Beck is an opportunist and only half libertarian, but if you can stand him this is a pretty good show, especially once the Mises Institute economists Tom Woods and Yuri Maltsev appear (hat tip Lew Rockwell):
Beck, Woods & Maltsev on Hayek
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Tag Archives: communism
Huxley vs. Orwell
Thanks to Tim Knight for finding this.
There is lots more, so click here for the full version.
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The cartoonist and Neil Postman think that Huxley got it right, and he certainly saw a lot that Orwell missed. However, I would argue that those who look at today’s society and only see Huxley (sex, drugs and entertainment) and not Orwell (censorship, secret police, torture, perpetual war for the health of the state) have themselves chosen the comforting version of reality.
Also, Huxley’s opiates work wonders so long as times are easy, but when the predations of the state run their course and cold and hunger are again issues, those in government become more open about their use of guns to hold onto power. In the last decade, the west has made great leaps in the direction of Orwell, with omnipresent reminders of who has the guns and who must obey.
A chill in the air
Volume was downright anemic today after shorts were done covering at the open. Few were touching the market on the high plateau that formed. Look at DIA (Dow Diamonds Trust) volume:
Click image for sharper view. Source: Bigcharts.com
Isn’t that creepy? I heard a Bloomberg reporter say that the NYSE floor had an atmosphere of exhaustion this afternoon. There doesn’t seem to be any enthusiasm for stocks are these prices, save from the cheerleaders on TV. I would be very surprised if this were a lasting rally.
Where are we headed? History leads the way.
Our collective reality is going through a huge phase shift this fall. This is one of those events that sets the stage for drastic social changes. This would be a great catharsis if only the West had not lost its moral compass and embraced collectivism. Instead, our oligarchy is ensuring that the foreseeable future will be a never ending nightmare.
Collectivism always leads to economic and political horrors. Apparently Americans have learned no lessons from Russia and China’s experiences in the 20th Century, nor innumerable smaller failures at home (the Fed, FDIC, entitlements) so they are doomed to repeat their worst mistakes.
Those looking for a bottom should be prepared to wait at least two generations. The USSR lasted from 1917 to 1989. China was only communist from the 1940s to the early 1980s. Argentina’s economy collapsed in the 1930s and has never recovered. There, kleptocracy replaces kleptocracy, because the people fail to understand that they do not need this giant racket they call a government.
Freedom is a very, very rare human condition. Those of us who experienced a relatively high degree of it in the US prior to 2001 are lucky to have those memories.
Almost by definition, not many people are likely to accept my view of affairs at this stage of history. In Russia, the government was not accepted as the big joke it was until the 1980s, when everyone had finally learned their lesson. In Stalin’s day, one did not dare laugh. The whole nation had the air of a US airport security checkpoint: very serious business, these sacrifices for the collective good.
People do not want to accept that their reality is this horrible, so most simply don’t. Willfully blind to the danger, they don’t stand up to the outrages (fight), nor do they flee (fright). So the horrors progress with no resistance, even though this is still the phase where they might be stopped, if only people had more faith in themselves and less in their government.
History is full of the futile and fatal enterprises of collectivism, and once on a path to ruin, nations seem to stay the course. Why did the French and later the Germans march all the way to Moscow? Why did Macedonia under Alexander try to conquer India? Couldn’t they see that it was madness?
SEC intends to ban short selling. Government boxcars reported in Greenwich.
Hedge fund managers said to pack dirt under fingernails, roughen hands on bricks to avoid suspicion and possible shipment to North Dakota re-education camps.
These days it seems like we are living in an Onion article (1 , 2). It would be funny if it were not the end of the world as we know it.
I’ve been a bear since spring of 2006, preparing for a depression since early 2007, and have had no illusions about the death of the idea that was America. I saw these events coming a mile away, but the speed with which they have arrived is shocking.
By edict of the Duma…
I figured that the shorting ban (WSJ article) would pop up somewhere near the midpoint of the bear market, maybe Dow 8000, but this train to Animal Farm is an express. When will they ban international money transfers? Unapproved foreign travel? Gold?
The speed with which our leaders are dropping any pretense of respect for markets just makes me that much more bearish. 8000 could be next month, not next year as I had figured. And I have to rethink my bottom target of 3500. Really, that would not be the end of the world — this market started at 800 back in 1982, and you have to remember that equity values go POOF after an economy gets as leveraged as ours is. 75% stock market drops are not black swans. They follow credit bubbles like day follows night.
Markets are so bourgeois, anyway.
The possibility of Dow zero just ticked up a standard deviation or two. What happened to the Moscow stock exchange after 1917 anyway?
The end of the stock market? Impossible, right? Well, if our Bolsheviks enact their desires to use government funds to buy all manner of securities (as the Russians are now doing), they could eventually own everything, not just the mortgage market and a huge insurer.
Buyout mania, with a twist.
If a security’s market price is $10 and the government offers $20, that is not ‘market support’, that is a buyout. Of course, there are limits to this sort of nationalization, namely the difference in scale between the Fed’s $900 billion balance sheet and the many tens of trillions of dollars in US private equity and debt instruments, so at first they will be very selective (ahem), but they do have two tools to help them work around those limits: printing presses and guns. In a few short years, when the former lose their potency, the latter can be brought to the fore.
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PS — Of course, my opinion is that this rally (futures are up 2% on top of today’s dramatic close) is just a short squeeze and dead cat bounce. The air pocket under stocks just got a whole lot bigger. 90-day T-bills last traded at 0.07%. The stall warning light is still on.
Will Bill Gross please shut up?
“if we are to prevent a continuing asset and debt liquidation of near historic proportions, we will require policies that open up the balance sheet of the U.S. Treasury…” Bill Gross, September Investment Outlook
This guy continues to disgust me. If Americans before him had held the notions about markets that he does, there would be no wealth for him to manage, and he would not be a billionaire. This would be Venezuela.
Here is an excerpt from his latest bailout plea:
This rarely observed systematic debt liquidation is what confronts the U.S. and perhaps even the global financial system at the current time. Unchecked, it can turn a campfire into a forest fire, a mild asset bear market into a destructive financial tsunami. Central bankers, of course, adopting the cloak and demeanor of firefighters or perhaps lifeguards, have been hard at work over the past 12 months to contain the damage. And the private market, in its attempt to anticipate a bear market bottom and snap up “bargains,” has been constructive as well. Over $400 billion in bank- and finance-related capital has been raised during the past year, a decent amount of it, by the way, having been bought by yours truly and my associates at PIMCO. Too bad for us and for everyone else who bought too soon. There are few of these deals now priced at par or above, which is bondspeak for “they are all underwater.” We, as well as our SWF and central bank counterparts, are reluctant to make additional commitments.
Step 2 on our delevering blackboard therefore has stalled and is inevitably morphing towards Step 3. Assets are still being liquidated but there is an increasing reluctance on the part of the private market to risk any more of its own capital. Liquidity is drying up; risk appetites are anorexic; asset prices, despite a temporarily resurgent stock market, are mainly going down; now even oil and commodity prices are drowning. There may be a Jim Cramer bull market somewhere, but it’s primarily a mirage unless and until we get the entrance of new balance sheets, and a new source of liquidity willing to support asset prices. …
A Depression-era bank robber named Willie Sutton once said that the reason he robbed banks was because “that’s where the money is.” Illegal for sure, but close to an 800 SAT score for logic if you were in the business of stealing other people’s money. And now, while some will compare current government bailouts to Slick Willie, citing moral hazard, near criminal regulatory neglect, and further bailouts for Wall Street and the rich, common sense can lead to no other conclusion: if we are to prevent a continuing asset and debt liquidation of near historic proportions, we will require policies that open up the balance sheet of the U.S. Treasury – not only to Freddie and Fannie but to Mom and Pop on Main Street U.S.A., via subsidized home loans issued by the FHA and other government institutions. A 21st century housing-related version of the RTC such as advocated by Larry Summers amongst others could be another example of the government wallet or balance sheet that is required during rare periods when the private sector is unable or unwilling to step forward.
The bill for our collective speculative profligacy, obvious in the deflating asset markets, can be paid now or it can be paid later. Those aspiring for a perfect 800 on the Wall Street policy exam would conclude that the tab will be less if paid up front, than if swept under a rug of moral umbrage intent on seeking retribution for any and all of those responsible. Now that the Fed has spent 12 months proving that it “knows something…knows something,” it is time for the Treasury to do likewise.
Sorry, Bill, I’m not scared. Systemic debt liquidation is exactly what the country needs right now, and actions like this are exactly what laid the groundwork for this bubble, by absolving bankers and guys like you from responsibility for your actions. To repeat these mistakes on such a massive scale would distort our economy into a perverse and Orwellian system for the sole benefit of politically connected billionaires.
Is Gross really that cynical?
If he’s not cynical, he’s dumb, and I doubt any self-made billionaire investor could be this dense. As Carl Denninger points out, Gross bought much of this mortgage debt over the last 12 months, at a big discount, surely with the full intention of lobbying for a bailout of his positions (he has been using his column, media appearances, and certainly contacts in Washington to do just that). A man with this kind of character could only be rewarded with wealth and prestige in a society that has gone completely off the deep end. Time to drain and scrub the pool.
