Out of their depth

The first serious, sensible, important piece I've seen from Toby Young, and it's a corker. He reflects on the well-heeled but louche and rackety Bullingdon Club, of which David Cameron and Boris Johnson were members:

... the theatrical element of Oxford's secret clubs and societies, the fact that so much of their activity seemed designed to dazzle and mystify bemused onlookers, is precisely what makes them such ideal training grounds for British public life.

... you don't have to be to the manor born to become a member of Britain's ruling class - or even particularly clever. You don't need charisma or sexual confidence or a sense of entitlement. All you need is the wherewithal to pretend to be someone who has these qualities. Provided you can do a reasonable impression of a person with the right stuff - and provided you wear the right uniform - that's enough to propel you to the top.

... The discovery that all these young pretenders make when they take their seats at the Cabinet table, or become QCs, or pocket £100million on a complicated land deal, is that the people at the very pinnacle of British society - the people pulling the levers of power - are exactly like them.

There is no such thing as the real McCoy, just a bunch of schoolboys parading around in the contents of the dressing-up box. They don't feel like frauds, because everyone else in this elite little club is as fraudulent as they are.

And when all is well, they get away with it. But when it comes to an emergency, a crisis needing skill, grit and sacrifice?

My father served his 25 in the British Army, and my mother used to say, "Thank God for civilians," i.e. the experienced people that would come in on callup when war broke out. Doubtless it's different now, with our much reduced and far more battle-experienced Armed Services, but in my father's career he met more than a few "educated idiots." Does the current crop of politicians and bankers have what it takes, including the moral fibre, to get us out of this mess? Or when it gets too tough, will they jump, like "Lord Jim" Blair, leaving us to our fate?

We're going to find out sooner than we'd like, if Denninger is right. He's looking at new Treasury debt issuance of $235 billion in the next week alone, and is busily folding his kitchen foil into a helmet:

Folks, this is how you get detonation of a nation's monetary and political system. Timing the "event" it is not easy, but the certainty of outcome given this sort of outrageously irresponsible activity is not in doubt.

I'm increasing my stock of things that "will never go to zero" and keeping my ear to the ground. The "short the phone book but make sure you get out fast before you get trampled" moment approaches - mark my words.

Mutter

In support of Man In A Shed's "Silly Week" campaign, may I suggest the libertarian blogger's alternative to Twitter: Mutter.

Up to 140 characters of mutinous grumbling in the comments, please. After a time, all will collated and republished in a new "feast o' bitchin' "post.

Think of of it as a kind of haiku for the disenchanted.

Doomsday scenario

Marc Faber is now using the phrase "total collapse". A commenter on this post says he's joking, because he's smiling, but I don't think the commenter understands European schadenfreude. The Dance of Death illustration on Dr Faber's website should warn you that he is in a very long tradition that sees death and disaster as the spice of our transitory existence.

Faber lives in Chiang Mai, northern Thailand, a country whose King is a proponent of national economic self-sufficiency. It's also worth noting that Chiang Mai is a fairly short air-hop from Burma, Laos and China; and that Dr Faber collects Mao memorabilia and has business interests in Vietnam. I see him as a long-term planner who covers all possible options.

As Dr Doom notes, "...a major crisis like we had should clean the system but nothing has been cleaned," so why should all be well again? But you could choose to side with Faber's co-interviewee Giles Keating of Credit Suisse; very nice accent, nice bearing - just the sort of thing the clients like.

However, witness also Karl Denninger today, commenting on a report that US Federal Government support for the economy could reach almost $24 trillion:

A couple of market technicians have noted certain "patterns" in the market that have potential downside targets of zero. That sort of thing normally results in a loud guffaw from me - even though I'm bearish I'm not that bearish - I couldn't imagine anything short of global thermonuclear war, ala "Joshua", that could lead to such an outcome.

Well I think I just found something purely economic that could lead to that outcome, and it's right here.

Be prepared. As the Greek saying goes, "There is no borrowing a sword in time of war." I'm going to go back to doing what I started to do a few months ago: draw extra cash and stash it in a locker. And some other things (though not weapons - the tiger is the endangered species, not the rabbit).

House prices to sink further

Barry Ritholtz gives his reasons why house prices will continue to drop - 15% to the mean, probably more - say 20%? (htp: Michael Panzner)

But the market is segmented. Maybe it'd be more useful to discuss the projected impact on different regions and price brackets.

Step by step - how the dollar is recycled via China

A propos China and monetary inflation, please see two very useful and enlightening articles by The Contrarian Investor - this explaining why the money supply is growing there, and this detailing the steps by which money from the US goes on a round trip to China and back.

North Dakota? Or New Mexico?

Interactive WSJ diachronic unemployment map here. (htp: Tim Iacono)

Lost in fantasy

Following up my Parthian shot about Waldsiedlung in the previous post, I looked up Erich Honecker and discovered that one of his slogans in the 80s was "Vorwärts immer, rückwärts nimmer" ("Always forwards, never backwards").

Perhaps you remember Tony Blair's "Forward not back" in 2005? Or his "the People's Princess" (I thought I heard his throat tightening in a desperate attempt to stop the awful phrase coming out - Diana was an Earl's daughter - but maybe it was only a stage sob). And how about "In the years to come, wherever I am, whatever I do, I'm with you", weirdly echoing Matthew 28.

A schlock PM, turning eclectic sources into a mishmosh of gibberish less meaningful than Queen's Bohemian Fantasy, for the sake of a momentary, meretricious glamour. An extension of the "Spacematic DISCO with LIGHTS!!" of his Oxford student days.

Did he ever understand what he was playing with?