Re: XB-70 a prototype for Mach 3 SST?

On Sep 3, 12:43 pm, Mxsmanic <mxsma...@xxxxxxxxx> wrote:
Willie.Moo...@xxxxxxxxx writes:
The piece of paper that gives you the right to take delivery of a
commodity is very similar to a piece of paper that gives you the right
to a portion of the profits of a corporation for the term of its
existence.

The latter doesn't usually exist. Having stock in a corporation gives you a
right to receive dividends ... if the management of the corporation declares a
dividend. Some don't.

I don't know what you mean by 'intrinsic value'

I agree.

You don't understand what i'm saying, so I doubt you understand what
you are saying now. So, I will explain it to you son. Your usage of
the term 'intrinsic value' does not comport with my usage of the term,
or a dictionary definition. So, when YOU use it, it doesn't make any
sense. Therefore, it doesn't make any sense to me. Now, in a simple
trick of wordplay, you try to impune my intelligence by recasting this
simple statement about your obvious lack of understanding into some
sort of indictment of me. haha.. It won't work. Your lack of
knowledge, and clear and concise usage of terms is obvious to all - no
matter what word games you try to play.


I suspect you don't either.

Intrinsic value is the possibility of productive use, as opposed to having
value only when sold.

So, because you can take physical delivery of the commodity that
creates intrinsic value according to you.

That's stupid because in many instances, actually taking physical
delivery incurs costs far in excess of what you paid - creating
negative value..

The productive value - as you are now calling (as opposed to intrinsic
value which you wrongly claim to be defining) - depends on who uses it
and what its used for.

Think about it man. A trading lot of pork bellies is 40,000 pounds on
the CME. FORTY THOUSAND POINDS - that's a train car load of meat!!!

That much bacon is of very limited value to most people. Even you.

What would you or me or anyone do with 40,000 pounds of pork belly
meats showing up at your house?

We couldn't even give it away because it wouldn't be properly cut,
packaged, aged, dresse... haha...

It would rot and become a public health hazard. It would actually
have a negative productive value for you and most people..

Now, if you were set up like Hormel or any number of other meat
processors to make efficient use of those meats, then they'd have
tremendous productive use.

But only if you had relationships with buyers across the country to
take delivery of say 20,000 two pound packs of meat in a few days of
receiving it. Because pork bellies like any other food, has a shelf
life, and people won't buy the food if its too old, and in fact you
cannot legally sell them, if you do not sell them in a certain period
of time according to certain laws.

And besides, unless you have the appropriate permits and places to do
the work,approved by inspectors and so forth or contract with someone
who does, you cannot legally unpack the meat cut it and repack it in
more saleable sizes even if you had the buyers. And no buyer who had
to answer to a health inspector and insurance company themselves would
touch your meat.

So, cleearly you are confused. Plainly you don't understand what
you're talking about. Obviously you haven't thought through clearly
what you are sayinjg.

Pork bellies can be eaten if properly prepared. In your mind that
gives them 'something you call intrinsic value. Bacon for example is
one such item that is made from pork bellies if properly dressed.
That is a clear understandable use for pork bellies and so in your
mind that has intrinsic value.

So? The value the ability to eat pork bellies creates depends on your
situation and abilities, just like anything you buy and sell.

Stock cannot be eaten. This is also true. And in your mind that makes
it valuless. But the dividends a company pays its shareholders
periodically from its quarterly profits, can be taken to the bank,
and cashed in, and used to buy breakfast at a restaurant where pork
bellies products are served.

The value of those divedends are easier calculate and cash in for
folks like us than the value of the pork bellies you buy for
consumption - and not trading - which is what you said at the
outset.

That is you can buy a stock to hold it for dividends rather than
appreciation - and not trade it. Just like you can buy pork bellies
for physical delivery. But whereas its a simple matter of going to
the bank to cash your divident checks, its not so simple to realize
value from physical delivery of 100 trading lots (4,000,000 pounds) of
portk bellies.

It is far easier to get value from holding a stock and collecting
dividends than it is to get value from taking physical delivery of
commodities.

So, by your own definition, of 'intrinsic value' - which is not my
definition by the way - you have proven that stocks that pay a regular
dividend which are held have greater intrinsic value than any
commodity you might buy.

So, you are really rather confused. as I pointed out at the outset.

The utility of somethng varies with your skill, your assets, and your
situation -

For example, you can grow crops on land in build a
house on land, and you can cook and eat pork bellies.

The value of land to one person can be quite different than the value
of the same land to someone else. That's why I used it in the example
of the donut shop owner and the gas station owner. Many things enter
into the value of something to someone - and they're not 'intrinsic'
if you're talking cash.

Value has many usages, since we're talking about markets, a reasonable
assumption is that you are talking about a price for something
established by the market.

Intrinsic too has many usages, but I would say that you are speaking
of the essential nature of a thing by its constitution.

So, one may talk about the intrinsic worth of a gem for example. Gems
are very valuable due to their portability, scarcity, size,
desireablilty. So, they always have great WORTH, Their value on any
given day, on a diamond exchange, VARIES - depending on supply and
demand and other factors - despite their great intrinsic worth.

Now you would have us all believe that 40,000 pounds of pork bellies
have an intrinsic worth. I would argue they do not. In fact, the
value of pork bellies on the mercantile exchange in Chicago is highly
dependent on the economic conditions of the meat processors located in
and around that city. And when you look at the underlying value of
the pork belly market in Chicago and contrast it with the enterprise
value of all the meat processors that benefit from public trading of
this commodity, you can see the role the pork belly market plays to
diversify risks associated with handling this commodity which after
all can spoil.

In fact, intrinsic worh, applies to things that are intrinsically held
in high regard by all humans - and rarely applies to things that
appear in the market. My daughter has high intrinsic worth to me -
something so valuable I wouldn't even consider putting a value on
it.

To prove my point that you CANNOT make efficient use of commodities, I
will buy ONE contract of pork bellies and have it delivered to your
house if you agree to two things.

(1) attempt to butcher them and dress them and age the shipment
yourself so they may be eaten, and then cook them and eat them
yourself before they rot (you can invite any number of friends over to
help if you like - so long as they are not contracted butchers and
meat packers - true neighbors and friends with no connection to the
meat industry);

(2) agree to let me film the proceedings and broadcast it as I see
fit.


Then, we can see. If you can make use of 40,000 pounds of pork
bellies without wasting say 20% of the stuff, then I will agree with
you. If you cannot then you must admit that you don't know what the
hell you are talking about.

Thus, they have
intrinsic value--their value does not depend on finding someone willing to buy
them.


The value you have in taking delivery of 40,000 pounds of pork bellies
is very much dependent on you finding someone who knows what to do
with it, and is willing to take delivery of them. No person could eat
40,000 pounds of pork bellies - including the skin and hair and so
forth - in theirlifetime. Sorry.

So, by your own deifnition - this particular commodity - has no
intrinsic value to you.

What is true is that the future cannot be predicted, with precision
and so there is a natural tendency for markets to create vehicles
whereby any risks associated with this inabilty or inefficiency are
mitigated.

The future cannot be predicted; therefore this is gambling.

This is a naive view. That is kind. It is wrong and reflects a deep
seated ignorance. That you don't understand even that you ARE
ignorant on this subject marks you as stupid. I'm not attacking you,
I am merely pointing out the obvious.

So, let me try to educate you.

The future cannot be predicted but people can benefit no matter what
happens in the future, if they are clever, depending on their
situation.

A baker and a grain farmer are on opposite sides of a transaction.
The more the grain farmer gets for his grain, the less profit the
baker sees. the less the grain farmer gets for his grain, the more
profit the baker sees. Both would like to plan for the future, so
they can run an efficient business. Neither can predict the weather
or the crop yeild with absolute certainty. They can take opposite
positions on futures contracts to benefit them both however. They
both pay a premium for this to the market, the traders who take the
risk and earn a profit. But this is less like gambling (where every
dollar bet comes from the gamblers, minus the house take) and more
like an insurance premium against uncertainty (where a small fee is
paid to assure that prices and hence the profits of both are within a
narrow range)

Understand the difference in blowing your money in a gambling parlor
and paying an insurance premium - both of which involve uncertainty -
and you have taken a step toward understanding one value of the
commodity market.


For ecample, Sam, a donut shop can have a book
value - the value of the ovens, the mixers, the cash register, the
coffee makers, the buildings, the land, the parking lot - these might
be $380,000.

Yes, but that has nothing at all to do with stock.

We're dealing with your ignorance surrounding your misuse of the term
'intrinsic value' - we haven't gotten to stock yet. Lets get the
basics straight and then we can move to more advanced subjects.

Markets exist because uncertainty exist and when that uncertainty
affects the value of doing business, markets arise to mitigate that
uncertainty.

Casinos exist because uncertainty exists.

Casinos are built by Casino owners to take money out of gamblers
pockets and put it in their own. Lotteries are taxes on the stupid -
according to Milton Friedman, and I tend to agree with him.

This is distinctly different than paying an insurance premium - which
is used to mitigate uncertainty and provide a meausre of stability for
folks.

Securities markets are casinos,

No they are not. I have given you simple examples, examples that you
might have a chance of understanding given your extremely limited
knowledge on this subject. You are more interested in defending the
notion that you are right, rather than learning from them. The
example of the baseball enthusiasts who trade their baseball gear to
increase value is an excellent example. The example of a farmer and a
baker agreeing to take opposite sides of a futures contract as a way
to create an assurance that both will have expected profits regardless
of the weather - and the profits the traders make as a group - can be
considered the premium. These are all valid and important things to
understand -and to understand why markets are tolerated while gambling
and theivery are not.

because they deal in uncertainty and valueless items.

Casinos fix the odds to make sure that games of chance benefit the
house always. Insurance companies keep detailed actuarial data on car
crashes, medical problems, fires, earthquakes, you name it, so they
may cover losses for an efficient premium and earn a reasonable profit
doing so. Retailers buy products they think people will buy and make
a reasonable profit doing so, despite the uncertainty. Commodities
exchanges buy and sell contracts that benefit the makers of those
contracts in much the way insurance premiums benefit the makers of
those contracts and for much the same reason. Stock exchanges buy and
sell positions in a company that benefit the traders as well as the
makers of the stock - in much the same as commodity makers with
different benefits.

All of these activities have a clear measureable uncertainty
surrounding them. Only Casinos fail to provide measurable value to
the population of gamblers they work with. In all other cases, BOTH
parties benefit in the other cases - in clear definable ways. The
most lotteries and casinos can offer is - odds are you'll have fun!
haha.. And as Rodney Carrington says in one of his acts, I pretty
much got screwed on that deal! haha...

No markets create value - which is why they're an important part in a
free society. Casinos do not - that's why they're part of the
entertainment business. You buy a lottery ticket or sit at a roulette
wheel in Vegas, for how it makes you feel. Knowledgeable folks who
make their living in the market every day go to work and actually
create tremendous value from their activity, and gather some of that
value - because they know what they do and how to do it.

You would rather not believe these things are true because - as you
have reported here yourself - you lost your shirt. And its obvious
when you take your woeful lack of appreciation and knowledge together
with this fact you have admitted, that you are merely trying to prove
that you are right, and its the market's fault,rather than take
responsibility and learn from your mistake.
. .
Supermarkets, however,
are not gambling venues.


Yet even there there is uncertainty., How much bacon to buy from the
meat packer? Too little and the shelves are empty and people go
elsewhere and might not come back. Too much and you throw away rotten
bacon at the end ot the quarter.

Even if you buy and sell stuff that has a longer shelf life you are
taking risks as a retailer. A friend of mine who owns dress shop
chain puts it this way. If one store sells a red dress and a blue
dress. Another a red dress and a green dress. Another a red dress
and a yellow dress. NONE know the red dresses are hot. NONE know the
brown dresses are dogs. But if you combine the STATISTICS from
various stores - you can know THAT DAY - to raise the price on the red
dresses and reorder them. Put the brown dresses on the discount rack,
and cancel the orders for them. By doing this, you can triple your
throughput and profits as a retailer. That's why chains like Walmart,
and The Limited have great advantage over mom and pop stores. This is
the value of understanding the statistics of what's going on in your
inventory - and why you have computer based cash registers -

United States Patent 4,903,200
Mook, Jr. February 20, 1990

--------------------------------------------------------------------------------
Point of sale apparatus


Abstract
Point of sale apparatus wherein a general purpose computer is utilized
in emulating the functions of an integrated POS system. A general
purpose computer is employed with a cash register specific keyboard to
provide a broad range of computational and data handling capabilities
for the apparatus. To perform in conjunction with the general purpose
computer for its general computing function, a typewriter-type
keyboard is employed with the apparatus. A prioritized protocol is
developed between the two keyboard functions giving operational
priority to the latter keyboard. To achieve a necessary reaction to
cash register keying operations, a device driver program is positioned
at a high priority level in the BIOS area of memory of the general
computer to develop a vector interrupt deriving a jump address
approach to the execution of cash register key function commands.




YOU may have speculated wildly and lost your shirt.

No, others did that and I lost my shirt.

You entered some sort of contract that spelled out that was to be
done. You signed it and wrote the check. You are responsible.
Accept that and you can begin to learn from your mistakes.

Clearly, you lost your shirt and you prefer to blame the market rather
than yourself.

There was nothing I could have done.

The cry of the perpetual victim. This is absolute nonsense. You
wrote the check you signed the contracts. You did so without clear
understanding. YOU are reponsible - not the market..

Obviously you are blinding yourself and creating this drama about
markets because a) you don't understand how markets really work, and
b) you don't want to take responsibility for your actions.

When the market bankrupts you, you may feel differently. I know it's hard to
believe if you've been lucky thus far.

Luck has little to do with success or failure. Those that would
prefer not to take responsibility fo rtheir lives, speak differently.
It doesn't make them right, or what they say useful - even to
themselves.


You are ranting on and on and on - getting more agitated.

I'm not agitated at all.

Whenever anyone says to me they lost their shirt and then rants on and
on saying more and more outlandish things - to me that makes them seem
agitate to me.

There are
two kinds of people in this world. Those that make things happen.
Those that have things happen to them. Your locus of control is
outside yourself. So, you are a perpetual victim. So, you are
informed by a world view that makes you the victim. In your mind its
better being a victim than being a patsy or a fool. But none of this
has anything to do with the reality of markets or the reality of our
ability to use markets to build a Mach 3 super-concorde.

Which self-help book did you find this in?

Life experience son.

People often confuse crooks with business folk.

People often don't realize that business folk are frequently crooks.

People who think they have been bamboozled by crooks don't want to
take responsibility for their actions - or inactions - or blind greed
on their part that enabled the loss in the first place.

So, folks who trade in stock and commodity exchanges are providing a
service to those who create the stock and the commodity- by making
their activities more liquid for one - and diversifying risks another
- and more benefit besides.

But it's all worthless paper.

No its not. An insurance contract is paper - but its far from
worthless, even if you keep up the premium payments and never make a
claim.

Great amounts of money are being diverted to
fundamentally counterproductive activities.

If markets were counterproductive they would be part of the
entertainment business not an essential part of ALL business. Life is
full of uncertainty, and where that uncertainty has real impact on
real businesses, there is a potential to create a market to diversify
that risk away for some small premium paid by the makers of the market
to the traders who benefit from the market.

A few get rich, and everyone else
gets poor.

As in my story which you elided, the few who get rich get rich because
they create that wealth for themselves - through hard work,
understanding, and care. Those who remain poor either are lazy, don't
educate themselves, or don't care to know how what they do impacts
others.

Your locus of control can be inside or outside. Children tend to have
their locus of control outside. Adults tend to have it inside. You
speak as a child might speak about what was done to them by those
crooked bastards who stole your lunch money. GROW UP! Take
responsibility for your situation and do something about it. And quit
blaming honest hardworking people who create the value they enjoy.

As in the case above, Sam's stock can rise and fall depending on what
Sam does in response to what life offers him.

Sam's stock is worthless unless he can find the (potentially elusive) "greater
fool" who will pay for it.

You have deleted the story and then made misleading comments about
it. Shame on you. Fact is, Sam through his intelligence, work and
care, created tremendous value for himself, while Fred, who took the
money and ran, felt cheated by Sam's success. Meanwhile, folks that
helped Sam along the way, Billy, Julie, Sally, enjoyed a measure of
Sam's success because they were essential to CREATING the wealth Sam
enjoyed. The Oil company that bought out Sam benefitted more than
Sam. They increases their total sales by 20% - which is far more than
the $100 million Sam agreed to - but Sam benefitted as well, because
$100 million is more than he could have ever made alone without his
strategic partner.

WEALTH IS CREATED BY APPRORIATE CONTRACTS ENTERED INTO BY
KNOWLEDGEABLE AND FREE PEOPLE. That's why we have contracts. They
are a source of great wealth - providing both parties are
knowledgeable,and free.

At the very least is the net present value of all that company's
future earnings.

Since the future cannot be predicted, this is imaginary, and it's gambling.

You are being pedantic just to avoid the obvious. The future dividend
of GE, or the future earnings of a chalet that's rented during the
season in the Rhone valley, is better known than the quality or shelf
life of 40,000 pounds of pork bellies. I mean, lets look at a Chalet
in the Rhone Valley of Switzerland. You buy it for $8 million and
Swiss property values have NEVER gone down appreciably over the past
1000 years. They appreciate at 4% to 5% per year forever. The
benefit of being totally isolated from the world, and never getting
involved in wars and whatnot. This five room chalet earns $800,000
per season - with rents rising 5% per season - so, we're talking about
$8,000 per week per room.. on season. And its open the rest of the
season. Now, I can create a limite liability company with 5 friends of
mine to buy $1.6 million share of the chalet, and stay there off
season - and collect $160,000 per year - year in and year out. And in
7 years I might want to sell my share for $3.2 million - This is
prefectly predictable - more preictable than the quality and shelf
life of any particular 40,000 pound trainload of pork bellies.

In the real world lots of things can happen - but with a little luck,
a lot of hard work, and intelligence and care - value can be created
by people working together - and markets reflect that reality.

If it requires luck, it's gambling.

You are being churlish. Operating a casino is not the same as running
an insurance company or taking market risk. Buying into a hand at a
casino is not the same as buying insurance for your car, or a share in
a Swiss Chalet.

I've demosntrated that and you are refusing to see it.
..
It depends on how people regard it.

Of course. The problem is that people are very emotional and change their
minds constantly.

You are missing my point.

Go back to the grain farmer and bakery. They are on opposite sides of
the same transaction. They necessarily regard a futures contract
oppositely. So, they are BOTH AHEAD by making the RATIONAL decision
to enter into opposite sides of a futures contract - since by doing so
UNCERTAINTY IS REDUCED. They pay for this of course, they pay the
traders to take the risk for them. But like the insurance premium you
pay for your car, its worth it to everyone concerned.

What seems valuable today may be worthless tomorrow.

Spoken as a person who is profoundly ignorant of the market.

This
can even happen with cash, although it rarely does.

At the end of the Vietnam war, when the excessive spending of the US
government came home to roost, the value of the US dollar plummeted.
We were on the gold standard at that time, and as a result, France
started buying up as much gold as it could get for $35 per ounce.
Nixon put a halt to that, which caused a huge deflation in the US
dollar. This got the Saudi's shorts in a bunch because all their oil
contracts were denominated in dollars. So, they got together and
stopped selling oil to the US oil companies until they renegotiated
the contracts. The availability of oil diminished in the US as it
flowed to those more able to pay - with currency that wasn't
marginalized by excessive spending. Meanwhile, prices skyrocketed for
energy. Then, other prices rose as price increases for energy rippled
through the markets. Sugar, which takes a lot of energy to make, was
hard hit, and the price of a candy bar tripled. Meanwhile people
purchased fewer cars, and drove cars less due to higher prices. This
had an adverse effect on American auto makers and their suppliers.
The Japanese who already made small cars started shipping them to the
US market to take advantage of the increased demand. They couldn't
get parts suppliers and repair folks to support their product, so they
redesigned their US export cars to be supremely reliable. This was
the beginning of the end to the US auto business. Japan with 200
million people has 9 major auto makers. The US with 300 million
people has 3 major auto makers.

The value of paper, of any paper, hs to do with what it represents
relative to the fundamental things that are going on in the economy.
The US got involved in Vietnam and spent something like $200 billion
per year - these are 1960s dollars, this is more like $4 trillion
today - in a very short time. We got away with it in the short term-
but all those dollars came back - and deflated the value of the
currency. More dollars chasing the same amount of goods. And this
was reflected in the value of commodities like gold and oil. Now the
President could remove gold from the market - because it didn't have
such a big impact on our economy But he removes other commoditiies
from the market at great peril to the US economy. Controlling the
prices of gasoline for example merely led to shortage. There was no
solution but to pay the price the real price of that commodity with
deflated dollars.

The same is about to happen again with our current President. He
unilaterally got us involved in a war in Afghanistan and a war in Iraq
and is saber rattling around Syriia and Iran and even North Korea. If
the costs were borne equally among all our trading partners, this
wouldn't be so bad. But we're doing it all alone. And like Vietnam,
were going to pay a terrible price for spending $65 billion per month
more than we have the means to produce... to sustain these
conflicts.

I have a daughter who lives in Switzerland. I send her money. I
could see the value of the dollar plummet as we expanded our
unilateral war on terror. A swiss franc was $0.65 a few years ago,
and its now $0.85 - so this is another reason I got involved in the
chalet deal.

It happens much more
frequently with paper instruments like stocks and bonds.

What you fail to realize is that values received by the buying and
selling of stock reflect underlying values created by the companies
and the transactions among traders.


These things ARE worthless peices of
paper if everyone regards them that way. But to the extent they are
accepted at legitimate symbols to be taken seriously, they represent
fundamental value and wealth.

Assuming that they will be so regarded is risky.

That depends on the details. In a nation like Switzerland that has
NEVER involved itself in warfare or become dependent on any single
source of supply outside itself, and filled with people who appreciate
and respect markets, with a strong banking system and strong economy -
the Swiss Franc is pretty damn stable - for such a small nation. A
nation like Indonesia, which is at the center of conflicting regions
and has a weak government and a people who do not have a strong market
or banking tradition - the Indonesian currency fluctuates wildly
against the dollar or the Franc.

The US is a special case, because of its size. 4.38% of the worlds
population control over 25% of the world resources. There are
something like a trillion dollars worth of US bank notes in
circulation, compared to $300 billion worth of Euiros, the next
largest curency... backed by 400 million people who control something
like 8% of the world's resources.

But even the US - as was shown during the aftermath of the Vietnam
war, can get into trouble financially and that is reflected by the
value of its currency.

Another reason to buy Swiss real-estate. Of curse foreigners cannot
buy Swiss real-estate easily. Especially for rental. But since my
daughter was born in Switzerland and her mom is Swiss, well, I have
residency. Which is pretty lucky I think I can provide for my
daughter and retirement with a pretty solid investment that increases
5% per year - in real terms, no matter what the Euro or Dollar are
doing over the next 10 to 20 years.

Wealth is created by people doing things for one another. Markets are
a way they may do that and share equitably in the wealth that they
both create.

Nobody does anything for anyone in a stock market.

Yes they do. They both benefit, otherwise the transaction wouldn't
take place.

It's just shifting money
around,

You say foolish things like this and wonder why I call you a fool.

in exchange for worthless paper.

I'm sure that a 3 year old watching his dad pay the insurance premium
for the family car and pay the note on that same car, and the monthly
bill for the gas purchases thinks the same thing. The father knows
better. In each case both the Father and the parties he writes checks
to are better off after he writes the checks than before.

FOR YOU who didn't take the time and trouble to understand the
fundamentals.

For everyone.

If that were true people would organize and close down the stock
markets the way they organize and close down crack houses. THEY DON'T
because everyone benefits - except those who approach the
opportunities presented with a lazy and greedy ignorance that marks
them off as sheep to be slaughtered.

If you feel otherwise, you've simply been lucky.

Luck favors those who are prepared.

Don't risk
anything you can't afford to lose.

That is true in any endeavour you engage in.

I'm not attacking you I'm speaking the obvious.

You're engaging in personal attacks; you've run out of arguments.

No not at all. YOU are the one who made it personal when you said you
lost your shirt and were taken advantage of. I am merely responding
to your admission of what went on with you. Your ignorance is obvious
to all. Your failure ditto. Merely pointing out that you are an
ignorant fool in light of these facts is not a personal attack at
all. Note that I have been trying to carefully and patiently educate
you on all the matters you bring up and to continually point out your
errors withotu judgement or rancor. YOU are the one who prefers to
see my statements as an attack because it allows you to maintain the
fiction in your own mind that you are blameless and everyone else is
at fault.



.