Chat about Financial Advice, was Re: Marxist Financial Advice
Marx made a killing on the stock market one time according to Tussie's biographer, slavers,pirates and all behind that historic market. CB by Carrol Cox Sabri Oncu wrote: This is not diversification at all. It is a single bet, a bet on the US dollar hegemony, whose future is more uncertain than ever. Let's remember that very few if any of the subscribers to this list have much in the way of discretionary investment. So the question (which probably ought not to have Marx's name tagged to it) simply concerns a chat among fellow leftists about how people in their situation can have a trifle better chance of surviving at least until dementia sets in and medicaid takes over. And the first question emphasized the ethics of the topic. I argued at the time that there was no ethics to it. That is, that (leaving aside organized boycotts) progressive politics placed no constraints on how one spent or saved one's money. There would be no _political_ or _ethical_ constraint in investing in Shell, in investing in a napalm manufacturer, in shopping at Wal-Mart or Naiman-Marcus, etc etc. (Assuming no organized boycotts, which one honors.) Carrol Sabri
Re: Marxist Financial Advice
Yes, it is wrong. It adds nothing to the list. You can tell X personally that you do not like him/her off list, but not here. On Fri, Jun 25, 2004 at 09:21:31PM -0700, Sabri Oncu wrote: Michael: What is wrong with letting a person know that you do not like him Michael? Do we have to like everybody? -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: Marxist Financial Advice
Suffice to say that, no joke, in (I think) 2002 when the 10bn lira note was introduced (quote from the Central Bank Governor at the time It's not exactly a proud moment having your name on a note with ten zeros on it, but needs must), there was a small but serious atempt by some members of the Turkish Parliament to get Ataturk's face removed from the notes, as they felt that it was sullying his memory. (In the UK, we had the opposite issue; until the 1950s, the Bank of England refused to put images of the Royal Family on banknotes, as they felt that the popularity of the royals was far too transient and risky to risk tarnishing their own brand with). And I speak as someone who does have a couple of lira-denominated instruments (IIRC, the equity shares of Turkiye Is Bankasi) in my retirement fund. Turkey is a classic example of the neo-liberal orthodoxy not working. In the last ten years I have been asked to produce disaster scenarios for the eventuality of a Turkish economic collapse on no fewer than three occasions. It hasn't happened yet. I personally don't think that it will. The secret to the Turkish economy's astounding ability to muddle through, IMO, is that the banks are, for the most part, owned by powerful industrial groups which are themselves profitable. This means that 1) the banks can be recapitalised by the families which own them, which is intrinisically more stable than having their ownership dispersed and 2) the economy as a whole is nothing like as exposed to fluctuations in the market's views of the Turkish economy, as the source of working capital for the commanding heights of the Turkish economy is a banking system largely controlled by its main customers. Turkey is in the process of bringing in Western style corporate governance, and as soon as I think they are about to achieve it I will run a mile. best, dd -Original Message- From: PEN-L list [mailto:[EMAIL PROTECTED] Behalf Of Devine, James Sent: 26 June 2004 01:03 To: [EMAIL PROTECTED] Subject: Re: Marxist Financial Advice I won't ask how much 20 million Turkish Liras are worth but I'm going to diversify by putting my assets into gin _and_ tonic or scotch _and_ soda. jd --
Re: Chat about Financial Advice, was Re: Marxist Financial Advice
Carrol Cox wrote: Let's remember that very few if any of the subscribers to this list have much in the way of discretionary investment. How do you know? A lot of PEN-Lers are professors with retirement accounts that invest in stocks and bonds. Many, maybe most, are in the upper quintile of their national income distribution. Even the righteous S.artesian probably has a pension from the railroad. So these aren't just idle theoretical speculations. Doug
Re: Chat about Financial Advice, was Re: Marxist Financial Advice
I am not righteous. I put two daughters through college. I know a lot about investing-- none of it has anything to do with Marxism. Nobody's against pensions. Railroad pensions, for your edification, are not self-direct investments. They are defined benefit plans. My only point was that Marxist financial advice re investing is an oxymoron. Real Marxist financial advise would be limited to seize the banks, cancel the debt. - Original Message - From: Doug Henwood [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Saturday, June 26, 2004 11:01 AM Subject: Re: [PEN-L] Chat about Financial Advice, was Re: Marxist Financial Advice Carrol Cox wrote: Let's remember that very few if any of the subscribers to this list have much in the way of discretionary investment. How do you know? A lot of PEN-Lers are professors with retirement accounts that invest in stocks and bonds. Many, maybe most, are in the upper quintile of their national income distribution. Even the righteous S.artesian probably has a pension from the railroad. So these aren't just idle theoretical speculations. Doug
Re: Chat about Financial Advice, was Re: Marxist Financial Advice
sartesian writes: I know a lot about investing-- none of it has anything to do with Marxism. for what it's worth, pen-l isn't self-defined as Marxist. I'm also not sure that Marxist financial advice is necessarily oxymoronic. There may be some stuff in the volume III discussion of money and finance that says something different that might be relevant to personal finance, though I doubt it. jd
Re: Chat about Financial Advice, was Re: Marxist Financial Advice
- Original Message - From: Devine, James [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Saturday, June 26, 2004 12:14 PM Subject: Re: [PEN-L] Chat about Financial Advice, was Re: Marxist Financial Advice sartesian writes: I know a lot about investing-- none of it has anything to do with Marxism. for what it's worth, pen-l isn't self-defined as Marxist. _ Really? There's a graphic of Marx on the home page. The query that triggered this all was for Marxist Fianancial Advice. I'm also not sure that Marxist financial advice is necessarily oxymoronic. There may be some stuff in the volume III discussion of money and finance that says something different that might be relevant to personal finance, though I doubt it. Nothing I've read in Vol. 3 can be considered advice for investors. jd
Re: Marxist Financial Advice
I'd like one. If you don't like me, I'll pay the postage myself. mbs By the way, as Michael pollak knows, you may even be able to obtain a 20 Million Liras Turkish Banknote from me free of charge. I even pay the postage. The only condition is that you have to be someone I like. Sartesian has no hope to get that 20 Million Liras Turkish banknote from me, for example. Best, Sabri
Re: Marxist Financial Advice
I'd like one. If you don't like me, I'll pay the postage myself. mbs Of course, I like you. There are not many I don't like but if I give this away things may get out of control: 20,000,000 Liras is roughly $13.5 US in these days. But I will bring you one from my trip to Turkey. I am leaving shortly and will be back in a few weeks. Best, Sabri PS: If you have my e-mail address, why don't you write to me directly? I don't have yours.
Re: Marxist Financial Advice
Jim: The guidance I gave, as Michael Perelman noted, was simply common sense, not something from Marx (though I doubt Marx would reject the advice). Put differently, it was simply common nonsense. If Roach is right and the equity bubble of the late 1990s was a transforming event in many ways for the US economy, then that guidance is misguidance: http://www.morganstanley.com/GEFdata/digests/20040621-mon.html#anchor0 As he calls it, this asset economy, the genesis of which according to him can be traced back to the late eighties, is dependent on wealth-effects driven by asset price inflation, itself driven by the poring money from foreign investors, central banks and US households who have been indoctrinated by that common nonsense into the US asset markets. I go one step further and claim that the genesis of this asset economy can be traced backed to 1971, when the Bretton Woods system was dismantled and the US dollar became the world reserve currency. Although I have no means of knowing what Marx would have done had he been alive, I have doubts that he would agree with the advice. It is my view that the period we are going through is not a good time for diversification, if by diversification what is meant is diversification into US assets such as well-diversified US fixed income and equity index funds or funds of funds holding such index and even actively managed funds in some proportions. This is not diversification at all. It is a single bet, a bet on the US dollar hegemony, whose future is more uncertain than ever. Sabri
Re: Marxist Financial Advice
c'mon! Diversification is diversification, not diversification only in dollar assets. Strictly speaking, diversification includes holding gold and canned food, along with euros and rupiahs. It's true that if the world economy melts down (or if the scenario of the flick the Day After Tomorrow happens), diversification won't do you any good. It can't deal with generalized or systematic risk. But I think it would probably do better than putting all one's assets into one basket. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine Jim: The guidance I gave, as Michael Perelman noted, was simply common sense, not something from Marx (though I doubt Marx would reject the advice). Put differently, it was simply common nonsense. If Roach is right and the equity bubble of the late 1990s was a transforming event in many ways for the US economy, then that guidance is misguidance: http://www.morganstanley.com/GEFdata/digests/20040621-mon.html#anchor0 As he calls it, this asset economy, the genesis of which according to him can be traced back to the late eighties, is dependent on wealth-effects driven by asset price inflation, itself driven by the poring money from foreign investors, central banks and US households who have been indoctrinated by that common nonsense into the US asset markets. I go one step further and claim that the genesis of this asset economy can be traced backed to 1971, when the Bretton Woods system was dismantled and the US dollar became the world reserve currency. Although I have no means of knowing what Marx would have done had he been alive, I have doubts that he would agree with the advice. It is my view that the period we are going through is not a good time for diversification, if by diversification what is meant is diversification into US assets such as well-diversified US fixed income and equity index funds or funds of funds holding such index and even actively managed funds in some proportions. This is not diversification at all. It is a single bet, a bet on the US dollar hegemony, whose future is more uncertain than ever. Sabri
Re: Marxist Financial Advice
c'mon! Diversification is diversification, not diversification only in dollar assets. Strictly speaking, diversification includes holding gold and canned food, along with euros and rupiahs. Well! Nice to see that we agree. Now let us give some Marxist financial advice based on this definition of diversification: To start with, I suggest two cans of pineapple juice, a few loaves of bread, prefereably rye bread since rye bread lasts longer and a 20 Million Liras Turkish banknote. By the way, as Michael pollak knows, you may even be able to obtain a 20 Million Liras Turkish Banknote from me free of charge. I even pay the postage. The only condition is that you have to be someone I like. Sartesian has no hope to get that 20 Million Liras Turkish banknote from me, for example. Best, Sabri
Chat about Financial Advice, was Re: Marxist Financial Advice
Sabri Oncu wrote: This is not diversification at all. It is a single bet, a bet on the US dollar hegemony, whose future is more uncertain than ever. Let's remember that very few if any of the subscribers to this list have much in the way of discretionary investment. So the question (which probably ought not to have Marx's name tagged to it) simply concerns a chat among fellow leftists about how people in their situation can have a trifle better chance of surviving at least until dementia sets in and medicaid takes over. And the first question emphasized the ethics of the topic. I argued at the time that there was no ethics to it. That is, that (leaving aside organized boycotts) progressive politics placed no constraints on how one spent or saved one's money. There would be no _political_ or _ethical_ constraint in investing in Shell, in investing in a napalm manufacturer, in shopping at Wal-Mart or Naiman-Marcus, etc etc. (Assuming no organized boycotts, which one honors.) Carrol Sabri
Re: Marxist Financial Advice
-Original Message- From: Sabri Oncu [EMAIL PROTECTED] Sent: Jun 25, 2004 6:56 PM To: [EMAIL PROTECTED] Subject: Re: [PEN-L] Marxist Financial Advice The only condition is that you have to be someone I like. Sartesian has no hope to get that 20 Million Liras Turkish banknote from me, for example Best, Sabri Hey, didn't you read what Michael said about nastiness? How counter-productive it is? If I weren't such a thick-skinned, jolly, all around sweet guy I might be tempted to answer in kind. Hmmmh... with something like And in the scheme of things, the banknote and your personal opinions are equally worthless. I'm just thankful that my Marxist retirement plan investment portfolio doesn't include any Lira denominated instruments. Hugs
Re: Marxist Financial Advice
David is right here. Banter is fine when both parties are on the same page, but once tempers get a little warm, its best to lay off. On Fri, Jun 25, 2004 at 07:20:28PM -0400, s.artesian wrote: -Original Message- From: Sabri Oncu [EMAIL PROTECTED] Sent: Jun 25, 2004 6:56 PM To: [EMAIL PROTECTED] Subject: Re: [PEN-L] Marxist Financial Advice The only condition is that you have to be someone I like. Sartesian has no hope to get that 20 Million Liras Turkish banknote from me, for example Best, Sabri Hey, didn't you read what Michael said about nastiness? How counter-productive it is? If I weren't such a thick-skinned, jolly, all around sweet guy I might be tempted to answer in kind. Hmmmh... with something like And in the scheme of things, the banknote and your personal opinions are equally worthless. I'm just thankful that my Marxist retirement plan investment portfolio doesn't include any Lira denominated instruments. Hugs -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: Marxist Financial Advice
I won't ask how much 20 million Turkish Liras are worth but I'm going to diversify by putting my assets into gin _and_ tonic or scotch _and_ soda. jd -Original Message- From: PEN-L list on behalf of Sabri Oncu Sent: Fri 6/25/2004 3:56 PM To: [EMAIL PROTECTED] Cc: Subject: Re: [PEN-L] Marxist Financial Advice c'mon! Diversification is diversification, not diversification only in dollar assets. Strictly speaking, diversification includes holding gold and canned food, along with euros and rupiahs. Well! Nice to see that we agree. Now let us give some Marxist financial advice based on this definition of diversification: To start with, I suggest two cans of pineapple juice, a few loaves of bread, prefereably rye bread since rye bread lasts longer and a 20 Million Liras Turkish banknote. By the way, as Michael pollak knows, you may even be able to obtain a 20 Million Liras Turkish Banknote from me free of charge. I even pay the postage. The only condition is that you have to be someone I like. Sartesian has no hope to get that 20 Million Liras Turkish banknote from me, for example. Best, Sabri
Re: Marxist Financial Advice
I wish I could fully support Mr. Devine's portfolio plan. I cannot. I believe vodka is preferable to gin. Freezing cold vodka. Straight up, with a twist. Many twists. Like life. Name the author: The passions of the human heart are as twisted as a corkscrew.
Re: Marxist Financial Advice
Sartesian: Hey, didn't you read what Michael said about nastiness? It is you who is nasty, not I. I am just responding in kind. If I weren't such a thick-skinned, jolly, all around sweet guy I might be tempted to answer in kind. What a coincidence that we used the same phrase. I must be learning your language. I'm just thankful that my Marxist retirement plan investment portfolio doesn't include any Lira denominated instruments. Now, this is of course an insult but as you know, I keep insulting you guys all the time. After all, you are just some westerners who are not capable of opening their hearts, not even capable of confessing to yourselves that most of your actions are driven by your hearts, not by your brains. Now, maybe this has something to do with those social relations Marx was talking about. Best, Sabri
Re: Marxist Financial Advice
Michael: David is right here. Banter is fine when both parties are on the same page, but once tempers get a little warm, its best to lay off. What is wrong with letting a person know that you do not like him Michael? Do we have to like everybody? Does everybody have to like each of us? It was okay for me to say that I liked even loved Mark. Why is it not okay for me to say that I don't like David? If we like or dislike a person, why cannot we share that feeling with him/her? I have some distaste for systemic/systematic destabilizers. That is all! Best, Sabri
Buy Venezuela Bonds: Marxist Financial Advice
Daniel wrote: 2. Chuck it into the bonds of more or less politically palatable emerging market countries. Venezuela has a few series of quite high-yielding bonds available, and buying them would both help Chavez to buy a little time to fend off the hegemon, and offer the possibility of a nice capital gain when and if he eventually fails and Vene becomes a US protectorate. Sort of a win-win situation, if you have a rather perverse definition of what constitutes a win. As I don't have the means to act on your advice, alas, I took the liberty of posting the above to my blog: Daniel Davies of D-Squared Digest (who nowadays mainly posts to Crooked Timber) says: I have two pieces of Marxist financial advice (note to regulators: no I don't). Depending on your own financial circumstances and risk appetite, blah blah, I would: 1. Find a life assurance company run by people you trust and chuck it all into one of their long-dated policies. or for the more adventurous 2. Chuck it into the bonds of more or less politically palatable emerging market countries. Venezuela has a few series of quite high-yielding bonds available, and buying them would both help Chavez to buy a little time to fend off the hegemon, and offer the possibility of a nice capital gain when and if he eventually fails and Vene becomes a US protectorate. Sort of a win-win situation, if you have a rather perverse definition of what constitutes a win. (Progressive Economists Network, June 23, 2004) Good advice. Despite the Venezuelan oligarchy's repeated attempts at economic sabotage, Hugo Chávez's record of debt management has been excellent, and high oil prices and big foreign reserves should continue to bolster investor confidence: * I think Chavez will stay in power, whether he avoids the recall or holds the vote and wins, said Jose Pedreira, a managing director at LW Asset Management, a New York-based hedge fund. Wall Street, put off by Chavez's anti-capitalist rhetoric but impressed by the country's debt management policies, sees smooth sailing for Venezuelan sovereign bonds. They have already rewarded holders with total returns of 34.6 percent so far this year while the rest of the market is up 27 percent. Venezuela total returns have risen 3.6 percent since Dec. 1 while JP Morgan's Emerging Markets Bond Index Plus has edged just 1.6 percent higher. . . . Venezuela bond prices have been going higher because, at the end to the day, Venezuela is in good shape in terms of being able to pay its debts, Pedreira said. Other emerging market countries offer much less yield, which continues to make Venezuela attractive. (Hugh Bronstein/Reuters, Venezuela Bonds Seen Rising above Political Woes, December 7, 2003) * Venezuela offered to buy back $1 billion of six-month dollar-denominated bonds after a surge in oil prices swelled government coffers. The government, which had sold the securities to local investors in March, offered to buy the 1.15 percent notes due Sept. 30, 2004, at 100 cents on the dollar, or par. They've had huge revenue off the oil side for quite some time and huge reserve levels, said Enrique Alvarez, a Latin American debt analyst with research company IDEAglobal in New York. And they're very comfortable repurchasing this since they're done selling dollar debt the rest of this year. Venezuelan oil has averaged $30 a barrel this year, more than the $18.50 estimate the government used to calculate this year's budget. Venezuela, the world's fifth largest crude supplier, will likely receive between $5 billion and $7 billion of extra oil income this year, Central Bank Director Armando Leon said last month. (Alex Kennedy, Venezuela Offers to Buy Back $1 Billion of Bonds, Bloomberg.com, June 7, 2004) * Venezuelan President Hugo Chávez has almost unlimited supplies of cash, with Venezuelan oil selling at over $30 a barrel, foreign reserves of more than $23 billion, and few qualms about using public funds to bolster his campaign for a 'no' vote (Phil Gunson, Chávez Well-armed in Recall Battle, Miami Herald, June 22, 2004). Credit rating agencies have been extremely tough on Venezuela, to be sure, but that's only because they are politically motivated. Bondholders have not lost confidence in the Bolivarian Republic: Venezuela, for instance, is rated Caa1 by Moody's -- one of the lowest ratings, even among high-yield, or junk, bonds -- and a full two notches below Brazil's B2 high-yield rating. Yet yields for Venezuelan bonds are comparable to those of Brazil. That means the market isn't demanding a higher premium from Venezuela, despite the lower rating. Investors like Mr. Hopper say this is understandable. Venezuela is a big oil producer and boasts foreign reserves that more than cover its debt, while Brazil's don't. Venezuela has been volatile, and at times overdiscounted by the market, he says. The ratings agencies have contributed to that. (Craig Karmin/The Associated Press, Ratings Take on Political Risk, June 21, 2004) http
Re: Marxist Financial Advice
Sartesian: The query about Marxist financial advice devolved, or evolved, into a discussion of efficient markets, as if somehow markets were an abstraction from the social relations that drive free exchange; I don't think anyone engaged in this discussion claims or thinks that markets are an abstraction from the social relations. Efficient Market Hypothesis, as the name suggests, is just an hypothesis within the realm of neoclassical finance. Some take it seriously as this guy does: http://www.ima.umn.edu/public-lecture/2003-04/ross/ross.ppt Some like me don't! I don't give any financial advice to people, Marxist or otherwise. As a Turkish saying goes: If the bold had known how to cure boldness, he would have cured himself first! Best, Sabri
