Walter Bagehot
"It is a far, far better thing to have a firm anchor in nonsense than to put out on the troubled seas of thought."
John Kenneth Galbraith, The Affluent Society
"Democracy is held captive, not just by money, but by ideas — the ideas that money buys."
William Greider
"As in all periods of speculation, men sought not to be persuaded by the reality of things but to find excuses for escaping into the new world of fantasy."
John Kenneth Galbraith, The Great Crash of 1929
"When the modern corporation acquires power over markets, power in the community, power over the state and power over belief, it is a political instrument, different in degree but not in kind from the state itself. To hold otherwise — to deny the political character of the modern corporation — is not merely to avoid the reality. It is to disguise the reality."
John Kenneth Galbraith, Power and the Useful Economist, 1973
"Dimon told Bloomberg TV it's possible the central bank will continue hiking rates by another 1.5 percentage points, to 7%...When members of his board ask him whether interest rates could really go that high, his answer is always 'yes,' he told Bloomberg."
Nicole Goodkind, CNN Reporter, Be prepared for 7% interest rates, warns Jamie Dimon, October 2, 2023
I watched the Bloomberg interview, several times in the course of that day. And also the subsequent interview with CNN. Dimon cautions about the potential for a recession, but is merely suggesting that rates *could* go to 7% given some improbable set of circumstances.
And he is quite correct in his estimation of the things that might cause a recession, and that is hardly an outlier opinion at all. Many have been expecting some sort of recession, including this guy here, and for many of the same reasons. It is not at all unusual for a recession to follow a period of Fed tightening the money supply. That, after all, is their purpose. They merely like to quibble about the degree. After all, rate policy is a blunt instrument, too often used to unjustly correct a financial asset bubble grown to outrageous proportion due to (self-serving from a class perspective) policy error.
But one might ask, if they have a financial mind, how likely is the Fed to increase its benchmark rate to 7% if the real economy falls into an actual recession? Even given their enduring propensity for awful forecasting and myopic nincompoopism? Have we so far retreated into our own realities, or the doublespeak of Wall Street speculation?
Many, many things are 'possible.' But much less are probable. Preparedness is good, especially flexible preparedness based on some reasonable calculation of the probability of various outcomes with flexible models for adjustment.
In fairness to CNN, the spokesmodels on financial TV has also been outright saying that 'Jamie Dimon (thinks/says/sees) rates are going to 7%.'
Rather than asking Mr. Dimon if rates *could* go to 7% would it not be more appropriate to ask him how likely such an event might be.
Jamie hedged his statements very carefully, allowing that his bank is capable of hedging against such an outcome. And I should like to think that they could, since that is the business that they are in.
But how easily we lose all concept of the nature of tail risks, in a very bipolar manner. We seem to either obsess about the merely possible, or disregard a careening approach to the abyss completely.
Has the good work of Nassim Taleb and other thinkers, as well as our own personal experience, gone completely for naught? Have we been so completely mesmerized by that duplicitous rationale that 'no one could have seen it coming', even though many people made themselves willfully blind to it, for professional purposes and convenience? That all outcomes are equally probable if we can but imagine them, or hear them on television from some clueless politician or spokesmodel?
It's easy to become too cynical these days, in the empire of lies and lawlessness.
So today we had the rally off the dire selling of yesterday, with most equity markets higher.
VIX fell quite sharply.
Gold and silver were under pressure, even as The Dollar declined.
Gold snapped back to about unchanged in the last fifteen minutes. What a surprise.
Traders are doing their usual market reaping boogie woogie ahead of the Non-Farm Payrolls report on Friday morning.
Whipping the public between fear and greed is all part of the endless wealth transfer of the wash and rinse.
People, even nominally good people in positions of nominal righteousness, can make Faustian bargains for the sake of a 'higher good.' It's one of the devil's favorite snares.
How many in the 20th century made a deal with the devil to spite Bolshevism, or even a despised liberal tolerance? How many today make similarly corrupt deals for some other higher good that they espouse in their exceptional righteousness, especially in judging others?
It's never between you and them. It's always between you and God. And he has made his will clear, for all but the hardest of hearts.
Have a pleasant evening.
