Wednesday, October 28, 2009

Even Later October 2009 Links and Quotes from AKIC

...according to Spengler.  Here are two key quotes from the very technical article:

Every sort of idiotic explanation is offered by academic economists for the financial crisis. Explaining the crisis has become a major industry. The academics by and large haven't a clue. Grass might as well grow where their classrooms now stand. Wall Street greed and absence of risk management was the usual answer. That's silly. The investors who bought sub prime assets in 2006 weren't any greedier than when they bought prime assets in 2004. The difference is that monstrous demand crushed the returns on prime assets.

The financial crisis may have calmed down, but the sources of the crisis remain unchanged: the industrial world is unable to fund the greatest retirement wave in history at current returns. Everything that seems to offer yield turns almost instantly into a mini-bubble. 

(Economic laws properly considered are like physical laws.  No one can defy the law of gravity.  Investments can't grow without something, somewhere, of physical value, being produced.  And if you expect 9 percent rates of growth, you are asking for the physically impossible.  When you expect too much from the economy, it will strike back at you.)

This article explains why Keynes was wrong and why Obama is the wrong man at the wrong time.  The article ends with two questions:

First, if the government rigs reality by messing with the value of money, how can we expect any other part of the economy to not be distorted and dishonest?

Second, if we abandon simple, comprehensible rules and rely on constant tinkering by wise leaders, what happens when we instead get leaders who, having done no work but rabble-rousing among Chicago's poor, have not the least clue about running an economy?

Quote from W.S. Maugham's "On a Chinese Screen"

 " ...they look upon him with the suspicion and awe with which human beings always regard those who do not share their tastes."  

This little sentence  made me go "aha!".  Why?  I thought it described my situation.  Although, I now I notice that word "awe" and realize that it doesn't wholly apply to me.  "Suspicion" however most certainly does, though I have no idea what I am suspected of.  

I wonder why I care about this.  Reason tells me that it is of no importance whatsoever.  But the sinking feeling in the stomach can't be  rationalized away.
Is China's Economy out of the woods?
Can recent reports of China having 8.9 percent growth in the third quarter be believed?  This article and this article suggest maybe not.  One of the articles suggests that China is growing an unsustainable bubble caused by overbuilding.
I see this overbuilding in my part of Wuxi.  I have seen buildings being built before what has currently been built has even been occupied.  To me it seems crazy.  I see workers trimming bushes and yet nothing being done about the garbage filled ditches besides which the poorer people live.  Locals tell me that many cannot afford to move into all the new apartments that are being built.
Bush-Haters would probably make jokes about W making speeches in Saskatoon, Saskatchewan.  Be that as it may,  Saskatchewanians were shocked to see what the real W. was like.  In a link above, a reporter sees that the real George Bush is a very decent and engaging fellow  --  miles away from the caricature painted of him by the Left.
Though I want to become a Catholic, I do like going to Jewish religious sites like the Jewish World Review.  It is a conservative site that doesn't care much for Obamao.  The site is full of political opinion and self-help advice from Rabbis like the article linked in the headline.  Here is a prize quote from the article:
Some people become confused about knowing themselves. Their confusion goes something like this: "I don't know who I am, or what I want. Who is the real me? I have an identity crisis." Often, the problem is the question itself. Human beings are the sum total of all their thoughts, words, and actions. Since this includes a multitude of categories and myriad factors in each category, it is impossible to sum up the true identity of a person in a few sentences.
I would add that writing a blog entry very day doesn't seem enough for me to explain what I am to myself. let alone my rare readers.

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