Fannie Mae & Freddie Mac - the big bailout?

[Cynno]

Originally Posted by Lyrical

I am not sure Kugbok or Cynno ever really had a position (based in logic anyway). Its easy to rail about how the Fed is nothing but a huge conspiracy, but Paul's viewpoint makes no sense.

1- You claim to be about free markets, but you are going to enforce price valuations based on assets. You guys still haven't said how you will enforce price controls on the market. This isn't allowing the free market to decide its own valuations. I guess you are going to throw people in jail that don't think a company is worth more than its tangible assets. Dosvedonya, comrade!

In your world, a two companies with the same quality of tangible assets are worth the same, regardless of how long they have been in business, reputation, the levels of customer service, or even who is making more in net earnings. This makes zero sense.

2- You ignore that inflation does happen and that markets don't really regulate it that well.

3- You ignore the ALBATROSS that is governement policy. Both sides have pushed major bills that have been inflationary because they are pandering to the voters. The Fed has fought inflationary policies of the government, and if it didn't, we'd be seeing double-digit inflation (or at least inflation increasing faster than real wages) year after year. Inflation screws everyone!

The Paul plan doesn't even work on paper, and can be disproven in less than five minutes. Thank God Paul won't ever be President.

Ok, let's take you on your merit even though everything you posted shows a lack of economical know how, and Pauls plan looks horrible on paper.

The current course we are on IS BROKEN AND NOT WORKING IN REAL LIFE.

I love how you guys create straw man arguments against posts, I never said Asset valuation would be the only factor in a stock price, yet you jump on that point as if I did. Liquid Assets are the foundation of a strong company, but obviously if they only maintain those assets the stock won't go anywhere and the price for a share remains the same.

If they are steadily increasing their liquid assets, it could be said that they are growing at a good rate, and so in the future will have a higher stock price. So I don't really see the problem with that.

The problem now is debt as an asset. It should never have been an asset to begin with and we are seeing why. It needs to be liquefied and the market should fall to where it should be with the debt gone, and the actual liquid assets that remain.

I'm actually not sure how you can argue against asset valuation, you want artificial values for companies?

[Eomer]

Calculated Risk: JPMorgan Conference Call

This doesn't look promising, at all.

Fuck yes. I am so buying a place in Cali next fall.

As far as the rest of this discussion goes, most of it is way the fuck over my head. But this whole "companies should be valued according to their liquid assets" shit, jesus christ. I know very little about this kind of thing, but that just reeks of stupidity.

Take my company for example. We have liquid assets of probably a million or two at any one time. Some vehicles, material, cash, tools, holdbacks, etc. So our company, if it were publicly traded, should be valued at only a couple million bucks. We'll make 5+ million this year and the next. How the shit does it make any sense to value the company at a couple million?

[Lyrical]

Originally Posted by Eomer

Fuck yes. I am so buying a place in Cali next fall.

As far as the rest of this discussion goes, most of it is way the fuck over my head. But this whole "companies should be valued according to their liquid assets" shit, jesus christ. I know very little about this kind of thing, but that just reeks of stupidity.

Take my company for example. We have liquid assets of probably a million or two at any one time. Some vehicles, material, cash, tools, holdbacks, etc. So our company, if it were publicly traded, should be valued at only a couple million bucks. We'll make 5+ million this year and the next. How the shit does it make any sense to value the company at a couple million?

It makes about as much sense as saying that the market (or politicians) can manage inflation on its own, without any monetary policy, or that the Fed is nothing but a trick to give the government debt and usurp power. None of it makes sense.

[Lyrical]

Originally Posted by Cynno

Also, the way the market works now is horribly broken, basing a companies worth on their earnings creates the issues we saw with Enron, Tyco and others. Companies need to be valued by their Liquid Assets, or easily liquefied assets.

I suppose this was Lumie that hacked your account and said to stop valuing companies on earnings, but on assets? I am calling you on your b.s.

[Cynno]

Originally Posted by Eomer

Fuck yes. I am so buying a place in Cali next fall.

As far as the rest of this discussion goes, most of it is way the fuck over my head. But this whole "companies should be valued according to their liquid assets" shit, jesus christ. I know very little about this kind of thing, but that just reeks of stupidity.

Take my company for example. We have liquid assets of probably a million or two at any one time. Some vehicles, material, cash, tools, holdbacks, etc. So our company, if it were publicly traded, should be valued at only a couple million bucks. We'll make 5+ million this year and the next. How the shit does it make any sense to value the company at a couple million?

I could have 5 billion dollars worth of assets.

I could make 50 billion dollars per year.

Do these 2 things make my company worth more than 5 billion?

What if I told you my company was losing money, my costs were 50.1 billion dollars.

Now what's my company worth? about 5 billion. because if I sold my business there are only 5 billion dollars worth of assets.

I'm not really sure why this is so difficult to understand.

[Eomer]

When I said "make", I meant "earn". Profit. Sorry my bad for not being clear. Revenues are more like 20 million.

So again, does it makes sense to value my company at 1-2 million? Absolutely fucking not. It's more like 10-15 if we did a valuation.

[Cynno]

Originally Posted by Eomer

When I said "make", I meant "earn". Profit. Sorry my bad for not being clear. Revenues are more like 20 million.

So again, does it makes sense to value my company at 1-2 million? Absolutely fucking not. It's more like 10-15 if we did a valuation.

Obviously not, but your company is probably more transparent than a huge corporation. It's easier to look at your company as a whole and make a good valuation.

Like I said, Assets are a foundation of a company, not the "complete" value.

The only reeason this matters is companies are lying their collective asses off to create false value. there needs to be transparency, that's all I want, and I know basing a companies worth on assets alone is stupid, so quit picking that one point of argument as a crutch to spew stupid bullshit.

[Lyrical]

Originally Posted by Cynno

I could have 5 billion dollars worth of assets.

I could make 50 billion dollars per year.

Do these 2 things make my company worth more than 5 billion?

You act like you don't know the answer. One thing you learn in a basic macro High School course is to set up a basic model and assumptions. You've left so many things open ended it would be folly to try and answer.

- Is the $50B in revenues, or profits?
- How long are the profits expected to last? Will earnings have a growth rate?
- What is the discount rate of the cash flows of either company?
- Does the company that is losing money have any big contracts expected to come in later on?

You can't put forth a model out and leave out so many assumptions. Company 2 could have a $500B contract that could hit in year 2 (with a high margin).

[Lyrical]

Originally Posted by Cynno

Obviously not, but your company is probably more transparent than a huge corporation. It's easier to look at your company as a whole and make a good valuation.

Like I said, Assets are a foundation of a company. Not the "complete" value.

Amazing how you changed this in just a matter of three pages after you were called on the absurdity of your first statement.

[Cynno]

Originally Posted by Lyrical

Amazing how you changed this in just a matter of three pages after you were called on the absurdity of your first statement.

I didn't change anything.

Jesus christ you straw man arguing bullshit spewers are fucking retarded.

LOGIC MOTHER FUCKER DO YOU USE IT.

You act like you don't know the answer. One thing you learn in a basic macro High School course is to set up a basic model and assumptions. You've left so many things open ended it would be folly to try and answer.

- Is the $50B in revenues, or profits?
- How long are the profits expected to last? Will earnings have a growth rate?
- What is the discount rate of the cash flows of either company?
- Does the company that is losing money have any big contracts expected to come in later on?

You can't put forth a model out and leave out so many assumptions. Company 2 could have a $500B contract that could hit in year 2 (with a high margin).

ZOMG, and Company 2 could fail at year one, no contract goes through, and then an elephant could run over the CEO creating shareholder trust issues, then a terrorist could fly a plane into corporate HQ.

Get the fuck over it, this is not a fucking hypothetical situation, these are real companies in real life lying to investors and going under. This is a REAL system we use and it is broken as fuck.

[Kiroy]

So is there a difference in what your company is worth and how much can you sell it for?

I think that's the problem - ya, we can say your company is worth 2 million (liquid), but if your earning 5 million a year you could sell your company for many millions of dollars - so is it worth 2 million, or many millions.

The argument confuses me a bit.

[Lyrical]

Originally Posted by Cynno

I didn't change anything.

Jesus christ you straw man arguing bullshit spewers are fucking retarded.

LOGIC MOTHER FUCKER DO YOU USE IT.



ZOMG, and Company 2 could fail at year one, no contract goes through, and then an elephant could run over the CEO creating shareholder trust issues, then a terrorist could fly a plane into corporate HQ.

Get the fuck over it, this is not a fucking hypothetical situation, these are real companies in real life lying to investors and going under. This is a REAL system we use and it is broken as fuck.

Thank you for showing you have never taken a course in finance, or economics or business administration. For someone so concerned about business issues, you could have at least taken a high-school level course so that you would have something to add to the conversation, instead of pummel us with your nonsensical statements. Did you even graduate from High School?

[Cynno]

Originally Posted by Lyrical

Thank you for showing you have never taken a course in finance, or economics or business administration. For someone so concerned about business issues, you could have at least taken a high-school level course so that you would have something to add to the conversation, instead of pummel us with your nonsensical statements. Did you even graduate from High School?

Which is what you've just done.

You've posted nothing that makes sense except for stating the obvious.

"omg it's hard to value companies" Teehee.

No shit sherlock, it's even harder when they all lie to shareholders and get away with it.

[Lyrical]

Originally Posted by Cynno

Which is what you've just done.

Nice comeback there. "I know you are, but what am I" went out of style in the fifth grade.

Originally Posted by Cynno

You've posted nothing that makes sense except for stating the obvious.

I've posted the obvious to everyone but the oblivious.

Originally Posted by Cynno

"omg it's hard to value companies" Teehee.

No shit sherlock, it's even harder when they all lie to shareholders and get away with it.

That's not the point I was making. The point I was making is that you wrongly originally stated that a company should be valued on its assets only, and that government should enforce prices on everyone. After you had a few posters call you on it, you then changed your standpoint because you knew it was wrong before you posted it.

Furthermore, if you really wanted an intelligent discourse, you should be able to make a basic model and state your assumptions.

Never go full retard.

[Cynno]

Originally Posted by Lyrical

Nice comeback there. "I know you are, but what am I" went out of style in the fifth grade.



I've posted the obvious to everyone but the oblivious.



That's not the point I was making. The point I was making is that you wrongly originally stated that a company should be valued on its assets only, and that government should enforce prices on everyone.

Never go full retard.

lol, I never stated that, keep up the straw man. god I'll even link the wiki, maybe you don't undrestand what you're doing.

Straw Man