Wednesday, October 15, 2008
Tuesday, October 14, 2008
Who would have thought?
“The Bush administration, which took office as social conservatives, is now leaving as conservative socialists.”
-Allan Mendelowitz
-Allan Mendelowitz
Sunday, October 12, 2008
When the Invisible Hand slaps your face
NA:
"Why should Lehman bother you? I wish they would let the market WORK. Just quit fucking with it. Let it go as low as it wants to. "
me:
That's like saying we should let 747's fall out of the sky when the mechanics screw up. Because markets are made up of people, and people do dumb things: they are not rational actors, they are emotional actors. Apparently people need limitations placed on their behavior because they are unable to control themselves.
NA:
"You cannot legislate rationality. What will happen if Congress makes it illegal for makets to go down? "
me:
They already did by making shorting of stocks illegal.
The idea was that politics and economics could be separated. You are living in an historic moment, when this idea that started back in the 1600's has finally run its course. Politics and economics have always been two halves of the same coin (which is why it was called Political Economy in Mr. Smith's day). The Invisible Hand has always been attached to a political/social/philosophical/emotional/religious body. The Western practice of dissolving things into their constituent parts and treating them in isolation is highly useful but it has its limitations.
"Why should Lehman bother you? I wish they would let the market WORK. Just quit fucking with it. Let it go as low as it wants to. "
me:
That's like saying we should let 747's fall out of the sky when the mechanics screw up. Because markets are made up of people, and people do dumb things: they are not rational actors, they are emotional actors. Apparently people need limitations placed on their behavior because they are unable to control themselves.
NA:
"You cannot legislate rationality. What will happen if Congress makes it illegal for makets to go down? "
me:
They already did by making shorting of stocks illegal.
The idea was that politics and economics could be separated. You are living in an historic moment, when this idea that started back in the 1600's has finally run its course. Politics and economics have always been two halves of the same coin (which is why it was called Political Economy in Mr. Smith's day). The Invisible Hand has always been attached to a political/social/philosophical/emotional/religious body. The Western practice of dissolving things into their constituent parts and treating them in isolation is highly useful but it has its limitations.
Bread and the Palin Circus
A note from Hamlet:
"Palin is great! Besides the fact that she has better legs than Cyndi or Michelle, she makes the feminists crazy and is redefining the debate. Read what feminist Camile Paglia says about this:
http://www.salon.com/opinion/paglia/2008/10/08/palin/index1.html "
Yea, it's too bad Palin is such a lightweight, she could have made things much more interesting but as it is she is only a sideshow and IMHO will be little more than a footnote, like Geraldine Ferraro...Sarah's 15 minutes are almost up already. Economics will prevail in this election. FYI, none of my conservative friends will accept a friendly wager on the election. I am thrilled to death that the house of cards came crashing down (was anyone surprised?) on Bush's watch and not 1 or 2 months after Obama was elected. Can you imagine? The right-wingers are going apeshit RIGHT NOW blaming the Democrats for every social ill, even reasonable and otherwise intelligent people have taken this grossly oversimplistic position which is absolutely impervious to reason. Frankly, it is scary. Nobody forced any American do bury himself in debt, carry 50 extra pounds on his waistline, or wall himself off from the rest of society in his personal armored car (SUV) and starter castle complete with electronic moat. I am a hopeless optimist but that view becomes increasingly difficult to sustain. I'm not sure where the vitality needed to systain our system is going to come from. Vast amounts of energy are being dumped into the sinkhole of naked manipulation, crass money-grubbing, and mental flights of fancy from fantasy football to online porn.
"Palin is great! Besides the fact that she has better legs than Cyndi or Michelle, she makes the feminists crazy and is redefining the debate. Read what feminist Camile Paglia says about this:
http://www.salon.com/opinion/paglia/2008/10/08/palin/index1.html "
Yea, it's too bad Palin is such a lightweight, she could have made things much more interesting but as it is she is only a sideshow and IMHO will be little more than a footnote, like Geraldine Ferraro...Sarah's 15 minutes are almost up already. Economics will prevail in this election. FYI, none of my conservative friends will accept a friendly wager on the election. I am thrilled to death that the house of cards came crashing down (was anyone surprised?) on Bush's watch and not 1 or 2 months after Obama was elected. Can you imagine? The right-wingers are going apeshit RIGHT NOW blaming the Democrats for every social ill, even reasonable and otherwise intelligent people have taken this grossly oversimplistic position which is absolutely impervious to reason. Frankly, it is scary. Nobody forced any American do bury himself in debt, carry 50 extra pounds on his waistline, or wall himself off from the rest of society in his personal armored car (SUV) and starter castle complete with electronic moat. I am a hopeless optimist but that view becomes increasingly difficult to sustain. I'm not sure where the vitality needed to systain our system is going to come from. Vast amounts of energy are being dumped into the sinkhole of naked manipulation, crass money-grubbing, and mental flights of fancy from fantasy football to online porn.
Saturday, October 11, 2008
Who is getting hit?
Due to fate and a particular lack of talent for accumulation of lucre, I'm not among the world's financial elite. But when I call back to the US I ask my friends how they are faring amidst the financial carnage, it does not seem to be affecting the average guy...yet.
So who is getting whacked? Here's an interesting tidbit:
"While Russia's 1998 default and devaluation of the ruble eradicated savings for most of the population, this year's losses are wiping out its richest citizens' fortunes. "
http://www.bloomberg.com/apps/news?pid=20601109&sid=aIAWDrA4RSTQ&refer=home
I'm not saying that the last few years have been primarily an Insider's game, but it seems to be the insiders who are taking the hit now.
So who is getting whacked? Here's an interesting tidbit:
"While Russia's 1998 default and devaluation of the ruble eradicated savings for most of the population, this year's losses are wiping out its richest citizens' fortunes. "
http://www.bloomberg.com/apps/news?pid=20601109&sid=aIAWDrA4RSTQ&refer=home
I'm not saying that the last few years have been primarily an Insider's game, but it seems to be the insiders who are taking the hit now.
Wednesday, October 8, 2008
It has got to be the Democrats fault, right?
Right-wingers have been desperate to pin the tail of financial chaos on the Democratic donkey. The favored target is the Community Reinvestment Act, a Carter-era law amended by Clinton that is supposed to have inspired the whole sub-prime lending market.
so please check your facts at:
http://www.newsweek.com/id/162789
http://bigpicture.typepad.com/comments/2008/10/misunderstandin.html
for example:
" The four biggest problem areas for housing (by price decreases) are: Phoenix, Arizona; Las Vegas, Nevada; Miami, Florida, and San Diego, California. Explain exactly how these affluent, non-minority regions were impacted by the Community Reinvesment Act ?"
IMHO, conspiracy theories are the junk food of the mind.
so please check your facts at:
http://www.newsweek.com/id/162789
http://bigpicture.typepad.com/comments/2008/10/misunderstandin.html
for example:
" The four biggest problem areas for housing (by price decreases) are: Phoenix, Arizona; Las Vegas, Nevada; Miami, Florida, and San Diego, California. Explain exactly how these affluent, non-minority regions were impacted by the Community Reinvesment Act ?"
IMHO, conspiracy theories are the junk food of the mind.
Sunday, October 5, 2008
Gold fetish
A friend sent this link about the pending hyperinflation in the US
http://www.shadowstats.com/article/292
If you recall, Mexico in the mid-1980's experienced hyperinflation. I thought for sure there would be a revolution, but there wasn't. The poor had no savings and so were relatively unaffected. The rich had assets: land, factories, foreign bank accounts. Only the people who kept Pesos were wiped out. Maybe the best policy would be to spend all the paper stuff while it still has value. Party on!
And frankly, gold is a fetish. Asians are wilder about it than the round-eyes, but fundamentally it has no more value than the seashells used by the Pacific islanders. The US went off the gold standard because the supply of gold-based money could not accurately mirror the increase in actual wealth: corn & wheat, internal combustion engines, microprocessors, penicillin. That said, the primitive wiring in the human brain will not go away anytime soon so it's probably good to stash some gold, but you'll need to have gold coins in small enough denominations to pay your electric bill and buy your six-pack of Heiniken.
http://www.shadowstats.com/article/292
If you recall, Mexico in the mid-1980's experienced hyperinflation. I thought for sure there would be a revolution, but there wasn't. The poor had no savings and so were relatively unaffected. The rich had assets: land, factories, foreign bank accounts. Only the people who kept Pesos were wiped out. Maybe the best policy would be to spend all the paper stuff while it still has value. Party on!
And frankly, gold is a fetish. Asians are wilder about it than the round-eyes, but fundamentally it has no more value than the seashells used by the Pacific islanders. The US went off the gold standard because the supply of gold-based money could not accurately mirror the increase in actual wealth: corn & wheat, internal combustion engines, microprocessors, penicillin. That said, the primitive wiring in the human brain will not go away anytime soon so it's probably good to stash some gold, but you'll need to have gold coins in small enough denominations to pay your electric bill and buy your six-pack of Heiniken.
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