Archives for category: Economy

The difference between us and the rest is that we can choose.
People – humans, that is, are capable of deciding things while the rest of the animals use simpler mechanisms of determining the way forward.

The ability to decide has consequences.
The most important being ‘responsibility’.
The most common being ‘blame’.

When confronted with ‘uncomfortable’ consequences of the decision making process, people get to choose between blame and responsibility.
Between apportioning blame – and feeling better, and determining responsibility.

I’ve long ago given up ‘blame’.
Because blame is driven by emotion. Hence blinds the blamers. Prevents them from checking all the angles. Prevents them from getting as close to the reality as possible.

Let’s go back to the current pandemic.
A large number of people have not yet been immunized against Covid -19, despite the vaccine being widely available. In certain ‘jurisdictions’…

Because each of the yet unvaccinated has chosen to pass the opportunity?
Or because so much ‘dubious’ information has been floated around that it has almost drowned the sensible voices?

Should we blame the as yet unconvinced or should we ask ourselves what’s going on in the heads of the ‘gaslighters’?

Facts are clear.

WSJ is a highly reputable source, the information is old enough – if ‘fake’ it would have already been ‘debugged’,…
Then why isn’t this being hammered down our throats? Constantly?

The vaccine which had been used was Chinese?

Let’s make the same experiment using one of ours!
It has been already done?
Let’s hear about it!

We are in the middle of a pandemic.
Which will continue until we’ll build ‘herd immunity’. Which can be achieved through vaccination or by surviving the disease. Surviving the disease takes longer and costs way more than the vaccine. Lives lost, money spent for health care and money lost because of business interruptions.
And if we don’t build herd immunity fast enough, the virus might mutate into a new one. And we’ll be back to the square one.

The only section of the society which has anything to gain from our reticence to get the vaccine is BigPharma.
They are the ones who will eventually come up with a vaccine for the new strain of virus.
They are the ones providing the treatment given to the infected patients. They are the ones providing the tests.

Want to give the finger to BigPharma?

Go out there and get the jab!

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And to provide for my family.
Earning money takes time.
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The whole thing raises a poignant question.
We have a business here.
The sporting tournaments live by selling advertising space. To do that, they need to grab our attention.
Given the insistence with which the organizers insist that the athletes have to attend the press conferences, which is the main attention grabber? The ‘athletic prowess’ itself or the ‘big talk’ that follows the actual ‘sports meeting’?

Not because I’ve noticed how easy it is to be successfull as a con-artist. If you have what it takes, of course.
Far easier than it is to be successful as a bone fide entrepreneur, for example.
No, this wasn’t exactly news.

I’ve got the blues when I realized how many people are OK with this!
Without even beeing aware of it…

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As much as I love writing, I do have to eat.
And to provide for my family.
Earning money takes time.
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If you need to dig deeper, you might want to read Aja Raden’s The Truth about Lies, 2021.

Resources, Time, Evolution.

Information, Learning, Revelation.

Opportunities, Experience, Self-Improvement.

Things, Structure, Understanding.

Limits, Interactions, Outgrowth.

Smells like The Dow Theory?
Because that was my starting point….

But we should not forget Abraham Maslow.
If you think of it, Maslow’s stages are nothing but the three thrusts up which define a bull market.
For an individual to be able to master the ‘self actualization’ phase, they need to have mustered enough resources, have had enough relevant social experience and to have ‘properly digested’ the information accumulated during the process.


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As much as I love writing, I do have to eat.
And to provide for my family.
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As much as I love writing, I do have to eat.
And to provide for my family.
Earning money takes time.
If you’d like me to write more, and on a more regular basis, hit the button.
Your contribution will be appreciated!

As much as I love writing, I do have to eat.
And to provide for my family.
Earning money takes time.
If you’d like me to write more, and on a more regular basis, hit the button.
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For a while, after WWII, many in the Eastern part of Europe were convinced that, soon, ‘the Americans will come’.
And save them from communism.

At the end of the Korean war, most of those hopes were dying away.
Whichever were still alive had been buried at the end of 1956. When the Soviets had occupied Budapest. And nobody lifted a finger…

The erstwhile hopeful had adapted to the new reality. Changed tack …
Instead of hoping that America will eventually deliver them from communism, they saved themselves. One way or another, they left their countries and pursued the American Dream in America proper.

They somehow reached those shores – welcoming shores, in those times, set to work and made it.
You see, in those times the American Dream was not as much about becoming rich as it was about becoming ‘your own man’. Being rich was considered useful, indeed, only it wasn’t seen as a goal in itself.

As to how to do it, things were crystal clear. Luck was optional while hard work was deemed essential. And, often enough for people to become convinced, things went on as expected!

‘Find what you’re good at, work hard and, sooner rather than later, your dream will come true’.

And it did. For many enough so that achieving the American Dream was considered to be the norm rather than an exception.
Maybe not for everybody. But for many enough so that Regular Joe was convinced that hard work and determination will take you places.

Is this assumption still valid today?

When so many of the well paying jobs have been exported?
When it’s far easier to make money by investing already owned capital than it is to work your way up the socio-economic ladder?

A lot of people point their finger at those who prefer to take hand-outs instead of accepting minimum wage jobs.
On the face of it, it doesn’t make much sense, does it?
No matter how generous, hand-outs will never be large enough for a comfortable life. While hard work will, eventually, take you there.
Are you sure about that? About hard work eventually taking you ‘there’? In the present conditions?

Furthermore, the former American Dream was about about giving your best before expecting Fate to reward your efforts.
Today’s mantra, ‘greed is good’, had completely altered the premises.
‘Get as much as you can, give as little as possible’ has become the new modus operandi.

What?!?

Maybe put in this way it will be easier to recognize.

Buy low, sell high.

‘Profit maximization’.

You see, using fancier words, those who prefer hand-outs to hard work do nothing but obey, intuitively, the law of the diminishing returns.

Then hand-outs should be drastically reduced!

That’s, indeed, one way of solving the problem…

Except for another ‘rule’.

You catch more flies with honey than vinegar!

But this is about ‘flies’, not ‘people’!

Yeah, right… as if people were less intelligent than flies…

You see, Henry Ford had found a way out. By dramatically increasing the ‘benefits’ extended to his workers he had managed to retain a stable work force. And, an unforeseen consequence, he had set in motion the wheels of the consumer society. The very economic set up which had made possible the fulfillment of the American Dream.

Currently, solvent demand is drying up.
Unnoticeably, for now.
For as long as credit will take up the slack, the evidence will remain under the radar.

But ‘evidence’ has the bad habit of hitting the fan.
Exactly at the worst possible moment…

It’s not necessarily a coincidence that this group of Goldman Sachs analysts chose the current moment in which to speak up, bucking the grin-and-bear-it culture.
There are a mix of factors at play: the ubiquity of social media, where the survey initially appeared; the rise of a generation more conscious of workplace toxicity and mental health; and a general sentiment of activism for equity.
The pandemic may have become a factor, too. Keenan notes that, from his experience, office camaraderie was one of the things that buoyed him through the worst days. In isolation during forced remote work, many of these tough experiences may be made even tougher, exacerbating their effects
.”

Meredith Turits, Is extreme working culture worth the big rewards?
BBC Worklife, 27th April 2021

“The Texas educational system inundates the children with the almost mythical stories of Sam Houston, Stephen F. Austin, and other Texan heroes. This perpetuates the feeling that Texans are superior to others. Social Identity Theory claims that in-group biases are a direct need to feel superior to another group. By reinforcing such ideals of Texas history at an early age, they are indirectly making Texans feel superior to other states.”

Don’t mess with Texas, Justin R.Erenkranz, retrieved on February 18, 2021

In fact, Texans are so proud of their state, and so confident in themselves, that their power grid, run by ERCOT – Electric Reliability Council of Texas, has no connections linking it to the outside world.
Yes, your eyes are OK. Texas – most of it, anyway, cannot import electric energy. No matter what!

For those who know anything about power management, this is insane.
For the rest of the people, this sounds like gibberish.

Who cares where the power comes from?!?

Until it stops coming… exactly when you need it most!

Texas produces and consumes more electricity than any other state, but it is the only state in the continental United States that runs a stand-alone electricity grid, which was designed to keep the state’s energy system independent and isolated from other markets.

‘OK. But surely, there are also other systems which are independent. And isolated. What about Hawai’i? It’s too far away to connect itself with anybody else and it’s doing just fine.’

True enough. And I can name a few more, easily. Only most of them are independent because they are isolated, not by design.
And, exactly because they are isolated, they are run with utmost care. More precautions are taken than in ‘normal’ situations.

‘Precaution’ meaning, in this case, spare capacity.
The responsible people running those systems make sure that, when push comes to shove, somebody is there to deliver the goods. The megawatts of power.

Since 2010, ERCOT’s reserve margin – the buffer between what it can produce vs. forecasted demand – has dropped to about 10% from about 20%. This has put pressure on generators during electricity demand spikes, making the grid less flexible, NERC said.

NERC stands for North American Electric Reliability Corporation. Which corporation, in December 2020, had released “a long term reliability study” maintaining that “ERCOT’s market and system operations have been successful over the last several years even as demand has continued to rise in Texas“. It was the same study which had mentioned that the grid was becoming “less flexible“….

SEC Rule 156 requires mutual funds to tell investors not to base their expectations of future results on past performance before they invest.

Oops…

Reality is an Acquired Taste.

Past performance is not… John Brown, Forbes, 2016

Maybe we need to reconsider our infatuation with ‘just in time management’.
While ‘just in time management’ maximizes profits by streamlining inventory, it works its magic only when everything goes according to plan. And the stricter the streamlining, the harsher the consequences of anything not going according to plan!

As people in Texas have just learned.

And there’s something else which bothers me ever since I’ve started writing this post.
How much sense does it make to be able to pipe oil all the way down from Canada to the refineries lining the Gulf of Texas when you end up freezing to death because you don’t have enough electricity to operate those refineries?!?

And no, I’m not making fun of the ordinary people who suffer the consequences!
This being the moment when I feel the need to remind you that the author of this blog – that’s me, tries to asses the consequences of our limited consciousness. Of the fact that none of us knows much. And, furthermore, that very few of us admit that!
Which consequences might be – as too often are, tragic.

Specially when those who are not aware that their knowledge is limited happen to be invested with critical decision power.

‘Are you nuts? or something?
Isn’t exactly this what the Europeans had been doing all over the world? For the last five centuries?
And you attempt to ‘nuance’ it?
Aren’t you ashamed of yourself?!?’

Ashamed of what some of my predecessors have done, yes!
Also ashamed of what some of my contemporaries are doing.
Right now, as opposed to back then.

And since there’s nothing to be done about the past, but to learn from it, and everything to be done about the future, right now, I’d rather have at least some of those statues still standing.

In public squares!
Maybe not in the same places, maybe not in the same settings. But still in public!
Hiding them in museums would mean taking them out of the limelight. Out of public scrutiny!
If we are to learn anything from past mistakes we must focus on them. Putting those statues aside because we feel too strongly about them would only serve those who don’t want to admit mistakes had been perpetrated. Who actually don’t want to own our past.

Those who had promoted Jim Crow legislation had erected the confederate statues as a symbol of their regained public influence.
Obliterating the statues won’t make anything suddenly right. The consequences of Jim Crow won’t disappear, as if by magic, along with the statues. They didn’t disappear when the legislation had been abolished and they won’t disappear now.
If we want to put the past behind us, we must accomplish what has to be accomplished. We need to make things right, not hide away the prickliest pieces of evidence.

Demolishing statues won’t help any of those living in still segregated neighborhoods. Won’t help the children going to heavily underfunded schools. And so on…
Demolishing statues will only help those who will certainly ask, in a few short years, if nothing changes in our hearts and minds:

What more do they want?!?

We’ve even dispatched those damn statues!!!

What next?

Crows are deemed to be the smartest birds around.

“Crows are the hominins of the bird kingdom,”
“Like our own ancestors, they evolved proportionally massive brains by increasing both their body size and brain size at the same time, with the brain size increase happening even more rapidly.”
Dr. Jeroen Smaers

Crows have also witnessed our evolution.

All life transforms its habitat.
Living things actually pass ‘segments’ of their habitat through their digestive systems. Digest them. Consume the useful components and discard the rest. And, finally, excrete whatever their metabolism had turned the useful components into. Urea and carbon dioxide, to name but a couple. For us, mammals. Other living creatures contribute something else to their environments.

The blue-green algae of yore are believed to have produced the oxygen we breathe now.
Wolf Reintroduction Changes Ecosystem in Yellowstone“.
Humans alter their ‘nesting’ places in ways sometimes detrimental to their own well being.

So, basically, we – as a society, actually ‘digest’ our planet. Our home… Our only home!

Are we happy with the results?

Are you happy with what you’ve done to your home?
To OUR home?

Two days ago, I did a very stupid thing.
I cleaned it, then I forgot to turn it back on.

A small freezer.

This morning, after throwing everything away and while washing the plastic containers, I realized – again, how much we depend on each-other.

The freezer itself was made by somebody else.
The electric current it uses comes into my home as a consequence of many people cooperating for this purpose.
The food I cooked and stashed away had been grown by an unknown number of toiling individuals and distributed, then sold, by yet another legion.
The garbage I made on this occasion will be disposed of by yet another team of hard working people.

I’m grateful to all these individuals!

All of them make my very life possible.

All of YOU, actually!

Thank you.

Happy Winter Solstice, everybody!

In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom.” Milton Friedman, 1970

Between 1776 and 1970 the world had leaped forward. Technologically, economically and socially. Not only that we’ve managed to learn so much about the world and to produce immense wealth but we’ve somehow managed to ‘spread around’ the results. The proportion of people who had improved their fortunes had grown constantly during the entire period.

The majority of Americans share in economic growth through the wages they receive for their labor, rather than through investment income. Unfortunately, many of these workers have fared poorly in recent decades. Since the early 1970s, the hourly inflation-adjusted wages received by the typical worker have barely risen, growing only 0.2% per year. In other words, though the economy has been growing, the primary way most people benefit from that growth has almost completely stalled.” Jay Shambaugh, Ryan Nunn, HBR

Isaac Newton hadn’t invented gravitation. He only ‘noticed’ it. Put it in words.
Adam Smith hadn’t invented the free market. He had noticed how it used to work and opened our eyes about it.
For what ever reasons, enough of us had chosen to close those eyes back. And have reached the conclusion that ‘greed is good’.

Milton Friedman was both horribly wrong and exactly right.

He was right in the sense that he had gouged correctly what the ‘general public’ wanted/was ready to accept. “in accordance with their desires, which generally will be to make as much money as possible

He was horribly wrong in the sense that he had perpetuated Marx’s error. Karl’s, not Groucho’s.

Money isn’t everything. Life beats it to the post.
Profit is, indeed, essential. Only it is nothing but an indicator. About how efficient a corporation is.
Meanwhile the role of a corporation is to accomplish – as Friedman himself had dully noted, the will of the shareholders.

The problem arises from the fact that ‘near mindedness’ blinds.
If/when both shareholders and management have nothing but ‘money’ in their scopes the market actually looses its freedom.

Economic agents no longer converge towards the market to solve each-others problems – like Smith had noticed, but to ‘make money’.

Not the same thing. Not by a long shot.