Tag Archives | Economy

Systems Collapse When The Irrational Is Considered Rational

Panneau_à_l'intersection_William_St_et_Wall_St

Photo: Agamisudo (CC)

Oh thank you, Wikipedia, for this definition:

“Irrationality is cognition, thinking, talking or acting without inclusion of rationality. It is more specifically described as an action or opinion given through inadequate reasoning, emotional distress, or cognitive deficiency. The term is used, usually pejoratively, to describe thinking and actions that are, or appear to be, less useful or more illogical than other more rational alternatives.”

And what about this one? Market Psychology?  This term is defined in the Investopedia this way:

“The overall sentiment or feeling that the market is experiencing at any particular time. Greed, fear, expectations and circumstances are all factors that contribute to the group’s overall investing mentality of sentiment.”

Q: What do we have when we put the two together?

A: The current madness and market mayhem.

S&P’s downgrade is being blamed for the market panic even though all the business media expected a downgrade and initially minimized its potential impact.… Read the rest

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The Trouble With Too Much Democracy

US_Government_Accountability_Office_sealIs America’s bigger problem the economic decline or it’s political decay? Andrew Potter writes in Axis of Logic:

The most telling moment of the recent standoff over talks to raise the American government’s debt ceiling came on July 22, when President Barack Obama called a press conference to announce that House Speaker John Boehner had backed out of the negotiations. “I’ve been left at the altar twice now,” Obama pouted. In case the image of the President as a jilted lover was not clear to everyone watching, he added that he had spent the previous day waiting for Boehner to return his phone calls.

The whole affair has left a lot of Americans in a state of bipartisan disgust, with citizens from all points on the political compass cursing out their elected representatives. Yet it doesn’t seem to have occurred to many people that there is something structurally flawed with a system that allows the head of just one legislative house to treat the supposed leader of the free world as his last choice for the senior prom.

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Second Recession In This ‘Double Dip’ Will Be Worse Than First

Panic1837_cropThere’s no doubt about it, the United States never really recovered from 2008’s crash and burn and the gas frantically poured on the fire by the Obama administration to “stimulate” the economy created nothing more than a spike in corporate profits that were never distributed to the people. What should we do now – start growing vegetables and stockpiling canned goods? Catherine Rampell reports on America’s dubious prospects for the New York Times:

If the economy falls back into recession, as many economists are now warning, the bloodletting could be a lot more painful than the last time around.

Given the tumult of the Great Recession, this may be hard to believe. But the economy is much weaker than it was at the outset of the last recession in December 2007, with most major measures of economic health — including jobs, incomes, output and industrial production — worse today than they were back then.

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The Political War Will Continue

partyfightAs The Dog Days Of Summer Approach, Politicians Rest Before Returning To The Fray

Now that the debt drama is over for the moment, we can all safely retreat in what was once called the “Dog Days Of Summer” and chill out if the volatile weather allows us to. We can think back to that old song, “Summer time and the living is easy.” Even as we all know that for millions “the living” is anything but.

The House and Senate have become ghost-like chambers because all its members, so filled with strident indignation and inflexible talking points just a week ago, are now off on their paid vacations hyping their political war stories to grandchildren.

Imbued with a sense of triumph, the Tea Party is huddling to come up with ongoing tactics to hold the system hostage while the party leaders plan the new “super committee” with 12 chosen acolytes (how Biblical, that number 12!) to map the next round of fiscal blood-lettering.… Read the rest

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Is Apple Holding More Cash Than The U.S.?

Photo: TheIronLion

Photo: TheIronLion

Do US companies have more money than the US government? Recent financial figures show that Apple does. Via BBC News:

Apple now has more cash to spend than the United States government.

Latest figures from the US Treasury Department show that the country has an operating cash balance of $73.7bn (£45.3bn).

Apple’s most recent financial results put its reserves at $76.4bn (£46.9bn).

The US House of Representatives is due to vote on a bill to raise the country’s debt ceiling, allowing it to borrow more money to cover spending commitments.

If it fails to extend the current limit of $14.3 trillion (£8.7tn) dollars, the federal government could find itself struggling to make payments, and risks the loss of its AAA credit rating.

[Continues at BBC News]

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Durban South Africa, Friday Night at The Movies: We Can’t Escape The Tensions Around Us

Soweto. Photo: Michael Toft Schmidt (CC)

Soweto. Photo: Michael Toft Schmidt (CC)

It’s Friday night, and the motorways are packed with cars heading for the mall. Here in Durban, the Gateway Mall is the destination of choice. It’s huge, the biggest of its kind in the Southern Hemisphere. It’s stuffed with stuff, much of it upscale, calling itself a “theater of shopping.”  (It is actually built over what was once a dump.) The parking lots are packed with late model cars, many of them high end.

I have to confess, I was invited there to see America’s latest high culture import, the 3D version of the movie Transformers 3, based on a toy and cartoon, in a modern movie complex with 18 theaters and rows and rows of packed gates where you line up for endless popcorn and soft drinks.

Business was booming; the theater was full. Most of the crowd seemed to be whites and Indians but there were also many blacks now firmly anchored in the consumer life style.… Read the rest

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Video: President Obama Says It’s ‘Time To Be A Dick’ (Parody)

With news of President Obama's frustration with the debt talks, here is a parody from Funny or Die of what Obama may really want to say. As he said about the debt talks:
"I have reached the point where I say enough," and added "I've reached my limit. This may bring my presidency down, but I will not yield on this," according to the Republican aide. After leaving the debt talks, Obama said this confirms the totality of what the American people already believe" about Washington politicians who are "too focused on positioning and political posturing." (RawStory)
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The Final Nail In The Supply Side Coffin

md_horizTaxes are low and corporate profits are high, but nothing is trickling down to the American worker.

If politicians are going to continue kowtowing to every whim of the rich, can they at least think of a new excuse? Via Salon:

The theory of supply-side economics tells us that if you cut taxes on rich people and corporations, the moguls and businessmen will take their windfall and invest it, creating jobs and accelerating the rate of economic growth. The benefits of a light hand on the upper class, therefore, will “trickle down” to the working man and woman.

Ever since Ronald Reagan first attempted to make supply-side economics a reality and proceeded to inaugurate an era of persistent government deficits and growing income inequality, it has become harder and harder to make the trickle-down argument with a straight face. But we’ve never seen anything quite like the disaster that’s playing out right now.

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The Age Of Perpetual Self-Branding

imageFacebook wants to be the place where you feel most yourself, with the most control over how you are regarded. It inextricably intertwines marketing with selfhood, so that having a self becomes an inherently commercial operation.

Writing for n+1, Rob Horning concocts a frightening, fantastic, and thought-provoking essay on how we live today, connecting the reign of “fast fashion” companies such as Forever 21, social media such as Facebook, and 21st century capitalism’s demand that workers market and reinvent themselves endlessly:

I’ve always thought that Forever 21 was a brilliant name for a fast-fashion retailer. These two words succinctly encapsulate consumerism’s mission statement: to evoke the dream of perpetual youth through constant shopping. Yet it also conjures the suffocating shabbiness of that fantasy, the permanent desperation involved in trying to achieve fashion’s impossible ideals.

Despite apparently democratizing style and empowering consumers, fast fashion in some ways constitutes a dream sector for those eager to condemn contemporary capitalism, as the companies almost systematically heighten some of its current contradictions: the exhaustion of innovative possibilities, the limits of the legal system in guaranteeing property rights, the increasing immiseration of the world workforce.

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Are Banksters Too Big To Jail?

BankUSWhy are we banking on banks to a promote economic recovery? HBO’s “Too Big To Fail” should have been about banksters “too big to jail.”

This week the financial crisis finally went prime time in the form of a big budget HBO docudrama called “Too Big To Fail.”

It was a well-acted docudrama focused on the BIG Men and some women in the banks and in government who tried to put Humpty Dumpty back together again up on that wall to prevent a total economic collapse when panic dried up credit and financial institutions faced failure.

Based on the work of a New York Times reporter, it offered a skillfully-made but conventional narrative which, like most TV shows, showcase events but miss their deeper context and background.

We heard all the explanations, save one.

There was greed, ambition, ego and money lust. There were personal rivalries and ideological battles, parochial agendas and narrow self-interest.… Read the rest

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