What China Wants

March 3, 2010 // No Comments »

The Financial Times points out the quirks in the Chinese market that have Western companies racking their brains to stay on top of sales:

“The big spender in China, in years past and even more so today, is the state: private consumption as a percentage of gross domestic product has fallen from 60 per cent in 1968 to 36 per cent last year and could be as low as one-fifth in 2009 as the government ramps up capital investment.

In fact, the Chinese, who already have a world-beating savings rate of nearly 40 per cent of their income, tend to become more frugal when times are tough. As bank deposit rates decline, most of us spend more. The Chinese tend to stash away even greater sums to make up for the lost interest. The reason for this conservatism is the lack of a social safety net in China – citizens have to provide for their own medical care, old age and possible unemployment.

This makes them “penny pinching, ruthless, suspicious shoppers”, says Tom Doctoroff, north Asia director of advertising agency JWT and a writer on Chinese consumer trends. In a recession this behaviour only grows worse. “The downturn has made people keener on finding the cheapest deal,” says Yuval Atsmon, an associate principal in McKinsey’s Shanghai office. Even when they can easily afford it, buying a PC typically involves six visits to a store, and more often than not, customers will wait six months before making their decision after consulting blogs, online comparison sites and – the most important source of information in China – friends and family. Sales of copycat mobile phones, with all the functions of top models but a lower price, have soared from 17 million units in 2006 to 62 million units last year.

Brand consciousness is high, at least in the big cities, but brand loyalty is much lower than in the west. A price cut or good in-store promotion can often sway shoppers. And for cultural reasons, appealing to an individual’s taste or personal comfort typically doesn’t work, Doctoroff points out. A purchase either has to publicly signal status or wealth, like a flashy car does. Or provide a practical benefit: the latest craze in China is chocolate with added calcium, eaten not for pleasure but for the health benefits. The growing appeal of diamonds to women is not based on romance, but as a financial signal of a man’s commitment. Trust is another key issue in a country where so many consumer products are faked. Chinese mothers, for example, will pay 30 per cent more for safe baby milk – and this should favour foreign brands.

But foreign retailers and manufacturers have to cope with vast regional differences in demographics, language and culture that make it hard to plan a single marketing strategy – indeed treating China like a single country is usually a mistake. Natives of Zhejiang on the east coast like “toilet roll as rough as sandpaper”, the former head of Wal-Mart China liked to observe, a penchant thankfully absent elsewhere. Atsmon points out that cities even an hour apart can be entirely different: in southern Shenzhen, more than four-fifths of the population consists of migrant workers, mostly under the age of 35, who speak Mandarin and drink in bars. In nearby Guangzhou, migrants number just over a quarter, more people are older, enjoy watching Cantonese TV and go out to restaurants to drink with family members. Adequately addressing such niches requires an army of local suppliers, costly infrastructure and several layers of wholesalers and intermediaries. Even then, success may remain as elusive as it always has been: “No matter what you may be selling, your business in China should be enormous, if the Chinese who should buy your goods would only do so,” lamented Carl Crow, an advertising executive in Shanghai and author of the original book on how to sell to the Chinese … more than 70 years ago.”

Posted in Crowds, Economy, Finance, Globalization

Maya Angelou On What People Remember

January 24, 2010 // 10 Comments »

“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

— Marketing saw, quoted by Maya Angelou

My Comment:

This quote led me to think of the way in which political debates these days have become entirely devoid of emotional intelligence. I’m convinced that the way we debate things is at least as important as what we debate. Maybe even more important.

There’s something fundamentally wrong with the media when it humiliates public figures, either directly and anonymously on the internet, or indirectly though misrepresentation and innuendo in print. There’s nothing funny, liberated, or “free speech” about any of it. It’s an abuse of speech… a form of violence.

Now if you cuss out someone who’s provoking and attacking you directly, that’s one thing. Turn about is fair play.

But using sexual humiliation as a tool to demonize political candidates (Sarah Palin) or feeding public voyeurism about prominent figures with no political relevance (David Letterman, John Edwards, Tiger Woods) is morally wrong and socially dangerous. It feeds a constant cycle of partisan retaliation that drives everyone but the most insanely ambitious out of politics.

Then, of course, the media turns around and complains without irony about how insanely ambitious politicians are.

Reporters are professionals. They have standards to adhere to. It’s not their job to simply supply a demand. It’s one thing to follow stories that interest people (within certain boundaries of what’s relevant to public discourse). That’s fair enough. But reporters can’t just cave into whatever it is they think people want to talk about.

You could, after all, argue that people also like watching snuff movies. Does that mean the media feeds that appetite too?

Demand doesn’t just come into being. It’s also created. And that’s not a one-way thing. There’s a feedback loop. Demand feeds supply, which feeds demand….. There’s an addictive element to the whole thing.

Which means writers can’t just give up their own moral freedom to feed a demand for immoral things. They have to make a conscious choice to go against what’s in their (or their publisher’s) economic interest and, instead, do what’s right. Admittedly, it’s hard.

As for the so-called hypocrisy of politicians, politicians and entertainers aren’t meant to be moral exemplars, so the question really shouldn’t arise at all.

Since the public expects a certain image, politicians have to conform if they want to get elected. Wanting that image to reflect reality strikes me as an example of the foolishness of the public, not of the hypocrisy of politicians.

Public figures are more and more simply the victims of mob mentality. From that perspective, John Edwards did quite right to deny the scandal until the end. It’s no business of the mob’s to know everything about a politician’s marriage and demand a standard from him that the vast majority of people don’t hold to.

Now, Edward’s team members are a different issue. They sacrificed money and time and they might naturally feel betrayed. That’s a different matter. Perhaps they should have researched him a bit more before latching onto him. That they didn’t suggests they have a problem - mindless hero worship.

People can have extraordinary talents but it doesn’t follow they’re perfect human beings, and there’s something deeply troubling about the urge to demand perfection from mere human beings…. and then attack them when they can’t supply it.

If I were Edwards, I would have banged the door on reporters who hounded me, a long time back. I would have turned the tables and started asking them a few questions about their private lives.

I suppose that’s why I have a degree of sympathy for people who’ve played the game back at reporters, like CEO Mark Cuban..and lately, Patrick Byrne.

Cuban has used Web 2.0 to his advantage against regulators as well.

A New York Times article in 2007 described how John Mack Mackey of Whole Foods and even disgraced and convicted financier Conrad Black of Hollinger International posted anonymously on message boards to counter negative posts about their companies. The articles noted that they ran the risk of violating securities laws, especially if they disclosed company business in their posts.

Perhaps that’s where the problem lies. We have laws to stop CEO’s of companies from defending themselves against attacks, but none for the people who do the attacking, even if they have a financial motive for it and even if their attacks are founded on semi-truths and lies indistinguishable by casual or lay readers.

Mack Mackey used the handle rahodeb, an acronym of Deborah, his wife’s name, and he even commented on how cute he looked with a new hair-cut.  Byrne, on the other hand, has used a pseudonym Hannibal (the ruler of Carthage, not the star of “Silence of the Lambs”), but always signs his name underneath. Both took up the pen to counter attacks on their companies by anonymous internet posters.

It seems to have become a real problem.

In 2008 Apple CEO  Steve Jobs finally had enough of the rumor mongering about his health and called Joe Nocera of the New York Times a juicy epithet I will chastely refrain from repeating.

[Since I've begun contributing to Deep Capture and enjoy a degree of bloggeraderie with them, I'm refraining from commenting directly on Byrne's running battle with the media, about which I've written before. I will just admit to being on their side versus Goldman and the short-raiders. I think they tell it like it is. But any obscene rants at reporters' expense don't earn brownie points with me. And I maintain a neutral rating on Overstock, since I just don't know enough about that end of things].

Either journalists act like a responsible press, or they are paparazzi, in which case they should expect to be hounded and harassed in turn. If reporters want access to the highest levels of business and government, if they want to report on subjects that are socially and politically important, then they should show some respect for their jobs, qualify themselves, adhere to professional standards of behavior, and avoid tormenting other human beings just to make their names.

Remember these are the same reporters who failed to report accurately or in time on one of the biggest stories in a hundred years, and why was that? Because (with honorable exceptions) they were either too comfortable with Wall Street, too lazy to do the research, too ignorant to know where to look, too provincial to read the people who could tell them, and too venal to go against their interests…. or all of the above..

This kind of public exposure we subject people to is not a one-time business. There is a record of the Edwards saga for ever on the net, visible to the whole globe….every little painful detail. What kind of sensitivity to a sick woman does that show, just to take one angle. Or consider their children..

Isn’t it a kind of torture?
And doesn’t it make us, as it makes any kind of torturer, bestial?
Meanwhile, the victims never forget…

Posted in Art and Ideas, Cognition, Crowds, Mobs

Edward Bernays On Why Conspiracies Work

December 30, 2009 // 3 Comments »

“In almost every act of our lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons [...] who understand the mental processes and social patterns of the masses. It is they who pull the wires that control the public mind, who harness old social forces and contrive new ways to bind and guide the world.”

–  Edward Bernays

Posted in Cognition, Crowds, Media, Mobs

The “Enough Already” Factor

December 3, 2009 // 2 Comments »

From AP, Americans signal they´ve had enough of the imperial state:

“WASHINGTON – Americans are turning away from the world, showing a tendency toward isolationism in foreign affairs that has risen to the highest level in four decades, a poll out Thursday found.

Almost half, 49 percent, told the polling organization that the United States should “mind its own business” internationally and let other countries get along the best they can on their own, the Pew Research Center survey found. That’s up from 30 percent who said that in December 2002.

Results of the survey appear to conflict with President Barack Obama’s activist foreign policy, including a newly announced buildup of 30,000 U.S. troops in Afghanistan to fight Taliban and al-Qaida extremists.

“Isolationist Sentiment Surges to Four-Decade High,” the nonpartisan research center headlined its report on the poll about America’s role in the world.”

Posted in Crowds, Mobs

Eduardo Galeano on the Nobodies

November 17, 2009 // 1 Comment »

Fleas dream of buying themselves a dog, and nobodies dream of escaping poverty: that, one magical day, good luck will suddenly rain down on them - will rain down in buckets. But good luck doesn’t rain down, yesterday, today, tomorrow or ever. Good luck doesn’t even fall in a fine drizzle, no matter how hard the nobodies summon it, even if their left hand is tickling, or if they begin the new day on their right foot, or start the new year with a change of brooms. The nobodies: nobody’s children, owners of nothing. The nobodies:  the no-ones, the nobodied, running like rabbits, dying through life, screwed every which way. Who are not, but could be. Who don’t speak languages, but dialects. Who don’t have religions, but superstitions. Who don’t create art, but handicrafts. Who don’t have culture, but folklore. Who are not human beings, but human resources. Who do not have faces, but arms. Who do not have names, but numbers. Who do not appear in the history of the world, but in the crime reports of the local paper. The nobodies, who are not worth the bullet that kills them.”

– Eduardo Galeano, “The Nobodies”

Posted in Crowds

The Spectacle of General Secrecy

October 5, 2009 // 2 Comments »

Political theorist Guy de Bord on the spectacle of public life:

“The concentrated spectacle

The spectacle associated with concentrated bureaucracy. Debord associated this spectacular form mostly with the Eastern Bloc and Fascism, although today mixed backward economies import it, and even advanced capitalist countries in times of crisis. Every aspect of life, like property, music, and communication is concentrated and is identified with the bureaucratic class. The concentrated spectacle generally identifies itself with a powerful political leader. The concentrated spectacle is made effective through a state of permanent violence and police terror.[edit]

The diffuse spectacle

The spectacle associated with advanced capitalism and commodity abundance. In the diffuse spectacle, different commodities conflict with each other, preventing the consumer from consuming the whole. Each commodity claims itself as the only existent one, and tries to impose itself over the other commodities:

Irreconcilable claims jockey for position on the stage of the affluent economy’s unified spectacle, and different star commodities simultaneously promote conflicting social policies. The automobile spectacle, for example, strives for a perfect traffic flow entailing the destruction of old urban districts, while the city spectacle needs to preserve those districts as tourist attractions.

The diffuse spectacle is more effective than the concentrated spectacle. The diffuse spectacle operates mostly through seduction, while the concentrated spectacle operates mostly through violence. Because of this, Debord argues that the diffuse spectacle is more effective at suppressing non-spectacular opinions than the concentrated spectacle.

The integrated spectacle

The spectacle associated with modern capitalist countries. The integrated spectacle borrows traits from the diffuse and concentrated spectacle to form a new synthesis. Debord argues that this is a very recent form of spectacular manifestation, and that it was pioneered in France and Italy.

According to Debord, the integrated spectacle goes by the label of liberal democracy. This spectacle introduces a state of permanent general secrecy, where experts and specialists dictate the morality, statistics, and opinions of the spectacle. Terrorism is the invented enemy of the spectacle, which specialists compare with their “liberal democracy”, pointing out the superiority of the latter one. Debord argues that without terrorism, the integrated spectacle wouldn’t survive, for it needs to be compared to something in order to show its “obvious” perfection and superiority.”

My Comment:

Thanks to reader J. T. Gordon for reminding me of this. I’ve posted before on de Bord and the notion of the spectacle of society. Like so much powerful analysis, this one too has roots in the ideas of Friedrich Nietzsche, one of the most productive thinkers of the last 150 years.

What should be noted here is that in the spectacle of secrecy, the greatest emphasis is placed on openness. Thus, “freedom of speech”  occupies a central position in the culture. By this means, all barriers to privacy are brought down, all psychological barriers between the individual and the crowd. Yet, this openness at one level (in public culture) operates side-by-side with secrecy at the highest level (governments and corporate leaders).

(More later)

Back…

Reading through this again, I feel I need to question De Bord’s division, which corresponds to communist, capitalist and liberal democratic. It’s too neat. In fact, things are much more muddy

Posted in Art and Ideas, Cognition, Crowds, Political Theory

War Pigs

September 2, 2009 // 1 Comment »

War Pigs - Nothing’s Changed
Hat-tip to Brad Spangler

It’s still the bankers making money from debt and war…

While the sheeple swing their woolly heads back and forth, hypnotized -

left-right

black-white

public-private

socialist-capitalist

gay-straight, feminist-patriarchal, Muslim-Christian, East-West, poor-rich, working-class-middle-class, urban-rural, blue-state-red-state…

back-forth…democrat-republican…

Posted in Art and Ideas, Crowds, Kleptocracy

Why More Swine Flu Deaths in Bangalore?

August 30, 2009 // 2 Comments »

From Sify.com:

“State health commissioner P.N. Sreenivasachari told IANS: ‘It’s difficult to say why Karnataka, more precisely Bangalore, which is endowed with adequate healthcare facilities, is witnessing large number of swine flu deaths. We too are puzzled.

‘We can say the virus is already in the air and it’s time people became more aware and cautious to stop the spread of the virus. However, from the point of view of the administration, we have provided adequate healthcare facilities to treat swine flu patients,’ added Sreenivasachari.

Principal secretary (Health) I.R. Perumal said people should not get panicky.

‘People with swine flu like symptoms should immediately get themselves checked, as the city is well equipped to deal with the pandemic,’ added Perumal.

On Friday, two deaths were reported from Bangalore, one came from Bijapur.

My Comment

Why? I have no idea. More international travelers is one reason and a plausible one. But I confess  I couldn’t help thinking about this piece I wrote in 2005, “Terror Hits Bangalore.”

One result of swine flu scare-mongering  will be a shift of money to influenza research - hitherto absent in India. That means funding for drug trials. I wonder who the lucky drug companies are that will benefit?

The two states hit hardest are Karnataka (where Bangalore is) and Maharashtra (where Bombay is). Those are also the states that are the destinations of most foreign travelers and where India’s IT business and stock market are located. Bangalore is the home of a booming biotech business. And a locus of the anti-globalization movement as well. Just thinking out a loud…

Deaths so far are a hundred or less. That’s in a country of roughly a billion and a quarter where tens of thousands die from traffic accidents (300 a day or around 100,000 a year) and from water-borne diseases like diarrhea, typhoid, and jaundice. Hundred of farmers are committing suicide. None of that has qualified for the term pandemic….OR for the accompanying switch in research funding..

Here’s some information on malaria in India in 2008:

“While the official figures state that in 2008 India had 1.5 million malaria cases, resulting in 924 deaths, the real number of deaths is higher by several orders of magnitude.

“These numbers are a joke,” said Sunil Kaul, a doctor who works for a volunteer organization called the Ant that treats villagers. “In Assam alone we had at least 1,500 deaths last year.”

The real number of malaria-related deaths in India was closer to 40,000 in 2008, according to various non-governmental sources and some government officials who didn’t want to be named.”

Under-reporting and lack of knowledge about the disease are two of the main obstacles in retarding the spread of malaria. But interestingly, it’s also international organizations like WHO that obstruct progress in many ways:

“These problems are further complicated by foreign agencies such as the World Health Organization (WHO), which — under the influence of global lending agencies like the World Bank and big pharmaceutical companies — have pushed India to adopt prevention methods that don’t suit the local conditions and to initiate huge, ill-considered projects rather than targeted ones. ….”

More here at The Global Post.

Posted in Crowds, Empire, Globalization, Mobs, Police State

The Political Ideology Behind Swine-Flu Hysteria

August 27, 2009 // 1 Comment »

A new piece about swine-flu that I’m still working on:

The President’s Council of Advisers on Science and Technology, the creators of the swine-flu scenario, has three co-chairs:

1. John Holdren (Director, White House Office of Science & Technology, Obama’s “science czar”)

2. Eric Lander, (head of the Broad Institute, MIT)

3. Harold Varmus (CEO of Memorial Sloan-Kettering Center, NY)

A little digging fills in the details.

1. Holdren:

Holdren isn’t just any old bureaucrat. He’s a climate change expert who holds the Teresa and John Heinz Professor of Environmental Policy at Harvard’s Kennedy School of Government

(The ‘Teresa’ is, of course, John Kerry’s wife when she was spouse of Ketchup king, John Heinz)

The support for climate change policies goes hand in hand with support for nuclear technology that Holdren believes is needed for those policies. He also believes all nuclear energy should be under the monitoring of the International Atomic Energy.

Climate change and “peaceful nukes” have been the beneficiaries of a huge PR effort over the last 15-20 years, largely stemming from the Pentagon, specifically, from Andrew Marshall, a charismatic theorist of American dominance whose Office of Net Assessments is the most influential outfit you never heard of. This PR typically derides any dissent from climate orthodoxy and downplays the enormous costs and risks involved in the global move to nuclear energy.

There’s more. As early as 1969 Holdren teamed up with neo-Malthusian doomsdayer Paul Ehrlich to advocate population control to “fend off the misery to come.” In 1977, he and Ehrlich, as well as Anne H. Ehrlich, co-authored a textbook (”Ecoscience”) in which they discussed “a wide variety of solutions to overpopulation from voluntary family planning to enforced population controls…..”

Check out this site for some truly mind-boggling quotes:

Toward a Planetary Regime
…
Perhaps those agencies, combined with UNEP and the United Nations population agencies, might eventually be developed into a Planetary Regime—sort of an international superagency for population, resources, and environment. Such a comprehensive Planetary Regime could control the development, administration, conservation, and distribution of all natural resources, renewable or nonrenewable, at least insofar as international implications exist. Thus the Regime could have the power to control pollution not only in the atmosphere and oceans, but also in such freshwater bodies as rivers and lakes that cross international boundaries or that discharge into the oceans. The Regime might also be a logical central agency for regulating all international trade, perhaps including assistance from DCs to LDCs, and including all food on the international market.

The Planetary Regime might be given responsibility for determining the optimum population for the world and for each region and for arbitrating various countries’ shares within their regional limits. Control of population size might remain the responsibility of each government, but the Regime would have some power to enforce the agreed limits.

Posted in Crowds, Ideology, Media, Mobs

Bill Blum on the Obama Cult

June 9, 2009 // 5 Comments »

“The praise heaped on President Obama for his speech to the Muslim world by writers on the left, both here and abroad, is disturbing. I’m referring to people who I think should know better, who’ve taken Politics 101 and can easily see the many hypocrisies in Obama’s talk, as well as the distortions, omissions, and contradictions, the true but irrelevant observations, the lies, the optimistic words without any matching action, the insensitivities to victims.  Yet, these commentators are impressed, in many cases very impressed.  In the world at large, this frame of mind borders on a cult.
In such cases one must look beyond the intellect and examine the emotional appeal.  We all know the world is in big trouble — Three Great Problems: universal, incessant violence; financial crisis provoking economic suffering; environmental degradation.  In all three areas the United States bears more culpability than any other single country. Who better to satisfy humankind’s craving for relief than a new American president who, it appears, understands the problems; admits, to one degree or another, his country’s responsibility for them; and “eloquently” expresses his desire and determination to change US policies and embolden the rest of the world to follow his inspiring example.  Is it any wonder that it’s 1964, the Beatles have just arrived in New York, and everyone is a teenage girl?
I could go through the talk Obama gave in Cairo and point out line by line the hypocrisies, the mere platitudes, the plain nonsense, and the rest.  (“I have unequivocally prohibited the use of torture by the United States.” — No mention of it being outsourced, probably to the very country he was speaking in, amongst others. … “No single nation should pick and choose which nation holds nuclear weapons.” — But this is precisely what the United States is trying to do concerning Iran and North Korea.) But since others have been pointing out these lies very well I’d like to try something else in dealing with the problem — the problem of well-educated people, as well as the not so well-educated, being so moved by a career politician saying “all the right things” to give food for hope to billions starving for it, and swallowing it all as if they had been born yesterday.  I’d like to take them back to another charismatic figure, Adolf Hitler, speaking to the German people two years and four months after becoming Chancellor, addressing a Germany still reeling with humiliation from its being The Defeated Nation in the World War, with huge losses of its young men, still being punished by the world for its militarism, suffering mass unemployment and other effects of the great depression.  Here are excerpts from the speech of May 21, 1935.  Imagine how it fed the hungry German people.
———————

HITLER:

“….. Germany, too, has a democratic Constitution.  Our love of peace perhaps is greater than in the case of others, for we have suffered most from war.  None of us wants to threaten anybody, but we all are determined to obtain the security and equality of our people……….

The German Reich, especially the present German Government, has no other wish except to live on terms of peace and friendship with all the neighboring States. Germany has nothing to gain from a European war.  What we want is liberty and independence.  Because of these intentions of ours we are ready to negotiate non-aggression pacts with our neighbor States.

Germany has neither the wish nor the intention to mix in internal Austrian affairs, or to annex or to unite with Austria.

The German Government is ready in principle to conclude non-aggression pacts with its individual neighbor States and to supplement those provisions which aim at isolating belligerents and localizing war areas…….

Germany is ready to participate actively in any efforts for drastic limitation of unrestricted arming. She sees the only possible way in a return to the principles of the old Geneva Red Cross convention. She believes, to begin with, only in the possibility of the gradual abolition and outlawing of fighting methods which are contrary to this convention, such as dum-dum bullets and other missiles which are a deadly menace to civilian women and children.

To abolish fighting places, but to leave the question of bombardment open, seems to us wrong and ineffective. But we believe it is possible to ban certain arms as contrary to international law and to outlaw those who use them. But this, too, can only be done gradually.  Therefore, gas and incendiary and explosive bombs outside of the battle area can be banned and the ban extended later to all bombing.  As long as bombing is free, a limitation of bombing planes is a doubtful proposition. But as soon as bombing is branded as barbarism, the building of bombing planes will automatically cease.
Just as the Red Cross stopped the killing of wounded and prisoners, it should be possible to stop the bombing of civilians……

The German Government is of the opinion that all attempts effectively to lessen tension between individual States through international agreements or agreements between several States are doomed to failure unless suitable measures are taken to prevent poisoning of public opinion on the part of irresponsible individuals in speech, writing, in the film and the theatre.…… [1]

– End of speech excerpts –

How many people in the world, including numerous highly educated Germans, reading or hearing that speech in 1935, doubted that Adolf Hitler was a sincere man of peace and an inspiring, visionary leader?

Posted in Crowds, Ideology, Media, Mobs

Over a Million Refugees in Somalia

May 25, 2009 // 3 Comments »

In the news on Friday, May 22:

“Martin Bell, former BBC war correspondent and current UNICEF UK Ambassador for Humanitarian Emergencies, recently concluded a three-day trip to the north-east zone of Somali to report on the situation of children and women affected by conflict, drought, displacement and other hardships – and to shed light on UNICEF’s efforts to provide them with crucial services.
In Bossaso, one of the country’s busiest ports, Mr. Bell visited settlements for displaced people and saw firsthand the dire conditions in which they live. Displaced populations form a group of chronically vulnerable people here, lacking even the most basic social services and livelihood opportunities.
Bossaso hosts 27 camps where 40,000 people have sought refuge from other parts of the country. Over 1 million people in Somalia are internally displaced, mainly due to the conflict and insecurities in the central and southern regions..”

More at Relief Web.

Doctors Without Borders/Medicins Sans Frontieres reports that more than 270,000 have fled to Northern Kenya, to camps operated by the UN High Commission for Refugees, where rations have been cut by 30% and malnutrition runs at over 22%, well above the emergency threshold. That’s driving many of the refugees back to the war-zone.

My Comment

This was sent to me by a young Somali friend, who urges everyone to help in any way they can.
Now, my focus in this blog is on mass thinking, but the organization of crowds (through state propaganda, coercion, and surveillance) has as its other face, the dis-organization of crowds in times of crisis, often state-produced crisis, such as at New Orleans during Katrina, or here. Among people on the move in large groups, refugees are probably the largest group.
What is amazing to me about crowds of refugees is that they move peacefully, giving the lie to fear-mongering imagery of masses of people overwhelming civilization. That’s the sort of imagery usually conjured up by authoritarians when discussing mass migration or mass movement of any kind.

Posted in Activism, Crowds, War

Financial Follies: Condo Builders Under Water

May 19, 2009 // No Comments »

In the news today, AP reports:

“Multifamily construction plunged 46.1 percent to an annual rate of 90,000 units after a 23 percent fall in March. Permits for multifamily construction dropped 19.9 percent to 121,000 units. Analysts said apartment construction is being hurt by a glut of condominiums on the market and by tightening credit conditions for commercial real estate.”

My Comment

Oh, my. This made my day. Condo flippers and developers are in big trouble.

Overlook the opening of this article, with that plaintive reference to a ” modest rebound in single-family home construction in April” that  “raised hopes.”

Hopes should not be raised. That’s pretty clear by now. Not unless you’re being paid to pump houses for some rash developer who ran out of buyers for his pet eye-sore. We can think of a number of things that should be raised  - black flags, eyebrows, interest rates…..but not hopes.

I’ve been checking condo prices all over the world and it’s the same news. From Panama to Kuala Lumpur, from Miami to  Baltimore. Commercial developers are in trouble.

If that doesn’t warm the cockles of your heart and put a smile on your face, I don’t know what will. These wretched companies drove up housing by 100-300% (and more) in some cities and literally chased people on small or fixed incomes out of places they’d been living for years.

And don’t tell me they added any real value.

In New York. construction in one building was so shoddy, the Buildings Department had to intervene.  I personally inspected a condo where, when the owner kicked the wall, her foot went right through.  Many of them were aesthetic monstrosities that ruined the skyline,  polluted the air, and destroyed the architectural beauty of the places where they metastasized.

Now there’s a glut and the developers are losing their shirts.

Miami’s condo king, Jorge Perez, is sitting on top of a market with the biggest glut in the country. Since 2003, nearly 23000 condos were added to downtown Miami, and 33% of them remain unsold. The financial hurricane hit just when Perez, the “tropical Trump,” had opened his newest project, Icon Brickell, a boutique hotel combined with over 1,640 luxury apartments and squeezed into three towers. Only 18 units have sold so far. Perez (once estimated to have a net worth of $1.3 billion) is in big money trouble. His company, Related Group, lost $1 billion in 2008 and ran up debt of $2 billion, $700 million from Icon Brickell alone.

It just doesn’t get better than that….

Posted in Activism, Crowds, Economy, Finance, Media, Political Theory, Uncategorized

Record Prices for Rarities at Auction Sales

May 13, 2009 // 4 Comments »

High prices at auctions are an indication that investors are avidly interested in high quality tangible assets which will hold onto their value and are ready to pay extraordinary prices for them even in this market. Two illustrations from the auctions houses:

In Namure in southern Belgium, on Sunday, demand for Tintin, the cartoon reporter, broke national and world sales records, AFP reports. Five hand-drawn pages by Herge raised 1, 172,000 euros (1.57 million dollars) a world record for Herge as well as a national record for cartoon strips books. Buyers came from all over Europe, the United States, Lebanon and China.

Meanwhile, Reuters reports that at Sotheby’s semi-annual sale at Geneva, a virgin blue diamond straight from South Africa, weighing 7.03 carats, sold to any anonymous buyer on May 12, Tuesday, for a record 10.5 million Swiss francs ($9.49 million), including commission, the highest price paid per carat for any gemstone at auction and a new world record price for blue diamonds. The sale price without commission, a record, was $1,349,752, Sotheby’s said.

Posted in Crowds, Finance, Investment Ideas, Mobs

Judged by the Elitest of Elites

May 4, 2009 // 2 Comments »

I knew the Supreme Court of the US was weighted heavily in favor of the elite products of high-powered law schools, high-powered federal work experience, and high-powered theories.

But this chart of the make-up of the Supreme Court in recent years at the New York Times (May 2, 2009) was still something of a stunner to me.

One hundred percent of SC justices are former federal judges.

How many now are state judges? Nil.

How many now are private lawyers? Nil.

How many now are elected officials? Nil.

How many now are government lawyers? Nil.

How many now are law professors? Nil.

As Adam Liptak, the SC correspondent at The Times, justifiably complains,

“None of the justices have held elective office. All but one attended law school at Harvard or Yale. And the only three justices in American history who never worked in private practice are on the current court..”

But then Liptak holds up as a model, David Souter, a former attorney-general of the State of New Hampshire.

This, as trial lawyer Norm Pattis points out, is like depending on a sprinter to win a marathon.

“When is the last time a lawyer who made his living from fees earned
representing ordinary working people sat on the Supreme Court?”

But the question could be asked of many more government insitutions.

When was the last time the SEC was staffed with officials from small banks and  thrifts?

When was the last time a mayor from a small-town made it to the White House?

We talk about localism a lot. But in practice we’re heavily prejudiced against it.

A small-town resume, we presume, is fit only for small-towns.

There are a lot of reasons for this but I’ll focus on a couple that strike me at once (and I’ve blogged on them recently):

(1) It used to be that education fitted you to exercise judgment. These days we avoid judgment altogether, confusing it with judgmentalism.

In the absence of the ability to judge (and any common standard to judge by), we become victims of public relations and marketing. When no one can agree on substance, image becomes everything.

Brands rule. Harvard and Yale are the best known national brands, so we outfit our justices in them.

(2) Increasing specialization means that fewer people feel capable of pronouncing judgment about something, even if they felt it was permissble to. They look instead to experts to make their choices for them. The media, which has a disproportionate effect on nearly every choice made,  tends to focus on experts who come from the same educational and socio-economic background. The circle of the elite thus tends to get smaller and clubbier with every year.

Posted in Crowds, Pols and Pundits

Banks Chatting Up the Market

May 1, 2009 // No Comments »

From Bill Cara comes this insight on the happy talk about the market:

“Stress tests at the US banks will show that much more capital is required, so the banks would like to talk this market higher to minimize the resultant dilution. However, they will have six months to raise that capital, and a lot can happen in that amount of time….”

Posted in Crowds, Media, Uncategorized

Indian Business Students Drive Sales Of Mein Kampf

April 25, 2009 // 4 Comments »

“Sales of Mein Kampf, Adolf Hitler’s autobiography and apologia for his anti-semitism, are soaring in India where business students regard the dictator as a management guru.
Booksellers told The Daily Telegraph that while it is regarded in most countries as a ‘Nazi Bible’, in India it is considered a management guide in the mould of Spencer Johnson’s “Who Moved My Cheese”.

Sales of the book over the last six months topped 10,000 in New Delhi alone, according to leading stores, who said it appeared to be becoming more popular with every year.

Several said the surge in sales was due to demand from students who see it as a self-improvement and management strategy guide for aspiring business leaders, and who were happy to cite it as an inspiration.

“Students are increasingly coming in asking for it and we’re happy to sell it to them,” said Sohin Lakhani, owner of Mumbai-based Embassy books who reprints Mein Kampf every quarter and shrugs off any moral issues in publishing the book.

“They see it as a kind of success story where one man can have a vision, work out a plan on how to implement it and then successfully complete it”.

More at The Telegraph, UK”

My Comment

April 20 was Hitler’s birthday and I suppose the anniversary provides the justification for stories like these.  Mein Kampf is a book that I’ve never read myself and haven’t felt curious enough to read, either . It’s apparently selling briskly to Indian students, not for its anti-semitism but for the inspiration it provides management students.

More mischievously, the article goes on to insinuate a link between Gandhi and the Nazis.

There was one, but nothing that would please any Nazi-hunter. Gandhi was not unusual in seeing the European war as intra-imperial and seemed to think that satyagraha would work on the Germans as well as it had done on the British.

He went so far as to advise  Jews to let themselves fall before the Nazis as a kind of sacrificial gesture that would turn the consciences of their oppressors. Many scholars have - unsurprisingly - reacted to this with repugnance, but the advice was more a symptom of Gandhian quixotry than anti-Semitism - conscious or unconscious.

Posted in Art and Ideas, Crowds, Ideology, Mobs

Bernays On Citizen Parrot

April 16, 2009 // 7 Comments »

Theory:

“Opinion polls are designed to gauge whether the agitprop of the corporate state is having the desired narcotic effect on the general population. The more the average citizen can parrot back what he has been told by his betters, the more democracy, as defined by the elite, can be preserved.”

- Edward Bernays, the father of modern marketing psychology

Practice:

“When You’re Flush But Acting Flat Broke: Social Cues Can Drive a Downturn” Washington Post, April 16, 2009, is an interesting piece by Michael Rosenwald, which quotes Robert Cialdini on how social influence can make a downturn even worse.

Interestingly, we referenced Cialdini’s enormously useful work in “Mobs, Messiahs and Markets” (Bonner & Rajiva, 2007) in Chapter 4, footnote 14. p.88. I happened on the book purely by chance, but now, reading the Post piece, I’d like to read his other work.

Rosenwald’s take in his piece is rather close to mine, with one crucial difference.

I see no reason why people who have money in their pockets should hold off buying when there are so many bargains to be had.

I wouldn’t go so far as to say it’s your patriotic duty to go forth and spend when the economy is hurting.  But there’s certainly no reason why doom-saying should prevent people who are far from the edge from continuing with their investments. Panic only makes things worse. And many astute people are no doubt making things much worse because they’re on that end of the trade.

I don’t believe in papering over how serious the economic situation is. But ’serious’ is not the end of the world, even if such a thing could be.

So I think the Wash Po piece gets the “Mobs” part of the equation right.

But I’m not sure if getting experts to sell optimism is the right advice. That’s where the “Messiahs” part of our book comes in.

Whatever you decide to do should be based on your own study of the matter at hand and should suit your own circumstance, life-style, psychological profile, risk appetite, and responsibilities.  Trading gurus, commodity mavens, gold boosters, currency experts, professors, analysts, and talking heads - take all the advice you want and look through as many eyes as you can.

But in the end, choose for yourself.

Ultimately, it’s the only way to build up your own economic and moral well-being.

No one else will do it for you.

Posted in Art and Ideas, Crowds, Media, Mobs

Hedge Funds Reap Billions From Calling Market Right

April 3, 2009 // 2 Comments »

“With a combined $2 trillion under management, the hedge fund industry is coming off its richest year ever — a feat all the more remarkable given the billions of dollars of losses suffered by major Wall Street banks.

In recent months, however, scores of hedge funds have quietly died or spectacularly imploded, wracked by bad investments, excess borrowing or leverage, and client redemptions — or a combination of those events.

“To some degree it’s a very gigantic version of Las Vegas,” said Gary Burtless, an economist at the Brookings Institution.

As Alpha’s list shows, managers who reap big gains one year can lose the next.

Edward Lampert, the founder of ESL Investments and a member of the 2007 Alpha list, was absent this year. His fund fell 27 percent last year, according to Alpha. About 60 percent of ESL’s equity portfolio is invested in Sears, whose shares plunged 40 percent last year. ESL is also a major holder of Citigroup, whose abysmal performance matched that of Sears.

A manager who ranked high in the 2007 list and fell off in 2008 was James Pallotta of the Tudor Investment Corporation, who was 17th last year and earned $300 million. Mr. Pallotta’s $5.7 billion Raptor Global Fund fell almost 8 percent last year, according to Alpha.

A few who did not make the cut still made buckets of money. Bruce Kovner of Caxton Associates and Barry Rosenstein at Jana Partners didn’t make the top 50. But Mr. Kovner earned $100 million, and Mr. Rothstein earned $170 million, according to Alpha. Spokesmen for the hedge fund managers either declined to comment on Tuesday or could not be reached.

Since 1913, the United States witnessed only one other year of such unequal wealth distribution — 1928, the year before the stock market crashed, according to Jared Bernstein, a senior fellow at the Economic Policy Institute in Washington. Such inequality is likely to impede an economic recovery, he said.”

More at the New York Times.

Comment

Inequality in a free market is the result (among other things, of course) of  different levels of competence and of capitalization. It’s not the essential problem.  If it’s increased tremendously, it’s because we’ve also been fiddling with the market tremendously, ostensibly to make things better, but with the opposite result.

But the crash has now given a lot of people a platform to vent.

The very people who called the market wrong (Citi, Goldman and their buddies in the regulatory business) are going to blame their incompetence on lack of regulation…. and make successful managers  pay a price. (Note that it was Goldman and Citi managers in government who helped pushed many deregulatory initiatives and changes in leverage requirements, in the first place).

I’m all for transparency, following the rules, and proper regulation.

But let’s face it.  Where we are now, more regulation isn’t going to protect the little guy or a small business from fraud. The little guys are already crushed by rules and regulations….and they’re still being defrauded. It’s just going to give one set of  big money managers yet another weapon they can use against another set of big managers. And since the guys who didn’t lose are obviously smarter than the losers, what makes anyone think they’re going to sit around and become targets?

The only reason we have such monster financial firms, anyway, is because of laws that enabled the growth of monopolies….and because we keep depreciating the cost of money through interest-rate manipulation.

Posted in Crowds, Finance, Kleptocracy

Give Immigrants Residency to Prop Up Housing Market

March 23, 2009 // No Comments »

“The Obama administration should seriously consider granting resident status to foreigners who buy surplus houses in this country. This makes more sense than the president’s $275 billion housing bailout plan, which Americans greeted with a Bronx cheer.”

Comment:

A great proposal and one I wrote up here on March 6 2009….

http://www.google.com/search?hl=en&q=lila+rajiva&start=30&sa=N

Lila Rajiva: The Mind-Body Politic. Individuals Not Ideologies ….. Lila Rajiva on Washington Won’t Let Skilled Immigrants Solve Housing Crisis …
lilarajiva.org/ - 57k

Some of my pieces have this weird way of getting tucked behind the others, even when they’ve been opened many more times.

The immigration piece only shows up on the second or third page when you do a search for Lila Rajiva. Same for this piece:

The Paulson Putsch

Sep 25, 2008 … Lila Rajiva [send her mail] is the author of the ground-breaking study, The Language of Empire: Abu Ghraib and the American Media (MR Press, …
www.lewrockwell.com/rajiva/rajiva10.html - 56k - Cached -

But this one with far fewer hits is on the first page.

Three Card Capitalists.

Oct 1, 2008 … Lila Rajiva [send her mail] is the author of the ground-breaking study, The Language of Empire: Abu Ghraib and the American Media (MR Press, …

www.lewrockwell.com/rajiva/rajiva11.html - 35k

It’s from the same site, Lew Rockwell, so I don’t see why Google wouldn’t put that on the first page of a search. Got to figure that out.

Posted in Crowds, Economy, Globalization, Uncategorized

That Darn Elusive Black Swan

// 2 Comments »

“The profit motive is a good thing when it operates in an environment where bad bets are punished with losses and good investments are rewarded. Only government can distort that healthy profit-and-loss system, giving people incentives to make bad decisions. And it’s in this environment that greed is no good to anyone. It turns out, however, that greed—or better, rational self-interest—can help our economy stabilize faster than government ever could. As the lubricant of our economic system, self-interest will cause a million market actors to recalibrate and to direct resources to projects that create value in our society. We the people will temper our irrational urges and mitigate our risks if government restores the rules that let profit and loss bring discipline. But if government continues to change the rules to bias the market in favor of irrational behavior, rent-seeking, and corporatism, the chaotic aspects of the system will continue to wobble out of equilibrium. Black swans will become commonplace.”

Max Borders in The Freeman

Thanks to Mike Martin for pointing out the piece.

Comment:

This is a nice piece pointing out how metaphors govern our thinking - we talk about the economy as it were a machine when it’s actually more like an  eco-system. Interestingly, Tom Wolfe made a similar point about the misuse of metaphors in Freudian psychology (for eg. the term repression, as though the body were in need of an outlet to blow-off steam).

But there are at least two things I object to here.

One is - greed isn’t rational self-interest. That’s a complete confusion of terms. Gordon Gekko-like greed is anything but rational. It’s compulsive.  The self has many other  interests and drives besides doing down other people. Rational self-interest is the prudent self-interest of “right reason,” as the Catholics call it. A well-ordered reason. Not one that’s the slave of your drives. It’s self=governing reason which produces genuine self-interest.

And two: sigh.  None of this was a black swan.  Taleb himself doesn’t claim it was, either.  Black swans only make sense in talking about  an un-manipulated world, I would think. Taleb was talking about the way risk is modeled. He says on his website that he uses the banks in his book as an illustration and then gives some quotes in support, which, he says he wrote between 2003-2006 (the book was published April 2007).

But Felix Salmon at Portfolio.com points out that his actual comments on Fannie in an interview before they went bust were quite vague.

However, the author of this piece is spot on in the rest of this comments.

I’ll try to  post my calls on this, not to prove I can predict the markets (I can’t), but to prove that we don’t have a market. We have a kind of rigged puppet show, which you can (sort of) predict, not because of any genius on your part, but because of the obviously crooked motives of of several leading actors. The only special skill you need for this is the ability to recognize propaganda.

I know I came across Fannie’s corruption when I was researching Goldman Sachs in July 2006 from the Washington Post which had a long series of excellent articles on it from 2004. So, how was this crisis unexpected?

Here’s my piece (from 2006)

“Most recently, regulators are looking into claims that Goldman (among others) helped managers at the US Federal National Mortgage Association (known as Fannie Mae) prettify their books to maximize performance bonuses at the company entrusted with keeping US home loans afloat. Which means that Goldman was center-stage not only in the credit and derivative booms, but in the housing boom too. (Goldman and the other firms deny wrongdoing.)”

My original investment report on which this article is based had much more on Fannie and I will post it here. I’m pretty sure there were plenty of  prominent people in the financial world who had already decided that Fannie was going to go bust. In fact, I think a lot of people had taken short positions on it.  I’m not sure how on that basis you could argue this crisis was a Black Swan.

Posted in Cognition, Crowds, Media

In Trading, Go Against the Crowd…

March 10, 2009 // 4 Comments »

Betting against crowd sentiment is usually a reliable trading method.  Which is why I’ve expressed some reservations about the incessant trashing of the dollar.

Not that I don’t agree with the fundamental analysis behind it. The dollar, like all currencies, is toast if central banks around the world embark on a massive reflationary scheme, such as looks to be in the works. But…and this is the million dollar but…because the ultimate direction of a policy is clear, it does not mean that the proximate (near-term) developments by which that policy unfolds are going to be unidirectional.

Meaning, just ‘cos the buck’s going to hell doesn’t mean it’s going to hell in a straight line.

Things zig. And they zag. That’s the way the US Government operates and it’s also the way nature does.

There are no straight lines in nature.  They only look straight because we’re time-and-space-bound creatures.

Everything moves in curves…and cycles….and waves…..

A wave up is followed by one down. You can’t always tell the size or the timing but you can tell the sequence.

So when the dollar went through 72 on the most popular index of the dollar (it was over 120 at it’s height in the 1990s), I waited things out. Since then, the dollar - in fits and starts - has pushed upward with considerable strength (in light of its rotten fundamentals).

Likewise, despite the gold community rah-rahing about precious metals prices,  I expressed some doubts about its immediate prospects and  in  a Feb. 23 post (Gold Double Top?) cited a post suggesting that gold was putting in a double-top in the mid-term (for a couple of weeks to months) .

The thrust upward just didn’t seem as strong as everyone said it was.

My proprietary trading signal?

A complex multidimensional formula based on fractal theory that took me several years of advanced training in mass psycho-dynamics, linguistic structural analysis, and advanced organizational observation theory, all of which told me:

WJCPG-IT(/3)5

When Jim Cramer Pumps Gold - It’s Time To Take Five

(Check out this video of Cramer saying not to worry about Bear Stearns).

And, wouldn’t you know, this morning I see that the spot price has fallen below $900….

(And it’s closed below $900…)

Posted in Crowds

Obama: Yes to Banksters, No to Haitian Refugees

March 1, 2009 // 1 Comment »

“BBC called the situation “eye-popping,” and the Miami Herald said it was “the worst humanitarian disaster (for) Haiti in 100 years” leaving:

– Gonaives, Haiti’s third largest city, uninhabitable;

– most of the nation’s livestock and food crops destroyed as well as farm tools and seeds for replanting;

– irrigation systems demolished;

– collapsed buildings throughout the country; 23,000 houses destroyed; another 85,000 damaged; 964 schools destroyed or damaged;

– conservatively about $1 billion in storm damage;

– the threat of famine, especially for children and the elderly;

– 2.3 million Haitians facing “food insecurity,” according to USAID, reeling under 40% higher prices than in January;

– inadequate sanitation and clean water;

– the widespread threat of disease; and

– overall millions lacking everything needed to survive who in normal times struggle to get by.

In December, Director Randy McGorty of Catholic Legal Services for the Archdiocese of Miami said:

“After dealing with this administration on Haitian issues for eight years, I’m forced to conclude that its policy toward Haiti is based on racism. It’s shocking. People (lack everything and) are starving. This callous disregard for human life is inexplicable. Many deported Haitians simply have no communities to return to. It is disappointing that the Bush administration would even consider sending people back to this incredibly fragile nation….(Haiti’s) humanitarian crisis….continues and worsens.”

(South) Florida Immigrant Advocacy Center’s (FIAC) executive director, Cheryl Little, said: “We are attempting to do whatever we can to convince government officials to change their minds on this. It’s an outrageously inhumane act.”

On January 26, FIAC urged new DHS Secretary Janet Napolitano to “immediately stay the inhumane deportations and to seriously consider granting Temporary Protected Status (TPS) for Haitians already in the United States.” On December 19, former DHS Secretary Michael Chertoff denied the Preval government’s TPS request. As a result, Haiti won’t cooperate, so ICE is making Haitians get their own travel documents (including passports) and assist in their own deportations.

Throughout 2008, around 1000 occurred in total. After a near-three month suspension (from September 19 - December 9), they resumed slowly, but picked up noticeably after Obama’s inauguration. According to FIAC, men like Louiness Petit-Frere are affected, deported on January 23: “Here ten years with no criminal record, he leaves his US-citizen wife behind along with his mother and four siblings, all (with) legal status….One of his brothers, US Marine Sgt Nikenson Peirreloui, served and was injured in Iraq.”

In 2008, Obama campaigned vigorously for South Florida’s Haitian vote. Now he’s betrayed it the way he’s abandoning millions of distressed households by providing little in real relief compared to trillions in handouts to Wall Street and the rich….”

More at Stephen Lendman

Comment:

Here’s a link to a report on Haiti’s hope for an Obama presidency

and an open letter from Haitians to Obama on the catastrophic conditions in their country.

Posted in Crowds, Empire

Obama Tanks the Dow

February 26, 2009 // No Comments »

• The Dow has fallen about 11% since Election Day.
• The Dow’s fall on Obama’s Inauguration Day was the worst Inauguration Day decline in history.
• The Dow fell 384 points on Feb. 10, the day Treasury Secretary Geithner unveiled his financial stability plan.
• The Dow fell 298 points on Feb. 17, the day Obama signed the Stimulus Bill.
• The Dow fell to an 11-year low on Monday, following weekend reports about the government’s potential new plan to bail out Citigroup.
• The Dow fell nearly 200 points intraday Wednesday following Obama’s generally well received speech Tuesday evening. (The index did recover some lost ground, even briefly trading positive in the afternoon, before closing down 80 points as Treasury announced yet more bailout options for banks.)

More here

Comment:

Going further,  the Deal Journal gives the President some tips on how to make nice to the market and stop being Obummer.

The budget numbers are out, and they aren’t pretty, projecting a $1.75 million deficit for the year and including a provision to auction off permits to exceed carbon emission caps (frankly, this sounds like the sale of indulgences by popes during the Middle Ages - only now, we’re all so much more enlightened...).  This might tank the Dow even more,…

Especially if it also takes a look at  GM’s horrible numbers (a $9.6 bn Q4 loss and a decline in its cash position from the previous quarter of $2.2 bn ($16.2 bn to $14 bn).  And let’s see what London’s FTSE will do now that Royal Bank of Scotland has announced the biggest annual corporate loss in UK history ($34.2bn/24.1 bn BP)

Posted in Crowds, Media, Pols and Pundits, Trading

Police State Chronicles: The All-Seeing Eyes Of Advertising

February 1, 2009 // No Comments »

Watch an advertisement on a video screen in a mall, health club or grocery store and there’s a slim — but growing — chance the ad is watching you too.

“Small cameras can now be embedded in the screen or hidden around it, tracking who looks at the screen and for how long. The makers of the tracking systems say the software can determine the viewer’s gender, approximate age range and, in some cases, ethnicity — and can change the ads accordingly.

That could mean razor ads for men, cosmetics ads for women and video-game ads for teens.

And even if the ads don’t shift based on which people are watching, the technology’s ability to determine the viewers’ demographics is golden for advertisers who want to know how effectively they’re reaching their target audience.

While the technology remains in limited use for now, advertising industry analysts say it is finally beginning to live up to its promise. The manufacturers say their systems can accurately determine gender 85 to 90 percent of the time, while accuracy for the other measures continues to be refined.”

From AP, via Cryptogon.

Posted in Crowds, Mobs, Police State

Mobs: Male Consumption Patterns Related to Reproductive Strategy

January 4, 2009 // 1 Comment »

Posted in Cognition, Crowds, Economy, Writing

Trader Psych: Incredible Dollar-Swissie Reversal

December 18, 2008 // No Comments »

“USDCHF – Recent US Dollar/Swiss Franc price action is a testament to the effectiveness of Speculative Sentiment Index-based currency forecasts. Forex trading crowds had remained heavily net-short the USD/CHF since July, and the pair went on to mount an impressive multi-month rally. Most recently, that same crowd capitulated and actually went net-long the USD/CHF near the 1.2000 mark. The US Dollar subsequently went on to post its biggest monthly loss against the Swiss Franc in history—incredible by any standards. Looking to very short-term trading, the crowd is currently net-short the pair, with short positions outnumbering longs by 1.08 to 1. Such a flip gives us reason to look for a reversal, but a sharp drop in open interest gives us little conviction in our forecast. Our forex trading signals previously went short the USD/CHF for sizeable profits, but the strategies now hold a weaker bias….”

- trader, David Rodriguez 

Comment:

This was quite a move up for the Franc and it shows why trading currencies in a regular (non-trading) account is hard to do.

I had planned to buy Swissie at the end of last week and then decided that the dip in the dollar from 86 - 83 on the Dollar Index had already priced in a Fed cut. So I held off, waiting to do it on Monday.

Then came Madoff. And on Tuesday, a Fed rate cut that was historic.

And as a result, from Monday to Wednesday, the dollar lost more than half the gains it made this fall. The Swissie shot up. A great trade on Friday looked almost risky by Wednesday. What if the Swissie fell back after that surge? Trader sentiment switched to shorting the dollar.

As if to confuse sentiment again, at Thursday close, the dollar had recovered some of its footing against the majors.

In Forex, trying to look for a bottom (as I was trying to do with the Swissie) takes just a little too much time for action that quick. Crowd sentiment out there is as volatile as it could possibly be.

Now the crucial thing is if GLD (the ETF, as a proxy for the spot price) can hold above 850 and the dollar over 80 by Friday close. If they do, a trend reversal of the pair will be confirmed technically.

Note: I am talking about GLD and the dollar as inversely correlated, once again. They had decoupled for a while but have returned to their inverse relationship recently.I don’t know how long that will last though. Not very long, I suspect. Notice that GLD is moving out of synch with other commodities. Oil, for instance, is down at 41/2 year lows. GLD’s move, in step with the Swissie, typified a rush to safety.

Posted in Cognition, Crowds, Finance, Trading

Market’s Worst Week Ever

October 10, 2008 // No Comments »

For the week, the S&P 500 crashed -18.20%, Dow -18.15%, the Nasdaq -15.30%, and the Russell 2000 -15.65%

Posted in Crowds, Economy, Finance

Pundits & Pols: Don’t Buy Gold; Stay in Cash Says, IBD; IMF to the Rescue (or Miscue?)

// No Comments »

“The same is true for gold, another refuge for cowardly capital. Buying gold amid a financial crisis means paying a premium amid a panic. What happens when that panic recedes? Your gold is worth less….” writes Investor’s Business Daily.

Comment:

Maybe so. Maybe not. But who is saying this? Investor’s Business Daily, which is in the business of selling stocks. Naturally, it wants you liquid and ready to jump in and buy. I’d like to go back and check what it was saying in June or July this year…

Meanwhile, President Bush will be addressing the market panic from the Rose Garden this morning. And the G-7 meet today to consider government guarantees of interbank lending.

The IMF has activated an emergency financial mechanism to help, says Dominique Strauss-Kahn, IMF chief, who has the ear of Hank Paulson.

And Robert Zoellick, World Bank chief (also an ex-Goldman Sachs man and formerly US trade rep) says poor countries will be hit hard. Maybe G-Sax should sell them some more junk bonds to help them out.

Posted in Crowds, Finance

Propaganda Nation: Market Manipulation & Bank Banditry (Updated)

October 9, 2008 // 3 Comments »

Do Statistics Back Claims of Complete Credit Freeze?

“Many commentators claim, however, that virtually no transactions are occurring in this market. These claims are completely false. For the week that ended October 1, which is the most recent week currently reported, total commercial paper outstanding amounted to $1,607 billion. Yes, this amount was down from the $1,702 billion reported for the previous week, but is a 5.6 percent drop a good reason to panic? If we go back to March 2008, when nobody was talking excitedly about the commercial market’s “freezing up,” we find that the total amount outstanding, on average, was $1,822 billion, or only 13 percent more than last week. In March, the market was working fine; now it’s “locked up.” This sort of hyperbole, with which we are being bombarded hourly around the clock, is totally without a basis in the facts…..”

Robert Higgs, suggesting that some people are fomenting panic. He asks why.

Comment:

The answer lies in asking yourself:

Who has benefited so far? How? What do they want to happen?

Paulson Plan Premeditated?

Here’s Bill Engdahl tying up the loose ends of my piece on Paulson on how Paulson’s plan benefits the three new super banks, Goldman, JPMorgan Chase, and Citi and how they would be used to dominate global, especially European, banking.

Interbank Wars - Latest

The latest in Citi’s fight with Wells Fargo is that Citi has terminated negotiations and is planning to pursue breach of contract against Wells, so Wells is going ahead with its deal. Citi has Goldman Sachs connections: Rubin, Clinton’s Treasury Secretary and a former Goldman chief is a director. Meanwhile, with regard to Bear’s demise, here is a piece arguing that JPMorgan was involved in gold price manipulation under cover of their bail out of Bear this spring. JPMorgan chief Jamie Dimon sits on the Board of the NY Federal Reserve and as such was privy to the NY Fed’s actions re Bear Stearns.

Media Trix

Bill O’Reilly, not usually my favorite person, has been pretty good on standing up to the bail-out. This evening, he had a clip from an NBC skit on the sale of subprime mortgages to Wachovia by a couple, the Sandlers. It mocks Barney Frank’s role in eliminating oversight of Fannie and Freddie. Apparently the video was edited to remove the reference to Frank. The Sandlers had a long list of progressive groups they donated to (including Move On.org).

O’Reilly’s tack seems to be that the positions of those groups is undermined by the funding. That part is far-fetched, but it is time someone pointed out that not everyone affected by the decline in housing prices is an innocent. Many people made fortunes during the boom and are making more money from the bust.

Update - Market Moves Or CyberWars?

Another amazing day. I walked out of the house for 2 hours to buy a laptop for traveling, since my old one had mysteriously lost its internet connectivity. When I came back, the market was closing with a sell off, down 7% (679 points).

It began in the morning when
Paulson announced that insurance companies were in for trouble. That set off the selling in the bank and insurance stocks, including regional bank funds.

The whole thing was compounded by the fact that today was the day the ban on short-selling around 1000 financial and finance related stocks was lifted, so short-sellers were pouncing.

[Companies on the SEC's list slid 18 percent on average during the ban, compared with 24 percent drop for all financial companies in the Standard & Poor's 500 Index].

Then, General Motors had a bad day: Standard &Poor threatened to downgrade it (as well as Ford) to junk. GM shares got beaten down under $5; Ford was down over 20% too.

You had to wonder at the timing.

1) It’s the Jewish holiday, Yom Kippur, today. Recall that the selling began the evening of Rosh Hashanah. Remember that old saw - sell Rosh Hashanah, buy Yom Kippur? Markets are weaker at the time…

2) The declines came on the one-year anniversary of the closing highs of the Dow and the S&P. The Dow has lost 5,585 points, or 39.4 percent, since closing at 14,164.53 on Oct. 9, 2007. It’s the worst run for the Dow since the nearly two-year bear market that ended in December 1974 when the Dow lost 45 percent.

3) The decline is 7 years from 9/11

Anyway, when I got back the damage had been done.

[I ended up buying my computer at a shop that sold refurbished electronics in a rather shady side of town. A cop car was pulling away just as I walked in. But having just been a spectator to one of the biggest bank heists in history, I suddenly found the grungy looking characters hanging around rather harmless].

James Altucher, a trader, has this to say at The Street:

“The single biggest reason the stock market has fallen in the past five days is hedge fund liquidations. Of the top 20 hedge funds in the world, something like 18 are down 20% or more this year. They are getting redemptions, they are liquidating, they are selling stocks with reckless abandon to raise cash. Our job as good investors is to give them liquidity and take their bargain-basement merchandise off of their hands. Let’s get their selling over with so we can make money.”

Well, that’s evident. There was big selling, especially at the end, the kind from sell signals going off in program trading.

Morton Kondracke on FOX News in the evening was telling us sagely that it’s not a liquidity issue, it’s a confidence issue, and (get this) the answer is to create a global central bank. Right. The solution to a confidence problem is to give the markets to the confidence-men.

A note on cyberwarfare might be apposite hear. I dig it up from an old article I wrote that references Laurent Murawiec’s now notorious power-point presentation in 2002 advocating seizing Saudi oil fields. Murawiec is connected to Donald Rumsfeld’s Revolution in Military Affairs (RMA) which makes InfoWars central to the battle ground.

“In all these cases, IW involves creating phantom cyber-images, which can include phantasms of nonexistent trains, airplanes, stock market orders, and bank transfers; false impressions of the enemy’s troop strength and one’s own, of supplies and movements, of fake attacks and all-too-real defenses; and phantom images of the enemy’s leaders doing evil things on screen because one has video-morphed images of them doing them so.

“Information warfare is not about machines or even electrons. It is about people’s minds, society’s functions, and armies’ strategies. Cyberspace endows us — and our enemies — with new and extraordinary means with which to achieve our respective aims. “We have only begun to cyber-fight….”

More at “Tom Tancredo Takes Out Mecca: The Cyber Wars Playing Near You.”

Posted in Art and Ideas, Crowds, Finance

Propaganda State: Can a Market Panic be Manipulated?

October 2, 2008 // No Comments »

“In a report published in March by the Bank for International Settlements, economists Jacob Gyntelberg and Philip Wooldridge raised concerns that banks might report incorrect rate information. The report said that banks might have an incentive to provide false rates to profit from derivatives transactions. The report said that although the practice of throwing out the lowest and highest groups of quotes is likely to curb manipulation, Libor rates can still “be manipulated if contributor banks collude or if a sufficient number change their behaviour.”

Thanks to Naked Capitalism.

Comment:

Libor stands for the London Interbank Offering Rate. It is the interest rate at which banks agree to lend to each other over various time periods, including overnight, three months and 12 months.

The post at Naked Capitalism is concerned about Libor being unreliable because of banks understating the rates they are paying (to conceal their desperation). The rate is an estimate set at the HQ of the British Bankers’ Association at 11 a.m. every morning in London on the basis of offers from 16 member bankers. The possibility exists that it could be manipulated.

Posted in Cognition, Crowds, Finance, Psyops

The Paulson Put(sch): Questions for Hank Paulson

September 25, 2008 // 28 Comments »

The Paulson Put(sch)

Questions for the new CEO of US Government Inc.

[Last Wednesday, Hank Paulson was installed as CEO of US Government Incorporated, replacing the now defunct United States of America].

Charles Krauthammer wrapped up an astounding week in American history with a hosanna to Ben Bernanke and Hank Paulson. The best possible team to have on your side in a financial crisis bigger than any since the 1930s, says he. Bernanke, because he is an economic historian specializing in the Great Depression. And Paulson because he knows everyone in the banking industry and is the perfect person for arm-twisting and deal-making. Financiers aren’t all bad, sniffs Krauthammer. There were all those greedy realtors and home-owners too.

Yes, Charles, we do see that greed is a many-splendored thing, visiting the poor and rich alike. But on a mundane level, the yearning of the cleaning lady who gets herself in over her head with a home loan she can’t pay is not the same sort of public hazard as the cosmic larceny of financiers who’ve skipped out with hundreds of millions from companies they’ve skinned like pole cats…

Read the rest of my latest piece on Paulson’s power grab at Lew Rockwell. You can find other articles of mine on the old archive of Dissident Voice. I will (eventually) get my pieces onto this site in a more approachable way, but being bloggitudinally challenged, that may take a while.

Posted in Activism, Crowds, Economy, Empire, Finance, Writing

Justin Raimondo On Iran’s Weapons of Mass Distortion

July 14, 2008 // No Comments »

“Are we really supposed to take the alleged Iranian “threat” – which Barack Obama deems “the greatest strategic challenge to the United States in the region in a generation” – seriously? Not unless Photoshop is reclassified as a “weapon of mass destruction.”

Nice piece by Antiwar’s fiery Justin Raimondo on Iran’s recent threat…

Posted in Crowds, Empire, Media, Psyops

Bear Stearns Hedge Managers: Doing The Perp Walk….

June 19, 2008 // 2 Comments »

“Two former managers of hedge funds at Bear Stearns were arrested and charged with securities fraud on Thursday, a year after the collapse of the funds signaled the onset of a credit crunch that shows little sign of abating….
The indictments, which will be detailed this afternoon by federal prosecutors in Brooklyn, are the first to be brought against senior Wall Street executives linked to a tight credit market that has rattled global markets, led to more than $350 billion in write-offs, cost numerous executives their jobs and culminated in the demise of Bear Stearns.

The two funds had names as obtuse as the complex subprime securities in their portfolios — High Grade Structured Credit Strategies Fund, and its riskier sister offering, the High Grade Structured Credit Strategies…….”

More at the New York Times.

Comment:

Tut…And these guys were gods only yesterday. How soon they forget….

All it took was for gas prices to double…..and the mob got out the noose and the gallows…

Posted in Crowds, Finance

Financial Flings: Consumer Prices Here to Stay

June 15, 2008 // 1 Comment »

“Don’t expect to see any drop in the prices you pay at the pump — or at the grocery store or anywhere else — from any decline in the price of commodities. The price of gas at the pump actually climbed to a new high at $3.983 a gallon last week, according to automobile club AAA, even as the price of oil was falling. (And it kept on climbing, to $4 a gallon, on June 8 after a two-day rally in crude oil prices.)

You can expect the same from other commodities that have tumbled in price. Consumer prices will stay high even as commodity costs come down. Wheat prices are down. From a record $13.95 a bushel on Feb. 27, the most actively traded contract on the Chicago Board of Trade had dropped 42% to $7.78 a bushel on June 5. The prices of most other commodities — well, except for corn, which has soared as heavy rains have held up planting — have tumbled in recent weeks. See any drop in the price of bread or in a meal at your favorite restaurant?

No, and don’t expect to. There’s no quick relief coming to consumers even if commodities continue — or resume, in the case of corn and oil — their retreats in prices.”

More from Jim Jubak’s Journal at MSN Money.

Posted in Crowds, Economy

Bad Subjects On The Right Not to Drive…

May 25, 2008 // 2 Comments »

“I certainly don’t’ fault people for using cars or supporting their right to drive, because like every other critic of automobility, I recognize that there are few options for people to do otherwise. But that’s exactly the point that automobile critics are trying to make: people are significantly limited in their ability to choose between different forms of mobility. Pro-automobile advocates love to talk about the ‘right to drive’ or the ‘freedom’ to travel, but they never talk about the freedom to choose any other mode of transportation—particularly ones that don’t pollute the Earth or require an infrastructure that engulfs most of the usable public space in our cities. Pro-automobile advocates don’t like to talk about how automobile accidents are the #1 cause of death for people between the ages of 4-34, killing approximately 43,000 people a year. Nor do they address the fact that the 2.9 million annual injuries caused by auto accidents costs our society roughly $230 billion a year. Even when people aren’t getting maimed or killed, the literal financial costs of automobility are staggering. According the National Highway Traffic Safety Administration, traffic congestion collectively costs an average of $168 billion a year and the Texas Transportation Institute estimates that the 75 largest metropolitan areas experienced 3.6 billion vehicle-hours of delay, resulting in 5.7 billion US gallons (21.6 billion liters) in wasted fuel and $67.5 billion in lost productivity, or about 0.7% of the nation’s Gross Domestic Product. One would think that this raw financial data alone would surely convince people that there are better ways to simply get around. However, it’s hard to make informed decisions about transportation when groups like the Reason Institute can utilize major news outlets to push their agenda.”

More here at Bad Subjects.

Posted in Crowds, Economy, Ideology

Fighting for Food: Mobs riot as food prices soar in Somalia….

May 6, 2008 // No Comments »

“Down with those printing the fake money!” the young men yelled, denouncing the growing number of counterfeiters who have contributed to escalating prices. “Down with opportunists!”

The Mogadishu Traders’ Union said it decided Tuesday to again accept the old 1,000-shilling notes and ordered its private security units to enforce that at the city’s main Bakara market.

“We, the big traders, have already decided to accept the old note and today we want to tell other businesses also to accept the decision,” said Abas Mohamed Duale, deputy chairman of the union.

Protests and riots over rising food prices have recently hit other nations, including Haiti, Egypt, Cameroon and Burkina Faso. The price of rice and other staples has risen more than 40 percent since mid-2007.

The Asian Development Bank said Monday that a billion poor people in Asia need food aid to help cope with the skyrocketing prices.

Soaring fuel prices, growing demand from the burgeoning middle classes in India and China and poor weather have contributed to the jump in food prices worldwide, economists say. Africa has been particularly hard-hit.

In Mogadishu, the price of corn meal has more than doubled since January. Rice has risen during the same period from $26 to $47.50 for a 110-pound sack.

The cost of food has also been driven up by the plummeting Somali shilling, which has lost nearly half its value against the U.S. dollar this year because of growing insecurity and a market clogged with millions of counterfeit notes. The shilling has tumbled from about 17,000 to 30,000 per $1…..”

More from AP.

Posted in Crowds, Economy, Finance, Globalization

Boom Without End: What The Web Knows…..

April 21, 2008 // 1 Comment »

“India and China combined are commonly acknowledged as the next two economies to be reckoned with, in terms of double digit economic growth. Prices for basic materials such as copper, steel, nickel and virtually every other mineral used in construction are marching steadily upward.Certain economic commentators are calling this a ’super-cycle”, implying that the trend will eventually reverse itself, and these industries will contract as they have done since the industrialization of mankind.

It is no such thing.

The cyclical nature of mining is dead, a relic of the past.

What do you think is going to happen to the demand curve for basic materials when China, India, Africa, and Latin America’s internet penetration percentages rise to meet North America’s?

How bout Russia?

China is the largest consumer of copper, but the United States is second. Once a standard of living is achieved it must be maintained.

The rest of humanity’s existence will now be spent in bringing the rest of the world population up to a better standard of living. Or we shall perish in the effort.

The secret is out….”

James West in The Midas Letter

Posted in Crowds, Economy, Finance

Bruni & Sarkozy Take Their Show on the Road…

April 3, 2008 // No Comments »

And, a moment of comic relief, in the middle of all the financial trouble. On the public (and, apparently, well-hydrogenated) display of affection by the exhibitionistic French president, Carla Bruni, and her escort, Nicholas what’s-his-name, the last word came from a British columnist:

QUOTE:

“However, ultimately, it wasn’t her nudity in the past that was the issue, it was the Sarkozys’ naked ambition in the present, which was seemingly to be crowned as the hot new couple on the international political stage, the couple who make all other political couples look dusty, passionless and redundant. And correspondingly their politics, too, even their countries.

Indeed, was it inadvertent or was there a bizarre whiff of quasi-sexual competitiveness from the Sarkozys towards the Browns, a preening display of potency?

Whether Carla was sashaying into Sarah’s charity lunch or Sarkozy was ‘playing football’ with Brown at Arsenal’s stadium (both men coming across like two girls desperate not to get their petticoats dirty), it seemed palpable; the none too subtle one-upmanship from the French camp. The whole event had the air of a quiet, serious country couple making the mistake of inviting a glamorous, intimidating couple over for a hellish weekend of nonstop patronising, the story of the town mouse and the country mouse as reinterpreted for the international political stage.

However, for some of us, if the idea was to make the Browns, and by association Britain and its politics, look a bit passionless and lacking, it backfired. No offence meant, but the last thing I ever want to see is the Browns playing tonsil tennis on a boat on the Thames. Or anywhere. To me, this doesn’t say ‘virile and go-getting’, it says ‘midlife crisis alert, get him away from the button’.

Admittedly, it was all very diverting and it was sweet to see how gallantly British men rushed to welcome Madame Sarkozy and her interesting views on monogamy. Ultimately though, the whole try-hard thing with the Sarkozys left one with a huge appreciation for the Browns. In fact, I’d like to use this column to make an apology: I interviewed Gordon once and left whingeing that he was serious and dull. I’d like to change my mind. Like surgeons and airline pilots, you don’t want your world leaders to be too exciting or, God forbid, surprising - it’s reassuring that they’re serious and dull.

Indeed, although one feels this country was too easily seduced by the Carla-Nicolas roadshow, and should maybe have felt affronted by the way they made British politics look passionless by comparison, perhaps in the end, we should just feel relieved….”

More from Barbara Ellen in The Observer.

Posted in Art and Ideas, Crowds, Ideology

Mind Body: Credit crunch also driven by panic…

March 17, 2008 // No Comments »

“Household debt-service ratio is near a record high 14.3%, while the personal savings rate hovers near a record low 0.5%. Still, it is worth noting that in many cases debt service is as much about perception as reality. Optimistic social mood creates the right conditions for enhanced credit appetites and an optimistic view of how much debt one can service without stress. That is one reason the high-debt service ratio and low savings rate has been able to persist, and to grow to unimagined heights, for so long. A negative social mood can take things to an opposite extreme, where debt is repudiated or shunned…..”

More at Minyanville.com.

And this from The Big Deal.com:
“What makes me even more skeptical about the solidity and cogency of the financial market as a whole is the fact that this disaster was largely caused by panic, or “sentiment”, if you prefer.
Bear Stearns prime brokerage business, providing admin services to hedge funds with a fixed income bent, was the main source of liquidity for the now-moribund financial institution. Last week a rumor, which later led to rampant speculation, was put out about Bear Stearns fragility and its excessive exposure to US mortgages. Obviously all the hedge funds using Bear Stearns to deposit their assets panicked and were quick to terminate their relationship with the bank.
Without the funds’ liquid assets in its “vaults” Bear Stearns was not able to meet its running costs.

The worst part is that just a few days later, on March 27th, the bank would have been able to exchange its gigantic portfolio of mortgage backed securities for high quality, liquid US Treasuries…”

Posted in Cognition, Crowds

Amazon Blog: Do-Gooding Do-Do

March 5, 2008 // 2 Comments »

“Those who now speak of decoupling used to talk of globalisation. This is oxymoronic, you can believe in one or the other but not both,” says analyst James Montier.

Montier thinks that the world is bound to go the way of the American economy - down. If you pumped for globalisation and global growth when the going was good, he says, you can’t now argue for decoupling. You can’t now say that the global economy doesn’t depend on what happens here. That would be cognitive dissonance.

Here, I’ll take the part of cognitive dissonance. It’s what makes the world go round.

Mobs, Messiahs, and Markets is chock-full of it.

Critics have called that a terrible thing…..or terrific, depending on where they stand,
But if our detractors rested their case against us only on this, they’d have a non-starter on their hands. Anyone who’s sniffed a grand theory up close knows better.

Why?

Because the real world is a jungle and logic cuts only a very narrow track in it; we’d be foolish to mistake our little wayward path for the woolly thickets our machete didn’t get to.

There is no logical structure that doesn’t rest on a blind spot….there is no sense that does not have a foundation that is nonsense. (That’s from a piece I did on Tom Friedman).

In fact, a bystander watching the way we mangle language could be pardoned for thinking it our original sin. He’d see that we’re fooled not just by our theories, but by words themselves. Their sense and their nonsense.

“Mobs” is a book about words.

On my part, it started from my critical work on language; from studying propaganda and from my popular writing on the subject .

In “Do Gooding Do-Do” and “Developmentally Disabled,“ two pieces used in the book (incorrectly attributed in several places), I took a look at some common words used about economics … and got into trouble with progressive and conservative friends.

What did I say that was so bad?

I said that “free market” language is used a lot to support what’s essentially managed trade. And that “social uplift” language is used the same way.

But how can you not take a position, asked the critics, a la Montier. Isn’t globalisation

A Very Good Thing? Or A Very Bad Thing?

Is it?

Perhaps it’s neither…or both….
Perhaps it’s sometimes one thing..sometimes another.
Perhaps it’s just too complicated for slogans. Sometimes government regulations are the lesser evil. And sometimes the greater. Perhaps you can talk about globalisation….and also talk about decoupling. Perhaps, on most things with any complexity the best response is not the one the mob wants to hear - Yes or No.

The best response is - It Depends.

Posted in Amazon blog, Cognition, Crowds, Economy, Globalization

Activism: Virtual Rapist Takes the Rap in Rome….

// No Comments »

“An Italian man was jailed for more than two years for putting pornographic pictures of his ex-girlfriend on the Internet and sending them out in more than 15,000 e-mails.

The 32-year-old man had created a Web site that appeared to show his ex-girlfriend offering sexual favors and erotic games, with her phone number also on display….”

More at Reuters.

Comment:

Two years isn’t enough but bravo to the Italians for a good start. Now wait for the chatterati to howl about censorship. Punishing criminal behavior will be turned into an assault on free speech.

Of course it’s nothing of the sort. Publicly circulating pictures of this type is an assault of a very physical and damaging kind. In Iraqi Women and Torture (Chapter 8 of The Language of Empire) I argue that photographing and circulating nude or sexual pictures of women or men against their consent is an assault at least as bad as rape, and often much worse.

Our notions of consent and representation need considerable updating. I hope to be contributing something to that for the Routledge Key Concepts series.

Posted in Activism, Crowds, Media

Trader Psychology: The Dash for Trash…

February 26, 2008 // No Comments »

“The most important thing to do is to stick with the processes that have served you well, but appreciate that the environment we are operating in may be altering. If in doubt, as I wrote last week, inaction and hence holding cash may well be the safest bet.”

Read more by James Montier in Mind Matters.

Comment

Montier is talking about 20%-40% cash.

He also recommends purchasing value stocks with good dividend yields, rather than growth stocks, since he thinks valuations of US stocks - while off from their bubble peaks - are still far too optimistic.

As the piece indicates, Montier is no fan of the “decoupling” thesis - the idea that global growth can continue despite a recession in the US. He asks how it is that the same people who once talked most enthusiastically about globalisation are now endorsing decoupling - just as enthusiastically. He calls it cognitive dissonance.
He has a point.

On the other hand, I happen to be a fan of cognitive dissonance. Mainly because our cognitions aren’t as pure and simple as we think they are. They are just points of view.

To assert both globalisation and decoupling at the same time strikes me as quite plausible. Certain aspects of trade are global. Others are not. Some countries depend more heavily on the US consumer - either directly or indirectly. Others do not. It makes perfect sense that US stocks should be overvalued and not likely to go anywhere for years……and that emerging markets stocks, even if relatively overvalued and due for a correction, should do better - even much better - over the long-term.

But the piece is still worth studying for those investors in whom hope for their favorite growth stock springs eternal….

Posted in Cognition, Crowds, Finance, Trading

Amazon Blog: Government of PR flacks, by PR flacks, for PR flacks

February 20, 2008 // No Comments »

Where you get your words from doesn’t matter. That was the verdict of pundits and newsmen last week on the charges of plagiarism flung back and forth between the candidates.

Maybe.

But. in a time when words are increasingly going astray, a man or woman who makes his living with them can’t afford to fool around. He’d better stick with the ones he picks. And they’d better be his.

Four years ago, the country went to war for words later proved false. Word provided by politicians, pundits and newsmen… who should have known better. Who had a duty to their words - to keep them honest, unadulterated, and organic.

Because we swallow what they tell us.
We live or die by their words.

When words don’t anchor themselves in reality, then they’re only slogans…memes. The stuff of PR. We are dying by PR in this country.

It’s a major theme of Mobs, Messiahs and Markets.
The slogans that drive the mob crazy and pollute the conversation in our country.

If the point of words is to get what you want, then you can pitch them anyway you want. That’s the bottom -line.

But bottom-line thinking isn’t really what a conversation among citizens is about.
That’s what corporations do.

If our country is a business - even a not-for-profit business - run to achieve a social goal, however noble, or meet a production quota, however magnificent, then it doesn’t really matter whether anyone plagiarizes. It doesn’t matter how words are treated. It only matters that they do what we want them to do and take us where we want to go.

But if your country is not a corporation but an association of individuals, then words have to mean something more than slogans to move your listeners this way or that. They have to be more than tools to get your way.
You have to treat them with respect, like the people who speak them With care.

Like fine cutlery at a dinner. You don’t bend them or break them and you don’t pinch them, even from friends.

Real words are an exploration of the changing truths of the heart. They express what we are. They take us to places we did not know existed and let us become what we never dreamed to be.

They make up a conversation between individuals.
Not a script crafted by PR flacks.

Posted in Amazon blog, Art and Ideas, Crowds, Writing

Amazon re-viewed….

February 16, 2008 // No Comments »

What gets into people when they get in front of a computer keyboard? Talk about power corrupting. …And nothing is more powerful than a review.

In the old days you at least had to show some mastery of the field to make comments on the work of other people. These days you don’t have to show any command - of your field….of the language….even of yourself….you just need to hit a button and there, you’ve trashed a year or two of sweat by some poor sod silly enough to want to display his talents to the public.

By all means destroy a book….with another book. Savage your opponent…. with a sardonic lyric. But press a button?

Amazon “trash” reviews - especially by anonymous posters — are the dirty bombs of criticism.

And no - I am not crying over myself. Political writers are used to becoming the target of cyberfury….especially in an election year.

No, my wrath is on behalf of Cyprien Katsaris (one of the living legends of classical piano, if you’ve had the extreme misfortune never to have heard of him). His monumental performance of the Liszt transcription of the Beethoven symponies is rated only 4 stars by some Amazon customers.

Four stars, dear reader? What were those reviewers withholding that one star for, I wonder?

That’s mass man for you. Never able to look up to anyone or anything. Always leveling. Never able to see anything bigger than his own miserable limits.

Short of raising the dead and making the blind see, Katsaris’s performance is as close to the divine as clods of clay will ever get. The physical stamina demanded alone is mind-boggling, let alone what’s needed technically, intellectually and emotionally.

I assume these critics actually play some instrument besides a kazoo? Having spent many years at the keyboard let me say that the Liszt transcriptions of the Beethoven symphonies are some of the most excruciatingly difficult piano pieces there are. Hitting seventy-five percent of the notes would qualify you as a very competent pianist. Hitting every one of them with a level of precision, power, beauty, imagination and depth that would make the archangels stop dead in their tracks and take notes is a feat of which few…very few….maybe no more than a score of mortals…. have ever been capable in the life of this sorry planet. Katsaris is one of them.

Amazon does not have enough stars to rate that performance. The proper response to it is not button- pushing but chastened silence.

If you can find words, they had better be the best you can summon up.

Thus, my first Amazon review:

One of the finest recordings I have ever heard, February 15, 2008

Katsaris is simply incredible. He has virtuosity and power to spare - that goes without saying. He plays this extraordinarily difficult score as though he were born doing it; as though he had an orchestra in his ten fingers. I can’t think of many other pianists who could pull out every voice so individually from this complex arrangement and bring to each one such a range of color.

Add to this a majestic singing line, commanding intellectual presence, a tone quality that is sumptuous, relentless rhythmic power, and technical panache that never detracts from the musical depths that open from under his fingers. The slow movements spin out into galactic space, the filigree passages are iridescent, the fast movements are volcanic dithyrambs driven by centaurs.

What a genius. And what a genius Liszt was to make you almost think the unthinkable - that these transcriptions of Beethoven improve on the originals. Music written by one titan, recreated by another, and brought to life by a third.

Encountering this recording was one of the musical high points of my life. I cannot imagine piano playing any better than this. At least not on earth.

Posted in Art and Ideas, Crowds

The Mob You Run With: What Friends Are For

October 29, 2007 // No Comments »

A true friend stabs you in the front”
-Oscar Wilde

Posted in Art and Ideas, Crowds

The cyber-games people play……

October 21, 2007 // 1 Comment »

What’s with Amazon? We have been requesting them to put the great blurbs we got onto the webpage of the book - so people can see them.

They put them up in August…..and then took them down just when we needed them up the most. And since then, despite repeated requests, they still aren’t up, after nearly two months!

You begin to wonder……

Update:

Apparently, the blurbs “dropped off” — ours, along with many others.

The way of the web.

However, even if they did, why would they not respond to repeated inquiries? And why would no one follow up, respond, or drop a line?

Why? Because people are not the little angels they are supposed to be according to the mythology of democracy. And what we are today is no longer the hard-working, thrifty, sober people who created the wealth of this country. Today, we are lazy, profligate, and delusional — and we love it. We no longer practice any self-restraint or discipline. We have no laws within ourselves. That’s why we have so many laws outside us. If you cannot rule yourself, someone else must.

And someone else does. The state.

Posted in Crowds, Technology

Demo-crass-y: questioning the tyranny of the majority…

September 27, 2007 // No Comments »

“China’s threat to sell its US Treasuries - if actually carried out - will be triggered by the US Congress. This fall, the US Congress will vote on a bill that would impose a 20% across-the-board tariff on all Chinese goods imported into the US. The supporters of the bill describe its passage as “veto-proof” - that they now possess enough votes to override a presidential veto.

This possibility calls again into question the very efficacy of democracy, to wit., the belief that the collective will of the people is preferable to the capricious stupidity of a king or queen or any other selected or self-appointed tyrant, or indeed, virtually any government official…..”

Ah yes. Precisely the theme of “Mobs.”

And one no one likes to hear. Masses of ignorant, ill-informed, or passion-driven people are not exactly the ones we should be listening to. Not, of course, that the majority ever wanted to get into this war in the first place. They didn’t. Our elected oligarchs did that. But they can always count on enough mass hysteria to let them get away with it.

Of course, criticizing “the people” is out of the question these days. That would make you, what, an elitist? Well — I am an elitist. When I study something I don’t go to someone just as ignorant as me, I go to some one who knows better. When I want financial advice, I go to people who know how to make money and have more of it than me. Everything revolves around that sort of hierarchy - and acceptance of it. So, this constant talk of egalitarianism moves me about as much as “self-esteem” babble unaccompanied by any effort to improve. People who make better decisions, contribute more, and work harder ought to do better. Nothing wrong with that. The problem is when rewards don’t match the value added and are a result of the system being rigged.

So, when the demagogues jump into protectionism (just as they did with Smoot-Hawley) what is likely to happen?

“China is longer dependent on America to buy its goods. The Eurozone now shares the distinction of being China’s largest market. Additionally, when and if the US Congress votes to impose 20% tariffs on Chinese goods, the damage to China’s economy will be significant.

China will retaliate; and, dumping $1.33 trillion of US Treasuries on the open market will be an all too easy and accessible option. It would destroy the US dollar and deal the US economy a body blow from which it would take years to recover….”

and more fun stuff here.

Frankly, I would rather live under a despot who left me alone most of the time than under an endlessly meddling democracy.

Posted in Crowds

Don’t tase me bro, details

September 20, 2007 // No Comments »

Video footage:

1.http://www.youtube.com/watch?v=SaiWCS10C5s&mode=related&search=

2.

http://www.youtube.com/watch?v=AlnIkhYCS4w

3.

http://www.youtube.com/watch?v=V8ndctwAJmU

Courtesy of Rude Pundit at Democratic Underground.

I do not know where the early reporters got 19 and 9 cops from. Looks  more like 5-6 here.

Posted in Crowds, Police State

Housing Bubble trouble: Countrywide, Fed rate cut, and Osama as chief policy advisor

September 9, 2007 // No Comments »

“Home loan colossus Countrywide Financial Corp. announced Friday that it would slash as many as 12,000 jobs, or nearly 20% of its workforce, saying the downturn in the housing market and the credit crunch related to sub-prime loans have created the worst conditions ever seen by the modern mortgage industry.

The announcement by Calabasas-based Countrywide came hours after a smaller rival in the mortgage business, Pasadena-based savings and loan IndyMac Bancorp Inc., warned that it probably would record its first loss since 1998 in the third quarter. IndyMac said it would cut 1,000 jobs, 10% of its total.

Countrywide, the No. 1 home lender, funded $284.2 billion in mortgages this year through July 31, up from $255.8 billion in the same period in 2006, but said it expected lending to decline 25% next year….”

More by E. Scott Reckard at the Los Angeles Times.

Is this just a subprime lender problem?

At Thoughts from the Frontline, John Mauldin doesn’t think so:

“Goldman Sachs suggests home values could drop as much as 20%. Gary Shilling has been saying 25%. We don’t have time and space this week to go into housing prices, but many of the mortgages sold in the past two years only made sense in a housing market that was rising by 10-15% a year. A market that is dropping 10-15% a year, as it may do in the next 12 months, is only marginally be helped by a Fed funds cut.

But that does not mean they should not cut. They should, simply because the economy is clearly slowing, and the risks are now to the downside.

I have maintained for a long time that the bursting of the housing bubble would cause a serious slowdown or a recession in the economy. My critics would counter that housing is only 5-7% of the economy and a housing recession would not be enough to drag the whole economy down.

They are wrong for the following reasons. First, rising home values have allowed homeowners to use their homes as an ATM through mortgage equity withdrawals, which have added almost 2% to GDP annually over the last five years. That is now evaporating.

Secondly, falling home construction and lower home sales means fewer jobs not just in the direct home building market, but in the parts of the economy related to the home building markets, like mortgage brokers, real estate agents, hardware and furniture, etc. As an example, Countrywide announced a planned 10-12,000 person lay-off, when just a few weeks ago they were thinking of expansion, as they now think new mortgages may drop 25% in 2008. Fewer jobs mean lower consumer spending.

Consumers are not going to spend as much due to the wealth effect. If you feel your house was going to be a major part of your retirement, and now the value is going down, you are going to be more cautious and actually think about saving. This has been a dangerous prediction for 50 years, but I think consumer spending, some 71% of the US economy, is due to slow down. Year over year growth could drop below inflation later this year.

Further, with all the additional homes coming onto the market due to foreclosures, hone values are going to drop even more, and new home construction, which peaked at an annual run rate of 2,000,000 homes per year, is likely to fall to less than 1,000,000. We are currently at a level of 1,400,000, so we are not yet close to the bottom.

Rising unemployment. A housing market looking at the deepest recession in values since the Great Depression. A consumer under siege. A visibly slowing economy……”

Rate cut or not?

Since he seems to be setting himself up as a foreign policy advisor, maybe we should ask Osama Bin Laden.
“Iraq and Afghanistan and their tragedies; and the reeling of many of you under the burden of interest-related debts, insane taxes and real estate mortgages; global warming and its woes; and the abject poverty and tragic hunger in Africa; all of this is but one side of the grim face of this global system,” he said….”

Posted in Crowds, Economy

Mobs in the Market: the crisis is unfolding…..

September 6, 2007 // No Comments »

The sub-prime debacle rolls on:

“American Home Mortgage joins more than 50 lenders in bankruptcy this year.”
~MSNBC - Aug 6, 2007
~Bloomberg, Aug 10, 2007

“Goldman Sachs Group Inc.’s $8 billion Global Alpha hedge fund has fallen 26 percent so far this year…”

Check out this piece I wrote in Money Week about Goldman Sachs
I kind of jumped the gun on it, but the fact is the big bank is in trouble over the credit crunch, something few people would have once thought possible.

Hedge funds are keeling over all over the place as well:

“Hedge fund operator Sowood Capital Management said Friday it would return $1.4 billion to investors after losing an estimated 60% of their money last month…”
~LA Times, Aug 4, 2007

Hedge funds are taking a hit for 60% in a month.

Home mortgage lenders are going belly up, 50 this year alone.

Meanwhile, the “plunge protection team” at the Federal reserve is on the job with soothing words:

On March 28th, Fed Chairman Ben Bernanke told Congress he believed that sub-prime defaults were “likely to be contained.”

On June 20th, Treasury Secretary Henry Paulsonsaid the fallout “will not affect the economy overall.”

On June 27th, Merrill Lynch CEO Stanley O’Neal claimed the defaults were “reasonably well contained.”

In August, $40 billion in credit had been pumped into the financial system over two days - more than anything the Fed has done since 9/11.

But can the economy stay on keel?

Today, Sept. 6, there are announcements of terrorist warnings as dire as any since September 11…

Are we near a crisis?

Who knows? The point is when you have a situation this large and this complex, all bets are off.

Posted in Crowds, Economy, Finance