Kiwi Ghost Chips posted:Cash flow is very different between industries. Insurance companies have plenty of float invested that they can use, while airlines are constantly in trouble due to having massive capital costs and not actually having a profitable business model despite a century of effort. Great, now explain why telcos like Verizon requires the use of these instruments when they are literally making billions every quarter. What value is added by them using these exactly (other than making the books look prettier and exposing them to systemic risk)
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Jun 4, 2014 03:48
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down with slavery posted:I know what commercial paper is. I'm asking you why it's necessary You don't know what it is if you don't know why it's necessary.
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Jun 4, 2014 03:54
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Nintendo Kid posted:You don't know what it is if you don't know why it's necessary. Great non-answer in the name of keeping Verizon's pole polished. I didn't ask why it's necessary for commercial paper to exist, I'm asking why it's necessary for Verizon to use it to the extent that they do. Why are you and others hell bent on defending these sort of aggressive accounting and financial practices? There's no reason for a profitable company of Verizon's size to be taking out those sorts of short term loans to pay their bills. I don't know the whole story behind commercial paper (I'd love for you to add something other than one line of nothing as usual) but I suspect it was never intended to be used this way nor is it best practices or a good idea to use it this way. Feel free to convince me otherwise, I suspect you have no goddamn clue about what you're talking about though, hence the thin (read: no) content. down with slavery fucked around with this message at 03:57 on Jun 4, 2014 |
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Jun 4, 2014 03:54
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down with slavery posted:Great, now explain why telcos like Verizon requires the use of these instruments when they are literally making billions every quarter. Because they are a normal business. down with slavery posted:Great non-answer in the name of keeping Verizon's pole polished. You're pretty lovely at building strawmen these days. This is like a straw-pile.
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Jun 4, 2014 03:55
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down with slavery posted:Great, now explain why telcos like Verizon requires the use of these instruments when they are literally making billions every quarter. What value is added by them using these exactly (other than making the books look prettier and exposing them to systemic risk) Verizon makes several billion in loans each quarter in the form of carrier subsidies (they pay full freight to the manufacturer and recover it over time). Commercial paper is one of the most common ways non-financial institutions float loan capital, since their business model doesn't rely on having capital available to loan out, and using short term loans insulates them against variation in sales (both positive, by allowing them to make more sales without having increased capital on hand, and negative, by allows in them not to have cash sitting around unused.) And again, if credit had remained unavailable, Verizon would have failed even if they had had a month of cash on hand as the entire system ground to a halt. It isn't systemic risk that commercial paper exposes them to - it's catastrophic risk, and as I have said multiple times, there's literally no point in hedging against the end of the world because at the end of the day, the world loving ended.
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Jun 4, 2014 03:57
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Nintendo Kid posted:Because they are a normal business. Commercial paper is not used by all businesses.
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Jun 4, 2014 03:58
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down with slavery this derail is terrible and you happen to be wrong. Businesses using credit to cover everyday operations is totally normal.
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Jun 4, 2014 03:59
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down with slavery posted:Commercial paper is not used by all businesses. It is, however, used by many businesses, to the tune of approximately 300 billion dollars outstanding on any given day. The overwhelming majority of which is essentially zero risk and is paid back in the three month window.
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Jun 4, 2014 04:00
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down with slavery posted:Great, now explain why telcos like Verizon requires the use of these instruments when they are literally making billions every quarter. What value is added by them using these exactly (other than making the books look prettier and exposing them to systemic risk) According to their financial sheets, they're sinking tons into infrastructure and accumulating cash.
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Jun 4, 2014 04:00
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Kalman posted:Verizon makes several billion in loans each quarter in the form of carrier subsidies (they pay full freight to the manufacturer and recover it over time). Commercial paper is one of the most common ways non-financial institutions float loan capital, since their business model doesn't rely on having capital available to loan out, and using short term loans insulates them against variation in sales (both positive, by allowing them to make more sales without having increased capital on hand, and negative, by allows in them not to have cash sitting around unused.) Yes, and what I'm saying is that they don't need to have capital on hand that they don't have. Making that available is exposing them to systemic risk whether or not you want to admit it. It is a CHOICE to allow this behavior. You have yet to demonstrate the benefits aside from them being able to spend more money before they have it. Do you think making those funds available to them benefits society in some measurable way? Why do we allow large corporations to operate this way in the first place if it's not necessary? quote:And again, if credit had remained unavailable, Verizon would have failed even if they had had a month of cash on hand as the entire system ground to a halt. It isn't systemic risk that commercial paper exposes them to - it's catastrophic risk, and as I have said multiple times, there's literally no point in hedging against the end of the world because at the end of the day, the world loving ended. But credit didn't remain unavailable, the federal government was able to end the liquidity crisis. The point being that the crisis would have been much more contained if more firms weren't reliant on these instruments. And yes, it does expose them to systemic risk. Interest rates are not set in stone and betting that the next loans you need to take out will be at a rate you can afford or is favorable IS a risk.
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Jun 4, 2014 04:01
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down with slavery posted:Commercial paper is not used by all businesses. It is used by the majority of businesses that deal in volume retail.
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Jun 4, 2014 04:02
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Kiwi Ghost Chips posted:According to their financial sheets, they're sinking tons into infrastructure and accumulating cash. That's not an answer as to why they need to use them, if anything it's a reason as to why they don't need to. (If they are accumulating cash and it's on hand) Arglebargle III posted:down with slavery this derail is terrible and you happen to be wrong. Businesses using credit to cover everyday operations is totally normal. Like I said, whether or not short term credit markets are necessary or a good idea is way beyond the scope of the thread, "you're wrong" isn't going to convince me of poo poo so stop wasting your time and actually post something informative. I've been waiting. I had pretty much dropped it but Slanderer posted:You're mad about both corporate finance and broadband, yet refuse to learn how either works? Weird... Someone still wanted to educate. So here I am. The only people keeping the derail going are the ones who are unwilling to admit that nationalization of our communications infrastructure is in our best interest.
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Jun 4, 2014 04:08
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down with slavery posted:Yes, and what I'm saying is that they don't need to have capital on hand that they don't have. Making that available is exposing them to systemic risk whether or not you want to admit it. It is a CHOICE to allow this behavior. You have yet to demonstrate the benefits aside from them being able to spend more money before they have it. Do you think making those funds available to them benefits society in some measurable way? Why do we allow large corporations to operate this way in the first place if it's not necessary? Yes, the federal government ended the liquidity crisis by doing things like MAKING LOANS TO loving VERIZON LIKE WE'VE BEEN TALKING ABOUT. The availability of commercial paper is, again, not the kind of risk you need to worry about. Interest rate changes is a more meaningful one, but because commercial paper is (because of regulatory issues) at most a 270 day duration and more typically a 90 day duration, changes tend to occur relatively gradually and rate shock is minimal. Or we could sit on trillions of dollars as an economy and have it provide us with no benefit whatsoever since a liquidity crisis would still annihilate these companies.
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Jun 4, 2014 04:10
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down with slavery posted:That's not an answer as to why they need to use them, You would know it is if you knew anything about how business works. poo poo, I think Marx might have even covered it.
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Jun 4, 2014 04:10
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Kalman posted:Yes, the federal government ended the liquidity crisis by doing things like MAKING LOANS TO loving VERIZON LIKE WE'VE BEEN TALKING ABOUT. No poo poo? Who said otherwise. quote:The availability of commercial paper is, again, not the kind of risk you need to worry about. Interest rate changes is a more meaningful one, but because commercial paper is (because of regulatory issues) at most a 270 day duration and more typically a 90 day duration, changes tend to occur relatively gradually and rate shock is minimal. It's not trillions, quit being dramatic. According to http://www.federalreserve.gov/releases/CP/outstandings.htm we're talking about $100 billion in the commercial paper market being used by non-financial domestic firms.
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Jun 4, 2014 04:13
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down with slavery posted:No poo poo? Who said otherwise. You did. You complained that Verizon shouldn't rely on commercial paper being available because it exposes them to risk. Then you said that instead of using that, they should hold cash on hand. When I pointed out that holding cash on hand wouldn't actually have insulated them from risk in the event of a liquidity crisis, you fell back on the federal government backstopping the commercial paper market. So basically, you said that Verizon shouldn't take loans and should sit on cash to avoid risk, and when it was pointed out that that wouldn't actually avoid the risk of the lending market collapsing, you said that "well obviously the lending market didn't collapse because the government ended the liquidity crisis." So basically, you are simultaneously arguing that commercial paper exposes Verizon to unacceptable levels of risk, and arguing that that risk is non-existent because the government will step in. (The trillions was a reference to your "corporations should have a month's costs on hand just in case.") A serious question: do you think credit being available is a good thing, y/n? edit: Also, way to link to the 2011 numbers, you lying piece of poo poo. The current numbers are, as I have said, ~300 billion in non-financial. 200ish for domestic. Kalman fucked around with this message at 04:23 on Jun 4, 2014 |
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Jun 4, 2014 04:18
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Kalman posted:You did. You complained that Verizon shouldn't rely on commercial paper being available because it exposes them to risk. Then you said that instead of using that, they should hold cash on hand. When I pointed out that holding cash on hand wouldn't actually have insulated them from risk in the event of a liquidity crisis, you fell back on the federal government backstopping the commercial paper market. Having cash on hand would have insulated them from risk in the event of a liquidity crisis because they could afford to pay their creditors while the government is dealing with the crisis. It's about controlling the scope of a potential crisis (when we all know that another one is coming, it's only a question of when) quote:So basically, you said that Verizon shouldn't take loans and should sit on cash to avoid risk, and when it was pointed out that that wouldn't actually avoid the risk of the lending market collapsing, you said that "well obviously the lending market didn't collapse because the government ended the liquidity crisis." So basically, you are simultaneously arguing that commercial paper exposes Verizon to unacceptable levels of risk, and arguing that that risk is non-existent because the government will step in. I'm saying that the risk is non existent, which is why they use it. If the risk did exist, they wouldn't take advantage of those instruments, because in the event of short term credit markets drying up their business would fail to make payments. The risk should exist. In fact, there's really no benefit to allowing a firm like verizon to offer unsecured debt on the open market. quote:(The trillions was a reference to your "corporations should have a month's costs on hand just in case.") Yes, I know. That quoted statement was made in passing. I got the data for you, turns out these commercial paper markets ARE hardly necessary. quote:A serious question: do you think credit being available is a good thing, y/n? Yes, credit has a valuable role in society and I don't think we should entirely get rid of it. But I do think that it's abused by many people and these non-financial paper markets... well, I'm still not hearing a compelling reason for why these firms should even be allowed to do this in the first place. Why should they be allowed to offer unsecured debt on the open market? Can you explain the benefit?
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Jun 4, 2014 04:24
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down with slavery posted:Yes, I know. That quoted statement was made in passing. I got the data for you, turns out these commercial paper markets ARE hardly necessary. What data, the data from 2011 that's completely out of date? Come back when you aren't lying through your teeth.
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Jun 4, 2014 04:25
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Kalman posted:What data, the data from 2011 that's completely out of date? Haha yes my data is 3 years old so now I'm a liar. The flailing is adorable. http://www.federalreserve.gov/releases/cp/outstanding.htm Here's the up to date data source, go look at the numbers yourself "Lying through your teeth" holy poo poo that is rich I can just see the spit on your monitor. down with slavery fucked around with this message at 04:31 on Jun 4, 2014 |
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Jun 4, 2014 04:28
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Nationalize all ISPs, free 100 Mbs internet for all  Xae posted:I'm starting to think that Internet Socialist is the new Internet Libertarian. Would you say the Truth Is In the Middle? Farecoal fucked around with this message at 04:46 on Jun 4, 2014 |
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Jun 4, 2014 04:34
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down with slavery posted:Great, now explain why telcos like Verizon requires the use of these instruments when they are literally making billions every quarter. What value is added by them using these exactly (other than making the books look prettier and exposing them to systemic risk) Payday, Verizon is only payed once per month from their customers but they have to pay their workers 2-3 times a month.
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Jun 4, 2014 04:48
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Farecoal posted:Nationalize all ISPs, free 100 Mbs internet for all I would require business to pay the government for internet access honestly, I don't think they deserve to profit off that.
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Jun 4, 2014 04:50
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down with slavery posted:Haha yes my data is 3 years old so now I'm a liar. The flailing is adorable. I am really enjoying your quoting back to me the exact page I linked, which shows that your numbers are off by over a hundred billion dollars.
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Jun 4, 2014 05:22
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karthun posted:Payday, Verizon is only payed once per month from their customers but they have to pay their workers 2-3 times a month. Yeah but in his fantasy world, Verizon should keep cash on hand to cover that while eating the opportunity cost of having money sleeping in a bank account. According to him, they are supposed to keep more cash on hand to not use credit for every day cash flow and also invest more in the infra to upgrade to broadband speed something like maybe 5% of the user base would sign up for.
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Jun 4, 2014 07:19
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This thread has me speechless, I don't know how so many people are even responding to the single poster who clearly has no clue about finance.
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Jun 4, 2014 07:30
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supersnowman posted:Yeah but in his fantasy world, Verizon should keep cash on hand to cover that while eating the opportunity cost of having money sleeping in a bank account. According to him, they are supposed to keep more cash on hand to not use credit for every day cash flow and also invest more in the infra to upgrade to broadband speed something like maybe 5% of the user base would sign up for. Also I think no one's even brought up how much money that would remove from the economy if every company did that which I imagine would be pretty significant.
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Jun 4, 2014 08:48
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reignonyourparade posted:Also I think no one's even brought up how much money that would remove from the economy if every company did that which I imagine would be pretty significant. JeffersonClay posted:OK, your solution here is for each and every business to keep at least a month's cash on hand and therefore not rely on short term loans. Your plan would require US businesses to keep around 1.3 trillion dollars in cash on hand. At an interest rate of 4%, that's an opportunity cost of 50 billion dollars per year. More to the point, that represents about half of the total M1 money supply. Those are the costs. I dare say you have not articulated a benefit which outweighs them.
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Jun 4, 2014 11:18
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mike- posted:This thread has me speechless, I don't know how so many people are even responding to the single poster who clearly has no clue about finance. It's been fun watching him move from topic to topic, of each he is less knowledgeable than the last. Somehow being angry at dad doesn't translate into valid talking points!
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Jun 4, 2014 12:19
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Dallan Invictus posted:I'd like to bring this back in the vain hope of dragging this train wreck back on track. This is probably the post on which we should focus, rather than DWS's incoherent leavings. The questions you raise are, if I can distill them down, then comment, 1) Should the government be in the telco/ISP business. Should the US GOVT (or state/local) become the builder and operator of telco/ISP infrastructure? 2) Should the service be subsidized? To what degree? There are lots of calls in this very thread for 'free' broadband for all. 3) Is there a quantifiable benefit to society/citizenry of your answers above are yes? 4) Can anyone show (I asked earlier but nobody responded)evidence of benefit in another nation where telco/ISP is nationalized and subsidized? 5) What about us brain dead slobs? Would we be given cushy jobs? Basically, outside of the people who are always calling for nationalization of big segments of the economy, I haven't seen any compelling reasons to do so. If there was a demand for higher bandwidth that the carriers/ISPs weren't filling, then maybe there would be a case. Holding up Google fiber as an example, where they're not worried about losing money, isn't going to work, unless your position is that 100mb+ Internet Access is a fundamental Human Right, and that we should shift our spending priorities to make sure that everyone can get it for lower cost. That's the next question for the nationalizers in this thread. Do you think that Internet Access should be 'free' (paid for by taxes) or do you believe there should be a fee associated with it to the end user? Should end users pay by usage? Or should someone who does exabytes of filesharing monthly should pay the same as Joe Sixpack who just uses the Internet for espn.com and email? As Dallan brings up, lets say in this Full Socialism Now future, the collective decides that nobody needs more than 20mb. What happens then? edit: meant also to ask about voice calling. should that be free as well, as in government provided handset, and usage? Pauline Kael fucked around with this message at 13:02 on Jun 4, 2014 |
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Jun 4, 2014 12:47
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To be fair I don't know what M1 money supply means.
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Jun 4, 2014 13:28
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reignonyourparade posted:To be fair I don't know what M1 money supply means. To be fair I'm only talking about non-financial firms taking advantage of these types of accounting, of which there is around $150-200b outstanding at any given time. I posted the links to the page that's maintained by the federal reserve. mike- posted:This thread has me speechless, I don't know how so many people are even responding to the single poster who clearly has no clue about finance. Finance is incredibly complicated, I'll be the first to admit I don't know everything. What I haven't seen is a compelling reason that Verizon should be able to offer millions of unsecured debt on the open market.
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Jun 4, 2014 13:42
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Is there anything I can do about dl/ul caps? I know our bandwidth could be better but the speed in my area doesn't bother me its the fact that I could go over the 250gb cap just by watching Netflix with my wife everyday after work that pisses me off.
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Jun 4, 2014 14:43
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Sephiroth_IRA posted:Is there anything I can do about dl/ul caps? I know our bandwidth could be better but the speed in my area doesn't bother me its the fact that I could go over the 250gb cap just by watching Netflix with my wife everyday after work that pisses me off. Have you called to complain? Do you have Comcast? I'm aware of only a few ISPs that are capped right now. I'd call customer service and make some vague threats about leaving. It's best if you have some alternative that you can name, like VZ DSL or whatever might be available, plus gee maybe I'll get directv for television and go away from cableco completly. Often, they can give you relief for the asking. 250gb is a low cap.
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Jun 4, 2014 14:49
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They're really the only option in my area for Internet and I don't have cable tv or any of their other services. I don't have comcast, I'm with some smaller cable company which essentially has a monopoly in my area atm. My guess is they're eventually going to have to raise the cap as more and more grandmas and regular people start using Netflix streaming. My understanding is that an hour of HD on netflix goes for about 3gb. Sephiroth_IRA fucked around with this message at 14:58 on Jun 4, 2014 |
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Jun 4, 2014 14:53
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Sephiroth_IRA posted:Is there anything I can do about dl/ul caps? I know our bandwidth could be better but the speed in my area doesn't bother me its the fact that I could go over the 250gb cap just by watching Netflix with my wife everyday after work that pisses me off. Unless you can find another ISP that is more reasonable with this you're probably SOL. Out of curiosity, when Netflix launched in Canada (this was in the they-just-launched 720p HD streaming days) they had quality settings you could set that would lower the video quality as well as the data used, with the lowest consuming 1 gigabyte of data for every 3 hours watched; does Netflix US offer this as an option now too? I'm assuming "after work" means like 5-6 P.M. but if you're working some crazy shift where you're ending after midnight you might be able to find an ISP where very late-night data consumption isn't metered (e.g. a few ISP's don't count any consumption between midnight and 8 A.M.) This is hugely area-dependent, both in terms of city and in terms of your specific address (since a specific ISP might not be able to hook you up for some random reason like if you happen to be too far from a DSLAM or limited wiring options). Do you have any idea how much data you actually use (or want to use), and how much of that is Netflix? univbee fucked around with this message at 15:00 on Jun 4, 2014 |
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Jun 4, 2014 14:58
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Yeah, I'm pretty much SOL unless there's some workaround, people start complaining, a competitor shows up or better compression comes out. I've looked into compressing my web traffic but that feature in Chrome doesn't seem to work at all. My problem is that there are a few shows/videos that I feel I should be able to watch in HD and if I go over the cap because of that I'm going to be pissed. Not to mention dl a game can range from 500mb to 8gb or more which I rarely play but still. I could get the cap raised to 300 and get higher speed but that would cost me another 20 bucks a month. If I need any large files I'm going to have to use my work computer and a thumb drive sadly. edit: Back when I was with Time Warner (same speeds/prices but no caps) I'm sure I probably hit 250 or more every month without even trying. My wife watches a lot of movies on Netflix and I would watch every show I liked in HD. Honestly 250 gigs didn't seem like a problem at all (I could have lived with it) until we got Netflix. My wife hasn't noticed the quality drop so I think she'll be fine but my guess is even low bandwidth streaming hurts a bit. Is Internet bandwidth actually harder on the cable companies than Television? Why can I watch an unlimited amount of TV (if I had TV) without slowing anyone down but web traffic supposedly needs to be capped and affects the rest of my neighborhood? Sephiroth_IRA fucked around with this message at 15:13 on Jun 4, 2014 |
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Jun 4, 2014 15:00
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Sephiroth_IRA posted:They're really the only option in my area for Internet and I don't have cable tv or any of their other services. It's 2.25 GB for an hour of Netflix at 5Mbit/s. The cap gives you ~3 hours per day, ignoring other internet needs.
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Jun 4, 2014 15:10
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Sephiroth_IRA posted:They're really the only option in my area for Internet and I don't have cable tv or any of their other services. Probably yes. I got lucky where i live. I had bought land and was going to build, and looked into the broadband. I was just outside DSL range (by a couple hundred feet, looked in goldenwire myself so I knew they werent BSing me)and the local yokel cable company had an acceptable use policy, that when you dug deep, said usage was capped at 10gb per month. I work most days from home, and do mostly streaming media, so 10gb wouldnt last me 48 hours. I really held off on building because that wasnt going to work for me, and I really didn't have any options outside of a dedicated circuit which would have cost a fortune. Luckily, at the 11th hour, TWC bought the rinky dink company, and now I'm getting ~90mb down pretty consistently, for a total package price of about $150 a month which includes cable with premium channels, home phone with unlimited ld included, and internet. I'm pretty happy with that.
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Jun 4, 2014 15:11
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computer parts posted:It's 2.25 GB for an hour of Netflix at 5Mbit/s. The cap gives you ~3 hours per day, ignoring other internet needs. Exactly. The problem is my wife will watch a movie and I'll watch a show but we also use the Internet to watch youtube, hulu and every once in awhile I'll download something big like a game from Steam or software. This can all take place over 2 hours before we settle down to read/ do something else after work and we also watch/do more stuff online on the weekend. When I signed up and started complaining about the cap the guy said "Well dude you'd have to be sharing your connection with the whole neighborhood to go over it" so I breathed a sigh of relief and asked, "OK how high is it?" thinking he'd tell me a TB or something and started laughing at 250gb. When I found that out I made sure to load up a few externals before the move, thank god for that. Anyway I heard netflix is coming out with better compression so I hope that helps.
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Jun 4, 2014 15:19
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Sephiroth_IRA posted:
Television is piped over satellite (or fiber in some cases) to the cable head end in your city. From there it goes out over the local distribution network (fiber to the pole, coax to your house, usually) so it' isn't dependent on the head end's connection to the rest of the world. Internet, on the other hand, requires a symmetrical connection between your ISP and the rest of the internet. With TV, there's no communication from your house back out to the programming source, just back to the equipment at the head end. Even for on demand stuff, that's all sitting in edge distribution at the head end locally, NOT some server a continent away.
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Jun 4, 2014 15:19
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