Sunday, March 29, 2009

This is the week, that was...

I was, earlier in the week, going to do a blast about an article that appeared in the Herald. After digging around, it became apparent that the only (at that time) other sources were Ha'aretz and the Beeb. There was no comment in Jpost, apart from one or two rather desultory letters to the Ed that skirted around... All of that seems to have gone, though the Beeb article still eads the search engine. The Jewish Weekly also has the story - for those who might be interested.

This morning, I turn to the old fav ALDaily and there is an echo of the response I posted a couple weeks back to TF's item on narcissism.

Rather than being written by a "world reknowned expert on narcissism" (the one whose only qualification is an off-the-shelf Doctorate in "Philosophy of Physics")this is from a journalist, Emily Yoffe, who has taken the time to research
This is the cultural moment of the narcissist. In a New Yorker cartoon, Roz Chast suggests a line of narcissist greeting cards ("Wow! Your Birthday's Really Close to Mine!"). John Edwards outed himself as one when forced to confess an adulterous affair. (Given his comical vanity, the deceitful way he used his marriage for his advancement, and his self-elevation as an embodiment of the common man while living in a house the size of an arena, it sounds like a pretty good diagnosis.) New York Times critic Alessandra Stanley wrote of journalists who Twitter, "it's beginning to look more like yet another gateway drug to full-blown media narcissism." And what other malady could explain the simultaneous phenomena of Blago and the Octomom?

These days, "narcissist" gets tossed around as an all-purpose insult, a description of self-aggrandizing, obnoxious behavior.

And too, can I add, as a politically charged epithet for people whose politics are somewhat different to one's preference and whose appearance is far more widely praised than one's own.

She rather spoils the line of thought with this;
A recent study titled "Leader Emergence: The Case of the Narcissistic Leader" describes how narcissists have skills and qualities—confidence, extraversion, a desire for power—that propel them into leadership roles but that when true narcissists are in charge, other aspects of their makeup—a feeling the rules don't apply to them, a need for constant stroking—can have "disastrous consequences." Yes, we're talking about you, former Illinois Gov. Rod Blagojevich. After Blagojevich was caught on tape trying to sell a Senate seat, he reveled in the opportunity to appear on talk shows, making the case that he himself was a victim—self-pity being a favorite narcissist refuge.

A line from a New York Times profile of him is as trenchant a description of narcissism as is found in most psychology textbooks: "[He] is unapologetically late to almost everything, and can treat employees with disdain, cursing and erupting in fury for failings as mundane as neglecting to have at hand at all times his preferred black Paul Mitchell hairbrush." There it all is: the sense that other people don't matter, the belief others are instruments for the narcissist's use, the self-admiration.

Well, at least she chose a valid instance.

Another of ALDaily's links led to this piece from Geoff Mulgan ; one which , I recommend, requires reading and careful thought; one which, I suggest, is in the realms of far-sighted analysis that we should see far more of in future. Yes, TF, he is a "socialist" but he does not present socialism as "the answer". He raises very valid, and to the point, questions.
The US banking system faces losses of over $3,000bn. Japan is in a depression. China is headed for zero growth. Some still hope that urgent surgery can restore the status quo. But more feel that we are at one of those rare points of inflection when nothing is the same again.

But if one dream is over, what other dreams wait in the shadows? Will capitalism adapt? Or should we be asking again one of the great questions which has animated political life for nearly two centuries: what might come after capitalism?
Only a few years ago that question had been parked, deemed about as sensible as asking what would come after electricity. Global markets had pulled China and India into their orbit, and capitalism’s triumph appeared complete, with medievalist Islam and the ragged armies that surround the G8 summits jostling to be its last enfeebled competitor. Multinational companies were said to command empires greater than most nation states, and in some accounts had won the affiliation of the masses through their brands.

Yet the lesson of capitalism itself is that nothing is permanent—“all that is solid melts into air” as Marx put it. Within capitalism there are as many forces that undermine it as there are forces that carry it forward.

His conclusion -
Capitalism’s crisis is, of course, a global one, and has shown up the limitations of the global institutions that took shape half a century ago. China is set to become a dominant player in a strengthened IMF and World Bank, followed by India and Brazil. The G20 is edging out the G8 as the club that matters. And waiting in the wings are possible new institutions to police and manage carbon, to handle everything from global migration to the regulation of biotechnology, alongside less formal institutions to help the world’s public to engage, from e-parliaments to global campaigning platforms like Awaaz, an online newspaper.

No one can know which of these possibilities will come to fruition. There are in principle an infinite number of directions social systems can take. But history suggests that at key moments evolution is highly selective. Only a few models turn out to be sustainable, with an affinity to the prevailing technologies, values and power structures.

In the first phase of the crisis the most successful claimants for support have been the big, failing (and well-connected) industries of the last era of capitalism. But the arguments are moving on—to how recovery plans can back job growth, fixing the future (as in San Francisco’s electric car infrastructures or Korea’s massive green jobs programme) rather than trying to fix the mistakes of the past. It’s not clear yet which politicians will be able to articulate a vision of a “servant capitalism” better suited to the 21st century. David Cameron has made some attempts—hard though that may sometimes be for the descendant of generations of stockbrokers. Gordon Brown is a son of the manse, but also deeply implicated in the crisis. Obama should be ideally suited to offering a new vision, yet has surrounded himself with champions of the very system that now appears to be crumbling.

The result is that a large political space is opening up. In the short run it is being filled with anger, fear and confusion. In the longer run it may be filled with a new vision of capitalism, and its relationship to both society and ecology, a vision that will be clearer about what we want to grow and what we don’t. Democracies have in the past repeatedly tamed, guided and revived capitalism. They have prevented the sale of people, of votes, public offices, children’s labour and body organs, and they have enforced rights and rules, while also pouring resources in to meet capitalism’s need for science and skills, and it has been out of this mix of conflict and co-operation that the world has achieved the extraordinary progress of the last century.

To discover what comes next, maybe we should look upwards. Skylines provide the simplest test of what a society values, and where its surpluses are controlled. A few centuries ago the greatest buildings in the world’s cities were forts, churches and temples; then for a time they became palaces. Briefly in the 19th century civic buildings, railway stations and museums overshadowed them. And then in the late 20th century everywhere they were banks. Few believe that they will be for much longer. But what will come next—great leisure palaces and sports stadiums; universities and art galleries; water towers and hanging gardens; or perhaps biotech empires? We need to rekindle our capacity to imagine, and to see through the still-gathering storm to what lies beyond.

At which point I want to return to the Emily Yoffe piece, and her conclusion.
If the observers who say that part of our economic troubles result from a mass case of narcissism, from consumers who thought they should have the house of their dreams financed on bad debt to bankers who thought they deserved eight-figure bonuses for packaging that bad debt, then perhaps we are about to be cured. Twenge and Campbell point out that the 1920s was a narcissistic era whose economic collapse led to the Great Depression and the greatest generation. Perhaps it's time to dig out those Depression-era recipes for humble pie.

Humble pie that should first be served in the Middle East.

Saturday, March 21, 2009

What can I say?

One might remember from last year the fulminating over the totally ridiculous, unilateral, and idiotic little piece of legislation dreamed up by Auntie Helen; the one that masqueraded under the title of the "Electoral Finance Act". As a piece of political suicide it was perfect.

It does, however, have its humourous side. I missed this one, my wife drew it to my attention, so it must have been a particularly bad day for me...

Thanks to the Herald for the photo, taken without permission...

The story is that Mr Green is an operatic singer, a teacher of music, politically active, and a member of the Green Party. His hedge, in its sculptured form, has been there for some years. But that did not stop some little minded idiot from referring it to the Electoral Commission as an illegal electoral advertisement.
Faced with ruling on the somewhat bizarre case of a green hedge pruned by a Green Party member called Mr Green, the Electoral Commission has, for want of a better word, hedged its findings.

The commission has made no determination on a pre-election complaint from a member of the public that the hedge on the Auckland property of opera singer Richard Green constituted an election advertisement under the since defunct Electoral Finance Act.
His hedge is no ordinary hedge. He has pruned it to display the word "Green" in two-metre high letters - something the singing teacher says he has done for the past eight years to make it easier for students to find his house on what is a busy street.

Friday, March 20, 2009

Food time!!!

The Teflonman has put out one of his recipes which (if I leave out the cranberries, perhaps replace them with fresh apricot slices) sounds like a very nice piece of pork belly.

It raises the thought -


Get up, make an extra cup of green tea and infuse with mint (I used a green tea and mint teabag) then leave to cool for a while. Have breakfast.

Pour tea into a small casserole. Add 1 minced clove of garlic, a sprig of rosemary, salt and pepper to taste to the cold tea. Four lamb steaks (I used leg steaks which are taken from the outside of the leg). The liquid should cover the steaks.

Leave in the fridge until you get home from work.

Heat oven to 180C. Cook for 40 minutes. Serve on rice with greens.

Sunday, March 15, 2009

Babes in the international economic wood...

Back in November I put together a few thoughts that came out of the weekend papers while I was toasting the toes in the balmy and relaxed atmosphere of the Hokianga.

One of the lines of thought in that echoed comment that I have left with a number of people over the past year or so, to the effect that the economic power and influence of the US will as a result of the present "global correction" wane and be replaced by the likes of China and India.

So, the WSJ features the damage control reaction to Wen Jiabao's rather blunt scepticism of the worth of US bonds.
The Obama administration rejected China's concerns that its vast holdings of U.S. assets might be unsafe, in an unusual diplomatic exchange that underscored the global importance and the potential fragility of the Sino-U.S. economic relationship.

In a coordinated response to blunt comments from Chinese Premier Wen Jiabao, White House officials said Friday that Mr. Obama intends to return the country to fiscal prudence once the crisis passes.

"There's no safer investment in the world than in the United States," said presidential spokesman Robert Gibbs.

That view was reiterated by the president's chief economic adviser, Lawrence Summers, who defended record U.S. deficit spending as a salve to the nation's economic woes. "If you don't prime the pump and you allow the processes of decay and decline and de-leveraging to continue, it's much more costly to do it later," he said.

Which is what the US (under the new administration) has been doing.

But the meat is here -
In late January, Mr. Wen squarely blamed the U.S.-led financial system for the world's deepening economic slump. Chinese leaders have felt bruised by some badly performing U.S. investments they thought were safe, including holdings in mortgage giants Fannie Mae and Freddie Mac, Morgan Stanley and the collapsed Reserve Primary Fund, the money-market fund that "broke the buck" in September as a result of the Lehman collapse. China, which for years was the largest foreign investor in bonds from Fannie Mae and Freddie Mac, has trimmed back its holdings of that debt.

The premier's comments were unusually pointed and raised the possibility that Beijing's appetite for U.S. debt could wane. In the worst-case scenario, a significant new aversion to U.S. investments could drive down the dollar and drive up interest rates, worsening the U.S. recession. Mr. Wen indicated China wouldn't be rash in making changes to its $1.946 trillion stockpile of foreign reserves. While China is looking out for its own interests, it will "at the same time also take international financial stability into consideration, because the two are inter-related," he said.

The Obama administration has been working to ease tensions with Beijing after Treasury Secretary Timothy Geithner, during his confirmation process, accused Beijing of manipulating its currency to gain a trade advantage over U.S. companies. Since then, Obama officials have been at pains to praise China's purchase of Treasurys and its efforts to stimulate domestic economic growth.

As one might expect, there is a fair bit of politiking going on in the background. Read the whole thing. What is certain is that a man in Wen's position does not say anything without reason.

In the simple offer of humanity...

Taking my weekly wade through WSJ turned this -

The U.S. has complained to Israel over the holdup of aid shipments to Gaza of items as basic as jam, toothpaste and toilet paper, which U.S. officials say are being frequently trapped amid an erratic decision-making process.

Howard Sumka, mission director for the United States Agency for International Development in the Palestinian territories, said senior diplomats have had to intervene with Israeli authorities, and aid workers have had to repack shipments to meet changing criteria of what qualifies as vital humanitarian aid. He said the situation hasn't improved despite U.S. efforts.

A spokesman for Israel's Ministry of Defense, Peter Lerner, said humanitarian aid is getting into Gaza every day, including 110 aid trucks on Thursday.

But he acknowledged disagreements with donor countries and aid groups over what counted as humanitarian aid. "There may be differences between what we consider basic food commodities and what the various governments and aid organizations want to bring in," said Mr. Lerner. "That's where the question marks are being raised."

On Thursday, Israel rejected a shipment of 960 boxes of tuna, canned meat, diapers, wet wipes, sterile gauze, blankets and candles, along with 184 boxes of flashlights, Mr. Sumka said. A week earlier Israel had approved the shipment, but reversed the decision Wednesday evening, he said. "When you're dealing with that kind of uncertainty it makes it hard for us to plan, it creates inefficiencies and it certainly makes it more costly to deliver the assistance," said Mr. Sumka.

Now I know that the response from many will be that Israel owes nothing to Gaza, that they are implacable enemies and all of the rest of it so "...why should they help?"

Well, in my naive simplicity, my response would be "Out of simple humanity." Forget every other "consideration" (read "excuse for not helping"), or the attribution of fault. The numbers of Gaza residents who constitute the active members of Hamas (and any other of the various criminal groups) might reach 30% (up from 10% over the past year). I have no way of knowing that truth. The fact is that a very sizeable proportion of Gaza's population are the innocents; the children for a start, and the majority of women.

That it is the deliverers of American aid that are having the problems and complaining should add some weight.

What seems to be coming through is that the Israelis are doing nothing "wrong", as such. In the same way as they never have done anything "wrong". They are just making sure that nothing goes "right" either. They have no desire to make things easy, or right, or even be helpful.

Sunday, March 01, 2009

How the banking system works... 2

Courtesy of todays Sunday Star Times we have yet another example of the BSC (Banking System Crisis, or is it really BS Crisis?) and the kind of operation being run by many of the banking institutions.

AN ELDERLY grandmother with no known assets or income was lent $4 million by a mortgage fund company chaired by former prime minister Jim Bolger a transaction now under investigation by the Serious Fraud Office.

Mortgage documents obtained by the Sunday Star-Times show that Trustees Executors, a trust company chaired by Bolger, advanced $4m to Maria de Magalhaes, a 73-year-old Portuguese speaker originally from Mozambique, who was only in the country on a visitor's visa.

After explaining that the $4M loan is part of a total of $33M lent to a “property developer”, SST comes up with this very brief paragraph.

Sources dealing with the fallout of the saga say it raises serious questions about the lending practices of Trustee Executors. The money was part of the $242m Tower MortgagePlus fund, administered by Trustees Executors and frozen last April. More than 5000 investors had savings tied up in the "low-risk" fund, of which about 40% has been returned.

For more on the Tower saga, you can read up here, but the primary statements are –
Tower said the NZ$242 million TOWER Mortgage Plus fund, which is owned and issued by Trustees Executors, will shut after a surge in redemption requests and a jump in the proportion of mortgages in arrears to 9.1 per cent.

The Trustees Executors-owned 1st Mortgage Fund, branded TOWER Mortgage Plus, was being wound up, Tower Investments Chief Executive Sam Stubbs said. The fund lent on a diversified portfolio of residential and commercial first mortgages and was no longer relevant given heavy competition from banks, Stubbs said.

“Given heavy competition from banks”? Given that it seems over 13% of their total assets have gone down just one drain, I would hold little hope for a good part of the remainder.

But that is not the major point...

The bulk of the investments in the Fund (in TMP) were in the “low risk fund”. Let’s just think about that for a moment.

I have my super (401k equivalent) in a “cash and low risk” category. From that I expect to earn no more than about 3% nett of tax in a good year. On the other side of the ledger, I don’t expect to earn less than 1% nett of tax in a bad year.

It seems that if the same expectations apply to TMP, we can start with a mortgage interest rate of (say) 7%. Take out “expenses and administration” at 0.5% (not unreasonable for keeping a computer account straight). Take out tax at 35% and we get 4.5% ROI. So the bank is paying me 3% for their “good year”. Who is getting the other 1.5%??

The same calculation from a savings bank interest rate of 5% (not too high for a good year) we get a ROI of 3.2%; very much in line with the actual return.

So, there is a matter of Trust involved here.

Personally, I do not think that the investment policies of TMP and many of the other superannuation and unit investment funds have ever been any different. What is going to emerge from the ashes of TMP will be some very questionable investment decisions by all manner of people from Board on downward. Investment decisions that are all driven by the pursuit of personal wealth, rather than the benefit of the investors for whom they are purportedly supposed to be acting. High returns for the Company, means high bonuses at the end of the year....

And, I most sincerely hope, there will be some very high heads in many of the other "investment funds" who will losing significant amounts of sleep over the next few months until they are sure that their own patchs are cleaned and seemingly kosher. The shredders will be running...