Joulie

How We Lost Faith in the Financial Superstructure

Dmitri Kashirin - A job that can be done at a desk can be done at any desk. Here is a report by Rand for the US Dept. of Labor describing the labor pool for the next decade or so - the fastest growth area is in "knowledge workers" - I also thought it was interesting that in 2012, the average age of a US worker will be 59.5 y.o.:
www.rand.org/pubs/mono...

Of course factory floor jobs require on site workers, although I would query whether there will be alternatives to single individuals driving automobiles.

How We Lost Faith in the Financial Superstructure

Oil economic considerations are premised on difficult substitutions for liquid fuel for cars.

Yet, the true cross-elasticity for gas in the tank is the internet -- telecommuting.

This is the fastest, cheapest, and cleanest way to eliminate dependence on mid east oil.

We need to decide if cultural issues are so important that we have to devote most of our national resources to keeping people in their cars so they can drive to a desk downtown.

Scarlett O'Hara, Doris Day and Financial Market Tumult

Thanks for the article, I thought it was great.

I haven't read the Grant piece, but the gist seems to be: All the backstops in regulatory, corporate governance and simple individual ethics failed, what happened?

Deconstructing what happened, not surprisingly, the theme running through it all like a red thread is, "Maximize my pay regardless of my performance". Put another way, "Money attracts flies."

So where are we: disorientedly afloat. Asset (stock, commodity) market values are untethered from the price of the financial instruments that created them.

The article points to the gold standard. Is gold the answer? It does tie valuation to something. I think it's too early. We don't know what we don't know, we need more unwinding. I don't even think mark to market by selling 10% and seeing what you get will work -- it's a moving target.

My vote: We need damage control during this "Great Unwinding".

Regulate leverage up the wazoo where ever you find it. Naked shorts, commodity futures, whatever. I'm not sure what needs to be done, but, painful as it may be, we need to have supply and demand relate to the asset, not to the financial instrument alone.

So far, the regulators seem to be saying, to paraphrase Scarlet, "[public] opinion is a matter of supreme indifference to me."

I'd like to see the D&O insurers help as far as governance, maybe they can team up with the regulators and make and actual plan, unlike what we have now, which is chaos.