RE: Financial institution fallout
Yeah. I've been watching this unroll. Though to my shock and horror, I've actually been seeing some of Rand's villains showing up in Washington whining for their bailouts ... I had dismissed her as over-the-top and preachy and impractical for decades! http://idiotgrrl.livejournal.com/ From: [EMAIL PROTECTED] To: brin-l@mccmedia.com Subject: Financial institution fallout Date: Sat, 6 Dec 2008 23:51:20 -0600 I saw an interesting article from the bastion of free enterprise publication, the WSJ, at http://online.wsj.com/article/SB122852289752684407.html It has some interesting analysisand it doesn't seem good. What I find interesting is that it seems to be a balanced analysis, not a polemic for letting the markets decide everything. My feeling is that everyone but those who believe than Atlas Shrugged is the greatest work of philosophy, literature, and economics ever, have been badly shaken by how the market failed. It's not that government was blameless, but they didn't force the 5 investment banking institutions and the biggest insurance company in the world to make the decisions they did. The implications of this article are quite sobering. I don't have time, alas, for an analysis for the list, based on what I read and discussed, but I'll mention one factor here. Fund managers who played things properly, who bet that real estate would not go up forever, quickly found themselves having to explain to their clients year after year after year why they didn't invest in AAA assets. It's like refusing a betting scheme based on there never ever being a straight flush in poker. It usually works, and the person who refuses to get in looks like their losing moneyin this case it would be for decades. Thus, the funds managers who were prudent ether were converted or lost their jobs. I don't think Adam Smith envisioned the GDP of the world being issued as credit default swaps. Dan M. ___ http://www.mccmedia.com/mailman/listinfo/brin-l ___ http://www.mccmedia.com/mailman/listinfo/brin-l
RE: Financial institution fallout
-Original Message- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Pat Mathews Sent: Sunday, December 07, 2008 7:28 AM To: Brin List Subject: RE: Financial institution fallout Yeah. I've been watching this unroll. Though to my shock and horror, I've actually been seeing some of Rand's villains showing up in Washington whining for their bailouts ... I had dismissed her as over-the-top and preachy and impractical for decades! Actually, Rand's hero's are in line there too. :-) They are heroes in her book because they are successful. In reality, the private market failed, and needs the government...even according to its bible. Dan M. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Anathem
On Sat, 6 Dec 2008, Doug Pensinger wrote: So has any one finished? I'm about 250 in and so far; very good. Doug Yes. It totally rocks. It takes a few turns, but when you get to the end, you realize that's where it was headed all along. Oh, and all those different words terms? One of them is *much* better than our term, IMO. (But I think that's around page 620 or so.) And my favorite quote of the book is on page 320. :) Julia ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Anathem
Hi Doug,
So what are your impressions of the book? I'm a big NS fan, but haven't got
Anathem yet. However, I'm thinking of treating myself for Xmas - a good
idea, yes?
Cheers,
DANNY
2008/12/7 Doug Pensinger [EMAIL PROTECTED]
So has any one finished?
I'm about 250 in and so far; very good.
Doug
___
http://www.mccmedia.com/mailman/listinfo/brin-l
--
It has been reported that Tanuki fell from the sky using his scrotum as a
parachute -- Tom Robbins ('Villa Incognito').
___
http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Anathem
On Sun, Dec 7, 2008 at 2:50 PM, Julia Thompson [EMAIL PROTECTED] wrote: So has any one finished? I'm about 250 in and so far; very good. It takes a few turns, but when you get to the end, you realize that's where it was headed all along. Yes, lots of big stuff still to happen. And my favorite quote of the book is on page 320. :) Obviously, I had to look this up. Protractor? Martin ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Anathem
I'm not Doug, but I think treating yourself to a copy is an excellent
idea!
Julia
On Sun, 7 Dec 2008, Danny O'Dare wrote:
Hi Doug,
So what are your impressions of the book? I'm a big NS fan, but haven't got
Anathem yet. However, I'm thinking of treating myself for Xmas - a good
idea, yes?
Cheers,
DANNY
2008/12/7 Doug Pensinger [EMAIL PROTECTED]
So has any one finished?
I'm about 250 in and so far; very good.
Doug
___
http://www.mccmedia.com/mailman/listinfo/brin-l
--
It has been reported that Tanuki fell from the sky using his scrotum as a
parachute -- Tom Robbins ('Villa Incognito').
___
http://www.mccmedia.com/mailman/listinfo/brin-l
___
http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Anathem
On Sun, 7 Dec 2008, Martin Lewis wrote: On Sun, Dec 7, 2008 at 2:50 PM, Julia Thompson [EMAIL PROTECTED] wrote: So has any one finished? I'm about 250 in and so far; very good. It takes a few turns, but when you get to the end, you realize that's where it was headed all along. Yes, lots of big stuff still to happen. Lots. And the last turn is *very* close to the end. And my favorite quote of the book is on page 320. :) Obviously, I had to look this up. Protractor? Yep. :) That's right up there with the Zulus in _The Diamond Age_, IMO. Julia ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Anathem
Julia wrote: I'm not Doug, but I think treating yourself to a copy is an excellent idea! I'll defer to Julia as she's finished it and I'm still working on the first half, but if you liked Cryptonomicon and the Baroque Cycle I'm pretty sure you'll like this one. Welcome to the list! Doug ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Wal-Mart is evil, why it must be eradicated
On Sat, Dec 6, 2008 at 9:39 PM, Dan M [EMAIL PROTECTED] wrote: But, I think this recession will hit everyone, and a sinking tide lowers all boats. I know that investment bankers are nervous now. Both of them? :-) Nick ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Financial institution fallout
On Sat, Dec 6, 2008 at 9:51 PM, Dan M [EMAIL PROTECTED] wrote: I saw an interesting article from the bastion of free enterprise publication, the WSJ, at http://online.wsj.com/article/SB122852289752684407.html Thus, the funds managers who were prudent ether were converted or lost their jobs. Not all of them. Some people and fund managers made money betting against the insanity. And it only takes a few. That is how markets evolve. Survival of the fittest. It just may take longer than we like for the fittest to win out. But while the unfit lost some money recently, a lot of them were bailed out by the government. Maybe that makes them fit for their enviornment, filling the niche of leaching off taxpayer dollars. Here are Kaufman's bullet points, interspersed with my comments: 1) International portfolio diversification has been undermined. This has been obvious for at least 10 years. Certainly anyone paying attention noticed in 1997. 2) Risk modeling will lose popularity. VAR and other techniques that concentrate too much on modeling past history should lose popularity. But the physics and economics Ph.D's learned all that math and they want to use it, who cares if past history cannot predict future results? 3) Financial concentration will gain even greater momentum and influence I've mentioned this several times as a consequence of the government considering firms too large to fail and bailing them out. Instead of a vibrant, diverse collection of hundreds or thousands of smaller businesses, competing and innovating, surviving and failing based on their merits, our government is forcing on us a few large firms who have already failed spectacularly but are being given the chance to fail again while crowding out innovative new (smaller) entrants. 4) The end of an era of ballooning nonfinancial debt Part of the reason the current situation is painful is that, I believe, household and business debt were much too high for years. One symptom is how the financial component of the economy ballooned to handle those debt transactions (financial company profits made up about 40% of the SP500 profits at their peak, which is absurd...historically it is around 10%). If the nonfinancial debt is now decreasing (along with the financial companies that transact it and extract their pound of flesh), then I think that is a good thing. Creative destruction will cause short-term pain, but should allow more stable and productive investment in the future. Unless the government interferes by bailing out the unproductive companies and enticing people to borrow and spend unproductively. 5) U.S. government borrowing will continue to swell, at least for a few years And this is a terrible thing. As we know, the government is good at borrowing and spending, but not so good a paying down debt and reducing spending. We must demand a government that spends much less of our money. 6) Americans will begin to save again Again, this sounds good to me, if it occurs. Our government is fighting it, though. Encouraging consumers to spend, spend, spend. 7) Regulatory reform of financial markets will carry high stakes This is amusing but scary. Here we have an old economist and former Federal Reserve employee, saying how extraordinarily difficult it will be for goverment to interfere in the markets to reform things, both technically and politically. And yet he seems to assume that there is no choice but to forge ahead with the impossible task. It seems egotistical government regulators never learn. They will keep trying and failing. Apparently the most succesful financial (and auto) firms will be the ones who realize this and take advantage of it. Perhaps we have the government we deserve. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Financial institution fallout
On Sun, Dec 7, 2008 at 6:33 AM, Dan M [EMAIL PROTECTED] wrote: Actually, Rand's hero's are in line there too. :-) They are heroes in her book because they are successful. In reality, the private market failed, and needs the government...even according to its bible. I've never read Ayn Rand (at least not more than a few pages)...her writing style does not appeal to me as fiction, I've never seen anything particularly insightful attributed to her. But your statement above is not particularly insightful either. To say that the market failed is either wrong or meaningless. The market is made up of many participants each trying to achieve their own goals. The market as a whole does not have a purpose or goal, and so cannot fail at that goal. Many of the market participants recently failed at their goals, if those goals were to make money or to successfully run a business. But some of the participants did not fail at their goals, if their goals were to profit from the mistakes of others, either by shorting the financial, housing, and auto markets, or by leaching money from tax payers through government bailouts. The private market does not need government interference and bailouts, but certainly many individual participants will compete to gain an advantage in any way they can, including accepting bailout money or lobbying for government rules and interference that benefit them at the expense of their competitors. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Anathem
On Sun, Dec 7, 2008 at 6:50 AM, Julia Thompson [EMAIL PROTECTED] wrote: Oh, and all those different words terms? One of them is *much* better than our term, IMO. (But I think that's around page 620 or so.) And my favorite quote of the book is on page 320. :) I've already given away my copy. So what is the term and the quote you are referring to? You can add spoiler space if necessary... ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Anathem
On Sun, 7 Dec 2008, John Williams wrote: On Sun, Dec 7, 2008 at 6:50 AM, Julia Thompson [EMAIL PROTECTED] wrote: Oh, and all those different words terms? One of them is *much* better than our term, IMO. (But I think that's around page 620 or so.) And my favorite quote of the book is on page 320. :) I've already given away my copy. So what is the term and the quote you are referring to? You can add spoiler space if necessary... Sent offlist for now. Julia ___ http://www.mccmedia.com/mailman/listinfo/brin-l
RE: Financial institution fallout
Actually, Rand's hero's are in line there too. :-) They are heroes in her book because they are successful. In reality, the private market failed, and needs the government...even according to its bible. This idea that the private market failed and needs the government? Who is the government? These guys going to Washington don’t serve the populace But are attorneys for the Wal-Mart [ie Clinton]; Goldman Sach man in Washington [ie Paulson]; and before I go to far let me say the whole mess of these smart lawyers serve Large private individuals who live off the general public and will out the American Populace at the drop of a hat. The representative government serve the fat cats with The golden parachute. The People need to stay on there computers and don’t dismantle Their conversation bout the earlier out sourcing of jobs and in sourcing of credit which Has fell through the floor. Someone up in here need to get it straight. The bailouts should be preferred stock in the large companies which is owned by the people of this country. This stock should be utilized to foster a wide training program for the American youth beyond the X-box and Nintendo warriors cult and that says enough about both sides of the issue. See: Ghettonomics man and myth the religion of racism By Morris J. Peavey, Jr. Track the journey from plantation to wage slave economies. http://www.chapters.indigo.ca/used-books/Ghettonomics-Vol-Man-Myth-Religion-Morris-J-Peavey/1410721000-rare.html Talk that talk PV -- Original message from Dan M [EMAIL PROTECTED]: -- -Original Message- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Pat Mathews Sent: Sunday, December 07, 2008 7:28 AM To: Brin List Subject: RE: Financial institution fallout Yeah. I've been watching this unroll. Though to my shock and horror, I've actually been seeing some of Rand's villains showing up in Washington whining for their bailouts ... I had dismissed her as over-the-top and preachy and impractical for decades! Actually, Rand's hero's are in line there too. :-) They are heroes in her book because they are successful. In reality, the private market failed, and needs the government...even according to its bible. Dan M. ___ http://www.mccmedia.com/mailman/listinfo/brin-l ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Financial institution fallout
To say that the market failed is either wrong or meaningless. If I understand this correctly it was meant that markets can't fail in the same way physics isn't failing if you fall to your death having driven off a cliff. However a person saying the 'markets failed' isn't unnecessarily claiming something meaningless (such as my analogies claim 'physics failed because I fell') because the odds are they mean something like... 'the actions taken by authorities in the claim that benefits would be provided by free market actions failed' ...which is more akin to saying that physics didn't work the way the driver claimed they would when he said we were going fast enough to bridge the gap. Physics didn't fail - it was some combination of the drivers knowledge and/or control of the cars speed and it's relationship to the required jump that failed. It isn't an argument about the effectiveness of the economic disciplines descriptive powers but about the practical effects of government policy. It being true that markets can't fail if by markets all you mean is the descriptive actions of economics it is also true that being able to describe economics doesn't make that the answer to everything. Continuing with analogies, being able to describe the physical properties of matter doesn't mean everything if I want to build a house. I still have to build something with my understanding and it doesn't help for people to keep saying 'let it sort itself out' because hammers, wood and nails won't, no matter how much I will value the house, construct one if I don't design it and organise the work. Economies will always exist, but if we want one structured to an end we desire (public police forces supporting rule by law for example being something we want provided by our economy), we have to build it. And if the design includes the ridiculous nonsense that has recently endangered all economic activity then it's fair to say it has failed. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Financial institution fallout
On Sun, Dec 7, 2008 at 1:06 PM, Euan Ritchie [EMAIL PROTECTED] wrote: I still have to build something with my understanding and it doesn't help for people to keep saying 'let it sort itself out' because hammers, wood and nails won't, no matter how much I will value the house, construct one if I don't design it and organise the work. How incredibly egotistical and demeaning a statement. How are participants in a market equivalent to wood and nails for someone to hammer together? ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Financial institution fallout
At 03:28 PM Sunday 12/7/2008, John Williams wrote: On Sun, Dec 7, 2008 at 1:06 PM, Euan Ritchie [EMAIL PROTECTED] wrote: I still have to build something with my understanding and it doesn't help for people to keep saying 'let it sort itself out' because hammers, wood and nails won't, no matter how much I will value the house, construct one if I don't design it and organise the work. How incredibly egotistical and demeaning a statement. How are participants in a market equivalent to wood and nails for someone to hammer together? Obviously Hammers have little talent for finance, at least if MC is any example . . . Golden Parachute Pants? Maru . . . ronn! :) ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Economics comment
Hi. I was just reading the comments on a post at Crooked Timber on how/if WW II ended the Great Depression: http://crookedtimber.org/2008/12/07/the-economic-lessons-of-world-war-ii/ And found this gem: HH 12.07.08 at 5:26 pm The bottom line on WWII economic stimulus is that weapons in wartime were the only public goods to which America would commit vast resources. Thus, it follows that for large public works to be undertaken, Americans must disguise them as warlike measures (e.g., The National Defense Student Loan program, or the National Defense Highway Network). With history as our guide, it should be simple for us to disguise train cars as rail-guided vehicular killing systems and nuclear power plants as death-ray power generators. Investments in inner-city schools can easily be relabelled as child-soldier training, and gasoline conservation measures can be represented as terrorist funding denial measures. It is really very simple. For pathologically bellicose Americans to justify public expenditure, they must be persuaded that they are investing in killing people. Well, I thought it was funny. ---David ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Financial institution fallout
On Sun, Dec 7, 2008 at 10:53 AM, John Williams [EMAIL PROTECTED]wrote: But your statement above is not particularly insightful either. To say that the market failed is either wrong or meaningless. The market is made up of many participants each trying to achieve their own goals. The market as a whole does not have a purpose or goal, and so cannot fail at that goal. Nonsense. We rely on markets to be regulatory mechanisms, feedback loops that reward the efficient and penalize the inefficient. To fail to consider whether or not they are doing so is to abandon not only intellect, but also morality. Perhaps you meant to say that markets possess no *intention *(and are therefore amoral)? Nick ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Financial institution fallout
John Williams wrote: On Sun, Dec 7, 2008 at 1:06 PM, Euan Ritchie [EMAIL PROTECTED] wrote: I still have to build something with my understanding and it doesn't help for people to keep saying 'let it sort itself out' because hammers, wood and nails won't, no matter how much I will value the house, construct one if I don't design it and organise the work. How incredibly egotistical and demeaning a statement. How are participants in a market equivalent to wood and nails for someone to hammer together? The relationship between 1 and 5 is analogous to the relationship between 1000 and 5000, but this does not imply equivalence. Doug ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Financial institution fallout
On Sun, Dec 7, 2008 at 6:31 PM, Nick Arnett [EMAIL PROTECTED] wrote: We rely on markets to be regulatory mechanisms, feedback loops that reward the efficient and penalize the inefficient. What an egotistical statement. Why not say that you would like markets to do what you want them to do? To fail to consider whether or not they are doing so is to abandon not only intellect, but also morality. Ha ha ha! You are hilarious! ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Financial institution fallout
On Sun, Dec 7, 2008 at 6:58 PM, Doug Pensinger [EMAIL PROTECTED] wrote: John Williams wrote: On Sun, Dec 7, 2008 at 1:06 PM, Euan Ritchie [EMAIL PROTECTED] wrote: I still have to build something with my understanding and it doesn't help for people to keep saying 'let it sort itself out' because hammers, wood and nails won't, no matter how much I will value the house, construct one if I don't design it and organise the work. How incredibly egotistical and demeaning a statement. How are participants in a market equivalent to wood and nails for someone to hammer together? The relationship between 1 and 5 is analogous to the relationship between 1000 and 5000, but this does not imply equivalence. OK, my statement above is wrong. Let me rephrase. An analogy does not necessarily imply equivalence. If I describe a star by saying it looks like shining a light through a tiny hole, am I implying equivalence? Doug ___ http://www.mccmedia.com/mailman/listinfo/brin-l
