Anarchists

Not surprised by anarchist embassy bombings. Wonder where this is going. A return of the violent left in Europe?

Modernity

Currently reading The Post American World by Fareed Zakaria. An interesting and quick read. I am, however, struck by the use of the term modernity. It is used as a description of the current level of development and to have some import as distinct from past world views. As if each preceeding age didn't see itself as modern and the culmination of what went before it. To future generations, the description in a few decades/centuries may seem to make us into self absorbed adolescents rather than adults.

Primary Day

UPDATE

My predictions were slapdash and incomplete, such as Arkansas run off potential etc. But lets check the update. Paul wins 59-35. Democrat and Republican turnout about even as a percentage of registered voters.

Predictions

Pennsylvania - Sestak beats Spector by 4 points, Critz beats Burns by 2 points
Arkansas - Lincoln beats Halter by 3 points
Kentucky - Paul beats Grayson by 6 points

Lets see how it turns out tonight

It's All Situational

Quote from CNN

In the CNN interview, Papandreou said many in the international community have engaged in “Greek bashing” and find it easy “to scapegoat Greece.” He said Greeks “are a hard-working people. We are a proud people.”

“We have made our mistakes,” Papandreou said. “We are living up to this responsibility. But at the same time, give us a chance. We’ll show you.”


This is very true, the Greeks are exceptionally hard working people. Unfortunately this generalization only applies to Greeks outside of Greece.

Some Practical Advice

As I watch the rioting unfold around the world and recall my own experiences of Los Angeles '92, a few thoughts come to mind. Many people will complain about the "socialist masses coming for their stuff" and think that as gun totin' self preservationists they will take out the M4 and retreat to the sandbagged breakfast nook to hold off the mobs.

Some practical advice. Make your home uninviting in the sense that people don't notice it, also most mobs don't rampage through the suburbs. You will most likely find yourself in the midst of the mayhem by accident. When a crowd gathers and they have masks and are scooping up bricks leave before the mayhem starts. If you are carrying and feel that things are going badly don't think you can "enlist" on the spot and help the authorities. They will shoot you first before you can explain that you are on their side. If you have to take out the gun for protection then take it out only when you are sure that you will have to shoot. If you have to shoot then fire and immediately move away towards an exit from the situation. Most people will scatter when shooting starts, use the confusion to your advantage and leave the area.

Volatility

Volatility is getting wild. I'm very concerned about the increasing violence in Thailand. The King may be all that's holding the place together and he can't live forever. The further problem is that the conflict seems to lack any sort of ideology (at least discernable to my Western understanding). I'm watching closely.

Bailout Success?

Almost $1 trillion thrown at Greece. Now the question is whether they will bite the bullet there and take austerity steps to bring long term budget trends into a sustainable path. I see the crowds are hitting the streets again.

On a domestic note, I think the anti-incumbency is very real. However, we still see some outlier type situations that are too easy to generalize. Sen. Bennett (R-UT) is a mainstream Republican who suffered a fringe nominating process, Rep. Al Mollohan (D-WV) was wrapped up in earmarks scandals, otherwise we haven't seen the pure incumbent anger play yet. The Kentucky primary with Trey Grayson and Rand Paul may show whether the strength of the angry roots is real. However, again we are not yet talking about a "pure" incumbent getting the ax. Don't get me wrong, I think it is entirely within the realm of possibility.

One more thing. What is this recent phenomenon of the silver sales people jumping on the gold bandwagon. Gold and silver are completely different metals. Does no one remember the great debates of the 19th century monetary policy? Gold based currency holds value and favors creditors. Silver is abundant and inflationary (you can mine much more than gold) and favors debtors. Outrageous.

China Trouble Foretold

China's economic health is looming on the horizon as a concern. A housing bubble combined with an undervalued currency is my longterm concern for the Chinese economy. The question I have is where is the income going from China's economic grownth. Is the man on the street feeling more economic benefit or just a strong nationalistic sense. The Chinese have done a great job at maintaining stability in the face of a lot of real social challenges. My concern is that any rocking of the economic boat can unleash some real trouble. Particularly the second class citizen system that segregates rural from urban.

The International Monetary Fund and the Greek Bailout

My equities buying decision of last week now seems wise. At least for the first hour of trading. One dynamic of the Greek bailout that I didn't see coming was the FOX news attack. Already this morning we had a commentator describing the IMF involvement in the Greek bailout as putting the US taxpayer on the hook for the cost. I had to scratch my head at that one. IMF assistance is primarily advisory with some lending (not grant) to the affected country. If there is interest I can get into the details of the mechanics of Special Drawing Rights, etc and how the IMF works.

What is of concern is the FOX news attitude of whatever happens around the world is immediately politicized through their lenses. It will, I'm sure, rile some people up to demand that Greece be allowed to fail. Damn the consequences. Is there a masochistic streak in these FOX Republicans? I know they were spending some RNC money on bondage clubs, but come on...

Look, I've never been a big fan of the Greeks and their economic system. It combines an incredible sense of socialistic entitlement with absolute focus on self enrichment at the expense of their countrymen. If you are committed to the "European social model" then PAY YOUR TAXES.

Electronic Madness

With the stock market drop Thursday due to electronic mechanism not market sentiment I feel a little vindicated in my Friday buying. Unless?

On a side note, the sadest story of Greece must be the deaths of the three bank employees in the fire last week. These weren't the real bankers of popular pitchfork based mythology. They were the tellers and clerks trying to make a living. I think next time I'd fire real bullets into that crowd (made up in part of overprivileged students) if I'm a riot policeman living on low wages (and probably looking at a pay cut himself).

Stock Market Meltdown

900 point drop. I think its time to buy. A jobless recovery means better margins and higher profits. Unless it all goes up in smoke.

New Jersey

Gov. Chris Christie, the man who is loved (in a manly way I am sure) by Rush Limbaugh, has declared a full frontal assault on the New Jersey tax and budger equation. Declaring a fiscal emergency, he has taken on public sector wages and benefits with a vengeance born of a man who has waited too long at the DMV line.

Buffet line is another story. Yes, a cheap shot but I haven't had breakfast yet.

His plan to freeze teachers's wages, require a healthcare contribution, and reduce school budgets is the first shot. Probably about a 5% cut according to what I read. This has led to a decline in his approval ratings of nine points to 43%.

In the great hype over the meaning of the 2009 elections in New Jersey and Virginia, people forget that Christie won a three way race for Governor with a total vote of about 48.5%. This was against Governor Corzine, a Goldman Sachs alumni. Granted this was before the recent Goldman Sachs bad press, but still at the height of the backlash against Wall Street bailouts. My point is that a 43% approval rating compared to what he took in the general election (I know not perfectly comparable, but it gives a sense of who's on which side) is not terrible.

I wonder what the reaction will be. Public employees seem to have a good run in New Jersey. Average citizen probably hasn't had the best services. The wealthiest public schools in New Jersey have almost zero poor students. Not a small percentage, but in many cases not a single poor student. Compared with private school tuition that is a pretty good government benefit. Assuming that wealth of students is a good surrogate for quality. Not an off the wall assumption.

So who will be in the streets of Trenton and Bergen?

Greek Contagion

As we watch the rioting in Athens, it raises the question - what if we can't get what we want?

Living beyond your means can't go on forever. Either individually or as a government. Borrowing from savers abroad propped up a generous "welfare" state (I like the term "benefits" state, but whatever) now the savers are getting scared and don't want to lend anymore. That means taxes have to go up to pay them back for the past loans and reduced benefits in the here and now. If you have a lot of government employees that means wage and pension cuts.

The tough part to come to grips with is the realization that you didn't actually produce enough in your capitalist system to really merit the lifestyle you led (or were led into leading). This causes some angst. What do I do now? This is not what I expected. Who is to blame? Who benefitted more than me that I can blame? Etc.

I wonder how each of us would react. If you believe its all about your own effort and bootstraps, you will be angry at others for free riding. If you think society/government has some collective responsibilities, you will still be angy that it is failing you. So the default position will be anger at someone. Being smart enough to see that neither world view is exactly on spot is a rare condition. And who wants to believe that there is no consistent workable worldview anyway?

I think I may continue to buy US assets, stocks, etc in the pension fund. But I have no illusion that any of these assets are "real". They only have value if everyone (or most everyone) plays along.

I think its also good to work out in troubled times. If you can't control things around you, at least you can try to squeeze out one more rep or shave a few seconds off your best time.

We shall see.