Finance

"The world of finance is a mysterious world in which, incredible as the fact may appear, evaporation precedes liquidation."

"Nothing in finance is more fatuous and harmful, in our opinion, than the firmly established attitude of common stock investors regarding questions of corporate management. That attitude is summed up in the phrase: "If you don't like the management, sell your stock." [...] The public owners seem to have abdicated all claim to control over the paid superintendents of their property."

"There’s no longer any reason to believe that the wizards of Wall Street actually contribute anything positive to society, let alone enough to justify those humongous paychecks. ... It’s hard to think of any major recent financial innovations that actually aided society, as opposed to being new, improved ways to blow bubbles, evade regulations and implement de facto Ponzi schemes."

"Money is created when banks lend it into existence. When a bank provides you with a $100,000 mortgage, it creates only the principal, which you spend and which then circulates in the economy. The bank expects you to pay back $200,000 over the next 20 years, but it doesn't create the second $100,000 - the interest. Instead, the bank sends you out into the tough world to battle against everybody else to bring back the second $100,000."

"Your money's value is determined by a global casino of unprecedented proportions: $2 trillion are traded per day in foreign exchange markets, 100 times more than the trading volume of all the stockmarkets of the world combined. Only 2% of these foreign exchange transactions relate to the "real" economy reflecting movements of real goods and services in the world, and 98% are purely speculative. This global casino is triggering the foreign exchange crises which shook Mexico in 1994-5, Asia in 1997 and Russia in 1998. These emergencies are the dislocation symptoms of the old Industrial Age money system."

"Don’t look for the needle in the haystack. Just buy the haystack!"

"Where returns are concerned, time is your friend. But where costs are concerned, time is your enemy."

"Let us begin with a definition of economics. Over the last half-century, the study of economics has expanded to include a vast range of topics. Here are some of the major subjects that are covered in this book:"

"The U.S. stock market was now a class system, rooted in speed, of haves and have-nots. The haves paid for nanoseconds; the have-nots had no idea that a nanosecond had value. The haves enjoyed a perfect view of the market; the have-nots never saw the market at all. What had once been the world’s most public, most democratic, financial market had become, in spirit, something like a private viewing of a stolen work of art."

"One recent history of economic thought (Jürg Niehans’s A History of Economic Theory) devotes twenty-four pages to Samuelson’s ideas. Adam Smith only gets thirteen. Samuelson’s work on stock markets and the random walk takes up less than two of those twenty-four pages. He was “the last generalist in economics,” as he liked to say, and for him financial market studies were just a side project that he at times seemed deeply ambivalent about. His intervention was, however, crucial to the triumph of the random walk. Here was one of the most important economists of all time, and he didn’t think the relationship between coin flips and the stock market was a dinner-speech triviality."

"What the insurance companies have done is to reverse the business so that the public at large insures the insurance companies."

"Unemployment insurance is a pre-paid vacation for freeloaders."

"It was the labor movement that helped secure so much of what we take for granted today. The 40-hour work week, the minimum wage, family leave, health insurance, Social Security, Medicare, retirement plans. The cornerstones of the middle-class security all bear the union label."

"New Deal liberalism broke with progressivism in many if not most respects. Progressives wanted technocratic economic planning. By the 1940s, New Dealers dropped planning for Keynesianism. Most progressives were nativists who supported immigration restriction on ethnic or cultural grounds. New Deal liberals celebrated the melting pot and liberalized American immigration laws in the 1960s. Woodrow Wilson resegegrated Washington. Lyndon B. Johnson signed the Civil Rights Act and the Voting Rights Act. Franklin D. Roosevelt created Social Security and Johnson created Medicare. Wilson opposed national health insurance."

"I detest life-insurance agents: they always argue that I shall some day die, which is not so."

"Life insurance became popular only when insurance companies stopped emphasizing it as a good investment and sold it instead as a symbolic commitment by fathers to the future well-being of their families."

"It is true that the theory of our Constitution is, that all taxes are paid voluntarily; that our government is a mutual insurance company, voluntarily entered into by the people with each other; that each man makes a free and purely voluntary contract with all others who are parties to the Constitution, to pay so much money for so much protection, the same as he does with any other insurance company; and that he is just as free not to be protected, and not to pay any tax, as he is to pay a tax, and be protected."

"What, exactly, is the cost of this inaction? Estimates of the total national cost of medical malpractice range from $20 billion to $45 billion annually. But this number hardly tells the whole story. There also is the more hidden cost of defensive medicine, including unnecessary testing and second opinions that send patients scurrying through processes that would not otherwise be ordered and deepen the financial burden of America’s health care system by an estimated three percent of our country’s total health care expenditures. Who ultimately pays these costs? Reckless doctors? Faceless insurance companies? Seldom mentioned, the totality of these expenses ultimately falls exclusively on the consumer, since each malpractice award translates ultimately to increased malpractice insurance premiums, which, in turn, translates to either higher health care costs, fewer physicians (with less competitive pricing pressure), or both."

"The demutualization of property and casualty insurers raises a series of conceptual and practical problems. The assets of a mutual are essentially community assets built-up over the generations of those living in the community."

"Most of us understand that innovation is enormously important. It's the only insurance against irrelevance. It's the only guarantee of long-term customer loyalty. It's the only strategy for out-performing a dismal economy."

"The trade union movement represents the organized economic power of the workers... It is in reality the most potent and the most direct social insurance the workers can establish."

"Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history."

"Just as we have the power to harm the ocean, we have the power to put in place policies and modify our own behavior in ways that would be an insurance policy for the future of the sea, for the creatures there, and for us, protecting special critical areas in the ocean."

"In banking or insurance trust is the only thing you have to sell."

"Basically, the math of intelligently selling insurance is better than the math of intelligently buying insurance."

"At bottom, a sound insurance operation needs to adhere to four disciplines. It must (1) understand all exposures that might cause a policy to incur losses; (2) conservatively evaluate the likelihood of any exposure actually causing a loss and the probable cost if it does; (3) set a premium that will deliver a profit, on average, after both prospective loss costs and operating expenses are covered; and (4) be willing to walk away if the appropriate premium can’t be obtained. Many insurers pass the first three tests and flunk the fourth. They simply can’t turn their back on business that their competitors are eagerly writing. That old line, “The other guy is doing it so we must as well,” spells trouble in any business, but in none more so than insurance. Indeed, a good underwriter needs an independent mindset akin to that of the senior citizen who received a call from his wife while driving home. “Albert, be careful,” she warned, “I just heard on the radio that there’s a car going the wrong way down the Interstate.” “Mabel, they don’t know the half of it,” replied Albert, “It’s not just one car, there are hundreds of them.”"

"This is classic insurance reaction [according to Bob Hunter, director of insurance at the Consumer Federation of America and a former Texas insurance commissioner] They did it after AIDS and SARS"

"A lot were permitted to do this: A regulatory body known as the Insurance Compact has approved 32 such requests since March"

"In June, insurers started filing requests with the Delaware Department of Insurance to change their application forms to specifically ask applicants if they’d had COVID-19"

"Microeconomics is the study of how people make decisions in resource-limited situations on a more personal scale. It deals with the decisions that individuals and organizations make on such issues such as how much insurance to buy, which word processor to buy, or what prices to charge for their products or services."

"Insurance - an ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction that he is beating the man who keeps the table."

"w:Travel insurance is a line of insurance we consistently hear problems about. It’s much less regulated than other lines of insurance and tends to include exclusions for things consumers believe they’re covered for.”"

"Many seniors understand that Social Security is social insurance as opposed to a program where we put money aside for our own retirement. But most elderly individuals think they're getting their money back. So it isn't selfishness as much as a misunderstanding."

"Almost half of the bankruptcies in the United States are connected to an illness in the family, whether people had health insurance or not. Middle-class Americans, who had the misfortune of either experiencing a medical emergency themselves or watching a family member suffer, were then forced to face the daunting task of pulling themselves out of debt. Bankruptcy law has allowed them to start over. It has given hope. Now this new law will put people on their own. Illness or emergency creates medical bills. We are telling the people that they themselves are to blame. At the same time, we are removing protections that would stay an eviction, that would keep a roof over the head of a working family. We allow the credit industry to trick consumers into using subprime cards, with exorbitant interest rate hikes and fees. Then we hand those same consumers over to an unforgiving prison of debt, to be put on a rack of insolvency and squeezed dry by the credit card industry. We are protecting the profits of the credit card industry instead of protecting the economic future of the American people. Americans are left on their own. That's what this Administration's "Ownership Society" is all about — you're on your own — and your ship is sinking."

"Among the phenomena, of the causes of which we are ignorant, there are some, such as those dealt with by the manager of a life insurance company, about which the calculus of probabilities can give real information."

"Bankruptcy in my opinion ever was and yet is considered as a crime, whatever tradesmen may now think of it. It was anciently punished with corporal punishment."

"It is said that the world is in a state of bankruptcy, that the world owes the world more than the world can pay, and ought to go into chancery, and be sold."

"Capitalism without bankruptcy is like Christianity without hell."

"Taking out a commission of bankruptcy is a well-known mode of recovering a debt."

"Donald Trump has America back on the road to bankruptcy, an area where he has unparalleled expertise for a president of the United States. The small band of fiscal conservatives who remain in the Trump administration warned the president about the eventual dangers of his out-of-control spending addiction. In one such meeting, Trump reportedly said, "Yeah, but I won't be here." I never heard him say those words, but it doesn't come as a surprise. That's how he thinks. What does he care if the federal government goes belly-up? By then it won't be his problem."

"One of the biggest lies in capitalism is that companies like competition. They don't. Nobody likes competition."

"One of the bad effects of an anti-intellectual philosophy, such as that of Bergson, is that it thrives upon the errors and confusions of the intellect. Hence it is led to prefer bad thinking to good, to declare every momentary difficulty insoluble, and to regard every foolish mistake as revealing the bankruptcy of intellect and the triumph of intuition."

"Our national debt after all is an internal debt owed not only by the Nation but to the Nation. If our children have to pay interest on it they will pay that interest to themselves. A reasonable internal debt will not impoverish our children or put the Nation into bankruptcy."

"A man may be a bankrupt, and yet be honest, for he may become so by accident, and not of purpose to deceive his creditors."

"Such was the origin of that debt which has since become the greatest prodigy that ever perplexed the sagacity and confounded the pride of statesmen and philosophers. At every stage in the growth of that debt the nation has set up the same cry of anguish and despair. At every stage in the growth of that debt it has been seriously asserted by wise men that bankruptcy and ruin were at hand. Yet still the debt went on growing; and still bankruptcy and ruin were as remote as ever."

"Bankruptcy is considered as a crime, and the bankrupt in the old laws is called an offender: but it is a principle of natural justice, and of our law, that actus non facit reum nisi mens sit rea."

"A woman's whole life is a history of the affections. The heart is her world: it is there her ambition strives for empire; it is there her avarice seeks for hidden treasures. She sends forth her sympathies on adventure; she embarks her whole soul on the traffic of affection; and if shipwrecked, her case is hopeless — for it is a bankruptcy of the heart."

"'How did you go bankrupt?' Bill asked. 'Two ways,' Mike said. 'Gradually and then suddenly.'"

"The privileges of creditors to come in under a bankruptcy, and of bankrupts to be discharged, are co-extensive and commensurate."

"He who desireth to sleep soundly, let him buy the bed of a bankrupt."