Comments on: The Solution to the Global Financial Crisis http://www.ritholtz.com/blog/2009/05/the-solution-to-the-global-financial-crisis/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Sat, 21 Nov 2009 21:07:54 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Hot Links: Lemonade, Eschatology & The Gotti Foreclosure « The Reformed Broker http://www.ritholtz.com/blog/2009/05/the-solution-to-the-global-financial-crisis/comment-page-2/#comment-172258 Hot Links: Lemonade, Eschatology & The Gotti Foreclosure « The Reformed Broker Sat, 16 May 2009 13:55:15 +0000 http://www.ritholtz.com/blog/?p=26256#comment-172258 [...] Finally, Prieur Du Plessis contributed a very funny joke/ allegory to Barry Ritholtz’s The Big Picture.  It concerns a sum of money being paid and repaid around a town and asks whether or not anyone is “richer” for it at the end of the day. [...] [...] Finally, Prieur Du Plessis contributed a very funny joke/ allegory to Barry Ritholtz’s The Big Picture.  It concerns a sum of money being paid and repaid around a town and asks whether or not anyone is “richer” for it at the end of the day. [...]

]]> By: Urkel http://www.ritholtz.com/blog/2009/05/the-solution-to-the-global-financial-crisis/comment-page-2/#comment-170917 Urkel Tue, 12 May 2009 22:06:15 +0000 http://www.ritholtz.com/blog/?p=26256#comment-170917 It wouldn't have worked if the farmer was David Vitter. The prostitute would have had to charge extra for the diaper. It wouldn’t have worked if the farmer was David Vitter. The prostitute would have had to charge extra for the diaper.

]]> By: jaysan http://www.ritholtz.com/blog/2009/05/the-solution-to-the-global-financial-crisis/comment-page-2/#comment-170833 jaysan Tue, 12 May 2009 19:36:23 +0000 http://www.ritholtz.com/blog/?p=26256#comment-170833 How was the hotel owner able to give the Russian back his E100? I think a better ending to this story would be for the Russian to keep his room long enough to have sex with the prostitute. How was the hotel owner able to give the Russian back his E100?

I think a better ending to this story would be for the Russian to keep his room long enough to have sex with the prostitute.

]]> By: August1991 http://www.ritholtz.com/blog/2009/05/the-solution-to-the-global-financial-crisis/comment-page-2/#comment-170623 August1991 Tue, 12 May 2009 01:08:42 +0000 http://www.ritholtz.com/blog/?p=26256#comment-170623 As has been noted above, this little story only sees the liability side of the balance sheet - but it ignores the asset side. While each person has a 100 euro liability, they also have a 100 euro asset and so each one has net worth of zero. In the real world, individuals rarely all have debts equal to assets. The only relevance to the real world is that in the aggregate, since we can't borrow from other planets (or from the future), all debts cancel out and we are left with our real assets and our equity claims on these real assets. As has been noted above, this little story only sees the liability side of the balance sheet – but it ignores the asset side. While each person has a 100 euro liability, they also have a 100 euro asset and so each one has net worth of zero.

In the real world, individuals rarely all have debts equal to assets.

The only relevance to the real world is that in the aggregate, since we can’t borrow from other planets (or from the future), all debts cancel out and we are left with our real assets and our equity claims on these real assets.

]]> By: glusec http://www.ritholtz.com/blog/2009/05/the-solution-to-the-global-financial-crisis/comment-page-2/#comment-170614 glusec Tue, 12 May 2009 00:46:36 +0000 http://www.ritholtz.com/blog/?p=26256#comment-170614 This joke was going around the former Yugoslavia when it was breaking up with the only difference being the currency in use was the Deutschmark. This joke was going around the former Yugoslavia when it was breaking up with the only difference being the currency in use was the Deutschmark.

]]> By: Moss http://www.ritholtz.com/blog/2009/05/the-solution-to-the-global-financial-crisis/comment-page-1/#comment-170598 Moss Mon, 11 May 2009 22:13:42 +0000 http://www.ritholtz.com/blog/?p=26256#comment-170598 This is not really debt but accounts payable/receivable since a service or product was provided. Money for nothin and chicks for free.. yeah thats the way to do it. Dire Straits This is not really debt but accounts payable/receivable since a service or product was provided.
Money for nothin and chicks for free.. yeah thats the way to do it. Dire Straits

]]> By: ardano http://www.ritholtz.com/blog/2009/05/the-solution-to-the-global-financial-crisis/comment-page-1/#comment-170596 ardano Mon, 11 May 2009 22:01:34 +0000 http://www.ritholtz.com/blog/?p=26256#comment-170596 Better story: The 3 Stooges... They have one dollar. Each owes the other $2.00. They pass the same dollar around two times, settle the debt at which point Moe slaps Larry and Curly in the face...same logic... Better story:

The 3 Stooges…

They have one dollar. Each owes the other $2.00. They pass the same dollar around two times, settle the debt at which point Moe slaps Larry and Curly in the face…same logic…

]]> By: Pat G. http://www.ritholtz.com/blog/2009/05/the-solution-to-the-global-financial-crisis/comment-page-1/#comment-170582 Pat G. Mon, 11 May 2009 20:49:03 +0000 http://www.ritholtz.com/blog/?p=26256#comment-170582 "Could this be the solution to the global financial crisis?" Uh, no. Total (inflated) debts far out weigh total (deflated) assets. Unless they print money and monetize the debt. Oh yeah, they are doing that aren't they? I guess it could work then, afterall. “Could this be the solution to the global financial crisis?”

Uh, no. Total (inflated) debts far out weigh total (deflated) assets. Unless they print money and monetize the debt. Oh yeah, they are doing that aren’t they? I guess it could work then, afterall.

]]> By: aitrader http://www.ritholtz.com/blog/2009/05/the-solution-to-the-global-financial-crisis/comment-page-1/#comment-170581 aitrader Mon, 11 May 2009 20:48:50 +0000 http://www.ritholtz.com/blog/?p=26256#comment-170581 Seems the velocity of money was temporarily high and suddenly dropped to zero: a good parallel to the last 8 months in the US. What happens next? The velocity of money in the town's economy is now zero. No one is able to print any. The town economy flew over a cliff when the Russian departed. So everyone goes further into debt or loses their livelyhood and ends up on the unemployment rolls. I'd bet everyone in the town is heavily bullish on their economic future regardless. Seems the velocity of money was temporarily high and suddenly dropped to zero: a good parallel to the last 8 months in the US.

What happens next? The velocity of money in the town’s economy is now zero. No one is able to print any. The town economy flew over a cliff when the Russian departed. So everyone goes further into debt or loses their livelyhood and ends up on the unemployment rolls.

I’d bet everyone in the town is heavily bullish on their economic future regardless.

]]> By: emailcraigs http://www.ritholtz.com/blog/2009/05/the-solution-to-the-global-financial-crisis/comment-page-1/#comment-170559 emailcraigs Mon, 11 May 2009 19:52:54 +0000 http://www.ritholtz.com/blog/?p=26256#comment-170559 Unfortunately..........no. The way business is done today, from government contracting to outsourcing to simple purchases, there are far too many middlemen who take their cut for doing practically nothing. Thus, the hooker would be shafted in the end and the process would stop there on her, and every other common laborers, back. (Pardon the pun) This can be evidenced in who is really paying for all of the malfeasance on wall street and beyond.......the taxpayers. Unfortunately……….no. The way business is done today, from government contracting to outsourcing to simple purchases, there are far too many middlemen who take their cut for doing practically nothing. Thus, the hooker would be shafted in the end and the process would stop there on her, and every other common laborers, back. (Pardon the pun) This can be evidenced in who is really paying for all of the malfeasance on wall street and beyond…….the taxpayers.

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