Wednesday, January 29, 2014

Whose interest?

Moral: Wherein we consider these times after the taper tantrums (we haven't heard more coo-coo talking from the FED) and wait for Janet's put: will savers be more miserable?


Peggy isn't wrong on this (WSJ - January 16, 2014).

    Our Selfish 'Public Servants'  (From the White House to the schoolhouse to the George Washington Bridge)

    Sometimes the most obvious thing is the most unnoticed. I find myself thinking this week about the destructive force of selfishness in our political life. This common failing is the source of such woe! Politicians call themselves public servants, so they should be expected to be less selfish than the average Joe ; their views and actions should be assumed to be more keenly directed toward the broad public good. But no one expects that of politicians anymore, and they know it and use the knowledge to justify being even worse than they'd normally be. "If I have the name, I might as well have the game."
    They are the locus of selfishness in the modern world.
    Chris Christie's problem isn't that he's a bully, it's that he's selfish. Barack Obama isn't stupid and therefore the maker of mayhem, he's selfish.
    There isn't a staffer on the Hill who won't tell you 90% of members are driven by their own needs, wants and interests, not America's. The former defense secretary, Bob Gates, has written a whole book about it, and the passages in which he speaks most plainly read like a cry from the heart. The chaplain of the Senate, Barry Black, made news a few months ago because he'd taken to praying that the character of our representatives be improved. "Save us from the madness," he prayed one morning last October. "We acknowledge our transgressions, our shortcomings, our smugness, our selfishness." The single most memorable thing I ever heard from a Wall Streeter was from one of its great men, who blandly explained to me one day why certain wealthy individuals were taking an action that was both greedy and personally inconvenient to them. "Everyone wants more," he said, not in a castigating way but as one explains certain essentials to a child.
    People in public life have become more grasping, and less embarrassed by it. But the odd thing, the destabilizing thing as you think about it, is that we're in a crisis. We've been in it since at least 2008 and the crash, and the wars. We are in unprecedented trouble. Citizens know this. It's why they buy guns. They see unfixable America around them, they think it's all going to fall apart. In Washington (and New York) they huff and puff their disapproval: Those Americans with their guns, they're causing a lot of trouble. But Americans think they're in trouble because their leaders are too selfish to face challenges that will do us in.
    What's most striking is that in a crisis, you don't expect business as usual. You expect something better from leaders, you expect them to try to meet the moment.


    Mr. Christie is a great talent, a political figure of real and natural gifts. What has jeopardized his position is not that he's gruff, in-your-face, insistent—a bully. It's that he's been selfish. In 2012 he was given a star role, keynote speaker at the GOP national convention. His speech was strong, funny and ran about 2,340 words. But it took around 2,000 of them before he got to a guy named Romney. Everything else was "The greatest lesson that mom ever taught me . . . When I came into office . . . I have an answer." The GOP nominee needed a boost from blue-state man, but there wasn't much in it for blue-state man. He'd only get Republican cooties on him. So he played it like a vanity production and made a speech about himself.
    That wasn't a major sin—it's only politics, not policy. But it fit in with his effusive embrace of Mr. Obama in the days before the 2012 election. Any governor would show strategic warmth for a president in charge of ladling out federal money after disaster. But Jersey was about to re-elect president Obama by nearly 18 points, and Mr. Christie wanted to win over Democrats when he ran the next year.
    He was already going to win big. But he had to win bigger, had to have more.
    Again, not much of a sin. But when Bridgegate came, it seemed to fit the pattern—he'll ding you when he doesn't have to, even if it makes local citizens cry, to gain an advantage, to get more. Whoever made the call, selfishness is at the heart of the scandal.


    There's an increasing sense in our political life that in both parties politicians call themselves public servants but act like bosses who think the voters work for them. Physicians who routinely help the needy and the uninsured do not call themselves servants. They get to be called the 1%. Politicians who jerk around doctors, nurses and health systems call themselves servants, when of course they look more like little kings and queens instructing the grudging peasants in how to arrange their affairs.
    Which gets us, inevitably, to the King of I, who unselfconsciously claims ownership of . . . everything. "My military," "my White House," "my cabinet," "my secretary." The president does first person singular more than Mr. Christie does. But his actions are so much more consequential, because they're national and because they play out in the area of policy.
    The president's health-insurance reform had to be breathtaking, mind-bending, historic. It had to be a Democratic Party initiative only. It required a few major lies to gain passage, but what the heck.
    It was political selfishness that blew up the American health-care system. And it's the public, in this and other messes, that's left holding the bag. But as government gets bigger the bag gets bigger, and people will get tired of carrying it. They're already tired.
    I close with the selfishness story of the week, the stunning New York Post expose on Public School 106 in Far Rockaway, a neighborhood in the borough of Queens. The grade school is a poster child for the indifference of those who are supposed to be helping the country. There are no gym or art classes, the Post's Susan Edelman reported. The library is a junk room; the nurse's office lacks essentials; there are no math or reading books for the Common Core curriculum. Kids are left to watch movies. Kindergartners are shunted off to dilapidated trailers. The principal, Marcella Sills, often doesn't show up for work, or swans in near the end of the day. School staff were afraid to speak up because they feared retribution from Ms. Sills or the teachers union.
    When the Post broke the story, the city's Department of Education sent an inspector. The principal actually showed up early that day. The school took delivery of some books. Everyone was in high spin mode.
    The union will look to the union's interests, Ms. Sills will no doubt see to hers, the new city administration will try to limit embarrassment, handle the fallout and change the subject. But you couldn't read the stories without thinking: Who's looking out for the kids? And what's happening to us?
    Someday history will write of our era, and to history the biggest scandal will be the thing we all accepted in our leaders, chronic and endemic selfishness. History will be hard on us for that.

Lords, and serfs, cover more than public servancy.

Remarks:  Modified: 09/17/2014

09/17/2014 -- Yes, she did. The coo-coo, goo-goo goes on. The landscape is strewn with the lifeless bodies of the savers. Thanks, Janet.

Tuesday, January 14, 2014

Being slapped silly

Moral: Wherein we think about what has happened over the last five years and wonder what Janet will bring that is new.

Slapped silly? Yes, Ben started the slapping. I know, he had his rationale. And, in his mind, savers meant nothing, evidently. It seems as if he would rather have those playing the heated equity markets thinking well of him than worry about how he has trashed the lives of the lowly types, namely savers.

What will Janet do? Well, we have said that we'll give her time.


In the meantime, we'll go back over the past few years from our perspective. I knew of the coming downturn. Too bad that Ben was such a cowboy when it happened. You see, he has us over the barrel with his huge balance sheet. Does the fact that he is leaving a mess mean nothing? Of course, why ought he worry since Janet will have to deal with the issues.

The savers' gains are important; savers' gains are emphasized here as equity gains, in terms as we've seen of late, are ill-begotten (to the max - look it up in a search here). And, anyone with a conscience wouldn't want to brag about such gains. A sustainable approach would favor steady gains that are of a nature which has some rationale behind it.

All of this is arguable, of course. But, look at the thing from the viewpoint of someone who retired in 2005, after years of hard work and saving. The person sacrificed over the years in order to not have debt (yeah, Ben, the guy, he has us in hock up to the ears). The person paid his bills, monthly. The person was a good citizen. The reality is that the advent of retirement (which is well understood) meant that some bit of income was expected from savings.

You see, it doesn't take much to sustain a reasonable lifestyle. Unfortunately, such a lifestyle is far away from the gaudy live's of those who spend other people's monies (concentrated in NY and DC, for one). Now, mind you, for a year or two, Ben's actions weren't troublesome. As one could hope for a turnaround. The recoveries always happened before within a reasonable time frame.

But, no, this time it was different, due to the depth of the depravity of financial scheming. So, Ben kept interest low. Why? Liquidity. But, for one thing, this act encouraged debt. And, it wasn't just reasonable debt; it was debt without collateral. Plus, it was leveraged debt. What we saw were several bankruptcies along the way of firms who took on debt (many times, it was so that those in the upper realms could have a payday on the backs of the workers - ah, yes, how can one even think that this would be the way to go? -- is it that players like the golden sackers don't allow limits on themselves? - other than legal, if that?).


So, let's see, how to end this? Yes, we had two years, And, then, three years. Slapping of the face, on a regular basis, as laddered things came to maturity, each time spawning off lower returns. In the meantime, though, Ben was feeding the addicts (QE infinities, one upon another). He would coo (talk baby talk to them) when they had a tantrum. The latest of these was last year. Ben talked taper (some little semblance of asking maturity from those who were suckling - we all know that weaning is a step toward growth) just a little. And, things got hairy (not really; as, at the time, Ben could have pulled the plug - he could have unwound all along this crazy trail of his).

Then, three years turned to four. Now, he was talking ad infinitum access to the teats, almost. But, then, he is going. Janet has to step up and resolve Ben's mess. Yes, what thinks she of savers?


So, again, we're sitting here, six years down the road, without any insight as to when those who control the money will help the little guy. You see, Ben could have allowed a reasonable interest for those who are on fixed income. But, no. He ran after the chimera (actually spawned its reemergence). Why? That is the one question I have not heard him answer (oh yes, he's put out rationalizations galore - these do not answer the question).

Aside: That measure is bogus; there is no way that all could sell out and get their monies. Stable value approaches are better in that regard. Of course, people see paper gains. What likelihood is there that they will get those goodies when needed? Not as great as some think. That side of the story is never discussed.


What if we could have a more severe taper now, actually an unwinding? Let's try it and see; too, let's measure the impact. From what we see, now, of how main street has not benefited much, it could not be any worse. Too, savers would not be slapped so much; we have been seriously bruised. Ben needs to make note that he did not kill off the class (savers - was such his goal?). He must understand that debt upon debt upon debt (which is how we can characterize his balance sheet) cannot be viable; someone holds the other end who is, then, lord and master. With the chimera, as he's inflated the thing, it's a game, not unlike Russian roulette, into which he has pulled us.


WSJ quoting
(see Remarks 01/15/2014)
In essence, Ben has trashed the retirement of a whole lot of folks with his decisions and actions. Okay, he had the right. But, let's enumerate that total pain for the guy. And, let's let Janet know, to boot. Have you heard these people whine like the fat cats on Wall Street (and at other places)?

No, many of them have worked a lot harder than has Ben, Janet, or their ilk (this is even discussed in the realm of The Tablet - talking about capabilities and attitudes - heck, I would like to muck manure with Ben while we talked truth and economics). And, these retirees have learned throughout their lives to sacrifice. What has Ben sacrificed? His ride in a limousine? ... Needless to say, the guy being gone will not keep his name out of the ensuing analysis and discussions.

Remarks:  Modified: 01/16/2014

01/15/2014 -- A recent WSJ quoted from a Boston College Study. The study was from the Center for Retirement Research and asked whether or not the upturns were going to help those who are now or close to retirement. See image, above. The equity chimera gets more attention, in my opinion, than is warranted.

01/15/2014 -- We need to have some type of model to explain the bulging that comes with equities (and its ilk when gamed via markets) on the up side and the rapid plunge on the other. Say you have 10 things, you don't know their value. Okay, you sell one of them for $1. Well, you can say that you now have $9 worth of stuff (9 at a $1). But, overall, there is $10 in value for the whole mix.

Let's use a table.

             seller has                        1 sold at $x                  total value
  1             10                                                                       ?
  2               9                                       $1                          $10
  3               8                                       $5                          $50
  4               7                                       $10                        $100
  5               6                                       $15                        $150
  6               5                                       $9                          $90
  7              ...

You see, an idiot shows up at step 4 and puts out $10 for 1 item. So, that raises the total to $100? Just like that, magical, isn't it? As the price goes up, so too does the tide (nowhere, in nature, is there a tide that keeps going up and up without going back to low tide - oh, yes, we can set traps and dam up water). Ben's been doing that now for several years as his easy money is supporting such a thing, via gaming. Too, automated trading is seeding (they actually admit this, it's called necessary to establish liquidity - crapola!). So, at step 4, you had seven things left that are worth $10 or $70 with an overall value of of $100. You know that this is a paper value. You know that you would have to sell the remainder of the items at that price to keep the value up. Where, at step 4, did that $90 (in total increase) come from? Yes, talk to Buffet and them and you'll hear about value (accumulated over time). But, his (and his ilk's) small value part does not outweigh that total gaming aspect that is a high-leveraged illusion. As long as Ben has kept up his support, this thing has gone upward. Supposedly, letting the balloons fly will lift us. But, it's like the dirigible. Isn't it better to have a 747 freighter? How do we get that with the market situation? Believing in the need to have stable value is one thing. There are other things to consider. ... But why is so much effort put into talking about the chimera, everyday? Is this to try to establish a more realistic framework for the aeration? But, the reality of the fizz is hidden underneath of the weight of the verbiage; how can that be science? ... By the way, step 6 is shown at $9 to indicate the down side. That is, $60 is lost on paper, just like that. Ben has prevented this by keeping interest low such that people had to go to equities in order to make something (or so they thought). So, in a sense, you get the ponzi (made-off) aspect - new money coming in (calling this gains is laughable - yet, it's so tragically stupid). ... Janet may not be any better in this regard; we'll have to see. In the meantime, I'll continue describing "stable" value's characteristics and need. Aside: not in any way to be associated with what are called stable value funds.

01/16/2014 -- After starting the above example, complications started to lurk that we could ignore for awhile, but, at some point, these would have to be addressed. Say, after a few items were sold by the one who had them first (arbitrary boundary situation, here), those who bought would look at how they could, perhaps, make more than illusory money by selling at a higher price. The value determination then would become some type of functional problem bringing in difficulties that have been long the domain of the mathematicians (the ultimate abstraction'ists, somewhat, but, analytics would be involved). While looking at pedagogic material that would be of interest, I ran across this web site (Intuitive guide to exponential functions). I have not read this yet, but the fact of the amount of comments that have ensued, plus those who commented, got attention. Too, John von Neumann said that we don't understand mathematics (higher-order types); no, we get used to it. However, there must be an intuitive aspect if we are going to appeal to truth and people's place in its determination. So, that usage resonated with my thinking. Too, though, we have a class'ist split that is happening under our noses. In one sense, it relates to numeracy. But, the more insidious part deals with overlays (computationally enhanced) becoming more real than the reality itself (we'll get into that ad infinitum).

Thursday, January 2, 2014

Two views

Moral: Wherein we look at year-end thoughts and such.

Namely, this post's theme is motivated by The Economist's "Christmas Specials" which come out in the final publication of the year. These articles are always worth a read, since they get above the normal routines related to busy-ness.

Below are comments about interesting articles.
  • Bleak chic - I liked the use of miserabilism. One might say that this emotional state is more often frequented by the 99% than by any of the 1%, except such a comment might suggest, perhaps, that money can buy happiness. Too, such a thought would ignore the values that relate to things beyond that measured by money. Of note to this discussion will be near zero.   
  • A tale of two rushes - The article compares the "gold in California" time with a new phenomenon, namely fracking's boon (put this way as the deleterious effects are, as of yet, unclear). For the 1849 scene, Brands' book on the age of gold provides a lot of the material. This quote, pulled directly from The Economist's page, will be part of our discussion, to boot (Whereas the Puritans dreamed of accumulating modest fortunes “a little at a time, year by year”, through “sobriety, thrift and steady toil”, the ‘49ers dreamed of “instant wealth, won in a twinkling by audacity and good luck”. Among the early settlers, failure “connoted weakness of will or defect of soul”. In the gold fields, by contrast, “a person was expected to gamble, and to fail, and to gamble again”. And “[w]here failure was so common, it lost its stigma.” This idea—that failure is a socially acceptable stepping stone to success—is one reason why American capitalism is so dynamic.) Yes, the recent downturn came about from the second attitude. What grates is that plenty of the do-rights have had their futures trashed by the idiots in the second camp. 
  • ...
We'll add in more articles. 

So two views? Essentially, using the second bullet (two rushes), how do we get banking to be of the first category (yes, Puritan in thought)? Why is it that the second category is even allowed outside of a high-regulated playing field (think sandbox, field of endeavor, etc.)? And, didn't Ben just show himself of the second category? So much to discuss there.

And, we'll have to look at the "genie out of the bottle" aspect of the web (wild west, indeed). 


The Economist's article locks down after three reads. It's worth a read. Here is an open article dealing with something similar (greed warps the mind). See Remarks below (01/07/2014) which brings in a class-oriented framework that we'll be expanding. We could build a better society by having a national service (military or otherwise) where all have to participate. Too, those of the high-falutin' family histories ought to have to muck manure (or a number of other things - this old guy has done all sorts of the supposed dirty tasks [without getting paid the bucks taken in by the guy with the TV show - let's see him endure some of those environments for a year or so], seeing the people doing these tasks, and never losing his beliefs in the Creator's wish that people uplift themselves and others). I'll be going back again and revisiting the topic (having now spent a deal of time tracing aristocratic descendants in this country, some of whom, actually, are what one would call ideal citizens [based upon the American dream] - others carried their old ways to the new world) of the split (haves and haves not is one way to characterize - there are oodles more) that we see where a small percentage rape/pillage/accumulate (with a real sense of entitlement due to several possible things - heritage, talent, looks, ...) while limiting the majority (we'll look closely a near-zero, and its importance) all the while claiming that this is the way it ought to be (hah, but, even economists are pulled into the chimera - I read recently, to my chagrin, that one big name likes that he made money on the market (ill-begotten gains), from his books, and from his rewards - nice, have to give the guy credit, but, where is the thinking, modeling, being done that goes beyond the materialistic crap?).

Remarks:  Modified: 01/07/2014

01/07/2014 -- Janet was confirmed yesterday. We'll have to see how things go. The markets are puffing up today. Why is it not apparent to certain views (mostly intellectually founded, I think, even though they tout that they are data driven - God help us from this new illusion) that the markets are as high as the pot buyers of Colorado? Perhaps, in the realm of Janet and her cohorts, the kings and queens (you see, old-time kings had geographic domains - the newer ones have a virtual realm that is beyond control, as we will see with things going forward - the effects of global outsourcing is a small hint at what is to come) of the world have limited perception (say, the 30K feet or more metaphor). Down where the crap is (and kings and queens make as much effluent as does the miserable peon - except they expect others to deal with the crap [we'll look closely at the military imbalance - what? - yes, the responsibility ought to be cast wide-spread, across all classes] or they are of the type that think that their outputs are other than smelly and poisonous [loose usage, okay?]). If you search in this blog for kings and lords, you'll see that I've already waxed on the subject (and will bring those earlier musings up to date). Now, what I will propose is that I can help Janet, and her ilk (through having my feet in the crap, yet, there are no bounds to the mind), get a better grip. And, I am not alone in this talent. But, you won't find me traipsing to their gilded palaces, in awe. I've seen that. No, they have to make field trips other than Ben's type of honoring the Tetons with his presence and going to talk to the best-and-brightest in their little (yes, yes) University-milieu of which he is so comfortable.