Clinamenic

θερμοδυναμικός καπιταλιστής
Speaking of nukes, imagine if the Soviets + Nazis had managed to team up, win the war, and finalize the Manhattan Project using US scientists.

That's the scale of problematic we could be considering if China gets to superintelligent general AI first.
While I'm not familiar, do have doubts about their alliance networks relative to those of the US. Also I need a better familiarity with even the membership of the EU, yet alone whatever unified action it can undertake, but I assume that if we can really get on the same page, than things would look all the dimmer for China, barring some technical revolution that the CCP manages to keep control of.

edit: typo fix from "better familiar" to "better familiarity"
 
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thirdform

Well-known member
America's the worst imperial oppressor of the 20th C except when compared to all the other ones, etc

Better or worse doesn't factor into it. The Soviets and Nazis wouldn't have had the amount of capital the US had post WW II. Even Britain didn't.
 

Clinamenic

θερμοδυναμικός καπιταλιστής
Thoughts on the securitization of sub-prime mortgages:

Reading a brief description of what these are, what the process really is, to see how well I can extrapolate beyond a simple description, fill in the details, consider consequences, etc. Largely in the interest of better understanding the sub-prime housing crisis.

Referring to a page from wisegeek.com, which seems to suffice for a basic encyclopedic account.

So the loan issuer, lets say a bank (not sure if other legal entities can issue mortgages), has an asset on their end of the deal, namely the principal plus whatever interest is stipulated in the loan, while the debtor, lets say a single person, has a liability on their end, as they have to pay back the principal plus the interest.

But the bank still incurs risk here, despite the mortgage being an asset from their perspective and being a liability from the perspective of the single. The risk, from the perspective of the bank, seems to boil down to the chance that the debtor doesn't pay the debt.

But this risk, again from the perspective of the bank, can be smoothed out if the mortgage, as an asset that carries some degree of risk, is sold to another financial institution that is able to pool mortgages purchased from a number of banks, and represent this mortgage pool by exchange traded funds (i.e. securities, hence the "securitization of mortgages) that are available for purchase to institutional and/or retail investors.

So the process of issuing a mortgage originally entails a risk being incurred by the mortgage-issuer, but the mortgage-issuer can defer this risk to the financial institution which is then, itself, able to securitize these mortgages and defer the risk even further to investors.

In principle, investors ought to know about what they are investing in, and should make investment decisions in light of discernible risk - risk which, in the case of securitized mortgages, still boils down to the chance that the mortgage-taker, the single individual, won't or can't pay the principal + interest.

And from what I understand, beyond this short wisegeek page about mortgage securitization, there were mortgage-rating commissions or something that would assign levels of risk (e.g. sub-prime) to different mortgages, assignments made, presumably, on the basis of what sort of screening process the bank would enforce before issuing a mortgage.

I also understand, from a Bernanke seminar, that there was a trend of banks being disturbingly indiscriminate in terms of screening potential mortgages. And I also think there may have been some foul play involved with the mortgage-rating agencies, whose word investors were trusting in their discernment of risks.

So here we can see how, if banks are liberally and indiscriminately issuing mortgages, selling those mortgages to other institutions that pool mortgages and represent them as securities which can be purchased by investors, and the investors are basing their risk-assessment on the potentially inaccurate grades given by mortgage-rating agencies, we can end up with a mess of risk deferral that is difficult to sort out, even by good actors.
 

Clinamenic

θερμοδυναμικός καπιταλιστής
But I really do enjoy thinking about these things, if enjoy is the right word.
 

Clinamenic

θερμοδυναμικός καπιταλιστής
You make a good point, and it does elude me sometimes, but I would insist that a literacy in these things isn't nonsense in every circle, but it can be in circles as gnostic as ours. And I would venture that some people have their ears shut to anything but this stuff, and that more gnostic lessons can be tacked on to messages that demonstrate sufficient technical literacy, lessons that may be met with thoroughgoing ignorance otehrwise.
 

Clinamenic

θερμοδυναμικός καπιταλιστής
I didn't know whats what you meant by child earlier, but it makes sense now.
 

Clinamenic

θερμοδυναμικός καπιταλιστής
this is what i mean by being a child. not idealism but 'playing grown-ups'
Actually I think this is a point worth focusing on, and it applies in more areas than just economics or politics, which are just perhaps the more obvious of "grown-up" topics.

I think there is a real danger here, becoming too fixated on worldly technical stuff that seems endlessly complex. Thats why I think its important to see through it, which I can't yet do all the time, but usually only after a conscious and concerted effort to withdraw from the details and the concepts, back to an ambivalent resting state from which it all collapses into different flavors of trivia.

Really you were right on it calling this activity childish.
 

Clinamenic

θερμοδυναμικός καπιταλιστής
So do I have your approval to go back to the securitization of sub-prime mortgages?
 
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