Category Archives: Crowds

Financial Flings: Consumer Prices Here to Stay

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“Don’t expect to see any drop in the prices you pay at the pump — or at the grocery store or anywhere else — from any decline in the price of commodities. The price of gas at the pump actually climbed to a new high at $3.983 a gallon last week, according to automobile club AAA, even as the price of oil was falling. (And it kept on climbing, to $4 a gallon, on June 8 after a two-day rally in crude oil prices.)

You can expect the same from other commodities that have tumbled in price. Consumer prices will stay high even as commodity costs come down. Wheat prices are down. From a record $13.95 a bushel on Feb. 27, the most actively traded contract on the Chicago Board of Trade had dropped 42% to $7.78 a bushel on June 5. The prices of most other commodities — well, except for corn, which has soared as heavy rains have held up planting — have tumbled in recent weeks. See any drop in the price of bread or in a meal at your favorite restaurant?

No, and don’t expect to. There’s no quick relief coming to consumers even if commodities continue — or resume, in the case of corn and oil — their retreats in prices.”

More from Jim Jubak’s Journal at MSN Money.

Bad Subjects On The Right Not to Drive…

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“I certainly don’t’ fault people for using cars or supporting their right to drive, because like every other critic of automobility, I recognize that there are few options for people to do otherwise. But that’s exactly the point that automobile critics are trying to make: people are significantly limited in their ability to choose between different forms of mobility. Pro-automobile advocates love to talk about the ‘right to drive’ or the ‘freedom’ to travel, but they never talk about the freedom to choose any other mode of transportation—particularly ones that don’t pollute the Earth or require an infrastructure that engulfs most of the usable public space in our cities. Pro-automobile advocates don’t like to talk about how automobile accidents are the #1 cause of death for people between the ages of 4-34, killing approximately 43,000 people a year. Nor do they address the fact that the 2.9 million annual injuries caused by auto accidents costs our society roughly $230 billion a year. Even when people aren’t getting maimed or killed, the literal financial costs of automobility are staggering. According the National Highway Traffic Safety Administration, traffic congestion collectively costs an average of $168 billion a year and the Texas Transportation Institute estimates that the 75 largest metropolitan areas experienced 3.6 billion vehicle-hours of delay, resulting in 5.7 billion US gallons (21.6 billion liters) in wasted fuel and $67.5 billion in lost productivity, or about 0.7% of the nation’s Gross Domestic Product. One would think that this raw financial data alone would surely convince people that there are better ways to simply get around. However, it’s hard to make informed decisions about transportation when groups like the Reason Institute can utilize major news outlets to push their agenda.”

More here at Bad Subjects.

Fighting for Food: Mobs riot as food prices soar in Somalia….

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“Down with those printing the fake money!” the young men yelled, denouncing the growing number of counterfeiters who have contributed to escalating prices. “Down with opportunists!”

The Mogadishu Traders’ Union said it decided Tuesday to again accept the old 1,000-shilling notes and ordered its private security units to enforce that at the city’s main Bakara market.

“We, the big traders, have already decided to accept the old note and today we want to tell other businesses also to accept the decision,” said Abas Mohamed Duale, deputy chairman of the union.

Protests and riots over rising food prices have recently hit other nations, including Haiti, Egypt, Cameroon and Burkina Faso. The price of rice and other staples has risen more than 40 percent since mid-2007.

The Asian Development Bank said Monday that a billion poor people in Asia need food aid to help cope with the skyrocketing prices.

Soaring fuel prices, growing demand from the burgeoning middle classes in India and China and poor weather have contributed to the jump in food prices worldwide, economists say. Africa has been particularly hard-hit.

In Mogadishu, the price of corn meal has more than doubled since January. Rice has risen during the same period from $26 to $47.50 for a 110-pound sack.

The cost of food has also been driven up by the plummeting Somali shilling, which has lost nearly half its value against the U.S. dollar this year because of growing insecurity and a market clogged with millions of counterfeit notes. The shilling has tumbled from about 17,000 to 30,000 per $1…..”

More from AP.

Boom Without End: What The Web Knows…..

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“India and China combined are commonly acknowledged as the next two economies to be reckoned with, in terms of double digit economic growth. Prices for basic materials such as copper, steel, nickel and virtually every other mineral used in construction are marching steadily upward.Certain economic commentators are calling this a ‘super-cycle”, implying that the trend will eventually reverse itself, and these industries will contract as they have done since the industrialization of mankind.

It is no such thing.

The cyclical nature of mining is dead, a relic of the past.

What do you think is going to happen to the demand curve for basic materials when China, India, Africa, and Latin America’s internet penetration percentages rise to meet North America’s?

How bout Russia?

China is the largest consumer of copper, but the United States is second. Once a standard of living is achieved it must be maintained.

The rest of humanity’s existence will now be spent in bringing the rest of the world population up to a better standard of living. Or we shall perish in the effort.

The secret is out….”

James West in The Midas Letter

Bruni & Sarkozy Take Their Show on the Road…

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And, a moment of comic relief, in the middle of all the financial trouble. On the public (and, apparently, well-hydrogenated) display of affection by the exhibitionistic French president, Carla Bruni, and her escort, Nicholas what’s-his-name, the last word came from a British columnist:

QUOTE:

“However, ultimately, it wasn’t her nudity in the past that was the issue, it was the Sarkozys’ naked ambition in the present, which was seemingly to be crowned as the hot new couple on the international political stage, the couple who make all other political couples look dusty, passionless and redundant. And correspondingly their politics, too, even their countries.

Indeed, was it inadvertent or was there a bizarre whiff of quasi-sexual competitiveness from the Sarkozys towards the Browns, a preening display of potency?

Whether Carla was sashaying into Sarah’s charity lunch or Sarkozy was ‘playing football’ with Brown at Arsenal’s stadium (both men coming across like two girls desperate not to get their petticoats dirty), it seemed palpable; the none too subtle one-upmanship from the French camp. The whole event had the air of a quiet, serious country couple making the mistake of inviting a glamorous, intimidating couple over for a hellish weekend of nonstop patronising, the story of the town mouse and the country mouse as reinterpreted for the international political stage.

However, for some of us, if the idea was to make the Browns, and by association Britain and its politics, look a bit passionless and lacking, it backfired. No offence meant, but the last thing I ever want to see is the Browns playing tonsil tennis on a boat on the Thames. Or anywhere. To me, this doesn’t say ‘virile and go-getting’, it says ‘midlife crisis alert, get him away from the button’.

Admittedly, it was all very diverting and it was sweet to see how gallantly British men rushed to welcome Madame Sarkozy and her interesting views on monogamy. Ultimately though, the whole try-hard thing with the Sarkozys left one with a huge appreciation for the Browns. In fact, I’d like to use this column to make an apology: I interviewed Gordon once and left whingeing that he was serious and dull. I’d like to change my mind. Like surgeons and airline pilots, you don’t want your world leaders to be too exciting or, God forbid, surprising – it’s reassuring that they’re serious and dull.

Indeed, although one feels this country was too easily seduced by the Carla-Nicolas roadshow, and should maybe have felt affronted by the way they made British politics look passionless by comparison, perhaps in the end, we should just feel relieved….”

More from Barbara Ellen in The Observer.

Mind Body: Credit crunch also driven by panic…

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“Household debt-service ratio is near a record high 14.3%, while the personal savings rate hovers near a record low 0.5%. Still, it is worth noting that in many cases debt service is as much about perception as reality. Optimistic social mood creates the right conditions for enhanced credit appetites and an optimistic view of how much debt one can service without stress. That is one reason the high-debt service ratio and low savings rate has been able to persist, and to grow to unimagined heights, for so long. A negative social mood can take things to an opposite extreme, where debt is repudiated or shunned…..”

More at Minyanville.com.

And this from The Big Deal.com:
“What makes me even more skeptical about the solidity and cogency of the financial market as a whole is the fact that this disaster was largely caused by panic, or “sentiment”, if you prefer.
Bear Stearns prime brokerage business, providing admin services to hedge funds with a fixed income bent, was the main source of liquidity for the now-moribund financial institution. Last week a rumor, which later led to rampant speculation, was put out about Bear Stearns fragility and its excessive exposure to US mortgages. Obviously all the hedge funds using Bear Stearns to deposit their assets panicked and were quick to terminate their relationship with the bank.
Without the funds’ liquid assets in its “vaults” Bear Stearns was not able to meet its running costs.

The worst part is that just a few days later, on March 27th, the bank would have been able to exchange its gigantic portfolio of mortgage backed securities for high quality, liquid US Treasuries…”

Amazon Blog: Do-Gooding Do-Do

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“Those who now speak of decoupling used to talk of globalisation. This is oxymoronic, you can believe in one or the other but not both,” says analyst James Montier.

Montier thinks that the world is bound to go the way of the American economy – down. If you pumped for globalisation and global growth when the going was good, he says, you can’t now argue for decoupling. You can’t now say that the global economy doesn’t depend on what happens here. That would be cognitive dissonance.

Here, I’ll take the part of cognitive dissonance. It’s what makes the world go round.

Mobs, Messiahs, and Markets is chock-full of it.

Critics have called that a terrible thing…..or terrific, depending on where they stand,
But if our detractors rested their case against us only on this, they’d have a non-starter on their hands. Anyone who’s sniffed a grand theory up close knows better.

Why?

Because the real world is a jungle and logic cuts only a very narrow track in it; we’d be foolish to mistake our little wayward path for the woolly thickets our machete didn’t get to.

There is no logical structure that doesn’t rest on a blind spot….there is no sense that does not have a foundation that is nonsense. (That’s from a piece I did on Tom Friedman).

In fact, a bystander watching the way we mangle language could be pardoned for thinking it our original sin. He’d see that we’re fooled not just by our theories, but by words themselves. Their sense and their nonsense.

“Mobs” is a book about words.

On my part, it started from my critical work on language; from studying propaganda and from my popular writing on the subject .

In “Do Gooding Do-Do” and “Developmentally Disabled,“ two pieces used in the book (incorrectly attributed in several places), I took a look at some common words used about economics … and got into trouble with progressive and conservative friends.

What did I say that was so bad?

I said that “free market” language is used a lot to support what’s essentially managed trade. And that “social uplift” language is used the same way.

But how can you not take a position, asked the critics, a la Montier. Isn’t globalisation

A Very Good Thing? Or A Very Bad Thing?

Is it?

Perhaps it’s neither…or both….
Perhaps it’s sometimes one thing..sometimes another.
Perhaps it’s just too complicated for slogans. Sometimes government regulations are the lesser evil. And sometimes the greater. Perhaps you can talk about globalisation….and also talk about decoupling. Perhaps, on most things with any complexity the best response is not the one the mob wants to hear – Yes or No.

The best response is – It Depends.

Activism: Virtual Rapist Takes the Rap in Rome….

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“An Italian man was jailed for more than two years for putting pornographic pictures of his ex-girlfriend on the Internet and sending them out in more than 15,000 e-mails.

The 32-year-old man had created a Web site that appeared to show his ex-girlfriend offering sexual favors and erotic games, with her phone number also on display….”

More at Reuters.

Comment:

Two years isn’t enough but bravo to the Italians for a good start. Now wait for the chatterati to howl about censorship. Punishing criminal behavior will be turned into an assault on free speech.

Of course it’s nothing of the sort. Publicly circulating pictures of this type is an assault of a very physical and damaging kind. In Iraqi Women and Torture (Chapter 8 of The Language of Empire) I argue that photographing and circulating nude or sexual pictures of women or men against their consent is an assault at least as bad as rape, and often much worse.

Our notions of consent and representation need considerable updating. I hope to be contributing something to that for the Routledge Key Concepts series.

Trader Psychology: The Dash for Trash…

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“The most important thing to do is to stick with the processes that have served you well, but appreciate that the environment we are operating in may be altering. If in doubt, as I wrote last week, inaction and hence holding cash may well be the safest bet.”

Read more by James Montier in Mind Matters.

Comment

Montier is talking about 20%-40% cash.

He also recommends purchasing value stocks with good dividend yields, rather than growth stocks, since he thinks valuations of US stocks – while off from their bubble peaks – are still far too optimistic.

As the piece indicates, Montier is no fan of the “decoupling” thesis – the idea that global growth can continue despite a recession in the US. He asks how it is that the same people who once talked most enthusiastically about globalisation are now endorsing decoupling – just as enthusiastically. He calls it cognitive dissonance.
He has a point.

On the other hand, I happen to be a fan of cognitive dissonance. Mainly because our cognitions aren’t as pure and simple as we think they are. They are just points of view.

To assert both globalisation and decoupling at the same time strikes me as quite plausible. Certain aspects of trade are global. Others are not. Some countries depend more heavily on the US consumer – either directly or indirectly. Others do not. It makes perfect sense that US stocks should be overvalued and not likely to go anywhere for years……and that emerging markets stocks, even if relatively overvalued and due for a correction, should do better – even much better – over the long-term.

But the piece is still worth studying for those investors in whom hope for their favorite growth stock springs eternal….

Amazon Blog: Government of PR flacks, by PR flacks, for PR flacks

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Where you get your words from doesn’t matter. That was the verdict of pundits and newsmen last week on the charges of plagiarism flung back and forth between the candidates.

Maybe.

But. in a time when words are increasingly going astray, a man or woman who makes his living with them can’t afford to fool around. He’d better stick with the ones he picks. And they’d better be his.

Four years ago, the country went to war for words later proved false. Word provided by politicians, pundits and newsmen… who should have known better. Who had a duty to their words – to keep them honest, unadulterated, and organic.

Because we swallow what they tell us.
We live or die by their words.

When words don’t anchor themselves in reality, then they’re only slogans…memes. The stuff of PR. We are dying by PR in this country.

It’s a major theme of Mobs, Messiahs and Markets.
The slogans that drive the mob crazy and pollute the conversation in our country.

If the point of words is to get what you want, then you can pitch them anyway you want. That’s the bottom -line.

But bottom-line thinking isn’t really what a conversation among citizens is about.
That’s what corporations do.

If our country is a business – even a not-for-profit business – run to achieve a social goal, however noble, or meet a production quota, however magnificent, then it doesn’t really matter whether anyone plagiarizes. It doesn’t matter how words are treated. It only matters that they do what we want them to do and take us where we want to go.

But if your country is not a corporation but an association of individuals, then words have to mean something more than slogans to move your listeners this way or that. They have to be more than tools to get your way.
You have to treat them with respect, like the people who speak them With care.

Like fine cutlery at a dinner. You don’t bend them or break them and you don’t pinch them, even from friends.

Real words are an exploration of the changing truths of the heart. They express what we are. They take us to places we did not know existed and let us become what we never dreamed to be.

They make up a conversation between individuals.
Not a script crafted by PR flacks.