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Grade 3 Math Assignment
From Peter Tchir of TF Market Advisors
Grade 3 Math Assignment
Tom has 1 apple.
Tom has promised to give Robbie, Jim, Anne and Mary, half an apple each.
How does Tom get 4 half apples from 1 apple?
Bonus Question:
While Robbie, Jim, Anne, and Mary are waiting for their half apple, Tom gets hungry and takes a couple bites out of the apple. How does Tom now turn a half eaten apple into 4 half apples?
And you aren't allowed to call it an iApple and say it can do anything.
Here is the basic problem and why Italian and Spanish bonds are getting crushed again today (ignoring horrific unemployment data out of Spain).
If Italy defaults with a 40% recovery, there is 1.613 trillion euro of debt affected (that is up about 10 billion in about a month). That means creditors would lose 970 trbillion. Spain with 663 billion would cost almost 400 billion (its debt has shot up about 15 billion in a month).
The problem is that EFSF doesn't take default off the table. It may delay the time to default (by helping roll debts as they mature), but all it mainly does is shift who would take the loss. The guarantors can't handle losses that big.
There is no "ideal" solution because the problem is just an order of magnitude too large to provide any real help. Either the economies are going to get to balanced budgets (some combination of growth and cuts) or it will fail. Will EFSF do enough to see if the economies can get there?
And we have to help the banks too. But it isn't just their exposure to sovereign debt that is troubling, but their exposure to Spanish real estate for example. We are asking a lot from Germany and France and so far haven't gotten it. China will likely come up with something, if they put a big number into banks at a good price, or buy all sorts of bonds of Spain and Italy, that is good. If they buy some EFSF bonds, all they are really doing is buying Germany, France, and Holland - helpful, but probably something they are already doing.
Italian 5 year bonds just hit their highest yield since at least 2000. In 2000, German 5 year bunds were yielding over 5% too. The ECB can cut rates, which could help a bit (they ar quite low already) or it could print money. Either risks unleashing inflation, but I think we are a long long long way from "mission accomplished". Maybe the 4 am press conference was the EU's "Bush" Moment.
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The math problem requires an unacceptable answer, therefore it must be ignored.
Exactly!
It will be ignored until it isnt.
Trade the trend. Find the inflection points, but reality is for entertainment purposes only. It should not be used for trading purposes.
It will be ignored until next year. All the ramifications Peter is talking about take time. For now, we can go back to watching the world series or Paris Hilton porn and ignore all and everything until next year. I'm almost willing to bet thre will be no melt-down THIS year at this point.
It will be taken by gunpoint from the tax payers and redistributed to the.....oh wait, did I say that out loud?
all spot on, after the mother of all short-squeeze yesterday, the market is continuing the ride today, not even giving anything back, that clearly indicates rally to continue with coordinated easing and QE kicking-in. Could be window dressing, but all risk assets in same mode, including $, copper, oil, silver. this party is on. Shorts are fucked. Graham Summers just out with another idiotic all guns and canned food investment "letter"
Is the market blind, manipulated or irrational? Really doesn't matter. The effect is the same. Caveat emptor.
www.pmbug.com
I do think with no annoucment of QE3 on the 1st and 2nd you could see a litte sell off......but then, it'll be off to the races again into the new year.
Does Paris have a new movie out? I've been trying to find something to do until the end comes.
Quarter is the new Half
Just give them a sliver and call it the "new, low calorie" apple and be done with it.
Works with ever other product in the store.
pods
Based on the past growth performance of apples, a quarter is expected to grow into a half over the next 20 years.
I believe the answer will require the use of a mirror, and perhaps some smoke...
Growing the apple is the hoped for answer.
It's hard to run a really good debt peonage system if bondholders have to take losses. If they did, they wouldn't be able to denominate the value of the peons' labor.
There's an App for that.
Remember there are negative numbers. Multiply two negatves and get a positive--must be what goverments are doing.
Fractional Reserve "guaranteeing" is an oxymoron, no?
...An oxymoron that meets the definition of fraud.
Simple. Plant the seeds of the apple in the ground and wait for an apple tree to grow enough apples. Everyone starves while waiting but we can ignore that minor detail.
Of course you still need energy (now expensive) to provide water and fertillizer. Yes, the answer is unacceptable. The secret is, there is not secret. got physical assets?
After a big run up physical assets dont usually do so well for a while.
I think now is the time for paper. I may be able to get twice as much land and physical assets for my EWZ if I wait a while.
If you think asset deflation is coming, that's a good plan. I'm betting on inflation and hence, holding assets (except a comfortable amount of cash for an emergency).
You need money for fertilizer and water? I get free water from the sky (I think it's called rain) and free fertilizer out of my ass!
My god man, don't you know what's coming?
You need to brush up on your horticultural knowledge quickly. No good having a pile of gold but can't scrape a meal together!
There is plenty of free "fertilizer" being produced in the economic data/statistics out of DC...
Just a Hanker Chief. Makes me weep it does.
How many Greeks does it take to plant an apple seed? All of them + one German.
creditors would lose 970 trillion
wowowowowowowowow!
Should be billion. Unless Tyler is factoring in total collapse of the derivatives market too, although I don't think there's 970trillion gross even in that space.
Trillion, billion, schmillion.. at these levels what's the difference?
There is that much in the derivatives market....all held by J.P. Morgan.
Trillion, Billion, Million confusion is a problem. The f-wads in charge skim off the top. whether it goes to buy their book, fund their in-laws construction company, to their buddies solar firm, their lobbyists defence firm, their own carbon credits company, or their benifactors bank. It's all skimmed off the top. In all accounting 1% is hardly ever noticed or looked after. Think about it, if you throw 100 dollar bills in the wind, after you find and pick up the first 99 how long would you look to find that last dollar. Gov't spending is the same (except that gov'ts probably would quit when they find the first 70 dollars, it's not their money anyway). Let' assume the only 1% is skimmed. 1% of a million is 10K and not worth the time. 1% of a billion is 10M and most wouldn't sell their country for 10M , but 10B? 10B of nearly any currancy in the world will make evil men out of most. When these NWO folks are kicking around trillions who the hell is finding out wher the billions are going. F-n-A that's a lot of evil potential just floating out in the wind.
That was a misprint.
I'm pretty sure it's supposed to be $970 Billion....Ouch still....
Boo fucking hoo. They should not have guaranteed then. These insurance dilletantes need to be taken down. Instead ,with all these bailouts, they are being coddled to the point of absurdity. When the transaction is on their side, you better pay up. When the transaction goes against them, they whine like bitches that they need bailouts.
Wait, I think I know the answer. Is it to punch someone else in the beak in the hope of distracting everyone from the unpleasantness at hand, and hopefully picking up a few apples in the process?
Tom? I think you mean Timmeh
Tom China has 1 $20 crack rock...40 European crack ho's beg for the crack rock, while also promising to be in crack rehab and totaly cured by Monday, while enroute to the Nunnery...how much crack does each crack ho get and what are the odds of success that their promise to become nuns by the end of the year, and how many $20 crack rocks are then distributed from Toms original 1 rock?
AM I the only guy here that's rubbed his gonads on the Elgin Marbles?
Will that get me a rock to give to a nun just when she gets out of rehab for a fun afternoon?
Is that a Plan or is it a Plan?
Is it as good a Plan as the EU's between a Rock and a Gonad Plan?
Who gives a rat's ass. This is all hopie and changeie shit anyhow.
Nothing.
Not a Fucking Thing Has Changed.
The EU is still Bankrupt.
They have not yet even discussed the disease (spending in excess of revenues) but continue to focus on symptoms.
The Euro and EU are fucking dead, what all with the Rule of Law, of Contracts being abrogated with the Private Sector taking the Haircut and the Public Sector going out Whole when it's the fucking Public Sector Made the Problems in the First Fucking Place.
This is Europe's GM moment on a Continental Scale.
Lehman was a drop in the Proverbial Bucket, Bitchez.
knukels, you sound upset!
"Not a Fucking Thing Has Changed", yes! and it's this way since quite a lot of time!
are you old enough to remember Mexico? or not that long ago Russia? or just shortly Brazil?
don't worry, the EU and the EUR will be still here next time you come to visit...
Ghordie, I remember Penn Central and Continental Illinios, was trading bonds and running portfolios in them days.
The song, the music neve,r ever changes.
It's always illiquidity or insolvency. Always through the debt side of the ledger....
What's disgusting (not upsetting, downright disgusting) is the fucking song and dance show time at the Acrapolis routine that these fucking EU politicians engaged in. No substance, mere shallow form.
And yes, I shall visit again.
I happen to love Europe, having been an ex-pat there for many many years, so my frustration is not from the perspective of a xenophobic Yank, but one who loves the place and hates seeing it driven into poverty unnecessarily.
... some unknowns there, number of Johns and fuckable children of the hoes .. ( aka sheeple to sell & fuck ) ....
lemme guess - the hoe with most of the children ( 82 Millions ), and the most of the fucks will get the rock, shoot or knive all the others and dump them to the river . Tom China will buy himself an Hummer, make an phonecall to the Tom Manhattan, create an AAA rated Fund on the on the hoe, and sell it to the sheeple as retirement.
... I'm still workin' on it. Me dumb.
One meelion dollars
http://www.youtube.com/watch?v=jTmXHvGZiSY
Problem: Most Amerikkans can't do pre-school math.
Without an iPod or another electronic device to provide them with the correct answer.
Oh, technology - you've advanced us so!
Anyone have an S4 to ask? Be curious to the responses...
"Ask again tomorrow" "Powers say 'yes'" "Ich bin ein hosen" "Bow before Watson"
Problem: Most Amerikkans can't do pre-school math.
American Bankers Can
E = M C nth
Earnings = Mine (as in Bankers) X Conned from to the n the degree
Yeah, but if Amerikkans deploy their main competence with the simple lowtec, there'll be an fast solution:
... we substitute the numbers with the headshots and choke, then count ...
Goldman Sux will be ready to give some free math lessons in no time ...
970 trillion? should just say .97 quadrillion just so you can use that word
More likely answer, takes someones else's apples.
OR
Give them four equal sized turds that were derivatives of an apple eaten earlier, problem solved!
Now, that is leverage!
Anyone that understands CDS's and is this true?
I'm told, so my "paper kills world" scenario goes something like this:
This weekend, one of the Big Players figures out they have more obligations due to the "voluntary" Greek pseudo-default and they're likely to go down because they won't be able to meet an obligation on a CDS.
Then, along about Tuesday of next week, they decide (woefully short of cash) to renege on a CDS obligation.
Wednesday, the counterparty who got stiffed discovers that they now don't have the dough to meet an even larger commitment and, since this is now quickly turning into musical chairs, they stiff the next party.
Within a week, maybe three or four tops, the whole global CDS settlement problem seizes up and we find out how good the political types really are at turning dirty paper into money.
not a chance in a billion...
Now there you go again using logic!
You're not wrong.
That was the AIGFP issue, and it was why GS seized all AIGFP's collateral and whined to the USGOV that the whole world would implode if they didn't take over AIG.
People who want to minimize the CDS situation (e.g., the ISDA) always talk about "net" notional exposure, because they figure it's like a futures contract: long+short=done & dusted.
But without an exchange to stand between buyers and sellers, when a big player defaults, "net" exposure quickly morphs into "gross" exposure because your long counterparty won't answer your call -- as you try to dodge the calls of your short counterparty. (TD made this point a few weeks ago.)
Good comments. The other side of the problem is that when these CDS-crack addicted lemming banks go under all the governments of the world, including the U.S. will socialize the losses. So, you could be a prudent bank keeping your hands off this economic cyanide as well as an individual investor but your government will hand you a "fair" slice of the turd pie created by these idiots.
That is when the clucking hens of the Euro political class will once again have another in a never ending series of summits to attempt more economic alchemy. They will assure us once again that flipping a few more economic levers, switches and lights will put everything in order.
Remember that roughly half of all CDS contracts are with those five counterparties:
Goldman Sachs, JP Morgan, Morgan Stanley, Deutsche Bank, Barclays
CDS-Crack addicted? I'd say yes. But hey, shall we citizens of the US and the EU be kept hostages by systemic-risk-MegaBanks forever?
I'd say we have to start somewhere. Take the live granades off those children's hands. BAN CDS (again).
21.5% Unemployment in Spain!
30% in Andalusia!
OMG. And that was following a good tourist season. Western world needs a whole lot of reality TV
20+% in good ol US of A!
Reminds me of the game "Hot Potato".. except with a live hand grenade.
They could put Obama, Bernanke, Trichet, Merkel, Sarkozy, Cameron, Berlusconi, Von Rompoy and a few banks executives in a circle and they play hot potato with a live hand grenade till there's only one left.
... I'll buy myself an TV set for that show .... I promisse ....
Good analogy. When the grenade goes off it kills the closet and severely wounds the farthest. Anyone prudent would be putting distance into the calculation.
There has been set a horrible precedent.
By government decree, the debt will be expunged. The creditors will lose their money. It will be a non credit event also by decree.
Any time anyone shows up with documentation indicating they are owed money, and the payment of that money would destroy the EU status quo, that documentation will be expunged by decree.
We simply have to stop thinking about these things as if there is law or markets. There is not. There is only serial intervention. There is no money to be made in any of this, forever.
It's all over. There is no capitalism.
Very good comment, Crash. You are correct. There are no contracts or property rights being honored, here. As governments force loans on their populations it amounts to confiscations of wealth by force as well as autocratic debt serfdom for all who cannot buy their way out.
But, remember, it is for our own good as our bureaucratic lords tell us.
the sovereign by decree (fiat) creates
the sovereign by decree (fiat) taketh
hey guys, I don't want to shock you but in the EZ there are no so called "Common Law" principles
what you are referring to is derived from a completely different legal structure and history
"precedent", for example, is not that important in our legal systems (derived from roman and napoleonic codes), at least compared to your system
Communism is finished, as we know it, socialism is dead, as we know it. We know there is a new china and a new soviet union. Capitalism is finished too as we know it. You can hug a dead lover as long as you love to but is not going to get life.
Jim wants to burn a fatty with Anne and Mary (without Tom or Robbie), Robbie went to the store for some beer. Tom has a CDS on Robbie incase he kills himself in a car accident getting the beer.
Jim nails the two hot chicks, Tom rigged the car and made out ok - and he ends up getting the two chicks.
1+1+time=3. yea right!!
Um... I believe the answer requires a negative number under the root and therefore makes it an imaginary number. Simply put an "i" after the 1/2 and there you have it. Voila math done!
Long weekend looking very dangerous to hold over, as the clouds of Hopium and 'done deal' euphoria wear off and people have 2 days to ponder nothing at all has been resolved.
Two more days of, "Who cares?" and lots of imbibing.
Is there a futures contract on whether Burlusconi pulls a Winehouse or not.
You may get Zero return and lose all your principal is the problem with bonds.
And the last math problem:
Bernie has four apples. Goldie takes two apples away, Sol takes three away, and Milton takes two away.
How long will it be before they take Bernie away?
Eleventy!
Eleventy seven.
Should have written "Ben has..."
Bernie has already done this and is now serving a 120 year prison sentence.... You must keep up with news...
The govt and the fed dont like competition
Ignore please, dble post
Money printing.
The answer is simple.
Tom cuts the apple and gives the good half to Robbie,
...he then takes it from Robbie and gives it to Jim,
Anne and Mary follow next.
The act of 'giving' was completed - taking away again was never forbidden.
Tom might have to use tanks and bombs to get his half apple back - but then that just 'cures' another problem.
You lot are all about the formula's and the fundamentals - you need to step outside the ring.
...of course I didn't say that Tom wouldn't return home to find his orchard was occupied
Is that reflective of the situation?
Spain has no way out of this mess even if the government there actually has put in a tad more than the minimum effort over the last couple of years. The housing sector is broken and quite frankly has not been repriced properly yet. Figures are thrown around and overall it looks like 20-25% is shaved of since the boom peak, at least that is what the consensus and the official documents say. There are at least 687k empty homes (as per BBC October 13th) and even if Russians are taking over more of the market they are far off from replacing trigger happy british sunseekers wanting to live the dream on spanish soil. This merry jog around the xmas tree will stop. Recession is looming and at one point something gotta give. Banks have their balances filled to the brink with unicorn marked repossesed properties. Developers have been lucky to recycle debt as banks are fearful of the outcomes of a write down and home owners domestically and abroad can hardly afford to live their nightmare anymore. Dreams are postponed a number of years.
On a bright note. Soon we can buy mansions by the med for a nice price. Ahhhh! Sangria in the sun, here I come!
Robbie asks Anne and Mary if they would like some hard cider, then takes the apple from Tom and smashes Tom's face with it.
empirical test:
i asked my nine-year-old son, who is homeschooled and sitting here working on his math lesson [studying fractions just now; timing is everything] as i type this, the very question posed above:
Tom has 1 apple.
Tom has promised to give Robbie, Jim, Anne and Mary, half an apple each.
his response ... "you can't do that! you can't get four halves out of one apple! what kind of stupid math problem is that?!?! what are you reading over there, dad?"
problem [un]solved.
you're welcome
+1 for homeschooling.
Your son can never become a collectivist or democrat with that kind of thinking. Better start sending him to government schools to get his mind right.
First rule: There is an infinite amount of free stuff for everyone in the name of fairness.
Second rule: If there is NOT enough stuff it is because greedy producers will not properly share their bounty. They got it through trickery and oppressing the people who need the free stuff anyway so it is okay to take it.
we are hopefully teaching him to be a skeptic; one who can fit in and get by in this world but who questions ... everything. i'd like to think he understands that its wrong to take that which doesn't belong to him, and that nobody should be taking things from him either by theft, redistribution, or outright fraud. judging by his comments he understands that few, if any, of the talking heads [politicians, media, etc] on the television are concerned about what is best for him whether they label themselves as liberal or conservative.
as hard-headed and independent as he is, to the point of being an outright contrarian, i have no fear of collectivism rearing its head for his foreseeable future. not surprisingly, given his environment, he already has a greater understanding of most aspects of economics and politics, along with many more of science and reason, than do most adults i'm acquainted with.
cheers
You get the good dad award in my book. The trick is to get them to reason. If you reason things out, look at history and human nature you can never be a collectivist. You should end up on the far right or libertarian side of life.
Both my sons ended up libertarian-ish through logical discussions and observations. Healthy skepticism is the start, as you say.
Converserly, I have noted all modern liberals (as opposed to classical liberals) devolve into two groups. Group 1 I call the childish liberals who have this infantile view of the world and it's resources. They believe Rule 1 in my post. The second group are the Adult group. They are the dangerous ones. They understand that in the end it is all about power and control. They use Rule 2 and the people who believe Rule 1. When they take power it is ugly and generally fatal for large groups of people.
Tyler must be sent back to Grade 3 for remedial math lessons. 'Tis a modicom of difference between 970 trillion and the correct 970 billion.
ahh, this ones easy...Tom goes to the nearest Kinko's, shoves the apple into a printer and prints off thousands of paper apples. he then takes them back to his friends and disperses the printed fruit equally among them, proud of the fact that he exceeded expectations by providing not just half an apple, but hundreds of apples to his friends...
then wonders why it is that his friends, unable to secure gainful employment in the fiat ponzi riddled economy, who are now out of unemployment, starve to death when he provided them with all those apples.
That's it! Use a 3-D printer and make two more apples, there will be extra left over!
http://www.youtube.com/watch?v=jQ-aWFYT_SU
Good point. It is the same as taking a teaspoon of apple and telling them it is now a whole apple. Then they wonder why it takes 10 apples to be full instead of the old single apple.
Don't forget that you just crashed the apple market because you overcame demand for apples by supplying the paper ones! I think you are on to something here!
Vote for me i have a 5% plan. You got 5% interest on your fiat!
You import some apples.
and get the apple vendor to give them to you on credit.
crappy double post
China's on it.... apples to come....
simple, just redefine the pertinent terms... just as default no longer exists... "four apples" now means rotten chewed on remains of one apple.
Austerity for the 99%, Prosperity for the 1%: The new math.
Now that's what I call Biflation, honey !
Take what is left from the apple and smash it. Add 4 cups of water.
Now eat your apple water
They all flunked grade 3 math. Politicos are the product of feelings and conflict resolution from so-called educators that filled their collective heads with bullshit from the 1960's through the 1990's. Now that they are in charge, what do you expect?
Silvio B., Barry Soetero, et al - how the fuck are they in charge?
Well, now that women have equal rights to the British Throne, I feel so much better...
1 = (x2/0.6875) - (Ê + 4/23) = 1.5
I have to pass this along the way I got it
forward this as received, but without comment.
Yes, he told us in advance what he planned to do. Few were listening. The following is a narrative taken from a 2008 Sunday morning televised "Meet The Press'. From Sunday's 07 Sept. 2008 11:48:04 EST, Televised "Meet the Press" THE THEN Senator Obama was asked about his stance on the American Flag. General Bill Ginn' USAF (ret.) asked Obama to explain WHY he doesn't follow protocol when the National Anthem is played. The General stated to Obama that according to the United States Code, Title 36, Chapter 10, Sec. 171... During rendition of the national anthem, when the flag is displayed, all present (except those in uniform) are expected to stand at attention facing the flag with the right hand over the heart. Or, at the very least, "Stand and Face It". NOW GET THIS !! 'Senator' Obama replied: "As I've said about the flag pin, I don't want to be perceived as taking sides".. "There are a lot of people in the world to whom the American flag is a symbol of oppression.." "The anthem itself conveys a war-like message. You know, the bombs bursting in air and all that sort of thing." (ARE YOU READY FOR THIS???) Obama continued: "The National Anthem should be 'swapped' for something less parochial and less bellicose. I like the song 'I'd Like To Teach the World To Sing'. If that were our anthem, then, I might salute it. In my opinion, we should consider reinventing our National Anthem as well as 'redesign' our Flag to better offer our enemies hope and love. It's my intention, if elected, to disarm America to the level of acceptance to our Middle East Brethren. If we, as a Nation of warring people, conduct ourselves like the nations of Islam, where peace prevails - - - perhaps a state or period of mutual accord could exist between our governments ...." When I become President, I will seek a pact of agreement to end hostilities between those who have been at war or in a state of enmity, and a freedom from disquieting oppressive thoughts. We as a Nation, have placed upon the nations of Islam, an unfair injustice which is WHY my wife disrespects the Flag and she and I have attended several flag burning ceremonies in the past". "Of course now, I have found myself about to become the President of the United States and I have put my hatred aside. I will use my power to bring CHANGE to this Nation, and offer the people a new path..My wife and I look forward to becoming our Country's First black Family. Indeed, CHANGE is about to overwhelm the United States of America " WHAAAAAAAT, the Hell is that??? Yes, you read it right. I, for one, am speechless!!!Dale Lindsborg , Washington Post
Red for giving us Yesterday's news. Obama hates our country. We already know that.
Green for giving us the truth: Obama hates our country.
ask the libyans, or the Pakistanis or the afghanis or the the Bahranis etc if they think the obummer is spreading peace and love around the world....
And the very last math problem for third grade final exam:
Ben has one apple. He loans two apples to Goldie, six apples to LLoyd and five apples to Morgan.
How long will it be before they take Ben away?
the piigs got the money now, lets see it be put to use.
Give the apple to the piigs, watch it become bacon!
edit: with apologies to Jim Gaffigan
Slam the half eaten apple in the photocopier, Key in 1,000,000 and hit turbo print. Keep feeding the machine paper, rinse, repeat. It's what they're going to do in the long run anyway, might as well get started and save us the drama.
The FED cuts the damn apple tree down and start printing apples to infinity...
Let's take the half and call it a whole and cut that in half and then do that three more times, now everyone gets a half with a couple halves left over to use to lend later. For all those apple cart guys who had apple insurance in the case that value of Robbie's apples went down, well sorry. Robbie wanted to do this and so the apple guys insurance doesn't work.
The story is so much nicer when we make these examples about fruit instead of the collapse of Western civilizations entire financial structure.
Sometimes it is hard to sleep at night when I contemplate the future.
one of the Ministers at the EU Summit explained the complex plan at curbside
although, he changed his tune once inside and I think with good reason:
essentially it sounded too much like Old Europe (a snippet)
http://www.youtube.com/watch?v=fcDzcIx5pJU
short cut_apple(short apple)
{
' Return even shorter apple (Dont Go Long!)
return cut_apple(apple/2);
}
run
Stack Overflow!
EU Core Dump
Should the markets not be discounting this and forward looking? We are up at least 300pts too high.
Make what remains into apple sauce. Add an extender - oh something like horse shit - get the USDA to call it Grade A. Call it Apple Backed Securities (no, not that Apple). Get Moody to rate it AAA and act like any other Wall Street investment banker. Tastes great - less filling.
Great piece...
If you listen to the msm, you'd think the world's problems were solved yesterday...
Our problems have just begun...
What about CDS on them apples?
Like Albert Edwards says: if Italy is insolvent what are the others?
Total Gov net liabilities (from SG study) + private sector debt % GDP:
France 549% / 155% (AAA)
Germany 418% / 128%
Italy 364% / 121%
UK 442% / 215%
Spain 244% / 171%
US 541% / 174%
Talk about comparing apples to oranges…
Absolute nonsense of an analogy!!! …because this analogy is using an apple, which is truly edible commodity that is subject to natural laws.
Comparatively, the bond is the orange! (it’s more like Sunny D. Fake orange) It’s not real, nor is it subject to any laws other than the reach of our “imagination”. (or should I say financial “innovation”) It’s created from thin air. The bond is a promise. but viewed as some sort of hard asset, but it’s still just a widget. …and I can split that promise/widget as much as I like. I’ll give everyone in the world my half promise… There you go.
The rub is, the 4 people’s expectations. If they expected half… well they have to know that the numerator (people promised) & the denominator (widget/expected value of said widget) can keep on changing.
in the end, it doesn’t matter because those four people know that the apple they have “ain’t no eatin apple, …thems a tradin apple”
…and when they mark their apple to market, it miraculously comes out to the half they thought they had anyway.
All the best, Miss America.
Fractional reserve apples trading
Grade 3 Math Assignment or Macro Economics 101
Next question, please...
Excellent post!
I've blogged a quite similar approach: eupublic.x4hosts.eu . Take a look.