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Old 04-03-2012, 12:28 PM   #1
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Snidely Got an offer today which I could easily refuse

As some of you know, I have a professional history in the financial industry as a commodity futures fund manager. Today one of my old friends who still works in the industry called me and told me that he has been hired by a major tbtfb. He was chosen to run their commodities unit - a pretty "exiting" job. We're talking about big salaries and huge bonuses here. So he told me he had a job for me in his unit. I should run the base metals branch. After considering it for 2 nanoseconds, I politely said "no, but good luck anyway and thanks for asking". He asked why and I told that I think the financial industry as a whole is going to blow up. That the share of the FI in terms of total GDP is going to decline rapidly and that I'm a happy "retiree". He didn't really understand this. Maybe it's because he has been in the industry for over 2 decades. I just spent a few years in it. Anyway, just a small story which illustrates that nothing has changed in the minds of the average bankster since the crisis of 2008.
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Old 04-03-2012, 12:54 PM   #2
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Why should anything change? They get bailouts and bonuses even when they screw up, and keep the profits when they don't - so there is zero motivation built in, no "give a shit" factor as Kyle mentions.

ZH worked out the cost of Greece with no bailout vs a bailout. They were within a few percent of one another - no compelling reason to do the bailout in other words.
Except with it - no banks lose on bad bets, taxpayers pay it all, the other way, the banks lose without harming the taxpayers. Europe's "representative" government decided to favor the banks, not the citizens. Not that ours is any better.

That's the underlying fact that should be getting and keeping people truly outraged, but with the short attention spans, it's like we need some new outrage every week to even stay upset, they know this, and just keep piling on more incrementally.

Socializing the bad bets, but privatizing the profits is really the core issue. It's like these big banks and trading houses weren't happy with already skimming quite a bit off everyone actually productive and went for the gold with government help, worldwide.
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Old 04-03-2012, 01:26 PM   #3
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Change won't come voluntarily. But it will. The debt will be reduced one way or the other. Eventually the whole system will either blow up in a hyperinflation or some sane politicians will be elected and stop the vicious cycle of bailouts and bubbles. In either case the dominant position of the financial sector will vanish.
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Old 04-03-2012, 03:06 PM   #4
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Hey S/A

thats quite an insight

You were an insider for many years
You see whats coming and position yourself accordingly
Not even the insiders 'exciting' offer will tempt you..........

how many 'insiders' actually get it and are just going along for the ride ?

I was given to pondering this when Paul Tustain ( Bullionvault boss) said in an interview with Chris Martenson that he was surprised at how many bank managers were opening accounts.

Or are the majority of insiders still convinced that all is well ?
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Old 04-03-2012, 04:14 PM   #5
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Originally Posted by rblong2us View Post:
Hey S/A

thats quite an insight

You were an insider for many years
You see whats coming and position yourself accordingly
Not even the insiders 'exciting' offer will tempt you..........

how many 'insiders' actually get it and are just going along for the ride ?

I was given to pondering this when Paul Tustain ( Bullionvault boss) said in an interview with Chris Martenson that he was surprised at how many bank managers were opening accounts.

Or are the majority of insiders still convinced that all is well ?
Well, the average "insider" is just a normal person. They don't get the big picture. Most of them have a timespan in their minds which lasts to the end of the current quarter (bonus payment) at best. The upper level people I know (not so many) probably know how dire the situation is, however most of them have a "the show must go own"/"you have to dance until the music stops" attitude. Max Keiser uses the famous example of the traders in the WTC towers during 9/11. Some of them didn't leave the second tower although the first one had already collapsed. Many people in the financial industry are money junkies. They always need a bigger fix. It's also not a coincidence that illegal drug use and prostitution is epedemic in the circles. This is literally an industry run by be people who can be seduced by money/drugs/sex.
Luckily, I'm not an addictive personality at all. Maybe that's what saved me. Secondly, my father's family is Jewish and had to flee from the Nazis to Switzerland in 1935. They resided in Frankfurt, Germany until then. My great grandfather survived the German hyperinflation of 1923. I still own some gold coins which he bought back then to preserve his purchasing power. These stories are beeing passed on from generation to generation in my family.

I'd say that about 20% of the people I know in the industry are aware of what's going on. They either leave completely like me or they have a shtf plan (including some gold). The rest is doing business as usual.

-----------

Just to put things into perspective. Here's a story which is beeing told in the (Keynesian minded) documentary "Inside Job" (about the subprime crisis):
Paul Volcker had a friend in the 1960s who was one the few US government bond traders for a major New York bank, probably one of today's tbtf. This guy traded bonds during the days and had to have a second job as a security guard in the evening to make a living for his family. By the late 1970s, the same guy made millions every year. He pretended it was, because he was so smart.
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Old 04-03-2012, 06:35 PM   #6
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Thank you S/A

Didnt know about the traders in tower 2. Chilling insight into the trader mind eh.

And fascinating how WW2 has played such a large part in our histories.

My German Grandfather owned a car factory one week in 1923 and the next was in the soup queue.
I only exist because my Father was in the occupying forces after the war and married his secretary.
My Mother was forced to join the hitler youth movement but her group paid only lip service and continued to function as girl guides. She was as shocked as everyone else when the camps were revealed to the world ........
Her Father had to walk / cycle home from Belgium at the end of the war and scavenge whatever he could to survive, along with thousands of others who were on the move.
Many starved in the days and weeks after the war ended.

No winners in war, apart from the evil controllers who seek only to profit from the suffering of others.
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Old 04-03-2012, 07:04 PM   #7
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Here are some charts which explain why I think that the financial sector is going to shrink dramatically:





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Old 04-03-2012, 07:28 PM   #8
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Nice that you are the PM guy
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Old 04-03-2012, 08:09 PM   #9
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Good discussion here, fellas.

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Old 04-03-2012, 08:22 PM   #10
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SA, I'm not sure why you think this means the finance industry is going to contract significantly. It seems like it's just monotonically rising as a percentage of everything, through thick and through thin - I don't see the blowoff top forming here, and in an industry (rather than a traded stock) that all works a little differently too.

Not disagreeing, just looking for enlightenment here.

I see things a little differently, maybe. Since it now only takes a tiny fraction of people and capex to make the food, and all the "Stuff", the money has to go somewhere else - these days to things less materially productive, like medical care here in America, which has been growing faster than GDP for decades, but not getting any better results really, and the finance business, sort of the same thing.
I guess lawyers have been doing pretty well too, judging by all the lawsuits.

Both employ people who aren't really productive in huge numbers, who would likely be even more expensive to support were they on welfare, and far more expensive yet to control were they rioting in the streets because they felt they had nothing to lose by it. It's the only way I can think of it and not get too angry sometimes.

What will happen to make finance become a smaller part of things? I'm not holding my breath that the government, no matter who we elect (if we even have a say in that in any effective way anymore) will do anything about it. They just have so much power that even the government does their bidding in large part.
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Old 04-03-2012, 09:23 PM   #11
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10-4 vox, great discussion on this thread. That's one of the main reasons I am here a lot.

Typically my short & snappy stuff goes to Zero Hedge. If I want to comment at a little longer length, I come here. LOTS of good stuff here! If I want to expound at length (for better or worse) I write it at my blog.

@ SA,

+ 1

That's kind of ballsy of you to turn down what would likely be a high paying job (stressful and perhaps non-productive (as in DCFusor's immediately above remarks), and yet not having to deal with the old "looking yourself in the mirror in the morning" -- an expression we have here for lawyers...).

@ rbelong2us and DCFusor, + 1 to each!

I always read with great interest your comments. rbl, you have an interesting history it looks like, maybe you will tell us more in the future.

DCF, I saw and handled a 7.62 x 54 HEAVY rifle (essentially an M-14 Garand I was told) yesterday, the gun store guy told me that because it was HEAVIER than my friend's .30-06 (light, plastic stock), that the recoil I would feel would be less, would that be right? Only problem: $3000, ouch!!!
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Old 04-03-2012, 09:51 PM   #12
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Yeah, that's kind of on the expensive side for my taste - you can get a .50 cal for that. Old M1's & M14's are still popular in some circles, but a little stiff for a lot of shooting for me without a recoil pad - I'm a little guy. The rimmed Russian round is more or less the same as a 30.06, and is still used by them for sniping - about the oldest round still in use, actually. That sounds like a heck of a collector premium there, so unless you're collecting, I'd skip it. You can get a Mosin-Nagant bolt action in that round for about $70 in most gun shows around here these days.

For that money, I'd be getting something new - you can get a full custom sniper grade rifle for that, or if you want it to shoot fast, an AR-10 or SR-25 in the much more common .308 would do fine and have similar if not better performance. Those are better on recoil than a bolt action too, because of the action working in recoil.

(get a copy of John Plasters "the ultimate sniper" and read it - good stuff)

For me, that high power stuff is for real long ranges - or taking out an engine block close in, maybe. In either case, you don't need speed, just accuracy (good optics!).

For closer in, your SKS or AR 15 (preferred by me) is more the ticket. Ask people who've been in combat some - your handgun is just how you fight your way back to the rifle. You use the big stuff to keep them pinned (or wiped out) at longer range, where it gives you a ballistic advantage, just like a long-armed boxer. You can shoot them, but their guns don't reach back.

As they say in the Marines, anytime you find yourself in a fair fight - shoot your planner first, he's supposed to do better than that. That's where the long range capability matters most - if you happen to find yourself in terrain where you can even see 400 yds or more.

I've put lead into my long range benchrest guns in the big calibers to reduce recoil. It really helps as long as you don't have to carry them much. I've drilled out wood stocks and just cast it right on in there, even replaced clips with lead since in BR shooting, the speed of loading isn't that important - and having to load a round at a time isn't all that slow once you get used to it. The extra weight helps to shoot them more accurately, to the point there are now rules about that...weight classes, just like boxing.

Of course, adding your own weight to the gun by properly pulling back into your shoulder hard, pre shot, also helps a lot. Most people don't learn that technique, but it's important on the big stuff or you get bruised. You don't want the gun to have a running start on your shoulder, ever.
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