"It is easy to confuse what is with what ought to be, especially when what is has worked out in your favor."
- Tyrion Lannister
"Lannister. Baratheon. Stark. Tyrell. They're all just spokes on a wheel. This one's on top, then that's ones on top and on and on it spins, crushing those on the ground. I'm not going to stop the wheel. I'm going to break the wheel."
- Daenerys Targaryen
"The Lord of Light wants his enemies burned. The Drowned God wants them drowned. Why are all the gods such vicious cunts? Where's the God of Tits and Wine?"
- Tyrion Lannister
"The common people pray for rain, healthy children, and a summer that never ends. It is no matter to them if the high lords play their game of thrones, so long as they are left in peace. They never are."
- Jorah Mormont
"These bad people are what I'm good at. Out talking them. Out thinking them."
- Tyrion Lannister
"What happened? I think fundamentals were trumped by mechanics and, to a lesser extent, by demographics."
- Michael Barone
"If you want to know what God thinks of money, just look at the people he gave it to."
- Dorothy Parker
Wednesday, April 20, 2011
Tuesday, April 19, 2011
And the entire subject could scarcely be more of a political hot potato: most of these drafts were being written in the years of the George W. Bush tax cuts. 'There’s something very interesting about civics and selfishness, and we get to ride the crest of it. Here in the US, we expect government and law to be our conscience. Our superego, you could say ... Americans are in a way crazy. We infantilise ourselves. We don’t think of ourselves as citizens.' Or, a more WikiLeaksy approach: 'Consider ... the advantages of the dull, the arcane, the mind-numbingly complex. The IRS was one of the very first government agencies to learn that ... abstruse dullness is actually a much more effective shield than is secrecy.'
Wallace ironised the tendency, somewhat, through narrative refraction and recursion; but the problem must have worried him, and perhaps explains why he tried to interest himself in low-level fiscal bureaucrats, surely one of the least romanticisable social groupings imaginable on this earth. He may also have liked the element of self-mortification involved in this choice, or perhaps it was the challenge he found exciting: 'To function effectively in an environment that precludes everything vital and human,' he has a nameless character say at one point, 'is the key to modern life. If you are immune to boredom, there is literally nothing you cannot accomplish.'
"When the Federal Reserve gets out of the Treasury market on June 30th, the question becomes who will buy them at these yields, and I don’t know who would." Gross, incidentally, has put his money where his mouth is by making a big and very public play against Treasurys.I'd take the Fed even though Gross is a player. The Fed can print money without an ensuing wage-price inflation spiral and the US government can raise taxes very easily if it has to. There are a lot of profitable US businesses. It could even stick it to China which would hurt some politcally-connected US firms and yet benefit the national economy as a whole.
Stocks, Flows, and Pimco (Wonkish) by Krugman
... If you believe that it is obvious that rates will spike as soon as QE2 ends, you have to ask why investors aren’t moving out of US debt now in anticipation; you don’t have to believe in efficient markets to believe that totally obvious gains or losses will be anticipated.
I’d also add that if flows matter a lot -- if it’s hard to persuade investors to buy a suddenly increased quantity of newly issued Treasuries per month, as opposed to being willing to hold the total amount of Treasuries outstanding -- the big shift into budget deficits and the corresponding increase in Treasury issuance should have led to sharply rising interest rates.
And as you may recall, some people did predict just that -- and ended up not just with egg on their faces, but losing a lot of money for their investors.
So I don’t buy the notion that rates are low only because the Fed is doing QE2; if there were really a problem with the marketability of US debt, rates would be high regardless. And so I don’t expect rates to spike when QE2 ends unless there’s good economic news that gives us a reason to believe that the zero-rate policy on short-term rates will end sooner than expected.My estimation of Bill Gross just took a hit.
Monday, April 18, 2011
It is also worth noting that S&P has a horrible track record for judging credit worthiness. It rated hundreds of billions of dollars of subprime backed securities as investment grade. It also gave Lehman, Bear Stearns, and Enron top ratings right up until their collapse. Furthermore, no one was publicly fired for these extraordinary failures. Investors are aware that S&P's judgement does not mean very much.-----------------
* the US still has a AAA rating, but S&P now says the outlook is negative, or not good. They did this to Japan, but nothing ever came of it and the market allowed the Japanese government to continue to borrow at low rates.
Sunday, April 17, 2011
The first is as a coherent, if incomplete, portrayal of our age unfolding on an epic scale: a grand parable of postindustrial culture or "late capitalism," and an anguished examination of the lot of the poor (that is, white-collar) individual who finds himself caught in this system’s mesh. The setting that Wallace has chosen as his background (and foreground, and pretty much everything in between) could not be more systematic: the innards of the Internal Revenue Service -- the sheer, overwhelming heft of its protocols and procedures. If, as one of Wallace’s characters asserts, "the world of men as it exists today is a bureaucracy," then the I.R.S., "a system composed of many systems," not only represents that world but also furnishes the ultimate stage on which its moral dramas are enacted. In the words of Midwest Regional Examination Center Director DeWitt Glendenning Jr., one of the more shadowy (or pale) presences in this multicharactered and multivoiced book, "The tax code, once you get to know it, embodies all the essence of [human] life: greed, politics, power, goodness, charity."
To its own agents and enforcers, the I.R.S. even offers a role and status akin to that of the lone, righteous gunslinger in the Wild West or the caped crusader in Gotham. "Enduring tedium over real time in a confined space is what real courage is," accounting students are informed with evangelical zeal by their instructor. "To retain care and scrupulosity about each detail from within the teeming wormball of data and rule and exception and contingency which constitutes real-world accounting -- this is heroism." The proposition is comic (one of the novel’s would-be heroes practices saying "Freeze! Treasury!" in front of his mirror) but sincere as well: the instructor is a Jesuit priest, and the scene is redacted with a genuinely epiphanic air. In a universe of veiled and veiling numbers, the task of drawing the true ones out into the light and holding them up for inspection, clear and remainder-less, really is a sacred one. "Gentlemen," the instructor rounds off his sermon by saying, "you are called to account."
The problem, as I.R.S. recruits soon discover, is that neither moral nor heroic codes hold true anymore. The bulk of "The Pale King" takes place in the mid-1980s, as the Spackman Initiative is being implemented. Pure invention (as far as I can tell) on Wallace’s part, the initiative nonetheless describes an all too recognizable shift in administrative culture, with the supplanting of a public service ethos (tax enforcement is an affirmation of all citizens’ duties toward others) by a free-market one: the I.R.S. is a revenue-generating business and, as such, should audit only those returns that promise the highest yield-to-man-hour-spent-investigating ratio. Post-Spackman, the tax agency is a godless space whose commandments are simply those of the profit motive, and whose driving logic is being automated at an alarming pace thanks to emerging software. "It was frightening," writes David Wallace (a character who shares his name not only with the author but also with another David Wallace at the I.R.S., causing yet further blurring of identities and voices), "like watching an enormous machine come to consciousness and start trying to think and feel like a real human."The Power of Mockery by Kristof
The juiciest story behind the Middle East uprisings doesn’t concern Col. Muammar el-Qaddafi’s "voluptuous" Ukrainian nurse or C.I.A. bags of cash. Rather, it’s the tale of how a nonviolent revolutionary strategy crafted by Serbian students and an octogenarian American scholar came to challenge dictators in Egypt, Tunisia, Bahrain and many other countries.
This "uprising in a bottle" blueprint was developed by the Serbian youth movement, Otpor, to overthrow Slobodan Milosevic in 2000. One of Otpor’s insights was that the most effective weapon against dictators isn’t bombs or fiery speeches. It’s mockery. Otpor activists once put Milosevic’s picture on a barrel that they rolled down the street, inviting people to hit it with a bat.