Dec

1

Goodbye from Nassim Taleb

Filed Under Intellectual Honesty | 1 Comment

A gem from Nassim Taleb, a trader who predicted the crash and sees more difficulties ahead:

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.

Sep

22

SEC, Where Art Thou?

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It should boggle everyone’s mind how easily bloggers are able to catch obvious fraud in the financial markets while the SEC and other regulatory bodies are looking the other way.

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.

Sep

10

Elizabeth Warren grills Timothy Geithner

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Beautiful.  Minutes 3 – 4 are the best.

Anytime you feel sympathy and/or hope for Obama, just remember he appointed this dirtbag and re-appointed Bernanke.

Amazing how Mr. Hope and Change is opposed to auditing the Fed and fully supports those who fed us a massive spoonful of corporate welfare.

Takeaway:  Governments are power structures which are abused/manipulated.  Giving up power/money to the government to fix our economy, environment, schools or anything is a mistake.  Audit the Fed.

Aug

30

Austan Goolsbee, Liar

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The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Austan Goolsbee
www.thedailyshow.com
Daily Show
Full Episodes		 Political Humor Healthcare Protests

Two “answers” which speak volumes of our leaders:

  • At 1:12, Jon Stewart asks “Are we broke?”, Goolsbee replies “No”.

Bizarre.  It seems that a country running trillion dollar deficits and unable to function without borrowing money could be classified as “broke”, but not to our leaders.

  • At 4:20, Goolsbee says:  “When you’re looking in the face of the next Great Depression that’s not the time to tighten the belt”

Indeed, when has there *ever* been a time when either party thought it would be a good idea to tighten the belt and stop borrowing?  Heaven forbid we curtail spending on military/”the children”/retirees/politically connected segments of the population.

Takeaway:  Leaders will do what it takes (lie, obfuscate, deceive) to accrue political capital.  It is not in their interest to be honest with us, especially when our borrowing/spending based economy relies on confidence that “everything will be ok”.  A system heading over a cliff due to instability cannot be solved with more of the same pathetic ideas (reliance on debt, policy tweaks) that got us here.

Aug

25

Obama Reappoints Bernanke

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Obama reappointed Bernanke as Fed Chairman earlier today, effectively sealing their fates as men that will take us from a recession into the Greater Depression.

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:

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.