COLLECTIVE MADNESS
“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."
Armageddon Averted, Narrowly
ReplyDeleteWell I tell you it's something of an education to me, how little I know about these matters.
I think one should try to manage one's affairs so as to be as little exposed to such events as possible. There are too darned many connections in our modern world.
My dad told me, and I've had it confirmed by some others, that during the depression around here, hardly anyone noticed, the farms being nearly self sufficient, and there being no major industries anywhere near to go out of business.
One gets the feeling that neither of our candidates or Bush or anybody in the Congress, but only a few federal money guys had any clue as to what was happening or what to do about it.
Of course, Bird and Fortune knew the skinny.
Smaller is better.
ReplyDeleteOf course, Bird and Fortune knew the skinny.
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And they knew it already in August 2007. More than a year ago.
Yeah, like reading the future as if it's already happened.
ReplyDeleteIt is hard not to admire the way casino owner Steve Wynn reacted when Goldman Sachs volunteered their services in one of the controversies he had with legendary financier Kirk Kerkorian a couple of years ago.
ReplyDeleteWhen the GS executives arrived and cited an exorbitant figure for their services as a retainer, Wynn pressed a silent button. Six large German shepherd dogs ran into the room and fixed their open but snarling jaws on the crotches of Mr. Wynn’s visitors (regardless of gender).
This was persuasive, and the proposed Goldman retainer shrank quickly.
Conrad Black -Lessons to learn from Wall Street's week of no return
A (re)Defining Moment:
ReplyDeleteBruised by stock market losses, Americans bought houses. The mortgage industry used securitised bonds to ensure that the people who initiated the mortgage did not worry about getting paid back; risk was packaged and sold to others. This time Mr Greenspan did not just stand aside. He said repeatedly that housing was a safe investment because prices do not fall. Home owners could wait out any downturn. Is it any surprise that so many people thought if the world’s financial genius held this view it must be all right?
Even as things went completely wild, Mr Greenspan dismissed those who warned that a new bubble was emerging. It was just a case of a little “froth” in a few areas.
Later, after waiting until 2007, two years after he left office, he conceded that “froth” had been his euphemism for “bubble”.
“All the froth bubbles add up to an aggregate bubble,” he told the Financial Times.
This time, as with the equity bubble, the mistake was not to set interest rates too low; it was to stand back as wildly imprudent policies were pursued by mortgage lenders.
Indeed, any lender would have been encouraged by his words in April 2005: “Where once more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in subprime mortgage lending.” Well, he was right about the rapid growth in subprime lending.
Greenspan’s sins return to haunt us