Has Capitalisim reached the end?

[JackLuis]

'Too Big to Fail?

"* Independent Senator Sanders introduces break-up bill"

[JackLuis]

AND!

They are turning on each other!

[JackLuis]

And yet the rich get richer?

Maybe it's just a phase?

[stickwork]

Work it, my man.

Shout it out!

[voluptuary_manque]

Berkshire Hathaway gets richer because Buffet and his crew can tell the difference between companies that make money and companies that make smoke and mirrors. Good products and good management make for good investments.

[stickwork]

Originally Posted by voluptuary_manque

Berkshire Hathaway gets richer because Buffet and his crew can tell the difference between companies that make money and companies that make smoke and mirrors. Good products and good management make for good investments.

Aren't the products usually "good", for the most part, in retrospect?

[voluptuary_manque]

Originally Posted by stickwork

Aren't the products usually "good", for the most part, in retrospect?

No. You can tell from the outset. Why do you think Warren bought See's candy? Why does he own Dairy Queen instead of one of the others? He'd by In and Out Burger if the family were to sell. They won't, of course, because they want to see their company do well instead of having some other corporation milk it as a cash cow. I'm not implying Buffet would do that but too many big corporations have. That's why many family companies stay in the family for generations.

[TE999]

Capitalisim is all about risk taking...who knows what's going to be the next Microsoft or Xerox...it's all about growth and prospering...there's no equality involved...it's financial Darwinisim. The turtle only gets somewhere when he sticks his neck out.

[stickwork]

Originally Posted by voluptuary_manque

No. You can tell from the outset.

You must be a very wealthy clairvoyant.

Or are we talking about "Capitalism"?

[Dragonlipz]

Capitalism never got started - and was corrupted like a whore on dollar night shortly after they let it out of the banking system.......

[JackLuis]

It's not the first time this has happened, Trust Busting Teddy did it in the early 1900's.

I have no problem with B-H making a few Billion here and there. It is funny to see the Banks react to the pressure that is being put on them.

I've seen good companies and bad. I was "merged" a couple of times in my career. You could tell the bullshit artists from the producers.

Perhaps the Banks have reached a natural barrier, Too Big to allow to exist?

If the Teabaggers, aimed at the banks instead of the Government, they might have a point.

[DeeZire]

Originally Posted by TE999

Capitalisim is all about risk taking...who knows what's going to be the next Microsoft or Xerox...it's all about growth and prospering...there's no equality involved...it's financial Darwinisim. The turtle only gets somewhere when he sticks his neck out.

You left out bribery, corruption, and the advantages of the meritocracy - all integral aspects of financial Darwinism capitalists don't talk about.

[Epmd607]

Originally Posted by voluptuary_manque

Berkshire Hathaway gets richer because Buffet and his crew can tell the difference between companies that make money and companies that make smoke and mirrors. Good products and good management make for good investments.

US Bancorp made the same smoke and mirrors investments as citigroup. Warren's pretty deep in USB a bunch higher than where it's trading now after a massive move. Eventually he'll make money on it because it's a good bank, but even he had no idea the loan losses they would have to realize. He didn't buy more USB when it was below twenty because he realized his previous assessments were flawed.

[JAMESBJOHNSON]

Warren Buffett will fall over dead sooner than later and BH will be another WAL-MART milked by heirs and courtesans for fast bucks.

[rgraham666]

Capitalism is a tool. And a damned useful one. But like all tools it needs to be used with care and with a goal in mind.

As I've noted before I can dig a garden or gut another human being with a shovel. It's much the same with capitalism.

[Pure]

state supported capitalism, in the US, is in fine health, i'd say. banks' profits are up, after the bailouts.

as another post mentioned 'trust busting' is largely just talk. the surviving big banks are going to be fine. likewise Goldman Sachs. there are so many Goldman Sachs people in government, it would be suprising if it were otherwise.

a large number of jobs, and instances of home ownership are "reaching the end". state supported capitalism, hardly.

==
TE is pulling our leg, i think:

Capitalisim is all about risk taking...who knows what's going to be the next Microsoft or Xerox...it's all about growth and prospering...there's no equality involved...it's financial Darwinisim.

in this "Darwinism" the losers of a year ago get bailed out....those with access to gov't subsidy and loans survive.! the "risk" they undertook was non existent: hence the saying 'too big to fail.'

The "capitalism" of TE and rg [the 'useful tool'] does not exist, and this is especially evident in the US, for the last 50 years. wake up, guys!

[Liar]

Originally Posted by TE999

Capitalisim is all about risk taking...who knows what's going to be the next Microsoft or Xerox...it's all about growth and prospering...there's no equality involved...it's financial Darwinisim. The turtle only gets somewhere when he sticks his neck out.

Darwinism relies on one thing that the market does not encompass: In due time, everyting grows old, weak and eventuelly dies, and is replaced by that which it spawned.

This doesn't happen with companies. An old company can live on strong indefinitely, nipping competitors with better "genes" (as in better products and ideas) indefinitely with it's aquired financial power.

It takes extraordinary circumstances, unchartered emerging markets and a great deal of sheer dumb luck for a new company to gain foothold. Google is a good example. They found a market without a dominating player, and became it. And now, if I'm the little company with the Great Idea in the web service market, chance is that Google or Microsoft will outspend me or buy me instead of letting me compete.

[Epmd607]

Originally Posted by Liar

Darwinism relies on one thing that the market does not encompass: In due time, everyting grows old, weak and eventuelly dies, and is replaced by that which it spawned.

This doesn't happen with companies. An old company can live on strong indefinitely, nipping competitors with better "genes" (as in better products and ideas) indefinitely with it's aquired financial power.

It takes extraordinary circumstances, unchartered emerging markets and a great deal of sheer dumb luck for a new company to gain foothold. Google is a good example. They found a market without a dominating player, and became it. And now, if I'm the little company with the Great Idea in the web service market, chance is that Google or Microsoft will outspend me or buy me instead of letting me compete.

At least you'll get paid well, most likely be overpaid if you come up with a new idea. Myspace and facebook, youtube, are three perfect examples of good ideas that msft, Newscorp, and google overpaid for. Who wants to toil in some business for years just to make good products or provide better services? We would all jump at the chance to get out with a few billion in our pocket. Steve Wozniak wouldn't be making any more money now had he stayed on with apple in the day to day business of the company. I don't think twitter has really sold to anyone yet. That's an idea that has almost zero potential for serious revenue growth, they could jump ship for a few billion right now.

[JAMESBJOHNSON]

There's no harm making a few million from a great new idea, especially if youre not a great manager. You may have a lot more fun as an innovator and head of a small staff of kindred spirits. Christ! Stephen King got so full of himself he wanted to write the books and screenplays and direct goddamn movies based on his books.

[Liar]

Originally Posted by Epmd607

At least you'll get paid well, most likely be overpaid if you come up with a new idea. Myspace and facebook, youtube, are three perfect examples of good ideas that msft, Newscorp, and google overpaid for.

Originally Posted by JAMESBJOHNSON

There's no harm making a few million from a great new idea, especially if youre not a great manager. You may have a lot more fun as an innovator and head of a small staff of kindred spirits. Christ! Stephen King got so full of himself he wanted to write the books and screenplays and direct goddamn movies based on his books.

Yep. This is all true, in the cases when startup enterprises with ideas and patents are actually seen as a goldmine for the Big Corp, and rewarded for their innovations with a generous bid. That is not always the case. The flip side is market bullying and price dumping.

There's a local supermarket where I live. It is open every day from 10 AM to 6 PM.

Some people opened a small convenience store that were open from early morning to midnight, so that people in the neighborhood could get their small emergency purchases of milk and toilet paper and Pringles in the off hours.

The big supermarket responded by extending their opening hours until midnight too. Naturally, the smaler store could not compete with the product range and bulk prices that the supermarket had, so they were soon competed out of business.

The same day that the small store closed, the supermarket went back to their old opening hours. They just did that, and took a temporary loss doing so, to make sure no competitior was allowed to establish business.

[voluptuary_manque]

Originally Posted by Liar

Yep. This is all true, in the cases when startup enterprises with ideas and patents are actually seen as a goldmine for the Big Corp, and rewarded for their innovations with a generous bid. That is not always the case. The flip side is market bullying and price dumping.

There's a local supermarket where I live. It is open every day from 10 AM to 6 PM.

Some people opened a small convenience store that were open from early morning to midnight, so that people in the neighborhood could get their small emergency purchases of milk and toilet paper and Pringles in the off hours.

The big supermarket responded by extending their opening hours until midnight too. Naturally, the smaler store could not compete with the product range and bulk prices that the supermarket had, so they were soon competed out of business.

The same day that the small store closed, the supermarket went back to their old opening hours. They just did that, and took a temporary loss doing so, to make sure no competitior was allowed to establish business.

Which should serve as a cautionary tale to anyone wanting to start a business. Don't try going mano a mano with a grizzly bear if you're a chipmunk. Find some other idea. To do otherwise will earn you a financial Darwin Award.

[Liar]

Originally Posted by voluptuary_manque

Which should serve as a cautionary tale to anyone wanting to start a business. Don't try going mano a mano with a grizzly bear if you're a chipmunk. Find some other idea. To do otherwise will earn you a financial Darwin Award.

Which is exactly why the whole metaphor of financial Darwinism is bupkus. Because that grizzly bear is not affected by time. It and it's bad idea/product/service is immortal and will reign forever. Patience doesn't kill it, only a bigger bear will.

[trysail]

Originally Posted by JackLuis

And yet the rich get richer?

Maybe it's just a phase?

Berkshire's short term accounting ( GAAP or Generally Accepted Accounting Principles mandated by the Financial Accounting Standards Board ) profits are notoriously volatile due to two factors:

(1) mark-to-market accounting requires that Berkshire report NON-CASH changes in its huge securities portfolio quarterly and

(2) the lack/occurence of natural disasters and catastrophes which either require or don't require large charges for Berkshire's very substantial "super-cat" [ "cat' being short for catastrophe ] property and casualty insurance business.

Buffett has always warned his shareholders ( of whom I am one ) that they should expect large swings in short term reported accounting profitability. The fact that Buffett has "educated" his shareholders' expectations has provided Berkshire with an ENORMOUS COMPETITIVE ADVANTAGE that has redounded to its benefit: it is a company with an extremely long term business philosophy and is able to engage in activities that other large public companies are reluctant to enter because of short run cyclicality/volatility. Berkshire is and has always been perfectly willing to accept "lumpy" profits in pursuit of long run profit growth. The most recent results reflect, in part, the year-ago quarter where things weren't quite so peachy. In case you haven't been paying attention, since the stock market's "bottom" on 9 March, 2009 it has risen ( as measured by the S&P 500 ) by just over 58%.

For a discussion of this, read Buffett's Annual Letters to shareholders which are easily accessible at: http://www.berkshirehathaway.com/ under http://www.berkshirehathaway.com/letters/letters.html

[scotsmitch2001]

no(many reasons why it hasnt at moment.It will though)

[trysail]

Originally Posted by Liar

Which is exactly why the whole metaphor of financial Darwinism is bupkus. Because that grizzly bear is not affected by time. It and it's bad idea/product/service is immortal and will reign forever. Patience doesn't kill it, only a bigger bear will.

General Motors was once "the biggest bear" with a U.S. market share approaching 60%. At one point in the '60s the U.S. Justice Department seriously considered suing to break up the company as a monopoly.

How do you think it feels to be a Ford shareholder these days? The government is artificially preserving TWO ( not one, but TWO ) of your largest competitors.

In the long run, monopolies are only preserved by LOWERING prices. This is counter-intuitive to most people ( and beyond the ken of the illiterati ) but it has been borne out by history.

Once upon a time, K-Mart and Sears were the largest U.S. retailers. Once upon a time, IBM dominated personal computers. Once upon a time, Lotus was the dominant provider of spreadsheet software. Once upon a time, VisiCalc was the dominant provider of spreadsheet software.