Sunday, August 28, 2011

Goodnight Irene

Two quick predictions: The media will be accused of overhyping Hurricane Irene (at least in NYC), and any soft patch in consumer spending/back-to-school sales will be blamed on Irene (overhyped or not).



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Friday, August 19, 2011

Why This Economic Dip Will Be Even Worse

Many financial commentators are assuring me that despite all the bad economic news, the US economy should not double-dip, and that we will not see a replay of 2008. I agree that it won't be a replay, because I think it is going to be worse.

A few reasons:

Last time the crisis was in the banks, who ultimately wound up getting backstopped by governments. Now those government "safe havens" are the cause of the crisis. Who is going to backstop the backstops?

Going into 2008, the decoupling story was still a bright spot for the bulls. Many thought that while the developed world might slow down, emerging markets like India, China, and Brazil were going to boom enough to keep the rest of the world sputtering along. Now India and China are dealing with serious inflation hazards, and EM stock markets like Brazil's are performing much worse than those in the developed world. Unless "To the moon, Alice" suddenly becomes a viable export model, there aren't going to be any markets frothy enough to tug the rest of the world into prosperity.

In 2008 there was still room for interest rate cuts, and central banks all sliced with abandon. Have you seen today's interest rates? There ain't much to cut.

What about "quantitative easing?" There may be less appetite for it now, but that doesn't mean central bankers are suddenly going to abandon their diet of counterproductive actions. We probably will see more QE measures, but all they will do is further stoke the corosive inflation that already has people wincing. That extra inflation will leave folks with even less money to spend on, well, anything.

And let's not ignore the psychological component. In 2008, many were caught flat-footed because events they had previously thought to be impossible (US home prices falling, major banks going under) happened again and again. 2008 wasn't that long ago, so those "impossible" shocks are still fresh in people's minds. Consequently, they will act much more urgently to avoid getting buried in the collateral damage of the impossible. This means capital will flee more rapidly at early signs of trouble, making the shockwaves even worse. This might explain why European stock markets have sold off so brutally at every fresh bearish peep out of Greece, Spain, and the like.

Perhaps it is time to coin a new investment phrase: The end is your friend!



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Tuesday, August 16, 2011

Gag me with a stress ball

I don’t know about you, but I have absolutely no interest in S&M. The way I see it: isn’t everyday life already painful enough? I don’t need bondage to be uncomfortable.

After I’m done going to work, doing my job, coming home from work, cooking dinner, doing the dishes, running errands, answering email…man, I just don’t have the energy to get whipped.

If I were to go to a dominatrix, I’d be like, “Please Madame, may I have a nap?”

Ironically, you have to be a go-getter to enjoy being put in restraints.



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Saturday, August 13, 2011

Why Obama Will Be Reelected

Things are looking woeful for Mr. Obama. The economy has people gagging. The country’s credit rating was just reduced to AA. Jimmy Carter references are in the air. So why don’t I think the President is vulnerable?

All a Republican candidate can bring to the table is the promise of fiscal austerity. Couldn’t be a worse time for such a platform. Unemployment is high. Do you really think a majority of voters is going to get psyched about someone they think might snip their unemployment benefits?

The insolvency of Social Security/Medicare is finally being examined openly. Seniors are a serious voting bloc. Do you honestly expect those cash-strapped seniors, who don’t have a job market to fall back on, to come out in force for someone promising to “make the tough choices” on entitlements?

Sure, the recent Republican momentum has been built on the promise of smaller government. Trying to make that translate at the Executive level is a quick campaign bus ride to defeat. It wasn’t even effective enough to lock up the Senate.

Yes you say, but the debt downgrade has made everyone aware that we need fiscal austerity. Won't that be attractive to voters? No. Since when are voters rational? These adjustments have been needed for decades, yet Americans have continued voting for promises that can't be kept. What is going to make them forward-thinking now? Nothing. It is not "different this time."

Of course government is out of control. It always is. That doesn’t mean small government is going to capture voters’ imaginations. The average voter has never heard of Henry Hazlitt. He isn’t familiar with the idea of the public sector crowding out the private one. Even if he is and is concerned about it, if he thinks he is one missed unemployment check away from the Grapes of Wrath, he isn’t going to buckle down and vote for the long term. In the worst job market since World War II, talk of “boot straps” and “rugged individualism” is going to nudge more than enough people to the blue side of the aisle.

The other usual Republican plank is foreign policy. The country isn’t too excited about war these days. Even the attempts to incite people against Iran are being drowned out by the horrible economic headlines. And now that America's banana republic budgets are being discussed around dinner tables across the nation, highlighting the cost of war is no longer taboo, so if it becomes a choice between someone promising to spend on war or someone promising to spend on Medicare, war guy loses. The only foreign bogeyman that might be suitable for tricking voters is China, because the China bogeyman would be easy to scapegoat for America's rotting economy. I don’t see the Republican nominee pushing that one too far however, because unlike Afghanistan or Iran, China can actually fight back.

You ask: Why couldn’t a Republican just run on a more “moderate” platform? Because if he did, then he would be too similar to Obama, so who would rally behind him? No one. “Moderate” Republicans fail every time. Romney, who inspires no one, is being groomed for the nomination. The American electoral system is a zero sum game where turnout is king, and no one stampedes to vote for centrists. Someone like Michele Bachmann might alienate more people, but she would at least generate a high turnout. The same can’t be said of Romney (am I the only one who thinks Mitt is doing a Frank Drebin impression?).

Speaking of turnout, in '08 the young went for Obama in a big way. They might be less gaga for him this time, but c'mon, are they suddenly going to become zealots for Romney?

Obviously, not one promise made by either candidate is going to be kept. That has nothing to do with this discussion. We’re talking about whose lies are going to be the most persuasive.

Someone might ask me, “Okay then, who are you going to vote for?”

I don’t believe in voting.

Oh no, don’t tell me you’re one of those people!

I feel the same way about you.



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Wednesday, August 10, 2011

Blind dating with my eyes open

I have started Internet dating again (back by popular demand). It continues to be a misadventure, mainly because the women I like spend the whole date planning their exit and the ones I don’t care about come back for more.

When it comes to first dates, it has reached the point where as soon as I start to like a woman, I have to repress grim chuckles, because I know in a few weeks I’m going to be walking down the street, my head tilted slightly, wondering how I bungled it…

Right now I am nursing one of those glum bits of reflection.

Recently I arranged a date I had a good feeling about, and by good I actually mean bad, because I kept thinking if I like this woman and it goes poorly…how am I going to pick myself up for the 10 millionth time?

Day-to-day I’m a sour, saggy guy, so perking up for first dates is a full cardio workout. First dates demand even more pizzazz than job interviews. You can't be a grouchy vegetable and expect another shot. This puts overwhelming pressure on a killjoy like me. Normally, if I smile more than five times in an evening, I have to go home and ice my cheeks.

When my date entered the bar, I couldn't keep from blurt laughing. I knew I was going to like her. I think I even muttered, “Not gonna go well.”

But it did go well, and I wound up liking her even more than I expected to. I could have spoken to her all night. And for my part, I was absolutely on fire. No crabbiness, no ill-timed sighs. Somehow I kept matching her crackling energy. I was fighting above my weight class, but I never clinched. I was like Billy Conn in his first 12 rounds against Joe Louis.

When we said goodnight, my first thought was, "That is as well as I will ever be able to sell myself. If that wasn’t enough, it just ain't gonna happen.”

Of course it wasn’t enough. She didn’t buy what I was selling. Not even the unusually upbeat and spicy version of me she was treated to was sufficiently intoxicating.

If I were younger, I could reassure myself by saying: "At least I know I gave it my best." Too bad I'm old enough to know better. It is far more comforting to fail when you didn't rise to the occasion, because then you have this trusty excuse: "If only I'd given it my best...it would have worked out."

When you deliver the goods and still flop, you are forced to endure the cruel fact that your best still wasn't good enough.

Another youthful rationalization is the classic line: "Hey, it's a learning experience!" Sorry, but after a while your failures stop bringing you new wisdom. No one ever erred their way into Mensa. “You mean I made exactly the wrong decision yet again? Cool, now I can take that job teaching particle physics.”

At some point you need some victories to round out your knowledge base.

Just as nothing succeeds like success, nothing fails like failure. Eventually compound interest takes over and every little misfire wounds you down to your marrow.

I have no further need for “learning experiences.” I have learned quite enough from failure. I have fallen on my face more times than a drunken kangaroo. I need some wins, because I am all out of rationalization juice.

I'm still here though, so I must have rationalized it somehow, right? Would you like to read that rationalization? You just did.



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Friday, August 5, 2011

The Funnyman in the Mirror

One sign of intelligence is being able to recognize your own image in a mirror. Dolphins' ability to recognize their own reflection is one reason they are considered one of the smarter human-inferiors.

On the Homo sapien front, having a sense of humor about yourself requires a certain knowledge of your own mannerisms, inflections, behaviors. Humorless people lack this knowledge. When a mirror (of sorts) is held up to them in the form of a joke, they do not recognize their own image.

So while having a sense of humor about yourself may not be associated with how intelligence is traditionally measured, if there is anything to "emotional intelligence," perhaps it has implications there. We'll get Oprah on the case.



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Thursday, August 4, 2011

Taking the hard line

I don't have to tell you that in recent years pharmaceutical companies have blessed the market with impotence drugs; Viagra, Cialis. In response to this, some have tried to sound smart by saying, "They cured impotence before they cured cancer? Definitely a world run by men!"

You know what else they cured before cancer? Polio. Yet I don't hear these "socially aware" suckers whining: "They cured polio before they cured cancer? Definitely a world run by people who want to keep walking."

Most importantly: men also get cancer. Most old guys wish their tumors were less erect.

How far are they going to take this? "They cured impotence before they cured death. Definitely a world run by people who don't want to live forever."

Wednesday, August 3, 2011

Will the Express Lanes Run Red?

I recently watched this clip of stampeding Black Friday shoppers. Its Armageddonish voiceover warns of the "complete madness of the populace of our lost society." The voiceover also laments the "wanton lustful commercialism" on display.

Timing is everything. Had the clip circulated pre-credit bust, the shoppers' madness would have been blamed on the fake wealth effect caused by easy credit. Because it circulated post-credit bust, the madness can instead be blamed on the hardship created by the bust and on the change in mentality--consumers' presumption of entitlement--created by the preceding credit boom. Not the first time such patterns have been dissected. Economic thinkers like Mises were analyzing them long before there were Black Fridays, Cyber Mondays, or Buyer's Remorse Saturdays.

The voiceover says the avarice-adorned shoppers exhibit "No outrage over the bankers raping them."

Outrage abounded over the bailouts. There was a noisy campaign against them as they were occuring. Not surprisingly, that outrage made all the difference of earmuffs in a nuclear winter. The outraged were ignored and the bailouts prevailed. But the outrage was widespread and widely broadcast. Maybe some were too busy reading the Mayan calendar to notice.

People like to riot, in good times and bad. They riot at sporting events. They riot at concerts. They riot because they have no bread. They riot because they have too much bread. There were riots at the beginning of America, when government was slimmer. There will be riots at the end of America, when government gulps us whole. And with each riot in our history, there have been commentators warning us that the end is near. In a sense, they're right. The time period in which these commentators commentate and the sensibilities they define as "the present" are always nearing an end. Every era is fleeting. This is one of the inevitabilities of the Human Predicament, whether there are Festivus Day sales or not.