carey_jim

Fallen Giant, by Ron Shelp: The Uneven History of AIG

Business is still the business of America and the best and brightest among the economically privileged still become businessmen.

The only other serious game in town is science and technology. The less economically favored become scientists and technologists.

The rest become bean counters and bureaucrats.

Success in both science and business depends on the mysterious quality of talent wedded to energy which is sometimes called ambition.

Talent and energy are mostly inborn and to that extent mysterious to those without either or both. All that is needed an opportunity to succeed.

Biographies are all too often filled with rancorous envy, hero worship or simple fantasy and to that extent, useless. Autobiographies or even good, "honest" fiction are usually more useful.

There are many exceptions to the rule, of course, but a book reviewer needs to make us believe that he has just read one of them.

Wall Street Breakfast: Must-Know News

Just a quick comment on the Microsoft Word issue.

Microsoft used its virtual monopoly of PC operating systems, Windows, to get a monopoly of other, non-related systems such as Microsoft Word and Microsoft Internet Explorer.

They did this by using several unfair advantages. For example, in the beginning, they included Microsoft Word for free with every copy of Windows and, in addition, they would not share vital information about their operating system to vendors of other word processors such as Word Perfect which was almost forced out of business.

This has actually been standard practice in American financial history, for example, with such companies and Standard Oil, etc.,etc. but most of them were broken up into smaller competitive businesses in the period just before World War I. The resulting system was called oligarchy capitalism. The previous one, monopoly capitalism.

That's why we call the present owners of American businesses oligarchs. Microsoft Corporation is a mastodon, just as IBM was a generation ago, in that it is a virtual monopoly in PC operating systems. In an age of virtual regulators, that isn't surprising. Obama is now kicking up a lot of political dust now, and breaking up Microsoft is probably part of a plan.

America: The Land of the Fleece Scam

The sad part about it is that we Americans, from the beginning in 1620, have felt ourselves to be an exception and exempt from the normal rules of history.

John Winthrop, our first founding father, called us a 'City on a Hill' and a beacon of hope for the rest of the world. He thought we had a unique chance to begin again, free from the tyrannies of European kings.

This original hope has developed into what is called American Exceptionalism and it prevents us from seeing that we are subject to the same rules of history and human nature as everyone else.

It is one of the reasons that Americans are ready to believe any snake oil salesman who comes along preaching riches and prosperity for all if we will only purchase his snake oil.

Wall Street Breakfast: Must-Know News

Read the biographies of Thomas Edison, Alexander Graham Bell, Henry Ford, Bill Gates, Steve Jobs and others ....
There is no formula.


On May 05 11:32 AM MICHAEL WILEY wrote:

> Please Post and Please send copy to President Obama.
> I'm an entrepreneur from Michigan and a 4-Time Gold Medal Winner
> on Inventions, and I received The First Place Gold Medal for The
> United States Of America at The World Genius Convention in Tokyo
> Japan. I Have some Patents issued on some of these Ideas, and I'm
> working on patents for the rest of them.
>
> #1. A new Invention that will Save Police Officers Lives, We loose
> a Police Officer every 47 hrs. here in the US.
>
> #2 A device that will help Prevent Multiple Vehicle Accidents, <br/>100
> car-200 car, 500 car pileups. This unit will save Lives.
>
> #3. An device that can help Prevent High Speed Police Chases.
> This will Save Lives Every Year.
>
> #4. An Invention that will Help Contain and Control Wild Fires,<br/>Like
> in California, So many people loose their Loved Ones, Homes and
> Property. This will also help save the lives of the Public and The
> Lives of Fire Fighters, This will save Billions of Dollars each year
> from these Tragic Wild Fires. ( This idea should also be addressed
> to Governor Arnold Schwarzenegger)
>
> #5. A new Semi Trailer that will Revolutionize the Trucking Industry.
> This Trailer will save Hundreds of Millions of Dollars
> with the transport company's.
>
> #6. A unit that will Protect Internet users from Internet Fraud and
> Identity Fraud. This will save approximately 10 Billion a year.<br/>
>
> #7. An Invention that will Prevent 95% of all Bank Robberies , <br/>The
> US had over 9000 Bank Robberies last year, that’s over 25 a day.
> We can Help Save Lives , Property, Cash, Reduce Hostage Situations,
> and Police Officers Lives. We can Have this Up &amp; Running with-in
> 6-9 Months
> Several more to list.
>
> I'm Opening a Research &amp; Development Company and I need to find
> a Company or an Investor that wants to share in a 50/50 Split on
> Royalties and income from this Facility.
>
> A market survey last year estimated that they were going to build
> and import approximately 24.5 Million vehicles this year. When we
> met with Officials In Washington DC, They advised us to meet with
> the National Highway Traffic Safety Administration, because all cars
> should have #2. and #3 Safety Devises Listed Above installed on every
> car Build or Sold in the US.
>
> The cost of the Product to be Installed is about $ 52.00.
> We are looking for $100.00 per unit in Royalties.
> Simple Math 24.5 Million Vehicles X $100.00 = 2.45 Billion a Year
> in Royalties. We want to Manufacture as many ideas as Possible here
> in the U.S.A. We know we have to adjust the number of vehicles now
> because of the Economy.
>
> My Question is-
> HOW DO I PROCEED AND MAKE THIS HAPPEND?.
> More Information on globalinventionsolutio...
> Click on Company Overview
> Michael Wiley
> [e-mail]

Expect the Treasury Bubble to Continue to Inflate

Good research effort.

However, the financial future is never certain, there are only probabilities. Even the weatherman gets it wrong sometimes.

Watch out for black swans.

Why This Rally Is Unsustainable

Many people listen to Cetin, as his all time record negative ratings prove. If they didn't read his posts, they wouldn't rate them.

But when people protest too much about things like pornography and prostitution we often suspect them of being hypocrites and we remember all those preachers on their knees asking forgiveness.

SOMEBODY is buying this rally but not very many are admitting it.

Cetin is in up to his neck and doesn't mind admitting it.

On May 01 08:52 PM Donkey Kong wrote:

> Stop posting because no one is listening to you......

Seven Uncomfortable Predictions for the Economy

The deeper problem that America faces is the ever widening gulf between our spiritual values and our material values.

The American advertising industry teaches us that happiness can purchased with money and that success is only measured by the number of houses we own, the size of our yachts and the prestige of the schools that our children go to.

We scare each other with tales of bankruptcy and poverty, with the specters of loss of jobs and income and with the chaos of crime and revolution in the streets.

At the same time, we scoff at the ancient values that philosophers such as Aristotle listed as essential for a happy life.

Friendship, family, learning about the natural world around us, enjoying and practicing the classical arts such as music, literature and philosophy, is seen as a waste of valuable time that could be used for making money.

From the time of its inception, the American Constitution, rather than being the sacred document that it should be, has been interpreted by the Supreme Court to be whatever is best for the oligarchy.

Economic chaos wouldn't hurt the poor very much because they have a very short distance to fall. The rich would feel nothing, of course.

It is the small middle class, or about ten to fifteen percent of the American people who would suffer the most.

The real question is, if economic chaos comes, will the mass of poor side with the rich, who will try to buy them off, or with the middle class who will try to convince them to create a more 'vituous' society.

The Misuse of Language in the Financial World

This is a deep problem that has been with the human race from the beginning.

The classic modern treatment of the problem is by George Orwell who writes about it in 1984 and Animal Farm.

It goes back to the ancient world in the debate between Plato and the Sophists and resurfaces in the Middle Ages in the debates between the Nominalists and Realists.

It even shows up in China with a philosophical movement known as The School of Names.

We see Nominalism in the modern world in advertising, propaganda and religious beliefs. They all have their own 'correct speech' which correlates loosely (and sometimes not at all) with empirically observed reality.

I believe that, in the financial world, the blatant misuse of language that you describe derives its great force from religious and philosophical habits that are still influential in universities and churches such as the Catholic Church.

The basic, and very old, idea is that if you can control the way people use language, you can control people. This veneration of language and overestimation of its power is very old, and will not die quickly. Remember the myth of Buddha's shadow: It is said to have remained on the wall of the cave where he meditated, for a thousand years after he died!

Americans (America was founded by religious totalitarians such as John Winthrop) take words and descriptions of behavior very seriously and that is why the debate over such things as homosexuality -- is it a matter of 'choice' or are homosexuals 'born that way'? -- and socialism -- is socialism 'government regulation' or is it 'government ownership' -- are so heated:

You can always tell when you are dealing with Nominalists and their ideology-based discourse because, at some point in the argument, you will find yourself treated as a heretic or untouchable because you have uttered a 'third rail' word, or merely dared to point out the 'the emperor is wearing no clothes.'

Realists and materialists don't believe that words have any essential power over the direction of material events, except as vehicles for human control of other human beings, and they search for underlying forces at work in the world so that the course of events can be better understood and predicted.

When Giordano Bruno was burned at the stake by the Catholic Church for refusing to recant his belief that the earth moved around the sun, he screamed from the flames, 'Whatever you say, it moves!'

And, it still does.

Added Debt Won't Rescue the Great American Ponzi Scheme

These are great questions.

We don't really know the answers.

Our moral histories (the Bible) teach us that sin of all kinds is punished by God (or natural laws if you prefer.) Most of us teach this to our children.

But from the time of Plato's Thrasymachus (at least), www.iep.utm.edu/t/thra... who said that 'justice is the interest of the stronger', political scientists and moralists have debated the topic.

Hobbes, Machiavelli, Lenin, Henry Kissinger and others have sided with Thrasymachus www.city-journal.org/2... and denied the relevance of abstract ethical principles of justice to politics. (Although most of them advocate hypocrisy and would vehemently deny this!)

Does nature (God) punish moral imbalance and is politics an extension of morality into practical life?

Or is politics merely the activity of the strong securing their own advantage under the aegis of political slogans?

Giving this post a minus or plus one will not, alas, add anything to the debate, of course, but it's human nature so why not give into temptation? ;)

Wall Street's New Math

The problem with using abstract, simplified business models (and their algebraic formulas) to make financial predictions is that factors that are left out of the abstract model can, suddenly and unexpectedly, become become predominant.

If there is a war or political revolution, for example, then the models are much less useful as panic and wartime conditions set in.

For example, even if it was true (and in my opinion it isn't) that World War II 'got America out of the Great Depression' it isn't a helpful explanation anymore than it would be helpful to say that putting the unemployed in prison will solve the unemployment problem.

The Russian communists solved their unemployment problem that way because their abstract labor model assumed that unemployment was impossible under communism because the communist government made jobs available for everyone. If anyone refused to work they were, by definition, shirkers and therefore criminals.

The P/E ratio of Exxon would become irrelevant (no matter how you measure it) to the future price of Exxon stock if, for example, a scientist announced that he had found a simple, inexpensive way to produce power from nuclear fission.

If that same scientist had a company with a stock that had a negative P/E ratio for ten years before the discovery, that mathematical fact would become irrelevant to the value of its new P/E ratio.

Government Risk Rises: Credit Markets Face Structural Collapse

Leftfield:

Don't get me wrong, I agree with everything you just said. I just think we could be in for even MORE irrationality, in the near future, and even if the masses (including the middle class) manage to take on the elites successfully and bring more real equality (which the minority and womens' rights groups wrongly think they have already brought us) it will bring danger and more chaos than we are used to.

It's ironic that we've entered a time when asking for a more free markets and more regulation of monopolies and oligopolies, which most people on this board want, seems subversive to the elites both in government and business.

And Ron Paul seems more radical than Vladimir Lenin (or even John Lennon!)

Famous Chinese curse on one's enemies: 'May you be condemned to live in interesting times!'


On Jan 26 02:04 PM Leftfield wrote:

> I'm always struck by the consensus that seems to form around the
> idea that the public might get irrational, then we're really in trouble.
> Like inflation statistics that say, "we're" only in trouble when
> wages rise. A result has been decades-long lousy and deteriorating
> conditions for lower-income masses who would once have been middle
> class.
>
> They've been irrational for years, and, sure it probably will get
> worse. Look at election results. The same fools voted in over and
> over. But, how could they be actually worse than the elites? Who
> engage and coerce all the lousy statistical modeling that is being
> slowly outed?
>

Government Risk Rises: Credit Markets Face Structural Collapse

Rakesh:

I think it's dangerous to rely too much on economic and financial models right now, and especially on the classic connection between a country's currency exchange rate and its interest rates.

If the dollar continues to rise (classical theory predicts that it will fall at some point in the future, of course) then U.S. interest rates will continue to fall.

I think politics and the relationship between government and business elites will determine immediate future results rather than economic laws which will not cease to have their inevitable influence but an influence that is deeply distorted by the elites who are playing outside the rules.

That doesn't mean these 'movers and shakers' will get what they want or even a reasonably good outcome, just that they will be a larger force than economic laws, in the short run at least.

If the economy continues to get worse, they might be forced to deal with unreasonable (uneconomic) demands from the general population also which would further distort the underlying financial and economic forces.

In my opinion this inevitable, continued political intervention will produce more volatility and unpredictability than normal and investment strategies using traditional financial tools will fail.

Mass behavior has always been irrational but, from time to time, the irrationality climbs to very high levels! We might be entering such a time in world history.

Government's Next Lesson: Small Is Beautiful

Reference to the Antitrust law (Sherman I presume) makes me laugh.

The Sherman Antitrust Act (1890) was never enforced and in fact monopoly capitalism was created under it's nose.

The Supreme Court didn't uphold the SAA either except in one of it's monumentally reactionary decisions against the Hatters' Union strike (1909) when the benighted union innocently urged boycotting non-union hatters.

The Supreme Court ruled that the Hatters' Union was in violation of the Sherman Antitrust Act and levied fines to be payed for loss of income due to the boycott and presumably added, as a swipe at unions, "small is beautiful."

I think the AMA is in violation of the SAA too but the boys at the Supreme Court aren't listening, obviously.

You can take this to the bank and draw interest on it: The President, Congress and Supreme Court are never going to limit business unless they limit losses on profits.

Why Bailouts Are Not the Answer

The sentence "the decision to let [Citigroup] fail" gives away the game.

It isn't simply semantics or logic to point of that when any business can be saved (bailed out) or condemned to failure (allowed to fail) by "unseen powers behind the throne" then we don't have a capitalist economy but something that is closer to socialism.

Business failure is an essential part of capitalism. When there are "eminences grises" behind the scenes with the power to save (or "allow" to fail) any business they deem worthy or unworthy, then we have one of the many forms of socialism.

For years economists have pointed out that socialism has crept into America under the radar of anti-communist rhetoric, as oligopoly capitalism, but as long as the system created prosperity and jobs, no one payed any attention to them. Even so, most Americans call this system "socialism for the rich."

It is only a short step from socialism for the rich to "socialism for the rest of us."

"I have seen the enemy and he is us." Pogo.

Time to Dismantle the 'Corporatocracy'?

This is "dangerous" talk, not in the sense that the Supreme Court ruled during the 1930's and 1950's when they ruled (absurdly) that the American Communist Party was a revolutionary party who wanted the violent overthrow of the United States government, and therefore a danger to The American Way of Life.

Ironically, these Supreme Court rulings themselves were dangerous because they prevented Americans from having the freedom to thrash these ideas around, try them out and find out for themselves, as Europe did, that (mostly or at least very often) THEY CAUSE MORE PROBLEMS THAN THEY SOLVE.

America is a pragmatic country and we should be allowed to try just about anything, even socialism but it is going to be a frustrating and in my opinion "dangerous" experiment.

It will be interesting to see if 1) America tries once more to take the path to socialism that Roosevelt started in the 1930s and 2) if the Supreme Court will live up to its very reactionary history (Dred Scott Decision, etc. etc.) and will strike down the decisions of the Congress and the President again.

It looks like we might be entering "interesting" times again.