtors. I assume a single large bank would be sweating a lot more.
https://en.wikipedia.org/wiki/Se%C3%A1n_Quinn is another example; he managed to persuade the bank, via accomplices, to lend him €451 million to buy its own shares in a sort of circular pyramid scheme to inflate its value.
I don't know what he did but since his question seems unproblematic enough I'll answer here - I didn't finish all the book, my Tom Wolfe phase was done, it seemed ok but not as cool as I thought Bonfire of the Vanities was, I remember some snide reviews of it at the time all about how Wolfe was still trying to be his idea of a great writer which was hopelessly out of date (opinion of reviewers).
My understanding it the Netflix adaptation has gotten a lot of complaints.
You owe the bank $100 and have $0 to your name then they're just out. Although I guess they didn't lose sleep until it was a bunch of people's mortgages so probably ~250k.
The popular conception of a bank, even when I was a kid, was a place that was based in your town and had maybe a few branches and took in people’s deposits and wrote mortgages and business loans.
That’s about double the percentage in 2000. Things have changed a lot and the trend continues.
The quote, that is the title of this comment thread (we're discussing a specific thing here, the quote in question, mind you, not which banks are good and bad) was a whole lot more applicable in the past than it is today.
Yes, sure there are small banks. But if you walk around any major city or drive around any major residential area, nearly all the banks you see (and in reality, nearly all the banks people actually bank at) will not be a match for the main point this quote is making.
That's because the banks that nearly all of us interact with now, are so large, and so politically connected and interwoven with our core financial structures, that it's actually impossible for almost anyone living to have a bank at their mercy due to the amount of money they owe the bank.
So the quote, once widely understandable and applicable, is slowly starting to make less sense to the average reader.
Which is kind of interesting.
How do they stay in business I wonder since noone sees them and noone banks there? What was your point again?
PS: I am aware that Elon's shares on other companies were used as collateral, but yet...