Thanksgiving and Black Friday 2009

Happy Thanksgiving

Oops – think I missed it.

To my American friends – don’t eat too much turkey. You know how I remembered? The cranberries in the chutney in my cupboard. It was a surprise that it’s only been an annual tradition in the United States since 1863. It did not become a federal holiday until 1941.

Still, I wonder if you celebrated with these – fowl, venison, fish, lobster, clams, berries, fruit, pumpkin, squash, turkey, stuffing, sweet potatoes and pumpkin pie.

To all the turkeys – I think it’s safe to come out now.

I wonder how many Brits know of Black Friday?  With America under the hammer, it will be interesting to see how it goes this year.

thanksgiving

Puzzle at Nine

bloom_muffins2The issue this evening is not whether you get it but how long it takes you:

Hunter, Aaron, Nicholas, Alexis, and Makayla each ate something different for breakfast (a bagel, muffins, pancakes, waffles, and a melon). They also each had something different to drink (orange juice, milk, tea, coffee, and apple juice).

Figure out what each person had for breakfast.

1. The person who had pancakes also had milk.

2. Aaron did not have muffins.

3. Nicholas did not have a bagel or milk.

4. Aaron did not have orange juice.

5. Makayla did not have a melon or coffee.

6. Hunter did not have tea.

7. Alexis did not have muffins.

8. The person who had a bagel also had orange juice.

9. Makayla likes to drink either orange juice or milk for breakfast.

10. Hunter did not have coffee.

11. Makayla did not have muffins.

12. Alexis did not have a bagel or coffee.

13. Hunter likes to drink either coffee or apple juice for breakfast.

14. Nicholas did not have muffins or orange juice.

15. The person who had waffles did not have tea.

16. The person who had muffins did not have orange juice.

17. Makayla did not have milk.

18. The person who had a bagel did not have tea.

Late evening listening – flute and violin

bear-and-flute

The oldest flute ever discovered, though this is disputed, may be a fragment of the femur of a juvenile cave bear, with two to four holes, found at Divje Babe in Slovenia and dated to about 43,000 years ago.  In 2008 another flute dated back to at least 35,000 years ago was discovered in Hohle Fels cave near Ulm, Germany.  The five-holed flute has a V-shaped mouthpiece and is made from a vulture wing bone. The researchers involved in the discovery officially published their findings in the journal Nature, in August 2009.   The discovery is also the oldest confirmed find of any musical instrument in history.

When the madness grips us

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A poorly written article on MSNBC looks at Madoff’s current situation in prison and the lawsuit against him, among others:

The lawsuit goes to length to compare Madoff’s prison existence with his deluxe former life, including photos of his yacht and homes and claims that he ran an office rife with drug use and sexual escapades.

According to the allegations — their source isn’t specified — Madoff deployed an employee to get drugs from 1975 to 2003, fueling an office so cocaine-laden insiders dubbed it “the North Pole.”

Office parties featured topless waitresses, employee affairs were common and Madoff kept a list of his favorite pretty masseuses in his personal phone book, the lawsuit said, claiming investors’ money helped pay for it all.

This is so depressingly familiar and ties in with other posts at this site.  Sitting in the lounge of my hotel in Frankfurt a few years back, having just finished a discussion with a group of businessmen and about to walk out to the Mercedes taxi, the “Madoffness” of their lifestyle was so apparent.

It’s a lifestyle of “no rules for us”, “smart money is never your own”, “live high and talk fast” and an overweening arrogance that you’ve got all the answers and you’ve got the money making schemes, not always Ponzi schemes.  It’s the fast lane, the Billionaire Boys Club, even though there were power-dressed women there as well.  The movie Changing Lanes was about this sort of mindset and lifestyle.

It’s a question of personality clashes in my case.

These people have a perfect right to make their killings, with judicious use of their resources, to live their fast and loose life and look down their noses at the sheep – some people say that I do that in my own way.

I suppose what I’m trying to say is that there is a point where it goes beyond rational, where it really sucks people in and gives them a false god they serve obsessively, it’s all about image rather than substance, about clever accounting rather than about solid gains.

Already my terminology here is a dead giveway.

My accountant and friend for many years was most successful, he drove an above average car and was very, very busy.  We’d dine out and he’d tell me, from his investment adviser friends about ways to minimize tax and had some tips on what to invest in .  Though fiscally conservative – he’d not get caught with his pants down – he also believed that your money should work for you.

He skirted around the edges but never joined the fast lane per se.    He retained a sense of proportion.  His money at that time was in commodities, bricks and mortar.

Fine.  That was his type of person, I was a professor type, another friend of mine was an engineer – rough and ready, called a spade a spade and hated teachers.  It takes all types.

When a dodgy moral compass, powerful ambition and a very loose connect with the average pleb [in their eyes] or maybe even because of one’s former experiences with nothing to show for one’s labour, combine in one person and when that person progressively meets more of the type as he claws his way up the slippery pole, he can go the way of Richard Nixon – surrounded by gatekeepers like Haldeman, ruthless men who’d stop at nothing and our climber is intoxicated by that and by his own success.  Or maybe they become a John Dean.

At times it seems all too easy to dupe people and then the line is crossed – one does dupe people and intends to square it later.  But as Leeson could tell you, it never happens that way because something gets inside, something deep in the brain and whatever heart there once was is set aside and is now kept in a box.

I’ve seen true ruthlessness in the eyes of certain people I’ve met that I was constantly meeting and every single one of them had that restless jauntiness, that inability to get down to anything meaningful in conversation.  They’d tap the armrest or the table if kept at a topic for longer than three minutes and there was a lot of rehearsed evasiveness.

I’ve been at a Madoff type cocktail party and have seen how I was instantly appraised but the joke was on them because I seemed to be kocher in their eyes, which in fact I wasn’t.

Someone who snaps and kills someone has this madness.  Someone setting up a business has it.  I know I quote Christie a lot but this seems apt:

“He’s got on wonderfully in the world and naturally he wants something to show for it but many’s the time I wonder where it will all end. It’s like a runaway horse,” said Lady Coote. “Got the bit between its teeth and away it goes. He’s got on and he’s got on and he’s got on until he can’t stop getting on.

He’s one of the richest men in England – but does that satisfy him? No, he still wants more. He wants to be – I don’t know what he wants to be! I can tell you, it frightens me sometimes!” – from “The Seven Dials Mystery”, 1929

Anyone who gets obsessed about things, e.g. using the internet late at night, has entered this madness.  If someone tried to take you away from it and you snapped at that person, you’ve got the madness.

Another word for it is possession.  Something’s got into these people and reason has flown out.  That was Madoff.  He began the scheme in a small way, it got bigger and bigger and the rest, as they say, is history.  Alcoholism, sex obsession.

Last  Sunday I had a boat design problem which obsessed me and I must have done so many variants and then forced myself to leave it alone and do other tasks but had to come back to it because it was niggling.

When a couple fight, you can trace the path of the madness.  When one introduces past history with a malicious twist to the lip – that’s the madness, that’s the evil.  When the other goes ballistic and loses self-control – that’s the madness, that’s the evil.

Somehow we have to recognize it when it gets into us, even if we are already inclined to brush it off as criticism and it’s so hard to stop ourselves, especially if “self-control” is not our second name.

You might call all this just human nature.  I think of it as an outside entity possessing us.  Either way, the madness sure does grip and there’s no arguing with it.  It then takes the deed to be done or some big shock to come out of it and see where we were lemminging off to.

False dawn – we are not coming out of it, only the money players

smallhellThe fundamental disconnect between almost anyone and the economists is that the latter use jargon – they can’t help it – and consequently, they don’t so much talk down to us but they ignore us in their analyses.

This is an attempt to make it more comprehensible. The recent post on The True State of the Recovery was almost completely ignored, except for Wolfie who is in the business. His comments appear further on.

There are three major things going on which even we can comprehend:

1. There is money being printed and poured into the economy as if it’s going out of fashion;

2. Bankers are being given an armchair ride by the Central Banks – incest is so much fun;

3. Less understandable for the layman is the OTC derivative. This one needs a bit of explanation.

Firstly, an economic writer explains that an oversight committee in the U.S. not only refused to take testimony on the out of control OTC market but actively blocked the testimony being placed on the official record.

Still all at sea? Well so are the derivatives, which are just transactions which are essentially bad debts and the bottom line is that no one knows how many there were nor where they actually are now. They were privately negotiated deals between two players.

This explains it a little:

A swap is a very common type of OTC derivative, which includes that destroyer of economies, the credit default swap (CDS). While industry folk commonly speak of a buy-side and a sell-side to the swap market, you can’t really buy or sell a swap in the classic sense, since a swap is an instrument in which both sides have obligations to perform in the future.

Naturally the Fed would like to see these under its control and you can read about that here.

To simplify it even further – the very preconditions which contributed to the crash have not only not been reformed but the financial markets are virtually going back to where they were before and doing the same things over again. I mean this in the sense that the same Madoffs and semi-Madoffs [yes I know he was different – I was using the word as a pejorative adjective] are still in there playing.

All that’s happened is that people in the game have covered their butts for now and the banks have been obscenely bailed out. You and I, however, face unemployment, mortgage default and housing price crashes. Wolfie again on these players:

Worse, it gets quite disheartening to keep knowing that it’s going to happen and yet see the monster go on and draw yet more people into its maw.

I still believe that we would have had a bust and debt deflation in 2003 if it wasn’t for Sir Printsalot and Chopper Ben cutting rates to 1% to prevent the coming debt-deflation.

Naturally this simply took a mortgage bubble already on a moonshot and gave it a stardrive. Those guys will yet go down in history as the folks who saved a recession at the cost of a depression.

So there’s no escaping that the general economies are going to hit the skids.

Pretty clearly the first hits will be in the financial sector. There are going to be swathes of redundancies in banking, stockbroking, estate agencies, builders and petty much anyone else who’s been an intermediary in the game.

Worse, since everyone is going to need a scapegoat (nobody blames themselves for their financial stupidity and politicians are adept at finding someone else to blame) some of those folks are going to jail. If you’re an estate agent, or a buy to let landlord, then keep your nose clean and your head down.

I’m serious: some of you are going to jail simply because someone has to. All folks need is some sort of chicanery which will suffice as a charge. An unsympathetic jury is already guaranteed.

Let me point out here that this above comment was written on November 25th, 2009, so when it refers to the future, it is actually the future from here on in. To continue:

Frauds are easy to hide when everything is booming, but not so easy when folks start nervously counting their money. The great Warren Buffet pointed out that it’s only when the tide goes out that we find out who’s been swimming naked. Needless to say, when these frauds are discovered, there will be a whole lot more nervousness to go around.

So all this talk of us coming out of the recession later than the rest of Europe but we are coming out of it, truly ruly, is so much hogwash. There is an enormous amount of fraud and bad debt being hidden, like a mouth full of abscessed teeth and it’s going to come to light in the next year or three. Hold on to your seats or at least to the roofs over your head.

Capitalism

The single most essential thing to do is not to fall for the leftist’s use of the term “capitalism”. Their argument is that because the global socialists the CBs et al, along with the bankers and the greedy have caused all this, that ALL free enterprise needs to be swept away and a “responsible state regulated system” be put in its place – people just can’t be trusted to look after their own money.

This whole collapse occurred because of people in the financial sector, along with the greed of the average punter.

It did NOT occur because of the shopkeeper, the buyer and seller of produced goods or because of the provider of services. The great error would be for the average voter to allow this subterfuge to be put over them.

In fact, the only way back is to put the shysters out of business and go back to ordinary transactions – I’ve produced something, I sell it to you, you sell your product to someone.

For the moment, do not believe a word of it when they say we’re coming out of it, particularly if that comes from the money markets, the CBs or the government.

In a nutshell

People don’t understand the nuts and bolts of economics as a rule and I have learnt some in the past three years. Maybe you have too.

People are therefore dependent on the ecopundits and these people who got it wrong and failed to predict the crash, are now predicting recovery. They announce and the media picks up on it that the recession has ended.

What they mean is that the recession in the bailed out money markets has ended but as an aside, they mention that there is still residual trouble in the employment and productivity fields. “Still”, as in “about to get better”.

On what basis “about to get better”? Is there new industry? Is there a complete Labour overhaul of the tax regimes and the crippling laws? Has the bureaucracy been slashed?

Labour are out of touch economically but they have their finger on the pulse of the community better in that they are playing on the fears of the average citizen that the Tories are going to slash spending straight away. They’re not going to do that immediately in terms of jobs but that fear is enough to give people pause.

So the economy is the number one issue, yes. But for David Cameron to say that the EU comes a distant second to the economy is either naive or just plain wrong or both.

Recovery depends specifically on withdrawal from or a fundamental renegotiation with the EU because it is they who are sucking us dry – look at the TPA figures. Even allowing for some exaggeration, as Europhiles charge, the figures are still mindboggling.

That’s before we even start on the social legislation.

Thus we need the referendum but even with a referendum, people are dangerously lulled into a “recovery”, based on huge injections of newly printed money – that’s not a recovery in any real sense of the term.

For goodness sake, many people are even considering voting back the same government again which lay in bed with the EU and exacerbated the American crisis to become ours as well. And others will vote for them because they’ve always done so. Really?

Excuse the rude word here but people have largely got it arse-end round in their analyses. Then what should we be doing? N1 – putting the referendum on EU membership. Even one year into the new parliament it will be too late for the second crash, the mooted “double dip” but as it can’t be done any sooner, it can’t be done any sooner.