"Restore(s) a little sanity into current political debate" - Kenneth Minogue, TLS "Projects a more expansive and optimistic future for Americans than (the analysis of) Huntington" - James R. Kurth, National Interest "One of (the) most important books I have read in recent years" - Lexington Green
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I found myself shouting at the computer screen a few minutes ago, spitting mad and cursing up a storm. The tirade stopped almost as fast as it started, when I realized what a spectacle I was making of myself. Lucky thing I live alone.
Seems the campaign for the Democrat candidate is seeking a female rape victim to use against the Republicans. The thrust of the ad will be that sexually abused women should vote for the Democrats because Republicans don’t fight for rape victims.
Like many, the current events in the financial markets have me a bit dazzled. I understand a lot more than I did a few weeks ago from reading blog posts, newspaper articles and a small book or two. I also have been watching CNBC and Fox Business which have had a lot of interesting information on them as well. But I have a reservation. Whenever I see a report on CNBC or soak in a few pixels of information on a website I get a certain empty feeling. I feel as though I am being played. These information outlets feed on advertising for their lives, after all. Blood always leads, even on the financial pages.
The very best thing I have read on the current situation was in the WSJ weekend edition a week ago. It wasn’t “world ending” stuff, and it was easy to understand and concise. Several articles in the same edition were excellent.
In these tough times, the media does it best to convey the impression that it’s really looking out for the best interest of the humble investor.
In its September 28, 1998 issue, Fortune’s cover screamed: “The Crash of ’98. Can the U.S. Economy Hold up?” The Managing Editor explained that Fortune was “dedicated” to making sense of the “scary” financial situation.
I am not trivializing the current financial crisis. I have no idea what the direction of the markets will take in the future. What I do know is the financial media have a vested interest in hyping extreme conditions because it is in their economic interest to do so.
Investors can learn from the terrible track record of the media in predicting the future of the markets. They are not a reliable source of information.
What are your alternatives?
Consider the 80-year history of the markets, which have experienced ten bear markets. Look at long-term risk and reward data. Read books that have peer review, academically tested data supporting intelligent investing principles. There has been a trend by authors of these books to write them in way that is easily understood by everyone…
…Ignore the financial media, unless you find it entertaining.
The big wooden horse the Greeks gave the Trojans was not a gift. Neither is the information provided with such confidence by most of the financial media.
The article is appropriately named Kissing Cousins: The Wall Street Collapse and Media Hype.
Posted by Ginny on 28th September 2008 (All posts by Ginny)
Eyes and ears are poor witnesses when the soul is barbarous. Heraclitus
Posted mid-Sunday, as bail-out talks continue.
Pinker complains in The Blank Slateof the increasing emphasis in the 20th century on nurture.This may well have increased our sympathies for others, but has led us to undervalue human nature and therefore not consider moral hazards that tempt it. Our experiences are so variable and their impact so ambiguous, we may be quick to assert effect where none existed – or emphasize it when convenient. Indirectly, we came to devalue that third and most personally consequential component – human agency.We say, “Officer Krupke, I’m down on my knees” and grin, but we aren’t always ironic.Our experience and history, however, should make us more optimistic and also wary:men can be good (and remarkably so) and men are fallible.(Sinners some might say, while the Deists find us prone to errata.)A culture’s use is in restraining us from being our worst and encouraging our best; the more those restraints and rewards are internalized the smoother, more productive, and happier our lives. Our goal is not too many laws but good ones, not many restraints but necessary ones.
The general consensus is that increased subprime lending encouraged by Congress led CEOs to make bad loans.We are selfish, our vision narrowed to our time and our profit:the home buyers may have been naïve but also wanted a free lunch; the CEOs wanted to please Congress – the source of their jobs, power & money; Congress wanted to buy votes, increase campaign contributions, and purchase their own houses cheaply. Those least likely to feel the consequences of their follies are in Congress.
Which is a long way around to the point:What the hell were Dodd and Frank doing writing a version of the bailout?Why do they think they should?Why does anyone else listen to them?Isn’t having a dog in that fight exactly the reason for recusals?Is there no moment when we say your history has undermined your authority? Read the rest of this entry »
The Iraq war was a no brainer. Saddam had been a threat to the region which prevented growth and development throughout, he used the implied threat to bully neighboring countries, al qaeda types and other small minded anti-americans saw allowing Saddam’s apparent (real or not) transgressions as taking face from America, and Saddam’s large army and the uncertainty of WMD made taking on Iran impractical.
We had pocket Aces, the flop was two Aces and a King. Saddam was bidding up the pot and bullying his neighbors suggesting he had a full house. What are we supposed to do, fold? We have 4 aces, it doesn’t matter whether or not Saddam has the boat. If he wants to go all in, you take him all in.
If anyone wants to add useful discussions or believes some here are not useful (and know more than I do which is pretty much anyone who posts here), then put others in the comments & I can add them above; or give reasons for their lack of insight or skewing of history that informs us.
Fyodor Dostoevsky, speaking through Ivan in his Brothers Karamazov, wrote that the only questions which really mattered were the eternal ones. They are what return in various guises generation after generation not because we can never resolve them, but because we resolve ourselves in them.
Fair Value accounting should be changed immediately. It does not work when there are no market prices. If we had Fair Value accounting, as interpreted today, in the early 1990’s the United States financial system would have crashed. Accounting should not drive economic activity, it should reflect it.
I just finished reading most of the posts to which Glenn Reynolds so helpfully linked on this topic. I also read many of the comments in response to those posts. The gist of the discussion is that pro-Obama people say Obama doesn’t really oppose the right to arms, while pro-gun people say he does.
I don’t understand why anyone would doubt the validity of the pro-gun people’s argument.
If Obama supported gun rights, many pro-gun people, even Republicans, would support him, because many pro-gun people are single-issue voters on this topic and Obama’s opponent has a spotty record on gun rights. (The NRA and pro-gun rights voters have supported pro-gun Democrats in many elections.) Also, if Obama really supported the right to arms, it’s likely that many additional Republican, libertarian and independent voters would support him because conservatives and libertarians often interpret a politician’s support for the right to arms as a reliable proxy for that politician’s support of other individual rights. This point seems especially strong now, since many Republican voters distrust Obama’s opponent on free speech, business regulation and other big-govt-vs-individual-rights issues.
So on the one hand we have single-issue pro-gun people opposing Obama on guns, and on the other hand we have people who are primarily Obama partisans, not gun people, arguing that pro-gun people should trust Obama on guns. Who should we believe?
Warren Buffett, the famed investor, owns a holding company named Berkshire Hathaway. Berkshire Hathaway invests in a number of industries where Berkshire’s leadership believes that they can make money over the long term.
Berkshire Hathaway made a lot of its money in the insurance business (GEICO). They like the steady returns and solid, understandable business model behind insurance. Also, due to Berkshire Hathaway’s AAA rating (VERY few US companies have this rating), they have a very low cost of capital which gives them a significant cost advantage against competitors.
The US utility industry (electricity) is an area where Berkshire Hathaway has made investments over the years. Berkshire Hathway bought up a group of Iowa utilities (where I used to work) that were rolled up into a company called MidAmerican Energy. Berkshire Hathaway has a very long time horizon (other CEO’s have to hit immediate earnings targets and are impatient) and thus they can be opportunistic, holding on to their (vast) cash until the right target comes along. Berkshire Hathaway jumped on Pacificorp, which had previously been bought up by Enron, when Enron’s finances imploded.
Recently Berkshire Hathaway bought up Constellation Energy, which is the electrical utility with nuclear plants that serves Maryland and Baltimore. Constellation Energy had a large energy trading arm that was intertwined with Lehman; when Lehman went bankrupt Constellation was going to be forced to put up more collateral and faced a downgrade in their credit ratings. Their stock plunged from $100 / share in early 2008 to as low as $13 before Berkshire Hathaway agreed to buy them; the stock is now at $26 / share and the company is worth $4 – $5 billion.
Constellation Energy was one of the “dreamer” companies that was thinking about taking advantage of US government tax breaks to re-invest in nuclear power. As I have noted previously, don’t bet on any of these plants getting built (maybe TVA builds one and someone else another one; this is not going to even cover those plants at end-of-life and being retired from service, much less constitute a renaissance in nuclear power).
Per a September 26, 2008 Wall Street Journal Article titled “Buffett Could Reshape Nuclear Power Industry” -
…we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.
Yeah. Look before you leap. A trillion here, a trillion there, you are talking real money.
My charity self defense course is a few months shy of being 18 years old. It has certainly taught me a great deal about the dark side of human nature.
When I say “the dark side of human nature”, I don’t mean that seeing the scars and hearing the stories of what my students endured opened my eyes to the cruelty and violence of which criminals are capable. My brief career in law enforcement was certainly adequate to do that! Instead it showed me just how people are willing to take advantage of my good nature in order to screw over an innocent human being.
I noticed after the first year or so that a few of the people who sought me out for help, some of whom claimed extreme abuse, weren’t acting the way the rest of my students would when discussing their experiences. They would exhibit some of the classic signs of telling a lie, they wouldn’t show any lingering physical signs even though they would claim serious injury, and their emotional reactions while relating their stories would be inappropriate.
The major news agencies are doing their best to find something to use to smear Gov. Palin. I think they have finally slid into that dark and moist abyss called madness.
This news article relates how some YouTube video the author came across shows Palin being blessed in her church before she tossed her hat in the ring to become Governor. A bishop visiting from Kenya asked that she be protected from witchcraft.
Okay, so what? I mean, what does this have to do with anything at all?
The reporter who wrote the story seems to think they have a major scoop, though. You see, Gov. Palin was baptized in the Roman Catholic Church when she was an infant!
Here is the speech that Governor Sarah Palin was going to give at the anti-Ahmadinejad rally in NYC. It’s a good speech, and deserves your attention. Excerpt:
Ahmadinejad may choose his words carefully, but underneath all of the rhetoric is an agenda that threatens all who seek a safer and freer world. We gather here today to highlight the Iranian dictator’s intentions and to call for action to thwart him.
He must be stopped.
The world must awake to the threat this man poses to all of us. Ahmadinejad denies that the Holocaust ever took place. He dreams of being an agent in a “Final Solution” — the elimination of the Jewish people.
Note that I referred to a speech that Sarah Palin was going to give. She was not allowed to give it, because she was disinvited from the rally. Read the rest of this entry »
When I first started working after college I was an auditor for a “Big Six” public accounting firm. Through the (bad) luck of the draw, I was assigned to work on utilities and government institutions. Since utilities are distributed across the United States geographically (unlike finance which is concentrated in New York, for example) I had to travel across the midwest in order to serve my clients.
On one of my first trips I sat next to a couple, a mother and a young son. After a while we started talking a bit on my way to Sioux City Iowa (to see Iowa Public Service, which has since been bought up by Berkshire Hathaway as part of MidAmerican Energy). They asked me why I was traveling to Iowa (a good question, actually) and I said that I was an accountant working for the local power company. The child piped up and said:
“Are you the man who turns off the power?”
The mother was embarrassed and we immediately changed the subject but clearly their family had their power cut off for non-payment at some point in the past and that is how the child knew of the power company. We had some stilted conversation from then on but the encounter has stuck with me for years. Read the rest of this entry »
A while back, we had a a symposium at Chicago Boyzto discuss and debate the superb book Science, Strategy and War: The Strategic Theory of John Boyd by Colonel Frans Osinga. It was a great discussion from which I learned far more about the ideas of the iconoclastic military theorist John Boydthan I had ever previously considered. Not everyone involved was an admirer of John Boyd, a few were initially skeptical and we had one certified critic ( though I had tried to recruit several more). Overall, it was the kind of exchange that makes the blogosphere special as a medium when it is at it’s intellectual best.
Shortly thereafter, viaDan of tdaxpI was approached by the publisher of Nimble Books, W.F. Zimmerman, who happened to be a military history buff and who was interested in working our loose online discussion of Dr. Osinga’s prodigious tome into a book. Initially, I was somewhat dubious but I warmed to the project at the urging of tdaxp and Lexington Green, and agreed to serve as the Editor and “herder of cats” in a project that would involve a large number of contributors with very different backgrounds and some fairly dense and esoteric material on strategic theory to digest and make comprehensible to a general reader.
I just got around to watching a few Conan O’Brien shows on my tivo and I saw this amazingly hilarious interview that Triumph the Insult Comic Dog conducted with Ralph Nader.
I love the moment when Triumph pans the camera around to the “media” that is there to interview Nader… some guy from Madison (Dan?) of course, and Triumph asks if they are going to compare their “Pure Prairie League” album collection.
Stephenson, Neal, Anathem, William Morrow, 2008, 937 pp.
Author Neal Stephenson has forged a substantial body of fiction in the last 15 years by combining elaborate narratives and witty, humourous dialogue with a more serious consideration of scientific and philosophical issues. Having covered nanotechnology, cryptography, and the early stirrings of Newtonian science in his more recent books, Stephenson turns now to cosmology and the nature of human consciousness in Anathem. The biggest of big pictures.
Set thousands of years in the future, Anathem is an adventure story that fits perfectly into the science fiction genre. The conflict between science and culture has led to intermittent but repeated civil conflicts, resolved finally by isolating the scientific and mathematic minds into the equivalent of walled medieval cloisters (maths). Outside the walls society waxes and wanes, prospers and collapses, while inside the walls the life of the mind continues, year after year. Comparisons with the famous 50s science fiction novel A Canticle for Leibowitz are inevitable.
This century will reconcile individuality with community. We will find the vision and the means to achieve kinds of community that becomes possible only after complete liberation of the individual from any but self-imposed obligation. Post-individuation communities will be dynamic networks of voyagers bound to one another by sovereign commitment to shared images of good. This will happen most rapidly and beneficially if the ground from which it springs is understood.
James Bennett offers an important contribution to such understanding in an article published in The National Interest, Winter 2004/05, drawing attention to the work of Alan Macfarlane. Bennett writes:
… Over the past thirty years an intellectual revolution has been taking place in historical sociology …
[Alan] Macfarlane and his associates have demonstrated very convincingly that English society back to Anglo-Saxon days has been characterized by individual rather than familial landholding; by voluntary contract relationships rather than by inherited status; and by nuclear rather than extended families. Individuals were free of parental authority from age 21 on, and daughters could not be denied their choice of husband (unlike on the Continent). The English nobility, regularly churned by elevation of commoners and marriage of younger sons to non-titled families, tended to mix freely with the rest of society, rather than being a separate caste, again as on the Continent. Rather than the English Reformation being the event that caused this change, it seems to have been (for the majority of the population) the event that brought formal theology and church government more in line with the pre-existing customs of the country. So the English “peasant” the Hollywood is fond of depicting turns out to be the figment of a 19th-century Marxist’s imagination.
Macfarlane’s body of work represents a momentous intellectual revolution. The implications of this revolution have not yet been fully realized, or even generally understood. It suggests that modernity and its consequences came particularly easy for the already-individualistic English.
[ef glyph 180] The Making and Riddle of the Modern World & other contents of Alan Macfarlane’s website, including ebooks on Yukichi Fukuzawa, F.W. Maitland, Baron de Montesquieu, Alexis de Tocqueville, and Thomas Malthus — provided as a gift from Alan Macfarlane. Thanks Alan!
Posted by Ginny on 21st September 2008 (All posts by Ginny)
My daughter is furious at her geography text; her teacher, she tells us, is ok and more balanced.The book, however, finds much wrong with globalization (and little good) and even more wrong (and less good) with the green revolution.Although she has a quiet strength and has always been concerned with ethics, she has not been impassioned in her teen years as were her sisters.Within the last year, however, she has developed enthusiasms – for bands few have heard, for certain styles, and for the free market.This is not because she reads (or cares much about) the blog on which her mother writes but because of a charismatic economics teacher (she took his enthusiasm with some salt, but came to believe he was generally right – it fit with her worldview and her belief in self reliance).Lately, she’s bought an appropriate t-shirt, since his were the first books she seemed to really like. Her uncle pioneered no-till practices and Borlaug’s influence (lightly) touches our community. She was not unaware both globalization and the green revolution were complicated and some effects weren’t positive. But she also assumed that over all, life wasn’t a bad result.