Plantation

The Daily Mail and the Express splutter at some of the nuggets in the following article, which I reproduce in its insouciant entirety from the Evening Standard (if the latter insists, I'll delete it, of course, but to them I'd say, I am increasing your readership at no cost to you or financial benefit to myself).

What comes across to me, is how decisions with far-reaching consequences are taken, not for the country's general benefit or to help the suffering, sliding working class, but merely to spite the political opposition, or for a temporary tactical gain.

I am reminded of Henry VIII's "plantations" in Ireland - and after 400 years, they still haven't quite rubbed all the corners off each other.

Then there's Fiji, where indentured Indian labourers were imported for a minimum initial 10-year term, during which time (inevitably, and I assume, entirely foreseeably) they would marry, have children, become rooted. Would it have entered the calculations of the landowners, that such importation would also make it harder for Fiji eventually to throw off colonial rule and assume full independence? Who cared that tensions would build up, leading to coups in 1987 and 2000?

But then, the powerful elite have always treated us like the beasts of the field. Remember the Highland clearances, also. "Who cares for the future, as long as I can make a few quid and booze it up with willing lovelies?"

As a Spanish Classical scholar observes:

It seems that there existed in Greece an expression or proverbial saying which is preserved in verse in a fragment of a tragedy whose author has not been identified (Tragicorum Fragmenta Adespota, 513 Nauck):

ἐμοῦ θανόντος γαῖα μιχθήτω πυρί·
οὐδὲν μέλει μοι· τἀμὰ γὰρ καλῶς ἔχει.

When I die, let earth and fire mix:
It matters not to me, for my affairs will be unaffected.
___________________________________________________
Don't listen to the whingers - London needs immigrantsAndrew Neather

23.10.09

Amid the sound and fury over Nick Griffin, there's a sad but unnoticed fact: it has taken this fiasco to make politicians talk about the impact of immigration.

Yesterday MPs Frank Field and Nicholas Soames called for a 75 per cent cut in immigration and accused the Government of "clamping down" on any debate.

What's missing is not only a sense of the benefits of immigration but also of where it came from.
It didn't just happen: the deliberate policy of ministers from late 2000 until at least February last year, when the Government introduced a points-based system, was to open up the UK to mass migration.

Even now, most graduates with good English and a salary of £40,000 or the local equivalent abroad are more or less guaranteed enough points to settle here.

The results in London, and especially for middle-class Londoners, have been highly positive. It's not simply a question of foreign nannies, cleaners and gardeners - although frankly it's hard to see how the capital could function without them.

Their place certainly wouldn't be taken by unemployed BNP voters from Barking or Burnley - fascist au pair, anyone? Immigrants are everywhere and in all sorts of jobs, many of them skilled.

My family's east European former nannies, for example, are model migrants, going on to be a social worker and an accountant. They have integrated into London society.

But this wave of immigration has enriched us much more than that. A large part of London's attraction is its cosmopolitan nature.

It is so much more international now than, say, 15 years ago, and so much more heterogeneous than most of the provinces, that it's pretty much unimaginable for us to go back either to the past or the sticks.

Field and Soames complain about schools where English is not the first language for many pupils.
But in my children's south London primary school, the international influence is primarily the large numbers of (mostly middle-class) bilingual children, usually with one parent married to a Brit.

My children have half- or wholly Spanish, Italian, Swiss, Austrian, Croatian, Bulgarian, Congolese, Chinese and Turkish classmates.

London's role as a magnet for immigration busted wide open the stale 1990s clichés about multiculturalism: it's a question of genuine diversity now, not just tacking a few Afro-Caribbean and Bengali events on to a white British mainstream. It's one of the reasons Paris now tends to look parochial to us.

So why is it that ministers have been so very bad at communicating this? I wonder because I wrote the landmark speech given by then immigration minister Barbara Roche in September 2000, calling for a loosening of controls. It marked a major shift from the policy of previous governments: from 1971 onwards, only foreigners joining relatives already in the UK had been permitted to settle here.

That speech was based largely on a report by the Performance and Innovation Unit, Tony Blair's Cabinet Office think-tank.

The PIU's reports were legendarily tedious within Whitehall but their big immigration report was surrounded by an unusual air of both anticipation and secrecy.

Drafts were handed out in summer 2000 only with extreme reluctance: there was a paranoia about it reaching the media.

Eventually published in January 2001, the innocuously labelled "RDS Occasional Paper no. 67", "Migration: an economic and social analysis" focused heavily on the labour market case.

But the earlier drafts I saw also included a driving political purpose: that mass immigration was the way that the Government was going to make the UK truly multicultural.

I remember coming away from some discussions with the clear sense that the policy was intended - even if this wasn't its main purpose - to rub the Right's nose in diversity and render their arguments out of date. That seemed to me to be a manoeuvre too far.

Ministers were very nervous about the whole thing. For despite Roche's keenness to make her big speech and to be upfront, there was a reluctance elsewhere in government to discuss what increased immigration would mean, above all for Labour's core white working-class vote.

This shone through even in the published report: the "social outcomes" it talks about are solely those for immigrants.

And this first-term immigration policy got no mention among the platitudes on the subject in Labour's 1997 manifesto, headed Faster, Firmer, Fairer.

The results were dramatic. In 1995, 55,000 foreigners were granted the right to settle in the UK. By 2005 that had risen to 179,000; last year, with immigration falling thanks to the recession, it was 148,000.

In addition, hundreds of thousands of migrants have come from the new EU member states since 2004, most requiring neither visas nor permission to work or settle. The UK welcomed an estimated net 1.5 million immigrants in the decade to 2008.

Part by accident, part by design, the Government had created its longed-for immigration boom.
But ministers wouldn't talk about it. In part they probably realised the conservatism of their core voters: while ministers might have been passionately in favour of a more diverse society, it wasn't necessarily a debate they wanted to have in working men's clubs in Sheffield or Sunderland.

In part, too, it would have been just too metropolitan an argument to make in such places: London was the real model. Roche was unusual in that she was a London MP, herself of east European Jewish stock.

But Labour ministers elsewhere tend studiously to avoid ever mentioning London. Meanwhile, the capital's capacity to absorb new immigrants depends in large part on its economic vitality and variety. There's not a lot of that in, say, south Yorkshire. And so ministers lost their nerve.

I hope it's not too late now, post-Question Time, for London to make the case for migration.

Of course we're too small a country to afford an open door - but, by the same token, if the immigrants dry up, this city and this country will become a much poorer and less interesting place. Why is it so hard for Gordon Brown to say that?

Send the office cleaners into the City

Cleaning up the trading rooms physically could be the way to amend the traders' behaviour (htp: Overcoming Bias)

People are unconsciously fairer and more generous when they are in clean-smelling environments, according to a soon-to-be published study...

... The first experiment evaluated fairness. As a test of whether clean scents would enhance reciprocity, participants played a classic "trust game." Subjects received $12 of real money (allegedly sent by an anonymous partner in another room). They had to decide how much of it to either keep or return to their partners who had trusted them to divide it fairly. Subjects in clean-scented rooms were less likely to exploit the trust of their partners, returning a significantly higher share of the money...

Are the markets being manipulated?

I'm partway through a 1990s American TV programme (htp: Jesse) about the lead-up to, and aftermath of the Great Crash of 1929. At that time, share price manipulation was legal, everyone knew it went on and even the losers came back for more, hoping they would get out in time the next time round. And in the 1920s, buying on margin became possible, so that provided a fatal extra impetus.

You know all this, of course.

My question (and pardon my ignorance) is about the interaction of derivatives and stock trading today. A takes a huge bet with B that the share price of Widgetco will go down - what stops B from borrowing more cash, purchasing Widgetco in time to boost the price before the date of the bet, collects the cash from A and then sells his firm's holding in Widgetco? Even if now illegal (and I'm not sure of that), are there not ways and means?

And are there other tricks to catch the operator who goes long on a share, instead?

Lessons from history

The Debt Offensive began in 2007: Charlie hit us with everything he had. Cadres of underpriced risk were tunnelling under our lines, popping up when least expected and decimating our defences. We fought back hard, dropping cash from the Hueys, first $700 billion, then trillions, but it was no use. Sure, we beat him back for a while, took down a few banks; but the public couldn't take seeing it all on TV. It was the turning point. We had lost the will to win.

Bozos in Parade

Two related items in today's Parade Sunday magazine caught my eye.

1. In reference to an intensive 2.5-year program in Computer Science at Neumont University, a Professor of Higher Education at Boston College is quoted as saying "I'm sure that they turn out really great technicians, but how are these students going to fit into the real world?"

Given that the real world is populated by a large percentage of what appear to be idiots, she's probably correct. However, many of the future teachers that I have taught do not appear to know anything about English, Mathematics, History, Geography, or even a foreign language. For them, higher education appears only to be a way to a job.

2. A piece taken from a new book, begins "Humans are good at many things - typing, inventing stuff - but we're quite bad at assessing risk".

To begin, I wouldn't class being a competent typist with being an inventor, any more than I would compare driving skill with a concert performance.

At most 5% of the population in the industrial world actually 'invents things', or advances human knowledge. Most of the rest just use it. Has it occurred to these authors that the same idiots who use all of that technology without understanding might just be the ones who panic unjustifiably?

Wine pressings

The crush of the present distils wisdom:

In general, my own prescription is all that I will share. I am 58 years old, and have amassed a fair amount of savings over the past twenty years. My general rules for the current period now are:

1. Get liquid. Have little or no debt. Be in cash and diversified. Reduce your expenses.
2. Get as far away as you can from Wall Street and dollar based assets as is practical.
3. Put something you can spare from savings into long term assets that are not directly contingent on anyone else whom you cannot trust:

a. Personal food production, preservation, and preparation
b. Precious metals as insurance against monetary inflation / breakdown
c. Essentials for daily living and personal health care
d. Investments in practical education
e. Personal infrastructure and efficiency

f. Have a contingency plan for a systemic shock.

If you wish raise your voice or to peacefully demonstrate, be prepared with a simple set of coherent positions and specific demands, avoiding anger. The mainstream media likes nothing better than to portrary demonstrators as cranks or fools. In general they are not sympathetic to the less powerful. They will not lead change, but they will eventually follow.

The "funny money" Dow

Comparing the Dow with CPI, and with debt

From economic crisis, towards politics and social change

Leo Kolivakis deeply regrets having to miss lunch with Michael Hudson:

[Dr Hudson argues] that we are moving to a "Neo-Feudal" world where the landlords and the bankers are again in charge of the economy (and the world).

Their strategy is to get the rest of the country into as much debt as possible. Whether this is so they can increase their claims on financial wealth (rents, interest payments, and capital gains on asset prices) or whether it's a political program to subjugate the population...that's one of the questions we were going to ask.

We were also going to ask if the "de-industrialisation" of advanced Western economies that Dr. Hudson talks about is a reversible process. Can Europe and America ever compete with China and Asia in manufactured goods? And if they can only do so in high-end goods (capital goods, technology, aerospace, IT etc.) what does that mean for the structure of employment in Western economies and corporate earnings.

Dr. Hudson, it seems to us, is right to point out that there is a kind of "Financial Oligarchy" that seems to be benefiting the most from the financialization of the economy. But everyone else - those betting on higher share and house prices to pay for retirement (and pay off huge debts) - may not fare so well. What should you do? What can you do? More on this in future reckonings.

US economic weakness to be exploited by China

Padders alerts me to this succinct WSJ article by Zakary Karabell, warning that just as the US leapfrogged a bankrupt Britain in 1945, China looks likely to do the same to the US.

Crony capitalism is our Vietnam War

Jesse passes on this CNBC tidbit, which explains how ex-Goldman Sachs operatives embedded in the US regulatory systems gave GS $70 billion just when nobody else had cash, so GS could buy up assets at fire sale prices and make monstrous profits at the taxpayers' expense. Truly, it's us against them, but all we can do is wave our placards as their limos cruise by.

Visit msnbc.com for Breaking News, World News, and News about the Economy

She's mine!

One teacher told how she and her new boyfriend snuggled up for the night, only to have her tomcat jump on top and soak them with urine.

So they heaved aside the soggy duvet and decamped to the second bedroom. But Tom came in and did it again.

They ended up having to grab a couple of blankets and sleep on the sofa downstairs.

And...

As Goldfinger says, "Once is happenstance. Twice is coincidence. Three times is enemy action.”

Laughing at the underclass

Doing the rounds on the Internet:

Two reasons why it's so hard to solve a redneck murder:

1. The DNA all matches.
2. There are no dental records.

Energy and polity

Following up comments kindly added to my piece, The Dolorous Stroke, I have aired the following and wonder if it has any merit:

I have a half-formed theory that coalitions/unifications have a destabilising effect. If, as with Germany and its customs unions in the 19th C, the result is greater efficiency, energy is released and the system attempts to expand, with the results we saw in the 20th C; if, instead, the system becomes less efficient, as with some giant commercial company mergers, the result is decay and contraction as inefficiencies fail to be addressed in a timely manner. I think the EU is / will be an example of the latter.

The wrecking crew

Jesse explains succinctly how the financiers are deliberately wrecking and looting what's left of the economy.

The money the government gave them isn't being loaned out, but instead is shoved into the stockmarket to create yet another illusory boom - so that more fees and bonuses can be earned. These are taken out of the system (where do they put their own stash?).

When the share-pumping stops, the market collapses again, less the plunder - so it's lower than before and there's even less cash to act as lifeblood for the real economy.

Meanwhile, the rich are, relatively speaking, richer than ever - even than their counterparts in 1929:

This threatens to destabilize society.

Death to the Higgs boson!

Police foil Al-Collider plot to blow up sub-atomic particle.

Two to note

1. Charles Hugh Smith reflects on something that's been nagging me for quite a long time, namely, the seeming impossibility of measuring "real" prices. Everything is relative to something else.

2. The Contrarian Investor's Journal fairly succinctly shows that the USA is fast approaching a debt level so high that Uncle Sam won't be able to service the payments. However, I think it may be time to separate actual here-and-now debt from notional debt in the form of medical and social security undertakings. Surely the latter will be revised radically, voluntarily or perforce.

Hunting in packs

Perhaps there's some fatal pheromone that causes a group suddenly to focus its aggression on a single individual. Or maybe there's a slightly more complicated, sadder explanation, involving cynical blamestorming by politicians and lazy, sensational reporting by the Fourth Estate.

A child known as Baby P is physically abused and killed by its mother, her boyfriend and his brother. The big fuss, however, is about the social services department and its chief is called on to resign. She points out the fact in the first sentence of this paragraph, refuses to resign and is called arrogant. Then she is dismissed from her post.

Her social workers (we are permitted to know by the media) have an average of 41 cases each, three times the recommended limit. Presumably Ms Shoesmith was not in a position to triple her department's budget and increase the number of her caseworkers by 200%.

Not good enough, you may say; the boss has to take responsibility. But the person who dismissed her was Ed Balls, the "Children's Secretary" yet, for some reason, he didn't resign. Is it a case of "the bucks stops... over there"?

Social work is one of a number of jobs that really, perhaps no-one in their right mind should consider doing.

Dealing with violence

I admire the restraint of this man, under great provocation. The unfortunate sap taunting him is too drunk and perhaps daft to notice the calm, balanced and very quietly action-ready way his "victim" is standing. Ah, if only it were always thus.

"It's moving towards you..."

As in "Alien", no-one knows where it's going to come from, but there's a bad feeling around:

1. ... it's easy to see that a financial crisis is brewing. Somewhere, something is going to blow sky high...

2. I see more bubble trouble on the way. Risk assets are being bid up all over the world as investors look for higher yields.

3. "Why is liquidity going into the financial sector? It's because the real economy is dying [and] everyone is fleeing into the stocks and bonds because they're liquid at the moment..."

4. In November 2008, Chinese banks said they would no longer play by our rules. Top tier banks (Bank of China and Industrial and Commercial Bank of China) reneged on derivatives contracts. [....] This should have been headline news in every financial newspaper, but it wasn’t.

Ironically, it is Marc Faber who takes the comparatively positive viewpoint:

5. If you look at the next 10 to 20 years in the West, I don’t see how the lifestyle of the average person will improve meaningfully. On the other hand, if you look at a country like Vietnam, they have a GDP per capita annually of $800 which may go to $3,000 over the next 15-20 years.

A modest proposal

Nine elderly ladies, one of them 106 years old, are to be moved out of their care home in Wolverhampton, even though there's plenty of evidence to suggest that such a traumatic event is likely to reduce their remaining life expectancy.

Why not go the whole hog, and draft in foreign vets to put down the old?

PS: Read my topical short story online, on this subject.

UPDATES (12 October): an angel arrives.
(13 October): the Council - for no good disclosed reason - says no to Trevor Beattie's charitable offer.

Okay, what's going to keep us up so high?

Fourth Estate, Fifth Column

I hold no brief for the hapless Gordon Brown, but who does Adam Boulton think he is, telling HM the Queen's first minister "You're staying here"?:



And then there's this interview (clip 3) with the equally ill-starr'd Defence Minister Bob Ainsworth: "Can I just read to you some of the phrases that have been used to describe you? Bungling Bob, Mr Ainsworthless. Are you not in danger of becoming the story, when the story should be Afghanistan?"

As if this aggressive, grandstanding style - which led to former-Newsnight-bruiser-now-quiz-show-host Jeremy Paxman being sidelined soon after Labour got in - is ever likely to get a useful and unintentionally revealing answer.

Time some of these journos learned (a) some manners and (b) how to do the job effectively. Give me the oily David Frost any day; much more dangerous.

The Third Age

As we face the cheery news of further-deferred State retirement benefits, the item below is doing the rounds on the Net. I'm almost looking forward to going back to work tomorrow.

A few years ago my wife and I moved into a retirement development on Florida's Southeast coast. We are living in the Delray/Boca/Boynton Golf, Spa, Bath and Tennis Club on Lake Fake-a-hachee. There are 3000 lakes in Florida; only three are real. Most lake names end in hachee something. Our biggest retirement concern was time management. What were we going to do all day?

Let me assure you, passing the time is not a problem. Your days will be eaten up by simple, daily activities. Just getting out of your car takes 15 minutes. Trying to find where you parked takes 20minutes. It takes 1/2 hour on the check-out line in Wal-Mart and 1 hour to return the item the next day.

Let me take you through a typical day. We get up at 5:00 AM, have a quick breakfast and join the early morning Walk and Talk Club. There are about 30 of us and rain or shine we walk around the streets, all talking at once. Every development has some late risers who stay in bed until 6 AM.

After a nimble walk avoiding irate drivers out to make us road kill, we go back home, shower and change for the next activity.

My wife goes directly to the pool for her under-water Pilates class, followed by gasping for breath and CPR. I put on my 'Ask me about my Grandchildren' T-shirt, my plaid mid-calf shorts, my black socks and sandals and go to the club house lobby for a nice nap.

Before you know it, it's time for lunch. We go to Costco to partake of the many tasty samples dispensed by ladies in white hair nets. All free!

After a filling lunch, if we don't have any doctor appointments, we might go to the flea market to see if any new white belts have come in or to buy a Rolex watch for $20.00.

We're usually back home by 2 PM to get ready for dinner. People start lining up for the early bird about 3 PM, but we get there by 3:45 because we're late eaters. The dinners are very popular because of the large portions they serve. You can take home enough food for the next day's lunch and dinner, including extra bread, crackers, packets of mustard, relish, ketchup and Sweet-and-Low along with mints.

At 5:30 we're home ready to watch the 6 o'clock news. By 6:30 we're fast asleep. Then we get up and make 5 or 6 trips to the bathroom during the night and it's time to get up and start a new day all overagain.

Doctor-related activities eat up most of your retirement time. Calling for test results also help the days fly by. It takes at least half an hour just getting through the doctor's phone menu. Then there's the hold time until you're connected to the right party. Sometimes they forget you're holding, and the whole office goes off to lunch.

Should you find you still have time on your hands, volunteering provides a rewarding opportunity to help the less fortunate. Florida has the largest concentration of seniors under five feet and they need our help. I myself am a volunteer for 'The Vertically Challenged Over 80.' I coach their basketball team, The Arthritic Avengers. The hoop is only 4 1/2 feet from the floor. You should see the look of confidence on their faces when they make a slam dunk.

Food shopping is a problem for short seniors or 'bottom feeders' as we call them because they can't reach the items on the upper shelves. There are many foods they've never tasted. After shopping,most seniors can't remember where they parked their cars and wander the parking lot for hours while their food defrosts.

Lastly, it's important to choose a development with an impressive name. Italian names are very popular in Florida . They convey world traveler, uppity sophistication and wealth. Where would you rather live... Murray 's Condos or the Lakes Of Venice ? There's no difference. They're both owned by Murray who happens to be a cheap bastard.

I hope this material has been of help to you future retirees. If I can be of any further assistance, please look me up when you're in Florida .. I live in The Leaning Condos of Pisa in Boynton Beach ...

The Internet and collapsing real estate values

Web Ad Sales In Britain Overtake TV

Watch for the coming crash in commercial real estate, as increasingly, intangibles, non-perishables and some perishables get sold by Net and delivered from centralised locations.

The dolorous stroke

Falling towers
Jerusalem Athens Alexandria
Vienna London
Unreal


Hitchens (1):

A great grey Tower of Babel reaches up into the sky over Europe, lopsided, full of cracks and likely to collapse in the fullness of time...

For Britain, Europe’s oldest continuously independent sovereign state, [...] it is the end of 1,000 years of history, as predicted by the Labour leader Hugh Gaitskell as long ago as 1962...

In the EU, Ireland – no longer a Tiger – takes its place alongside Slovenia and Lithuania as a quirky, minor possession on the damp and unvisited fringes of the Continent, with almost no voting power.

Shorn – as it is now – of its ability to get in the way, it may find that the flow of subsidies will become much thinner in years to come...

The ascent of the EU happened to coincide with several decades of unheard-of prosperity and growth. But the EU did not cause that prosperity...

It was based on American Marshall Aid and helped along by American and British willingness to spend heavily on defending Europe against the USSR, while most of the EU nations kept their military budgets small.

The EU also cannot guarantee that Europe’s prosperity will go on forever. With so many member nations, many of them devastated by decades of Marxist misrule, its capacity to hand out subsidies is running out.

The credit crisis has not finished yet, Western Europe is fast running out of its own energy supplies and the shift of economic power to the Far East is speeding up, not stopping.

The European nations have not worked out how to deal with the enormous Muslim minorities which they have encouraged to settle on their territory and which increasingly demand the right to live according to their traditions.

Nor can they stop the slide of the manufacturing industry towards the regions where labour is cheapest.

Germany, still in a sort of post-traumatic shock over the cost of absorbing the Communist East, may not forever be willing to share a currency – and so a joint bank account – with the poorer and less well-run nations of the Eurozone.

Hitchens (2):

... At the coming Election, refuse to vote for any of them, and do so in such numbers that they can no longer claim they have any mandate to rule, so that their zombie parties collapse in a heap of dust and worms, and we can start again.

The alternative is the accelerating death of our civilisation.

Hannan:

People often wonder why national leaders are so ready to hand their powers to Brussels. Each successive EU treaty has weakened national parliaments, yet each has been enthusiastically ratified by those same parliaments, often in overt defiance of public opinion.

What makes the politicians do it? [...] Perhaps – let’s be blunt – they are defying their electorates in the hope of getting lucrative positions in the EU when their terms expire.

I realise that this is a big claim. But, in ten years as an MEP, I’ve seen it happen time and again.

I’ve watched people arrive in Brussels as moderate Euro-sceptics, but change their views as their lips become clamped around the teat of the expenses. I’ve watched ‘No’ campaigners turn into Euro-enthusiasts after being given sinecures.

Now Tony Blair is plainly not in that category. He was a Euro-enthusiast to start with, albeit in a rather vague, pro-Italian-holidays kind of way. And he’s hardly poor...

No, the charge against him is not that he abandoned his beliefs, but that he abandoned Britain’s interests...

Could the issue of the [EU] budget have been linked in Blair’s mind, even subliminally, with that of the presidency?

... if Blair really did seek to buy the presidency with British taxpayers’ money, he was almost literally selling his country – and there is a very unpleasant word for people who do that.

For those who believe in history with a human face, perhaps this is a punishment, for believing we could create some small and imperfect version of an Earthly Paradise, where even the poorest man would have a voice in his government, and have hope to better his position in society; where the bully would be held back by fear of punishment, and the powerful restrained by the apprehension of condign retribution.

My wife says she feels aggression everywhere, people arguing with bus drivers that they shouldn't have to pay. I say the hungry sheep look up and are not fed; we are lost and leaderless ; those at the bottom of society live in fear of the future, despair, impotent rage, having nothing but meagre dole given them with grandstanding condemnation and impossible promises of opportunity.

Put not your trust in princes, nor in the son of man, in whom there is no help, said the Psalmist.

Le Prince d'Aquitaine à la tour abolie
These fragments I have shored against my ruins

It always ends in a building project, whether the new EU Parliament or Ceauşescu's Casa Poporului...














But that two-handed engine at the door
Stands ready to smite once, and smite no more

It's not for us to take up arms. Worldly powers will rise and fall. Our defence, and the future, is the family. That is the nearest we can have to the Earthly Paradise.

The Other Side

I know that I have done my fair share of criticising the rich and influential on this forum. Why they think they should be in charge is exemplified in the website http://www.yousuckatcraigslist.com , to which I was directed by my lovely wife.

For those who don't know, Craig's List is a free website to exchange goods and services, among other things.

Polanski

Mark Steyn joins the discussion about Roman Polanski's arrest, adding some revolting and disturbing detail - Jerry Lee Lewis' marriage to his own 13-year-old cousin Myra, this isn't.

My question is, why have the authorities left it so long? There's some hidden agenda, surely. And surely, for justice to be seen to be done, there should not be hidden agendas.

Private life, public life

Alice Miles is a breezy columnist for the Times and one of a number who are fortunate in being able to turn their private life into copy, like Liz Jones in the Daily Mail (Jones' Mail on Sunday diary pieces are sadly irresistible).

Miles' opinion of the NHS, she wrote in 2006, was that some doctors are "arrogant and stroppy," an observation sharply resented by some in the profession. Perhaps this judgment was coloured by her personal experience during pregnancy, for she returned to this theme a year later in a piece titled "Natural birth! Hello? This is the 21st century": "... I remember when I told my very nice and until then helpful midwife that I was going to have a Caesarean (I, fortunately, had a choice). I might as well have said that after careful thought I had decided I would feed my baby heroin. When she had recovered sufficiently from the shock, Maureen, a large, broad-hipped woman and mother of about eight, suggested I might have been swayed by Posh Spice: “A lot of women want to follow their favourite celebrity.” Then she asked whether I was doing it at my husband’s request to keep myself perfect for him “down there”. " And then last year, she had a nice holiday in Madeira (pictured with her daughter in the article), which if it wasn't paid for by her paper, at least gave her the material to earn her salary. More, we don't know, unless and until she announces it.

You see, the Fourth Estate want to earn money talking about themselves at some times, yet preserve their privacy when it suits them. To dare to hoist them with their own interrogatory petard is treated almost as a sort of lèse majesté. When did journalists become, I don't know, not just celebrities, but a kind of minor royalty? Is it because the Left has been consistently undermining the Royal Family, so that a replacement has to be found?

At any rate, journalists can become quite chevalier in the exercise of their prerogatives. Last year, the former editor of Private Eye, Richard Ingrams, commented on Andrew Marr's use of a court injunction to suppress not only certain information about his private life, but also the very fact of his having obtained a court injunction to that effect (the magazine successfully defied the second part of that attempt).

The battle for press freedom continues: in this week's print edition of PE, the lead article is reduced to muttering, "Last month a certain institution obtained a high court injunction to prevent a certain newspaper from publishing a certain document. More than that we cannot say; to do so is fraught with danger." The article goes on to remind us of the debt we owe to the 18th century rake, wit and publisher John Wilkes, and reflects that "prior restraint" is rolling back the tide of Liberty.

I don't think this is a minor matter: I fear that we are witnessing the seemingly unstoppable reconstruction of aristocracy in all its worst aspects, on both sides of the Atlantic. And even their flappers are dressing themselves in the livery and rights of the Imperial Court.

Ironically, Marr himself recently interviewed the new owner of the London Evening Standard, Alexandre Lebedev, who in response to suggestions that the latter might have problems with Putin said, "I think the only right I'm defending is the freedom of speech and of course I am using to a certain extent my limited resources in actually supporting the freedom of information and freedom of press." Exactly one year earlier, Marr was also questioning Russians Gary Kasparov and Dmitry Peskov about press freedom in Russia. Following Marr's interview with Gordon Brown, in which he controversially asked the Prime Minster not only about his blindness but about rumours of drug treatment, he defended his right to ask such questions.

In August last year, Mazher Mahmood told Emily Maitlis on Marr's own show, "... what's happening is that a privacy law is creeping into Britain through the back door. Investigative journalism is slowly being strangled. The Max Mosley case is testament to that if it were needed."

Back in 1997, in his fine tribute to the late Ruth Picardie, Marr wrote, "She asked awkward, embarrassing questions, including about herself, and didn't flinch from nasty answers. And embarrassing questions are good, the lifeblood of journalism. Without them, we are duller, stupider bipeds.

These Ruth Picardie qualities are the opposite of what our accountancy- dominated culture, and indeed some politicians, seem to want journalists to be - obedient, emotionally-controlled and humble little information- processors with no life outside the profession, reliably mincing factoids into munchable, pain-free, sesame-coated pieces. And Hell, where's the pleasure in that? You might as well write a novel."

When powerful people - and, backed by the judges that at other times they may criticise, journalists are powerful - are allowed to determine the limits to liberty, it is unreasonable for us to expect it to retain its character. These quasi-liberal censors are like Douglas Adams' stupid philosophers Broomfondle and Magicthighs, who "demand rigidly defined areas of doubt and uncertainty!" Understandably seeking to prevent their own social embarrassment, they set the precedent for other, potentially wicked and dictatorial people to exploit for worse ends.

And it's not slow in coming. Alastair Campbell, himself a former journalist for the Daily Mirror and Today, earned a reputation as a fearsome handler of the Press when he became Prime Minister Tony Blair's spokesman. As a poacher-turned-gamekeeper, he knows the tricks of the journalists' trade, but his communication sources also yield him plenty of ammunition to keep the scribblers' heads down when he wants to; and the threat to Marr, via Campbell's blog, came swiftly:

"It was sad to see Marr, perhaps with an eye to a few Monday morning cuttings, feel that he had to raise blogosphere rumours about Gordon going blind, or being on heavy medication of some sort. I know it will give him the passing satisfaction of pats on the back from journos … But it was low stuff. I'm sure Andrew would agree that everyone has certain areas of their life that they'd prefer not to be asked about live on TV."

That's how it works, and that's why people in Mr Marr's position need to tell the truth and shame the devil, for otherwise the devil will know how to build on the weakness.

Eden, Noah, speculation and Bible truth

Without believing every detail in the Genesis account, I think the Noah story plausible. Rather than undermining it, I would say that the Epic of Gilgamesh corroborates it.

Graham Hancock has spent a long time developing his theory that the Flood is a mythicised memory of the melting of the northern European ice sheets some 10,000 years ago. I recall reading somewhere that some Australian aboriginal tales may be as old as their first arrival to the continent, 40 or 60 thousand years ago. Why not? If a story can be passed down from one generation to another, why should the transmission cease, unless the tribe is destroyed by invaders?

I think - I speculate - that there may have been many Noahs. The ice sheets can't have melted in a single season, so quite possibly there was an annual flooding in warmer weather every year for very many years, and this could have stimulated men to learn to build larger and more robust ships, to keep their families and livestock safe, rather than canoes suitable for shoreline fishing. Perhaps this led to the colonisation of central America by oceangoing tribes, since I've read the hunters that came down the ice-free corridor through Canada didn't get that far.

Years ago, I bought my mother the Times Atlas of History, in which it stated that agriculture was invented in Anatolia, northern Turkey, which happens to be the area where the Tigris and the Euphrates rise (two of the rivers that flowed out of Eden). Agriculture and fishing, around the Pontian shore, a shore that would rise every year. And hasn't there been some evidence that there are indeed remains of man-made structures in the oxygen-starved mud in that sea-shelf?

Just because an old, old story doesn't agree in every point with current scientific theory, that doesn't mean it isn't essentially true; the Ark may or may not have been 300 cubits in length, yet it may still have been very big. And many people have noted how the account of Creation itself also comes close to accepted cosmological opinion.

It's like Schliemann and his discovery of the remains of Troy: we're so used to dismissing traditional stories that we may fail to be guided by them.

Violence, illusion and reality

Nice extract here on what violence is really like. Interests me because indirectly, it reveals how much our world-view is skewed by fictional artefacts.

Sucking out the poison - or injecting it?

Padders has directed me to the latest financial craze, the re-remic. And, no doubt, in all the detail will hide another toxic djinn, while bankers, ratings agencies and quants run far, far away with their salaries, fees and bonuses.

Sit up and take notice!

From time to time, you get a piece of longer-term thinking that initially seems interesting, is then forgotten in the pell-mell of daily life, and finally haunts you with its truth years or decades later. For example, I remember one TV discussion back in the 70s where terrorism was flagged as the theme for the future; and another, criticising commercial advertising, where one ad honcho said the worrying thing was the increasing importance of the government as an advertising client.

This post by Edward Harrison seems to me one of those keep-it-by-your-desk pieces. He says too many things for me to summarise easily, but it has "secular bear market" written all over it, and Harrison goes further (into the territory recently explored by Michael Panzer in "When Giants Fall"):

... Needless to say, this kind of volatility will induce a wave of populist sentiment, leading to an unpredictable and violent geopolitical climate and the likelihood of more muscular forms of government.

Principles of investing

Bob Farrell’s Ten Market Rules to Remember

1) Markets tend to return to the mean over time. This is especially noteworthy now, for the housing market is returning to its mean by plunging, as are equity market, the dollar, the Yen, et al.

2) Excesses in one direction will lead to an opposite excess in the other direction. They always do, and the excesses of the housing bubble and excessive, lenient bank lending, are giving way to the housing collapse and inordinately tight lending practices.

3) There are no new eras — excesses are never permanent. And how strongly does that speak to us now, for the supposed era of unending housing price increases and of globalisation has given way to weak housing and growing protectionism.

4) Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways. Markets correct by going in the opposite direction, falling sharply after sustained, broad rallies, and rallying after sustained broad weakness. The world ebbs and the world flows; it has always been thus, and shall always be thus.

5) The public buys the most at the top and the least at the bottom. Of course they do; they always have and they always shall. The public buys when euphoria reigns, and it sells when depression does years later.

6) Fear and greed are stronger than long-term resolve. We are human beings dealing with rational and irrational markets; to believe that "fear" and "greed" can ever be lost is naive for they are the most fundamental of human traits.

7) Markets are strongest when they are broad and weakest when they narrow to a handful of blue chip names. Just as volume must follow the trend, so too must good markets have broad support and weak markets have broad weakness... and at the moment, the market is very, very broadly weak.

8) Bear markets have three stages — sharp down — reflexive rebound —a drawn-out fundamental downtrend. This really is how this bear market shall end; not with a hoped for "V" bottom, but with a great washing-out... a capitulation... and then months, or even years, of base building.

9) When all the experts and forecasts agree – something else is going to happen.... or as we like to say, "When they are yellin', you should be sellin,' and when they are cryin,' you should be buyin.' "

10) Bull markets are more fun than bear markets.... or as a friend of ours from Raleigh, N. Carolina used to say many years ago, "Bears don't eat; bulls party!"

Haw, haw!

The above is a photo of Clive Sinclair (later Sir Clive) with one of his inventions, the miniature TV (1966). Life magazine dubs it one of "30 Dumb Inventions" (slide 18 in the sequence).

Oh, yes? iPhone, anyone? (and see slide 26, to boot).

The difference between mockery and admiration is often a matter of timing (think of da Vinci's helicopter, or Noah's Ark). It's Sinclair's misfortune that, like many a genius, he led the market by too great a distance. But without people like this, we wouldn't have got here.

Two questions on productivity

A couple of quick ones:

1. Turn on, tune in, drop out

Robin Hanson says we are living in a "dream time", when survival instincts have been dulled by wealth so that Nature has (temporarily) let us get away with acting stupidly. I recall the old saying, "From clogs to clogs is only three generations" (i.e. the middle generation spends it all).

In this context, it's also interesting to note how at a time when we're drugging children and old people to stop them being a nuisance, libertarians are calling for young adults to have the right to zombiefy themselves with "harmless" mind-altering substances. Yes, they will still be able to work, some of them, for some time; I guess the same argument goes for functioning alcoholics. Dream on... until, as the Germans say, "Aus der traum, lieber Freund."

I've known black people who maintain that drugs liberalisation (and the associated laissez-faire approach to law enforcement) is a plot to keep their children in subjection. I tend to put it down to middle-class selfishness, instead; but I can see why they might think that.

2. Think big, think small

As higher taxation looms, some are already trying to draw a distinction between "productive" and "unproductive" workers. Well, effectively, practically everybody (including the poor) pays 40% tax already, when you look at the combination of income tax, National Insurance and sales taxes; though I do agree that a proposed 50% higher-rate income tax rate is likely to generate various avoidance strategies that will mostly wipe out the hope-for extra revenue.

But if Mish's friend "BC" is right, we are entering a "Schumpeterian Depression", during which big biz uses its access to finance to crush small enterprise; and so it may be a decade before young entrepreneurs develop the muscle to get out from under and start to succeed.

Besides, how much big business is founded on destroying small businesses and the self-employed? What, for example, if we looked at it closely, would be the real, total net benefit of the giant supermarkets? Weigh up the cheaper prices against the exploitation of their suppliers and the ruination of small shopkeepers - and the smashing of one of the ladders by which the aspirant working class - and their children - could rise and become self-supporting.

Where to turn, for financial security?

Richard Bookstaber (whom we've met before, here) looks at asset allocation and makes a point he's made before: in a crisis, everyone wants out, and the relative merits of different assets are ignored in the dash for cash. Provided cash (at bank) hasn't itself become risky - and after last year, that's not a given. Even outside the bank, there's inflation, devaluation and also, potentially, the fate of the Confederate dollar.

Leo Kolivakis comments, "I happen to believe that diversification is still important, but loses its power as huge inflows are going into all sorts of public and alternative asset classes."

That's the problem: we no longer know where to turn. As Kunstler comments, "the most perplexing part is that there hardly seems any safe place to preserve one's savings."

How about the smart, nimble operators? Investment guru Marc Faber spends his time looking at liquidity flows, trying to predict the next sudden tide and get in beforehand - not a game for the type of clients I have usually advised. And even he appears to be readying himself for the worst, "a total disaster, with a collapse of our capitalistic system as we know it today."

Recently, I seem to have been reading more commentators tending to the view that we are heading for that Mises "crack-up boom" - outlined here nine years ago, for example. And worse:

"And 'mid this tumult Kubla heard from far
Ancestral voices prophesying war!"

The great pleasure gardens of China's Emperor took some 40 years to build, in the first half of the eighteenth century. Vast, complex and exquisite, they were testimony to the wealth and power of the Middle Kingdom, only to be methodically destroyed in an act of punitive vandalism by the French and English in 1860. Premier Zhou Enlai decreed that the ruins should remain unaltered, a monumental lesson for the Chinese about the Western powers.

Of all the curses on humankind, long and vengeful memory may be the worst.

Inflation and the money supply

Interesting graph from Eric Janszen - he ignores the velocity of money (which can change quickly) and concentrates on money supply. He sees our situation as akin to that in 1981; I'm still thinking we're in the mid-70s, because round about 1982 was when we started to see real (post-inflation) returns on investments.

Poverty is OK

Robin Hanson looks forward to being poor. But I fear the path there won't take us to the anonymous semi-contentment of the Dark Ages, because it passes through population crash first.

Duty

Update: the media are focusing on rumours of Brown's taking painkillers, allegedly related to his eye problems, which the PM denies. I thought they wanted a regime change? If so, they'd be keen to keep him on, as the Tories must be, and so wouldn't probe him like this. But maybe they're also keen not to be shown up by the blogosphere, which maintains that the news media are colluding to avoid raising a more serious health issue - this one is doing the rounds.

He's not the only one suffering from dark whispers. There was that mysterious 2004 family crisis of Blair's, which some suspected really had to do with his own supposed nervous debilitation; and Leo Abse's book on Blair attempted to unravel the man's psychology. I myself was asking friends within a year or two of 1997 whether they thought he was mad; at that point, they looked at me as though they thought I was, instead.

Squaring the circle, packing your bags

In Britain, there are 28.89 million employed - 72.5% of the "people of working age"; median earnings approach £25,000.

In China, the average urban wage in 2006 was 1750 yuan per month, or (at today's exchange rate) slightly less than £2,000 per year.

_______

In Britain, there are 3 million homes where no-one works, with an average household benefit payment level of over £4,000 p.a. This doesn't factor in the cost of other benefits provided by the State, such as health and education. For example, State schooling costs something like £6,000 yearly per child.

In China, the official urban unemployment rate at the end of 2008 was 4.2%, or nearly 9 million people. This statistic does not include unemployed not eligible for benefits, or migrant workers - about 20 million out of 130 million migrants have no job. In industrialized Guangdong Province, for those who qualify, unemployment benefit for the first 24 months is 688 yuan per month, or £757 per year.

_____________

In Britain, the 27.5% of the "people of working age" that might be employed but are not, number approximately 10.96 million.

In China, estimates Eric Janszen of iTulip, there are 20 million officially unemployed and the real tally should be 40 - 50 million.

_______________

China has over 1 billion people and is desperate for land, and natural resources such as wood, water and arable soil. Despite restrictions on family size, her population continues to increase, largely because her people are getting to live longer (and will one day incur the high additional costs of growing old). She has industrialized at high speed and has built a massive skill base. She is continuing to acquire technological and scientific know-how, and is sucking in the world's steel and a panoply of key African and Australian minerals and rare earths. She sits on vast reserves of coal. The ruling Communist elite have not spent a long lifetime climbing the exceptionally dangerous slippery pole in their country, to see their beloved nation sink into chaos and their equalitarian beliefs defeated.

You are a British (or American) politician. You know all the above - or your handlers will tell you just before you go on "Question Time" or some other grill-the-pol show. (1) What will you say to your voters? (2) What private plans will you make for yourself, your family and your friends?

Trusting soul

So we're to lose a quarter of our sub-borne nuclear deterrent. Mexican standoff unilaterally defused by putting your gun down first, eh? On the other hand, remember what Churchill observed about the Hun.

Cut the cr-- and send 'em down

My wife (the smart one in this partnership) thinks Judge Judy should present the Jeremy Kyle Show, too. Now if only JJ, with her brisk, trenchant, from-the-shoulder, don't-pull-one-on-me style, could try all the soigné , sock-suspendered financial twisters that have jeopardised our collective wealth; five minutes in court and 20 years each in the hoosegow.

I had a dream last night
What a lovely dream it was
I dreamed we all were alright
Happy in a land of Oz...

- John Sebastian

A glimpse of the past

Out with my wife's relations on Saturday in the Black Country (the old coal-fired industrial area). One elder recalled that when they were poor, his mother would put the kettle on the stove on a Sunday, so the windows would steam up and the neighbours would think that they were cooking lunch.

Up with bonds, down with equities, out with with-profits

After the stockmarket ructions, pension funds are getting more cagey and thinking about weighting more towards bonds (htp: Pension Pulse). (A seminar I went to maybe 10 years ago predicted this trend.) Bill Gross of Pimco is also thinking that way; at the same moment when others reckon the recession's over, or nearly so.

My concern is that the market is now so volatile that only active traders will be interested. The smoothing approach of British with-profits funds has been undermined by downswings so sharp that more than once recently, they have had to apply penalties to investors seeking to exit early; which in turn will make those investors less inclined to reinvest in with-profits, and indeed quite possibly put them off investment generally.

That, plus the need to take more income as the population ages, plus a poorer next generation that will work longer, be taxed more and have less in State and other pension provision, plus the burgeoning of the world population, the gradual equalization of world average income (and it's a very low average), plus increasing ecological limits to fast-buck-type growth, all tend to make me more a bear than a bull for as far as I can see, whatever may happen in the short term as a result of desperate overstimulation with fiat cash.

Yes, there'll be opportunities for the agile financial player; but for the mom-and-pop saver?

Where's the gold, really?

As the price of gold continues to float above $1,000, I do wonder where it all is, really. Thinking about the Federal Reserve, I suddenly remembered Joanna Southcott's box.

At its peak, the Fed held 12,700 tonnes of the metal, but it's hard to establish even what it claims to have now - try making sense of the prose the Fed issues on the subject here. Some think the vault now contains no more than a lottery ticket and a horse-pistol.

Could they be snorting with laughter over their glasses of Petrus as they look down at us trusting plebs?

The coming tide

Thanks to Tyrone for his comment directing us to a YouTube presentation by W E Pollock, someone I've viewed with interest before. The comment was in response to an FTAphaville piece that asked why the Dow was rising so strongly.

Pollock, whose presentations are useful to the layman because he is at pains to be clear and calm, notes that the volume of trade is low, which may mislead us as to the value of the market as a whole. It is as if, in a slow-moving housing market, your neighbour suddenly manages to sell his house for much more than expected, because the purchaser has certain private reasons to get in.
He also notes that the gains on the Dow are counteracted by the fall in the dollar's value, and this is a theme I've touched on many times. You have to look at real gains; and even when you think you're beating the present rate of inflation in your country, currency exchange movements may be the early indicators of higher future inflation. This is why, comparing where we are now to the period 1966 - 1982, I think we may yet see the real-terms equivalent of Dow 4,000 and FTSE 2,000.

Pollock goes on to consider gold, over which he puzzles (but then, there's a lot of dirty work and hugger-mugger in that market); and oil - if foreign economies begin to recover and industrial production rises, increasing the demand for oil, then if the dollar continues to be weak the price of energy in the USA will become so high as to damage growth prospects there.

So, where are we with all this?

Even academic economists are beginning (very belatedly) to question the validity of their models. Across the world, the games are so weighted and rigged, the rules so suddenly variable, that we are talking about how things ought to work, rather than how they really do. This is why it's now a fertile ground for conspiracy theorists: there really is a lot of conspiracy. Trouble is, we don't know all of the plots, all of the players, and all of the details.

What I think we can do, is look at the ocean tide, and not at the individual waves.

Historically, Western countries became wealthy on technological advances and were able to sell goods not just to each other, but to undeveloped countries in exchange for cheap resources. Then the latter countries began to industrialise, and goods could be carried at low unit cost in vast bulk across oceans and continents. All that remained was to break down political barriers to trade, as Nixon began to do with his visit to China in 1972.

Trouble is, controlling the rate of change. It's one thing to turn on your oil-fired central heating, another if your fuel storage tank catches fire. We want to carry on as we are (or as we used to be), but poor people are in a hurry to attain our wealthy lifestyles, and are disinclined to progress more slowly. Vast international businesses and globe-trotting billionaires stand to do very well out of facilitating this trade; national politicians are under pressure from their voters to resist it - but on a personal level, will know how rich they themselves will be when they leave office, so long as they don't try too hard for the people who elected them.

So, while I don't quite subscribe to the Dick-Dastardly-and-Mutley view of politician's summits (G-name-a-figure, Bilderberg, et al.), I can see the natural attraction for them of a world (or at least supranational) government. It means being further away from the Great Unwashed, mixing with all the Right People, fine wines and yachts etc; it means going with the flow, helping wealth and power to gather into certain centres, and organising dole handouts to regions that lose out as a result. Only the fools will try to play King Canute.

Imagine the world economies as a series of canal locks descending a steep hill. We are in the top section, the poor countries lower down. Now if all the gates are opened at once, there will be a destructive gush of water; the narrowboats in the top lock sink into the mud; the ones at the bottom float on a higher tide; a brave soul on a surfboard (the international trader) rides a thrilling wave down the hill.

Free-traders will argue that trade brings mutual benefits; but I don't think the argument works when world income disparities are so great. A Dutchman bought Manhattan from the occupying tribe for $24, but I doubt they'd get it back for that price now, not even with 400 years' interest.

It's coming, it's coming fast, it's coming destructively; and the people we pay to stop it are telling us the lies we want to hear and planning their personal advancement*. Let us return the favour.

* “It is a totally wrong notion of people to assume that the government does anything for the people; the government is there to do something for itself, and not for the people” – Marc Faber on GoldSeek, 12 September 2009

And another thing

BBC economic journalist Robert Peston recently professed himself "nauseous" on reading of the paltry £9 million per head earned by the hapless Rover Four; yet when I read his book "Who Runs Britain?" this year, I failed to see him confess a similar gut reaction to Sir Philip Green's £1.2 billion dividend raid on Arcadia Group. (Actually, the money went to his wife, who is domiciled for tax purposes in Monaco, but that hardly improves the flavour.)

At the time, this monster cash extraction (done with freshly borrowed money) was more than three times Arcadia's operating profits, but I'm sure the banks that (expensively) approved the loans didn't care. And it was legal.

However, if, in the economic downturn, turnover and profits are savaged, and tangible assets decline sharply in value, and Arcadia becomes very weak, or even goes bust, what will Peston say then? Arcadia Group employs 27,000 people; was it really OK, other than in a strictly legal sense, to put such a heavy yoke around its neck? Had the dividend not been paid - and especially, not been funded by humungous bank loans - what more might the group have achieved? The consolidated balance sheet for 31 August 2008 is here; what will the 2009 one look like?



What are the implications for our so-called democracy when captains of industry become so gigantic, and the rest of us become relatively as insignificant as crablice?

Running out of bigger fools?

What's been powering the market? Max Keiser recently opined that the rich have been moving their wealth out of the USA since 9/11, Jesse has alerted us to insider selling, Mr & Mrs Average have been selling their holding and paying down debt, so...?

According to FT Alphaville (htp: Michael Panzner) it's technical/leveraged buying/betting:

Very likely it is still a combination of program trading, short coverings and portfolio managers desperately trying to make up for last year’s epic losses.

And when it becomes painfully clear that there are no more mugs to buy the rubbish off you?

Spiralling round the black hole of inequality

"Economist's View" argues that the Gini Index will go on rising until someone positively stops it:

Once income concentration becomes a reinforcing cycle of the kind we are witnessing, it is never stopped by pure market forces. Only extensive government intervention, of the kind that will inevitably create high controversy, reverses this trend.

Read the rest of Mark Thoma's piece here.

People get ready

We're going to be splatted by a headlights-on-full-beam, diesel-pluming, horn-honking road-train of debt. Fred Goodwin, CEO at Nomura (i.e. not the RBS wrecker who scuttled to his hideout in France - the private gated resort may be the one between Cannes and Mougins) has used the colourful phrase "clear and present danger" of the British economy. Unfortunately, shouting "Look out!" usually doesn't prevent disaster.

Karl Denninger, still indignant and vengeful but now also beginning to sounding the Cassandra note of inevitable defeat ("We are one cycle away from a collapse - if we're lucky"), graphs debt against GDP for the USA and it's clear that there must be a break in the smooth lines at some point.

And however bad it is for America - a country which periodically falls over, picks itself up, dusts itself down, and starts all over again - it'll be far worse for Britain, a country where the management has never quite lost that 1066 sense of being quite unconnected with the indigenous peasantry subjected to their cruel alien rule. This is why our overlords find it so easy to flee the country to take their place in the new pan-European aristocracy currently under construction, an unlovely amalgam of big-business swindlers, venal politicians and their marketing men. They're allying with old money smart enough to know which side its bread is buttered; history is made in the bedroom and the backroom (“Let others wage wars: you, fortunate Austria, marry”).

There is a long history of England's rulers employing foreign mercenaries (especially Germans) to put down uprisings of the overwrought population, both here in the sixteenth century, and in the American colonies in the eighteenth. In the modern world, where the predominant avatar of Power is money (Bertrand Russell's 1938 book is illuminating on the three-headed helldog), we are being driven off our business smallholdings and made day-labourers for giant enterprises owned abroad or by equally huge collective investments in which the individual shareholders' voices are lost "like tears in rain".

And when the Empire falls, as it must, as all do, the great forgetting will descend. Perhaps we can take comfort in the thought that after the bloody cataclysm, the Dark Ages, so named because untroubled by the scribes and accountants of expansive rulers, were, quietly and anonymously, as sunlit as ours.

The night they raided Minsky

Australian economist Steve Keen summarises Hyman Minsky's Financial Instability Hypothesis, which is that you get bubble after bubble, each time increasing the debt, until the process simply cannot continue and all will be catastrophically revealed.

So he's another forecasting and fearing systemic collapse - like Marc Faber and Max Keiser recently - and now Karl Denninger.

As the Dow heads for 10,000, the FTSE soars above 5,000 but gold seems now to be consistently drifting beyond the $1,000 breakwater, I feel of the bankers, traders and politicians, as Talleyrand said of the Bourbons, that "They have learned nothing and forgotten nothing."

Evolution of Creationism

In the 150 years since the publication of Charles Darwin's 'Origin of Species', the Theory of Evolution has been refined and strengthened on a daily basis. For 100 years, it has been the best-supported model that we have, and is settled science.

Culturally is a different matter.

Biblical literalists, principally in the US, with some in Canada, Australia, England, Ireland and elsewhere, have fought a public relations rearguard action, retarding US science and education. Even as they lose in the scientific arena, they also have lost in legal battles.

Ironically, this pressure has caused their arguments to evolve:

CREATION SCIENCE (ruled religion and not science by the US Supreme Court in 1987)

A used-car salesman in a cheap suit. Tries to convince you that a rusted-out junker is better than a new car.

INTELLIGENT DESIGN (Kansas and Ohio School Board hearings)

Salesman has a nicer suit. Paints over the rust, and tells you that the car IS new.

'ONLY A THEORY' and 'STRENGTHS AND WEAKNESSES' (Cobb County, Georgia and Dover, Pennsylvania court cases)

Salesman caught on video turning back odometer. Hides car and denies everything. Points out 'major defect' in new car next door. Closer inspection shows defect to be dead bug on windshield.