Daily Archives: December 24, 2016

Chanos: Is a Big Change Underway in Global Capitalism?

Naked Capitalism has this very important article Chanos: Is a Big Change Underway in Global Capitalism?.

Events conspire to derail our perceptions of presidents. When we look at their platforms, we think we know where things are headed. But in modern times, the only two presidents that I can think of who really got their ideas and platforms enacted wholesale were FDR and Reagan. Everybody else has gotten compromised, or has had events overwhelm them.

This is an interview with a very perceptive investor and academic who seems uniquely able to look at reality without letting his biases interfere. He sees things quite differently (and more wisely) from most of today’s pundits.

What is particularly enlightening about this interview is both how much he knows and also how much he is aware of what he does not know.

One thing to learn here is to avoid getting all worked up about what you imagine Donald Trump will do because there is too much uncertainty about what he might do. We are just going to have to hang loose and wait for events to transpire before we will know what to do.

Why Central Bank Models Failed and How to Repair Them

Naked Capitalism has the article Why Central Bank Models Failed and How to Repair Them.

Here is what Yves Smith, who posted the article, had to say to try to make the ensuing paper more understandable to a lay audience.

This is a layperson-friendly description of why the most widely used macroeconomic model, the dynamic stochastic general equilibrium model, is lousy. Most macroeconomists will acknowledge privately that these models are reliable only over a six month horizon, when they are used over much longer time frames. Note that while each central bank has it own version, they all have the same structure and underlying assumptions.

My experience with computer simulation of differential equations helped me understand some of the points of the article. Admittedly, my understanding is hardly complete, but each little piece I can add to my understanding eventually builds into a more complete picture. If you pick up anything out of this article, have faith that it adds to what you know.

The Locust Economy

Ribbonfarm has the article The Locust Economy.

The war between the 1% and 99% seems to play out with the 1% and the 90% collaborating to prey on the 9% in the middle — the Jeffersonian middle class.

The article is rather long, but I found the writing entertaining enough to keep me interested. It is also very educational.

Ironically, my sharing this post with you is participating in the locust horde.

I don’t want to be a locust on the internet. I keep promoting the idea of how people can defend themselves from locusts like me, but they don’t seem to catch on. Perhaps one day they will wake up to how things have to change. See my previous post Monetizing Internet Content – A Working Example.

Thanks to João Geada for sharing this locust article on his Facebook page.