Category Archives: Politics and Finance

The US Federal Reserve is committed to continuing to produce M1 for purpose of funding $1Trilliton+ deficits, and there’s no reason to expect the American output to keep up with the rate of M1 production. Period. End of story.

I’m going to send you two links.

These two links explain and verify what I’ve been trying to say for a couple of years at least. The explosion of M1 (money, or dollars, in the technical sense) without a corresponding increase in the production of actual American products and services means…

More dollars for the same or similar quantities of products and services makes dollars less useful.

This means inflationary tendencies…a bubble always looking for a place to occur.

My only question until today has been, “How does the bubble hide?” and now I know.

It hides in plain sight in the unregulated institutions which are as large as (and larger than some) national economies. The specific people involved are all named and shamed, and have paid their after-market dues. Now it’s time to make more M1.

First – internet equities, then real estate, what’s next? There is no if, only what and when.

One link I’m sending you contains direct quotes from the leaders of the organizations that are very literally now taking financial responsibility (years later, and at a much reduced cost, after society mops up the big expenses…Jamie Dimon, the guy who just took a 50MM+ paycut for 2012 alone because of his judgment is actually being quoted on risk management at Davos?) for the fracas that’s left me and both of my fully employed brothers-in-law homeless.

Mind you, all 3 of us are good men, 2 veterans, 2 cops and so forth, all with children and wives and all pay the bills and put family first.

The US Federal Reserve is committed to continuing to produce M1 for purpose of funding $1Trilliton+ deficits, and there’s no reason to expect the American output to keep up with the rate of M1 production. Period. End of story.

What to do? I don’t know. My plan is to move my family to place where growth rates can accommodate 5 brilliant kids and a wife who’s ready to be a serious entrepreneur. But I can’t help thinking that remaining captive to the American dollar is not a good long-term decision for my family.

Alex

Feel free to share, and to quote me.

Dimon Backs Shadow Banking as Necessary Service Providers
http://www.bloomberg.com/news/2013-01-23/dimon-backs-shadow-banking-as-necessary-service-providers.html

Shared via News360

http://en.wikipedia.org/wiki/Shadow_banking_system

and one last one…

http://www.google.com/search?q=jamie+dimon+pay+cut&oq=jamie+dimon+pay+cut&sourceid=chrome-mobile&ie=UTF-8

I just shared this with my father and my mentor. Do what you will with it.

 

Newtown is so awful that I can’t even think about it.

December 23, 2012

I have 5 children, 2-8 years of age, and am moved to write on the topic of gun control.

I don’t want to.  Believe me.  But I feel I must, as one who has been all over on the topic, and still feels ambivalence.

As a former US Marine Infantryman, and one of the earlier recipients of training that would come to be called Military Operations in Urban Terrain (MOUT) – (I’m 2nd generation USMC; served with pride; pray my children know some similar honor of devotion in their lives) – I understand weapons in a way that few do.

As a younger man, I felt firmly that an armed society is a polite society, and said so. For a while, I paid dues to the National Rifle Association, until I felt that my associates-at-a-distance were not really representing my full viewset, and so watched without offering financial support.  Truthfully, I’ve come to feel that association has gone a bridge too far, with a recent suggestion from its spokesperson that we arm volunteers at schools throughout the nation.

At the same time, I do understand that at a certain point, the floodgates of weaponry are open and that putting the genie back in the bottle is tricky – and might require armed responses from time to time.  Still, I’m very uncomfortable with amateur gun handling at schools, and tens of thousands of well-meaning gun-toting citizens are statistically bound to have some totally unfortunate accidental discharge on a campus, with all that implies.

Without even knowing what it is I’m trying to come to in terms of actual policy suggestions, this will be a personal attempt to phrase a few of the basic points on the compass, so that later, further reflections might align with some sort of underlying grid, offering navigational aid.

So – for the crowd that generally feels pretty strongly that the 2nd Amendment is a very good thing exactly as it is written, and that the Government (of the people) ought not be telling the Person what they do and don’t need…

  • There is validity to a literal reading of the 2nd Amendment, for a variety of reasons.
  • There is really no reason that an otherwise law-abiding citizen, properly trained and sober and so forth, ought to be denied the most effective self-protection methods in world of increasing violence and decreasing public funding for police and other crime-handling personnel.
  • Capitalism is wonderful in the sense that a panoply of possibilities, in all colors, shapes, styles, sizes and so forth are available for the law-abiding, sane consumer, who might elect to protect themselves and their loved ones any number of discreet ways.
  • At the same time, desensitization does occur through repeated exposure; and I’m not sure that I want my children desensitized to cold steel and gunpowder when it’s in the same room they are.  I’d really like them on their toes when explosives are nearby, and I can’t realistically expect them to only go to places I preapprove and actively monitor, and I can’t really control all the interactions they will inevitably have with the wonderfully wide variety of people comprising this United States of Ours.  I’m terrified by the cavalier attitudes I’ve seen in the Real World about steel and powder, and I’m not loving the thought of thousands of people suddenly deciding that they should practice the very martial art of weapons ownership and maintenance.
  • Similarly, with respect to exposure/desensitization – mass media is here to stay. So is the Internet, connectivity, and tribalism (at least for a while, on that last one).  One need only lift one’s head to find egregious examples of leadership with respect to this topic in all communities, except perhaps the Amish (as I recently learned from a movie – apparently there are places in that community with no recorded homicides.  Interesting.)
  • There could be some validity to the idea that on an island where guns never existed and couldn’t be invented, that society’s interest might be served by ensuring that tools specifically designed to help with killing don’t flood into the community.  Hence, as we no longer accept slavery or Jim Crow laws as a good idea, and we’ve just quietly waited for their crafters and supporters to move along to their next plane of existence while the rest of us have a rainbow of friends, so might society benefit from altering the future through today’s legislation, and allowing at least some combinations of steel and powder to become anachronistic expressions of a bygone era.

Now, for the crowd that feels the 2nd Amendment was intended to prevent invasions and tyranny and so forth, but that nobody really needs to carry around (or probably even own) thousands of rounds and a closet, or eight, full of steel…

  • It is true that society is only polite because it’s fed.  Anyone who has ever walked on the other side, or even been close to the depravity that is possible when human minds are desensitized and the welfare of others is low on the list of priorities, knows that sometimes the only answer is the ability to end the conversation emphatically.  It’s totally reasonable for a man, walking with his family on a side street to their parked car, to know that if needed, he has the means to repel attackers, who are real and who wait to prey.
  • Not everyone is Joe Kung-Fu and can defend themselves against a younger attacker, or a group of attackers.  For a modest investment and with some readily available training, Grandmother really can walk safely to get some creamer at 9:30 p.m. and isn’t independence for the elderly something to support?
  • The genie really is out of the bottle.  Putting the genie back in is impossible.  We can’t keep undesirable people, cargo and so forth out of our country now, and it’s not like bad guys keep plastic knives and forks for stickups.
  • It may be fine to legislate some arguably serious compromise around personal weapons ownership and maintenance, but it must be acknowledged that the anti-NRA crowd has their own bridge-too-far and it’s not as though they’re likely to suddenly call a halt on the march just because some moderate views found their way into the ruleset.  This is the old give-em-a-dollar argument, and it too is valid.
  • Expressions of violence against children, civilians and non-villains in the public square are more than just issues of controlling weapons ownership.  We see this all over the world, notably in China recently, where some loco slashed numbers of children.  Perhaps society does have some responsibility for the milieu it maintains and makes readily available to impressionable minds in every state of development and maintenance. Perhaps we can agree that glorification and limitless extrapolations of violence are not particularly helpful, even if they may be valid artistically, or some other way.
  • It really is not the American way to rely on the Government for everything.  Autonomy, individualism, independence of thought and action are hallmarks of the current experiment in self-management, and maybe individuals really should be free to follow their own hearts and consciences regarding the martial art of weapon ownership.  Perhaps, as it is true that social safety nets are imperiled, and that violence is in the hearts of many, that we ought not interfere too much with individual choices about how best to protect one’s life, liberty and pursuit of happiness.

It’s beyond troubling that the children of Newtown are gone.  The efficiency and effectiveness of the assault should be a clarion call for all of us in our little Newtowns.  For this reflection, I am clear that armed volunteers on every campus is past my own personal comfort zone.  I am also sure that desensitization to steel and powder is not in the long-term interests of my children.  My respect for the martial arts is profound.  My desire to protect my children from harm is beyond expression in this form.  My certainty that some measure of societal engagement is in everyone’s interest, that some middle ground will be acceptable to the first sigma of the bell curve that is Us, that acrimony might be held to a manageable level and societal benefit measurably increased, leads me to offer this frame for thought.

Until next time.

Revisiting the banking thing

it’s my sole observation at this time that the markets apparently were willing to grant the Eurozone more than the six weeks I negatively prognosticated.  Not feeling confident that all is well in hand.  Far from it.  Just confounded by the pace at which the actual world works, as opposed to the projections possible within a sideways-tree-visualized quantitative stochastic model entirely unencumbered by actual portfolios.  Freedom of mind, indeed. Humph.

There’s certainly more to discuss, but I’m moving on to a set of timely topics in the information technology world, because this place clearly isn’t going to organize itself.

BTW, I’d say that shorting the T-bill is madness if you actually expect collapse of the Euro.  Pimco stands as a lesson to us all.  The US is indeed a wonder in and of itself.  That being said and in the spirit of disclosure, I am shorting because I’m so far down on my Pimco follow (!) that now I’m just betting on a US equity-side any-kind-of-recovery netting out the same as if El Senor Bill had been right on my first go-around.  That’s OK.  No hard feelings.  I thought the same thing.  It’s good to know I wasn’t alone.

Until then,

AC

It occurs to me that the European banking system is collapsing under the weight of unrealized sovereign debt loss,

and that we know as much. European banks are avoiding write-downs on the sovereign debt they hold, in order to avoid having to recapitalize at a difficult time. The U.S. recognizes the risk in having the market handle the capital write-downs for those banks, having just narrowly avoided a very similar problem in 2008, and has opened a dollar lending window which is helping to keep the European banks’ collective balloon inflated. Now the ECB is stepping away from those same banks in an effort to encourage sovereign responsibility, which may be delivered, but which seems very unlikely to be delivered in a coordinated way, absent some serious policy rewrites in the EU. The risk of shock is high.

At the same time, there are people in the streets. I know because I read the Drudge report. There are people protesting austerity. There are people who feel a connection to the Israel/Palestine issue. There’s the entire Arab Spring to consider. I mean – think about it – there are a lot of people experiencing a deep enough level of personal unrest that they’re walking around somewhere in the night instead of reading this from their couches.

What happens when the capital run really starts in Europe…later this week or early next I’m guessing, because I don’t think the market gives anyone six weeks’ notice…and then people have fear to contend with on top of anger and uncertainty? Nothing good, I think.

If I were more diligent or educated, or conscientious, I would carefully document everything I’ve asserted in this post. As I am not, and as I very probably read all of the same things anyone who would actually consume this whole post does (and then wonder about sources), none of this is probably news to you.

If it is, or if I’m totally wrong on some point or another, please feel free to correct me. My only request is that you be kind, as I am simple and my feelings are easily bruised.

I will happily retract anything and everything, because I have no dog in the fight. I just wanted to pose the question. If it matters, I’ll even try to find the sources for my assertions.

Thanks,

Alex

next day additional – Interesting FT article covering much of European situation.  Changed title for clarity.  Doubt it worked 🙂

A Thought on National Health Care Reform

I’ve been thinking about national health care for a while now, and am happy to see the Obama administration attempting to address the problem.

I’m not sure that I agree with the approach they’re proposing, but then I’m not sure anyone else has offered a workable alternative.

(To be honest, I’m not sure that I genuinely understand the details of the various approaches which are being proposed, and I don’t think I’m alone).

Continue reading A Thought on National Health Care Reform