Monday, August 31, 2015

- Post-American America

Those who may draw rational conclusions from the photo above should remember their time in the brainwashing academy where we were all very carefully taught that diversity is our strength. What they meant was that the ideas in this murderer's manifesto are just fine, while ideas like mine (exposed here and elsewhere) are heretical and I should be shunned from civil society for mine while he should be forgiven for his.

It would be wrong to blame this shooting on Obama. Obama's 'empty suit' election as president was a milder symptom of the same illness not the cause of the disease. And let's not forget that the man holding this gun was bat-sh!t crazy. That issue more than the fact that he was black, and gay was the thing that led him down this tragic road. Other black people and other gay people go through their whole lives without shooting people. I don't see any cause and effect there. Had this particular crazy person not embraced this particular bit of lunacy, it would have no doubt been something else.

But we should not ignore the similarity between this man's views and the excuses our broader culture provided him. The only solvable problem here is with us, not him. In some respects, Flanagan's world view is a 'fundamental transformation' of America. It's an America where losing means someone cheated you, winning is more or less an admission of guilt, and victimhood is considered the only unassailable virtuous position that anyone can hold. It's an America where the only people who are accountable for their own lives are the people we prosecute for their success. Everyone else can blame others.

Crazy is as crazy does. But we should at least be trying to avoid the same flavor of crazy in our broader culture. Every time I hear from a feminist social justice warrior, or a black grievance monger, or someone tells me to ignore genetics and call Bruce Jenner a woman, in my mind I'm going to see the photo above. This is a natural extension of the world view they all promote in common. This is what is considered right and wrong in Post-American America

It's too late for anyone involved in the shooting from the photo above. The only meaningful question that remains is, is it already too late for the rest of us?

Thursday, August 27, 2015

- The real 'CAUSE" of the 2008 Market Crash

I can't believe the know nothings in the NRO comment section are STILL debating the 'cause' of the 2008 financial crisis. Let me spell it out once and for all. How you define 'cause' depends on how you measure, either chronologically, or by material impact.

If you measure it by date, then the cause was the market distorting regulation which detached the cost of a mortgage loan from risks associated with the loan. This was done in the name of 'fairness' and 'ending racism', but the motives don't really matter, since the regulation did absolutely nothing toward either of the goals. This is obvious, because the complaints of unfairness and racism have increased not decreased, from the moment the law went into effect.

But this was the seed that inexorably led to the chain of events causing the mortgage meltdown. It was followed by the banks finding a way to manage their risks prudently in spite of a regulation requiring them to do otherwise, by commoditizing and selling off the excess risk - a practice which has occurred without a moment's interruption since the first moment there was both a bank, and the desire to regulate it. Bankers have always been, and continue to be, considerably smarter than regulators. Twas ever thus.

The process they came up with in this case was called a 'credit derivative'. I was present in the room when the creature was created, so while I can detail it's structure, just take my word for it that the structure of the derivative wasn't a contributing factor. The only thing which really mattered was that it was a particularly elegant and mathematically complicated design that required a high degree of intelligence to even understand and value correctly, and it responded to a regulation distorting of one of the largest markets in the world. But in some respects what was even more important was that of the men who participated in it's creation, and the woman who most successfully marketed it, all were well above the 140 mark in their IQ's. They were literally geniuses.

It was successful because of it's elegance (meaning effectiveness), and became lucrative because it was successful. The specific personalities who facilitated that weren't important. They were motivated by the same thing all commerce is motivated by - growth. And had it not been them, it most certainly would have been someone else of nearly equal intelligence and skill. But that isn't to say the players didn't matter. As it became more lucrative, more people got involved in the marketing and management of it. And as the market grew it became more efficient, and by the law of averages, the mean IQ of the people participating in the market began to fall. Twas ever thus.

In the financial markets, there is only one way for someone less smart to consistently make money in direct and open competition with someone who is smarter. Since the option of being 'better' is off the table, they default to the other market solution which is being 'faster'. With an incomplete knowledge of the risks involved, they shortened their holding period (in my opinion incorrectly) believing this limited their risk, and used that as an excuse to begin engaging in more risky transactions. They were literally stepping on the gas of a car speeding toward the edge of a cliff, assuming they'll be able to hold the turn. But lacking the ability to calculate the risks of that turn themselves with the speed their businesses now required, they instead looked at what the geniuses at other firms were doing and reacted to their independent actions. To put it in less analogous terms, they stopped doing private analysis and began reacting to the public knowledge of what others were doing in the market place. This is sometimes described as 'the greater fool' theory. This very specific decision making dynamic has been the proximate cause of every single market crash in all of human history, from tulips onward. In financial markets, twas ever thus.

Eventually, the geniuses in the market took a step back, calculated a little financial physics and realized that at the rate things were going, no one could hold anything like the next turn. So they did what geniuses always do, they quietly and privately got out of the car, leaving only the less clever drivers controlling the wheel and managing all of the remaining market risk. Those few hedge funds that were both smart and lucky, prospered from the resultant crash. Goldman survived in 2008, as did JPMorgan, and others because they got out early enough to avoid the worst of it. the subsequent lobbying effort was nothing more than a part of the landscape, but it was a part whose effect was correctly estimated by the genius players at the largest banks.

But the least intelligent players - the insurance companies and politically motivated Federal participants in the mortgage market (Fannie, Freddie), bore the brunt of the destruction that followed. And their failure at managing risk inevitably flowed down to all the participants in real estate.

In terms of material impact, the "cause" of the market crash was the aggregate behavior of the economically illiterate people who 'got in on' the Real estate boom. I know a black female cabbie who used to pick me up every day at Penn Station when I got off the first train from NJ at 5:13 AM. She was a very sweet woman - age about 50, and she and I got on very well. But she was also just a hair above functionally illiterate and didn't really understand anything about finance, or markets. She was living in a small apartment in the Bronx with her daughter and granddaughter, but still bought a 5 bedroom house in suburban Atlanta with no money down, with the intention of 'flipping it' in just a few months. It was her bad decision, and the decisions of people like her who 'really' caused the crash by buying when it was clear to everyone but her that she shouldn't.

All the rest of the finger pointing is just politics. Specifically, it's the politics of envy, and the objection to the way intelligence distorts economic outcomes. The more intelligent almost always do better in aggregate than the less intelligent. But that fact doesn't make it any more palatable to the less intelligent, who are too hobbled by their frail ego's to admit their lack. And since intelligence is normally distributed, the mediocre vastly outnumber the more intelligent so they turn to politics where their numbers provide the greatest advantages. That's where all the talk of 'exploitation" and unfairness comes from in the end.

It bears pointing out that my cabbie friend is one of the very people who the original market distorting regulation was designed to empower, in precisely the way it empowered her. And it also follows that she and the people like her also bore the worst of the 'material impact' of the crash. But you simply can't make a rule which compels less intelligent people, to make more intelligent decisions.

Regrettably, twas ever thus.

Wednesday, August 26, 2015

- The Matrix Of Ignorance

I wasn’t going to write about this, but I made the mistake of reading the comments section and now I feel I have to.

The ‘wall street friend’ mentioned in the article is me. Kevin and I have been friends for years and have continued our correspondence, even with his relocation from New York to greater Las Vegas. He’s a great guy, and much, much smarter than the average bear. He’s also the single most economically literate English major I’ve ever met. I’ve said many times that there is no writer in the media with whom I agree more, and that goes for his opinions on Trump.

So to the meat of the matter.

The problems he points out are real ones, but to add just one more dimension to what he describes in a single word as ignorance, it actually seems to me to be a lack of understanding of the matrix of ignorance. Information comes in many forms, and Tom Sowell broke it down thusly in his book “Knowledge and Decisions”. There are facts, ideas, opinions, and feelings. And most problems generally described as ignorance are actually people who are mistaking one of these for the other.

To oversimplify it just a tad, facts are objectively verifiable, and more or less universally agreed upon by anyone whose gone to the trouble to do so. Ideas are concepts that may be struggling toward factdom and may have meaningful subjective supporting data, but maybe the evidence isn’t quite so clear cut. Opinions in many cases have no supporting evidence whatsoever – certainly none is required, and feelings are purely subjective phenomenon, and not really the good basis for anything but the most personal decision making.

Problems arise both when people mistake the kind of information they have, and the kind of information other people have as well. For instance, with regard to the effect of program trading, hedge funds, and derivatives, what I possess are facts. It’s an area of expertise for me. I know all about them, as do a great many of the people I’ve worked with over the years. But as soon as I try to ‘simplify’ my understanding of the topic for someone like Kevin, the information he possesses after hearing my explanation of the same topics, never rises above the level of an idea. He buys into the general principle of what I say and has a general understanding of my expertise. He ‘believes me’ when I say things because he knows my character. But until I explain the full detail and all the supporting evidence and have it objectively verified by him from other sources, he will never possess ‘facts’ about the nature of these topics. That’s clear in the way he describes my points as 'persuasive’. Facts come with their own persuasion, so he knows that he only has 'ideas'.

That's fair, and no indictment on me. It's just that information like that has a cost. A cost which Kevin hasn’t actually paid. Though for his part, he doesn’t really need to. He doesn’t claim to be writing facts. He claims to be writing opinions – hence his profession as an ‘opinion journalist’. And you can have an opinion about anything, verifiable or not. The value of that opinion is quite literally lower than the value of my ‘facts’. Kevin would never claim differently, and that his opinion and my understanding of the facts both paint the same picture, doesn’t change things. Ask him to assess the risks associated with a 2 billion dollar book of derivatives, and he’ll probably smile, swear a little, and inevitably tell you he’s the wrong English major for the job. That’s a job for someone with facts. And he, I’m pleased to say, knows this full well.

His commenters however, like the Occupy drone mentioned in the article, speak as if what they possess are facts, when few of them even rise to the level of ideas. They are opinions in most cases, without even the most meager supporting evidence. None of them have done any research into the topic, nor given the nature of the issue, have they really had any access to any. The only way you’ll really learn about derivatives, or HF trading is by working in the industry. All the rest is distilled academic thinking that has already been watered down by the author, and doesn’t rise to the level of ‘fact’.

Take this guy for example:

the things that caused the original stock market crash that created the great depression.. after that they installed safeties and regulation into place on the financial markets then, that would stop it from happening again. and thru the fifties and sixties it worked.. and then in the late 60s. the greed of the banks and financial markets made a comeback and they bribed and payed off politicians to start to remove those safeties and regulations.. and look what has happened.. the tech. bubble and real-estate loan failures... all the other crap that has happened since.. and you can thank bill and hilery for removing the last of the regulations.. and now we need to reinstall all those safeties and regulation back onto the financial markets... the free rein of the markets will crash again and again... over and over and over... the financial markets need hobbles to make sure they do not go wild like they are now. this is what needs to be done .. not all the bull crap all of these talking heads are spewing... and this guy is just another shill spewing nonsense... trying to sound like he really knows something...

Does this reader take into account the effect of technology advances, communications, decimalized trading? No. No need. Yet he speaks as if his ‘fact’ is widely accepted. It’s not. It’s archaic nonsense. That comment isn't based on facts as much as an 'old wives tale'. There is some wisdom in it deep down, but it's as far off the mark as on. Or how about this one:

And we can ask questions: "Executive salaries are soaring while middle and working-class salaries are stagnant. Is that a Good Thing? What factors are contributing to these trends? Can something be done to affect these factors and trends?" If good answers aren't forthcoming, perhaps we have no choice but to act on our ignorance.

That’s actually someone advocating making a broad policy decision based on a feeling that the gap between executive compensation and worker compensation is ‘bad’. It doesn’t even really reach the level of an opinion.

You can do this all day with comment sections on both sides of the political divide. No one in America knows how to think anymore. Nor do they apparently know how to tell when someone else is ‘thinking’.

But Kevin, as usual, is doing both. He may be wrong, but he’s never stupid. And that's because he understand the value of the information he possesses. He knows precisely where he falls on the matrix of ignorance, and has the personal humility not to pretend otherwise. If only more Americans would do the same.


Rewritten in 2015 for the economically illterate commenters on Kevin's NRO atricle.

Monday, August 24, 2015

Can a Republican in the Donald Trump mode win black votes?

Could Donald Trump pick up 15% or more of the urban black vote?  It seems immigration issues might be resonating with them.  From Liveleak:  A woman addresses the LA city council about illegal aliens being appointed to commissioner positions.

I keep meaning to write in detail about Trump and immigration... but my job keeps getting in the way of finishing it.  Hopefully I will have something posted before the primary  :+) 

Saturday, August 22, 2015

- My Bigoted Neckties

My in laws and I don't really connect. It's not a big deal, but I'm sure it is typical for most marriages. In efforts to connect I will buy them books, however they aren't big on reading. In turn, since they know I have have to wear a suit for work, they will make the effort every Christmas to try to help with the accessories. I don't wear cuff links and I don't wear tie tacks or tie pins. Needless to say they insist on purchasing these items for me. I am grateful, but I don't have the heart to tell them I don't wear this stuff. Two years ago, they gave me two Donald Trump Neckties.
They are very shiny and kind of loud, sort of like Trump. I rarely wore them because of their hyper luminous qualities until recently.
Living in Miami you are constantly subjected to the phony notion of Pan-Latinism. The concept that all "latinos" treat other "latinos" or Spanish speaking peoples as equals. Nothing could be further from the truth.  When Trump correctly identified that Mexico and other Central American countries were sending their garbage to the USA, immediately the Latin Media asserted the phony notion of pan-latinism. I work with Spanish speaking "legal migrants" from around the globe. It is hysterical to see "Caribbean Hispanics" try to assert pan-Latin baloney in the company of Colombians, Argentines, and Spaniards. A week before Trump had the audacity to speak the truth, the same Hispanics would have gladly polished the man's shoes and exalted his greatness.
Now Trump is a racist even though he never truly spoke against race.
South Florida publications routinely decry Trump as a racist but they are quickly reminded of the failed attempt to boycott his golf course, because he beat them to it by prohibiting Telemundo execs from entering the golf course or the resort property.
I used to work with a particularly annoying Hispanic automaton. He was Dominican and when given the opportunity, he would renounce any biological possibility of Caucasian connection. He looked no less Southern European than myself. He would often paint our Venezuelan co-workers with the non-white brush stroke in an effort to isolate me as the lone gringo. I used to foil his efforts with the simple question to our Venny friends: "when did your grandparents or great grandparents leave Europe and what was their nationality?" To a man it was either Germanic or Italian. Did they associate with pan Latinism? Not in the least.
Because of Trump, this pan Latin nonsense continues to percolate. I have been inspired to wear my Trump neckties at every opportunity. I have a friend from Mexico in my condo. He saw me on the elevator leaving for work. He admired the suit and remarked about the tie in particular. Needles to say we both laughed when I showed him the brand.
I wore one to work and immediately reported the necktie to Human Resources because it may be deemed insensitive and racially offensive. "Que Lindo!"
I now wear my Trump ties once a week for the tweak factor.
One of the Argentines said to me if he could vote, he would vote for Trump just to piss off the Mexicans! He liked the ties too!
When asked my presidential pick, I do not hesitate: Ted Cruz.
I particularly admire his ability to shut down a phony argument. The alphabet media will hail the lesbo actress as brave in her moronic attempt to confront Cruz. The beauty is Cruz continued to grill pork chops and eat BBQ while simultaneously deconstructing Ellen Page's ridiculous argument.
As Frank the Tank would say: "that's the way you debate!"

Monday, August 17, 2015

- The Way Of The Loser

If you want to know what sins lurk in a man's heart, don't look at his denials, look at his accusations.

We on the right constantly hear how we're full of hate. No, not just hate... "HATE!!!". But in spite of this heated rhetoric delivered daily by millions on social media, the right is also known for it's coldness and calculation; it's tendency to worry about the likely results from policy rather than the feelings of the people involved. It's the left that's always worried about feelings. And it's clear to anyone with an IQ above the mean temperature of New York City, that they certainly "doth protest too much".

The political left is based entirely upon the philosophy of losers. It's an adolescent chance to call a do-over in life. A 'reinvention' if you will, of the rules of society that proposes to place the personal attributes that society actually values that they don't posses at the bottom of the social hierarchy, and the personal attributes they perceive as their strengths at the top. This is why so much of their Diversity=Strength / Surrender=Victory, Orwellian newspeak nonsense sounds like gibberish to the majority of Americans. And lacking the ability to persuade large portions of the population on the merits of ugliness, stupidity, sexual deviance, laziness, and all of the other deadly sins which they deceptively advocate, they try to use our broken political system and the the force of government to make them mandatory instead. But sometimes the real article of their hatred is tricky to see.

As an example, feminists don't hate men, they want to be men. They are filled with envy for them, not hatred. What they hate is women. They hate the beautiful and the feminine. I don't know much about the politics of Emily Ratajkowsi, but I'll bet $1,000 that reinvention of what's considered beautiful isn't on her short list. Why should it be? But this is typical of the kind of misdirection that the left employs to try to make their ugliness more highly valued. Don't attack beauty directly, attack those that appreciate it. Beauty itself isn't presented as immoral, only the appreciation of it. But this kind of societal destruction, the overturning of the natural order, is the only goal of 'reinvention'. And it's long past time we begin calling a spade a spade.

We need to be aware that when newly elected President Obama said he wanted to 'reinvent America', stories like this, and this,and this, were exactly the point. To the Social Justice Warrior, the most ridiculously obscene and vocal losers of the left, stories like that look like a victory. They are a manifestation of the end goal - the destruction of society as it is, and it's reinvention as something else. A 'something else' where they get to decide the rules on what's considered moral, proper, and 'just'.

This may seem very counter intuitive, but the social media politics of 21st century America isn't a cause, it's a symptom. It's the red spots on the skin of the small pox victim. It's the visible sign of a much deeper disease. One that to my eye anyway seems like it is already probably fatal. Taking a concealer pen and hiding the dots will do nothing at all to the moral collapse that the left holds as it's justification. Bit by bit over the last 50 years we've indulged the adolescence of the far left, and now thanks to technology, we lack the ability to fight it anymore. Rome has already fallen, we just haven't buried the body yet.

The rules of American democracy worked fine when the citizens took their responsibilities seriously. When they felt a sense of ownership over their society. But those days are behind us. And in that way it's a mistake to look back on past solutions. This grand experiment in the pursuit of individual liberty has been dead a long time. There is no way I can see to impose the kind of incremental costs in idiocy anymore, without violating the things we hold dear. Free speech, individual rights of property and person? To me those look like luxuries we've proven that we lack the character (collectively anyway) to value. We need to begin to see them as the antiquated ideas they are. Ideas we can no longer rely on to keep us on a virtuous path.

It would be illegal for me to advocate violence against social justice warriors, and I do no such thing. But I wonder what the effect would be if it came to that. I wonder what would happen if we lived up (or really down) to the expectations of the 'Black Lives matter' movement, and the feminazi's who want all men kept only as pets. They rail against straw men, but what if their dark fantasies became reality? Because I believe that in the end it will come to that - which is to say, I believe it's the road we're on.

If you believe that white America has achieved more than black America because of initiative, and intelligence, and civility, then there is only so much you can take of this barbarian nonsense. Eventually the people who feel that way will organize into the same kind of mob that black America has organized into, and their accusations of 'hatred' be damned. If every time a feminist pointed her fat greasy finger in a mans face and screamed about misogyny, that man were to belt her right in her mangled teeth, very quickly they would be quiet. And when the police decide that they've had enough of being terrorized by those barbarians already within the gates, the result will be violence direct action of another sort. And when that becomes the norm instead of some prosecutable exception, the way of the loser won't be looking so appealing to quite so many.

I believe that's coming. I'm not advocating it, but I think the far left is leaving the rest of humanity no other choice.

Thursday, August 13, 2015

- America's Mental Breakdown

Rob P sent me the article below and I'd like to call your attention to it:

The Coddling of the American Mind

It's basically a description of the self propagating lunacy that the far left has inflicted on our institutions of higher learning, and the psychological damage that's being wrought on our children because of it. You all know the drill. For years, folks like us have described the philosophical core of liberalism as a kind of socially contagious mental illness. Well the above article describes the means of transference.

The thing I get from it is a signal of how complete our failure as a culture has become. To elevate feelings as a greater source of truth than objectively verifiable facts, leaves the practitioner without the ability to untie their mental straight jacket. They become trapped in long series of self reinforcing delusions, and will never have the ability to see 'reality' for what it is. Instead, rationalization, ego protection and solipsism become the norm for them.

One other thing the article doesn't actually come right out and say is how closely this model of 'thinking' is to the natural mental state of women. It is in fact a femininization of the American thought process. for comparison I would recommend reading Rollo Tomassi's book "The Rational Male" as a point of comparison, and a description of the Evolutionary Psychology that led to this mental muddle.