/lefg/ - Lefty Economy & Finance General #1

Let's try to keep this one going, shall we?

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8ch.net/8pol/res/80.html
fred.stlouisfed.org/series/TCU

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You already fucked up.
You should be analyzing the the data empirically, not trying to find ways to fit the data to your ideology, you pseudoscientific fuck.

Not exactly sure what kind of argument you're making but if you think you're being intelligent, you just sound like some epistemological centrist saying nuh uh, I don't need any hypothesis, I just analyze data empirically, rationally and neutrally. Read literally anything about philosophy of science and then report back.

Market crash is one thing. Debt and Rates leading to currency crisis is another. The second seems more indicative of a 'failure' in the system. The first is more a bump in the road.

Fair assessment?

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This>>96842

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Good thread, OP.

Here's my old infodump on this stuff:
8ch.net/8pol/res/80.html

I mostly started out from an objective perspective and tried to figure out what was driving the ups and downs of the (mostly U.S.) economy. I made a few predictions based on the data I gathered:
1. The market would undergo a period of consolidation/stagnation before crashing.
2. Based on historical data, the market correction in late January was probably not the beginning of a crash.
3. Bitcoin was driven by excess speculation and would not be a good investment, contrary to what Zig Forums was saying.
4. The real crash will probably happen between the end of 2018 and summer 2019.

The first 3 predictions were all proven correct. Still waiting for a confirmation of the last one.

What's the basis of my predictions?

In short, I believe that the development of capitalist markets has led to a situation in which the profitability of investing in production is now minimal and the only "profitable" investments are actually speculation. It's mostly just betting on asset prices like houses or stocks or whatever. This continues like a chain with each purchase/sale driving up the price a bit but eventually there are no more potential buyers and the price crashes. Some people will profit tremendously while the price rises but those who eventually can't find a buyer will lose most of their money.

So for years the stock market continued to rise despite a stagnating real economy. Companies choose to buyback their own stocks because investing in the operational side of the business wouldn't be as profitable. Plus, the real owners make their money via increased stock prices and dividends - not sales revenue. Once the well-performing stocks became overvalued, market speculators looked for new markets like cryptocurrency. Crypto investment was spillover. This is why bitcoin prices peaked in December 2017 and the stock market suffered a correction in late January. However, at this point I'm not sure that bitcoin will indicate another general movement since bitcoin (last I checked) increasingly correlates to the general market.

What about gold? Gold would be a good investment after the crash starts. During the last recession it dropped massively in value but then regained it shortly after. The people who shill for gold are usually people who sell it for a living.

Indicators I watch:
Employment level. (Most recessions in the U.S. have happened with 1.5 years of reaching "full" employment)
Treasury yield curve. (This indicator has been flattening this year, and when it finally inverts it almost always signals a recession.)

I'd agree with everything you said but also factor in streamlined production & service tech causing falling rate of profit, meaning high levels of real-economy consolidation. Amazon, Apple and other get huges while all the smaller fish gets merged or destroyed by competition because the big guy can always cut their prices.
Also debt is a huge problem that will start blowing up soon.
I think gold is a pretty safe storage of value, ofc it will lose value as the crash starts but then it will spike like crazy. There's no telling if if there is any point stockpiling gold at this stage because we might actually see very nasty real-life consequences that would make gold worthless.

Check this out:
fred.stlouisfed.org/series/TCU

During every recession the TCU drops and recovers. But each recovery is lower than the last.

lmao

This isn't the trash thread, mongoloid.

Why yes, that is in fact one of the causes of falling rate of profit. Good job user, now read the read of Capital and you'll really get things.

this has to be the funniest post on the board ever

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Is this an economical advice thread? I've $20000 to invest in somewhere, where should I pick?

CP

How does the efficient allocation of resources, particularly that extracted from capital (meaning primarily property, plant and equipment. Note: all of these can be publicly owned), work under a Marxian economics system? This question comes from ignorance, not incredulity. I haven't read Kapital.

I ask this because if there is one thing that capitalists claim repeatedly over and over again is that the free market automatically handles capital allocation. Knowing that this is false because there are large power brokers who manipulate the market, how would you synthesize a Marxian alternative that isn't steeped in bureaucracy?

Vanguard is a really stable, financially conservative fund. I would buy put money into one of their ETF accounts and just look at it every couple of years. It's about as good of a stable return over a long period of time that you're going to get.

Go to /biz/ and rule out anything they reccomend. is good advice, I've got 20000 in a mutual fund with American Century that provides a decent roi and about 40000 across other accounts. Avoid speculation on internet funny money and don't fall for the small business meme unless the initial investment isn't too much or you'll lose all your money.

Even if there weren't, this would still be false. The free market doesn't do anything automatically. Capitalists handle capital, steeped in a bureaucracy called financial industry.

It doesn't matter that you haven't read Capital since Capital doesn't talk about the internal workings of a socialist mode of production.

First, the efficient allocation of resources would be easier in socialism since everyone has access to production data, meaning that you know exactly how much it costs to produce widgets in Firm A, Firm B, and Firm C. There also wouldn't be a loss of investment funding to speculative activities since money would no longer exist. It wouldn't be possible, for instance, for someone to take $200,000 to speculate on real estate or stocks. The real wealth, raw material, and human labor represented by that money would be allocated towards real production to satisfy human needs. This wouldn't occur due to government policy or decree but rather because the technical means of economic speculation would no longer exist.

Second, the idea that a socialized system of production wouldn't be capable of allocating investment in capital goods is also spurious, since a measure of consumer demand (i.e. people need X widgets) would then create industrial demand (i.e. factory needs Y materials and Z labor). Funding for public goods like healthcare, education, and infrastructure would be decided collectively (possibly via referendum) and then "taxed" out of the total production of society.

So my basic answer is this: socialism has all the same methods of economic calculation as capitalism but also has the potential to plan more effectively since it would eliminate barriers and instability caused by a system of private property.


this.

What's some good, not all too archaic literature to read if I want to get a good grasp of concepts/institutions in bourgeois economy (shareholders, funds, the role of companies, etc. etc.) but preferably not from a bourgeois perspective?

Capital.

I do want to read Capital, but please give me something more modern and more accomodating to someone with a brainlet understanding of economy to start out with.

It is as modern as it gets. Anyway, try Lenin's Imperialism? It is the first Marxist book I read and I was shocked how modern it still was.

Probably should just read it then. I'm somewhat intimidated to get into it because of its reputation as a difficult economical treatise.
Yeah I'll definitely read that. I'm currently reading his book on national self-determination and don't struggle to understand it so far

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What's there to get though? They all exist to continue the M-C-M' cycle.

It's difficult for me to label independent actors buying and selling a wide variety of securitized assets a "bureacracy." Sure it might be an oligopoly (Moody's and Standard and Poors as bond raters, Goldman and other investments banks as securities underwriters, and mega institutional funds owning a large portion of available for sale securities), but it doesn't operate as a unified whole. The criticisms that I have are leveraged at those big firms for gaming the market through politics and other noncompetitive forces, fucking over everyday workers by dealing with abstractions of abstractions which mitigates responsibility and affords plausibly deniability for social concerns, and convincing the populace that capitalism as we know it is the only system that we can have (Capitalist Realism) and that it must go through the hands of the few. Nothing about that spells bureaucracy to me. I also don't have bureaucracy as long as there is transparency, worker ownership and accountability for individual actors.

I agree that transparency is the key. In your first bit. Confused how you would measure costs without monetary value in any meaningful way, however. Not skeptical, just confused.
Wouldn't these be reactive allocation rather than proactive? You would need a significant amount of data and high predictive accuracy of economic models in order to successfully allocate resources proactively. If you allocate resources in reaction to felt need as you seem to suggest, you have already missed the moment of demand at the instant of felt need. That argument of reactive allocation plays directly into capitalists' hands if you have to dole out resources every time some entities claim to need them. That is highly inefficient rather than as efficient as free market tards claim laissez faire works.

What are some wrong assumptions made in standard economic education/theory?

neoclassical economics is based on the assumption that people make economic decisions based on perfect knowledge. this is trivially untrue. and yet this nonsense is considered the mainstream orthodox economics.

I've discussed my own ideas for this in other threads but the basic idea is that people would work, get "paid" credits for each work-hour, and then have those credits deducted from their personal accounts when they buy something. The prices (in general) would reflect the cost in labor time to produce each individual item being sold. Calculating for production would be done directly in terms of goods + labor time.

What are called "public goods" in capitalism such as military defense, education, the legal system, pensions, etc. would need to be paid for via a system of taxes that could be decided via referendum or some other democratic process. Aside from that, production of goods could be allowed to mostly depend on the level of demand for consumer goods and the derived demand for capital goods and so on.

There is a superficial resemblance to a market economy but everything would operate via central coordination and there would be no private accumulation. For example, stores wouldn't accumulate credits with each sale. The credits would be deleted from the system. When an individual buys a product what he's doing is consuming part of his own abstract labor that was given to society in return for the item he intends to consume. The funding for the store comes from a central planning system and not from purchases.

This is true, and the idea I mentioned would only apply to commodities that are already being produced. For new products there would have to be some kind of estimate made of potential demand (if for consumer goods) or some kind of social need like military defense and so on.
This system would in theory allow for more predictive accuracy of potential demand than anything under capitalism, since everyone's consumption and production would be available to the public in some kind of database. In a system of private production the best one can do is to estimate the size of a given market and the potential demand for new goods. In a socialist system one could ask, again, in theory - "consumers aren't spending all of their credits, is it possible that demand exists for X?" If you gather data that indicates yes, then you could pitch a proposal to produce something new.
It wouldn't be "felt need" but rather non-monetary demand. Like I said above, people would have to work to earn credits and then spend those credits to buy goods. Whether or not they're willing to spend their hard-earned credits on some good is what determines the level of demand (at a given 'price'.)
I agree that it couldn't work like that. At an individual level they would have to work to buy goods. So individuals couldn't abuse the system by claiming they needed more. At the level of an industrial enterprise they would be given resources that they claimed were needed to produce goods. There's a potential for abuse here, but bear in mind that those resources have their own cost of production (or extraction) and if some industry tries to game the system by absorbing more inputs than necessary, or by working inefficiently, it will raise the cost of its own output. Consequently the finished goods would probably have a lower demand.

literally just knowing what all those different terms mean, what are the most important things to know about the state of the world economy today, etc.

Labor vouchers I think you are talking about right? Would people be paid more vouchers per hour of labor depending on the skill level/value the labor produces/how dangerous the job is?

Oh and specifically how the ongoing crisis developed that started in 2008. I'd like to understand this, but everytime I want to read some summary of it i realize I just need more background about extremely basic economic concepts

Yes.
Regarding the skill issue, a skilled worker would simply get paid for training. So, a doctor, for example, would be paid while studying in medical school rather than accumulating obscenely large debts that can only be paid back later via higher earnings.

Regarding dirty, physically demanding, and dangerous jobs the ideal solution would be to invest in making all jobs more-or-less equally desirable for the average person. So, basically in an ideal world we would manage to reduce the danger or physical strain or dirtiness of a job by investing in enough automation or equipment to reduce the impact felt by a worker. One would aim to attract workers by improving work conditions and not by paying more, since technically if you pay Person A twice as many labor credits as Person B then it kind of derails the entire purpose of labor credits and introduces possible miscalculations into the system. Paul Cockshott has proposed a 'graded system' of vouchers if I recall correctly.

Right there with you, bother.

Standard economic theory starts from the assumption that markets spring for spontaneously in a world where states don't exist and then concludes that states shouldn't "interfere" in the real world.

A good primer on basic economics is Michael Hudson's J is for Junk Economics. It's a nice glossary of Orwellian terminology that economists use to regularly stupify and deceive laypersons.

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Frustrating as fuck tbh, I also feel the same about political issues but to a lesser degree

This looks exactly like what I was looking for. Thank you

here's that book (from libgen)

Why? Bureaucracy is when decisions are taken from behind a desk ("bureau" in French), ie. far away from those impacted by these decisions. Financial industry fits perfectly.
Anyway my point was that the market doesn't handle anything automatically. There are people handling things. And as for your original question:
These people are engineers.

You should just google terms you don't understand and watch some youtube videos about how companies work. Not all companies are the same and not all use the same structure.


based

amazon increased wages
stock is down a bit today

I'm also interested in investment… Would it be a viable strategy to put all my money into, say, BP after the gulf oil spill if something similar to that happens again? Or some other company that gets a bunch of bad press but will inevitably go back up.

That's always a good strategy.

Peter Schiff is always telling people to buy gold (because he sells it) but a lot of his investors lost money in the last recession because they bought gold before it went down. They should have waited until the middle of recession to buy, then sold a year or two later.

learn to value invest instead of gambling. pro tip just buy the stock index

nice "tip"

better than losing 90% on a failed company

I don't wanna make 4% a year, I have no marketable skills and if I ever wanna own a home or something I need to trade up big. Maybe that's not realistic but if I could be one of those guys to earn a living on the stock market while making Marxist videos that would be pretty sweet.

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buy bitcoin now then

Bitcoin is a ponzo scheme, I'm not quite as dumb as the /biz/ faggots thank you. Speculating on crypto is what deranged wannabe millionaires do, speculating on stocks is what actual billionaires do.

just because you ideologically don't believe in something because of leftist tribalism doesn't mean you won't make money on it. bitcoins top is 3x here, most stocks are at ATH already

go away.

bitcoin already peaked and is an inherently speculative asset. when the general market crashes bitcoin will crash as well.

buying a failed company is also speculation. I can't tell if you want to make money or just gamble

Failed company is one thing, I'm just thinking 'temporarily troubled company'.

Buying any asset these days is basically gambling or speculation. There were people who made a ton of money during the 2008 financial crisis who later stated that stock performance really has nothing to do with the underlying fundamentals. But that's not the point. The point is to buy something that will increase in value. Bitcoin isn't going to do that in the near future since it already peaked and can only lose value during the next crash.

ffs - stop posting nonsense.

well as an example, i've been buying TSLA when it goes near support and shorting when near resistance. Troubles are just ways of letting me have more buying opportunities.

depends. you can clearly value companies even in current hyped conditions, eg i shorted TWTR because it was overvalued and bought AAPL because it is undervalued relative to other companies.
Most investors will have bought companies they researched in 2009 when the markets were low and are still holding.
Bitcoin is at support levels now and has room for long term growth imo. It might take a while to start uptrending of course

That's exactly what I'd like to do, but I don't quite know where to start. I don't even know what platform to use or the basics of how it works. And I know that the market is pretty bloated right now (seemingly) but I don't see what else to do with my money. Right my ISA pays 1% on money that's in it for one year, that's nothing, there's reputable funds that pay 10+% per year and that's without what I could make if I traded on my own (or potentially lose, I understand that much).

depends where you live. If you're american, don't bother trading for yourself, just get a job doing it

Yes, but like all things it's a risk in that the company may not recover. If you don't have much time to trade you may be better off just dumping money into a stable fund, that's virtually no effort and provides a decent enough roi.

Start with an account with a broker, preferably one with low commissions.

Robinhood does free trading, even has options now. Not sure how they make money though so maybe research it if it sounds too sketchy to you.

VIX at 23, tech stocks collapsing, is the bubble bursting?

My bourgeois dad swore by the business writer Scott Burns of the Dallas Morning News who had this thing called the "couch potato portfolio." Worked pretty well for him. Basic diversified mix of low-cost index funds. More or less the Vanguard funds. Another piece of advice he gave was "stay away from bonds."

Shit is really weird right now and the market plunge today is case in point. Or just how overvalued the market is which anyone who can rub two brain cells together can see.

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It's possible, although most indicators i've seen point to the likely timeframe for a crash as 2nd half of 2019.

What did they mean by this?

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Do you guys think I should buy a fund then? I kinda had the dream of personally buy low sell high-ing individual stocks. I know that's kinda risky but, I dunno, it seems like a fairly safe bet. Today would be a damn good day to put my money in too (unless the whole market collapses which seems unlikely).

This sounds kinda retarded now I typed it out but what I meant was that huge corporations basically never go out of business (unless I invested in something stupid like brick and mortar retailers), if I bought Volkswagen when they had the emissions scandal for $92 I would have $150 now, for $180 a few months ago, if I bought BP shares after the Gulf spill at £322 I would have £588 now. If I bought Tesla shares when the accusations of insider trading came out for $265 they would be worth $310 only two days later. And Tesla shares are super down right now too, which makes me think about putting all my cash (£25k) into it, since their earnings report is about to come out.

On second thought (actually I've been researching for like two hours) it doesn't seem so simple, UK stock purchases mean 0.5% stamp duty (tax) on the price of the stock, which seems like it would make short term trading feel very risky, even if I cashed out and bought another stock the same day I'd have to pay 0.5% again, the situation is even worse if I didn't make a profit. FUCKING GOVERNMENT TAKING MY MONEY FOR NOTHING REEEEEEEEEEEEEEEEEEEEEEEEEE

Oh shit I think I felt what being Porky is like for a second there. What a strange sensation. If I put the money in a fund instead I guess the manager will have to worry about all that stuff instead of me, and I don't have to take the time to do research. Plus many of those funds have 10%+ yearly returns anyway, some even have more like 75%+ 5 yearly.

If I buy US stocks I don't have to pay stamp duty on the other hand, but then I have to worry about FOREX instead. Plus, all my cash is in an ISA already and ISA money has to be in GBP. I could take it out but then I wouldn't be able to put it back in later (ISA is tax free savings basically) until next year. So I would have to pay taxes myself on any money I made and go through all the difficulty of figuring out that. But then on the THIRD hand, capital gains doesn't apply until you make £11,700 profit a year and I don't have enough money for that to be likely. But it also means dividends are taxable above £1000 per year and… FUCK WHY IS MONEY SO COMPLICATED REEEEEEE

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Yeah don't know about any of that stuff over in the UK but I would really keep a close eye on the commissions if you put money into an index fund. For example, the VTI (the Vanguard Total Stock Market ETF) has an expense ratio of 0.4%. That's good.

Individual stocks are really risky. It's hard to outperform the market generally unless you really know what you're doing. The index funds just track the market or big sectors of it. I play around with stocks though – but just play.

It is not a safe bet. The problem is that class mobility is frozen unless you can strike it rich gambling: and trading individual stocks is basically just gambling. So our generation is speculating like crazy. You could do really well or you could go broke. It has historically been the case that following the market results in cumulative returns over time.

I have pulled most of my money out of the markets. I think it's too weird right now. I'm nervous. I sold before the plunge earlier this year, but if I had bought back in, I would have made a nice return… until this week… which would have put me back to where I was in February. Either way it's kind of a wash unless I had timed the market just right, which is really hard to do.

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Also for the love of God don't put all of your money in Tesla.

I was gonna finally transfer my cash savings account ISA over into a fund today with a 53% 3 year yield due to the market prices right now and I found out I'll have to wait at least 2 weeks, probably more like 4, to get everything approved to move over to a fund trading savings account since I'm in an ISA. I'll probably miss this dip entirely. Oh well, what can you do…

I guess you're right, it would be awesome to luck out but it's not exactly likely and it would really suck to lose everything too, if I split between Lifetime ISA that gives you 25% extra when used as a home deposit, and the rest in a regular ISA with a few funds, maybe I can afford a mortgage in 10 or so years, who knows.

I agree that the market seems a little weird… But it feels like I would be missing out by not investing, even if there was a crash as bad as 2008 I would have my money back within 2-3 years if I held steady and if things go full late capitalism and keep climbing my savings won't be worth anything in 10 years.


Yeahhhh… That probably is pretty dumb. I think I know enough now to know what I don't know, I'll pick a well-performing fund.

Think on a longer timeframe. Well, hell if I know. I'm not rich. But that's what I'm trying to do.

So right now the Federal Reserve is raising interest rates gradually. See my post up a bit with the pic of Trump called the Fed crazy. Well, he knows the Fed is raising interest rates because it wants ammo to deal with the next downturn. Which means a downturn is coming. And the Fed continuing to raise rates is going to pop the inflated U.S. stock market bubble (that grew to enormous size because of a decade of ridiculously low interest rates). And if that happens, then the recession is going to happen on Trump's watch and he doesn't want that. He'd rather keep inflating it and pawn the consequences off to the next guy. At least that's my thinking.

So I'm staying out of it. Mostly.
Yeah that's an impossible dilemma. Dunno myself honestly

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Yeah, who the hell knows eh? I'm sure a market crash will happen eventually but what the hell, might as well ride it with the rest of the economy.

derp. we're at the crest of the latest bubble this is, by any definition, not a good time to put money in. and due to the nature of modern markets everything tends to go up and down together, although there are always outliers.
it happens all the time.


The time to invest is going to be after the next recession starts. That's when everything will be low. Or, you could short-sell something right before the recession but I'm not sure what kind of timeline you have to deal with when short-selling.

People have been predicting a market crash for at least the last 5 years though.

It might happen next year or five years from now but it's totally inevitable as governments, rather comically, have found themselves unable to find any alternative model even after 2008.

Bump!

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Pakistan, t*rkey and Venezuela's debts are blowing up. Dollar crisis potentially soon.
Basically imagine you're being paid in Pakistan/Turkish/Venezuela currency but borrowed in USD. So you get paid in local currency but due to your currencies collapsing against the dollar, your interest rates get increased 50+% and you get paid less at the same time. Basically they can't pay and they won't.

Tell me about MMT is it a meme?

It seems legit, and most of what MMT seems to advocate is that governments use their own ability to issue money as a way to handle crises and prevent the accumulation of massive private-debt. Not super familiar with MMT though.

bump

I smell blood.