*A day at the races would have more chance of success than investing in capitalist enterprises or ventures at the moment.*

Passy, because you do not understand some things, does not mean they
are not so. You should put down Marx and pick up Value Investing 101 :)

You only need to read Alan Kohler's Eureka Report to realise how
many self managed super funds are all cashed up, ready for when
bargains in the market appear. Warren Buffet has been "keeping
his powder dry" for years, waiting for moments like these. Some
of the young, gullible turks thought he was old fashioned. Now they
are learning the hard way, what value investing is all about.
Its a great time for value investors!

You really don't know much about what goes on in the real financial
world. There would not be a CEO of a major publicly listed company,
who does not spend a fair amount of time trying to impress institutional investors (super funds),
for if they go against him
and don't support his company, he will soon lose his job. IMHO
the super funds actually have too much power and often force CEOs
to make short term profit decisions, over long term wise investment.
These guys of course want to impress unitholders like yourself with
their healthy figures, so that they get a pay rise.

OTOH, when they are behind a company with their assets, they can
work magic. Ralph Norris only had to pick up the phone this week
to a few of them, to raise the 2 billion $ to buy Bankwest. What
a bargain! The board of any company is driven by what shareholders
think, because if they pull out, the company price crashes and the
CEO will soon get the chop.

You must have a crappy super plan. When I retire, I will own shares
like BHP for the next 20 years or so. What they are worth today
hardly matters to my retirement plans, unless I can buy some more
if they are cheap.

125-200K$ is exploiting workers? Hehe.

Passy “A day at the races would have more chance of success than investing in capitalist enterprises or ventures at the moment.”

Darn it, just when I think I am being too obvious…

The reference was to Marx and the movie starred Groucho, Harpo & Co…

As for “investing in “capitalist enterprises”

I am sure Yabby will agree with me that the time to buy is NOW.

Far more shares going cheap then a few months ago.

Banks are looking particularly good.

However, I have my personal targets already set, I know exactly where I will be investing, the return and the growth are spectacular, the best I have ever seen

but I do not need to share, so no insider tips.

The benefit of capitalism is its ability to adjust and recover, its called the market effect.

The danger to capitalism comes when some here-today-gone-tomorrow politician gets in on the act and decides to play ‘grace and favour’ with taxpayers funds.

That screws everything.

It’s like building up the banks of the Yangtze river,
The solution works for a while but the silt still build up the bottom and eventually the banks break.
The ensuing flood is far worse than if the banks had been left alone and allowed to break as normal. (btw ‘banks’ is the correct word, regardless of how much of an unfortunate pun it seems)

Socialism is all about government building up the river banks then watching helplessly as their efforts are seen to be futile and more damaging than doing nothing.

Col Rouge I understood your reference to a day at the races and was turning it on its head to highlight the irrationality of capitalism. Maybe stepping outside your arrogant framework and recognising others are not stupid might help you address some of the issues I am raising. BTW, I used to wear a badge from Paris May 1968 - je suis marxist, tendence Groucho.

Socialism is not about Government. It is the self emancipation of the working class.

The present Government interventions look to me like a return to the failed Keynesian policies of the past. You can mouth all the platitudes you like but you refuse to address the fundamental issue - the problem is the profit system itself. Crises are inherent to capitalism.

To quote from a submitted op-ed piece by one of my comrades:

"Even heavy duty state intervention is unlikely to solve the world’s current economic problems for two reasons.

"First, the problems are not simply financial. As Henryk Grossman put it in 1929, before the stock market crash, the very laws of capitalist accumulation impart to accumulation a cyclical form and this cyclical movement impinges on the sphere of circulation (money market and stock exchange). The former is the independent variable, the latter the dependent variable.

"More ‘transparency’ and better regulation of banking won’t deal with the underlying issue which is the rate of profit across the entire economy.

"During the long boom, capital intensive investment meant that outlays on employing workers declined compared to business spending on machinery, equipment, buildings, raw materials and other goods used in production.

"Yet it is only the labour of workers that creates new value. The rate of profit fell and the period between the mid 1970s and the early 1990s saw the deepest global recessions since the 1930s. Profit rates have recovered somewhat, largely thanks to neo-liberal policies that squeezed more work out of employees and, especially in the United States, led to declining real wages.

"Even so, the rate of profit did not recover to the levels of the long boom."

Passy,

"Socialism is not about Government. It is the self emancipation of the working class."

There's two problems withthis statement:

1) Socialism has to be about government - you can't foist Socialism on the people and expect them to lump it. If they don't embrace it then by it's own nature, socialism fails.

The big problem you face is that there isn't a mechanism to get socialism into government: Have you noticed that there isn't a major Marxist Socialist party in this country? Have you ever noticed how the public reacts to the mere suggestion of that style of policy?

If it isn't put to the people and if they don't adopt it, then it's not going to happen.

2) "Emancipating the working class": see, you've missed the mark here too. Howard was wrong on many things and was on the nose for a long time as a result (and would've been booted out earlier if there had've been a credible alternative), however he was right about the aspirational voter: the evidence for that is all around us - McMansions, huge credit card debts etc. The workers want more, they want to raise themselves up and move ahead in the world, both in terms of status and material possessions.

That runs contrary to what you're proposing.

It's not going to happen Passy. You've got to come into the real world at some point.

"Yet it is only the labour of workers that creates new value"

If you seriously think that the only way to increase the creation of "value" is by throwing more and more workers at things, then you've missed the entire industrial and computer revolutions. If you're trying to say that (say) 10 (wo)men working produces the same number of units of something as 10 (wo)men working on a production line, then you're out of your head.

'Management' (who I'll remind you are also workers) also create value by (amongst other things) investing in tools to increase the efficiency of those who will use the tool.

You're arguments haven't gained any clarity Passy. This is getting very silly.

BN, Yabby, Col Rouge

You don't grasp my arguments because they are outside your thinking and life experience.

I didn't write about the crisis of capitalism just to end up discussing value investing or the Marx brothers. (Can't resist this from Column 8. Groucho is walking past a restaurant and sees his former wife. Quick as a flash he says "Marx spots the ex.")

As to value investing, I'll mention that to the 3 bn people suffering from malnutrition, or the one billion of them starving. That should cheer them up no end.

I hope the companies you invest in survive the coming depression.

BN the labour theory of value is simple. You are right from an individual capitailist's perspective that what each company wants is more efficient workers (eg through new technology) to out compete for a while its rivals. But viewed from a systemic perspective that very competitive drive forces companies to invest more and more proportionally in capital than in labour. If labour is the source of value in the realm of production, then this means (unless those countervailing tendencies I mentioned briefly above come into play) that the profit rate must fall.

Low profit rates in the US and other developed countries have created this present crisis. Capital looks for better returns and flooded into the financial sector which offered high risk but high return investments (based on the fallacy of continuing house price increases). Yet the finance sector cannot offer such extra amounts for long periods because that sector produces no value (the real economy does) and so is dependent on getting a share of the surplus workers create in the real economy. The low rate of profit in the real economy flows necessarily through to the finance sector over time.

Look around you. Why is capitalism going to hell in a hand basket? It's not because Bush is a dud. Roosevelt didn't end the Depression with his Keynesian approach. War did with its massive spending on arms and physical destruction of capital. My fear is 1914 and 1929 are being rolled into one today.

Passy “You don't grasp my arguments because they are outside your thinking and life experience.”

“Out with the pixies” you mean?

“As to value investing, I'll mention that to the 3 bn people suffering from malnutrition, or the one billion of them starving.”

Those starving are often the victims of despots and authoritarian regimes (like Zimbabwe, not a capitalist economy), where 'tribalism' is a more significant social influence than “capitalism”.

Why is it that these starving people seek to obtain residency under the horrors "capitalism" -

the last time I looked, more people are trying to move to live "under capitalism" than there are those trying to "escape capitalism".

But tell me, how many did Lenin and Stalin starve to death to enforce a political objective?

“Why is capitalism going to hell in a hand basket?”

It is not.

Capitalism will survive.

Governments playing fast and loose to engineer and enforce socialist expectations (like everyone living in their own home when they cannot be held responsible for making loan repayments) and doing it with taxpayers money will not.

“My fear is 1914 and 1929 are being rolled into one today.”

That is what Gorbachev felt back in 1991

That battle has been fought and the swill lost.