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.

How she has this job is amazing since during her tenure as CFO at Citi (2004 – 2007) the bank accumulated vast amount of toxic assets.

One wonders what type of information was she feeding her CEO, Chuck Prince, who stated:

“When the music stops, in terms of liquidity, things will get complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”

That was July 9, 2007.

Just one month later, the credit crunch forced Citi to borrow from the Fed Discount Window.

Just over one year later, Citi was effectively bankrupt and exists only because of corporate welfare from both Democrats and Republicans.

Interesting and disturbing that the CFO of this firm, Sallie Krawcheck, is now given a job as head of a Wealth Management division and is rumored to be in the running for Ken Lewis’s job as CEO of Bank of America.

While thinking about Wealth Management and rewarding those who make mistakes, I realized that many parents do this inadvertently when bailing out their children.

Parents often think their child is safe and secure with a trust fund and/or large sum of money upon their passing.  Wealth Management firms aggressively push this logic.

In many cases, the child would be better off with a knowledge base, clear mind and sense of responsibility rather than entitlement.

After a certain time, a parent’s failure to parent becomes irrelevant and the child, now an “adult”, needs to rationalize things for himself.

To raise a well-adjusted child, it makes sense to create an environment of self-reflection, awareness and personal responsibility, rather than one of indoctrination.

It is healthful and beneficial to let the child F-E-A-R:  Fail Early And Responsibly.

As a “child”, it is healthy to wean yourself from your parents and challenge yourself.  The rewards are worth it.

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

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.

Since America is an instant gratification society with an ever-declining attention span, I was delighted to see this piece of human accomplishment so well-maintained and well cared for.  It brought to mind some important facts.

There are many parallels between taking care of a motor vehicle and taking care of your loved ones.  For husbands and fathers, it is important to know that the values that make cars last also make relationships last.

Preventative Maintenance - The Model T obviously required an inordinate amount of maintenance over the years from its owner.  Preventative maintenace is part of being a great husband and great father.  It takes years and years of daily care and attention in any relationship to build up a level of trust.

Patience - A loving relationship requires extraordinary amounts of patience and work.  It is easier to get into flings and shallow relationships/friendships, but the rewards aren’t as great.  The rewards of an honest, patient relationship are worth it.  A high level of trust makes it easier to get through the rough patches.

Pride - The man who owned the Model T took time out of his day to explain to me the nuances of his vehicle.  He showed me the old-fashioned horn, the gears and the antique headlights.  His actions and demeanor spoke for themselves.  Pride in your loved ones comes from patience and mutual respect.  Pride is not buying an expensive ring, it is holding the door; fifty years later.

Takeaway:  There are some cars that are new and flashy that never satisfy an impatient owner for very long.  A luxurious Buick or Cadillac, well-maintained and well-cared for, only gets better with age.

Your family is with you from the time you are an infant until the time you have children or grandchildren of your own.  Treat them them with pride and your investment will last a lifetime.

When you see more concern about the desire to uncover the truth than a party “winning” or “being right”, we’ll be on the right track.  The sooner, the better.

When the promises that “Government will provide (insert entitlement here)” go unfulfilled, only then will we realize that costs must be borne by individuals.  A woman with five children can, should and will pay more for healthcare, resources and lifestyle as a result of her actions.

The answer we will learn (the hard way) over the next few years is to stop ceding our power to the Fed, Treasury and governments since we can only rely on ourselves and those around us.

Hopefully, when this realization occurs, we will demand our power back instead giving away more of our rights, liberties and responsibilities.  Only then can the healing begin.

Used to be we stole the trade secrets in the form of automated looms textile manufacture, or pillaged a patented steam harnessing device. This must be the ultra postindustrial state. Trade secrets are computer algorithms which make automated low latency entrance and exit to markets with no intent of ever taking delivery of any physical product nor are making purchases/sells based on any business, but are merely exploiting market rules to ratchet numerals to their gain.

How did we get here? How sick is that person who draws a paycheck and has neither produced, manufactured, distributed, or made any useful service? Isn’t that the very definition of a Babylon? An economy so distanced from agriculture, mining, manufacture that it provisions life with intangibles? Please wake me up. Please let me out of such a vacuous existence.

- Ben Frananke, Zero Hedge comment (emphasis Inthon)

“No warning can save a people determined to grow suddenly rich.” – Lord Overstone

The father of Bill Gates, William Gates, has some great wisdom to share about raising his son.  You can read the entire interview here.

As a child, Bill Gates was introduced to a psychologist/psychiatrist who imparted on him the following valuable lesson:

There isn’t any benefit to fighting with your parents.  It was all about the issues, the battles were going to be about the real world, and they were really on my side.  And that was fantastic.  It just changed my mindset.  I was only 12 or 13 at the time.  I think it made things a lot smoother from that point on.

Inthon:  Our actions as children and parents should definitely mirror that important concept.  Honestly expressing your love for your child in a way that your child implicitly knows you care about them and that they can trust that you will be on their side in the long run.

Parents can also play a role in articulating that while fights are borne out of a disagreement about what is best for the child, parents should acknowledge that both parties want the exact same outcome: 

a healthy, successful child.

Obviously… easier said than done.

Bill Gates goes on to mention:

And the thing that people there taught us and emphasized, which is so significant is that you should never demean your child.

Inthon:  We all remember when our parents accidentally or intentionally demean us or put us down.  They can often overshadow great things that they taught us.  As adults, we must be mindful that, no matter what happens, demeaning does not produce positive results.

Lastly, Mohammed El-Erian of PIMCO had good advice on intellectual honesty:

Unless you read different points of view, your mind will eventually close, and you’ll become a prisoner to a certain point of view that you’ll never question.

I agree with this principle and I have made it a priority to get my information from radically different and opinionated sources.  It has been invaluable in expanding my worldview.

This issue of Fortune is on the newsstands now and is definitely worth checking out.

Takeaway: Life does not come with an instruction manual.  I have found it beneficial to learn as I go along for roles and duties which I will eventually face… in this case, fatherhood.  Feel free to submit ideas and tips to inthonblog@gmail.com

Jackson had a terrible childhood.  A childhood I cannot even begin to imagine:

• Jackson stated that he was physically and emotionally abused by his father from a young age, enduring incessant rehearsals, whippings and name-calling.

• In one altercation—later recalled by Marlon Jackson—Joseph (father) held Michael upside down by one leg and “pummeled him over and over again with his hand, hitting him on his back and buttocks”.

• One night while Jackson was asleep, Joseph climbed into his room through the bedroom window. Wearing a fright mask, he entered the room screaming and shouting. Joseph said he wanted to teach his children not to leave the window open when they went to sleep.

• He said that during his childhood he often cried from loneliness and would sometimes start to vomit upon seeing his father.

The trauma he suffered from his childhood, the constant media attention and a medical condition which altered his appearance obviously had a role in bringing forth some of his bizarre behaviors.

Child molestation charges aside (he was acquitted), he managed to come up with some very inspiring music, which can often touch us in ways that other mediums cannot.

One of his hits, Man in the Mirror, deals with a man’s realization of how lucky he is and how he plans to make a change.

As I turned up the collar on
My favorite winter coat
This wind is blowin’ my mind
I see the kids in the street
With not enough to eat
Who am I to be blind
Pretending not to see their needs

I’m starting with the man in the mirror
I’m asking him to change his ways
And no message could have been any clearer
If you wanna make the world a better place
Take a look at yourself, and then make a change

Man in the Mirror brings to mind another poem about being honest with oneself.

The Guy in the Glass is a poem about being true to yourself.  It is amazing how we can enjoy great food, wine, luxuries and still feel miserable if we’ve cheated “The Guy in the Glass”.

When you get what you want in your struggle for pelf,
And the world makes you King for a day,
Then go to the mirror and look at yourself,
And see what that guy has to say.

For it isn’t your Father, or Mother, or Wife,
Who judgement upon you must pass.
The feller whose verdict counts most in your life
Is the guy staring back from the glass.

He’s the feller to please, never mind all the rest,
For he’s with you clear up to the end,
And you’ve passed your most dangerous, difficult test
If the guy in the glass is your friend.

You may be like Jack Horner and “chisel” a plum,
And think you’re a wonderful guy,
But the man in the glass says you’re only a bum
If you can’t look him straight in the eye.

You can fool the whole world down the pathway of years,
And get pats on the back as you pass,
But your final reward will be heartaches and tears
If you’ve cheated the guy in the glass.

The word pelf in the first line means “wealth.” The word self is often incorrectly substituted.

It is startling how true that poem is.  Our minds have an innate ability to give us credit when we know we’ve earned it and feel guilty when we’ve done something wrong.

To improve, we should listen to these signals as closely as possible despite what social conditioning tells us.

You must be the change you wish to see in the world. – Mohondas Gandhi

Takeaway:  The hard work of improving yourself, your family, your country or anything begins with you.  We, as men, get the government/family/self-respect we deserve.