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Monthly Archives: October 2012

Paralysis

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“It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.”
– Franklin Delano Roosevelt

One of the key features of the time we live in is paralysis.  Uncertainty creates risk aversion, since risk is much more difficult to calculate.   After a few years living like this and people start to live day to day.  It eventually becomes “survival mode” when tomorrow becomes very difficult to imagine.  The result is nothing – and that often comes even when one person is calling the shots, let alone a system based on consensus among many.

The evidence is all around us that something unusual is happening.  Change is coming faster and in ways that are not often talked about adequately.  The economy is not simply recovering the way it has after any other post-war recession.  What should we do?  FDR had it right – try something and see if it works.  If that goes against every instinct you have right now, you’re not alone.  But let’s see if we can convince you that there are, in fact, some things that point to very different actions than we’re all used to.

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Singularity

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Imagine you are in a space ship hurtling toward a black hole.  You might try to turn the ship around and fire the engines full force.  The problem is that the blast from your engines only adds mass to the black hole, making its gravitational pull even harder.  What do you do?  Fire the engines harder to try to hit escape velocity?

That may sound like a silly analogy for our ecnonomy, and it is definitely far from complete.  But as the brilliant John Mauldin discusses in his “Thoughts From the Frontline”, the black hole of debt is posing some very unusual economic problems.  This “singularity” is, simply put, a place where the normal equations that describe the universe of economics no longer apply.  What can we do when everything we know no longer works?

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Housing Boom?

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Are you ready for a new housing boom?  It’s OK, I thought you might need a chuckle today.  But there are some analysts who seriously expect housing to lead the economy out of the slump of the last five years … much as it showed the way into this mess in the first place.  It’s probably overstating the upside dramatically, but there are signs of recovery or at least stability in the housing market overall.  It’s uneven and just starting, but this may be the latest sign that we are, in fact, more or less at the bottom right now and starting to turn up.

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One Hell of a Show

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Another repeat, but today is a bizzy day.  Besides, Week 6 is just starting …

Football is the most intellectual of all the major sports in the USofA.  Go ahead, laugh, but it’s true.  All those breaks between plays are more than time for wagging commentary and the occasional Bud commercial, they are a chance for the coach to send in a play that one side will attempt to execute while the other tries to foil it.  Raw athletic ability is often thwarted by a clever plan or a quick wit that sees past it.  Amid the changing fronts of trench warfare that form the game, a good General is what it takes to win.

But there’s a lot more to football than that.  What we’ve learned from the NFL in particular is how important it is to set up a system where everyone has a chance and the rules are evenly enforced.  It’s America at its best.

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A Guy Can Dream

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The Presidential election is tightening.  That’s only to be expected as we get closer, especially through the debate weeks.  It was predicted here that Romney simply showing up and looking like a human would give him a bounce after weeks of demonizing, and he did better than that.  Obama will have to find his A-Game to seal this thing.

But it is still Obama’s to lose.  The “toss-up” states are nearly all ones that Romney should be ahead in already, and he will have to win almost all of them to pull this thing out.  The big money is going to continue to flee his campaign and look to the more interesting races, particularly for the US House.

The race for the House is very close by the only measure we have, the Generic Congressional Ballot.  That could make for something very interesting this January no matter which party manages to pull it out.  In a big world of speculation this is worth thinking through.

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