If intelligence is measured through critical thinking and the application of knowledge, and AI continues to be used my the majority of the population as a purveyor of knowledge, then I would expect the bell curve of human intelligence to stay about the same with a widening at the edges of the curve. Less intelligent people will likely use improving AI as a crutch, while more intelligent people will likely use their increased access to knowledge to improve their intelligence.
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Dude, you should shorten your comments a little..... very reader-unfriendly.
This is the only time I'll comment on something like this because it diverts from the topic at hand and the moderators are picky about this sort of thing. I can appreciate no one want to read a 'block of text' like we often see, and I made efforts not to post one. Each topic I responded to is separated from the others by a quote and divided into multiple short paragraphs. In addition, each topic's parent quote came from either questions or disagreements to my previous comments' stated points of view. I wasn't ranting, I was explaining my position.
A statement asking "Please explain what checks and balances were on the ratings agencies" is a complicated request which can not be answered without describing the many layers of oversight already in place. Similarly, to disagree with a stated idea is worthless unless there is evidence to back up the disagreement, which is why I believe it to be necessary to provide a short historical background when presenting my positions.
Since disagreements to my POV were specifically directed to me by yabits and HumanTarget, I felt it was only right to provide a complete answer.
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I believe the proof needs to be presented to you one simple, logical step at a time.
I'm amazed that people still feel that the best way to approach a discussion is to first mock or degrade another's intelligence. I guess its in the spirit of modern politics, eh?
Please explain what checks and balances were on the ratings agencies?
Even assuming that the question is restricted to American ratings agencies, many checks are in place. Regulations set fourth by both the International Accounting Standards Board and Financial Accounting Standards Board (via IFRS and GAAP, respectively) are in place to verify that corporations accurately report their holdings and transactions. These corporations are then subject to audit, and the auditors are overseen by the Public Company Accounting Oversight Board.
With accurate records individuals, businesses, and governments have the ability to use financial models to compare corporations (including banks) to each other with both modern and historical data. The Office of Thrift Supervision, the Federal Deposit Insurance Corporation, and the Federal Housing Finance Agency (a merger of the former Federal Housing Finance Board and Office of Federal Housing Enterprise Oversight) are government run agencies who oversee American financial institutions. Further, regulatory agencies such as the Federal Trade Commission and the Securities and Exchange Commission are held with regulatory powers over publicly traded corporations.
Major credit agencies, as either corporations or LLCs, use this public data to come up with their financial ratings. These ratings include a combination of quantitative and qualitative data, and typically are similar between agency to agency. Anyone can come up with their own personal rating for a corporation or government; in fact, credit agencies rely on the individual ratings of several prominent investors before their overall rankings are made public. There is nothing that makes an agency's rating infallible. Its just that many investors recognize these companies' historical expertise, and they use their ratings to supplement their own findings.
Of course the greatest checks of all are individual investors themselves. They are the ones who ultimately determine if the 'expert' investors' ratings are correct or not.
Only a relative few were able to see through the smoke and mirrors and know there was something seriously wrong.
Again, I respectfully disagree. I believe there was plenty of evidence available that the housing bubble was going to collapse, even to those without a background in finance. First, from the mid-90s to mid-2000s, home values were increasing well above historical averages partially because they were seen as good investments. From Ezra Klein of the the Washington Post, May 29th, 2009:
In 1997 Congress made the first $500,000 of capital gains on the sale of a home tax-free for a married couple and $250,000 tax-free for a single person. This gave real estate a distinct advantage over other capital investments and distorted investment decisions from that time on.
At the same time, banks were encouraged to provide mortgages to those in less than practical financial situations in order to increase home ownership. People in poor situations were unable to pay for their mortgages, and as this compounded the foundation of the sub-prime mortgage crisis began. It is illogical to assume that more people would be able to own their own homes as prices rose, but that's exactly what played out.
So why did credit rating agencies not correct for such an obvious problem? The reason is because a situation like this had never arisen before. Banks were unable to properly anticipate the outcome of offering large scale sub-prime mortgages because they didn't have sufficient historical data to prove it wouldn't be profitable when paired with newly enacted government mandates. Ultimately, was the decision many banks made to continue offering sub-prime mortgages a good one? Of course not, in retrospect. I'm not trying to defend the financial institutions' decisions, but I am trying to point out that the outlook was debatable and many thought the situation would work itself out. They took a risk they felt was minimal, and by the time they realized it was not, they were deep in the red.
Maybe you grew up in a different time, but being a "professional" doesn't guarantee you a job anymore.
This response is directed at HumanTarget. Sure, a professional degree does not guarantee a person will have a high paying job, but I maintain that the job prospects for professionals are far superior to those without knowledge of a trade. Further, a competent person who obtains a skill set which differentiates them from others in their field provides as good a guarantee that they will earn & maintain employment as this world will allow.
Those who view college as simply a means to get a job offer would be better off utilizing their time and money elsewhere. What college should be used for is a way to obtain knowledge which can be applied to the field of a person's choosing. The obtainment and application of this knowledge is where a differentiation can be made to oneself, and in turn their job prospects. This is not a contradiction; a degree on its own does little to distinguish oneself other than to say "I've taken examinations with proficiency." Application of the knowledge gained, either through an internship, idea development, or personal venture shows an understanding of the knowledge obtained as well as intuitive. Any employer would be willing to hire this type of person if it is within their means to do so.
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yabits, there's no need to act demeaning. I've laid fourth a very basic, yet logical argument. Your counter-argument is essentially that the 'Wall Street gang' paid off credit rating agencies to profit off of the ignorant American public. My question to that would be, "Where is the proof?" Such a grand accusation must have some solid proof behind it. It sounds like a conspiracy theory. Even if proof was readily available your theory assumes that common investors are so clueless as to whats going on that they have no chance to see through the lies themselves and that the checks and balances in place are useless.
I believe investors are smarter than that. If not, they shouldn't be investing in the stock/commodities markets in the first place. As I previously mentioned, there's nothing stopping people from investing their money outside of stocks and rather inside of an invention, idea, or business of their own. That action creates value for everyone and leaves the outcome of final product in the hands of said investor. That person controls their own destiny.
I think everyone would appreciate that.
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General Butler served the U.S. marine corps with great distinction, but a major problem with quoting him here is that his views don't accurately represent modern capitalistic structures for a variety of reasons, including the exponential rise in international trade and standards of living since his death in 1940. At that time international travel for most people was still extremely rare, and the biggest catalyst for modern business (the internet) hadn't even been conceptualized. The issue at hand with Occupy Wall Street is people are unhappy with their earnings and job status as compared to those working at major, modern financial institutions. However, it would appear that the protesters' anger is being misdirected due to the ambiguity of the word 'fairness'.
Investing money anywhere, in banks or otherwise, requires risk. Many people don't look at it that way, but that's the case. Placing money in a risky bank with high interest rates is not a good investment. If the bank goes under, that responsibility is shared with both the bank and the investors. Why? Because the investors chose to place money in that bank out of their own free will. The investors are the enablers.
People, bank bigwigs included, make poor investment decisions. They don't want to, but they do. There is no law on the books or off that can prevent this, because investing requires risk. Giving a bank your money means that it is no longer in your control, no matter how safe it may seem. The solution to this is not investing one's money through one of those institutions, but hording it or investing it themselves.
The bottom line is no general bank/wall street entity is liable for anything because no laws were broken pertaining to investment strategies. Century old imperialistic POVs/examples represent a view of foreign policy which no longer exists, and does not apply to current 1st world financial models. If they were, then the protestors would have something to back their cause other than perceived unfairness of the American capitalistic financial system.
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I usually don't agree with Cleo, but this is one time I'd be willing to make an exception. She's right on here.
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I'm part of the 99% who is sick of hearing about how EVIL banks and financial institutions are. I was under the impression that professionals made enough that they didn't need to tear down other economic venues to feel better about themselves.
Oh, that's right. Professionals don't; they worked hard to obtain a profession and don't have trouble getting or keeping a job unless they display incompetence. Perhaps if these protesters took the time they're spending protesting to perfect or improve a skill, they would be able to get a better job, invent something, or even start their own business! Or is that too much actual work?
Look, the Wall St. bailout was wrong. Virtually no one, conservative or liberal, denies this. So why continue to blame financial institutions for saving their sorry behinds when the government was the one to provide them with the opportunity for a bailout in the first place? Any business in financial trouble would accept virtually free aid lest other similar businesses would earn a competetive advantage and potentially overtake their market share.
If the banks fail, its their own fault; better equipped institutions will quickly take their place. Most people understand this. What Americans can and should do is have their voice heard in political forums where logic and reasonable course of action is debated. Then, and only then, can politicians be held accountable for ignoring the will of the people to support their own agendas.
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Man oh man. I was going to post a logical argument here, but I've lost the will to do so after reading these comments.
Most of these conspiracy theories are mind boggling. That's all I'm going to say.
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The Bayi Rockets basketball team has been fined tens of thousands of dollars in the past by both domestic and international basketball associations for in-game fighting. Georgetown players were being kicked in the face, punched while on the ground, and were even hit by chairs and thrown water bottles. I'm sure this will be reviewed, but the Rockets have a history of rule violations which will hurt their case.
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While it is very positive thinking to suggest that people should grieve equally for other people's losses around the world, that simply isn't how people think. Every connection a person has with a group of people, be it through nationalism, ethnicity, profession, etc. will cause said person to feel more compassionate when said group is afflicted with a loss.
The tragedy of the Rwandan people should serve as a reminder to those around the world of horrible, widespread atrocities happening elsewhere. However, that should not detract from the memory of thousands of innocent men and women who lost their lives to isolated fanaticism. The September 11th attacks should serve as a reminder that no country, regardless of level of development, can stand to ignore threats and not see the impact of that lack of vigilance.
The aftermath of the attacks also proves something very important; that a democratic nation's level of protection against similar attacks will be proportional to the amount of freedoms that are given up. Freedom isn't free, and for a nation such as the US to enjoy the freedoms it maintains takes sacrifice in one form or another. As the 10th anniversary of the September 11th attacks comes, I too feel saddened for those who lost their lives, but at the same time feel a renewed sense of joy from that fact that I live in a nation with many freedoms which I play a part in maintaining.
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Well, what a storyline for Japan. USA completely collapsed. (Can't win em all, right?) Really good effort by the Japanese.
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John Paul II was a great representative for the Catholic Church. I am very pleased to hear he is being honored in this manner.
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Answer: Yes, it is. The US is proud to be the ally of Japan and I would like to believe the feeling is mutual. The time, money, and services donated to Japan by the American people should be proof of this.
To me, $80 million seems like very little for the support and expertise the US provided. That cost should be a drop in the bucket for either nation to bear. It costs almost $300,000 to start the USS Ronald Reagan's engines alone; when combined with the rest of the fleets deployed, the initial costs to even start the operation were in the millions of dollars.
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Posted in: Message for Abe