Tuesday, March 31, 2009

Mistakes Beget Greater Mistakes

The marketplace today wants to buy what the government has issued or guaranteed (explicitly and implicitly). Market operators also want to buy what our government is going to buy. In particular, the market absolutely adores Treasuries, agency MBS, and GSE debt. There is no chance that such a system will effectively allocate resources. There is today no prospect that such a financial structure will spur the necessary economic overhaul. None.
Many current numbers here. Above analysis at bottom.

Full article.

Monday, March 30, 2009

The Failure of Managed Capitalism, not the free market

This isn't free market capitalism. It's Davos capitalism, a managerial capitalism run by an enlightened elite--politicians, business leaders, technology gurus, bureaucrats, academics, and celebrities--all gathered together trying to make the economic world smarter or more humane. It might even be, as Bill Gates famously said last year at Davos, a more "creative" capitalism.

The late Samuel Huntington coined the term Davos Man -- a soulless man, technocratic, nation-less, and cultureless, severed from reality. The modern economics that undergirded Davos capitalism is equally soulless, a managerial capitalism that reduces economics to mathematics and separates it from human action and human creativity.
If they get away with it, they'll have a fundamental confusion to thank: Davos capitalism has become equated with free markets. While this is a thoroughly bi-partisan affair with roots stretching back many decades, much of the current confusion stems from the work of the New Democrats and New Labour of the early 1990s. The Soviet Union had collapsed and Keynesian economies in Europe and the United States had failed. It was politically unacceptable to use the language of centralized planning, so astute politicians like Bill Clinton and Tony Blair used market-friendly language. They spoke about a smarter capitalism, managed globalization, the government working with business, and public/private partnerships. They used market language while pursuing managerial capitalism.
Critical thinking that can be applied far beyond Davos.


Saturday, March 28, 2009

Rising home sales myth blown away: New Home Sales Fell 41% in February 2009

The parade of the mathematically innumerate business writers continue to misread data. The latest evidence? New Home Sales.

After incorrectly reporting the Existing Home Sales, the mainstream media misread the Census department report of New Homes.

No, New Home Sales data did not improve. In fact, they were not only not positive, they were actually horrific. The year over year number was a terrible down 41%. Sales from this same period a year ago have nearly been halved.
Let me remind that many of these folks incorrectly misinformed you that Housing wasn’t getting worse in 2006, 2007 and 2008 — just as Home sales and prices went into an historic freefall. Now, these same folks are misinforming you that Housing has turned around and is improving. That is simply unsupported by the data.
Documented in the article.

Full version.

Friday, March 27, 2009

Japanese economy beyond disastrous

Exports nearly halved in February, falling 49.4 per cent from a year earlier, as demand for Japanese goods plunged in key markets.
Exports to the US continued to decline sharply, falling by 58.4 per cent last month while exports to Europe also fell sharply, dropping a record 54.7 per cent.

Thursday, March 26, 2009

The Criminalization of Everyday Life

While I was inside, I was astounded by the kinds of things that take up police and court time. A couple of people nabbed for being in various parks after dark. One of them was walking his dog. Two young men accused of riding their bicycles on the sidewalk. Three people arrested for sleeping in a subway station. My roommate in the lock-up was an articulate and self-aware 60-year-old whose sin was that he bought a bottle of booze and had taken a swig on the street. In the cell next to us: two costumed Mariachis busted for busking on the subway. They were repeat offenders. Their weapons: a guitar and an accordion.

With zero tolerance, we have finally done it: We have criminalized everyday life. After all, in the course of their life people sometimes ride their bikes on the sidewalks. And once upon a time not too long ago, it was normal to go into the parks after dark. My friends and I did all the time, particularly if we had time to kill before or after the opera, the symphony, or a jazz or rock concert. We walked brazenly between subway cars. Some of us even – horror of horrors! – played music on the street or in the subway without a license. And, though my parents would not be happy to know it even now, we sometimes drank beer in public – making sure, in an important but legally meaningless gesture, that the bottle was in a paper bag. If I did any of this on a regular basis today, I’d probably be considered a behavioral recidivist and sent to Riker’s Island.
Full article.

Wednesday, March 25, 2009

British eloquence

Tuesday, March 24, 2009

On little spurts

"Most average people have this tendency to turn off their own capacity for making judgments when an expert comes into the picture," says Gregory Berns, a neuroeconomist at Emory University in Atlanta.
My pappy used to say, "An expert is a little spurt, long ways from home."

He was right.

Don't be fooled.


Monday, March 23, 2009

Gold For Bread - Zimbabwe

Wednesday, March 18, 2009

Out of town without even an American Express Card

We are broke, literally and figuratively and the “we” is inclusive. Consumers cannot pay back what they owe, entrepreneurs cannot pay back what they owe, corporations cannot pay back what they owe, governments cannot pay back what they owe and bankers owe so much that not even governments can repay what bankers owe although governments are promising to do so while lying about the amounts actually owed.
And only fools are loaning into this economy.

Think about it...draw your own conclusions.

Full essay.

Tuesday, March 17, 2009

Back to basics

Jim Rogers continue to invest in Chinese water treatment companies and Chinese agriculture companies as those companies will continue to prosper despite the financial crisis around the world.

“All your viewers who got MBA’s made a terrible mistake, the [sic] should try to go down and exchange them for farming degrees or mining degrees”
See it all.

Wednesday, March 11, 2009

Matrix crash imminent

"So much talk about The System, so little understanding." --Robert Persig

...though there's much understanding in this article .
“Barack Obama, Nicolas Sarkozy and Gordon Brown spend their time chanting about the ‘historic dimension’ of the crisis. But they do so in an attempt to clear their names from the future failure of their policies. In truth, they are just hiding the fact that they fully misunderstand nature of this crisis. Other global leaders prefer to persuade themselves that the problem will be solved like any normal technical [rather than "systemic"] problem.

“Meanwhile everyone continues to play by decades old rules [paper promises are as good as gold], unaware of the fact that that game is vanishing from under their noses. In the United States, Europe, China and Japan, leaders persist in reacting as if the global system has only fallen victim to some temporary breakdown, merely requiring loads of fuel (liquidities) and other ingredients (rate drops, repurchase of toxic assets, bailouts of semi-bankrupt industries,) to reboot it.

Saturday, March 07, 2009

What's Dead (Short Answer: All Of It)

If not today, soon...

Just so you have a short list of what's at stake if Washington DC doesn't change policy here and now (which means before the collapse in equities comes, which could start as soon as today, if the indicators I watch have any validity at all. For what its worth, those indicators are painting a picture of the Apocalypse that I simply can't believe, and they're showing it as an imminent event - like perhaps today imminent.)
He can dream.

Don't mean squat what D.C. does, even if it's right.

See the short answer.

Friday, March 06, 2009

World Economics: The Most Simple of Calculations

It is through asking one simple question that we can answer whether or not something is the best way to move forward in our lives: Is it voluntary? (If not, it's a reduction in wealth. I don't care what fancy claims someone may make.)
Absent fraud, it works.

But you'll occasionally get that with or without

Caveat emptor.

Full article.

Monday, March 02, 2009

"Stimulating" the economy, another myth uncovered

Rather strangely, of course, if I were to buy a superb colour photocopier and to start printing up copies of ten pound notes in my basement, to then "stimulate" my local economy, I would be quite rightly arrested and thrown in the public stocks for being a fraudulent criminal stealing the wealth from everyone around me. Everyone understands this. But when this private crime is done publicly, it somehow becomes good. If anyone would like to write in and tell me how my personal bid to "stimulate" the economy would be different in principle from how the government is about to start "stimulating" the economy, I shall be pleased to read it.
Full post.