A Balancing Act

Baggage, drawing by SonjaI’ve never studied economics and so the following is how I understand the recent financial crisis after asking around and using google.

In the last 5 years or so property prices particularly in the US started going up; this was stimulated by clever people creating new types of financial institutes that got around government rules about financial institutes needing a certain reserve ratio (amount to be kept in cash). This happened in various countries but more so in the U.S. because there the regulations were less stringent. Since the economy was flourishing, and even though experts in the field could see where this would lead, in such a climate no government would want to insist on tighter regulations – this would be very unpopular.

So we have this bubble of buying and selling – even ordinary people, re-mortgaging their houses for that extra cash to spend on something. It makes sense. You see an opportunity and you take it.

What makes this unstable is when what is borrowed is close to what is the value of a property, because property prices always fluctuate. At some point, sooner or later, experts involved in this buying and selling are going to realise that this bubble will break and so they stop buying and selling. When they do, other experts recognize what is coming and do the same. Now the time for a property to sell takes longer and so there is less cash in movement. It hits institutions (banks / financial institutions) first because they can’t move their money to repay loans.

There was also a stock market bubble, stimulated by interest rates being low. Governments kept interest rates low because this stimulates economic rate. This is a good thing but usually inflation starts to happen (a chain reaction of wages going up, things costing more to buy and so money having less buying power) and this is a warning governments usually see in time and then solve, by raising interest rates. This time inflation was well under control (so interests rates remained low); perhaps the efficiency of new technologies and globalisation (imported cheap products) masked or compensated for the inflation that usually goes with strong growth, but this is a guess.

What is of interest is how governments have responded to this.

The U.S. response was to give credit and to buy mortgages, instead of buying bank shares. Buying mortgages involves more administration and doesn’t punish the shareholders who are mainly to blame for the problem in the financial institutions to start with. Shareholders control how financial institutions work. Where the government buys newly issued bank shares, it means that shareholders lose part of their stake (influence on how the company works and the profits). The U.S. response, -buying mortgages- means that there is no future restriction nor punishment for the irresponsible fat cats (the majority shareholders). They have no interest in being prudent since they didn’t suffer, and are likely to repeat this in the future. Government-owned shares promote more prudent actions, but, yes, in terms of politicking, this is called socialism and that’s most likely the reason that the U.S. didn’t take the approach the U.K. government took. Today on the BBC radio (October 14th) it was announced that the U.S. is considering buying shares in the nine largest banks, whether they need it or not. If this goes through now shareholders of banks who were responsible will be punished along with the irresponsible ones.

A friend posed these questions:

?What would be a “Baha’i” solution to the problem, and here I mean more than the very general ideal of the elimination of the extremes of wealth and poverty and more to the point of how is this ideal to be accomplished?

Is a form of “world socialism” the answer?

Does free market capitalism as we know it have to be fundamentally changed, and if so, will the wealthy of the world ever agree to such?

To my way of thinking the failure of Marxist ideology was more than just the misuse of its ideals by tyrants such as Stalin and Mao. It was also the fact that individuals are more concerned with their own well-being (family and close relatives etc.) than with the well-being of the people they do not know or have contact with. How much are people willing to sacrifice individually for the good of the group, especially when the group is the size of humanity??

What do you think?

  • Craig Parke

    Thank you for your post. It is a good starting point but I am afraid to tell you that your mortgage market and shareholders analysis is only the very minor component of the sill looming potential catastrophe.

    The very dangerous financial plutonium mechanism is CDO’s (Collateralized Debt Obligations – ie. a specific kind of financial derivative) and CDS’s (Credit Default Swaps – ie. a kind of insurance).

    Today was a very, very important red letter day (October 21, 2008) in all this because this was the day set to settle the Lehman Brothers situation regarding CDS’s.

    http://www.istockanalyst.com/article/viewarticle+articleid_2725618.html

    Watch this situation very, very closely in the rest of the days this week to the weekend.

    I will try to post here over the next several weeks as I get time to try to explain what is going on. How this plays out could directly effect every person on Earth who has paper money in their pocket right now anywhere in the world.

    It is very interesting to note that CDS’s were often issued in FIVE YEAR TIME PERIODS just like the Baha’i “Five Year Plans” of yore! There are many parallels between these mind constructs on the depth psychology level.

    I will try to explain how these financial instruments work as time permits over the next few weeks and what the truth of the world situation is.

    The MSM is NOT covering any of this. It is far too disconcerting. And the media companies have corporate debt and issued stock too! The average “Joe Six Pack” or “Joe the Plumber” out there is sound asleep. But the citizen journalist Blogosphere is definitely NOT asleep! That is where you get your truthful information on ANY TOPIC on the planet EARTH these days.

    The people trying to manage this current situation are afraid. They are very, very, very afraid.

    Every one of us should be too. Stay tuned…

  • Craig Parke

    Thank you for your post. It is a good starting point but I am afraid to tell you that your mortgage market and shareholders analysis is only the very minor component of the sill looming potential catastrophe.

    The very dangerous financial plutonium mechanism is CDO’s (Collateralized Debt Obligations – ie. a specific kind of financial derivative) and CDS’s (Credit Default Swaps – ie. a kind of insurance).

    Today was a very, very important red letter day (October 21, 2008) in all this because this was the day set to settle the Lehman Brothers situation regarding CDS’s.

    http://www.istockanalyst.com/article/viewarticle+articleid_2725618.html

    Watch this situation very, very closely in the rest of the days this week to the weekend.

    I will try to post here over the next several weeks as I get time to try to explain what is going on. How this plays out could directly effect every person on Earth who has paper money in their pocket right now anywhere in the world.

    It is very interesting to note that CDS’s were often issued in FIVE YEAR TIME PERIODS just like the Baha’i “Five Year Plans” of yore! There are many parallels between these mind constructs on the depth psychology level.

    I will try to explain how these financial instruments work as time permits over the next few weeks and what the truth of the world situation is.

    The MSM is NOT covering any of this. It is far too disconcerting. And the media companies have corporate debt and issued stock too! The average “Joe Six Pack” or “Joe the Plumber” out there is sound asleep. But the citizen journalist Blogosphere is definitely NOT asleep! That is where you get your truthful information on ANY TOPIC on the planet EARTH these days.

    The people trying to manage this current situation are afraid. They are very, very, very afraid.

    Every one of us should be too. Stay tuned…

  • Craig Parke

    Since the UHJ is basically saying that the financial crisis was caused by people not doing what the UHJ says to do, what would be their advice here?

    http://bailoutsleuth.com/2008/10/more-bailout-contracts-contain-blacked-out-portions/

    Maybe they could start by example by putting the names of the specific Baha’is who wrote the Ruhi books right in the introductions in the books?

  • Craig Parke

    Since the UHJ is basically saying that the financial crisis was caused by people not doing what the UHJ says to do, what would be their advice here?

    http://bailoutsleuth.com/2008/10/more-bailout-contracts-contain-blacked-out-portions/

    Maybe they could start by example by putting the names of the specific Baha’is who wrote the Ruhi books right in the introductions in the books?

  • Bird

    Being that I watched my net worth drop by 28% in the last month I will be watching for your contributions on the subject Craig. If I knew that the 28% went to the poor I would feel alot better about it.

    The bit about the authors of Ruhi is a good point.

    The world is in turmoil, what are the Bahai’s doing to bring hope? Feeding anyone hungry? Clothing or housing the poor? Passing out prayer books for free? Hmmm not where I live.

    Perhaps they are still stock piling, time reveals just about everything, we’ll see…. staying tuned in…

    Bird

  • Bird

    Being that I watched my net worth drop by 28% in the last month I will be watching for your contributions on the subject Craig. If I knew that the 28% went to the poor I would feel alot better about it.

    The bit about the authors of Ruhi is a good point.

    The world is in turmoil, what are the Bahai’s doing to bring hope? Feeding anyone hungry? Clothing or housing the poor? Passing out prayer books for free? Hmmm not where I live.

    Perhaps they are still stock piling, time reveals just about everything, we’ll see…. staying tuned in…

    Bird

  • http://bahaisonline.net/tcb Steve Marshall

    Hi Bird,

    You wrote:
    [quote comment=""]Being that I watched my net worth drop by 28% in the last month I will be watching for your contributions on the subject Craig. If I knew that the 28% went to the poor I would feel alot better about it.[/quote]

    It’s quite possible that the 28% never existed, except in the collective imagination, in the first place.

    Consider that part of your net worth may be tied up in a house. your house may be worth less (in NZ, with an overcooked housing sector, it has lost about 10% in the last year and is expected by some to lose a further 20%) but, in non-monetary terms, it’s the same asset. And when everyone around you is going through the same corrections and adjustments, your relative wealth will be unchanged.

    ka kite
    Steve

  • http://bahaisonline.net/tcb Steve Marshall

    Hi Bird,

    You wrote:
    [quote comment=""]Being that I watched my net worth drop by 28% in the last month I will be watching for your contributions on the subject Craig. If I knew that the 28% went to the poor I would feel alot better about it.[/quote]

    It’s quite possible that the 28% never existed, except in the collective imagination, in the first place.

    Consider that part of your net worth may be tied up in a house. your house may be worth less (in NZ, with an overcooked housing sector, it has lost about 10% in the last year and is expected by some to lose a further 20%) but, in non-monetary terms, it’s the same asset. And when everyone around you is going through the same corrections and adjustments, your relative wealth will be unchanged.

    ka kite
    Steve

  • Bird

    Thank you for your input Steve.

    I’ve probaby got my numbers wrong, I am terrible with math, but I am pretty sure that the 28% was based on earned after tax cash I put into savings with a financial adviser. If I put $1,000,000.00 away in cash and there is a balance now showing $720,000.00 in the account I am not sure how that money never exsited or where the heck the $280K went or when the heck it is going to come back, LOL!

    I am grateful for the exchange.

    Bird

  • Bird

    Thank you for your input Steve.

    I’ve probaby got my numbers wrong, I am terrible with math, but I am pretty sure that the 28% was based on earned after tax cash I put into savings with a financial adviser. If I put $1,000,000.00 away in cash and there is a balance now showing $720,000.00 in the account I am not sure how that money never exsited or where the heck the $280K went or when the heck it is going to come back, LOL!

    I am grateful for the exchange.

    Bird

  • Craig Parke

    RUHI BOOK NINETEEN TWENTY NINE

    OK class. Looks like I am your tutor for Ruhi Book Nineteen Twenty Nine. I know that it is completely forbidden in the Ruhi Courses worldwide for a tutor to ever give their own personal opinion about anything from their own life experience. So I will stick with this mandated philosophy to try to conform with all top down directives in order to make a good impression so you may trust me because at the end of this class over the next few weeks, I may try to borrow some money from each of you. Just say’in! OK?

    Here we go.

    As Robert McKee says in his riveting screenwriting classes (especially in the part on the cinematography in “Casablanca” where the dialogue between Humphrey Bogart and Ingrid Bergman says “I hate you” but the camera work says “I love you” because Arthur Edeson thoroughly studied Eisenstein’s choices in “The Battleship Potemkin”) pay attention because maybe nobody else is covering this stuff like this anywhere else! You may only be getting this analysis worldwide in Ruhi Book Nineteen Twenty Nine.

    Money has been vaporized in the last six weeks to the tune of 2 Trillion in U.S. 401K investments alone.

    Lets’ try to figure out why and let us also in the weeks ahead try to analyze the mentality behind what has happened.

    A “derivative” is a financial entity based on a real asset. They go back, as most people understand it, to commodities futures. These were originally “derived” to help out farmers in their planning for the season. You would sell a contract to provide a certain amount of corn at a certain date for a certain price. This would mean the farmer had some protection from market fluctuations and could take out loans and so forth to finance his crops on such a signed contract as a kind of collateral.

    Unfortunately, futures turned out to be a great thing for speculators to gamble on because you could make huge killings with almost no effort (though also huge financial risk). Lately, various kinds of derivatives have been popular on Wall Street for similar reasons.

    The risks, however, are considerable if you lose your bet. Warren Buffet, famously, has called derivatives “financial weapons of mass destruction.”

    Mortgage backed securities are derivatives theoretically backed with mortgages on real houses. The idea behind them was that they were good investments (AAA rated) because real estate was ALWAYS going to go up. They are complex and I’m not sure if anyone really understands them (the AAA rating was certainly a joke). It appears from research on what has happened that mortgages are atomized, so your own mortgage might be part of a number of different securities. Someone’s current mortgage, for example, may have been sold several times and they might not be really sure who actually owns it now. One big dilemma in all this is that in some cases it is now getting really hard to trace back to foreclosed houses from the securities and vice-versa. Even the CEO’s of these Wall Street firms that are now being vaporized did not fully grasp what was going on in their own businesses.

    These bundled mortgages sold as derivatives are called CDO’s or “Collateralized Debt Obligations.”

    There are apparently now lots of foreclosed houses that no one knows who really owns.

    Uh oh. Not good. Not good at all.

    CDO’s (Credit Default Swaps) are basically a kind of loan insurance that banks would sell to each other, theoretically to balance out risk. They are very complicated and COMPLETELY UNREGULATED so they have been causing huge problems. For example, apparently you can sell these things without having any capital at all to back them up! Thus you can collect the fees but when you get called to back up a default, you can just go bankrupt and “poof” the guarantee is worthless. Since 2007 there has been plenty of discussion that the Credit Default Swaps were creating panic in the banking industry and had become unsaleable. Many people saw this coming and tried to alert others. There were supposedly tens of trillions worth sold every year. I am sure the UHJ and the U.S. NSA were up on all this, and got all the worldwide Baha’i Funds out of the banks that were involved in this, right?

    The further insanity was that banks thought they were protected from the riskier and riskier loans they were making because they had bought all these Credit Default Swaps (CDO’s). Once real estate prices started to decline, the whole pyramid scheme started to collapse.

    This is the real crisis. Not the bundled mortgages sold as derivative investments. It is the amazing “debt insurance” instruments that could take down the financial system of the ENTIRE WORLD. Again, I am sure the UHJ and all the NSA’s on Earth world wide are up to speed on all this and took steps according. After all, both Douglas Martin and Peter Khan have implied in various speeches that in the future the Baha’i Faith will be the ACTUAL BANKING SYSTEM of the ENTIRE WORLD. So I am sure these guys are studying all this so that our system will not implode and make ALMIGHTY GOD LOOK BAD. Right?

    The bottom line now is that these CDO’s and CDS’s have become so intertwined and complicated that no one knows how bad things really are. It is quite possible that most of the investment banking system is really insolvent and holds probably trillions in bad paper.

    I suppose under classic Adam Smith economics you should just let all these bad assets vaporize and start over. That would wreck the banking system and probably freeze the economy in a very low mode for many years. Eventually, things would correct but we in the U.S. and maybe even Europe too if it spread in a collapse chain reaction would probably be down to Mexico’s level by then.

    Does the UHJ follow Paul Samuelson or Milton Friedman in how they will run the future infallible ALL WORLD Baha’i banking system? What does Douglas Martin or Peter Khan say about the Chicago School? Since the Wilmette Temple is near Chicago, maybe our future system will follow the Chicago School. Right?

    OK. That’s it for our first class.

    Here are some links to read as your outside assignment in Ruhi Book Nineteen Twenty Nine for some background info as we move on to Lesson Two next time. Your practical skill development practice (and these skill development practices are very, very, very important for Ruhi Book Nineteen Twenty Nine to work) is to fervently pray if you have any money AT ALL. You can also go and visit someone on a home visit and pray with them too if they have any money AT ALL too.

    http://www.cbsnews.com/stories/2008/10/05/60minutes/main4502454.shtml

    http://en.wikipedia.org/wiki/Credit_derivative

    http://en.wikipedia.org/wiki/Collateralized_debt_obligation

    http://en.wikipedia.org/wiki/Credit_default_swap

    Now here is the key rote memorization quote that you must master for the next class. You can practice saying it at your keyboard until you know it by heart as part of the glass:

    “One large difference between credit default swaps and other types of insurance, is you do not need to own the bond or instrument being insured in order to obtain insurance on it. If the bond fails, then, theoretically, you get paid, possibly along with many others. Yet the “insurer” of the bond is not regulated and the transaction is beyond federal or state regulation. This allow speculators to make money by purchasing insurance on a company’s bonds and then shorting the stock of the company in great quantity, causing the company to fail, and getting a payoff that exceeds their risk of shorting.”

    Uh oh.

    This completes our first class in Ruhi Book Nineteen Twenty Nine.

    Oh, I almost forgot. If you memorize Henry Fonda’s lines here by the next class, you will also get extra credit too! No pun intended!

    http://www.youtube.com/watch?v=PWNmJb-EUtk

  • Craig Parke

    RUHI BOOK NINETEEN TWENTY NINE

    OK class. Looks like I am your tutor for Ruhi Book Nineteen Twenty Nine. I know that it is completely forbidden in the Ruhi Courses worldwide for a tutor to ever give their own personal opinion about anything from their own life experience. So I will stick with this mandated philosophy to try to conform with all top down directives in order to make a good impression so you may trust me because at the end of this class over the next few weeks, I may try to borrow some money from each of you. Just say’in! OK?

    Here we go.

    As Robert McKee says in his riveting screenwriting classes (especially in the part on the cinematography in “Casablanca” where the dialogue between Humphrey Bogart and Ingrid Bergman says “I hate you” but the camera work says “I love you” because Arthur Edeson thoroughly studied Eisenstein’s choices in “The Battleship Potemkin”) pay attention because maybe nobody else is covering this stuff like this anywhere else! You may only be getting this analysis worldwide in Ruhi Book Nineteen Twenty Nine.

    Money has been vaporized in the last six weeks to the tune of 2 Trillion in U.S. 401K investments alone.

    Lets’ try to figure out why and let us also in the weeks ahead try to analyze the mentality behind what has happened.

    A “derivative” is a financial entity based on a real asset. They go back, as most people understand it, to commodities futures. These were originally “derived” to help out farmers in their planning for the season. You would sell a contract to provide a certain amount of corn at a certain date for a certain price. This would mean the farmer had some protection from market fluctuations and could take out loans and so forth to finance his crops on such a signed contract as a kind of collateral.

    Unfortunately, futures turned out to be a great thing for speculators to gamble on because you could make huge killings with almost no effort (though also huge financial risk). Lately, various kinds of derivatives have been popular on Wall Street for similar reasons.

    The risks, however, are considerable if you lose your bet. Warren Buffet, famously, has called derivatives “financial weapons of mass destruction.”

    Mortgage backed securities are derivatives theoretically backed with mortgages on real houses. The idea behind them was that they were good investments (AAA rated) because real estate was ALWAYS going to go up. They are complex and I’m not sure if anyone really understands them (the AAA rating was certainly a joke). It appears from research on what has happened that mortgages are atomized, so your own mortgage might be part of a number of different securities. Someone’s current mortgage, for example, may have been sold several times and they might not be really sure who actually owns it now. One big dilemma in all this is that in some cases it is now getting really hard to trace back to foreclosed houses from the securities and vice-versa. Even the CEO’s of these Wall Street firms that are now being vaporized did not fully grasp what was going on in their own businesses.

    These bundled mortgages sold as derivatives are called CDO’s or “Collateralized Debt Obligations.”

    There are apparently now lots of foreclosed houses that no one knows who really owns.

    Uh oh. Not good. Not good at all.

    CDO’s (Credit Default Swaps) are basically a kind of loan insurance that banks would sell to each other, theoretically to balance out risk. They are very complicated and COMPLETELY UNREGULATED so they have been causing huge problems. For example, apparently you can sell these things without having any capital at all to back them up! Thus you can collect the fees but when you get called to back up a default, you can just go bankrupt and “poof” the guarantee is worthless. Since 2007 there has been plenty of discussion that the Credit Default Swaps were creating panic in the banking industry and had become unsaleable. Many people saw this coming and tried to alert others. There were supposedly tens of trillions worth sold every year. I am sure the UHJ and the U.S. NSA were up on all this, and got all the worldwide Baha’i Funds out of the banks that were involved in this, right?

    The further insanity was that banks thought they were protected from the riskier and riskier loans they were making because they had bought all these Credit Default Swaps (CDO’s). Once real estate prices started to decline, the whole pyramid scheme started to collapse.

    This is the real crisis. Not the bundled mortgages sold as derivative investments. It is the amazing “debt insurance” instruments that could take down the financial system of the ENTIRE WORLD. Again, I am sure the UHJ and all the NSA’s on Earth world wide are up to speed on all this and took steps according. After all, both Douglas Martin and Peter Khan have implied in various speeches that in the future the Baha’i Faith will be the ACTUAL BANKING SYSTEM of the ENTIRE WORLD. So I am sure these guys are studying all this so that our system will not implode and make ALMIGHTY GOD LOOK BAD. Right?

    The bottom line now is that these CDO’s and CDS’s have become so intertwined and complicated that no one knows how bad things really are. It is quite possible that most of the investment banking system is really insolvent and holds probably trillions in bad paper.

    I suppose under classic Adam Smith economics you should just let all these bad assets vaporize and start over. That would wreck the banking system and probably freeze the economy in a very low mode for many years. Eventually, things would correct but we in the U.S. and maybe even Europe too if it spread in a collapse chain reaction would probably be down to Mexico’s level by then.

    Does the UHJ follow Paul Samuelson or Milton Friedman in how they will run the future infallible ALL WORLD Baha’i banking system? What does Douglas Martin or Peter Khan say about the Chicago School? Since the Wilmette Temple is near Chicago, maybe our future system will follow the Chicago School. Right?

    OK. That’s it for our first class.

    Here are some links to read as your outside assignment in Ruhi Book Nineteen Twenty Nine for some background info as we move on to Lesson Two next time. Your practical skill development practice (and these skill development practices are very, very, very important for Ruhi Book Nineteen Twenty Nine to work) is to fervently pray if you have any money AT ALL. You can also go and visit someone on a home visit and pray with them too if they have any money AT ALL too.

    http://www.cbsnews.com/stories/2008/10/05/60minutes/main4502454.shtml

    http://en.wikipedia.org/wiki/Credit_derivative

    http://en.wikipedia.org/wiki/Collateralized_debt_obligation

    http://en.wikipedia.org/wiki/Credit_default_swap

    Now here is the key rote memorization quote that you must master for the next class. You can practice saying it at your keyboard until you know it by heart as part of the glass:

    “One large difference between credit default swaps and other types of insurance, is you do not need to own the bond or instrument being insured in order to obtain insurance on it. If the bond fails, then, theoretically, you get paid, possibly along with many others. Yet the “insurer” of the bond is not regulated and the transaction is beyond federal or state regulation. This allow speculators to make money by purchasing insurance on a company’s bonds and then shorting the stock of the company in great quantity, causing the company to fail, and getting a payoff that exceeds their risk of shorting.”

    Uh oh.

    This completes our first class in Ruhi Book Nineteen Twenty Nine.

    Oh, I almost forgot. If you memorize Henry Fonda’s lines here by the next class, you will also get extra credit too! No pun intended!

    http://www.youtube.com/watch?v=PWNmJb-EUtk

  • http://www.bahairants.com Baquia

    Sonja,
    thanks for introducing the topic. Hopefully I’ll find time to write about it as I’ve been meaning to for a while. Until then, here is a good series of videos for those that are interested in the details of what happened and where we are (part 1 of 5).

  • http://www.bahairants.com Baquia

    Sonja,
    thanks for introducing the topic. Hopefully I’ll find time to write about it as I’ve been meaning to for a while. Until then, here is a good series of videos for those that are interested in the details of what happened and where we are (part 1 of 5).

  • Craig Parke

    [quote comment=""]Sonja,
    thanks for introducing the topic. Hopefully I’ll find time to write about it as I’ve been meaning to for a while. Until then, here is a good series of videos for those that are interested in the details of what happened and where we are (part 1 of 5).[/quote]

    Baquia,

    I just spend three hours sitting here at work after everyone left for the weekend listening to NYU Professor Dr. Nouriel Roubini on various presentation links on YouTube. This man is excellent!

    Thank you so much for this link!

    His Web Site is:

    http://www.rgemonitor.com/

    He also has a FREE news letter (and a more advanced private PAID SUBSCRIBER one too).

    I plan on reading his web site EVERY DAY from now on.

    This man is absolutely first rate!

  • Craig Parke

    [quote comment=""]Sonja,
    thanks for introducing the topic. Hopefully I’ll find time to write about it as I’ve been meaning to for a while. Until then, here is a good series of videos for those that are interested in the details of what happened and where we are (part 1 of 5).[/quote]

    Baquia,

    I just spend three hours sitting here at work after everyone left for the weekend listening to NYU Professor Dr. Nouriel Roubini on various presentation links on YouTube. This man is excellent!

    Thank you so much for this link!

    His Web Site is:

    http://www.rgemonitor.com/

    He also has a FREE news letter (and a more advanced private PAID SUBSCRIBER one too).

    I plan on reading his web site EVERY DAY from now on.

    This man is absolutely first rate!

  • http://www.bahairants.com Baquia

    Craig, glad you enjoyed the link. Now go enjoy your weekend :)

  • http://www.bahairants.com Baquia

    Craig, glad you enjoyed the link. Now go enjoy your weekend :)

  • Craig Parke

    Here is a very interesting article given the topic of Ruhi Book 1929:

    http://www.time.com/time/business/article/0,8599,1853756,00.html?cnn=yes

    I am adding the requirement of reading this article as a “building basic skills” practical exercise to Lesson One of Ruhi Book 1929.

    We apparently did not make the list probably because we don’t have any money as a religion, but since both Douglas Martin and Peter Khan teach that the Baha’i Faith will actually BE the banking system of the entire world in the future (everyone paying that 19% on discretionary income will add up big time!) I think our guys had better start studying financial markets in the current mind bending disaster to have insights for when we are the banking system in say about 10,000 years. That should be plenty of time to get some banking insights. Or just keep a yellowed copy on hand to thumb through of the Glass-Steigel Act of 1933 that put into law that firewalls must be kept between Commercial Banks, Investment Banks, Securities Dealers, and Insurance Companies. That is pretty much ALL the economic insight you need to know as the entire financial system of the world possibly collapses now. That is why I know my Ruhi Book 1929 Course WILL eventually become part of the world wide TOTAL Ruhiization of every soul on Earth.

  • Craig Parke

    Here is a very interesting article given the topic of Ruhi Book 1929:

    http://www.time.com/time/business/article/0,8599,1853756,00.html?cnn=yes

    I am adding the requirement of reading this article as a “building basic skills” practical exercise to Lesson One of Ruhi Book 1929.

    We apparently did not make the list probably because we don’t have any money as a religion, but since both Douglas Martin and Peter Khan teach that the Baha’i Faith will actually BE the banking system of the entire world in the future (everyone paying that 19% on discretionary income will add up big time!) I think our guys had better start studying financial markets in the current mind bending disaster to have insights for when we are the banking system in say about 10,000 years. That should be plenty of time to get some banking insights. Or just keep a yellowed copy on hand to thumb through of the Glass-Steigel Act of 1933 that put into law that firewalls must be kept between Commercial Banks, Investment Banks, Securities Dealers, and Insurance Companies. That is pretty much ALL the economic insight you need to know as the entire financial system of the world possibly collapses now. That is why I know my Ruhi Book 1929 Course WILL eventually become part of the world wide TOTAL Ruhiization of every soul on Earth.

  • Craig Parke

    [quote comment=""]http://cnnwire.blogs.cnn.com/

    Very interesting.[/quote]

    Oops. Here is the Permalink:

    http://cnnwire.blogs.cnn.com/2008/10/26/mideast-stock-markets-dip-sharply/

  • Craig Parke

    [quote comment=""]http://cnnwire.blogs.cnn.com/

    Very interesting.[/quote]

    Oops. Here is the Permalink:

    http://cnnwire.blogs.cnn.com/2008/10/26/mideast-stock-markets-dip-sharply/

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  • Craig Parke

    RUHI BOOK 1929 – LESSON TWO

    OK all you financial geniuses on this Baquia’s Blog, it’s time for Ruhi Book 1929 – Lesson Two. I am going to try to make this one easier on you by making it more of a video lesson where you merely have to just absorb information. Remember, you have to have all this stuff down for when the Baha’i Faith is the banking system of the entire world as taught by Douglas Martin and Peter Khan in financing huge projects like a highway across the Bering Sea from…well.. Alaska to Russia! I think Sarah Palin might like that now as long as gas stays at $2.75 a gallon!

    But, remember, if this situation is not handled very, very carefully, no matter how much you pray, all of you are going to lose everything and die in the gutter eating Government cheese from the back of an Army truck in whatever country you are living in. So let’s all get up to speed in this lesson!
    ——————————————————

    This is the longer version of what I wrote on HuffPo tonight. If you can give 3 hours of your life to watching these two below long video links you will get a taste of the presentation President Elect Barack Obama is going to start to get as President of the United States starting to deal with this incredible financial catastrophe he has inherited.

    So here is your first Ruhi Book 1929 Lesson Two study question:

    (1) What do you think you would do after watching these people discuss the situation?

    Tonight it hit me while driving home from work musing on the importance of everyone getting educated studying Ruhi Book 1929. The image just suddenly came into my mind while gazing at the moving white striped highway after listening to these two videos today as I worked programming. This situation is the WTC buildings on 9/11. A MASSIVE Credit Default Swap default obligation EVENT going off somewhere in the world could be compared to a top floor of the burning buildings giving way and falling into the next floor and causing a chain reaction that has each growing weight of collapsing floors falling one onto the other and taking down the entire building structure. One tower is the economic system of the United States. The other tower is the economic system of the Entire World. This is exactly what we are facing. A financial WTC 9/11. It looks like OBL gave us the horrible metaphor gift that just keeps on giving.

    Some members of the class here in their seemingly impervious political cynicism apparently either live on another planet or are deluded about the seriousness of this situation if they don’t hope somebody steps up to the plate and very soon. The Obama Administration is tasked with very carefully defusing this very dangerous situation. One false move and that horrible chain reaction implosion could start and you die in the cold very hungry. That is WHY we must find out EXACTLY HOW the Lehman Brothers CDS settlement was carried out on Thursday, October 16th as the first case study of trying to manage this type of situation. It was the first major precedent in world history for this. The mechanism used has only existed for TWO YEARS and this was the FIRST real test of it!

    So here is your second Ruhi Book 1929 Lesson Two study question:

    (2) Research on your own exactly how the Lehman Brothers CDS settlement was carried out and explain it for the class? If you can do this I will get you a job at the Wall Street Journal because nobody has been able to figure it out yet.

    If you are just coming into the class having missed Lesson One, you can immediately put your self into the shoes of President Elect Barack Obama right away to get the presentation from the below experts, this 6 minute video will get you up to speed. This guy is kind of a “Tom Hanks Everyman” just trying to come to terms with this incredible situation!

    http://www.youtube.com/watch?v=BWEesozWp3I

    This is the longer version of what I wrote tonight on Huffington Post (I had to edit it for size to post)

    So here is your third Ruhi Book 1929 Lesson Two study question:

    (3) Pretend you are Mr. Howard Schultz, CEO of Starbucks, and write a theoretical answer to me to post here. Extra points will be given if you can prove you actually wrote it at a Starbucks.

    http://www.huffingtonpost.com/howard-schultz/yes-business-can_b_141969.html

    I wrote:

    “Thank you for your excellent post Mr. Schultz. I fully agree with your viewpoint. We need a fair and just system now to empower creativity. But what has happened is what economist Ravi Batra has been saying for at least 15 years. Concentration of wealth will always destroy an economy because it turns the financial markets into a casino. It did it in 1929 and it did it in 2008.

    http://www.ravibatra.com/Home.htm

    Your philosophy is nice. But it may be far too late now:

    UNIVERSITY OF PENNSYLVANIA WHARTON SCHOOL 10/21/2008
    (90 minutes)
    http://www.youtube.com/watch?v=DFvODCAYU-0

    STANFORD 10/10/2008
    (90 minutes – start 37 min mark where the discussion gets going)
    http://www.youtube.com/watch?v=4Rsngr6iQvo

    President Elect Obama must assemble the best team of rational economic thinkers available to defuse the Credit Default Swaps (CDS’s) financial nuclear weapons out there buried in balance sheets across the banking system of the ENTIRE WORLD. We sold them everywhere. There is little margin for error. There is little time. One could explode at any time. If I was President Elect Obama I would first ask someone to explain how $455 Billion of Credit Default Swap exposure by Lehman Brothers was settled for $6 Billion? Maybe you can supply the coffee because it will be a long day for someone to explain this. If so much of the exposure canceled out then why did Henry M. Paulson, Jr., Secretary of the Treasury, panic in terror to get the $700 Billion in bailout finds to keep liquidity in the system? No one I know in the financial markets believes this is the truth. The process was completely opaque. Absolutely zero transparency. Can you ask some of your friends to explain it to you and then get back to HuffPo and make a post. There is something going on here behind the scenes. WHAT IS IT?

    Again, thanks for your excellent post!”
    ————————————————————-

    On a side note after having watched those three hours of video from the Wharton School and Stanford, could you imagine the Mayor of Wasilla trying to figure out what to do after being briefed by these Professors with the financial system of the ENTIRE WORLD at stake! Thank God we have now gotten to first base at least with a very smart man now getting briefed on everything at stake who must figure out what to do. Could our guys on the UHJ give some insights on how to handle this? I am sure they have it all figured out, right? I am sure our guys are studying all this so they can make sure the Baha’is of the world get enough Government cheese from the backs of Army trucks too, right? I mean you can’t really complete the Ruhi Full Sequence of Courses if you are, well, dead from no food and no heat, right? So our system is looking out for everybody and everything is all figured out because we have had 87 years for the BAO to get ready to be able to handle any situation, right?

  • Craig Parke

    RUHI BOOK 1929 – LESSON TWO

    OK all you financial geniuses on this Baquia’s Blog, it’s time for Ruhi Book 1929 – Lesson Two. I am going to try to make this one easier on you by making it more of a video lesson where you merely have to just absorb information. Remember, you have to have all this stuff down for when the Baha’i Faith is the banking system of the entire world as taught by Douglas Martin and Peter Khan in financing huge projects like a highway across the Bering Sea from…well.. Alaska to Russia! I think Sarah Palin might like that now as long as gas stays at $2.75 a gallon!

    But, remember, if this situation is not handled very, very carefully, no matter how much you pray, all of you are going to lose everything and die in the gutter eating Government cheese from the back of an Army truck in whatever country you are living in. So let’s all get up to speed in this lesson!
    ——————————————————

    This is the longer version of what I wrote on HuffPo tonight. If you can give 3 hours of your life to watching these two below long video links you will get a taste of the presentation President Elect Barack Obama is going to start to get as President of the United States starting to deal with this incredible financial catastrophe he has inherited.

    So here is your first Ruhi Book 1929 Lesson Two study question:

    (1) What do you think you would do after watching these people discuss the situation?

    Tonight it hit me while driving home from work musing on the importance of everyone getting educated studying Ruhi Book 1929. The image just suddenly came into my mind while gazing at the moving white striped highway after listening to these two videos today as I worked programming. This situation is the WTC buildings on 9/11. A MASSIVE Credit Default Swap default obligation EVENT going off somewhere in the world could be compared to a top floor of the burning buildings giving way and falling into the next floor and causing a chain reaction that has each growing weight of collapsing floors falling one onto the other and taking down the entire building structure. One tower is the economic system of the United States. The other tower is the economic system of the Entire World. This is exactly what we are facing. A financial WTC 9/11. It looks like OBL gave us the horrible metaphor gift that just keeps on giving.

    Some members of the class here in their seemingly impervious political cynicism apparently either live on another planet or are deluded about the seriousness of this situation if they don’t hope somebody steps up to the plate and very soon. The Obama Administration is tasked with very carefully defusing this very dangerous situation. One false move and that horrible chain reaction implosion could start and you die in the cold very hungry. That is WHY we must find out EXACTLY HOW the Lehman Brothers CDS settlement was carried out on Thursday, October 16th as the first case study of trying to manage this type of situation. It was the first major precedent in world history for this. The mechanism used has only existed for TWO YEARS and this was the FIRST real test of it!

    So here is your second Ruhi Book 1929 Lesson Two study question:

    (2) Research on your own exactly how the Lehman Brothers CDS settlement was carried out and explain it for the class? If you can do this I will get you a job at the Wall Street Journal because nobody has been able to figure it out yet.

    If you are just coming into the class having missed Lesson One, you can immediately put your self into the shoes of President Elect Barack Obama right away to get the presentation from the below experts, this 6 minute video will get you up to speed. This guy is kind of a “Tom Hanks Everyman” just trying to come to terms with this incredible situation!

    http://www.youtube.com/watch?v=BWEesozWp3I

    This is the longer version of what I wrote tonight on Huffington Post (I had to edit it for size to post)

    So here is your third Ruhi Book 1929 Lesson Two study question:

    (3) Pretend you are Mr. Howard Schultz, CEO of Starbucks, and write a theoretical answer to me to post here. Extra points will be given if you can prove you actually wrote it at a Starbucks.

    http://www.huffingtonpost.com/howard-schultz/yes-business-can_b_141969.html

    I wrote:

    “Thank you for your excellent post Mr. Schultz. I fully agree with your viewpoint. We need a fair and just system now to empower creativity. But what has happened is what economist Ravi Batra has been saying for at least 15 years. Concentration of wealth will always destroy an economy because it turns the financial markets into a casino. It did it in 1929 and it did it in 2008.

    http://www.ravibatra.com/Home.htm

    Your philosophy is nice. But it may be far too late now:

    UNIVERSITY OF PENNSYLVANIA WHARTON SCHOOL 10/21/2008
    (90 minutes)
    http://www.youtube.com/watch?v=DFvODCAYU-0

    STANFORD 10/10/2008
    (90 minutes – start 37 min mark where the discussion gets going)
    http://www.youtube.com/watch?v=4Rsngr6iQvo

    President Elect Obama must assemble the best team of rational economic thinkers available to defuse the Credit Default Swaps (CDS’s) financial nuclear weapons out there buried in balance sheets across the banking system of the ENTIRE WORLD. We sold them everywhere. There is little margin for error. There is little time. One could explode at any time. If I was President Elect Obama I would first ask someone to explain how $455 Billion of Credit Default Swap exposure by Lehman Brothers was settled for $6 Billion? Maybe you can supply the coffee because it will be a long day for someone to explain this. If so much of the exposure canceled out then why did Henry M. Paulson, Jr., Secretary of the Treasury, panic in terror to get the $700 Billion in bailout finds to keep liquidity in the system? No one I know in the financial markets believes this is the truth. The process was completely opaque. Absolutely zero transparency. Can you ask some of your friends to explain it to you and then get back to HuffPo and make a post. There is something going on here behind the scenes. WHAT IS IT?

    Again, thanks for your excellent post!”
    ————————————————————-

    On a side note after having watched those three hours of video from the Wharton School and Stanford, could you imagine the Mayor of Wasilla trying to figure out what to do after being briefed by these Professors with the financial system of the ENTIRE WORLD at stake! Thank God we have now gotten to first base at least with a very smart man now getting briefed on everything at stake who must figure out what to do. Could our guys on the UHJ give some insights on how to handle this? I am sure they have it all figured out, right? I am sure our guys are studying all this so they can make sure the Baha’is of the world get enough Government cheese from the backs of Army trucks too, right? I mean you can’t really complete the Ruhi Full Sequence of Courses if you are, well, dead from no food and no heat, right? So our system is looking out for everybody and everything is all figured out because we have had 87 years for the BAO to get ready to be able to handle any situation, right?

  • Craig Parke

    Baquia,

    Looks like your analysis last week or so was spot on.

    http://www.latimes.com/news/nationworld/world/la-fg-iran10-2008nov10,0,1799465.story?track=rss

    Theocrats definitely cannot run an economy. They have no conception of timely decisions that require practical knowledge in the real world.

  • Craig Parke

    Baquia,

    Looks like your analysis last week or so was spot on.

    http://www.latimes.com/news/nationworld/world/la-fg-iran10-2008nov10,0,1799465.story?track=rss

    Theocrats definitely cannot run an economy. They have no conception of timely decisions that require practical knowledge in the real world.

  • http://www.bahairants.com Baquia

    Craig, thanks for the link. If the IRI wants to sweep this under the rug, as they have, it will just be more damaging as it unfolds. Most people inside Iran are living the economy so Ahmadinejad’s empty rhetoric fools no one. It reminds me of the collapse of the Soviet Republic. Outwardly it was all bluster and bluff, projecting a powerful image that within a few short months turned into a mirage when their economy collapsed.

  • http://www.bahairants.com Baquia

    Craig, thanks for the link. If the IRI wants to sweep this under the rug, as they have, it will just be more damaging as it unfolds. Most people inside Iran are living the economy so Ahmadinejad’s empty rhetoric fools no one. It reminds me of the collapse of the Soviet Republic. Outwardly it was all bluster and bluff, projecting a powerful image that within a few short months turned into a mirage when their economy collapsed.

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