Tag Archives: money

Nassim Taleb Crushes The ‘Merchants Of Virtue’

Source: ZeroHedge

I will always remember my encounter with the writer and cultural icon Susan Sontag, largely because it was on the same day that I met the great Benoit Mandelbrot. I took place in 2001, two months after the terrorist event, in a radio station in New York. Sontag who was being interviewed, was pricked by the idea of a fellow who “studies randomness” and came to engage me. When she discovered that I was a trader, she blurted out that she was “against the market system” and turned her back to me as I was in mid-sentence, just to humiliate me (note here that courtesy is an application of the Silver rule), while her female assistant gave me the look, as if I had been convicted of child killing. I sort of justified her behavior in order to forget the incident, imagining that she lived in some rural commune, grew her own vegetables, wrote on pencil and paper, engaged in barter transactions, that type of stuff.

No, she did not grow her own vegetables, it turned out. Two years later, I accidentally found her obituary (I waited a decade and a half before writing about the incident to avoid speaking ill of the departed). People in publishing were complaining about her rapacity; she had to squeeze her publisher, Farrar Strauss and Giroud of what would be several million dollars today for a book advance. She shared, with a girlfriend, a mansion in New York City, one that was later sold for $28 million dollars. Sontag probably felt that insulting people with money inducted her into some unimpeachable sainthood, exempting her from having skin in the game.

 It is immoral to be in opposition of the market system and not live (like the Unabomber) in a hut isolated from it

But there is worse:

It is even more, much more immoral to claim virtue without fully living with its direct consequences

and this will be the main topic of the chapter: exploiting virtue for image, personal gain, careers, social status, these kind of things –and personal gain is anything that does not share the downside of a negative action.

By contrast with Sontag, I have met a few people who live their public ideas. Ralph Nader, for instance, leads the life of a monk, identical to the member of a monastery in the sixteenth century.

Continue reading Nassim Taleb Crushes The ‘Merchants Of Virtue’

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The Established Order Will Be Challenged, by Raymond Matison

Source: Zerohedge

Submitted by Raymond Matison via The Market Oracle,

With its recent miniscule 2% devaluation of the Yuan, media pundits noted that China had now also entered into the global currency war.  What this comment implies is that other countries with the ability to issue or print their own currency, including the U.S., have been participating in a currency war by devaluing their own currency as a hoped for means to increase their country exports and thereby stimulate their economies.  As China’s currency has been pegged to the USD, it had recently grown stronger as a byproduct of dollar’s recent dramatic strength.  Accordingly, the peg that China used to tie-in to the dollar’s value had increased the Chinese yuan to a level that was hurting their exports.  The resulting devaluation was China’s attempt to correct partially this unwelcome currency appreciation.

With FED’s past QE series of money printing, we have been at the forefront attempting to devalue our own currency as a means to improve our exports, reach the FED’s stated goal of increasing inflation which would produce higher GDP figures, allowing government officials to claim that economic growth or recovery is resuming.  Not to be outdone, the European Central Bank has been purchasing weak credits from their banks, in order to make member bank financial solidity ratios appear stronger – which also requires substantially increasing its money supply.  The largest and most outrageous example of intentional destruction in the value of its currency is Japan, which for nearly two decades has been on a mission to devalue its currency in order to stimulate inflation.

Currency expansion may seem like an ideal, benign solution to a country trying to stimulate its exports, but it does create a financial assault or loss to their trading partners.  For example, China’s recent holding in excess of $1.3 trillion assets (until some recent sales of under $200 billion) from accumulated annual trade surpluses, would lose great value in its assets by the amount of such U.S. devaluation.  If the U.S. were to expand its currency by 10%, China’s Treasury holdings could be reduced by $100 billion – not an insignificant amount.  That is of course why the well known phrase “race to the bottom” stipulates that once one country starts to print currency, other countries, in order to protect themselves against the action of the initiator, have to follow and also devalue their own currency.  We are currently witnesses to a race to the bottom in a continuing global currency war.

Definition of Currency War.

Wikipedia defines a currency war as “competitive devaluation where countries compete against each other to achieve a relatively low exchange rate for their own currency. As the price to buy a country’s currency falls so too does the price of exports. Imports to the country become more expensive. So domestic industry, and thus employment, receives a boost in demand from both domestic and foreign markets. The policy can also trigger retaliatory action by other countries which in turn can lead to a general decline in international trade, harming all countries.”

It is arguable that currency wars are not only fairly current affairs, but that they last for relatively brief periods of time not extending beyond a few short years – as highlighted by our FED’s recent QE series.  How might our understanding of currency war change if we were to expand slightly the definition of currency war, and by also taking a far longer view – that of going back to the founding of the FED?  How would we appraise the big picture of government and FED policy over the years, and its now fully observable results on the populace?

Continue reading The Established Order Will Be Challenged, by Raymond Matison

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Beware the electronic iceberg!, by Mohsin Siddiqui

So the Greek pseudo-left’s poster boy has come back to Athens victorious after selling his country off to the vultures. But it is all that he could do you see, the negotiations were very tough. I suppose a good meal, a decent sleep, a morning swim and a new $3,000 suit will put his mood right. After all, most Greek pensioners do the same thing to feel better.

The Syrian people are waiting for the tens of thousands of Jihadis to die out so that they can rebuild. Well, that is if enough Syrians remain to rebuild. The conveyor belt of Islamic State recruitment to deployment, command and control and media are continuing to receive full support from NATO,EU,UK,USA, GCC and Israel. The systematic destruction of Syria is a shame on humanity.

But do not despair, Iran has just signed its deal of the century with the “Great Satan”. A deal so flaky that eco-friendly toilet paper probably has a better chance of survival.

Before you get too worked up, when is your next bill due? Are you behind on your mortgage payment? Or have you finally taken that vacation you have been talking about?

It is ok if you cannot afford it for now. You see, we are very important cogs in the system. Without our essential roles to buy and sell meaningless shit, how would the world go round?  Without your essential job, how would you get electronic money in your bank account and watch it disappear?

Money makes the world go round they say. The debt bubble is growing! Trillions in derivatives and this is just the tip of the electronic iceberg! Are you excited by collapse porn?! It sure is entertaining!

Surely, there is no way us humans can survive without bankers, paper money, pedophile politicians and monarchs. I mean, how could we ever figure out how to run our countries, schools, police and economy so brilliantly as the current leadership. Nonsense! Hearsay!

But hey, lets not ask dangerous questions. Lets not wonder who came around when and privatized the planet so that you and I are customers and not humans on the planet anymore. Lets not ask why we have to pay to exist? Nonsense! Hearsay!

Mohsin Siddiqui

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