Category Archives: Mobs

Bernays On Citizen Parrot

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Theory:

“Opinion polls are designed to gauge whether the agitprop of the corporate state is having the desired narcotic effect on the general population. The more the average citizen can parrot back what he has been told by his betters, the more democracy, as defined by the elite, can be preserved.”

– Edward Bernays, the father of modern marketing psychology

Practice:

“When You’re Flush But Acting Flat Broke: Social Cues Can Drive a Downturn” Washington Post, April 16, 2009, is an interesting piece by Michael Rosenwald, which quotes Robert Cialdini on how social influence can make a downturn even worse.

Interestingly, we referenced Cialdini’s enormously useful work in “Mobs, Messiahs and Markets” (Bonner & Rajiva, 2007) in Chapter 4, footnote 14. p.88. I happened on the book purely by chance, but now, reading the Post piece, I’d like to read his other work.

Rosenwald’s take in his piece is rather close to mine, with one crucial difference.

I see no reason why people who have money in their pockets should hold off buying when there are so many bargains to be had.

I wouldn’t go so far as to say it’s your patriotic duty to go forth and spend when the economy is hurting.  But there’s certainly no reason why doom-saying should prevent people who are far from the edge from continuing with their investments. Panic only makes things worse. And many astute people are no doubt making things much worse because they’re on that end of the trade.

I don’t believe in papering over how serious the economic situation is. But ‘serious’ is not the end of the world, even if such a thing could be.

So I think the Wash Po piece gets the “Mobs” part of the equation right.

But I’m not sure if getting experts to sell optimism is the right advice. That’s where the “Messiahs” part of our book comes in.

Whatever you decide to do should be based on your own study of the matter at hand and should suit your own circumstance, life-style, psychological profile, risk appetite, and responsibilities.  Trading gurus, commodity mavens, gold boosters, currency experts, professors, analysts, and talking heads – take all the advice you want and look through as many eyes as you can.

But in the end, choose for yourself.

Ultimately, it’s the only way to build up your own economic and moral well-being.

No one else will do it for you.


Goldman Changes Mind On Gold

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“Goldman Sachs now says it expects the gold price to average $930 this year.”

 Comment

Well, well.  They must be reading us.

Because readers of our humble blog will note that holding to our guns staunchly we’ve said the gold is not performing as well as it might….and unlike Goldman, we didn’t wait for a drop to say that… We’ve been saying that right through even when gold looked like it was going to take out $1000 (Of course, we wish we’d bought a little and taken a quick ride too)

We’ll change our tune in a hurry if we have to, but our own experience over the past year has been that it’s better to wait for the dips.

Quote:

“Gold has gone sharply down below 900.  Already I feel better, although it puts my SLV nibble in the red.I held off buying because I thought GLD showed more strengths on its down side moves – but recently I was just wondering if I was wrong after all and whether it was making a solid base at around 900-920.  Good thing I held off. That plunge down was sharp and shows that the corrective thrust is stronger than the upthrust still….”

That’s from an earlier post, “Gold Below 885” (March 18) Also check out “Dollar Index Imponderable” (March 20)

You can check them, and others, by using the search function on the right…..or just search “gold” and you’ll get my take on it over the past year…I’m long term bullish but bearish in the short term, and possibly also in the midterm.

Gold Above 940

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Wow. Bernanke opens his mouth and the dollar sinks to 84.5.

Can’t he read a RED STOP sign?

And this weird thing here: I saw a  piece on bond yields and when I looked it up on yahoo, it’d been removed.

/cnnm/090318/031809_credit_market.html http://news.yahoo.com/s/ynews/ynews_bs262‘

Here’s  the URL for the original site:

CMWire – The Capital Markets Newswire

But when I looked through Capital Markets wire just now I couldn’t find it.

Here’s a copy of  the google search result for the piece:

Mar 18, 2009 … Yields plummeted by the widest margin since 1987. … 14:41 AIG chief asks execs to return bonuses» CNN.com. AIG chief Edward Liddy told lawmakers ….. (

Corrects the headline to reflect that Treasury yields plunged). …
cmwire.com/ – 39 minutes ago – Similar pages –

(http://www.google.com/search?hl=en&q=yields+plunge+1987+cnn&btnG=Google+Search&aq=f&oq=)

Update:

OK – I found the piece. It’s by Deborah Levine and I found it at Market Watch.

I think the original wire report on CMWire and Yahoo might have been taken off to make the headline look less alarming, so that the reference to 1987 didn’t spook stock investors – the media’s target patsies.

You can see that the article now reads – “Treasury prices soared Wednesday, sending yields plummeting….”

The powers that be want to keep the poor Dow’s chin up at least for today before the big bad short sellers come out in droves…

“Treasury prices soared Wednesday, sending yields plummeting by the largest amount since 1987 after the Federal Reserve surprised bond investors by saying it would buy $300 billion in longer-term Treasury securities over the next six months.”

http://www.marketwatch.com/news/story/treasurys-soar-after-fed-says/story.aspx?guid={7DB91E8A-FD87-4BD4-9296-3C6EA402C920}&tool=1&dist=bigcharts&

Meanwhile here are the details at Bloomberg  on the FOMC decision:

” This Wednesday, the Federal Open Market Committee of the United States’ Federal Reserve made a unanimous decision to keep the Fed Funds rate unchanged at the 0.25% to 0% range. The rate decision was not a surprise for a good number of investors since the Federal Reserve stated clearly on its last FOMC statement that “economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time”. Even so, today’s FOMC statement sounded a bit more dovish than expected, not reflecting the positive performance of the U.S. stock, bond and credit markets over the last two weeks. The Federal Reserve said “it sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term”. In addition,  “to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months.” So once gain, the Fed said it will employ all available tools to promote the resumption of sustainable economic growth and this makes us believe that the Fed will continue to purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets. In other words, the Fed will use quantitative easing. Currency traders reacted very negatively to the FOMC statement driving the U.S. dollar lower against the world’s most heavily traded currencies.”

 Comment:

What are they doing? Blowing smoke in everyone’s eyes pretending they see deflation in store in order to throw everyone off the inflationary scent?  Hoping meanwhile that gold doesn’t pop up too much and give the game away before they finish the next mighty round of mortgage hot potato? (Most plausible scenario).

Or, are they really terrified of having so destroyed the capital base of the economy that they think something, anything (maybe another financial instrument’s been discovered we haven’t heard about)  has to be done. And since all they have is a printing press., well why not use it? Off with the heads of the middle class, the thrifty, the savers, those who have no debt, the creditors!  (Also plausible, though probably only if combined with the theory above).

There’s a third option, but I’ll explore that in another post.

And why is Bill Gross pumping this whole business to the public?

“You want to continue to buy what the government will buy,” Pimco’s Bill Gross told CNBC.

From now on, it will be Pimpco to me. Sorry.

Police State Chronicles: The All-Seeing Eyes Of Advertising

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Watch an advertisement on a video screen in a mall, health club or grocery store and there’s a slim — but growing — chance the ad is watching you too.

“Small cameras can now be embedded in the screen or hidden around it, tracking who looks at the screen and for how long. The makers of the tracking systems say the software can determine the viewer’s gender, approximate age range and, in some cases, ethnicity — and can change the ads accordingly.

That could mean razor ads for men, cosmetics ads for women and video-game ads for teens.

And even if the ads don’t shift based on which people are watching, the technology’s ability to determine the viewers’ demographics is golden for advertisers who want to know how effectively they’re reaching their target audience.

While the technology remains in limited use for now, advertising industry analysts say it is finally beginning to live up to its promise. The manufacturers say their systems can accurately determine gender 85 to 90 percent of the time, while accuracy for the other measures continues to be refined.”

From AP, via Cryptogon.

The Mind-Control Weapon In Your Living Room

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One of Britain’s leading authority’s on children’s speech development, she completed a ten year study which showed that the background noise in the average two year olds day can delay his or her acquisition of a language by up to a year. Almost invariably the background noise came from television.
Amongst other things she found that:
· Children learn to speak from their parents and parents don’t play or talk enough with their children when the TV is on.

· Background noise from TV or radio, confuses infants. In response they learn to ignore all noise and then they ignore speech.

· Children of two years or older should not be exposed to more than two hours of TV a day.

· Children of one year old or younger should not be exposed to television at all.
Sally Ward is currently preparing to focus on television and the way it affects our attention. In particular she will be looking at Attention Deficit and Hyperactivity Disorder (ADHD). “. . . a lot of people think it’s chemical,” she says, but in her view . . . “it’s very peculiar that at the onset of children’s television it got a lot more prevalent, and at the onset of children’s video’s it got a lot more prevalent.”
Her concern is being reiterated in America where child psychologist John Rosemond has stirred some controversy by suggesting that ADHD is environmentally created; a suggestion that is completely at odds with the pharmaceutical industry, which maintains that the disorder is genetically inherited and makes considerable profit as a result.
“Ritalin may work, temporarily,” says Rosemond, “But pharmaceutical intervention won’t change behavioural and motivational problems.” And these he blames on television – “the endlessly changing images, flickering like the attention spans of ADHD children.”

“Television: The Hidden Picture” – Rixon Stewart, via Handmaiden’s Kitchen

The Washington Post Spins the AIG Story

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Just came across this, since I was out of the country in October: 

Here is The Washington Post covering the story about AIG and the credit default swaps that underlay the crash in October, acting as though they were the first ones on it. No mention of the dozens of people in the alternative press, and in alternative investment newsletters and offshore news, who have been writing about this for years!

Read  The Crash: What Went Wrong and then go and look at my pieces at Lew Rockwell about two months ago, including Three Card Capitalists (October 1, 2008)

Putting Lipstick on an AIG  (September 19) and The Paulson Putsch. (September 25)

One of them, the more “leftish” sounding one, got linked a lot. The other two, more “rightleaning”, hardly got linked though they got passed around through email and fax among some southern Republicans with political connections, and I got a lot of private email (and some public). I swear even Newt Gingrich sounded like he was chanelling it the next day on TV when he suddenly started calling Paulson un-American, after praising him just a day or so before.

Now notice how the Post has slanted the pieces to make Rubin (Obama’s team has a quota of Rubin clones) look like the “good guy” while scrupulously avoiding calling him one of the good guys outright. Even the Post couldn’t go that far,  since after all Rubin is being sued – presumably not for his goodness – and people who follow these things have no great opinion of him at all.

Then notice the book that the Post recommends people read –   Richard Bookstaber’s “A Demon of Our Own Design: Markets, Hedge Funds and the Perils of Financial Innovation” which is from the industry itself. Naturally, the “machine” is blamed. The structure. The way things work.  

Not that I dislike Bookstaber’s book, I don’t. Here is an excellent review of it, by the way. 

Bookstaber is right about risk management too.

But risk management is not the whole story. You can’t just look at structures and techniques. You have to look at who’s behind them.

You don’t want to demonize anyone, true. But events are created by actions taken by individuals, and if you don’t look at them like that,  you don’t really understand what’s happening.

This is the problem (for me) with a lot of socialist analysis. It is heartfelt, well meant but analytically weak, because the objects of the analysis are not units in a calculation or cogs in a machine. They are human beings, organic, dynamic, opaque creatures.  And the structures we like to analyze are only “instantiated” in them… as a social theorist like Anthony Giddens might put it….They have no separate existence apart from them.

That’s all for now, while I go and do some research into where else I can put my little stash of winter nuts before the bear eats it all up… 

Media-Trix: Suspect In 2001 Anthrax Attacks Commits Suicide….

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“Federal prosecutors investigating the 2001 anthrax attacks were planning to indict and seek the death penalty against a top Army microbiologist in connection with anthrax mailings that killed five people. The scientist, who was developing a vaccine against the deadly toxin, committed suicide this week.

The scientist, Bruce E. Ivins, worked for the past 18 years at the government’s biodefense labs at Fort Detrick, Md. For more than a decade, he worked to develop an anthrax vaccine that was effective even in cases where different strains of anthrax were mixed, which made vaccines ineffective, according to federal documents reviewed by the AP.

U.S. officials, who spoke on condition of anonymity because of the sensitivity of the ongoing grand jury investigation, said prosecutors were closing in on Ivins, 62. They were planning an indictment that would have sought the death penalty for the attacks, which killed five people, crippled the postal system and traumatized a nation still reeling from the Sept. 11 attacks….”

More at FOX on a tragic twist in a bizarre case.

Comment:

For those of you who didn’t follow it, here’s the gist.

In 2001 Anthrax-laced mailings killed 5 people and led investigators to the government’s bio-defense labs at Fort Detrick, Maryland. Originally, the mailings looked like they were written by a Middle Eastern or Pakistani person. Relying on a novel technique of literary analysis created by an English professor and written up in Vanity Fair, the FBI shifted suspicion to a bio-terrorism expert, Stephen Hatfill, who was placed under 24-hour surveillance.

Hatfill later sued Vanity Fair and the English professor for the allegations. He also sued the government for leaking the charges that led to his hounding in the media. This June, the government settled (without admitting guilt) for a multi-million dollar figure. Now, another scientist, Bruce Ivins, who has been under investigation for the same attacks, has killed himself.

Hmmm.

So many killer scientists and so little anthrax….

What should we make of this?

Here’s my novel investigative technique. Leaning back in my chair and putting my finger tips together in my best Sherlock style ( I haven’t got a Stradivarius around to saw on…….let alone cocaine), let me pronounce judgment.

Could it be that our dear (almost departed) government was busy concocting “evidence” (with your tax dollars) to bolster their global-crazed-Islamicist-preemptive-porky-military-boondoggling case for going to war in Iraq? And that it didn’t quite fly….

That is to say, the suspicious-Paki-letter-writer part..er… bombed (overlook that imagery, please..).

And could it be that they then tried to distract attention by publicly fingering assorted scapegoats, leading to one of said scapegoats accidentally turning into sacrificial kebab?

And could it also be, dear reader, that I have a future as an FBI consultant….or at least, a Vanity Fair theorist?

For more on this, see Glenn Greenwald’s blog. Greenwald’s raised questions about the anthrax scares earlier.

Mobs: A Citation in ‘USA Today’

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Should have posted this last month when it came out…

As Economy Dips, So Does Customers’ Generosity

2008.3.21 22:30

Hair isn’t the only thing being trimmed at Head Bangers The Salon in Pendleton, Ind.

Customers searching for ways to fight high gas and food prices are doing some trimming of their own – in tips.

“Even the regulars are cutting back,” stylist Joanna Anderson said. “Usually they are apologetic and say they wish they could give more. But they just can’t right now.”

Many workers depend on tips for a substantial part of their income, and those hairdressers, bartenders, cab drivers and food servers have been among the first to be hit hard by the slowing economy, experts say.

Those workers are feeling a pinch because talk of a recession has consumers putting the brakes on extra expenses.

“It’s simply panic, and people cut back in anticipation of what may or may not come,” said financial commentator Lila Rajiva, co-author of “Mobs, Messiahs and Markets: Surviving the Public Spectacle in Finance and Politics.”

More at USA Today. 

(c) 2008, USA TODAY International. Distributed by Tribune Media Services Internationa

Feminastiness: Eastern Men As Oppressive As Westerners….

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Topping my recently opened female-of-the-species-is-more-deadly-than-the-male file, this, from an Indian site (I’ve changed some of the language for clarity):

How to Improve Gender Sensitivity in India: 

1) Women must not be imprisoned even if they kill. They need to be put into reformatories.

2) As soon as a woman marries, she should get 50% rights to her husband’s property.

3) Large scale single parenting by woman (with maintenance provided by husband) is the norm. Research shows that children who are not allowed to see their fathers after divorce for years grow up to be very healthy. In India, Gender Sensitive judges alone should decide if the women should allow the father to see the child after divorce or not. Or if he should ever see them.

4) Any violence committed by woman against others (including murder) should be considered self-defense.

5) The disparity between life expectancy rates in men and women needs to be raised to the levels in developed countries. In India, women live 2.4 years more than men on an average. This difference has to be improved to the levels in the US and Europe where women live more than 6 years than men on an average.

6) If a man cancels an engagement, he need to be punished by imprisonment of upto 5 months. On the other hand, if a woman cancels an engagement, she should be compensated with 30% or more of the man’s yearly income.

7) For any woman who commits suicide within 7 years of marriage, a dowry harassment (or other harassment) case against the husband should be filed by default. He should be imprisoned for at least a year for not taking care of his wife.

8) If a woman complains of domestic violence, the man should be imprisoned immediately and bail only granted by a court. All their joint bank accounts need to be frozen at once. The woman also has the to right to stay on in the “matrimonial home” (i.e., the husband’s house), until she gets a divorce. If the women has an adulterous relation that is proved beyond doubt, the husband must still allow her to live in his house, or provide alternate accommodation of equal quality. The benchmark case is in the movie, “Hum Dil De Chuke Sanam.” The husband is even expected to help the women achieve her adulterous goals. If he cannot directly help, he must provide one-third of his salary towards the wife until she marries the other man.

9) A man must do half of all household work, even if his wife is not working. But he must always work full-time. If he does not, even if he does all house work, he should be labeled lazy, improvident, pathetic, and derelict, certainly in private, and preferably in public where it will cause maximum humiliation and pain either to him or to his relatives. If a woman does not work either outside the house or in, she is nonetheless entitled to all consideration and respect and anything less than deferential treatment of all her needs, demands, whims, and psychiatric moods should be considered a violation of her human rights.

10) After marriage, a man must not stay with his parents or allow his parents to stay for a prolonged period with him (“prolonged” to be decided by the woman and subject to revision at any time on request by her, her friends, or her relatives however distant and uneducated). He must allow her in-laws to stay in his house for at least the same length of time his parents stay in his house. If he violates any of these fundamental human rights of a woman, he can be imprisoned for neglect and abuse of his in-laws.

11) If in-laws of a man “feel” their daughter (or they) are not properly treated, the man should be thoroughly counseled and sensitized to his failure. If he does not mend his ways, stringent laws must be passed (with provision even for administering a good lashing) that will rectify his behavior.

12) The ratio of male:female suicide rates in India should be brought to the levels in the West. In India, 50%(about 25,000) more men commit suicide than women. This is much lower than western standards, where about 150% more men commit suicide than women.

13) The richer and the more educated the men are, the more pressure should be placed on them. They should provide the wife with a lifestyle equivalent to their status….. and they must also spend quality time with family (See 9, 10, 11 above). If this is still impossible, see 12.

14) By definition, Bangalore techies (since they work with software) are required to be softer than others. Since they are also paid more than most, they should deposit 20% of their monthly salary, at least,  in their wives’ names.

15) If the wife of a techie complains of dowry harassment (or any other harassment), he must be sacked from the job immediately (that is, after he gets out of jail on bail).

16) If the wife and husband are both techies, then the wife must not spend any part of her salary towards household or personal expenses. All expenses must be born by the man.

17) Streedhan given as a gift to the daughter during marriage must also be considered dowry.

18) Rural women and poor women are ignorant and can’t afford legal help. So, clearly the laws are really meant for urban India. Rural women should actually be discouraged from approaching the police or the courts since they don’t have the money anyway. Instead, they should be empowered in other ways – by better employment and by continuing to live in the traditional family system where they respect the decisions of elders. That will show everyone that that women’s rights laws are really UNDERUSED and (more importantly) will encourage urban women to MISUSE the law and file false cases. That makes for good business for feminist and Human Rights lawyers and keep bribe-giving at a healthy level, the booty being divided between the police and the women’s organizations. Currently, the rate of extortion for a techie is upto 1 lac and for an NRI (non-resident Indian) it goes upto 4 lacs.

19) Since, rural women do not suffer from domestic violence (see 18), domestic violence laws must be used mostly – and most stringently –  in urban India. Quod Erat Demostrandum.


More here in the archives of one of many new blogs on the feminist abuse of dowry and domestic abuse laws in India.

It would be funny if it were not another grim reminder of the way statutory remedies by the state end up creating more problems than remedies. Ultimately, both the men’s movement and the feminists are right….only in different places and ways. The feminists are more right (generally) about rural, uneducated women…..and the men’s movements is more right (generally) about urban, well-educated women.. But even then, each individual case is unique.

Racism, sexism and exist, but only as useful terms for analysis.. Down in the marrow, it’s all about power and relative power.

And when it holds power, the fairer sex is also the fiercer sex…

Read more here on the abuse of dowry laws and some advice for expatriate men who want to return home to be married:

498A victims offer the following advice for men getting married in India:
• When the bride and groom’s families exchange gifts, keep a written record of everything received and given.
• If you are traveling to India, make copies of your passport, visa and all credit cards and leave the copies with a trusted friend or relative.
• Don’t give anyone your tickets or passport.
• Register with the local Foreigners Registration Office upon arrival in India, and let them know your expected date of departure as well.
• “Don’t sign any blank checks.”
• Consider a prenuptial agreement.
• Keep aware of any bank activity by monitoring your bank statements.
• Print out and save any emails that may help your case. Under India’s recent cyber-laws, the emails may be admissible as evidence.
For more information, contact the following:
• Yahoo! Groups: Misusedowryact and Nridivorce
• www.sangyabalya.org (site is not always operational; alternatively, call them in Bangalore at 011-91-80-5696-9850 or email them at victimsof498a@rediffmail.com.
• The FBI’s local Indian staff can be reached through the American embassy in New Delhi: 011-91-11-2419-8000
• A few blogs are online, such as batteredmen.fullhydblogs.com, batteredmen.rediffblogs.com and batteredmen.blogspot.com.

The Making of MOBS

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“Mobs, Messiahs, and Markets” is coming out next week in the book stores.

Pretty exciting.

And the end of a year-long saga.

Bill and I began work on the book in July, 2006.

Well, sort of.

In fits and starts.

We couldn’t fit in what both of us wanted to say and we got a late start… September 2006, to be exact.

The late start came about because Bill convinced me (he is a powerful persuader) that I ought to transport myself to South America to help write the manuscript somewhere on his 250,000 acre ranch in the terrain beyond the colonial university town of Salta (it might have been twice that much — I’ve lost count of the zeroes), lost in the north-western mists of Argentina, near the border of Peru.

It says something, I suppose, that I seriously planned on doing it.

Although I don’t speak Spanish and had never set foot in South America before.

But I ended up hanging out in Buenos Ayres.

Not a bad place to hang out, by the way.

And no, I did not live in one of Agora’s magnificent French apartments on Nuevo de Julio, but that’s another story.
Getting back to the book. Bill is a prolific author, as anyone who knows him would say. Churning out words is not a problem for him. And I believe I am not lacking in loquacity either. Of course, we could cull material from his financial columns. But this book was not really only – or even mostly – about finance. It’ s on something very central to Bill’s thinking —  “public thinking” — the kind of pseudo-thinking about big issues that dominates the newspapers.

We ended up working in a bit of a frenzy.

The result was that between late September and the end of December ‘06, while we thought we’d put together a manuscript of about 500 pages, we turned out to have been counting in single- spaced pages — which meant we actually had on our hands some 1000 pages, almost three times the length of the usual financial book.

It was, needless to say, a singularly tedious January for me…..

But, finally, we did manage to turn in the finished product right on deadline in the first week of February.

It was by then a slimmer and a more toned opus, but even then, as Bill’s good friend, contrarian guru Marc Faber asked — who would want to read a 400- page book, when most people these days think they can become informed about everything everywhere in the world from 30-second TV spots?

Good question.

But, apparently, a lot of people do. A week before hitting the stores and with the marketing just gearing up, MOBS is already #4 on Amazon (it was briefly #3) and #1 in the business/finance section. (It’s actually backed off to #5 this evening).
That means it’s up there behind Harry Potter, a story by Khaled Hosseini set in Afghanistan, a memoir of a famous rock-and-roll trifecta (George Harrison-Patty Boyd-Eric Clapton), and a book about Mother Theresa.

Saints, Sinners, War — and Magic.

We, I suppose, must classify ourselves under Money.

But I rather think there’s really a bit of everything in the book. In a skewed helter-skelter fashion.

Money, of course. The genuine kind and the dubious stuff mounting up in gigantic heaps all over the planet like industrial waste.

War, course. That’s what empires do best. And we included a full complement of would-be saints and the herd of sinners who stumble after them.

The only thing we missed was magic. Although, come to think of it, we have a dollop of that too — in the chapters about central banks and paper money.

Talk about conjuring from thin air.

Hogwarts has nothing on the Bank of Bernanke.