Gratitude —–> Acceptance —–> Hunger

MJ would later go on to win six NBA Championships and six NBA Finals MVPs in the next eight years.

We should all be so hungry.

What I am seeing and hearing on the news — the reappointment of Bernanke — is too hard for me to bear. I cannot believe that we, in the 21st century, can accept living in such a society. I am not blaming Bernanke (he doesn’t even know he doesn’t understand how things work or that the tools he uses are not empirical); it is the Senators appointing him who are totally irresponsible — as if we promoted every doctor who caused malpractice. The world has never, never been as fragile. Economics make homeopath and alternative healers look empirical and scientific.  (emphasis by Inthon)

No news, no press, no Davos, no suit-and-tie fraudsters, no fools. I need to withdraw as immediately as possible into the Platonic quiet of my library, work on my next book, find solace in science and philosophy, and mull the next step. I will also structure trades with my Universa friends to bet on the next mistake by Bernanke, Summers, and Geithner. I will only (briefly) emerge from my hiatus when the publishers force me to do so upon the publication of the paperback edition of The Black Swan.

Bye,
Nassim

Bingo.

I would go one step further; rather than blaming the Senators, blame the voters who elected these Senators (all of whom are ignorant of the dangers of fiat currencies, central planning and central banking).

The U.S. has never been this fragile.  An economy reliant on consumption, cheap energy/commodities, easy credit, entitlements, corporate welfare and social welfare is not durable or sustainable.

The years ahead will require deleveraging on a large scale and small scale.  Those grounded with an awareness of our current unsustainability will be more apt to mentally weather the future slowdown/economic pain.

Takeaway: Borrowing money to spend on entitlements, wars and handouts cannot go on forever.  Prepare yourself for the consequences of our current financial immaturity.

When discussing financial matters, the “financial media” represented by “Establishment” type reporters and bloggers, just like the financial “regulators”, is woefully behind the curve.

Watching pretty faces like Brian Williams, Anderson Cooper and Charlie Gibson fade into oblivion is a delight; the fewer adults watching these powerpoint presentations of repetitive Democrat vs. Republican nonsense, sound-bite reporting and oversimplifications, the better.

Jaywalking is a good representation of the effects of 12+ years of schooling and “news” on our culture.

Takeaway:  Your mind is the most powerful “muscle” in your body.  Keep it in shape by reading and conversing with those you disagree with and those that challenge your existing views.  Watching 22.5 minutes of political gossip and sponsor-approved stories will rot your brain.

It is not under-education or an inability to think critically which part people from their money, it is their uncontrolled emotions. Faced with purchasing a house which they know is unaffordable or choosing to rent they will not bother to run the comparison as long as it is their dream and “someone” told them they could. Had grumpy old Mr. Critical Thought been allowed to show up and run a spread sheet or put the numbers into Quicken they (the cold, emotionless reality of the numbers) would have irrefutably deprived them of their “dream”.

This drama plays out everyday at different levels across the spectrum of human psychology, the food you should not eat because you are morbidly obese, the years-old but never used exercise equipment in the garage, the spouse or partner who is abusive but you can’t leave, the dress, shoes, house, boat, car you have to buy but cannot afford, the candidates we vote for because we like the way they part their hair. The inconsistencies, contradictions and convolutions are endless and mind-boggling to the point of madness to the observer.

Facing your inconsistencies and contradictions is a never-ending battle.  To avoid succumbing to negativity and false senses of happiness (mindless consumerism, distractions, addictions/vices), I’ve found the following help:

• Surrounding yourself with friends, family that support and encourage your growth as a human.
• Feeding your brain positive information (listening to and engaging your mind in positive thoughts).
• Being introspective (journaling, silent thought) and determining your own value system, not one that your parents/your society gives you.
• Being consciously aware of your own strengths, weaknesses and limitations.  Actively working to tilt the playing field in your favor.
• Being honest with yourself, your lifestyle and those around you.  Honesty is sanity.

Takeaway:  Life is too short to waste time with distractions.  Since your mind can be your best friend or worst enemy, it makes sense to work on your attitude/worldview/values to have more peace of mind.

Here are some gems just from the last week alone:

1. Perot Systems FrontRunning – ZeroHedge.
2. Blatant reinflation of housing bubble – Denninger.
3. Corruption at HUD – Karl Denninger.

The SEC was not able to catch a ponzi scheme even after Harry Markopolos delivered it to them on a silver platter. 

Paulson and Bernanke have been incredibly incorrect on their assessment of the health of the US economy.

Choose your sources of information/facts/news very carefully.  Stick with those that are honest enough to state their opinions openly and publish their predictions.

Read what you disagree with before drawing your conclusions.

There is a difference between loyalty and blind loyalty.  Blind loyalty to anything (religion, government, ideology, spouse) is deadly.

Takeaway:  Perpetual reliance on someone else’s seal of approval will rot your brain.  Complacency kills.

How can you take a mundane task and do it so well it inspires others?

How can we serve our employers, families and customers in this way?

Takeaway:  Every act of creation is a self-portrait.  Take pride in  your work.

I was delighted last night to read his speech to schoolchildren and see what a thoughtful, intelligent speech it was.  I encourage you to read it, no matter what your political leanings.

Highlights:

• Here in America, you write your own destiny. You make your own future.
• Maybe you’ll decide to stand up for kids who are being teased or bullied because of who they are or how they look, because you believe, like I do, that all kids deserve a safe environment to study and learn.
• Michael Jordan was cut from his high school basketball team, and he lost hundreds of games and missed thousands of shots during his career. But he once said, “I have failed over and over and over again in my life. And that is why I succeed.”
• Asking for help isn’t a sign of weakness, it’s a sign of strength. It shows you have the courage to admit when you don’t know something, and to learn something new.
• I expect you to put your best effort into everything you do.

It’s rare for a politician to speak of personal responsibility and any effort to broadcast this message, however diluted, should be welcomed.

Obama is a disaster with his economic advisers, but a masterful speech giver and motivator.  He understands the power of making a positive impression.

Neatness and presentation count in all aspects of life.  Be Prepared.

Takeaway:  Successful men aren’t symbols of your inferiority, they’re examples worth engaging.  Learn from everyone around you; even those you hate.

“Every man I meet is my superior in some way. In that, I learn of him.” — Ralph Waldo Emerson

For those “economists” who’ve lately been singing his praises on CNBC, all I have to say is this…

It takes a special kind of system (government) to screw up this badly and still be resoundingly supported by its leader.

In his reappointment speech Obama also pledged support for the continued secrecy independence of the Federal Reserve.

How foolish of citizens to inquire where trillions of dollars are being spent… clearly we should trust the former bankers running the Federal Reserve that regulate the banking system. After all, they obviously know what they’re doing.

Instead of perpetuating the broken system financed by politically embedded financial organizations, Obama could have attempted any of the following:

• Raise awareness of the ghastly unaffordable pension schemes which will inevitably crumble
• Strictly enforce FASB mark to market accounting standards instead of allowing companies to use “judgment” to value their toxic assets
• Clamp down on High-Frequency Trading
• Require the FDIC to close and wind down insolvent banks before the government taxpayer-funded safety net has to be used
• Eliminate alphabet soup bailout programs which are forms of corporate welfare
• Demanded transparency for toxic assets which traveled from insolvent banks to taxpayers
• Slash parts of a budget (military, NASA, HUD, etc.) that are so bloated we must borrow billions from foreigners to stay afloat.

Would that severely correct the housing and stock markets? Yes, probably. Can we continue on our current path? No. Will we eventually face unbearable consequences for our decisions? Yes.

Ironically, neither Bernanke nor Obama nor either political party seem to care about the following message:

It is not the responsibility of the Federal Reserve–nor would it be appropriate–to protect lenders and investors from the consequences of their financial decisions. – Ben Bernanke

So, Obama reappointing the guy who didn’t see any of this coming, who bailed out the irresponsible, who continues to provide cover for banks in the hopes that things will return to normal still makes Obama the “man of the people”? Why aren’t those who voted for Obama clamoring that this Bush appointee is more of the same? Why do horrible decisions not matter when *their* party is in charge?

The reappointment of Bernanke does have a silver lining. All the people that bought into the hope proffered in eloquent speeches that government can provide jobs, clean energy, healthcare, education and other goodies will eventually learn a valuable lesson. The love affair Americans have with celebrity, good looks and good speeches and a lack of discourse/intellectual honesty will finally meet its match against a tidal wave of financial reality.

We are witnessing firsthand government selling Hope while funding Grift.

A generation will learn that our government system, like all systems which redistribute power and wealth, is one that is relentlessly gamed and manipulated for the benefit of those in charge.

Takeaway: Strip away the external validation that media/family/friends give to people and institutions and think for yourself.

The obfuscation via government intervention in all its forms (stupendous deficits, subsidies to failed corporations/business models, pork barrel handouts) is one of the factors seducing people into a false sense of complacency that our economy is just fine.  Borrowing money to keep your bills paid might seem ok, until you realize the borrowed money must be paid back with interest.

In less government-dependent/credit-fueled times, a major decision like raising a child was saved up for and anticipated.  Healthcare was funded out of pocket or with straightforward insurance.  Retirement required savings.  Nowadays, our government promises us all these goodies with borrowed money, which we will eventually pay for with interest (assuming the dollar doesn’t collapse first).

In less government-reliant times, there were fewer entitlements, senses of entitlement or bogus lawsuits which now haunt would be doctors and entrepreneurs. Why bother using your MIT degree to start a new business when you can day trade and make the “market more efficient”… hah!

Even the stock market used to be a reasonable measure of future economic value.  Now it is a game profitable game to be played/manipulated with enormous  leverage.  The S&P PE ratio is over 100 according to S&P and the graphical evidence is stunning.  Anyone with their 401(k) invested in stocks is asking to be smoked.  Meanwhile, insiders are bailing out.

I have no desire to go back to days of extreme hardship or give up technology, but it seems the more government obfuscation we allow to seep into our lives, bit by bit, the further we get from the truth and honest consequences of our lifestyles.  A single woman with three kids who is reliant on the state for breakfast and lunch year-round is in a worse off position since the true costs of her lifestyle are not borne by her, but rather, the taxpayer, who is under increasing pressure to stop paying them.  This “help” that the State provides via welfare, subsidized housing and other giveaways are not sustainable and ultimately dangerous for its beneficiary.

If you want to ruin a man, give him everything he wants.  Never let him fail, struggle, grow or mature into a man. – Inthon.com

As a result of government encroachment on all levels of life we are living in delusion about how much things *actually* cost and how they function.  There are now entire families dependent on the government for food assistance, educational assistance, medical assistance and job placement assistance.  This is neither normal nor sustainable.

As the credit-fueled economy inevitably slows down and inflation spike or benefits are cut, there will be a lot of disillusioned, angry and unprepared people.  There have been numerous chances to come clean from politicians, media and leaders.  Instead, all we hear are happy bromides about how things will be back to normal.  The only voices sounding the alarm that the debt-fueled economy is unsustainable are drowned out.

Takeaway:  I hate to be so closed-minded as “government bad” “free market good”, but it is obvious to anyone paying attention that the more we cede our power and money to the government, the less reliant, intelligent, capable, stable and robust we are as a society.

Two GEMS by Karl.

1)  Catches Barney Frank lying.

I’ve always said the American dream should be a home – not homeownership,’’ said Representative Barney Frank, chairman of the House Financial Services Committee and one of the earliest critics of the Bush administration’s push to put mortgages in the hands of low- and moderate-income people. – Barney Frank, boston.com article

Now watch the clip…

Quote of the clip… the last 12 seconds:

…but you’re not going to see the collapse that you see when people talk about a bubble.

Barney Frank is ideologically bankrupt, intellectually dishonest and self-serving.

He pats himself on the back when things to go right, then claims no responsibility when things blow up in his face.  Anytime people say that Barney Frank is “working on a bill”, remember this clip.  Thank you, Karl, for finding this and sharing it with the public.

2)  The truth about the overvalued stock market:

Let me note that this is all short-term trading - there is absolutely no intelligent way to INVEST for the “long term” in a market that is acting as this one has been for the last month and change.  The only INTELLIGENT thing to do as a LONG TERM INVESTOR in a market that is blowing off on a parabolic spike engendered by LEGALIZED ACCOUNTING FRAUD (the FASB “MTM” change) is to SIT IN CASH, as it is essentially impossible to know WHEN that fraud will be exposed and cause the market to return to underlying fundamental value BUT IT IS A CERTAINTY THAT IT WILL OCCUR.

Again, what does it take to get this covered on CNBC or any major news outlet?  Every CNBC guest spot ends with a BUY recommendation for some fund manager.  CNBC never mentions the P/E ratio is still over 100 for the S&P.

Karl Denninger does a fantastic job of not only understanding economics, delving into the details and reporting his nuggets of wisdom, but he also agitates for education, awareness and activism.

He takes the time to understand the issue and present the facts in a useful manner.  He does this without any allegiance to any bogus political “party”.

Takeaway: The media love to broadcast whatever sells ads (Sarah Palin news, celebrity gossip, the newest pill to pop, the latest diet miracle, etc.).  This is rarely compatible with useful, important information.

The websites on the right-side of the page have taught me more than CNBC, network news and my college finance professors combined.  Seek out the best friends possible, best sources of information possible and best “food” for your brain possible.