My Blogs related to our society may start as a provocative caricatured problem analysis with nevertheless the hope to collect feedback so that I can progressively enrich the analysis with your input. They will then get a new version increment.
After a problem analysis, a complementary blog with proposals will follow, according to the same procedure.
I expect contradictory viewpoints but for them being considered in my consolidation effort they should be more than an emotional rejection or acceptation.
The underlying philosophy I follow is a scientific one (not easy in social/political/economical matters; social experiments are indeed reserved to churches and to secret agency) where theories are falsifiable (which can be verified as erroneous through a wide agreement on experiments contradicting forecasts from the theory) (K. Popper). Science is indeed the single philosophy which evolves by challenging its current belief.
Religions are its contrary and the most conservative ones are the monotheist ones versus the polytheist ones that have less to loose when one of their gods gets neglected. Human being have been obliged to invent gods to keep themselves more quiet, having to face a frightening unexplainable nature. Religion and Churches emerged as an alternative power to brute force when the needs for this one started to decline. And monotheism facilitates taking over and mainly keeping the power (otherwise, somebody else may come with a new more attractive god much more easily).
Mysticism is the glueware between honest scientists and believers. If you are surprised by this statement, you are probably the victim of the tedious cold way with which science and mathematics are taught, forgetting that science grows with the discoveries made by people with a (quasi mystic) vision, seeing beauty in the patterns they discover and willing to share that with the world. The discovery process experienced by real scientists and artists is also made of suffering for some instants of ecstasy (as real religious or social leaders or great warriors).
To understand the society, you should know and understand Machiavelli who claimed "the power corrupts, the absolute power absolutely corrupts". Searching to whom the crime profits or adopting as principle: "privatisation of the profits, collectivisation of the lost" will help you too.
Th one who profit are somewhere in the 5% BI, paid by the 83% GS that have to remain very quiet:(regularly remember them to abandon their pride to authorities, educate them to be quickly fitting a job with a salary to keep their nose just above water while avoiding to awake any form of mind to criticise what they observe, promote a star system to let them dream, send them to war if you can, let them becoming addict to anything (legal or not), make them afraid for their health, give them sex or reality shows for free,...)
It is also an evolutionary one (S. Kauffman and I. Prigogine are here my mentors) where competition and co-operation are balanced. It is also an agnostic one.
Respecting life, thus diversity, is probably my single holy belief (where I'm somewhat mystical) but within a global context. (I come back at the end on this)
Now, unfortunately, I estimate that 2% of the worldwide population is made of people understanding this vision with the necessary ethic to fairly use their capabilities while respecting it (the GI quadrant); the BI quadrant is 5% and leads the world for their own power; the GS quadrant is 83% and abandons their autonomy to the BI quadrant; the remaining 10% (the BS) allows the BI to keep the GS busy for their safety.
Common sense is also a blessing but also a vanishing capability in the mankind. If common sense is defined by "what nobody knows, everybody knows" which is a statistical result called the law of the big numbers. It is declining because the average citizen (the 83% GS) is now brainwashed by the deadly triad: Finance - Media/advertising -Government/education and so common sense is progressively replaced by flattening the behaviors and minds with consumption as palliative.
Partisan of the theory of evolution believe that nature is auto-regulated (but not necessarily progressing, only adapting. So, if the mankind is natural, why taking care? Is the mankind forming a natural specie, stabilizing itself at the edge of chaos with other species? We are obviously the dominant mammal specie (all others are vanishing at a rate of 20 by century in progress) and we are the unique specie breaking down the dogma of biology leading to the so-called egocentric genome due to our capability to teach our children with our accumulated know-how so that their brain can control their genome.
We have thus the responsibility to preserve our capacity of adaptation and to keep this possible unique thing we are in the universe. We need to put back our long-term survival in the heart of our concerns and therefore to propose mankind-wide projects to see again something else than $ in the eyes of our children, to comeback to the time of the dreams.
Is this not an utopia? yes, it is! But is there a more attractive road to the future? No. IS it feasible? let's try we will see! Going dead is indeed more easily reachable. What is the most easy? to become stronger than your neighbors and defeat them or to be stronger today than you were yesterday? If you go to the budo to learn how to beat the others on street, a good teacher will disgust you because its exercises am to make you better than before and to respect the others. Were are the greatest rewards? the one you get when you reach the top of a mountain when you believed it was at the limits of your capabilities. And how easy it is to share that feeling with others having made the same experience and to feel again that feeling invading you.
But wait a minute! You are not going to let me believe that an ultimate truth is thinkable in human matter? No, indeed; this is impossible to obtain it, only to come day by day closer to it, and you will not see the time passing.
OK guy, but think deeper! You want we spend time to reach a better solution on a problem like voluntary abortion or euthanasia? But is it not a paradox to have a general law to regulate something which is best avoided? Yes, it is. But having though on such problems and formulating what you have learned to teach it to other will put you in a better situation to evaluate any particular case with is always different than another and help the people deciding /propose the least worst solution for all parties involved.
That's why we have a brain? To learn and understand a theory and be prepared to find a solution in a practical situation. Buy learning to apply recipes, you miss the point. For understanding, you must try hard and suffer until you get this aha! effect and then you will even become an expert, possibly proposing new breakthrough and experiencing by yourself the passion of discovering. We are in a (lack of ) culture where not understanding results from bad explanation. It is the biggest fallacy of our educational systems. Understanding is yours and it is your responsibility to find appropriate assistance for progressing. Even better, if you just understand that, the remaining is just a question of your motivation; and the best way to get a motivation is not to have your ass in the butter for the remaining of your life. I conclude with R.Feymann, Nobel prize of physics, reputed as the best teacher of quantum mechanic, who after 3 years teaching wrote " the students understanding quantum mechanics don't really need me but the ones needing me have never understood quantum mechanics".
That's folks! It's time to awake. (Dune, F. Herbert)
Tuesday, April 28, 2009
Monday, April 13, 2009
do the G20 really want to solve the financial crisis?
I'm finally happy to see the acceptation by the most major governments that this neo-liberalism
claiming for a sustained growth and spontaneous auto-regulation is a complete absurdity in an finite planet। Of course, if money is becoming an abstraction, producing money is then free lunch.
Sometimes, I think money really became an abstraction: when you see the amount of money governments claim to have provided to the market to solve the crisis coming from the "sub primes". Let's make some back-envelop computation on the sub primes:
1) 7 Mio US families were involved from which 2 Mio are now on street
2) average cost of a house: 350,000$ (rather high as average)
3) probably the banks don't completely deliver the required money to all (we will ignore this)
4) the 2 Mio families now on street paid back a small part of their loan (also ignored) but the banks recover that house (let's also ignore the unfinished houses) and now are trying to sell them
with an expected lost.
5) banks package these credits with other assets and sell that to other investors (banks mostly)
(we will ignore that because this money remains in the financial world except an unknown part)
The maximum maximorum lost value (number of families on street * house price)is thus 700 Bio $ (that will probably be recovered by the banks in the next 5 years at 75%). The only money that will finally vanish from the financial world is thus the depreciation's of these houses.
Globally, the governments have already promised to the banks more than 4,000 Bio$ (on the news at 2009/04/22) and at least 7 Mio people have lost their jobs (not the bank managers, they form a very big "family" where solidarity is real (the price of silence, maybe!)).
Where is going the profit (3,300 Bio$) of the crime? It is easy to understand why the banks managers get so high bonus।
Other explanations are:
1) banks overestimate the toxic assets they kept (actually, they don't know how much toxic they have because the complexity of tracking all of them to finally estimate the risks without common practice in that matter(I presume!) )
2) this is the bank's interest to augment the risks (more money from state, lower interest rate they have to pay to the central banks and to us, good pretext to not distribute dividend without taking the responsibility)
3) they are other affairs which have been accumulated and not coming from the sub-primes (fraud,..)
... and sorry I'm not going to search them... meaning that this last critic is not sustainable but it remains my conviction that my analysis is correct.
Are the banks now helping with that money the economical players as intended by the governments? Not really! The banks were the first to realize (15 years ago) that there is much less risk in the mass market (consumer market) than in sustaining technology investment in economy. ING recently communicates it will sell some of its assets to focus on credit to consumption and life insurances (however, this might be my filter applied on their real communication). Are the banks going to change their mind? surely not at short term because now they have the financial crisis as pretext.
Is it possible that all people of all governments are unaware of that? No way! Actually, they reveal their understanding by claiming that finance has to be regulated.
But do they understand they give money just to cover the eventual short term liquidity needs of long term winners? Probably as much as the bank managers know really what is their situation! No thus.
Is it more than a panic from unaware people? Probably not. (a possible solution is stopping to put unaware people at the leading of companies and countries!)
But we are in a democracy, isn't it? Thus while respecting the laws, we are all free. So, why then unaware people could choose in favor of what aware people are saying while they better understand what other unaware people are advising them to do? We might avoid that by (permanent) education! But education is also declining, and not by hazard!). But then, obligatory education to hope reducing the lack of awareness of all our empowered managers!
Fortunately, now the value of the $ is not covered by the value of the gold anymore but the $ is covering the value of all other moneys (sic!). (As an exercise, try to understand why USA is not bankrupted and why when Wall Street gets a cold, the world is out of breath!)
Money is thus really a pure abstraction with a culturally enforced value, mainly due to the media (with broadcast in 1st position by far (see M Mc Luhan)) , living from advertising and government subventions. And Finance is the only truly globalized activity (there is more money exchange by computed network in one day than they are money in the world! Reason why President Bush pushes the firemen, without breathing protection, to erase the effects of 11 September by restoring ASAP the Wall Street operations?).
All people having ever organized something know that there are prerequisites to every organization: Tasks are defined and assigned to functions, internal and mainly information flows are needed for Task being executed, people are designated to fulfill these functions and executing their tasks; for the external information flows, laws are needed because nobody will spontaneously give away his information for being controlled.
Do our government know that? Of course, they know! Probably, not all politician, but at that level, they know, for sure.
But did you hear a single world on how they want to regulate the finance?
Oh yes, they designated the fiscal paradises... but a few of them located in USA (Delaware,...) and UK (New Jersey,..) : a good start indeed! The "protestant" based government probably obtain that compensation in exchange of a promise of regulation of finance.
The banks (and insurances, which differences between them today? also something to regulate!) are designated as the devils. Not a single word on the role played by the stock exchanges!
But why the companies are out of controls?
1) by nature, a multinational firm escapes any government regulation
2) where is the authority performing a larger scale regulation?..??...???
3) if there are international regulations, who is controlling their respects? what are the penalties?
(it is the reason why Belgium is one of the greatest fiscal paradise: there is a regulation and an authority forbidding the control of the regulation for international companies)
4) US accounting is not used for taxation so that why not booking in your year results, result expectations of next years, Fe? Also a topic for worldwide regulation!
5) once a firm is noted on the stock exchange, its focus becomes communication for the finance consumers while their core business is becoming a background issue; from there a growing irresponsibility from the top managers of noted companies.
6) when a company is not in the financial sector, their board is mostly composed of financial people, chiefly when noted but not only, because a) the focus is put on the consumption market which live from credit and b) production & distribution must follow and new investment are required.
The growing irresponsibility of the top managers and the cultural proliferation of tolerating irresponsibility and impunity are making of humanity (because this model is the short term winner) a specie in danger.
Liberalism sustaining that economical growth is the way to go is unbelievably stupid, even children understand that they can't drink more water from their glass than their glass contains water unless you filled it again; the earth is finite and nobody will add resources to it when it will be exhausted. And Financial people want to know before investing that the project requiring investment will have a significant ROI (as good as the one they obtain by letting money making money). This is a consequence of the simplification of the science of Newton (17th century) where everything was deterministic and reversible and the linear systems (close to equilibrium) solvable, current science is exploring system far from equilibrium, non-linear, irreversible and unpredictable with the exception of qualitative changes (without knowing when , nor where). By invariance of scale, living systems participate to process where evolution is at work and by definitions unpredictable. Living is liking the unknown, without going ahead a step at a time, we will die but the next state may be less pleasant than the current one; it is only by going on that from time to time a better state will be reached.
Of course, liberalism can become auto-regulate but therefore it must follow the laws of evolution and unfortunately, liberalism does its best to block evolution: to be convinced, it suffices to observe if there is a growing diversity of products or a declining one (behind the various packaging, IE, the images).
My bank was less performing than I was in predicting what was happening on the financial market; the best deals I made on the stock-exchange were however made on basis of revealed confidential information; as a normal citizen, it is like with lottery: it is made for statistically loosing money. I claim that the stock-exchange is a kind of privatization of the profits for initiated members of some clubs paid by he widely spread out social distribution of the losses by the middle-class.
Now can we answer the initial questions? Do they really want to solve that financial mess, and now cascading to an economical and social mess? I doubt (since USA and UK did not publish their own fiscal paradises) but I can't refrain seeing Obama as a new messiah and I know he has to compromise and that he is really walking on the sharp of a razor; if it is true, he may also be crucified! Can they succeed? I'm afraid of no, I think we are at the end of a "civilization" and we need more radical departure: the return to growth is an illusion, an imposture; maybe , new growth waves will arrive but they will be shorter & more frequent until the latest one; and more we wait, more terrific might be the effects of collapse.
claiming for a sustained growth and spontaneous auto-regulation is a complete absurdity in an finite planet। Of course, if money is becoming an abstraction, producing money is then free lunch.
Sometimes, I think money really became an abstraction: when you see the amount of money governments claim to have provided to the market to solve the crisis coming from the "sub primes". Let's make some back-envelop computation on the sub primes:
1) 7 Mio US families were involved from which 2 Mio are now on street
2) average cost of a house: 350,000$ (rather high as average)
3) probably the banks don't completely deliver the required money to all (we will ignore this)
4) the 2 Mio families now on street paid back a small part of their loan (also ignored) but the banks recover that house (let's also ignore the unfinished houses) and now are trying to sell them
with an expected lost.
5) banks package these credits with other assets and sell that to other investors (banks mostly)
(we will ignore that because this money remains in the financial world except an unknown part)
The maximum maximorum lost value (number of families on street * house price)is thus 700 Bio $ (that will probably be recovered by the banks in the next 5 years at 75%). The only money that will finally vanish from the financial world is thus the depreciation's of these houses.
Globally, the governments have already promised to the banks more than 4,000 Bio$ (on the news at 2009/04/22) and at least 7 Mio people have lost their jobs (not the bank managers, they form a very big "family" where solidarity is real (the price of silence, maybe!)).
Where is going the profit (3,300 Bio$) of the crime? It is easy to understand why the banks managers get so high bonus।
Other explanations are:
1) banks overestimate the toxic assets they kept (actually, they don't know how much toxic they have because the complexity of tracking all of them to finally estimate the risks without common practice in that matter(I presume!) )
2) this is the bank's interest to augment the risks (more money from state, lower interest rate they have to pay to the central banks and to us, good pretext to not distribute dividend without taking the responsibility)
3) they are other affairs which have been accumulated and not coming from the sub-primes (fraud,..)
... and sorry I'm not going to search them... meaning that this last critic is not sustainable but it remains my conviction that my analysis is correct.
Are the banks now helping with that money the economical players as intended by the governments? Not really! The banks were the first to realize (15 years ago) that there is much less risk in the mass market (consumer market) than in sustaining technology investment in economy. ING recently communicates it will sell some of its assets to focus on credit to consumption and life insurances (however, this might be my filter applied on their real communication). Are the banks going to change their mind? surely not at short term because now they have the financial crisis as pretext.
Is it possible that all people of all governments are unaware of that? No way! Actually, they reveal their understanding by claiming that finance has to be regulated.
But do they understand they give money just to cover the eventual short term liquidity needs of long term winners? Probably as much as the bank managers know really what is their situation! No thus.
Is it more than a panic from unaware people? Probably not. (a possible solution is stopping to put unaware people at the leading of companies and countries!)
But we are in a democracy, isn't it? Thus while respecting the laws, we are all free. So, why then unaware people could choose in favor of what aware people are saying while they better understand what other unaware people are advising them to do? We might avoid that by (permanent) education! But education is also declining, and not by hazard!). But then, obligatory education to hope reducing the lack of awareness of all our empowered managers!
Fortunately, now the value of the $ is not covered by the value of the gold anymore but the $ is covering the value of all other moneys (sic!). (As an exercise, try to understand why USA is not bankrupted and why when Wall Street gets a cold, the world is out of breath!)
Money is thus really a pure abstraction with a culturally enforced value, mainly due to the media (with broadcast in 1st position by far (see M Mc Luhan)) , living from advertising and government subventions. And Finance is the only truly globalized activity (there is more money exchange by computed network in one day than they are money in the world! Reason why President Bush pushes the firemen, without breathing protection, to erase the effects of 11 September by restoring ASAP the Wall Street operations?).
All people having ever organized something know that there are prerequisites to every organization: Tasks are defined and assigned to functions, internal and mainly information flows are needed for Task being executed, people are designated to fulfill these functions and executing their tasks; for the external information flows, laws are needed because nobody will spontaneously give away his information for being controlled.
Do our government know that? Of course, they know! Probably, not all politician, but at that level, they know, for sure.
But did you hear a single world on how they want to regulate the finance?
Oh yes, they designated the fiscal paradises... but a few of them located in USA (Delaware,...) and UK (New Jersey,..) : a good start indeed! The "protestant" based government probably obtain that compensation in exchange of a promise of regulation of finance.
The banks (and insurances, which differences between them today? also something to regulate!) are designated as the devils. Not a single word on the role played by the stock exchanges!
But why the companies are out of controls?
1) by nature, a multinational firm escapes any government regulation
2) where is the authority performing a larger scale regulation?..??...???
3) if there are international regulations, who is controlling their respects? what are the penalties?
(it is the reason why Belgium is one of the greatest fiscal paradise: there is a regulation and an authority forbidding the control of the regulation for international companies)
4) US accounting is not used for taxation so that why not booking in your year results, result expectations of next years, Fe? Also a topic for worldwide regulation!
5) once a firm is noted on the stock exchange, its focus becomes communication for the finance consumers while their core business is becoming a background issue; from there a growing irresponsibility from the top managers of noted companies.
6) when a company is not in the financial sector, their board is mostly composed of financial people, chiefly when noted but not only, because a) the focus is put on the consumption market which live from credit and b) production & distribution must follow and new investment are required.
The growing irresponsibility of the top managers and the cultural proliferation of tolerating irresponsibility and impunity are making of humanity (because this model is the short term winner) a specie in danger.
Liberalism sustaining that economical growth is the way to go is unbelievably stupid, even children understand that they can't drink more water from their glass than their glass contains water unless you filled it again; the earth is finite and nobody will add resources to it when it will be exhausted. And Financial people want to know before investing that the project requiring investment will have a significant ROI (as good as the one they obtain by letting money making money). This is a consequence of the simplification of the science of Newton (17th century) where everything was deterministic and reversible and the linear systems (close to equilibrium) solvable, current science is exploring system far from equilibrium, non-linear, irreversible and unpredictable with the exception of qualitative changes (without knowing when , nor where). By invariance of scale, living systems participate to process where evolution is at work and by definitions unpredictable. Living is liking the unknown, without going ahead a step at a time, we will die but the next state may be less pleasant than the current one; it is only by going on that from time to time a better state will be reached.
Of course, liberalism can become auto-regulate but therefore it must follow the laws of evolution and unfortunately, liberalism does its best to block evolution: to be convinced, it suffices to observe if there is a growing diversity of products or a declining one (behind the various packaging, IE, the images).
My bank was less performing than I was in predicting what was happening on the financial market; the best deals I made on the stock-exchange were however made on basis of revealed confidential information; as a normal citizen, it is like with lottery: it is made for statistically loosing money. I claim that the stock-exchange is a kind of privatization of the profits for initiated members of some clubs paid by he widely spread out social distribution of the losses by the middle-class.
Now can we answer the initial questions? Do they really want to solve that financial mess, and now cascading to an economical and social mess? I doubt (since USA and UK did not publish their own fiscal paradises) but I can't refrain seeing Obama as a new messiah and I know he has to compromise and that he is really walking on the sharp of a razor; if it is true, he may also be crucified! Can they succeed? I'm afraid of no, I think we are at the end of a "civilization" and we need more radical departure: the return to growth is an illusion, an imposture; maybe , new growth waves will arrive but they will be shorter & more frequent until the latest one; and more we wait, more terrific might be the effects of collapse.
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