My comment from over there:
I've lost a lot of money, but 60% of my money was in cash and bonds before the crash. I don't mind losing money as long as everyone else loses more.
Your commentariat are full of academics who haz no monies.
Yeah, seriously. 60% of my money is in loose change kept under my sofa, so I think I'm well-positioned to weather the storm. I also have some stamps in my desk that are first class forever, so no worries there.
But that said, there's been news about a recession for a while. I have no idea what triggered today's numbers (proximately, not in general), but between housing & slowing growth, we can chalk up everything about this administration as a loss we're not all that surprised.
I need to learn about investments so one day I will know the meaning of panic when the market drops.
My net worth is in the negative six figures. I can haz lower interest rates plz?
I also have some stamps in my desk that are first class forever, so no worries there.
Yeah, those things are awesome! The first time I got them I thought something was up because they didn't have the little "X CENTS" thing on them, but instead they just had "FIRST CLASS FOREVER." And then this unknowable feeling of warmth and security flooded into me, like I had never known. A hundred years from now, when the waves have swept my bones clean amidst the wreck and ruin of this once-proud civilization, these stamps will still be first class.
I have decided not to pay any attention to the stock market collapse. In twenty years or so, it will all even out.
What's going on with the markets: they're fucked. We're fucked. Everybody's fucked.
The longer form of this: nobody really understands the amount of outstanding risk tied into CDOs, and nobody really understands how difficult it's going to become to raise capital, and nobody really understands whether or not the US is on the verge of another great depression and, since our free and easy access to credit has been fueling the consumer culture which has been fueling the growth of the (giant) emerging economies that were allegedly going to "decouple" and stand on their own without selling us cheap shit, nobody knows how far our coming crash is going to bring down the rest of the world.
The lesson: it's going to get way, way worse before it gets better.
From the Washington Post link:
In a news release accompanying the announcement of the rate cut, the Fed said it had taken the move because "incoming information" showed that a downturn in the U.S. housing market was growing worse, unemployment had begun to rise, and the overall economy was weakening.
So, I'm hoping this isn't, like, new news to the Fed.
INVISIBLE HAND.
I think my networth is zero, except in the special snowflake child of evolution way. So maybe .2.
As far as what specifically triggered this, I think the fact that Britian is having to bail out one of its largest private equity firms has to have shaken people. Also the fact that they realized we still have the same knucklehead in charge, and he's unlikely to find the golden economic pony that would be necessary to stimulate us out of this. I suspect his ineptly revealed stimulus package served as a bit of a tipoff in that regard.
I read an article last week that blamed the whole mortgage mess on Karl Rove and my uncle. Can't find it now.
I hope this discredits the "trickle-down" supply siders for all time. How did such a bad idea get so much political cache for so many years? Worse still, the "day-late-and-a-dollar-too-little" President still has a year to go, and reprehensibles in Congress are unlikely to reach a consensus.
My prediction: The average schlub who bails now and shifts his or her retirement savings from stocks to treasuries will (a) bail too late, and (b) will wait too long to get back into the market.
If you've got a diversified portfolio, and a long-term horizon, just sit tight. This ain't no Great Depression.
I have decided not to pay any attention to the stock market collapse. In twenty years or soBy the time I get any money, it will all even out.
A big trigger was Ambac getting downgraded on Friday - non-US markets plunged on Monday. It's far from the only reason - there was a lot of weak economic data published last week - but the equity markets have been lagging the credit markets for most of the last nine months. They finally seem to have woken up to the monoline situation.
Where's Bob? Already in his bunker, communications lines cut?
Remember me complaining last year about tax deferred retirement accounts with a limited spectrum of investment options controlled by one's employer? Consider me still complaining about them. Fuckers.
Eh, we're way above water on our apartment -- real estate prices couldn't possibly fall that far. So nothing's a real problem as long as everyone stays employed.
3: I thought you had some 18 months of salary set aside, FL? Or was that someone else?
Stras, you're first class forever.
I'm so impressed that there's so much confusion about the risks and value of various big-ticket financial devices. Like, I thought those guys got paid a lot to track this stuff accurately, and even though I don't understand it, they did, and all was well. Apparently not so much.
5.25 fixed rate, baby. Feel the love.
re: 10
Britain aren't bailing a private equity firm. They are bailing a mortgage lender and building society [like a savings and loan].
So, should I be feeling better or worse about my defaulted student loans?
Do you know what this thread needs? An ill-informed sermon about index funds and "the long term"! Go on guys, don't disappoint me.
Zadfrack, I wouldn't say 18, but I've got a cushion. It's just in a money market account, though, and my only stock-n-bond connection is my retirement stuff, which, as you say, is best treated with the set it & forget it heuristic.
As I understand, subject to correction, one of the problems we're gong to see is that a lot of the Keynesian type solutions have already been used. It's not like we can switch over to deficit spending to jump-start the economy.
re: 20, actually they're bailing out a bank which used to be a building society.
My instinct was that in today's interconnected economy, my owning nothing but one enormous banking company's stock was exactly as risky as actually being diversified. I think I was right about that.
Bob had to go in early for a meeting of the Citigroup board.
19: I've picked up the sense that a lot of the "risk models" the big boys used either ignored or underplayed any kind of systemic risk, and treated all risks as independent. This was clearly dumb (ask any home-insurance business in Florida), but was probably fueled by the idea that actually accounting for systemic risk would make all of the whizbang financial devices less profitable for the institutions slinging them around. So short-term profit drives out sanity once again.
28: my suspicion is that these financial models have reached a point where you can't really accurately model risk because there's so much weird nonlinearity introduced by using various combinations of funky derivates, but I say that from a standpoint of exactly zero knowledge, so, you know.
Britian is having to bail out one of its largest private equity firms
Eh? First I've heard of it. I think you probably mean Northern Rock, the bank that fell over last year.
Meanwhile, what's going on? fear'n'greed as always.
I just paid off mah overdraft.
12: I hope this discredits the "trickle-down" supply siders for all time.
Pah! Real, pure supply-side strategies have never been tried because of Dem obstructionism! We just haven't gone far enough. More tax cuts for big business!
Whatever kind of big financial entity it was. The Money Hut, I don't know.
The extreme funkiness and interconnectedness certainly doesn't help, no. The question is when anybody realized that their models weren't good, and what they did when they figured that out - did they slow down, back out, anything like that? It looks like the people who were actually worried about their models being bad were overruled in favor of raking in fat sacks of cash before everyone *else* realized that their models weren't good.
You realize, of course, the Dow is going to end the day positive. Love me that moral hazard.
My instinct was that in today's interconnected economy, my owning nothing but one enormous banking company's stock was exactly as risky as actually being diversified.
What money I have is pretty much all concentrated in one enormous Canadian power company.
Real, pure supply-side strategies have never been tried because of Dem obstructionism! We just haven't gone far enough. More tax cuts for big business!
Word. You know what would really turn the power of the market loose? Handing over Social Security to the geniuses on Wall Street.
You know what this thread needs? A detailed discussion of whether Patrick Nielsen Hayden's link at Making Light to Ezra Pound's "With Usura" reveals, beneath his publishing industry affectations, something unpleasant. Perhaps I am wrong to be so taken aback, but usually people don't condemn usury unless they're sincerely devoted to one or more of the traditional racisms.
The Asian markets clearly didn't like Bushco's bailout plan either, which helped get the ball rolling.
I'm a financial Luddite, but my guess is that once we get to the bottom of this we'll find that some whiz-kid genius's brilliant innovation in finance caused it. Something like that was true of Enron, and something like that was true of Long Term Capital Management (which disgraced two econ Nobelists, Black and Scholes, though no one remembers it but me).
There seems to have been a tendency to get rid of all the cautious, fail-safe parts of finance, like reserve funds for example, because they reduce returns, while at the same time tieing everything together into one enormous glob so that everyone is threatened by everyone else's problems.
I don't buy the Northern Rock argument at all - NR's share price shot up when the announcement was made, and people here have considered a bailout the most likely scenario for months. It's just been a question of whether it will be formally nationalised.
Perhaps I am wrong to be so taken aback
I'd really say you are. Talking about 'usury' as a metaphor for the fucked-up-ness of the financial industry appears to me to be almost certainly entirely unconnected with traditional anti-Semitism. (Also, I griped at Stras about this yesterday. If you're going to bring up the question of whether someone's racist or anti-Semitic, doing so in a mealymouthed way like "one of the traditional racisms" isn't gentler or less hostile than just saying it. But it is more annoying.)
43: John, to some degree this has already been established, w.r.t the subprime loan fiasco. It's a collection of whiz-kid games. Of course Bush has been spending money in Iraq like it's going out of style, and domestic policy hasn't been that economically sound either ... so this doesn't help at all. The subprime thing has given a serious blow to banks here an EU and Asia, though, so when everything else is already a bit wobbly, that's enough to shake things up.
I don't know, LB, "usury" sure is a loaded word, especially coming from Ezra frikkin' Pound. I'm not saying that the link reveals anti-semitism, but I do think it's in poor taste.
The only money I have in the stock market is in retirement funds that I won't need for 35 years. I am rather glad that I have about zero chance of losing my job, although my boyfriend is a little worried.
Frankly, I am amazed that U.S. consumer spending has just started dropping. Maybe an economy that values having low-priced consumer goods more than decent-paying jobs is finally catching up to us.
FL: I wish it wasn't loaded, because it makes an otherwise perfect descriptor of certain aspects of the CC, payday loan, etc. business.
You can say that linking to an anti-Semite is always in poor taste, but that's not all that far from thinking there's something questionable about reading Thackeray, or Trollope, or Kipling, or Dorothy Sayers. I know Pound's unambiguously anti-Semitic, but is he excluded from the mainstream of English literature to the extent that mentioning him says something bad about you?
50: Right. Saying "Usury (broadly construed) is bad or at least problematic" doesn't mean "Usury is always a code word denoting Jews" if not from someone who clearly means to be using it that way.
Thanks, Deregulation, for wrecking the economy of the Entire World.
47: but of course the subprime thing was just an extension of the increasingly desperate measures to extend the boom in consumer spending engendered by the various upstream booms from the Internet on, because if people stop buying, China might stop buying bond debt, and then how do we pay all the war profiteers?
LB, surely 51 is an uncharitable reading. Of course mentioning Pound by itself in and of itself doesn't say something bad about the speaker. But we're dealing specifically with a denunciation of "usury"-- not "oppressive financial arrangements," not "predatory lending practices" or anything more nuanced-- from a guy whose distaste for usury just might have something to do with his distaste for Jews. That's a bit further from reading Trollope.
My brother has a decent amount of his investments tied up in emerging markets on the "decouple" theory, that if American consumers retrench, consumers in Asia and elsewhere will just happily pick up the slack as cheap production continues apace. I'm thinking it doesn't look so good for that theory right now, but then again, that's not a shift that takes place on Day #1 of the American Recession--it would take time for it to become clear whether or not non-American consumers will in fact continue to fuel economic growth in China and elsewhere if American consumers pull back on spending.
Three quarters of a percent? Ho boy. I've been waiting for the Fed meeting at the end of the month to begin looking for a mortgage. 1bed/2bath fixer-upper in the ghetto, here I come!
But then, should I ride down in a house for a few years assuming my job won't fold, or should I look for signs of an upswing in a year or two? Decisions, decisions. Maybe the landlord won't be in such a hurry to get rid of us after all.
Whereas my money is all in a retirement fund that I had invested in an absurdly conservative fashion when I started working on the grounds that I couldn't imagine retirement as it was too far away and I was too lazy to choose something other than the default money-market fund. The older I've gotten, the stupider that has seemed, but then again I've occasionally thought that if the economic apocalypse hits everyone with a more aggressively invested retirement fund and I don't take a really bad hit, I'm gonna look like a genius.
LB gets it right.
Alternately, we could say that being anti-usury is associated not only with anti-semitism, but with pro-muslimism! Everybody panic! Stop using that word!
Pound's "Usura" came from his Social Credit beliefs, but anti-Semitism was there too. If I'm not mistaken Islamic banking theoretically forbids usury, though they have lots of work-arounds. Nelson's "The Idea of Usury" is a history of the way usury has been thought of. (link.
I am aware of the pitfalls of my Luddism, but I completely mistrust finance. I think that it has ruined pop music and the news media, for example. A lot of people have to learn not to think like economists, but I expect finance and economics to run wild for the rest of my life.
54: This is true. The elephant in the room is the the US has been behaving as if bad fundamentals doesn't matter to the US (due to fuzzy ideas about the necessity of the US economy, and US physical cash to other markets/countries) for decades. ...
I hope this discredits the "trickle-down" supply siders for all time. How did such a bad idea get so much political cache for so many years?
Because nobody gets cred on Wall Street like the cred "experts" get for explaining to rich guys that the welfare of the universe depends on rich guys holding on to as much of their money as possible. And the wannabe rich think this is somehow going to work for them too. How did the middle class fall for--oh, fuck it. they're stupid and lazy, that's how.
Tax cuts for the rich will grow the economy!!!
57: I wouldn't assume the housing market is at anything remotely close to bottom now.
55: Certainly Pound was an anti-Semite, and almost certainly (with the almost only because I haven't read much Pound at all) connected usury with Jews. I'm not defending Pound.
But looking askance at someone for referring to a poem of Pound's that references usury without mentioning Jews seems overly tense. Would you say the same about a reference to one of the Trollope books that deal with investment bubbles and are riddled with stereotypes about greasy, moneygrubbing Jews? Trollope was an anti-Semite, but the plots of his novels are about investment bubbles, and you can reference one without referencing the other.
The idea that a NY editor is trying to use code words to blame the financial meltdown on the Jews just seems lunatic to me; he hasn't got the right sort of audience to appreciate that class of code words.
which disgraced two econ Nobelists, Black and Scholes,
Footnote: Actually, Fischer Black was dead both before the Nobel (which he therefore didn't receive) and the Long-Term Capital Management fiasco (which he therefore can't be blamed for.)
As for the the current fiasco, my hunch is that moral hazard is the name of the game - ratings agencies, lenders and the guys who sliced and diced the securities all had incentives that were unrelated to creating viable market systems.
My best guess is that there are two big uncertainties: Nobody is quite sure where all the bodies are buried (that is, who holds all the bad debt), and nobody really knows how bad it all gets if we have a deep recession, especially if housing prices continue to drop.
But on all of this, I'd certainly defer to dsquared, who seems to know something about this stuff and whose mockery is the only thing that keeps me from making:
An ill-informed sermon about index funds and "the long term"!
But we're dealing specifically with a denunciation of "usury"-- not "oppressive financial arrangements," not "predatory lending practices" or anything more nuanced
No, in the context of Pound, "usura" means excessive interest rates on loans for productive investment, not just the charging of interest itself. Pound's economics were quite nuanced and worked out - they were influenced by Major Clifford Douglas' "Social Credit" and by Silvio Gesell. It's really quite wrong to say that Pound's economic views were just a throwaway ancillary to his anti-Semitism - anyone making that case has to at least admit that for someone who didn't really care about usury, he wrote a hell of a lot about economics.
Right, there are Islamic prohibitions on interest. Opinions differ on what to do about this: there are financial arrangements that are basically terminological variants, while some people think that what's prohibited is oppressive arrangements, and not, say, a reasonable mortgage that's in the interest of the borrower.
Semi-off-topic, since Flippanter has begun the discussion of whether everything on earth is anti-semitic:
What the heck happened at the end of the movie "Homicide"? Was Mamet leaving it extremely-open-ended? Or was there some sort of baroque conspiracy that was supposed to be explained?
which disgraced two econ Nobelists, Black and Scholes
Not Black and Scholes. Scholes and Merton.
I've felt bad for a long time about keeping my life savings in a coffee can under my sink, but today I feel better.
I wish I had some of those first class stamps, though.
LB, I realize you're just trolling me, but for the record
The idea that a NY editor is trying to use code words to blame the financial meltdown on the Jews just seems lunatic to me
I never claimed that he was. Your disagreement is either with a fictional character or another commenter.
d2: fair point; I stand corrected.
A communication from Minneapolitan, busily manning the desk at a financial services firm, suggests that things may not be panic stations yet. He does not believe we are in for a severe recession and says that this is an unpleasant correction and nothing more.
I don't have any other details, since I'd just emailed to ask whether I should go into my customary total-fear-and-despair-of-any-sort-of-meaningful-future mode, but I'm sure he'll be posting later.
(Strangely, although I'm all left wing the thought of total meltdown fills me with anxiety rather than euphoria. Possibly because I'm feeble and mild-mannered and sure to die of something preventable and silly in any sort of serious social crisis. There is hope, but not for us as some Frankfurt School guy or other perceptively remarked.)
71: I callously used my first class forever stamps because I was too lazy to go buy denominated ones. Little did I know what a risk I was running!
If you still measure by the pound rather than the kilogram, you're pretty clearly an antisemite.
I never claimed that he was. Your disagreement is either with a fictional character or another commenter.
Clarifying--rookie mistake. The move here is to suggest that LB is being defensive. Perhaps she's read Pound; she certainly hasn't denied that.
72: Right. My disagreement is with Flippanter, who asked if the link to Ezra Pound meant that PNH was engaging in a coded shout-out to anti-Semites, or somehow expressing his own anti-Semitism. (Or that was what I understood Flippanter to be saying.)
You said the link was in poor taste -- I'm not sure what that means other than "Even if it doesn't demonstrate anti-Semitism, it's the sort of thing you shouldn't do because people will think you're an anti-Semite for doing it", and I attempted to disagree with that, while not perfectly understanding what you meant by 'in poor taste'.
I meant Merton and Scholes.
The worst anti-semitic caricature I remember ever seeing was a pimp-pornographer-loan-shark in Elias Canetti's "Auto-da-Fe", but Canetti is Jewish. He was also apparently an Anglophobe after living in England for a long period. He was Sephardic and maybe he just didn't like German Jews. Isaac Bashevis Singer's "The Manor" also treated some of the characters in a way that would be regarded as anti-Semitic if someone else had written the book.
Dammit, I want to talk about how fucked we all are. C'mon, dsquared, lay some pessimism on me. Or tell me I'm wrong, either way; I just want that good hurtin'.
Sifu tweety was good enough above. Ginger Yellow is tight about the monolines, it is possible the US Gov't may have to nationalize them. was funny when Brad Setser said he didn't know about the monolines. Do you want monolines explained? Basically insurance that keeps bond interests a little lower. Whatever. Insolvency is the word Big Somebodies Somewhere are Bankrupt and the markets aren't sure who or where.
How much is probably about a 33% drop in US std of living relative to rest of the world. Maybe a 1/3 absolute drop. Setser has always worried that China and Saudi Arabia will stop loaning us money for consumption. The recent change has been that China & SA etc are buying American companies. That was scarey in the 80s but better for oligarchs now after globalization. Outsourced labor means scared unrevolting American labor.
Fast or slow. Fast might mean depression, but Bernanke is an expert on the depression and made his reputation by saying the Fed could have avoided the Great Depression and New Deal wouldn't have enacted with inflation. I kid you not. They are a lot better at fucking workers since the 30s,with better tools.
The Fed cuts are nice for the stock market, may avoid a depression, but might mean $9 bread in 2010. Something's gotta inflate to avoid deflation. The rich just really hate deflation. They would prefer slow slow so slow the worker doesn't realize how fucked he is and no populist revolt until it is too late. Serfdom can last for centuries. So much worse than war.
In any case, the plan has been since the early 80s:asset inflation & real wage deflation = upward redistribution = unassailable oligarchy. Bankrupt the gov't and kill entitlements. Read John Holbo's long long paper on David Frum.
Right now they are just trying to push the pain into the next Presidency. Might be nice in the fall for election. But the next President is going to be so completely fucked that there will be no joy at all for Democrats. Nothing but pain.
I am still pissed. All this "present" and other political bullshit massively underrates how fucked we are, how serious this is. Even if it looks different it is 1930s serious. The Republicans have this planned out and cannot be dealt with at all.
Personal advice:keep your job, pay down your debts, get into cash. Or party like the world is ending.
64: I'm not too terribly concerned about timing things just so. I just need a new place to live in a few months, and my two outdoor cats bump my rental prospects up to where the mortgage could be cheaper. It's more a matter of retaining enough regulars at the bar to compensate for a drop off in diners, real estate agents, and plumbers in the restaurant. Will alcoholism be as recession-proof as in the past? That and the small matter of getting a fixer-upper knowing that I won't have any equity to fix it up any time soon. Something with a new roof, please. I'll take the garish paneling and soiled carpet.
In light of the antisemitism discussion, I retract my earlier use of "ghetto".
78: I knew Merton's son in High School; he definitely had that "so what if my dad lost a trillion dollars" vibe, although this was before the crash. Very devil-may-care, very Republican.
Frowner, you and I know that Minneapolitan is a blinkered optimist. Don't mislead these fine people.
I've occasionally thought that if the economic apocalypse hits everyone with a more aggressively invested retirement fund and I don't take a really bad hit, I'm gonna look like a genius.
Money markets aren't invulnerable. They make a living by making investments, and your deposits aren't insured.
LB: I meant something like this: "while linking to Pound is almost certainly not dog-whistle anti-semitism, it is, in the context of denouncing usury, probably best avoided, because Pound is well-known as an anti-semite and the term 'usury' has a long history as part of anti-semitic slurs, and so there's an unfortunate if unintended association there." It sounds like we actually disagree, but it also sounds like a tedious conversation.
Are we really about to pass another tax-cuts-for-the-rich short-term emergency stimulus package? I swear I'm liable to send anthrax to my congressmen if we do.
I am certainly saying nothing (other than to take a few cheap shots at the Brotherhood of Our Lady Of The Index Funds, and defend the honour of Ezra Pound, natch). I am conflicted out here, unfortunately - it would be totally unethical of me to do anything that even resembled talking my own book.
Is comment 86 going to get me arrested? Shit. Dear FBI: it was only a joke.
Emerson - Scholes ran into some problems for being involved in an illegal tax shelter for LTCM. I don't believe Merton was truly disgraced in any way.
Now is the time to invest in a good divorce.
dsquared: It's a slow morning, cheap shots are most likely welcome
Oh, is something happening to Teh Market?
90 made me laugh. Look at Will, always drumming up business.
Will, when *isn't* it time (in your oh so uninterested party opinion) to invest in a good divorce?
My wealth is tied up in a securities litigation law firm. You guys lose a buck, we get you back a nickel and keep half a cent. The more you lose the more our half pennies add up. We are very happy this month.
Oh, and remember:1929 took several months to bottom the market, or years. The economy didn't bottom until 1932-33 (?). This is only the beginning.
Maybe they can bring down long rates. They would love to lock people into paying 50 percent of their income into a house worth less than the mortgage. I think they will try. Debt serdom. If you are in such a situation, mail in your keys.
89: Except that his briliant financial scheme lost five billion dollars and had to be bailed out to prevent worse losses. If I'm not mistaken the company itself was accused of some sort of fraud, and Merton was a director.
I'm just a rumor-spreading Luddite dog on the internet, guys. Pay me no heed.
I suppose I should note that "taken aback" is not the same thing as "shrieking accusations of anti-semitism." It is more that it seems an example of questionable taste to invoke Pound when complaining about the uncontrollable, invisible, malign interests of the financial industries.
Was that too direct?
Perhaps I should have opted for a more subtle dsquared-approach.
Social Credit was big in BC for a long time, along with the NDP. BC has pretty intense politics considering how mild-mannered the people are, and I haven't even mentioned the Doukhobors.
Well, I guess I have.
Definitely not too direct. Hilarious.
Instead of getting married, folks, just send will 3% of your net worth. You'll save a lot of money and grief that way.
It is more that it seems an example of questionable taste to invoke Pound when complaining about the uncontrollable, invisible, malign interests of the financial industries
This seems a bit pearl-clutching to me, frankly.
101 is exactly correct.
BC politics is a circus freakshow.
85, 98: Yeah. My response, and why I invoked the idea that it's lunatic to think that that's what PNH meant, is that if a statement isn't literally anti-Semitic (as, for example, by not mentioning Jews), and the circumstances are such that it's wildly unlikely either that it's intended to communicate anti-Semitism, or that it will be accidentally the cause of a sincere belief in a reader that it was intended to communicate anti-Semitism, it really seems overly sensitive to consider it in poor taste.
At least we're worried about anti-Semitism instead of sexism or racism for a change.
103: Because it's really the fucking Welsh who are at the top of the international banking conspiracy.
This seems a bit pearl-clutching to me, frankly.
Yes, but you hate the Jews.
Except that his briliant financial scheme lost five billion dollars
Well, I certainly won't be investing in any funds directed by Robert Merton again.
I'm not sure what the Jewish role in finance is now, or in Pound's time either, but most of the big banks are not Jewish. Maybe Jews (Goldman Sachs) play an unusually visible role.
Top 10: 3 Japanese, 6 European / British, 1 U.S (Citigroup at #2). It seems unlikely to me that any of the European banks would have much Jewish influence. The Rothchilds are a thing of the distant past.
So anyway, maybe Pound's error was in linking Jews and Finance, not in what he says about finance.
My brother's business is tremendously successful exceopt that he has some high-interest loans, and even without the crash he hasn't been able to refinance.
110: Is anyone arguing anything even remotely connected to that?
Bob is inconsistent. If you think prices will triple in 3 years ($9 bread), don't pay down your debt now and certainly don't get into cash. Buy inflation protected investments (eg TIPS, inflation-protected government bonds) and then pay down your debt after all the inflation when your debt has effectively been reduced by 2/3. Inflation is good for people with a negative net worth.
My Jewish dad works for a Jewish bank. I will own you all once I get my inheritance.
105: suppose I'd said something about some really articulate black speaker, sincerely intending it as a compliment. Wouldn't you pull me aside and say, look, I know you didn't mean that as a slight, but there's a history with this subject and this word, and maybe it would be better to avoid it?
I blame you all for the fact that "Throw the Jew Down the Well" has been going through my head all morning.
Well, I certainly won't be investing in any funds directed by Robert Merton again.
Robert Merton? I thought we were talking about Thomas Merton, author of The Seven Storey Pyramid Scheme.
I think that we can detach Pound's anti-Semitism from what he says about usury, even if Pound couldn't. The link criticized was about usury.
113: wait, it's a bad idea to follow McManus's financial advice?
113: Well, at least he hasn't told us that we need to invest in gold.
I hope this discredits the "trickle-down" supply siders for all time.
mcmc's right. Supply-siders would still be pushing extensions of Bush's tax cuts even if we were in an Argentina-style tailspin, and Republican candidates would still be running on fiscal responsibility. It's Dada-level absurdity.
Inflation is good for people with a negative net worth.
Countries, too. Hey, China! We're peeing on your bond debt!
115: Indeed, wasn't there a whole thread on that?
Agreed on the monolines. Lots of funds are prohibited from owning bonds with the slightest risk of not being paid back. The "monolines" insured bonds that had a moderate risk of not being paid back by promising that if the bond issuer didn't pay, they would. Now that it's become clear that the monolines don't have the money to keep their promises, the bonds they insured are back in "moderate risk of not being paid back" category. Which means that if a fund has them and is prohibited from owning them, it has to sell them. If everyone has to sell at the same time but no one wants to buy, prices will tank horribly and your pension fund loses most of its money.
It's seemed like this might happen at some point in the future for a while, but now it seems like it will happen soon. Hence markets tanking.
A detailed discussion of whether Patrick Nielsen Hayden's link at Making Light to Ezra Pound's "With Usura" reveals, beneath his publishing industry affectations, something unpleasant.
Well! What luck I stopped having "with usura hath no man a house of good stone" printed on my checks.
122: Investors in index funds don't pay dsquared's salary.
Is the "Bob" we're talking about the original Unfogged Bob, and if so, are people actually talking about him or just making things up?
So what's so bad about index funds?
They are cheap and therefore don't make big piles of money for the financial services industry.
124- Already happened with some state investment funds- see Florida.
119- Yes, I know I shouldn't respond to performance art.
125: Dang, I thought that quote went "With urea...".
115: The thing is, though, then you're at least actually talking about black people, so you can start worrying about invoking all of the unconscious stereotypes in people's heads. PNH (not that I know him, but guessing from writing style, age, location, and occupation) doesn't think, even subconsciously, that Jews control the international financial markets or are generally usurious moneylenders. His readers (similar reasoning) don't think, even subconsciously, that Jews control the international financial markets, etc. Like any passably well educated person, they're aware that the stereotype existed in the past, and probably still exists among neo-Nazis and the like, but it's not a currently vivid stereotype for the writer or his audience. At that point, worrying about invoking the stereotype by means of an allusion to usury that doesn't mention Jews seems to me to be borrowing trouble.
(Once you're actually mentioning Jews as a class or any specific Jewish person, I could see getting much more careful -- I wouldn't mention the Pound poem in the context of an accusation that George Soros had done something wrongful. But that was not this post.)
From The Good Shepherd
"Joseph Palmi:Let me ask you something... we Italians, we got our families, and we got the church; the Irish, they have the homeland, Jews their tradition; even the niggers, they got their music. What about you people, Mr. Wilson, what do you have?
Edward Wilson: The United States of America. The rest of you are just visiting."
I really did delete all my political blogs. The lady asked:"But isn't politics as important as economics?" But politics is hopeless.
LB, we disagree about when those sorts of allusions should be avoided. You take the more charitable, less -ism-prone reading, which is defensible but in my view not obligatory.
I think that we can detach Pound's anti-Semitism from what he says about usury, even if Pound couldn't. The link criticized was about usury.
This is getting pretty far afield, though, Emerson. At issue are the following:
1. Nielsen Hayden sounds vaguely Germanic.
2. Boys from Brazil get classified as science fiction. PNH works in science fiction. Coincidence?
3. I'm not saying it's determinative, but take away the facial hair from this and replace it with a little mustache....
Bob, why do I have the impression that you'd have said exactly the same thing if the index was up 600 points? One of these days I'll write a Bobifier that autogenerates you.
Great, I've lost Tim. The path of the righteous gentile is a lonely one.
One of these days I'll write a Bobifier that autogenerates you.
Are you sure this wouldn't be redundant?
135: Yeah, I was reacting rather strongly to Flippanter's 41 (A detailed discussion of whether Patrick Nielsen Hayden's link at Making Light to Ezra Pound's "With Usura" reveals, beneath his publishing industry affectations, something unpleasant.) which appeared to suggest a real belief that it was possible that the link did express genuine anti-Semitism. Which just seemed loony to me. Had the conversation started from a different angle, I might have been more sympathetic to the position that everyone should watch their language.
But the financial stuff particularly is hard to talk about if you're going to be that cautious. Look at say, 43, or 47, which are talking about secret unaccountable conspiracies that control the financial markets. Neither comment has anything at all to do with Jews or anti-Semitism, but they're getting fairly close to what would be an anti-Semitic trope if they did mention Jews.
As for Patrick Nielsen Hayden, I've been trying to figure out why everyone is so interested in the potential anti-semitism of a sitcom actor.
LB, how is 47 talking about secret unaccountable conspiracies? I think everything I mentioned there was a) fairly transparent in a look-at-this-great-new-instrument way, and b) driven by greed (no conspiracy needed).
Besides that, though, I agree entirely with you that because of historical uses, certain ways of framing things may be problematic depending on who/what is referred to. Expanding that too generously makes some meaningful discussions very difficult.
137:I have, and Stirling Newberry & Ian Welsh et al at the Agonist and many others have been and will continue to say the same thing.
A nation can't build & sustain an economy on borrowing & finance forever.
If Bernanke had lowered another 100 basis points the Dow might have gone up 600. That doesn't mean we can all relax.
It's seemed like this might happen at some point in the future for a while, but now it seems like it will happen soon. Hence markets tanking.
And yet MBIA and Ambac are up 20% or more today. Moral hazard today, moral hazard tomorrow, moral hazard forever! (People buying these, Ambac particularly, are dopes; Ackman and Pershing Square were absolutely right.)
I'd really just like to gte back to slagging on finance. I'm not knowledgeable enough to do a good job of it, so I could use some help.
Back in Portland a financial whiz kid (Andrew Weiderhorn) fleeced a union of about 60% of its pension fund (and others too). Up until that time he had received fulsome coverage as a young self-made genius local boy made good and was part of high society. He had succeeded in leverage a very small nest egg into a big pile by sophisticated financial maneuvers no one was able to understand. (Borrowing money to buy bad debt, contracting out the debt collection, and then borrowing even more money off the bad debt itself, and lending it out -- something like that.) He spent some time in jail, only because he'd bribed union officers, but he was able to protect most of his pile. He was unrepentant.
My feeling is that every sophisticated new financial device offers opportunities for quick easy profits for the first person to figure out how it really works, attended by an unknown amount of risk that the whole thing will blow up once it's been in play long enough.
So call me grandma who keeps her life savings under the bed. I don't understand this stuff and I really don't think anyone does, but I do think that the world is not in good hands, and it's a darn shame that finance controls as much as it does.
142: Well, it's a response to Emerson's "Once we get to the bottom of this," i.e., the cause of what's going on in the financial markets is secret, or at least concealed for now. I think both posts are sensible, and likely true, and have not the remotest thing to do with anti-Semitism, but if the same perfectly reasonable things were said in the context of a conversation that was otherwise about Jews, that would set off my anti-Semitism radar.
Which was my point: you can't use the fact that Jews have been accused of financial chicanery to make discussions of financial chicanery questionable in themselves.
A huge .75 percent rate cut, and the Dow is still down over 1 percent. I predict that the McManus Gloom Fund (NYSE: MNGLO) will perform well this week.
Which was my point: you can't use the fact that Jews have been accused of financial chicanery to make discussions of financial chicanery questionable in themselves.
No one was doing that!
LB, oh --- ok I see what you mean (and agree that a different wording could change things a lot).
Clearly I didnt' write it well though, as you read it somewhat backwards to my intent. I was suggesting to Emerson that there's nothing much to get to the bottom of, it's all out there in the open. Except for the question of who actually holds lots of debt, but that's a shell game problem to do with the complexity of the transactions. I don't think you need to posit anything more than (the ever-present) greed and short-sightedness to see very roughly how we go here. The details are complicated, sure, but they're just details.
As I recall, it's possible to predict with a fair degree of certainty that a bubble will burst, but not when it will burst, but that unless you know when it will burst, you can't protect yourself and you also can't profit off the burst. So the smartest people end up sitting around waiting for the disaster to hit, without being able to do anything about it, or even to protect themselves.
Also, a lot of them are predatory crooks anyway.
I wish Dsquared would quit arbitraging or whatever it is he does for a living and come around to explain things.
And yet MBIA and Ambac are up 20% or more today. Moral hazard today, moral hazard tomorrow, moral hazard forever! (People buying these, Ambac particularly, are dopes; Ackman and Pershing Square were absolutely right.)
They may be up today, but they are hugely down from last week.
I don't think it's concealed at all, if you care to look. The absurdly shaky underpinnings of American economic growth and deficit spending have been obvious for a while now.
Have we considered that PNH might have been oblivious to the whole Ezra Pound association when he linked it? I haven't read the poem but, if I had and thought it was prescient, I could picture writing a post thinking "hey! cool poem!" and since I know jack about Ezra Pound not realizing what I'd done. I don't know the background of every poet or author I like.
147- Actually, one thing that's interesting about the upcoming/current recession is how easy it is for individual investors to hedge or bet against the market. In previous down markets, shorting was only for the insiders. Even the recent 2001 slide didn't have the kind of options available today. By contrast, I used an ETF to short an index last summer and made some money- it was as simple as buying a regular stock. I missed it this time, but if you had bought that ETF (TWM, ultrashort small cap index) as recently as a month ago you would have made a 50% return.
As I recall, it's possible to predict with a fair degree of certainty that a bubble will burst, but not when it will burst, but that unless you know when it will burst, you can't protect yourself and you also can't profit off the burst. So the smartest people end up sitting around waiting for the disaster to hit, without being able to do anything about it, or even to protect themselves.
You can protect yourself by not playing. You will have to listen to participants call you a coward on the way up, but that gets counterbalanced by saying "I told you so" on the way back down.
When in danger or in doubt,
Run in circles scream and shout.
I'd say we are on plan, and this blog is doing its fair share.
I do think that part of that "Great Risk Shift" thesis holds: more people have become convinced that they should make crazy risky financial decisions (balancing mortages against student debt, investing retirement funds into stoks), and the fact is that few of us are really all that good at "out-performing" everybody else.
One big, diversified fuite en avance.
I should read this whole thread, and may actually, but I must single out 3 and 6, and thank the authors for making me laugh. Stras, especially, has brightened my day.
There's no secret, everything is out in the open, fine. But we're only just now figuring out how these new instruments work. And maybe the people with their hands openly on the controls have interests contrary to ours, and why should they tell us if they do?
Really guys, some things are conspiracies, some aren't, and there are a lot of in-between thingies which aren't actually conspiracies, but involve people in power (private or public) feathering their own nests at others' expense without saying that's what they're doing.
You only have to read a moderate amount of history to understand that conspiracies are fairly frequent and that some of them succeed. And if you're one of the people who's never going to be cut in on the game, you really have to think about that stuff.
And I suppose, if you think that maye you will be cut in on the game, you should not think about that stuff.
148: You were saying that quoting a known anti-Semite talking about usury was questionable, even in a context where neither you nor the anti-Semite was talking about Jews. Given that Pound was working from a definition of 'usury' meaning something more like oppressive or dishonest lending than just charging interest, you were getting pretty close.
I'm not meaning to call you oppressively PC or anything -- I was pushing back hard against Flippanter's 41, which seemed way out of line to me, and I'm pushing back some against your calling the PNH post in poor taste at all. I don't think you're wildly off base drawing the line where you do, but moderately so, yeah.
people in power (private or public) feathering their own nests at others' expense without saying that's what they're doing.
This should be your starting point assumption, always.
155: No, not playing doesn't protect you. For example, the upcoming credit crunch might drive my brother out of business, even though he hasn't played. And during a bubble, people who don't play can get squeezed by people who are temporarily winning.
Have we considered that PNH might have been oblivious to the whole Ezra Pound association when he linked it? I haven't read the poem but, if I had and thought it was prescient, I could picture writing a post thinking "hey! cool poem!" and since I know jack about Ezra Pound not realizing what I'd done. I don't know the background of every poet or author I like.
I'd be surprised. It's really one of the most salient features of Ezra Pound -- the 10-word biography goes "Modernist, genius, Eliot's editor, treasonous Jew-hating Fascist radio broadcaster."
Have we considered that PNH might have been oblivious to the whole Ezra Pound association when he linked it?
I haven't been following this subthread and seriously doubt there's much to be OUTRAGED about there, but PNH is a professional literary guy: I seriously doubt he'd be unaware of Pound's history of antisemitism. You get a lot of people in that world who refuse even to read Celine, and Pound actually went to jail.
As I recall, it's possible to predict with a fair degree of certainty that a bubble will burst, but not when it will burst, but that unless you know when it will burst, you can't protect yourself and you also can't profit off the burst. So the smartest people end up sitting around waiting for the disaster to hit, without being able to do anything about it, or even to protect themselves.
Also, a lot of them are predatory crooks anyway.
I wish Dsquared would quit arbitraging or whatever it is he does for a living and come around to explain things.
164, 165: Yeah, I don't know jack about Pound and I know that much, I'd be surprised if PNH didn't.
Great, I've lost Tim. The path of the righteous gentile is a lonely one.
I'm sympathetic to your broader point. In the specific case, I don't (or didn't, for some reason) connect usury with Jewishness. I would have known the Pound issue, but probably dismissed it with "oh, PNH is one of the sophisticated literate types, and separates out stuff."
Also, Obama is articulate. I suppose if others are also articulate, they might choose a different phrasing.
He didn't go to jail, JM - some of his friends pulled strings and got him found not competent to stand trial and confined to a private mental institution.
168: Precisely, down to the sympathy with the broader point.
So what's so bad about index funds?
They don't let you (for instance) pull money out of only financial stocks during a housing bubble plain to see coming a year in advance that will cause the banks to suffer. They don't let you try to profit from overpriced equities, you can only go long.
Emerson, have you read Doug Henwood's book ? He slags finance, and complains of being underpaid. It's interesting reading, only for the details in my opinion, but you may like his larger claims as well.
Today's selloff seems like panic to me.
154: I worked for a few interesting months, beginning in April 2000, for a firm of small-cap analysts (as a reporter, not an analyst), and if I'd stuck around for a little while longer I'd probably be confident about doing the same. I should look into that.
The Dow is now down 42 points. That's hardly panic.
171- They don't let you try to profit from overpriced equities, you can only go long.
Not true, see 154. Well, maybe true because you may be talking about mutual funds while I was talking about ETFs, but let's talk about index investing in general.
Wait, how did Ezra Pound crash the economy? I started skimming.
169: But he was kept for some time in a cage by the U.S. Army in Italy, which is maybe what JM was referring to?
At any rate, LB is clearly right about everything here.
169.---That's right. As soon as I posted the above, I got that queasy feeling, half-remembering Pound's confinement, not quite sure whether he'd actually been convicted.
The Dow is now down 42 points. That's hardly panic.
Dead cat bounce! Now it's back to 90 down!
It was kind of fun having a job where I essentially just watched numbers get bigger and smaller all day.
173: Well a .75 drop has to do something, right? Bit early to tell what the real effect is.
154: What I was told was that while the mechanics of shorting is now easy, you still have to time it right, because if you guess wrong you lose. And the thing with bubbles bursting is timing.
re: short ETFs
Point taken that it's possible. Index funds are IMO appealing because of the very low fees; the exotic ETFs were not nearly so cheap last time I looked.
There is nothing particularly wrong with index funds (actually, scratch that - there is nothing wrong with Vanguard USA, but lots of other index funds are actually very bad at what they profess to do), but they are not a) the only sensible investment to ever have b) the solution to any and all investment problems c) the secret way to avoid being fleeced by the terrible corrupt money people. And lots of the travelling missionaries of the Jesus H Bogle Church of Latter Day Index Fund Bores tend to claim they are all three.
It was kind of fun having a job where I essentially just watched numbers get bigger and smaller all day.
It's a shame that Kinsey Institute fired you.
180 - Well, I'd guess this postpones the crash but not the recession; if I want to be kind to Helicopter Ben, I'd say that he's trying to give Ambac and MBIA (which I agree are the proximate cause of the worldwide MLK Day freakout, although the Bank of China's subprime writedown surely didn't help) time to attract funding or wind down in a more orderly fashion. I doubt it can be done, and I don't think it's possible to stave off the recession at this point.
Wow. Pound's mug shot makes him look eligible for the insanity defense.
you still have to time it right
A two-year window is pretty wide, and accessible relatively cheaply for many indexes and individual equities through out-of-the-money puts.
Oh, shorting is definitely risky, but less so now- with traditional shorting in theory you have unlimited loss potential whereas going long you can only lose what you invest, but with ETFs that risk is eliminated (not sure how that works exactly, I think it's because they close their positions each day.) But the point is that it can be a hedge, which is what I used it for- if you're uncertain about the markets, but don't want to cash out because you'll have a big tax bill, you can balance your risk.
Also, it gives people like Sifu, who's saying above that he saw this coming for a year, the chance to put his forever stamps where his mouth is.
Here's a nice rant/summary of current goings on. (via Wolcott)
154: A friend of mine shorts for a living. He says that if you bet on a stock to go up, you can only lose your way down to zero. If you bet the other way, your losses are potentially infinite.
An ill-informed sermon about index funds and "the long term"!
Like how YoY the S&P is down less than 15%, and how if you can't take a 10% hit that's money that shouldn't be in the market? Hope that helps...
It could get much, much worse, of course...
with traditional shorting in theory you have unlimited loss potential whereas going long you can only lose what you invest
WTF? Traditional shorting allows you to lose more than you invest? They're going to come after your house and your car and your kid's piggy bank??
I think you misworded something somewhere.
187: actually I've seen it coming for three years, and so would almost certainly gotten the timing wrong. Plus I don't have any money.
the secret way to avoid being fleeced by the terrible corrupt money people Welsh.
(Just doing my part to fight anti-Semitism by redirecting wrath toward a more deserving minority.)
Brock, it's because there's a flat bottom for stock prices of zero, but Pets.com or Digital Angel can go to A MILLION DOLLARS A SHARE ZOMG. If you shorted at $30, it's really uncool if it makes its way to $300 on its way down to zero.
Traditional shorting allows you to lose more than you invest?
Correct. You borrow a share at $10, sell it, collect $10, and retain commitment to pay back borrowed share at a later time. If the stock goes to zero, you make $10. If the stock goes to $100, you owe $90.
184: right... i don't see any way to wriggle out of recession at this point (but what do I know). The rate change could smooth out a bumpy ride though.
I cashed out a little while ago (an illy coffee tin under the sink, say) so we'll see if that was dumb or not. Not that it matters much.
191: margin.
191 to 189, too. With traditional shorting it's very easy to lose 100% very quickly, which definitely blows the goat. But infinite losses? I'm having a hard time envisioning.
Oh, I see what your objection is. No, normally what happens is that brokerages start making margin calls -- if you can't pay, they close out your account and keep all the money that was in it, but you usually don't have to hock Fido and Junior.
191: Yes, you can lose more than you invest. In fact, you don't have to actually "invest" anything.
You short a stock by borrowing shares from someone else, and selling them, with the promise to buy them back later to return them. If the stock falls, you make money. If the stock rises in value, you're on the hook for however much it rose in value.
Coming after your house, car, and kid's piggy bank is stopped only by bankruptcy laws.
Short-selling is a very dangerous game to play.
185: Pound's mug shot makes him look eligible for the insanity defense look like Emerson.
Shorting is basically borrowing shares and selling them now, at some point you have to repay the shares you borrowed (cover). Your gain or loss depends on what you have to pay to return those borrowed shares. Prices can in theory rise forever but can only go down to 0. So when you short, your maximum earning potential is shares*short price, while your maximum loss is theoretically infinite, if the share price keeps rising and you need to eventually cover with some of those now expensive shares. This is why short selling is not a long term strategy.
Multiply pwned on preview.
195: so you default and you've lost your investment.
Wait, I just realized we're talking about natural persons signing the dotted line. That's indeed a risky idea. Sorry for the interruption. Carry-on.
195: so you default and you've lost your investment.
You default, and you've lost your investment and a bunch of other money besides. Usually you're limited in the amount you can go on margin (that is, borrowed, whether for shorts or for buying something with borrowed money) to some percentage of the total amount you've got at a given stock broker. That's their way of keeping you honest; if Pets.com announces an exciting new parakeet initiative and the stock jumps another $5, they'll ask you for money to keep yourself above the margin requirements. If you don't, they'll start indiscriminately selling things in your account to make themselves whole, because that's the way late capitalism rolls.
There are, of course, things like options where you pay for the right to buy or sell at a certain price, and if things don't go your way all you lose is the cost of buying the options. And as I said, short ETFs have a nominal value and are purchased as long shares, so you can only lose the value of your investment.
Well, sure. Nothing's riskier than the value of the company if you're a limited liability entity.
Right LB. Always short through a corporate shell.
As far as I can tell, the consensus is that it's impossible to hedge against a bubble bursting unless you know when it's going to burst, since in a bubble stocks rise until they fall, so if you guess wrong by even one day you can lose a lot of money instead of gaining a lot.
limited liability
Originally devised to allow Amsterdam's businessmen to share the risk on a ship that might sink. Not sure if the ships that gave Harlem its name were funded this way.
Come on, folks. More paranoia.
Probably the most paranoid people are the ones who, like me, are not playing the game and don't understand it well but are accurately aware that the game could affect them drastically.
I've know other people who picked up the irrational euphoria end -- even though they weren't playing and understood nothing, the bubble boom made them unreasonably optimistic in a cargo-cult sort of way.
209 is right, although "even one day" probably overstates things. But plenty of managers lost plenty of money betting "correctly" against the dot-com bubble in the late 90s, as just one example.
(Except it's perfectly possible to "hedge against a bubble bursting", which most people would take to mean taking some positions to minimize downside risk while participating in the market. You mean more "bet against a bubble".)
impossible ... unless you know when it's going to burst
No, there's an easy way with a two year window for many indexes and large equities. There's still risk, and it costs to play, but is accessible to anyone with a brokerage account through put options, and liability is limited to one's investment. Options dated far into the future are tend relatively cheaper than those soon to expire, even.
Well, one day is an exaggeration, but you need to hit it within a couple months. If you had said at the start of 2007 that the market was due for a crash, you have made nominal money (minus inflation and opportunity costs) if you had the stones to hold on until now. So you won't often make money betting on bursting bubbles.
Hedging, though, is going neutral on the market- if I have a bunch of stocks but I'm worried the market will go down, I can short the market AND keep the stocks. I will now make no money if the market goes up OR down, as long as I hold the hedge position. If I was wrong about the collapse, my short lost value but my stocks gained, and I lost the potential earnings of my stocks for that period.
The alternative is to sell all the stocks and hide the money in my couch, but if I have a large long-term gain on the stocks, I will have to pay a lot of money to the government for the right to avoid the market risk. Hedging is more efficient.
209: "The market can stay irrational longer than you can stay solvent" is the way it's usually put.
I forwarded my Fidelity funds from my 401K to my IRA, and I was quoted a $210 value. My balance now says $160. It's a paltry sum, but I'm keeping it in cash for now.
My 401k is up a little, while, at last look, the Dow is off 150. There's no luck like dumb luck.
For $160? That would be an expensive coffee can.
214: Long-expiry puts are semi-available, but they are actually quite expensive in terms of insuring your portfolio. The market isn't stupid, it knows the long-tail risk exists, and that's why those options actually cost quite a bit. Plus, portfolio insurance for institutional investors was a big deal in the mid 80s and did precisely dick to stop the crash of '87 (it didn't help when everyone realized only a couple firms were writing the put options, and they were bankrupt).
If you want a decent hedging strategy without the high commissions or large required units of options, some of the ultra-short ETFs such as this can be helpful.
Also, people seem surprisingly panicked. I've been kind of waiting for this crash since the middle to end of last year, so that I could actually start getting good buying opportunities instead of just crappy high volitility (which may help institutions, but I sure as hell can't trade it for low cost). My main complaint is that I didn't buy any VIX futures back a couple years ago when I looked at its index values and went "ha, like hell is that going to stay in the teens".
Are we really about to pass another tax-cuts-for-the-rich short-term emergency stimulus package?
The Congressional Democrats will not let this happen. They may suck on Iraq and civil liberties, but there's enough faded New-Deal DNA in there that the stimulus package will be targeted on low and middle income people. It will not be a repeat of 2001.
It's not like we can switch over to deficit spending to jump-start the economy.
Sure we can. The Federal government can always borrow more, especially if it's on a temporary basis and does not add to long-term debt. Truth is, because of the point we were at in the business cycle, the 2007 deficit was down to what is a medium or even low level for an advanced industrial country.
The Congressional Democrats will not let this happen. They may suck on Iraq and civil liberties, but there's enough faded New-Deal DNA in there that the stimulus package will be targeted on low and middle income people. It will not be a repeat of 2001.
Oh, you're just adorable.
221: The contents have been excreted by a certain breed of economist, and shipped to you after launderingcleaning.
Stras, PGD is trying to give you specific information. He's not at all uncritical of the Dems on the average, but says that he expects them to come through this one time. Jump on him after he's proven wrong.
That would be an expensive coffee can
And beware of shorting coffee, you could lose infinite stimulus. That's like negative consciousness.
Long-expiry puts are semi-available, but they are actually quite expensive in terms of insuring your portfolio.
Sure. I was responding to the claim that one has to know when a bubble will burst to profit. Long-expiry puts at a given strike price often have lower implied volatility than short-expiry puts. Yes, it costs to try, but it's a liability-limiting way for individuals to bet against bubbles. If you notice the bubble or the optimistic pricing of some equity after the WSJ, the options will be unrealistically expensive, agreed.
224: There will probably be more "and" than "or" in the choices finally passed. But I guess the threat of a recession would make Bush a mite less likely to veto anything called "stimulus". He'd piss and moan about how the Dems are doing the wrong thing and blame all the bad news on them, but a veto seems like a bad enough idea even Bush won't do it. (Now there's a losing financial bet.)
Hold firm this time, Dems!
Huh. I never knew until this very thread that the word "usury" had any connotation of anti-semitism at all, my familiarity with the term being purely legal as in "charging an excessive rate of interest as defined by statute."
That's not the way the game is played. Bush gets the TV time, and he'll propose something targeted to the middle & upper class- like an $800 income (instead of payroll) tax rebate, which means anyone under $40k doesn't get the full benefit and under $23k gets nothing. But he'll call it stimulus and blame the Dems if they don't pass it, and we'll hear about how it's not fair to give tax rebates to people who pay no (income) taxes, so they'll probably pass it.
Hold firm this time, Dems!
Like a phalanx of jellyfish.
If you notice the bubble or the optimistic pricing of some equity after the WSJ, the options will be unrealistically expensive, agreed.
But what I'm saying is that you have to pay up for those options no matter when you buy them. You could buy long-expiry put options on a completely fairly valued asset and it will still be expensive. The only reason that prices for puts at a given strike price tend to go down in cost for longer expiries is because of the time value of money (and sometimes lower implied volatilities, but that's not so true of one-year versus two, three year, etc. options). If you actually look at insuring a given present value of your portfolio's value, the options cost more as you go out in time, and become very expensive as a fraction of the present value very quickly.
If you really want to get a hedge on potentially overinflated assets as an individual investor, it's better to use a shorting instrument like the ultra-short ETFs that will come with much cheaper commissions and will provide much much cheaper coverage due to the downside exposure missing from the options (think of put-call parity: the difference in cost for the protection will be equivalent to the cost of a call option with the same expiration date at a strike price equivalent to the future value of funds kept in money markets. That's really really pricey.).
I admit that my reaction to Flippanter's initial slur on Patrick Nielsen Hayden's competence and/or judgment was an "oh for fuck's sake", and ensuing comments haven't much changed my mind. This is the post in question; there is no antisemitic content nor context in it. And in comments someone brought up D Squared's analysis of "Usura", to which Patrick replied, "I'm pretty sure either Teresa or I have in fact linked to that Daniel Davies piece in the past. (Short assessment: Davies is right.)" He's right, too: It got an enthusiastic endorsement back in 2003.
So, no, Patrick isn't oddly ignorant of Pound's bad side, nor of the weaknesses in his interpretation of the world's workings, but still found something worth quoting in a post that is in large part an honest howl of pain at a world that is so damnably screwed up and so hard to fix, in the midst of which he wants to share an altogether unexpected delighted. Lovely to know that trying to do that is good for getting smearing gossip. *sigh*
(I don't have a real opinion on the question of what's up with the markets, and am trying to avoid speculating in ignorance because there's enough of that about. So just reading, following links, and hoping to learn.)
231: Huh. I never knew until this very thread that the word "usury" had any connotation of anti-semitism at all....
Nazi.
I .... am trying to avoid speculating in ignorance because there's enough of that about
NO THERE ISN'T.
236: And therefore liberal! The circle is complete, and, er, someone's the master. With or without double wet suit, as may be.
232: Yeah, I've seen that movie. But this time we have candidates trying to outstimulate each other! There's got to be some press value to that in at least two out of three cases.
225, 227, 230, 233, etc.: not saying it will be perfect -- some kind of business tax sweetener might sneak in there (accelerated depreciation?), and the NY/California legislators might want to preserve some benefits for households making $100-$200 K. But it will be MUCH MUCH more equitable than the Bush tax cuts of 01-03. I'd lay money on that. (Let's make it more specific: I'd bet money that at least 90 percent of benefits go to the bottom 90 percent of income-earning households. The bottom 90 percent got less than half of the total tax cut in the 01-03 Bush tax cuts).
Let's revisit this after we actually get something, if we do.
Having no experience in my conscious lifetime with ever seeing any branch of the US government do anything to help anyone other than the rich and monopolistic corporations, PGD's confidence seems bizarre to me. But he's older than I am.
and sometimes lower implied volatilities, but that's not so true of one-year versus two, three year, etc. options
Compare IV for YHOO Jan 09 vs Jan 10 under BS, which takes time-value of money into account. The same held for homebuilders in summer of 06 1.5 years out vs 2.5 years out. I do not know if there is a good theoretical explanation. I do not believe the strong version of efficient market pricing, for whatever that's worth, and would not suggest to exploit this to insure a large portfolio, for the reason you mentioned. This may be getting too detailed, maybe email if you're interested.
227: John, I wasn't trying to jump on him. Just expressing some not-altogether-unwarranted-in-my-opinion skepticism about the firmness of the Democrats' ideological and moral commitment to the non-moneyed classes.
I'm still disappointed by the relative lack of hysteria , paranoia, and rage around here. If you guys were real Nazis instead of Nazis lite, you'd be coming through for me.
It turns out that Goldberg has criticized Bush, specifically for his liberal Nazi deviations -- compassionate conservativism, big-government conservativism. That is, Goldberg criticizes Bush's liberal-fascist side while fully supporting his fascist-fascist side.
I don't have time to read the whole thread, but: usury's awesome, haters! I'm going to go home and usury my wife right now.
I think that he was just saying that there was some shit that they won't eat. I'm not saying that he's right, either. Developing.....
I'm still disappointed by the relative lack of hysteria , paranoia, and rage around here.
Would it help if I started talking about how humanity will probably be extinct within a couple hundred years?
A foolish consistency is the hobgoblin of small minds. Emerson has a large mind, and admonishes stras:
Jump on him after he's proven wrong.
But then complains:
I'm still disappointed by the relative lack of hysteria , paranoia, and rage around here.
For my part, I'm with stras and the latter Emerson. Until proven otherwise, Democrats suck !!
As for you, PGD:
Let's make it more specific: I'd bet money that at least 90 percent of benefits go to the bottom 90 percent of income-earning households.
Well, there may be an impasse and nothing gets done. But if something gets through, it will be more tilted than this toward the wealthy.
248: Nah, that doesn't bother me.
Fooey. I wanted to talk extinction events.
It's a safe bet that all of us will be extinct in 200 years regardless, so why care?
We Emersons have long been aware of the perils of the consistency hobgoblin. McManuses too, probably, but we copyrighted it first.
251- Dirty hippies will become extinct but war lords, bankers and insurers will continue to thrive.
Well, there may be an impasse and nothing gets done. But if something gets through, it will be more tilted than this toward the wealthy.
$100 says you're wrong.
(If accepted: wonkiest bet ever!)
In support of PGD's unusual optimism: it appears to be conventional wisdom among the economists who show up on NPR that the only effective QUICK way to get a shitload of money out into people's hands is to increase benefits payments. Tax cuts and rebates take too long to implement to have a stimulus effect on a tanking economy.
Caveats: yes, NPR, but at least some of the economists were aligned with more conservative elements.
...an honest howl of pain at a world that is so damnably screwed up and so hard to fix....
Yes, there's something the world needs more of.
My unfoggedtariat, I have a dream, that we'll cease combat operations and withdraw all troops from Iraq, take the ~$300 billion that we would have spent on them over the next however many months and give $1000 cash money to each and every American citizen, no strings attached.
Also, ponies.
Flippanter, what do you suggest as an alternative? Grin and bear it, or something else? I have a strong bias in favor of being honest when one feels the world sucks this much, and then using that as a goad to see what I can do to change it for the better, but without pretending like I think the problems are all trivial or easy to resolve. To the best of my knowledge, Patrick's much the same. What exactly is wrong with this?
That's a serious question, actually, even though it sounds snippy. If I thought that there were some significantly better alternatives to dealing with the piles of crap all around, I'd take them. It's just that one of the things I'm pretty sure doesn't help is drive-by snarkouts at people with the gall to be honest about being downcast sometimes.
||
And Thompson is . . . out!
Too bad, I was hoping he would hang on, pathetically, through a few more Southern primaries.
|>
Unfortunately, my optimism does not extend nearly as far as 258. All I dare to hope is that the President maybe gets a few tens of billions less than he asked for in Iraq. If that.
252: Because "two hundred years" is a very generous estimate, because a lot of this is going to happen - and has already started happening - in our lifetimes, and because much of this is human-caused and preventable?
It's a safe bet that all of us will be extinct in 200 years regardless, so why care?
Where have I heard this before? Oh yeah.
Asked by Woodward how history would judge the war, Bush replied: "History. We don't know. We'll all be dead."
Gawd, I made the mistake of reading dsquared on usury as linked by Bruce in 235. The book on my desktop starts by saying that Adam Smith was more right than wrong about high interest rates fueling speculation and that Bentham misinterpretated Smith. Which is a place to start, Bentham's is a classic defense of finance/usury contra Smith. After a slight rehabilitation of Irving Fisher and a major rehab of Roger Hawtrey (a different kind of monetarist than the post-war psuedo-Keynesians and Friedman)....aww never mind.
Hawtrey was way cool during the 20s and very personally close to Keynes (not that way, Keynes had better tastes) but only gets a small paragraph at Wikipedia.
Shame:His prescription of letting wages drop to zero for a few months to end the depression fit some models very well.
261:I am with PGD on the stimulus package.
I think Bush has retired & retired Cheney and is gonna let the flunkeys run things until the end of term. Rice, Petraeus, Paulsen, Bernanke etc are in charge. Just my feeling.
262: What is going to extinct us? I can see a collapse of civilization and a horrific population crash, but humans are really fucking adaptable.
In support of PGD's unusual optimism: it appears to be conventional wisdom among the economists who show up on NPR that the only effective QUICK way to get a shitload of money out into people's hands is to increase benefits payments.
Hmm. Being effective vs funneling money to rich people. Wonder which Bush is inclined to do?
I'd actually be tempted to take PGD's bet, except that I think impasse and inaction is one strong possibility - and another possibility is a stimulus package that's aimed toward the middle class coupled with a separate graft package that's aimed toward the wealthy. I hate bets where the terms can easily be subject to after-the-fact wrangling, and W will no doubt have some cooked statistics to explain how poor people really come away with all the benefits.
I will, however, bet my reputation as an astute blog commenter that any package will be skewed more toward the wealthy than PGD predicts. Given that PGD is also staking his reputation on the outcome, I calculate that I'm offering at least 10-to-1 odds here.
262: [link to Standpipe's blog]
266: Climate change plus peak oil plus the depletion of potable water sources plus the ongoing extinction event. And humans may be adaptable, but we're not that adaptable. Our big advantage is our ability to build stuff, which is what got us in this shit in the first place.
270: Maybe the surviving remnants of miserable humanity will be able to MacGuyver a new, sustainable civilization out of the stray leavings of the old. Unless the fleshy-headed mutants get them first.
Reputations are worth more than a lousy $100 any day. If I win, my reputation gets to eat your reputation, digest it, and grow larger thereby.
And I know where to get good non-cooked numbers on this. Certainly nothing from the Reps will be acceptable.
266 is right according to the models at Oildrum. World population starts declining around 2015 and drops to a sustainable 2.5 billion around 2100. Now of course at the peak in 2015 people don't stop having babies so that means death rates will go way up way fast.
But it's all manageable, the wars and plagues and famines and stuff. And shit, we got 8 whole years.
Worrywarts.
271: Let's bet on it! I wager this shiny nickel. We'll meet up in two hundred years in the empty skull of the sunken Statue of Liberty to collect.
I would actually prefer to eat Stras' reputation, except that it might be all embittered and pessimistic. I think PoliticalFootball's will taste better.
As far as I know, unless you're a pensioner (or a trustafarian, in which case I don't give a shit), then a bout of periodic nerves on the stock market won't make or break you. Stocks will be back where they were in a few months.
OTOH, if the market shenanigans means that Wall Street has woken up and admitted to itself that Bush has been playing silly buggers with the functional economy for seven years, then the abyss may yet gape. Not that your investments will necessarily disappear, but your job might.
D^2 will hopefully now explain why I'm wrong. Which was the point of this comment.
Climate change plus peak oil plus the depletion of potable water sources plus the ongoing extinction event.
WTF is an "ongoing extinction event" -- the other species we're killing off? That stops when the oil runs out and we can't make our machines level the rainforests any further. Climate change drowns the coasts, destroys civilization, but makes places that were previously unlivable without oil livable. Depletion of potable water sources collapses the population, but rain still falls. If you brought the human population down to a million vegetarians, the rest of the world would bounce back pretty damn fast, with us nowhere near extinction.
266 is right according to the models at Oildrum.
If all you had was peak oil and global warming, maybe. But our model of civilization is itself killing us. We're in the middle of an extinction event, driven not just by global warming but by the fact that we keep building stuff on top of ecosystems we actually need to preserve.
Let's see peak world population at 10 billion to 2.5 billion in 4 generations with a declining but positive replacement rate...too much math.
Just ballpark 10-20 billion people will die this century. Your kids will get to watch.
WTF is an "ongoing extinction event" -- the other species we're killing off?
Dude, half the species on the planet are expected to be extinct in a hundred years.
That stops when the oil runs out and we can't make our machines level the rainforests any further.
When we run out of oil, we'll switch to coal and nuclear, which is when it's going to get really awesome.
Bob, in a century almost everyone dies anyway,
What exactly do you know about the current state of the art in nuclear reactor design, stras?
Damn, I have to go swimming to work, on the one day I managed to goad someone in to talking about this. Hold this for another day!
280:I ain't arguing with ya stras, but even Kunstler doesn't project extinction.
There is no question of "switching" to coal. A material portion of domestic power is the daughter of the smudgy breath of the smokestacks.
Okay, that's done. Now that I see that Hamilton Lovecraft is distracted by Unfogged, I'm off to see about usurying his wife.
extinction event
What are you guys, 12? Comic books are great, but there's no need to repeat stuff like this, neither funny, poetic, nor true. India, China, and South America are all showing the same decline in population growth that comes with increasing wealth. In contrast to much of recorded history, half of humanity has something to lose and knows how to read, both of which lead people to plan ahead. New diseases are a threat, but you may as well worry about asteroids.
278: Yay? I rather enjoy seeing my political enemies waste their money, and every dollar spent on Thompson's primary run was a dollar not spent in the general election.
It's times like these that I realize that I'm a stupid, stupid investor. For example, when oil was 5 dollars a barrel, I thought "this can't last". Did I invest in oil companies then? No, I did not. Likewise, when volatility was at an all-time low, did I try to take advantage? No, I did not.
When I build my Anti-Asteroid Ark, lw is off the guest list. That will teach him/her a lesson.
284: yep. My bold and glad prediction is—in 50 years no more boomers! (I don't think the life extension folks are going to make any real progress in that time.) Now we'll muck up a bunch more stuff on the way out and squander all of Cala's retirement money, but you kids will be free! Free at last.
And the humans extinct in 200 years is a pretty laughable prediction. Reduced in population, dignity, whatever you want, maybe. Extinct hardly.
293 is probably the first time in the history of this blog that I've disagreed with Cala.
even Kunstler doesn't project extinction.
Kunstler predicts that Kunstler will live on, accompanied by several worshipful young women and enough adoring fans to populate a quaint little rural village that relies on local agriculture. He will be chief pontificator.
I've always thought the barely-hidden yearning for apocalypse on the eco-left is just as embarassing as the similar desires among the fundamentalist set. The world will end! That will show those suburban SUV drivers what's up!
I already feel bad about making the joke in 291. I'm not cut out to comment on Unfogged.
Doesn't predicting the long-term future make anyone who does it look like a fool, without exception? It amazes me the certainty that people bring to it.
298.2: Nostradamus excepted of course.
Thompson, to me, is like Tancredo, in that he's so bizarre about, e.g., immigration that he makes anything leftward of 'shoot 'em on sight' seem perfectly reasonable. It's like having someone drum up nuking Iran so that bombing them with conventional weapons suddenly seems like the well-considered and thoughtful option of the reasonable man.
Also, it was driving me crazy that people were voting for an actual TV actor... not someone who had been an actor and then active in politics even, but someone whose qualifications literally are can read a script.
Short of wiping out the rest of the planet humans are not going to be extinct. We're all over the damn thing in pretty much every environment. We might not be *happy* about it in 200 hundreds years, but we came through ice ages and shit.
I predict that the future will be much like the past in some ways and totally unlike the past in other ways.
I've always thought the barely-hidden yearning for apocalypse on the eco-left is just as embarassing as the similar desires among the fundamentalist set.
That cross-spectrum yearning is one of those things that -- for me -- recalls the root meaning of the word "apocalypse."
Thompson did used to be a Senator (albeit a notoriously lazy one).
we came through ice ages and shit
Not me, man. When the Apocalypse comes, I'd better already have reproduced because I am sure as hell not the fittest to survive.
I predict that the future will be like the present in some ways, and different in other ways, but in the exact opposite ways than Not Prince Hamlet predicts.
Ouch, the S&P hit me on the head. Must mean the sky is falling.
I like reading Kunsler every once in a while because he's such a vivid writer:
My favorite moment was seeing Treasury Secretary Paulson and one of his fellow shaved-head deputies at a press conference rostrum frantically trying to calm the news media rabble like a couple of extraplanetary high priests from a Star Trek episode -- the batteries having run down in their laser wands, and their incantations ("liquidity! liquidity!) veering into mystifying glossolalia.
Something like that, it's not even a question of whether I agree or disagree.
298: Awww. I was gonna say "tell her I said hi".
HL: She says she has something new to show you when you get off the computer.
New diseases are a threat, but you may as well worry about asteroids.
This is silly. The chances of getting hit by an asteroid are fixed, small and beyond our control. The chances of new diseases are increasing and eminently controllable by us. Further, early response changes what happens during an epidemic. It is not in the least futile to worry about new diseases.
Kunstler I often predicts that Kunstler I will live on, accompanied by several worshipful [strapping] young women and enough adoring fans to populate a quaint little rural village that relies on local agriculture. He I will be chief pontificator.
That's better.
307: That was about where I stopped reading: if you really have something of substance to say, please say it, and stop masturbating onto the page.
I'm genuinely sorry to be cast upon the waters. I had a good friend who wanted to build a wooden boat in his back yard, but he's moved. Planning over beer how to pour the keel was always a good way to spend an hour.
The other factor is the cottage industries of minor pundits involved in generating and spreading alarm over some cause-- the one-man-shop trumpeting the dangers of power lines is a nice illustration.
How'd you get her off her computer?
313 - Why would I ever want to do that?
300: Was Thompson really that far out in bizarro world (relative to median Republican candidate)?
It also saddens me that with Thompson gone, that's one less object of delicious snark like this:
First of all, are women voters, taken as a whole, really so much like retarded kittens in our motivations? And secondly, doesn't Fred Thompson pretty much look like a basset hound who's just taken a really satisfying shit in your hall closet?
290: but we came through ice ages and shit.
312: the cottage industries of minor pundits involved in generating and spreading alarm over some cause
Yes, a species that can survive a cataclysmic event like Y2K can survive anything.
When we run out of oil, we'll switch to coal and nuclear, which is when it's going to get really awesome.
Nuclear is way way way way way way better for the environment overall, even if you oopsie! melt down a reactor and kill and sicken thousands or millions of people in a limited area every once in a while. Wildlife is doing pretty well near Chernobyl, mainly because the humans are staying away.
Wildlife is Unspeakably hideous humanoid mutants are doing pretty well near Chernobyl, mainly because the humans are staying away.
Puny humans.
302:Last night one of the science channels had a show called "The World Without Humans." Stage one, lights go out except around Hoover Dam.
I was watching the Asian & Futures Markets with the day-traders. They all needed diapers.
There was a confessional, which is rare over at Rittholz they are a boastful crowd, by one hardened trader who bet the crash and got screwed by Bernanke. Lost 140,000 this morning. He says:"I don't know what happened. I got my rules, I've never done anything like that before."
Apocalypticism ain't unnatural.
eminently controllable
Really?
Investing in public health makes sense. Broadcasting frenzy because we're not doing enough about teh Viruses doesn't-- I'm reacting rather to the frenzy than trying to put together 20-word policy proposals.
317: Is there a taboo against masturbating to mental images of dead celebrities?
(Provided the mental image is one of the celebrity while he or she was alive, of course. Masturbating to mental images of celebrity corpses is sick.)
317. Why not? It is permissable to masturbate to images of the past.
Shame though. I knew nothing bad about him.
317:Fuck. Candy has been floating around On Demand for months. He was really just getting better & better.
You know, I keep having this conversation with a dude on my own blog, who tells me that real people get catastrophe fatigue when the dirty hippies say bad shit is coming.
This kinda puts us in a bind if we genuinely think that Really Bad Shit is coming and our immediate response should be A Whole Big Deal. If our sober, reasoned response sounds like a frenzy because that's what the facts sound like (you don't have to concede that those are the fact. We could be wrong.), then what should we do?
Well, no crash today. Fucking Fed. I'll watch Asians & Futures tonight and dream of brokers jumping out windows instead of sheep.
"Tomorrow, tomorrow
I love ya tomorrow
Always just a day away"
327: Say the same things in a perky, upbeat, tone? "Sacramento will be fine even after the annual seven foot floods begin. We just have to move the population into houseboats. No big deal." And then people start arguing with you that it is a huge awful scary deal, you can't just put the whole population of a city into houseboats, and then they ask "Seven foot floods? Annually? Really?" and they're primed to listen when you say "That's what the data look like, yes."
dreams of brokers jumping out windows
I don't mean to jump on you, Bob, but could you not say things like that please?
Presumably he knows better than to stand under your window.
Sorry, that was me. I've got to go now, anyway.
327: I don't think we're having that kind of conversation. Bad shit may be coming, and we should do things about bad shit, but one of the things that's probably not on the table is the extinction of the entire human race in the next 200 years. And I think there's plenty of actionable reasons short of postulating extinction events. Lots of nasty diseases? Insects and protozoae and shit that was supposed to only live in the tropics coming North to eat me? Plenty of reasons to act.
329 is probably right. A lot of the anti-scientific crap going round at the moment is because the scientists are saying such horrid, beastly things which upset us all, whereas a hundred years ago they were assuring us that the golden age was just round the corner.
329: I'm still trying to understand why so much money is getting invested in areas that are likely to be underwater within the useful life of what's being built.
Megan: This is really clear if you read finance blogs, but some people are just congenitally optimistic, and some people are congenitally pessimistic. Each is not any less sincere in than the other in their analysis of utopia or disaster, but it's so difficult to synthesize the facts into a correct picture that it always ends up being colored by the way the person naturally views the world. I think most people read predictions of environmental doom with that in mind.
Hee hee hee. The data look like twenty foot inundations in the first four hours of a big flood. I've been thinking of ways to present that to people. Some friends and I are thinking of an art project.
333. Has anybody seriously suggested that was on the table? It'll be us and the cockroaches, kid. How do you like them: stir fried or poached with a little white wine?
333 - No, I didn't think we were having that kind of conversation. I brought it up because I've been thinking about it and thought you guys might have suggestions. I liked LB's approach.
317: Genuinely sad. Also ruins my plans for the weekend.
Hippies are OK with me. It's the spazzes that bother me.
I don't know what should be done; I don't know of anything that can be imposed by a minority. Effective propaganda seems most practical, but I can't get excited about suggesting it. on preview, LB is practical.
Getting NASA back to helping look at the earth would be good, but probably all here knew that.
Tangentially: Segolene Royal's brother was apparently one of the French agents involved in sinking the Rainbow Warrior I learned a few weeks back.
How can a species that comes up with the Wondrous Vulva Puppet go extinct?
It's not that I object to the existence of vulva puppets per se. Teach girls not to hate their bodies, have a fun sex ed prop, yada yada. But why must it always be "wondrous" puppets of the "anatomy of the door of the goddess" that are "a celebration of the glory of feminine expression that you are"?
'Cause that sort of thing does kind of make me hate my cooch.
341: just don't ask me. I've proven my incompetence at this sort of thing.
341: Oh, okay. I think LB's approach is good. The trick is to say 'this is a catastrophe' without looking like someone who enjoys freaking out.
342: You and Heath had plans for the weekend?
'Cept if you say:
'What we are doing now will cause wildfires the likes of which we've never seen that will sweep through huge swaths of the state, sterilizing the soil behind them', people think you're getting all apocalyptic. You sound like you enjoy the freak-out when you are precisely describing what will happen.
You have to distinguish yourself from the people who naturally expect doom to happen (Kunsler is a good example of someone in that group).
348. You see, I'd always been told the lack of wildfires was part of the problem, and that more fire would tend to re-balance forested ecologies. And now you're telling me they'll sterilise the soil. One message at a time, please.
there have been a couple of brokers jumping off balconies recently - the estate agents pushing two big new residential developments out East are apparently getting antsy about who they will give a tour of the penthouses to, after a suicide week before last. I think it was personal rather than financial though.
330:I apologize, JM. I hesitated before I wrote it.
I lurk with the traders because I like them, and although perhaps not that explicit, they abound wth a dark humour I don't find on the econblogs.
348, cynically: No-one will be able to insure their great stuff. If we want to insure all that fabulous terrazzo and wood inlay in your lovely neighborhood, we need to make sure that those builders (are any of them local, anyway?) and farmers (are any of them under 40, anyway?) behave responsibly. Give them this brightly-colored binder and those mean old insurance companies will stop hassling you.
Yeah, wait, I actually did think wildfires fertilized the soil.
I think there's good and bad wildfires. If everything's been burning on a fairly regular schedule, the big trees live through it, the brush gets cleared out, the bristlecone pines germinate, and all the little woodland creatures do the happy fire dance. If fires have been suppressed for too long, everything dies and you're left with a parking lot.
Parking is kind of a pain in the ass in LA, though.
352+ Which is kinda funny and interesting, how cautious and sober the academic economists are in comparison to the people whose money & reputations are at stake.
James Hamilton (Econbrowser) today said he will call the recession last of anybody 'cept the NBER, and will call the recovery before any of his readers will possibly believe him.
Yeah, like LB said. With the build-up of brush and ladder fuels, fires are burning hotter than they used to.
I agree with lw, too, and keep hoping that insurance will be a leverage point.
You guys are probably right about using a cheery and perky demeanor to shout 'WOE! REAL BAD NEWS!'
Tangentially: Segolene Royal's brother was apparently one of the French agents involved in sinking the Rainbow Warrior I learned a few weeks back.
I was just anticipating my first Head of State sexual fantasies when I found that out. It ruined everything for me, and then she lost the election anyway. Fortunately Yulia Tymoshenko came through.
I should say that your blog has successfully scared the bejeezus out of me, largely because you do sound generally cheerful and optimistic. Having a cheerful, optimistic person with the relevant technical knowledge say that things are going to be very very very bad is terrifying.
Well - we do seem to be working up to an extended nuclear winter if we play our cards right (and we are.)
297:
I've always thought the barely-hidden yearning for apocalypse on the eco-left is just as embarassing as the similar desires among the fundamentalist set.
Jumping in without having followed the latter half of the thread, but watch yer language, sonny. Them's glib words.
Seriously, this is such an easy, easy dismissal of an unspecified swath of the environmental left that it doesn't amount to much more than a talking point, part of a predictable backlash against anyone who expresses serious concern.
I'd bet you know that, though, and I'm not sure I want to get into it.
Before speculating about stockbrokers' motives for jumping off of balconies, please head over to The Valve for their tutorial on authorial intent. I guaraantee that you will never be the same. (Quick summary: it's completely meaningless to say that anyone ever does anything for a reason.)
If Heebie shows up tell her I had my best smoked carp ever this afternoon. Not too dry, not too greasy, smoked just enough, no musty aftertaste.
365: Really?
Have I found another head-of-state fetishist?
I agree with lw, too, and keep hoping that insurance will be a leverage point.
Except that legislatures keep creating state-sponsored insurance pools for all the poor unfortunate souls who can't get affordable private insurance for their beachfront McMansions.
369: What is that? If you're going to build on a barrier island, accept that your house is going to wash away sometime. Honestly.
369: state and federal. But of course it's a little more complicated than that; where would all of Florida move to?
369: But it's not all of Florida, really. Just the ones living on the beach.
372: it's a lot of Florida; certainly it's a hell of a lot of Florida's population.
I understand the Great Plains are empty. They could move there.
It is true that when discussing Big Questions about the future, the ones out of any individual's control which will have no immediate effect on anyone specific, people tend to project their personalities.
But there are as many thoughtlessly complacent people and insanely euphoric people as there are gloom-and-doomers. Freemarketers of the "Dow 36000" type have been a lot more influential in US politics than gloom and doom types, and stupid complacency causes its own share of trouble.
Since the 1980 election, America as a nation has refused to think at all about energy policy, and a lot of relatively easy, effective responses have been suppressed. That's 27 wasted years. For many conservatives, absolute opposition to any proposal for energy conservation has become central part of the core ideology, and they've convinced a lot of others that there's no real problem.
Armageddonists think of the end of the world and the massacre of billions of people as a happy event, though. They're not gloom and doomers at all, they're cheerful, upbeat, and peppy!
They're not gloom and doomers at all, they're cheerful, upbeat, and peppy!
Of course we are. We have the Agrarian Utopia to look forward to, post-Collapse.
'Cause that sort of thing does kind of make me hate my cooch.
I realize that I have probably heaped enough praise on my town already today in the neighborhood thread, but I feel compelled to share that I saw a flyer last weekend for the local high school theater group's upcoming production of The Vagina Monologues.
This is the kind of thing that makes me feel all superior about living in a deep blue pocket of America.
373: That explains why there's a real problem, and I'm OK with the idea of spending public money to fix the real problem. But subsidized insurance isn't fixing the problem, it's perpetuating and expanding the problem. We're well past the point where we needed to start invoking the First Law of Holes.
Perhaps we could get Smoky Bear to tell people that home fires also play a big role in maintaining nature's wise balance.
Forget the Wondrous Vulva Puppet. What you need is a vagina couch.
I understand why California counties are dependent on issuing building permits to maintain services, because of horribly misguided Prop 13. Why are all you other states dependent on development? General, not-codified, anti-tax sentiment?
378: The real problem with schemes like that is they make irrational investments (society) look rational (individual) and prop up pricing on nice views in stupid areas.
Agrarian Utopia
Czech serfs in the 1600s needed the landlord's permission to marry off of the estate.
Yeah, well, the men in my village are gonna need my permission to marry off the estate too. Not all of them are going to get it.
381: I'm speculating here, but development decisions tend to be made at the local government level, which is often small-enough scale to be kind of unprofessional and easily convinced by well-funded developers?
why must it always be "wondrous" puppets of the "anatomy of the door of the goddess"
Vulvas are wondrous doors to the goddess. That's just a fact.
other states dependent on development
Developers tend to be the most enthusiastic donors in local election campaigns in places that are relatively clean. Developers tend to be criminal in places that are not. UBL was a builder originally, for instance.
376: Of course we are. We have the Agrarian Utopia to look forward to, post-Collapse.
I hear that it's going to be just like The Shire, but with shopping carts!
Armageddonists think of the end of the world and the massacre of billions of people as a happy event, though.
Fundamentalist armageddonists, sure. Environmental ones? An "environmental armageddonist" is cheerful about it? Okay.
A recent article in Harper's by Eric Janszen ("The Next Bubble" - not available online) proposes that our salvation from the collapse of the real estate bubble will be the creation of a new economic 'bubble' in the form of an alternative energy boom, complete with congressional legislation (already on the table) to ease the way, the advent of new technologies and invigoration of old ones (nuclear) to motivate investment, and so on. IANAE, but this sounds about right.
It's been suggested here and there that environmental doom-saying might be viewed with suspicion as a politics of fear, the left's version of the right's war on terror (both replacing the Cold War, dirty commies, nuclear terror).
385: As opposed to the federal level, which is large scale enough to be kind of unprofessionalunethical and easily convinced by developers Haliburton or Lockheed Martin?
this is such an easy, easy dismissal of an unspecified swath of the environmental left
I think it is a minority of the environmental left, most of whom are pretty sober and science-oriented. But when I meet such types I do get sort of dismissive, I admit it.
385: many local governments are wholly owned subsidiaries of developers. It doesn't take many helicopter rides to make friends with a city councilman.
I could see that. It wouldn't take many helicopter rides to make friends with me, either.
391: From what I've seen, it's a really tiny minority at that.
One of the problems with this stuff is a sober science-oriented look at a lot of it a) doesn't look very good for us but b) has big freaking error bars on a lot of it.
There are deep-pocketed interests pushing hard against (a) and, for that matter, any scientific look at it at all. Sometimes it must feel like the only way to counteract that is by dramatizing the worst plausible scenarios, because those that oppose a careful look at this are really on message, and it's quite difficult to get literally anyone to listen to anything else. Of course, if you do that you open yourself up to attacks on the basis that you are sensationalizing, which is intentional.
I only use "Armageddonist" literally, to designate the Christians waiting for the seven-headed dragon to rise from the sea. And they are happy folk!
I know a lot of very nice, non-criminal developers. Yet still it's stupid to build on floodplains. Weird.
395: Isn't it, though? It's not like there are hordes of nasty developers cackling in dark rooms somewhere about how they screwed everyone over. More like collective stupidity. I wonder how much of that has to do with normalization of things you see lots of people doing around you.
I wonder how much a parallel can be drawn to things like the collapse of the east coast cod fishery. From a localized point of view a number of quite rational decisions on your part can contribute to the overall failure of a system, entirely.
Local governments want to be bought. They use public money to bribe a Trader Joe's to locate there, they feel a sense of accomplishment and efficacy, people like to shop at TJs, everyone's happy. It's not like there is much of a counter-language to the public service = service to businesses ideology anyway.
Yeah, well, the men in my village are gonna need my permission to marry off the estate too. Not all of them are going to get it.
Baroness Megan of the Delta, will you settle for the Droit de Seigneur? [Link tidied up. LB]
You know, I have heard successful businessmen chuckling unpleasantly about the nasty shit they'd pulled off. Let's not jettison out caricatures unnecessarily. Some of the Enron guys joked nastily about what they were doing, as if the meanness of it made it more fun.
Droit de seigneur will assist me in deciding who gets to marry away from the estate.
396: comedy of the trojans and all that.
But yeah, while there are developers who are fundamentally immoral, and many more who are fundamentally amoral, they are of course correct that people need places to live, and probably shouldn't be faulted for building things exactly the way the systemic incentives encourage them to.
Droit de seigneur will assist me in deciding who gets to marry away from the estate.
Would you like to see my seven inches, my liege?
And on the environmental stuff: the language of "we're actually poor and capitalism has done nothing for us and soon environmental collapse will make us understand we're actually screwed" drives me nuts. I much prefer a message of "we're really EXTREMELY RICH but most of it is maldistributed and wasted, and if we could just get our collective act together in any kind of way we could be OK."
I think it's more true. Of course, the getting the collective act together part may be wishful thinking.
And there has been a significant loss in environmental quality over the last 100 years or so, with more to come. But at the same time life expectancies have been rising, etc.
Guys on Megan's estate won't have much to do, since she's reserved all the macho shit for herself.
399: I know the sister of one of those Enron guys. Apparently he's an okay guy outside of the whole screwing over millions of people thing; he kind of went along for the ride, and there was so much money he didn't step back and get the necessary perspective.
I wonder how much a parallel can be drawn to things like the collapse of the east coast cod fishery. From a localized point of view a number of quite rational decisions on your part can contribute to the overall failure of a system, entirely.
Tragedy of the commons! Tragedy of the commons!
On a more serious note, I think there's something self-perpetuating going on, where the places most suitable for human habitation are all already inhabited by yuppies who like their green space, leaving the governments in other places like Arizona and Texas to be dependent on developers to grow the tax base.
401: Well, yeah. The developers may not be evil, but they're in it for the money, and they don't have much of any incentive to worry about whether the houses they build are going to wash away. It's not surprising that they don't worry about it.
I'm not looking for a DJ, Cryptic Ned.
There is always enough work in the Agrarian Utopia for everyone to have strong pretty backs.
406: my spoonerism was even less serious, so nyah.
where the places most suitable for human habitation are all already inhabited by yuppies who like their little walled off private chunk of green space and don't want to live right next to anybody else because they just don't want to, okay?
Guys on Megan's estate won't have much to do
Drones have there purpose, just ask Bertie Wooster.
Apparently he's an okay guy outside of the whole screwing over millions of people thing; he kind of went along for the ride, and there was so much money he didn't step back and get the necessary perspective.
[bitter, mordant laughter.]
and 409 nails a large part of it.
What you need is a vagina couch.
That reminds me!!! Jammies & heebie claim there's a movie coming out called "Teeth," about a woman with an actual . . . wait for it . . . vagina dentata.
What you need is a vagina couch.
That reminds me!!! Jammies & heebie claim there's a movie coming out called "Teeth," about a woman with an actual . . . wait for it . . . vagina dentata.
What you need is a vagina couch.
That reminds me!!! Jammies & heebie claim there's a movie coming out called "Teeth," about a woman with an actual . . . wait for it . . . vagina dentata.
I have seen a review. Couldn't tell you anything about it, but there is such a movie.
We lost the tire case today. People will die, but auto industry profits are safe.
Reminder: check your tire pressure regularly. The number of deaths from underinflated tires is striking, no matter what the DC Circuit thinks.
Let me say that some of my best friends are developers, and while they are in it for the money, they are servicing a need. It's not like all you Unabombers are living in log cabins on land that you cleared by yourself. And increased density is usually opposed by the locals. Developers love it, so look to the drawbridge folk if you want a villain.
and don't want to live right next to anybody else because they just don't want to, okay?
The optimal place to live is in a densely inhabited, very walkable city with beautiful parks within 10-15 minutes and true wildnerness within an hour's drive. Assuming you like your neighbors and all.
Vagina dentata! Vagina dentata! Vagina dentata!
*poof*
Ow!
Getting influence with your local representative is remarkably inexpensive.
OT: Sir Kraab is not the best name to use when discussing vaginas.
And there has been a significant loss in environmental quality over the last 100 years or so, with more to come. But at the same time life expectancies have been rising, etc.
Sigh. Did you say you were an economist?
Kidding. But short-term gains (life expectancy), long-term losses, I dunno, and all measured in human terms. "Loss in environmental quality" seems a very mild way to capture irreplaceable things like disappearing rain forests, species, and so on.
S'okay.
Getting influence with your local representative is remarkably inexpensive
Do you mean local city councilman/ alderman or Congressman. Both pretty cheap, depending on one's need.
396: Jared Diamond's Collapse gets mixed reviews for some valid reasons, but is well worth a read. But the most arresting "treatment" of the concept I have ever read is Brautigan's extremely short and simple "The View From the Dog Tower". (Read the whole thing at the link in a miinute.)
Start:
"... three German shepherd puppies wandered away from their home up near the County line."
-- North Country Journal
Serving Northern Santa Cruz County
I have been thinking about this little item that I read in the North County Journal for a couple of months now. It contains the boundaries of a small tragedy
Their voices are used now only to cry out in fear and hunger, and all their playing days are over, those days of careless pleasure that led them into the terrible woods.
I fear that these poor lost dogs may be the shadow of a future journey if we don't watch out.
I saw something about that movie somewhere. A review on Salon, I think. The review said that, sadly!, the movie's not actually that good. Which seems hard to believe, because how could you go wrong with the concept???
Also, people are crazy for not wanting more density. More density = easier to not have a fucking car. Yay density.
The review said that, sadly!, the movie's not actually that good. Which seems hard to believe, because how could you go wrong with the concept???
How could you go right with the concept? It appears to be a grossout "horror" movie with some elements of "Saved!"-level satire. That's the best I think we could expect.
Kraab is just waaaaay to excited about that movie.
Kraab is just waaaaay TOO excited about that movie.
density has a place. But so does isolation.
And on the environmental stuff: the language of "we're actually poor and capitalism has done nothing for us and soon environmental collapse will make us understand we're actually screwed" drives me nuts. I much prefer a message of "we're really EXTREMELY RICH but most of it is maldistributed and wasted, and if we could just get our collective act together in any kind of way we could be OK."
...
And there has been a significant loss in environmental quality over the last 100 years or so, with more to come.
I like the first part of that message, about us being rich, but then I get scared that we aren't actually rich enough. I don't know enough about the true scale of economies and disasters to know that for sure.
The other part I always wonder is whether the depleted functions of the environment get counted when economists count up wealth. Like, our stocks of timber and petroleum and fish are way the hell down. That is wealth we no longer possess. And sink capacity, the ability of the air to absorb carbon and rivers to take away pollutants is depleted. That was wealth that we don't have anymore. Do those get counted, because in those categories, we're way poorer now.
WAAAAAAAY too excited about that movie.
Like, our stocks of timber and petroleum and fish are way the hell down.
Floorboards in old houses are always kind of disturbing. Boards two feet wide, used in a nothing-special farmhouse.
433: At least some economists, and I think many, think that there are substitutes for any resource, so economists should never give any consideration at all to the depletion of the stocks of anything whatsoever. Whatever exhaustions and depletions there are will be handled by price increases, technological change, and substitution (e.g. aluminum for copper wire).
420, 432: Density makes isolation possible. Sprawl destroys empty space. Even 30 years ago, the unprotected wild spaces in Oregon were being populated be scattered luxury homes and escape cabins. People who love the wilderness so much that they destroy it.
Also, in a city you don't need to like your neighbors at all. You just need to learn to ignore them, and cities by and large make that easy.
The other part I always wonder is whether the depleted functions of the environment get counted when economists count up wealth
The Gordian knot of modern civilization is how to produce enough surplus to allow for the hyper specialization (hello humanities profs!) without degrading the entire project. It's not like we can just stop doing "that" and everything will be hunky dory.
Right, but it was the book you recommended to me, by Cobb and Daly, that called some some stocks 'low-entropy stocks' and pointed out the obvious, that those are worth more than high-entropy stocks. That's why we used them all first.
Daly is a very, very atypical economist; he hinted that the profession had frozen him out.
I got that. I only mentioned it because he framed the problem so well.
I still don't know how most measures of growth and wealth do the accounting on mined natural resources. Do they come into being as wealth as they are being processed, or are they counted as having value before then (which may be less or more than their processed value)?
mined natural resources
I know that the federal government allows a depletion allowance as an income tax deduction against your oil royalties, e.g. they seem to understand that your well is worth less as you pump out the oil.
PGD's complaint was that the language of "we're actually poor" drives him nuts, and he much prefers a message of "we're really extremely rich."
I'm not sure how much of that sentiment ultimately rests on an accurate assessment of our resources. It sounds more like a statement of preference.
I think that they are regarded as coming into existence when they come from the ground. So a factory takes raw materials, machinery, and labor and produces value-added, and so does a mine. Except that the mine's raw materials just consists of fuel, roofing timbers, etc., not the rock in the ground.
On the other hand, the value of the land and its depreciation is taken into account. I don't know much about this end. But I'm pretty sure that there's no line item "100 million tons of non-renewable cobalt ore used up forever." Just something like "Land worth $100 million depreciated to $5 million". Probably it's even less precise than that, since land often comes dirt cheap from the government, and depreciation is probably a tax writeoff.
I haven't read Cobb and Daly for a long time, but a Crooked Timber thread run by nice liberal economists convinced me that the profession had ignored them and that economists weren't taking resource depletion into effect very well.
442: In other words, deplection is considered for tax break purposes, but not for conservation purposes. There might be an angle there, something like a Gross Domestic Topsoil Depletion Cost Report.
Did anybody buy today? Also, did anybody check whether we're smarter than Yglesias's commenters?
The optimal place to live is in a densely inhabited, very walkable city with beautiful parks within 10-15 minutes and true wildnerness within an hour's drive. Assuming you like your neighbors and all.
Aside from the walkable, L.A. fits this well. Though it's terrible on neighborhood parks--around 10% the acreage per person--Griffith Park is endless and the wilderness (not to mention ocean) is very close. Often too close.
a Crooked Timber thread run by nice liberal economists convinced me that the profession had ignored them and that economists weren't taking resource depletion into effect very well.
(sincerely) Good to get your take on that.
So we now have a homeless problem and a surplus of unsold houses. Hmmm.
Between this:
Did anybody buy today? Also, did anybody check whether we're smarter than Yglesias's commenters?
and this:
So we now have a homeless problem and a surplus of unsold houses. Hmmm.
along with the death of Heath what's-his-name, I'm having fits of dissociative disorder, which I also want to call cognitive dissonance.
Megan, I wish I had something more up-to-date to recommend. I'm just basically winging it, though this is one of my interests.
In fact, one of my builder friends puts the blame on the public builders, like KB and Lennar. They can sustain losses for longer than a private company that is either using its own capital or the bank's. Add to that the fact that the mortgage lenders didn't care who they lent the money to, since they sold the loan to Wall Street, which then packaged the loans to sell as bonds, and the bond rating agencies who only looked as far as the next fee, so that now no one knows how much those bonds are worth. No one. And of course, the housing bubble infected even normally financially conservative folk to refi, some into sucker loans. The Feds will want someon's head on a plate, and I think it will be Mozillo. Remember, Rudy made his first big splash busting Milken. A political future is to be made for the right sort.
Emerson's right, GDP growth and wealth measurement does not count resource depletion. The kind of environmental degradation I was talking about would be very difficult to measure in dollar terms. Of course, the true gain in our wealth is also very hard to measure in money. Ordinary people in advanced countries today have technological abilities that would once have been unimaginable.
I'm not sure how much of that sentiment ultimately rests on an accurate assessment of our resources. It sounds more like a statement of preference.
No, no, I'd claim it's true. I recommend Brad Delong's paper, "Cornucopia" on this:
http://www.j-bradford-delong.net/TCEH/2000/TCEH_2.html
Sorry for the poor formatting.
Look, GDP is mismeasured, but it still measures something real. It is increasing at something like 800 to 1000 percent per century now. We have lost a world and a way of life that will never return. But our increasing wealth gives us much ability to compensate for that loss, or at least to replace it with something extraordinary in a new way. I believe we are wealthy enough to do this even in the face of real losses from technologically-induced eco-system change. *If* we manage our society and our wealth well. If not, we will gradually destroy ourselves, which seems not unlikely. But I don't see the evidence that nature will do it for us. There is a big difference between seeing increased costs for our way of life and seeing the impending destruction of advanced civilization.
Density makes isolation possible. Sprawl destroys empty space.
Damn straight.
People who love the wilderness so much that they destroy it.
As the old saw goes: What's a developer? Someone who wants to build a house in the woods. What's an environmentalist? Someone who already has a house in the woods.
454 gets it right.
Density makes isolation possible. Sprawl destroys empty space.
agree completely.
I like to remind myself that you don't have to own it. It's neat, it's wonderful, but you don't have to own it. You can rent, you can borrow, you can use free public amenities, but loving something doesn't mean you need to own your own little piece of it.
I like to remind myself that you don't have to own it. It's neat, it's wonderful, but you don't have to own it. You can rent, you can borrow, you can use free public amenities, but loving something doesn't mean you need to own your own little piece of it.
Are we back to talking about prostitution?
Always. But then I live in a state whose economy is built on tourism and federal pork, so it's never far from my mind.
you don't have to own it. Are we back to talking about prostitution?
Sexist
what's going on with the financial markets?
my attitude is it's not my problem
459 TLL,
you are welcome to UB and Gobi :), just the next summer i still won't be home
Thanks read, I am looking forward to it. Let me know if there is something that I should not miss.
453: Thanks for all that. I'll look at Brad Delong's piece.
Re 453.the last: I don't know whether to thank you for your frankness or to be appalled.
But our increasing wealth gives us much ability to compensate for that loss, or at least to replace it with something extraordinary in a new way.
This is an instructive formulation, indicating the extent to which those who lament our irreplaceable losses might be said to be living in the past, while those who are, ahem, looking forward, are FREAKING CYBERBEINGS FROM
oh. Sorry. No, I take your point, though I don't value our advanced civilization as highly as you do.
My son's cousin spent a couple of weeks in Mongolia, including the Gobi. He went in late spring when the plants were flourishing. Parts of it are barren, but the fertile areas were spectacular. A lot like parts of the American West, except mostly roadless.
'my son's cousin' is your nephew i guess
i'm pro-laconicity :)
i've never been to Gobi though, had no chance
i want to go one day, because my mom was born in Gobi-Altai
I could call him my nephew, but he's a cousin on his mother's side.
those who lament our irreplaceable losses might be said to be living in the past, while those who are, ahem, looking forward, are FREAKING CYBERBEINGS FROM
oh. Sorry. No, I take your point,
Do you? I love the wilderness. We are, for example, wealthy enough to preserve much more of it than we do. Wealth does let you do a lot of things -- especially if the demographic transition takes hold and the world population starts to drop.
Let me say that some of my best friends are developers, and while they are in it for the money, they are servicing a need.
Sure, I don't think anyone is denying this. In general though, developers make lousy (or indifferent, same same) city planners, because there's nothing in it for them. That, and there are lots of disincentives for getting that stuff right. Developing is mostly and in-and-out business, and it will take shortcuts wherever they can. Natural enoughl
We are, for example, wealthy enough to preserve much more of it than we do.
This is extremely frustrating. We have the resources to do much better with preservation (and healthcare and agriculture ...) but lowball this stuff consistently. I believe we could do a vastly better job without any real reduction in quality of life. Doesn't seem to be much will to address it, though.
National accounts figures (like GDP) don't take depreciation into account at all. You can make a plausible argument that it's hard to account for it in dollars, but as a wise man once said on an unrelated question: if it was really important to economists, they would come up a solution. Measuring inflation is also really hard, but economists have come up with solutions for that. They're crude, but they're better than nothing.
I know this thread is dead, but just to post a couple follow-ups:
I don't actually yearn for the demise of civilization and the extinction of the human race, as a couple people above implied - I like humanity quite a lot, actually, and would be delighted to be totally wrong about this. I just think the odds are against humans collectively doing everything they need to do to avoid that.
I'd really like to see the kind of thing parsimon talks about in 389, where a massive boom in green technology saves us from our dependence on poisoning ourselves, but there are just so many ways that can go wrong. We have to reduce carbon emissions by 80% across the globe, which means getting the human race off fossil fuels at a time when clean alternatives aren't ready to replace them, which means energy and everything that depends on energy is going to get really expensive in the meantime, which means we're going to have to trust political leaders across the world to sacrifice short-term economic well-being - and possibly their political careers - for the greater good of earth and the human race. This might very well happen, and I'm hoping that it does - but it would represent a singular moment of sanity and altruism on a global scale.
The end results of unrestrained climate change really will be apocalyptic. We're not just talking about the flooding of the coasts here; we're talking about the potential shutdown of the ocean conveyor, the release of massive amounts of hydrogen sulfide into the atmosphere, and ensuing mass death on land and sea.
I think the apocalypse is avoidable, which is why climate change and the environment are my top priority issues for any politician. But it takes a certain amount of optimism at this point just to think this is doable.
Good points, stras. I think of Y2K and climate change as being on opposite ends of the "problems humans are suited to solve" spectrum for just those sorts of reasons: there's a short term cost to doing the long-term best thing, and the incentives at the political level are all set against this.
Even blondes won't be extinct in 200 years, let alone all humans.
For anyone who still cares, it looks like on e man's monster fuckup may have been the cause of the stockmarket crunch.
I know this thread is way dead, but:
472:
I'd really like to see the kind of thing parsimon talks about in 389, where a massive boom in green technology saves us from our dependence on poisoning ourselves
This wasn't your point, of course, but I'll say that the article I mentioned in 389 didn't suggest that a boom in green technology would save us from poisoning ourselves; rather that it might save us (whoever we are) from economic collapse. The emergent technologies in question would, or will, arise out of chiefly short-term, selfish motives.
It's one reason I'd pressed, without saying so explicitly, on the difference between environmental reform arising out of genuine concern, and merely instrumental manipulation of a rising popular bugbear.
