# \#OccupyWallStreet **URL:** \ **Category:** The BBQ Pit\ **Created:** [September 19, 2011, 6:27pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851 "2011-09-19T18:27:54Z")\ **Posts on this page:** 20\ **Page:** 111
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [December 2, 2011, 5:01pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2201 "2011-12-02T17:01:21Z")
Probably there is some pretty worthwhile shit I your last post to discuss. I read the book, too, and the one after it, boomerang, but I am not going to waste my time going over new shit with you until we’ve addressed this great big pile of old shit. So again, please show me the last 8 times you asked me these questions and my responses and explain what is deficient about them. And I actually, I tend to treat people with pretty much the respect they show me and the discussion. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [December 2, 2011, 5:07pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2202 "2011-12-02T17:07:07Z")
Oh, that’s all right, **Scylla**! You go right ahead and unleash your devastating riposte! Because, basically, its the same question. If you guys were ignorant, but highly paid not to be, why should we trust you? And if you were culpable, why should we trust you? And as far as you insistence that I play the game by your rules…that all my cards are dealt face up, you get seven, I get five, and you get to draw twice…no, thanks. You could Pit me, I suppose. Or kiss my ass till I bark like a fox. Hard to choose which prospect is the more entertaining. ---
**Author:** ![Zeriel](https://avatars.discourse-cdn.com/v4/letter/z/58956e/32.png) [@Zeriel](https://boards.straightdope.com/u/Zeriel)\ **Post date:** [December 2, 2011, 5:12pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2203 "2011-12-02T17:12:35Z")
> [@elucidator](#): > > **Arty** , move over. **Z** will be with us quite soon. Bringing pie, so its all good. > > Isn’t it amazing how nice **Scylla** can be, if he thinks he is lecturing to a respectful audience, sitting at his feet and taking notes? It doesn’t last long, does it? Eh, I’ll happily note he knows more about the technical aspects of some portions of financial trading. That doesn’t make his analysis of the global situation or the crash timeline any more correct–as I said, this last little lecture series is pretty much just cementing my opinion of the idiocy of the people making these decisions. To me it’s dead simple–it’s morally equivalent to a family man maxing out his credit card at the casino because he’s won a few times at the craps table and thinks he has a system. – I talk about my dad a lot in these discussions. Smart guy, but all horse sense. Decided that being a general store owner was his dream when he was a kid, did eight years in the Navy and two 'Nam tours to get the cash up, never asked anyone for a loan until he bought a house with 50% down, never carried a balance on his credit cards. He’s doing pretty well, has a house and a business and two cars completely paid off, owes no money to nobody. He owns the only place to get groceries, fresh meat, and produce within 15 miles, in a poor Appalachia community where most everyone is on some kind of assistance. If working hard at shitty jobs that are essential to the community paid as well as I keep hearing it does, he’d be Warren Buffet. Instead he’s busting his ass at 80-hour-weeks while in his 60s, and he’s going to be doing it until he dies because his stock portfolios got killed twice in the last decade or so, mainly due to stupid decisions being made by people who make more money in a year than he’s ever seen in his life (otherwise known as “market risk”). I’ve never know him to vote for a non-Republican (his truck STILL has a “Don’t blame me, I voted Republican!” bumper sticker) but he’s a supporter of OWS nowadays. THAT, more than anything else, should scare the hell out of some people. ---
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [December 2, 2011, 5:17pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2204 "2011-12-02T17:17:09Z")
My rules? I treated you a lot more seriously than you deserved. I answered your question multiple times. You ignored it. I figure you are being an asshole and showing bad faith but give you the opportunity to address it. It’s not that you have to play my rules, it’s that I don’t want to play by your rules. Ciao. ---
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [December 2, 2011, 5:48pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2205 "2011-12-02T17:48:10Z")
Z: I’m not really making moral judgements or endorsing these things. You asked what worked as the opposite of a CDS and I tried to explain. Personally, I don’t there is anything intrinsically wrong with leverage or any of these other financial instruments. They are simply tools. Like all tools, the more powerful they are the more dangerous they are when misused. ---
**Author:** ![Zeriel](https://avatars.discourse-cdn.com/v4/letter/z/58956e/32.png) [@Zeriel](https://boards.straightdope.com/u/Zeriel)\ **Post date:** [December 2, 2011, 7:20pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2206 "2011-12-02T19:20:57Z")
> [@Scylla](#): > > I’m not really making moral judgements or endorsing these things. You asked what worked as the opposite of a CDS and I tried to explain. I understand that–I mean, it makes sense that leverage would be the opposite in many ways, I just hate leverage so much I don’t even think about it. > [@](#): > > Personally, I don’t there is anything intrinsically wrong with leverage or any of these other financial instruments. They are simply tools. Like all tools, the more powerful they are the more dangerous they are when misused. Hmm, I’m going to have to disagree with you–I find it ethically wrong to gamble with other people’s money, and ethically wrong to borrow money in a situation where there isn’t a solid asset backing it. I don’t take unsecured loans for myself, for example, and I stick to my dad’s theory of credit cards (don’t buy anything you can’t afford to pay off that day)–I use 'em for the rewards, that’s it, which is fine with me because i’m already paying for those rewards as bundled into the slightly higher cost of goods due to credit transaction fees. The difference, in my view, between buying a house and buying a security with a loan is that, barring natural disaster, no matter how much cash value the house loses it is still intrinsically a physical asset (even if it burns down, one still has the land), while a security can depreciate to zero. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [December 2, 2011, 7:48pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2207 "2011-12-02T19:48:51Z")
> [@Scylla](#): > > My rules? > > I treated you a lot more seriously than you deserved. I answered your question multiple times. You ignored it. I figure you are being an asshole and showing bad faith but give you the opportunity to address it. > > It’s not that you have to play my rules, it’s that I don’t want to play by your rules. > > Ciao. Oh, so I am to be spared your devastating riposte? Whoa, what a relief! I mean, you’re the expert, got the facts right at your fingertips, just can’t seem to push them through the keyboard. But, this ignore thingy? Is that like **Shodan** , who doesn’t acknowledge my existence, but I can still make fun of him, anyway? Even if I invoke your very name? Nah. You’re bluffing, even if you don’t know you’re bluffing. Someone speaks of the Nameless One, and they have your attention. You are hag-ridden by your ego, it has the bit in your teeth and its spurs in your ass. Your ego is in the saddle, your mind is just the horse it rides. ---
**Author:** ![magellan01](https://avatars.discourse-cdn.com/v4/letter/m/45deac/32.png) [@magellan01](https://boards.straightdope.com/u/magellan01)\ **Post date:** [December 4, 2011, 7:24am UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2208 "2011-12-04T07:24:52Z")
Not for nothing, but do you ever just shut the fuck up? Sheeze. You look like a fucking tool in this thread. Must you just keep at it, dreaming that if you do some magic will happen and you’ll beat him in this particular debate. Good God, man! Why don’t you just shut the fuck up and observe the debate between Scylla and Zeriel and maybe learn something. ---
**Author:** ![Zeriel](https://avatars.discourse-cdn.com/v4/letter/z/58956e/32.png) [@Zeriel](https://boards.straightdope.com/u/Zeriel)\ **Post date:** [December 4, 2011, 3:12pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2209 "2011-12-04T15:12:10Z")
> [@magellan01](#): > > Not for nothing, but do you ever just shut the fuck up? Sheeze. > > You look like a fucking tool in this thread. Must you just keep at it, dreaming that if you do some magic will happen and you’ll beat him in this particular debate. Good God, man! Why don’t you just shut the fuck up and observe the debate between Scylla and Zeriel and maybe learn something. Say what you will, at least he’s contributing. You’re just hopping in to take steaming dumps, you fucked-up bigoted douchecanoe. Take your own advice from your first sentence. ---
**Author:** ![magellan01](https://avatars.discourse-cdn.com/v4/letter/m/45deac/32.png) [@magellan01](https://boards.straightdope.com/u/magellan01)\ **Post date:** [December 4, 2011, 6:41pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2210 "2011-12-04T18:41:56Z")
> [@Zeriel](#): > > Say what you will, at least he’s contributing. You’re just hopping in to take steaming dumps, you fucked-up bigoted douchecanoe. Take your own advice from your first sentence. :rolleyes: I did say what I will. And I will say this: Elucidator is typing, he’s not contributing (not that that’s new for him). You are. Syclla is. I’ve been staying away since the discussion has gotten more technical. Rather than just “type”, I’ve been sitting back and reading, learning from the discussion between you and Scylla. Odd that you’d seem to have a problem with someone doing that, you colossal asshole. And just out of curiosity: 1) what am I bigoted about? And 2) even if I were a bigot, what bearing would that bring to this discussion about about Occupy Wall Street and the financial instruments that you and Scylla have been discussion as of late? Of course, if it’s simply a childish ad hominem, feel free to ignore the questions. ---
**Author:** ![Shayna](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/shayna/32/17976_2.png) [@Shayna](https://boards.straightdope.com/u/Shayna)\ **Post date:** [December 4, 2011, 7:03pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2211 "2011-12-04T19:03:53Z")
> [@Enderw24](#): > > Scylla, > > I’ll make you a deal. I, for one, will go ahead and cede the argument that you have a vast sum of knowledge in areas of mortgages and securities and that you had no idea that what the bankers and investors were doing would be a problem and, therefore, no one could have predicted the total collapse of the economy. It was a complete mystery. An enigma. Ignorance fought now, we see the light! I’ll go ahead and grant you that. > > Here’s the thing, though. In 2007, credit default swaps equalled 77 trillion dollars. That’s trillion with a trillion. In comparison, the entire world’s GDP was 63 trillion. > > So if I grant you that no one could have forseen this economic collapse, then will you grant me that playing with money in excess of Earth’s entire economy without a clear understanding of its downside was a bad idea? Why on earth would you grant that ignorant blowhard anything of the sort? Here’s what his kind were doing, and if he didn’t see it, he’s dumber than a wet bag of hair. > [@](#): > > [A Banker Speaks, With Regret](http://www.nytimes.com/2011/12/01/opinion/kristof-a-banker-speaks-with-regret.html?_r=2&pagewanted=all) > > If you want to understand why the Occupy movement has found such traction, it helps to listen to a former banker like James Theckston. He fully acknowledges that he and other bankers are mostly responsible for the country’s housing mess. > > … > > Theckston says that borrowers made harebrained decisions and exaggerated their resources but that **bankers were far more culpable — and that all this was driven by pressure from the top**. > > “You’ve got somebody making $20,000 buying a $500,000 home, thinking that she’d flip it,” he said. “That was crazy, but the banks put programs together to make those kinds of loans.” > > Especially when mortgages were securitized and sold off to investors, he said, **senior bankers turned a blind eye to shortcuts**. > > “ **The bigwigs of the corporations knew this** , (aside: maybe **Scylla’s** alleged lack of insight is due to the fact that he’s not, after all, a “bigwig”) but they figured we’re going to make billions out of it, so who cares? The government is going to bail us out. And the problem loans will be out of here, maybe even overseas.” > > One memory particularly troubles Theckston. He says that some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. **So they looked for less savvy borrowers** — those with less education, without previous mortgage experience, or without fluent English — and nudged them toward subprime loans. > > These less savvy borrowers were disproportionately blacks and Latinos, he said, and they ended up paying a higher rate so that they were more likely to lose their homes. **Senior executives seemed aware of this racial mismatch, he recalled, and frantically tried to cover it up.** > > Theckston, who has a shelf full of awards that he won from Chase, such as “sales manager of the year,” showed me his 2006 performance review. It indicates that **60 percent of his evaluation depended on him increasing high-risk loans.** You fucking cretins _caused_ this mess. You damn well _knew_ you were causing this mess _when_ you were creating this mess. Claiming you couldn’t foresee it is tantamount to publicly admitting that you are a stupid, fucking idiot with no business whatsoever in the financial industry. None. > [@Zeriel](#): > > I’ve never know him to vote for a non-Republican (his truck STILL has a “Don’t blame me, I voted Republican!” bumper sticker) but he’s a supporter of OWS nowadays. THAT, more than anything else, should scare the hell out of some people. I think I love your dad. 🙂 And here’s another thing the Occupy movement has been successful at doing; finally getting the elite 1% to admit **out loud** that “supply side” economics is complete and utter bullshit. Always has been, always will be. > [@](#): > > [Raise Taxes on Rich to Reward True Job Creators: Nick Hanauer](http://www.bloomberg.com/news/2011-12-01/raise-taxes-on-the-rich-to-reward-job-creators-commentary-by-nick-hanauer.html) > > It is a tenet of American economic beliefs, and an article of faith for Republicans that is seldom contested by Democrats: If taxes are raised on the rich, job creation will stop. > > **Trouble is, sometimes the things that we know to be true are dead wrong.** For the larger part of human history, for example, people were sure that the sun circles the Earth and that we are at the center of the universe. It doesn’t, and we aren’t. \*\*The conventional wisdom that the rich and businesses are our nation’s “job creators” is every bit as false. \*\* > > I’m a very rich person. As an entrepreneur and venture capitalist, I’ve started or helped get off the ground dozens of companies in industries including manufacturing, retail, medical services, the Internet and software. I founded the Internet media company aQuantive Inc., which was acquired by Microsoft Corp. (MSFT) in 2007 for $6.4 billion. I was also the first non-family investor in [Amazon.com](http://Amazon.com) Inc. (AMZN) > > Even so, I’ve never been a “job creator.” I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate. > > That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be. > > … > > When the American middle class defends a tax system in which the lion’s share of benefits accrues to the richest, all in the name of job creation, **all that happens** is that the rich get richer. > > And that’s what has been happening in the U.S. for the last 30 years. > > … > > **We’ve had it backward for the last 30 years. Rich businesspeople like me don’t create jobs. Middle-class consumers do** , and when they thrive, U.S. businesses grow and profit. I, for one, am damn glad that this lie is finally being exposed, particularly by the ones who have benefited the most from it over the past 30 years. It is maddening and frustrating to try to explain simple “supply and demand” math to people who have become brainwashed by _political_ ideology and not economic _reality_. And I’m sick and tired of politicians [pushing fake economic policy](http://www.commondreams.org/view/2009/01/26-0) purely so they can continue to lord power over the proletariat for their own financial gain. It’s obnoxious and totally _un_American. Power to the People. #OWS. ---
**Author:** ![Zeriel](https://avatars.discourse-cdn.com/v4/letter/z/58956e/32.png) [@Zeriel](https://boards.straightdope.com/u/Zeriel)\ **Post date:** [December 5, 2011, 1:22am UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2212 "2011-12-05T01:22:33Z")
> [@magellan01](#): > > Of course, if it’s simply a childish ad hominem, feel free to ignore the questions. :rolleyes: If you’re not contributing to the debate, it can’t be an ad-hominem–I’m not using it to argue against your points, I’m just calling you an asshole. A brief lesson in logic: > [@Ad-hominem Fallacy](#): > > Magellan: I think x! > Zeriel: You’re a bigoted asshole, therefore x is untrue. > [@Not Ad-hominem Fallacy](#): > > Magellan: Some idiotic blather that doesn’t make a point. > Zeriel: You’re an bigoted asshole. That help you out, asshole? ---
**Author:** ![magellan01](https://avatars.discourse-cdn.com/v4/letter/m/45deac/32.png) [@magellan01](https://boards.straightdope.com/u/magellan01)\ **Post date:** [December 5, 2011, 2:10am UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2213 "2011-12-05T02:10:33Z")
> [@Zeriel](#): > > That help you out, asshole? I don’t need the help, Colossal Asshole. Thanks all the same. You used an ad hominem to poison the well—two, two, two fallacies in one. And since you didn’t answer my earlier question, I accept that you’re just being a childish little punk calling people names that have no bearing on the discussion. Not that I expect more from you, so don’t fret about it. ---
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [December 5, 2011, 3:28am UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2214 "2011-12-05T03:28:26Z")
> [@Zeriel](#): > > I understand that–I mean, it makes sense that leverage would be the opposite in many ways, I just hate leverage so much I don’t even think about it. Ok. It’s not exactly a hate, or not hate sort of thing, IMO. > [@](#): > > , I’m going to have to disagree with you–I find it ethically wrong to gamble with other people’s money, and ethically wrong to borrow money in a situation where there isn’t a solid asset backing it. Using leverage isn’t necessarily either of those things. > [@](#): > > I don’t take unsecured loans for myself, for example, and I stick to my dad’s theory of credit cards (don’t buy anything you can’t afford to pay off that day)–I use 'em for the rewards, that’s it, which is fine with me because i’m already paying for those rewards as bundled into the slightly higher cost of goods due to credit transaction fees. > > The difference, in my view, between buying a house and buying a security with a loan is that, barring natural disaster, no matter how much cash value the house loses it is still intrinsically a physical asset (even if it burns down, one still has the land), while a security can depreciate to zero. You have it backwards. Physical assets depreciate. Securities, as a rule, tend not to. In this thread, it seems to me that you have a general idea in your head of some securities and financial things that you don’t like and you think **all** financial things are these things. Your views on leverage are not very sophisticated. There is more under the sun than the simple scenarios of buying a home or using a credit card. Hedging for example is a strategy for lowering risk, and quite often that requires leverage and large amounts of it. That’s how the guy who delivers your heating oil, can fill his million gallon tank, but still sell it to you 2 months later at the market price, after the price has dropped without taking a loss that would put him out of business. In order for this to happen you need somebody to take the other side of the bet. You don’t seem to recognize this, a market has two sides. A speculator buys risk. You may think there is something morally wrong with this, but I think it’s dumb to judge. Their buying of risk allows other people to lay off their risk. ---
**Author:** ![Zeriel](https://avatars.discourse-cdn.com/v4/letter/z/58956e/32.png) [@Zeriel](https://boards.straightdope.com/u/Zeriel)\ **Post date:** [December 5, 2011, 4:31am UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2215 "2011-12-05T04:31:29Z")
> [@Scylla](#): > > You have it backwards. Physical assets depreciate. Securities, as a rule, tend not to. Except when they do. Tremendous amounts of notional and actual value disappeared in 2008, after all. Poof, gone. Most of it, by dollars, in securities. > [@](#): > > In this thread, it seems to me that you have a general idea in your head of some securities and financial things that you don’t like and you think **all** financial things are these things. I don’t think it’s the securities that are even necessarily the problem, though. It’s the idiotic, mindless risks that financial institutions take with them, to places far beyond what their own employees advise “ordinary” people to do. > [@](#): > > Your views on leverage are not very sophisticated. There is more under the sun than the simple scenarios of buying a home or using a credit card. Sophistication, IMHO, is not required. I view it as a moral wrong to gamble when you can’t cover the debt, and that includes leveraging yourself so far that you can’t pay the debt back because you’re sitting at 30-to-1 and the market crashes. Excessive leverage is a moral wrong, in my book. I don’t care what short-term profit it creates. I don’t care that it might make my heating oil a few cents more a gallon (hell, I pre-pay a season’s worth of heating oil in July specifically because it actually makes sense for everyone involved). > [@](#): > > In order for this to happen you need somebody to take the other side of the bet. You don’t seem to recognize this, a market has two sides. I do recognize it, which is why I only get mad when the risks taken are so mind-bogglingly large and short-sighted that my dollars end up bailing them out because “too big to fail”. As far as I can tell, very few of the people taking the heavy risks actually got personally hurt, and very few firms went down the shitter where they belonged. And the risks just keep comin’! > [@](#): > > A speculator buys risk. You may think there is something morally wrong with this, but I think it’s dumb to judge. Their buying of risk allows other people to lay off their risk. I think it’s morally wrong to buy risk you can’t afford. If you have the cash to cover it, buy whatever risk you want. If you’re leveraging or hedging, and a market crash CAN kill you anyway (let alone if it does or not), you are morally wrong. Really, that’s the primary difference in our outlooks. But again, I view leverage as morally equivalent to playing at the casino with the family credit card, and hedging as taking both pass and don’t pass at the craps table. There’s a better term here than “leverage”, I’m sure. I’m referring specifically to the act of borrowing on very little down to purchase stocks, bonds, or other securities, which I’m remembering as “accounting leverage”. I’d be happy if something akin to Regulation T applied to all securities, as an initial fix. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [December 5, 2011, 5:33am UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2216 "2011-12-05T05:33:57Z")
Saw \*60 Minutes \*tonight. Darn, I wish I understood the sophisticated terms they were using, like “fraud” and “stealing”. ---
**Author:** ![Shayna](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/shayna/32/17976_2.png) [@Shayna](https://boards.straightdope.com/u/Shayna)\ **Post date:** [December 5, 2011, 8:03am UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2217 "2011-12-05T08:03:56Z")
RT > [@elucidator](#): > > Saw \*60 Minutes \*tonight. Darn, I wish I understood the sophisticated terms they were using, like “fraud” and “stealing”. ---
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [December 5, 2011, 1:48pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2218 "2011-12-05T13:48:36Z")
[quote=“Zeriel, post:2215, topic:596851”] I don’t think it’s the securities that are even necessarily the problem, though. It’s the idiotic, mindless risks that financial institutions take with them, to places far beyond what their own employees advise “ordinary” people to do. [quote] Yes. I agree. I’ve been saying this very thing quite a lot. > [@](#): > > Sophistication, IMHO, is not required. I view it as a moral wrong to gamble when you can’t cover the debt, and that includes leveraging yourself so far that you can’t pay the debt back because you’re sitting at 30-to-1 and the market crashes. Again, I agree. People and corporations should not make bets that they can’t cover. > [@](#): > > Excessive leverage is a moral wrong, in my book. I don’t care what short-term profit it creates. I don’t care that it might make my heating oil a few cents more a gallon (hell, I pre-pay a season’s worth of heating oil in July specifically because it actually makes sense for everyone involved). It’s hard to argue with proposition that “excessive leverage” is bad. You might as well say “bad leverage” is bad. If I am to know what you mean by this, I’ll need an example or too. Can you give me an example of leverage near the cut off point between ok and excessive, or can you define your term better? > [@](#): > > I do recognize it, which is why I only get mad when the risks taken are so mind-bogglingly large and short-sighted that my dollars end up bailing them out because “too big to fail”. As far as I can tell, very few of the people taking the heavy risks actually got personally hurt, and very few firms went down the shitter where they belonged. This seems to be a more evolved position than you had earlier. I agree with it. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [December 5, 2011, 1:48pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2219 "2011-12-05T13:48:43Z")
> [@elucidator](#): > > Saw \*60 Minutes \*tonight. Darn, I wish I understood the sophisticated terms they were using, like “fraud” and “stealing”. And I thought Sarbanes Oxley was a brand of English tea. ---
**Author:** ![Zeriel](https://avatars.discourse-cdn.com/v4/letter/z/58956e/32.png) [@Zeriel](https://boards.straightdope.com/u/Zeriel)\ **Post date:** [December 5, 2011, 5:05pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/2220 "2011-12-05T17:05:05Z")
> [@Scylla](#): > > It’s hard to argue with proposition that “excessive leverage” is bad. You might as well say “bad leverage” is bad. If I am to know what you mean by this, I’ll need an example or too. Can you give me an example of leverage near the cut off point between ok and excessive, or can you define your term better? Well, realistically, “excessive leverage” is hard to measure, since it’s effectively “leverage that you can’t cover if you lose”. Depending on the firm’s income from non-securities sources and how it’s managed, that could be a lot or next to nothing. I did note I’d be happy as a start to see Regulation T apply to all securities and equity instruments across the board–as written it mandates a 50% margin reserve for non-exempt equities with strict rules about how other securities can be used to cover the margin instead of cash. As I understand it, that reserve translates to something like a 2-to-1 accounting leverage on any given transaction. [Previous page](https://boards.straightdope.com/t/occupywallstreet/596851.md?page=110) [Next page](https://boards.straightdope.com/t/occupywallstreet/596851.md?page=112)