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MaxxBot posted:Just out of curiosity, what would the pricing on cellular data be like if it were at or close to cost? I've always had the assumption that charging $30 a month for a measly 5GB of data would result in huge margins, considering that they used to offer unlimited plans. Is that a correct or incorrect assumption? There's a magical number of expected margin that seems pretty consistent through my career in wireline telcom then mobility. Anything over 15% is pretty much immediately approved, anything below it needs blessing and proof that it's a strategic initiative. There's lower cost providers who are willing to start in the single digits (buying revenue!) but they don't last.
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Jun 3, 2014 19:54
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computer parts posted:What does Google Fiber's demand actually look like? Please don't point to actions of other ISPs, I mean how many people are actually switching to it? Pretty decent, apparently MaxxBot posted:There are issues beyond pure advertised speed and price as well, such as that Comcast is so dominant when they are well known for providing such exceptionally lovely service. It might just be my area but I don't know a single Comcast user who gets their actual advertised speed and doesn't have problems with outages, and God help you if you actually need to call customer support. On top of that they're going to implement data caps on their service just as everyone is ramping up their use of streaming content. Luckily there's a fiber ISP that moved into the area that's literally an order of magnitude better than Comcast as far as megabits/dollar but they're still a pretty small operation and they're booked out months in advance for installations for obvious reasons. Unspecified fiber ISP: "Booked out months in advance for installations" Google themselves are doing demand-based rollouts, they aren't rolling out to to anywhere without a sufficient level of demand and density, so just look at a map of Google Fiber rollouts and wherever they are there's enough demand to support the infrastructure. The interesting thing is they actually require higher demand in high-density areas, which is backwards from the usual intuition. Since it costs a fixed amount to roll out the fiber based on area, you'd think you could get away with lower demand in high-density areas, since high density means more absolute people to average out the cost of the kit even with lower demand-per-person. Maybe they're deliberately overbuilding in urban areas to future-proof their capacity, if so good on them. quote:In the summer of 2012, Google carved up the entire Kansas City metropolitan area into 202 differently sized neighborhoods of its own making, which it called "Fiberhoods." Google then imposed minimum pre-registration requirements for each based on population density: between 5 and 25 percent of households in every Fiberhood had to pre-register online, or in person at the Fiber Space, before Google would bring internet to anyone in those areas. Areas with higher population density had higher pre-registration requirements. Pre-registration cost $10 per household, and Google gave Kansas Citians about six weeks to sign up. Paul MaudDib fucked around with this message at 21:47 on Jun 3, 2014 |
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Jun 3, 2014 20:21
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down with slavery posted:The entire failing of the economic model that led to these megacorps existing was socialized via TARP and other bailout programs. The people who own Comcast (the big shareholders) are the same people who are big shareholders for the other huge multinationals. When their "investment" models went tits up and the banks who fund these corps failed, who stepped up to bail them out? The US Government ie the citizens. And now we're still stuck with the same poo poo sandwich. Smoothed over that "bump" that was the financial collapse of 2008 and the fat cats at the top are back to raking in billions in profits while we continue to be provided with subpar service. I know I should leave this alone because you went back to your dank troll cave, but it should be pointed out that the telcos, particularly the big ones with cellular offers, did pretty well through the 2008 downturn. They were one of the few reasonably bright areas of the economy. Their investment models didn't go tits up, they in fact led to much greater investment, as discussed elsewhere in this very thread. None of the big players received any sort of bailout, period. I expect that unless you can prove otherwise you'll do the honorable thing and walk back your post.
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Jun 3, 2014 21:35
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Pauline Kael posted:None of the big players received any sort of bailout, period. I expect that unless you can prove otherwise you'll do the honorable thing and walk back your post. http://www.washingtonpost.com/wp-dyn/content/article/2010/12/01/AR2010120106870.html quote:Verizon CEO: No Bailout for Me, Thanks," reads the headline of this WSJ blog post from Oct. 14, 2008, in which Seidenberg said, "You’re not seeing the same liquidity issues and hue and cry coming out of the telecom industry that you’re seeing out of other industries." Seidenberg even took a shot at the U.S. government, saying it "helped create a lot of really bad business models." And then two weeks later, the government loaned Verizon $1.5 billion. Anyways here's a fun clip of John Oliver saying what everyone's thinking about how sucky our internet is as well as the internet potentially changing forever. https://www.youtube.com/watch?v=fpbOEoRrHyU
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Jun 3, 2014 21:47
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Buckwheat Sings posted:http://www.washingtonpost.com/wp-dyn/content/article/2010/12/01/AR2010120106870.html That wasn't a bailout, though? That was very much the opposite. Verizon wanted to borrow money on a short term loan (something companies do normally even when profitable for a number of reasons) but couldn't find any loans on the private market because the financial industry was frozen. So the Feds stepped in to make the loan instead. Verizon paid them back 90 days later. Commercial paper is what businesses use when they need to meet a financial obligation now, but don't have cash on hand to meet it - they borrow for a short period of time against future income to smooth out spiky income. Verizon probably wouldn't have failed without that loan, but it would have forced them to defer making other payments to other companies. Kalman fucked around with this message at 21:58 on Jun 3, 2014 |
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Jun 3, 2014 21:56
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Kalman posted:That wasn't a bailout, though? That was very much the opposite. Verizon wanted to borrow money (something companies do normally even when profitable for a number of reasons) but couldn't find any loans on the private market because the financial industry was frozen. So the Feds stepped in to make the loan instead. It's a bailout. http://www.technobuffalo.com/2010/12/22/verizon-took-bailout-money/ quote:Verizon. In fact, according to new government disclosures reported in the Washington Post, Verizon took $1.5 billion in government funds during the financial collapse.
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Jun 3, 2014 22:01
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You get that there's a difference between the bailout and commercial paper purchases, right? Like the fact that Verizon paid it back 90 days later and that commercial paper functions as a short term liquidity enhancement? Basically, just like no individual could get car or home loans during the core of the crisis, Verizon couldn't access credit either. Companies borrow money all the time. So the government made the short term loan needed by Verizon, which was paid back on the usual 90 day schedule, at value with interest. Contrast that with the bailouts where the government purchases portions of troubles companies for less than value with the hope that maybe, someday, they'd make the money back.
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Jun 3, 2014 22:15
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Pauline Kael posted:I know you *said* that TARP payments went to telcos No I didn't you dense moron. Kalman posted:That wasn't a bailout, though? That was very much the opposite. Verizon wanted to borrow money on a short term loan (something companies do normally even when profitable for a number of reasons) but couldn't find any loans on the private market because the financial industry was frozen. The irony... the irony. Let me ask you, how exactly is the government saving private industry by providing low interest short term loans? The whole reason the financial industry was frozen is we've allowed it to get as hosed up as it is. Big telco like Comcast, Verizon, ATT, Time Warner, all part of the same problem of excessive deregulation and shifting of power from the public to the private sector. The financial crisis was an indictment of the financial model the elites have pursued for the past 30 years, of which these big telcos are a direct consequence. Kalman posted:Contrast that with the bailouts where the government purchases portions of troubles companies for less than value with the hope that maybe, someday, they'd make the money back. http://en.wikipedia.org/wiki/Bailout Go ahead and read that first line down with slavery fucked around with this message at 22:19 on Jun 3, 2014 |
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Jun 3, 2014 22:16
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Kalman posted:You get that there's a difference between the bailout and commercial paper purchases, right? Like the fact that Verizon paid it back 90 days later and that commercial paper functions as a short term liquidity enhancement? I guess you know way more than the Washington Post political and business writers then. Really glad you're here to straighten things up. Since I provided evidence how about you do the same? Or is this just what you do on your extended lunch breaks?
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Jun 3, 2014 22:19
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Pauline Kael posted:None of the big players received any sort of bailout, period. I expect that unless you can prove otherwise you'll do the honorable thing and walk back your post. Or maybe you'll walk back half of the bullshit you've said in this thread in the name of fellating your corporate overlords?
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Jun 3, 2014 22:20
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Buckwheat Sings posted:I guess you know way more than the Washington Post political and business writers then. Really glad you're here to straighten things up. Since I provided evidence how about you do the same? Or is this just what you do on your extended lunch breaks? Well, okay. http://www.federalreserve.gov/newsevents/reform_cpff.htm I guess the Federal Reserve knows a lot more than WaPo. Edit: Verizon paid around 45 million dollars for the privilege of holding 1.5 billion bucks of the fed's money for 90 days. Kalman fucked around with this message at 22:33 on Jun 3, 2014 |
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Jun 3, 2014 22:30
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Kalman posted:Verizon paid around 45 million dollars for the privilege of holding 1.5 billion bucks of the fed's money for 90 days. And what do we call this in the financial world? There's a term that became popularized in 2008 that refers directly to "giving a loan to a company or country which faces serious financial difficulty", would you like to take a stab at what that is instead of ignoring the fact that you were absolutely 100% wrong. Seriously, a link to the fed? The CPFF by definition is a bailout you idiot. If you don't think that the major telecoms would have been just as hosed as everyone else without TARP (whether the funds were delivered directly in the case of VZ or indirectly in the case of the other guys) you have such a feeble understanding of our financial system that it's barely worth even responding to your stupid posts which amount to "I don't know what a bailout is". How hard is it to admit that maybe it would be in our best interest to undo the massive consolodation we've seen in the industry and/or take our communications infrastructure and nationalize it.
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Jun 3, 2014 22:38
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down with slavery posted:And what do we call this in the financial world? Commercial paper. Usually issued by banks. On any given day like today there's usually around 280 billion dollars of CP outstanding. For some reason banks weren't issuing any CP in late 2008...
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Jun 3, 2014 22:40
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The only real distinction between a bailout and all the other loans the government offers (student loans, small business loans, mortgages) is that companies who are failing and whose failure would significantly impact the economy as a whole get bailouts. Verizon didn't get a loan because they were going bankrupt, they got a loan because the entire financial system had cratered and there literally were no other loans to be had. Calling this loan a "bailout" is about as honest as calling the Red Cross "communists" because they give out free food after disasters.
JeffersonClay fucked around with this message at 22:43 on Jun 3, 2014 |
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Jun 3, 2014 22:40
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Kalman posted:Commercial paper. Usually issued by banks. For some reason banks weren't issuing any CP in late 2008... So the government stepped in and filled that role. This is what we refer to in reality as a bailout. Nobody put Verizon in a position where they were dependent on short term financing other than themselves, alongside all of the other companies that took advantage of that bailout when their short-term financial strategies blew up in their faces. I know it really hurts you to use the word bailout like the rest of us do and you really want to believe that it's just handing bags of cash over that defines a bailout, but you're objectively wrong and even dumber for trying to continue to argue the point. JeffersonClay posted:Verizon didn't get a loan because they were going bankrupt, they got a loan because the entire financial system had cratered and there literally were no other loans to be had. Serious question, what would have happened to Verizon had they not gotten that loan?
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Jun 3, 2014 22:43
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down with slavery posted:So I guess now that it's come to light VZ has taken these funds directly (as opposed to indirectly which is what I was implying) I guess you're going to put on the honor cap? You mean borrowed, and immediately paid back? That's not the same as "taken"
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Jun 3, 2014 22:44
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Pauline Kael posted:You mean borrowed, and immediately paid back? That's not the same as "taken" If you understood how these loans work and know what "low interest" rates mean in this context you would understand that it is in fact, free money. Yes, they paid it back because everything righted itself, but it doesn't change the fact that their financial model failed, the government stepped in to fix things, and as a result allowed them to continue down that road instead of letting them fail and allowing new firms to enter the marketplace.
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Jun 3, 2014 22:44
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down with slavery posted:So the government stepped in and filled that role. This is what we refer to in reality as a bailout. Nobody put Verizon in a position where they were dependent on short term financing other than themselves, alongside all of the other companies that took advantage of that bailout when their short-term financial strategies blew up in their faces. I know it really hurts you to use the word bailout like the rest of us do and you really want to believe that it's just handing bags of cash over that defines a bailout, but you're objectively wrong and even dumber for trying to continue to argue the point. They would have built a bunch fewer cell towers and laid off a bunch of employees.
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Jun 3, 2014 22:48
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Pauline Kael posted:They would have built a bunch fewer cell towers and laid off a bunch of employees. Which is what should happen to a company that takes an incredibly risky short term financial strategy that blows up in their face. Instead of having the government come in and allow them to entrench their position in the marketplace (what happened)
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Jun 3, 2014 22:49
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down with slavery posted:Serious question, what would have happened to Verizon had they not gotten that loan? Short term layoffs and delayed payments to suppliers, most likely. They wouldn't have collapsed or anything close to it. And again, commercial paper is a fact of life for a lot of large companies - Verizon likely wasn't predicting the complete dissolution of the financial system when structuring their operations.
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Jun 3, 2014 22:50
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down with slavery posted:Which is what should happen to a company that takes an incredibly risky short term financial strategy that blows up in their face. Instead of having the government come in and allow them to entrench their position in the marketplace (what happened) What the hell are you talking about? Commercial paper isn't risky or a short term financial strategy - it's a normal operating strategy for many large companies to manage liquidity and non-uniform cash flow. Edit: analogy time! I get paid once a month (true story, it's annoying). As a result, I put my purchases on a credit card during the month and pay it all off when I get paid. I could pay from cash during the month but I do it this way instead (mostly because I wind up flying interesting places for free as a result). Except all of a sudden, I find out no one is extending credit this month and I can't use my cards. Clearly my poor financial situation (of having the income to pay my bills in 30 days time) and planning (of expecting access to credit to continue) was faulty. Kalman fucked around with this message at 22:55 on Jun 3, 2014 |
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Jun 3, 2014 22:51
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Kalman posted:And again, commercial paper is a fact of life for a lot of large companies This is a problem, despite the governments attempts to keep this system alive. Large organizations should not live or die by short term financing. That sort of risk should be curtailed via regulation (lol who am I kidding the guys writing the rules are the ones making bank) quote:- Verizon likely wasn't predicting the complete dissolution of the financial system when structuring their operations. Maybe they, and all the other big companies that are dependent on the US holding together their oligopoly, should start worrying about that. Well, not really, because the guys in charge of the political system will bail them out endlessly. Moral hazard and all that jazz. Why NOT use short term financing to increase your profits/margin if the government will jsut step in and provide the service once the banks can't? Kalman posted:What the hell are you talking about? Commercial paper isn't risky or a short term financial strategy - it's a normal operating strategy for many large companies to manage liquidity and non-uniform cash flow. It's also complete bullshit that we allow these multibillion dollar firms to operate in that way. The risk needs to be reeled in. I know it's a normal operating strategy, but it's stupid and it's why we've gotten into many of the problems we're in now.
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Jun 3, 2014 22:52
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And again, none of this is even relevant because regardless of whether big telco was bailed out, they still need to be broken up, the communication networks still need to be nationalized and there's no good reason not to other than putting money in the hands of the shareholders. Let's not get too off point.
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Jun 3, 2014 22:54
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down with slavery posted:Serious question, what would have happened to Verizon had they not gotten that loan? Absolute worst-case, they would have delayed payments to (some of) their creditors by up to 90 days. That delay in payment would have snowballing effects on the economy, as those entities owed money by Verizon would likewise be unable to meet some financial obligations, and so on. The government didn't offer the loan to keep Verizon afloat, they offered the loan (and many more like it) so that the financial collapse wouldn't become a complete economic collapse. When the government purchased 45 billion dollars of Bank of America stock, that was a bailout. When the government was selling the same short-term loans that private banks regularly offer, but stopped offering because of a massive and temporary financial crisis, that wasn't a bailout. JeffersonClay fucked around with this message at 23:04 on Jun 3, 2014 |
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Jun 3, 2014 22:56
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JeffersonClay posted:Absolute worst-case, they would have delayed payments to (some of) their creditors by up to 90 days. That delay in payment would have snowballing effects on the economy, as those entities owed money by Verizon would likewise be unable to meet some financial obligations, and so on. The government didn't offer the loan to keep Verizon afloat, they offered the loan (and many more like it) so that the financial collapse wouldn't become a complete economic collapse. Yes and my point is that when the government bailed out the entire economy, the big players at top were the ones who made out like bandits, because it was their failed market positions that were protected. All that we did was push back the inevitable collapse, if we wanted to stop it would we would have attached conditions to the receipt of those funds. Short term financial strategies like this should not be in the game plan of billion dollar multinationals. It is insane, unnecessary, and will only blow up in our faces again if we don't change the underlying model. It's already obvious that there are better models out there. That's why you see municipal network quality way above that of private industry. And it's not even "all private industry" It's a few select firms that have colluded and decided that they won't upgrade the infrastructure until the demand is there (or a competitor comes in and provides better services, which these big telco firms fight against tooth and nail). Great, let's let the rest of the world build out new technologies and get a head start on building things that require the more robust network that is coming eventually anyways.
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Jun 3, 2014 23:00
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... Short term paper isn't risk. It's used to smooth out obligations and income. It's the super-large corporations equivalent of a revolving credit line, which is the medium/small sized firm equivalent to a personal charge card. You use it for convenience and to make it so you don't need to hold the entire sum of cash on hand to pay obligations during the times in between income. For large corporations that day to day cash flow is significant, so forcing it to sit in a bank account is not actually desirable. What part of that aren't you getting? down with slavery posted:This is a problem, despite the governments attempts to keep this system alive. Large organizations should not live or die by short term financing. That sort of risk should be curtailed via regulation (lol who am I kidding the guys writing the rules are the ones making bank) What risk is reduced by allowing companies to use short term loans to smooth out their cash inflow and outflow? Or, thinking of it another way, what benefit exists for forcing companies to sit on a giant pile of cash to prepay expected obligations instead of being allowed to fund day to day operations with day to day income? That kind of idiot thinking is currently destroying the Post Office.
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Jun 3, 2014 23:00
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down with slavery posted:Which is what should happen to a company that takes an incredibly risky short term financial strategy that blows up in their face. Instead of having the government come in and allow them to entrench their position in the marketplace (what happened) So you're arguing that an employer of 300k people should down with slavery posted:This is a problem, despite the governments attempts to keep this system alive. Large organizations should not live or die by short term financing. That sort of risk should be curtailed via regulation (lol who am I kidding the guys writing the rules are the ones making bank) What is an appropriate level of risk? Why is short term financing a problem?
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Jun 3, 2014 23:03
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Kalman posted:... Short term paper isn't risk. It's used to smooth out obligations and income. It's the super-large corporations equivalent of a revolving credit line, which is the medium/small sized firm equivalent to a personal charge card. You use it for convenience and to make it so you don't need to hold the entire sum of cash on hand to pay obligations during the times in between income. For large corporations that day to day cash flow is significant, so forcing it to sit in a bank account is not actually desirable. It is risk. That's what you don't get. I understand why the loans are taken out, it's just that it's not necessary. They could easily increase the amount of cash on hand they have with the profits that they make. It's a choice to finance themselves this way, a bad one. A company that provides millions of jobs that the economy relies on should not live or die on day-to-day financing. quote:What risk is reduced by allowing companies to use short term loans to smooth out their cash inflow and outflow? None? quote:Or, thinking of it another way, what benefit exists for forcing companies to sit on a giant pile of cash to prepay expected obligations instead of being allowed to fund day to day operations with day to day income? That kind of idiot thinking is currently destroying the Post Office. Lol no that's not why the post office is being destroyed (also, the post office isn't being destroyed). They are required by law to hold an excessive(key word here) amount of those prepaid obligations. Having Verizon keep a month of cash on hand is not unreasonable in any way. Pauline Kael posted:What is an appropriate level of risk? Why is short term financing a problem? Short term financing is a problem because it adds an additional point of failure for your business to a group of organizations you don't even control. It's fine if they want to pursue short term financing, but there are risks associated with that and they should realize those losses if that risk becomes a reality. The entire idea of loans and risk falls apart when you have the government just guarantee it. Imagine if you idiots could stop getting hung up on trying to define bailout and actually addressed the argument I've made, which is that these companies need to be broken up and their industry nationalized 
down with slavery fucked around with this message at 23:08 on Jun 3, 2014 |
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Jun 3, 2014 23:03
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The X-man cometh posted:Can you please provide a link to this? I live in the middle of the Chicago blue spot and i know for a fact you can't get gigabit speeds here. It is from broadbandmap.gov You can zoom in on it on the website. A full CONUS view is not accurate enough to show which particular blocks in Chicago have it, after all. Xae posted:Explain to me how your position is substantively different than "64KB of Memory ought to be enough for anyone". For one thing you misquoted a statement that itself was apocryphal. (640 kb was used in order that the other 384 kb of the available memory addressing in one particular 1981 computer could be used for processor to directly address plug in expansion cards) Kalman posted:UX item 2 is incorrect - US ISPs generally do deliver advertised speed, far more so than most other countries' ISPs. There was a link posted up thread showing exactly that. Yes, according to the EU study apparently the ISPs in the EU are currently doign a terrible job of matching real performance to advertised performance, while US ISPs have been successfully pushed into telling customers speeds that actually match what they'll get. Here's the study again if people need it http://ec.europa.eu/digital-agenda/en/news/quality-broadband-services-eu-samknows-study-internet-speeds Arglebargle III posted:
You'll have to specify them. Arglebargle III posted:
Well we and most of the rest of the world have private ISPs because most governments either refuse to run public ISPs, or formerly ran public ISPs but then fell for the privatization line. Then there's cases where smaller governments attempt to start them and get what amount to nuisance suits that drain their ability to fight for them filed by other ISPs or get blocked by disagreeing higher level governments. That said tons of utilities have either loose controls or none at all across different jurisidictions and countries. Some might even argue that a major problem in the west in general is the willingness of governments to subsizide providers without putting in price controls! Kalman posted:
No, what it says is that they're full of poo poo when they say "noone gets the advertised speed" (aside from certain providers of course). When the average customer is getting 100% of advertised speed at peak on an ISP, there's still room in there for some people to have major losses, it's just nowhere close to a majority. FilthyImp posted:I'd like to add that it's not just TV/Video/Audio that'll be a consideration for future bandwith. Sony's rolling out their PS Now service in the next year or so, with virtualized gameplay streaming to homes. PS Now/GaiKai's issue is definitely not going to be bandwidth - they'll only be streaming compressed 1080p or less video. The issue will be latency. Also what are you even talking about with "throttled 5 megabit"? Do you just mean it's a 5 megabit connection or what? Sony has said that 5 megabit is acceptable for the feature, by the way. Buckwheat Sings posted:We already do though? The government gave a ton of money to telecoms to upgrade infrastructure and they just pocketed it. I always love the final line of 'OMG SOCIALISM' when in fact we're already loving socialist as hell. Socialize loses and capitalize profits! It's just that it goes to the rich that's all. Embarrassing. Nice lies! They spent it building different infrastructure (mostly cell related) and the rest of it was spent on late 90s/early 2000s tech, because it was the late 90s/early 2000s, and that infrastructure is not anywhere close to high end today. In fact, if they had spent all on specifically what was high end at the time and none of the cell stuff, it wouldn't help us any 14 years on. Slanderer posted:The funding was for broadband as defined in like 1995 or 1996 (I forget), which was basically ADSL speeds, and they came through on this. I would have to dig up the actual source from the lovely Net Neutrality threa... That was the first round of funding and the definition of broadband in that time was 200 kilobit per second down and 128 kilobit per second up. Shockingly enough that ended up available just about everywhere by 2000 because it could be provided by "shotgunned" ISDN connections. Later rounds aimed at various targets from 1 megabit to 1.5 megabit to 3 megabit down and 256k to 768k up. Again, all those targets are now available within 95% or more of American households. MaxxBot posted:Just out of curiosity, what would the pricing on cellular data be like if it were at or close to cost? I've always had the assumption that charging $30 a month for a measly 5GB of data would result in huge margins, considering that they used to offer unlimited plans. Is that a correct or incorrect assumption? The thing to keep in mind is that the unlimited plans were offered with devices expected not to use much. A good example is the original iPhone and its unlimited plan: the fastest it could do was EDGE with a theoretical throughput of 400 kilobits per second if you had perfect signal. Now in theory, if you had perfect signal and were maxing that for a full month you'd get 123 gigabytes of data in a month; but in practice speeds were much slower and even heavy users were going full tilt on that for much less than 30 days straight; something like 5 GB would still take 40 hours total of continuous downloading at normal speeds. You can even still get "unlimited data" on a lot of featurephones these days - and they have a similar practical limitation on actual data you'll get through them because they use restricted browsers, often blocking or simply unable to handle streaming content especially HD. And then there's things like T-Mobile "unlimited" where you can get arbrirtrary connection speed reductions once you go over a certain usage, or the older MetroPCS "unlimited" that declared streaming video and other things wasn't allowed in the "unlimited".
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Jun 3, 2014 23:12
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So Verizon should sit on around 7.5 billion dollars at any one point in time (90b in annual costs divided by 12) because you think they should prefund one month out instead of being able to rely on commercial credit like everyone else, commercial credit that they never have a problem obtaining except when the system is collapsing. Yeah, that makes sense. You've convinced me.
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Jun 3, 2014 23:16
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Kalman posted:So Verizon should sit on around 7.5 billion dollars at any one point in time (90b in annual costs divided by 12) because you think they should prefund one month out instead of being able to rely on commercial credit like everyone else, commercial credit that they never have a problem obtaining except when the system is collapsing. Yes, if companies are going to be deemed "too big to fail" and the government is going to protect their market positions, yes, they should be required to reduce risk. Having 4 weeks of operating cash on hand is a great way to ensure that risk is reduced. quote:Yeah, that makes sense. You've convinced me. It made so much sense you couldn't even provide an alternative. Compelling and rich!
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Jun 3, 2014 23:19
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Except Verizon did nothing wrong? I mean, seriously, if you woke up tomorrow morning and your credit card suddenly didn't work would you go "I should have expected that and hedged against that risk?" The compelling alternative I've provided is called "assume that credit markets remain functional because they always have been and in the event they become non functional without warning we are hosed anyways." (I also don't think Verizon should have to hedge against meteors hitting the earth.)
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Jun 3, 2014 23:22
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Kalman posted:Except Verizon did nothing wrong? I mean, seriously, if you woke up tomorrow morning and your credit card suddenly didn't work would you go "I should have expected that and hedged against that risk?" Ahh yes, Verizon, a multibillion dollar multinational, comparable to a consumer credit card. You could write a really compelling argument on the Blaze about government debt I bet. How far down the stupid rabbit hole can you go? edit. and of course they did nothing wrong, the people who own Verizon control the drat financial system, the write the rules
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Jun 3, 2014 23:23
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down with slavery posted:Ahh yes, Verizon, a multibillion dollar multinational, comparable to a consumer credit card. You could write a really compelling argument on the Blaze about government debt I bet. Credit markets being suddenly nonfunctional isn't a reasonable risk to hedge against. (And you're the one making the insane "large companies should have a month of expenses on hand just like individuals should" argument.)
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Jun 3, 2014 23:24
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Kalman posted:Credit markets being suddenly nonfunctional isn't a reasonable risk to hedge against. Requiring businesses that are "too big to fail" to hold on to a month of operating cash is not unreasonable in any way. If you think credit markets becoming "suddenly nonfunctional" isn't a risk that large organizations should recognize, well then I've got a board spot for you on the Federal Reserve. Crises of capitalism are normal occurrences. If we are going to allow firms to become too big to fail, we should require them to not be reliant on short term financing. It's really that easy. Kalman posted:(And you're the one making the insane "large companies should have a month of expenses on hand just like individuals should" argument.) It's only insane if you don't want to see 2008 happen again. Ideally we just break up the TBTF companies, but if they must exist they should not operate in a fashion where they are financed day to day. down with slavery fucked around with this message at 23:28 on Jun 3, 2014 |
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Jun 3, 2014 23:26
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Verizon isn't too big to fail, though? The CFPP wasn't a program extended to tbtf entities, it was a program created to stand in for the failures of tbtf entities.
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Jun 3, 2014 23:28
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down with slavery posted:It's only insane if you don't want to see 2008 happen again. Ideally we just break up the TBTF companies, but if they must exist they should not operate in a fashion where they are financed day to day. Yes, I do not want to see 2008 happen again, which is why I think it's insane. Thank you for emphasizing my point.
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Jun 3, 2014 23:29
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down with slavery posted:Ahh yes, Verizon, a multibillion dollar multinational, comparable to a consumer credit card. You could write a really compelling argument on the Blaze about government debt I bet. You know how in other threads people rage about companies banking a ton of cash and sitting on it instead of investing or hiring people? Yeah, that's companies reducing their risk by ensuring they can self finance for awhile if they need to. Do you remember the epic leftist internet rage about companies hording cash in econ thread after econ thread awhile back? So do I.
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Jun 3, 2014 23:32
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OK, your solution here is for each and every business to keep at least a month's cash on hand and therefore not rely on short term loans. Your plan would require US businesses to keep around 1.3 trillion dollars in cash on hand. At an interest rate of 4%, that's an opportunity cost of 50 billion dollars per year. More to the point, that represents about half of the total M1 money supply. Those are the costs. I dare say you have not articulated a benefit which outweighs them. http://ycharts.com/indicators/us_total_business_sales
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Jun 3, 2014 23:32
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Kalman posted:Verizon isn't too big to fail, though? Then we should have let them suffer the consequences of their poor decision making, simple as that. Could you explain what a downside to requiring large multinationals to keep a month of cash on hand would be? JeffersonClay posted:OK, your solution here is for each and every business to keep at least a month's cash on hand and therefore not rely on short term loans. Your plan would require US businesses to keep around 1.3 trillion dollars in cash on hand. At an interest rate of 4%, that's an opportunity cost of 50 billion dollars per year. More to the point, that represents about half of the total M1 money supply. Those are the costs. I dare say you have not articulated a benefit which outweighs them. 50 billion dollars a year is a pittance compared to the amount we will pay when the poo poo blows up in our faces again and everyone is left holding a bag. I understand there are costs (as there generally are when you reduce risk) but we would be way better off with Verizon realizing their losses as opposed to the Federal Government realizing those losses, which is exactly what happened. AGAIN THE REAL SOLUTION IS TO DISSOLVE INSTITUTIONS THAT ARE TBTF OR THAT REQUIRE THIS TYPE OF RISKY SHORT TERM FINANCING Also I would like to point out that I'm talking specifically about firms like Verizon that are highly profitable and only take those additional risks on to increase profits. I'm sure there are some companies/businesses that can't solely operate using already existing income, but rest assured that VZ is not one of them. I'm not trying to condemn the entire business community, just the large firms at the top. down with slavery fucked around with this message at 23:37 on Jun 3, 2014 |
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Jun 3, 2014 23:32
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