When the Egyptian masses and a small US-funded revolutionary organization were able to bring change to the Middle East throughout the Arab Spring, I became completely enamored with the idea of a new global century, something that I have advocated for decades. I was so caught up in the moments that I had to see for myself. For the past six months, I have been traveling throughout the Middle East and Southern Europe and seeing first hand the changes that are taking place in this world. The old yoke of what is being lifted and new horizons are, for the first time, opening to welcome us.
I have returned to what does indeed seem to be the evil twin of the Arab spring: the Occupy movement in the United States. Independently funded and completely defying the expectations of conventional sanctioned dissent in the US, the Occupy Wall Street movement has spread throughout the country, and the state has been prudent in sub-contracting the anti-protest security arrangements to Xe. I had warned against these developments in GCP and in my talk at the 2011 Private Property Summit last January in Washington, where I argued that having paved the way for a veritable coup d'etat in the realm of property, many were now comfortably laying back and letting their guard down as the dominoes began to fall. Somebody is going to have to clean up all these dominoes.
The guardians of the gates, asleep at the wheel of progress, half-mindedly criticize the Occupy Wall Street folks saying that they are unemployed, useless parasites, who don't want to work, of course, playing right into their strategy of highlighting the fact there has been no appreciable job growth since the beginning of this whole thing back in the 1980s. If we keep drawing attention to this fact, it will be game, set, match.
Nobody wants to see a change in the course, and our position is far too strong for us to compromise. Criticizing these young protesters for their "uselessness" and "unemployment"--the very purpose for which we've long striven--is tantamount to the infamous adage of "let them eat cake." Don't give them the satisfaction of throwing it in our faces. Call it what it is. A revolutionary awakening and a movement against the imbalance of the status quo. A movement that will never be allowed to succeed.
Sunday, November 20, 2011
Sunday, March 6, 2011
Standing on the Precipice
Today we stand on a precipice, gazing out over the Middle Eastern landscapes as dark new horizons of a global century envelop the desert in a wild, pulsating post-modern critique and listless faces drag their heels through the streets of Cairo and Tripoli in Yesterday's funeral procession. All the while, bad men dressed as soldiers exchange sweaty glances in the bowels of tomorrow as they plot their next move. As always, the great white hope looms in the background, reluctantly looking on as a self-parody of Kipling's half-hearted beacon of justice. What does the future hold for this troubled region in a world in which borders are nothing more than faded, black lines on dusty yellow papers stacked in the corner of the basement of what was?
It was Aime Cesaire who first said that "a civilization that uses its principles for trickery and deceit is a dying civilization," and though his words have echoed through the empty halls of the Pentagon and Guantanamo for decades, business as usual carries on in the shadow of the Imperial Phallus of our nation's capital. No sooner had the "crests of foam" been carried out on history's strong molten back than a few measured mumbles trickled out of the side of Obama's trembling lips marking a new era. Will no one stand for property? Are we all transfixed in this moment of embarrassing ecstasy as everything we ever worked for slips through our fingers like grains of bitter sand? Now is not the time for romanticism. The sun is crowning on the banks of a new Euphrates and the new global century yawns in the distance.
Sunday, February 6, 2011
Bursting the Regulation Bubble with Ideal-Driven Investing
Like many American investors embedded in the rapidly globalizing world economy, I have been challenged by the recent domestic market conditions. The financial industry, crippled under the density of government intervention, has rapidly mutated from a system of rational self-interested agents to one of irrational entities who seem to lack a well-defined agency characteristic. Naturally, to succeed in this changing climate would require a drastic revision in one's strategic financial arsenal. Crucially, it also requires some unfortunate and unacceptable ideological concessions. Market models must account for what appears to be sub-culturally conditioned irrational behavior that is emergent in the neo-state capitalist system. In accounting for these effects, we implicitly acknowledge that existing models have failed. I argue that this is the wrong approach, and that these effects are an emergent property of our own ideological impurity.
No one would call it a stretch to read the past two years as hard evidence that the so-called failures of free market capitalism are actually the very proof of its intolerance for impure realizations. Simply put, when reason and logic no longer account for the rationale of the market, the tired laws of unidirectional causality suggests that one of two things must occur. Either our reasoning must change, forcing us to concede that what we thought of as rational behavior was actually irrational behavior masquerading as the rational, or the market itself must be manipulated into behaving rationally. We know this latter point to be a sort of inverse tautology, so the course narrows.
Through this deconstruction, one may easily arrive at a somewhat harsh reassessments of the so called "old" market models (namely, that they were incorrect) from their present failures, but is it not more powerful to reverse this causal relationship and say that the failures of these models are the very reason that they were wrong to begin with? In order to truly maintain ideological purity in this wasteland of conditional market freedoms, we must simply remember that when the market fails to operate rationally, it is because we ourselves have failed to interpret its behavior. However, it is obvious that this reversal technique fails when we claim that the impure realization of free market capitalism is merely a symptom of the implicit failure of free markets.
Accepting this, one can immediately see that the rules that govern rational behavior in the marketplace have all been warped into a sort of non-euclidean behavioral space. At the extrema, small changes in financial regulation produce enormous fluctuations in capital, while in the center of the policy space, truly substantially regulatory acts and longstanding policies seem only marginally effective. This produces a very widespread misperception that the federal government somehow has a one-to-one functional control over the health of the economy when it wields its tiny daggers. It is always a similar pocket of distorted forces that creates bubbles and overvaluations in every sector of the economy. The so-called government regulation sector is no exception, and mark my words, this bubble is about to bleed capital like a sliced artery.
It has often been said in hard social times: "We must not forget in our era of pillows and neckties that we are actually lions with whetted tongue, in search of meat." Indeed, as a set of animals, certain truths tend to be neglected in our daily interactions. One need only glance abreast at some of the more leftwing financial analysis publications such as "The Motley Fool" to see a flood of investment advice suggesting that investors would benefit from pre-empting this all-too-typical irrationality. The cost of all this is a loss of respect for the market process itself, and an undermining of the holistic faith in a deterministic economy. The solution, of course, is to funnel our investments toward the least regulated holdings and withhold as much capital as possible from those groups that are in bed with the powers that be. It is of course difficult to cut through the layers of obfuscatory publicity and the murkiness of the modern "annual report analysis" format. The message must be sent, however, at any cost. If a private firm lets this regulatory affliction touch its bottom line, then it is none but the investor himself who must step in and reject this state of affairs with his investment behaviors. They have always spoken louder than forlorn faces, angry words, votes and rifles combined.
At the very core of our behaviors, we must remember that while official government monetary value may no longer be unidirectionally deterministic, a compromise of value in supporting this turn of events is an implicit acceptance of them. When one invests in an overvalued "Green Energy" company, one is equally complicit in propping up the mythologies of green energy. Hence in order to objectively succeed in this climate, one's investments must no longer be viewed simply as a means of entrusting capital to establishments of sound financial constitution. Soundness is a term long lost for the rational agent. It is no longer ideologically sufficient to base one's portfolio on an optimally weighted formula for profit, because profit has been rendered meaningless by government overregulation. Though an eye must be kept on the calculated risks and rewards in reaping the milk from market ripples, one must remember the ideological precepts that make life possible and worthwhile in an asymptotically free-market.
In sum, a rapidly growing mass of the American public is beginning to awaken to the stark realities of investment in the new global world. In times of personal uncertainty, we must remember that our values and ideals are bigger than our own lives and certainly bigger than our governments. Generally, I feel no shame in admitting that my success has been furnished by the sort of persevering attitudes that have characterized all previous successful investors. Namely, timely currency speculation and a careful attention to consumer and financial industry trends. These are of course, timeless and indispensable strategies for a rational market, but they hardly tell the full story in the perpetual catastrophe that we face today.
No one would call it a stretch to read the past two years as hard evidence that the so-called failures of free market capitalism are actually the very proof of its intolerance for impure realizations. Simply put, when reason and logic no longer account for the rationale of the market, the tired laws of unidirectional causality suggests that one of two things must occur. Either our reasoning must change, forcing us to concede that what we thought of as rational behavior was actually irrational behavior masquerading as the rational, or the market itself must be manipulated into behaving rationally. We know this latter point to be a sort of inverse tautology, so the course narrows.
Through this deconstruction, one may easily arrive at a somewhat harsh reassessments of the so called "old" market models (namely, that they were incorrect) from their present failures, but is it not more powerful to reverse this causal relationship and say that the failures of these models are the very reason that they were wrong to begin with? In order to truly maintain ideological purity in this wasteland of conditional market freedoms, we must simply remember that when the market fails to operate rationally, it is because we ourselves have failed to interpret its behavior. However, it is obvious that this reversal technique fails when we claim that the impure realization of free market capitalism is merely a symptom of the implicit failure of free markets.
Accepting this, one can immediately see that the rules that govern rational behavior in the marketplace have all been warped into a sort of non-euclidean behavioral space. At the extrema, small changes in financial regulation produce enormous fluctuations in capital, while in the center of the policy space, truly substantially regulatory acts and longstanding policies seem only marginally effective. This produces a very widespread misperception that the federal government somehow has a one-to-one functional control over the health of the economy when it wields its tiny daggers. It is always a similar pocket of distorted forces that creates bubbles and overvaluations in every sector of the economy. The so-called government regulation sector is no exception, and mark my words, this bubble is about to bleed capital like a sliced artery.
It has often been said in hard social times: "We must not forget in our era of pillows and neckties that we are actually lions with whetted tongue, in search of meat." Indeed, as a set of animals, certain truths tend to be neglected in our daily interactions. One need only glance abreast at some of the more leftwing financial analysis publications such as "The Motley Fool" to see a flood of investment advice suggesting that investors would benefit from pre-empting this all-too-typical irrationality. The cost of all this is a loss of respect for the market process itself, and an undermining of the holistic faith in a deterministic economy. The solution, of course, is to funnel our investments toward the least regulated holdings and withhold as much capital as possible from those groups that are in bed with the powers that be. It is of course difficult to cut through the layers of obfuscatory publicity and the murkiness of the modern "annual report analysis" format. The message must be sent, however, at any cost. If a private firm lets this regulatory affliction touch its bottom line, then it is none but the investor himself who must step in and reject this state of affairs with his investment behaviors. They have always spoken louder than forlorn faces, angry words, votes and rifles combined.
At the very core of our behaviors, we must remember that while official government monetary value may no longer be unidirectionally deterministic, a compromise of value in supporting this turn of events is an implicit acceptance of them. When one invests in an overvalued "Green Energy" company, one is equally complicit in propping up the mythologies of green energy. Hence in order to objectively succeed in this climate, one's investments must no longer be viewed simply as a means of entrusting capital to establishments of sound financial constitution. Soundness is a term long lost for the rational agent. It is no longer ideologically sufficient to base one's portfolio on an optimally weighted formula for profit, because profit has been rendered meaningless by government overregulation. Though an eye must be kept on the calculated risks and rewards in reaping the milk from market ripples, one must remember the ideological precepts that make life possible and worthwhile in an asymptotically free-market.
In sum, a rapidly growing mass of the American public is beginning to awaken to the stark realities of investment in the new global world. In times of personal uncertainty, we must remember that our values and ideals are bigger than our own lives and certainly bigger than our governments. Generally, I feel no shame in admitting that my success has been furnished by the sort of persevering attitudes that have characterized all previous successful investors. Namely, timely currency speculation and a careful attention to consumer and financial industry trends. These are of course, timeless and indispensable strategies for a rational market, but they hardly tell the full story in the perpetual catastrophe that we face today.
Patrolling the Information Superhighway
On the heels of the Munich Security Conference, which many have compared to the Congress of Vienna in 1814 or the Conference of Berlin in 1884, many from the Hill to Hong Kong are all aglow at the prospect of truly global century. Among the topics on the agenda were the prolonged occupation of Afghanistan, a united attack on Iran's nuclear aspirations, and the first arms-sharing agreement between the U.S. and Russia. However, the most important collaboration to come out of the conference will be the first concerted effort by international magnates to monopolize and control the internet and permanently push back the ground lost in the past years through lack of focus on cyber-security issues.
While the blogger in me can't help but mourn the end of an era of n'er to be repeated net free-for-all, nobody can deny the immense benefit of laying down a few stop lights and sending out a few traffic cops on the information superhighway. Doing so will ensure that popular uprisings such as those in Tunisia, Egypt and Iran in the past year will not arise spontaneously or spiral out of control, meaning that we will be better able to transition regimes when necessary all while keeping a tighter grip on the transaction of goods.
There was, however, one point of concern that comes out of the global internet manifesto laid down by the major powers at the Munich Security Conference, and that is the persistent use of the archaic rhetoric of "terrorism" as a chief strategy for securing the internet. While the term terrorist when applied specifically to Muslim militants still has a little currency for some, in general, the public has gradually realized that this empty term is nothing more than a pretext or justification for otherwise illegitimate actions against states and free individuals. What's worse is that it has drawn attention to the plain fact that managing the globe does require killing innocent people. In this way, world governments have become trapped in their own venus fly trap of anti-terrorist rhetoric which technically brands them as terrorist regimes. While there had been a small push-back against the rhetoric of the war on terror in recent months, the Munich Security Conference and the internet debate have proven that many in the community are still unable to move past this old paradigm. Instead many are still echoing the tired words of Former Secretary of State Condoleezza Rice: "We're in a new world. We're in a world in which the possibility of terrorism, married up with technology, could make us very, very sorry that we didn't act." Indeed, it is a new, global world, and it is good that we are acting, but can't these measures be justified in some rational framework that will convince the bourgeoisie of where their collective interest lies?
Thursday, February 3, 2011
Recycle for a Better Tomorrow
Analysts and Beltway insiders have been stunned by the ease with which U.S. operatives and sleepers in Tunisia, Egypt and Mauritania have catalyzed exactly the kind of regime-changing popular movements that the Orientalist dinosaurs of the Cold War era have insisted since day one of the New World Order could not be fomented in the complacent, fatalist and yet simultaneously fanatic Muslim societies of the Middle East. A few well-placed internet posts coupled with careful activation of the appropriate economic mechanisms have unleashed upon the ancien regimes of the North African a veritable weapon of mass destruction represented by a genuinely united and determined popular resistance at a negligible operating cost. The demolitions of the Tunisia and Egyptian projects that ran their course in 2008 have thus far been much cheaper and cleaner than critics had expected. What this means is that the old paradigm of "creative destruction" that gained currency in the 70s has given way to what policy wonks are calling the first genuine recycling plan of the postmodern era.
Though the term recycling is very recent, the concept is quite similar to the strategy used by the British Empire to control the Ottoman state for nearly a century and to a lesser extent the strategy employed by the League and NATO in China. However, the term was first coined in the 1970s for the Iran case, which in that December of 1978 appeared a model example of a recycled regime. The idea was to manage and reuse the same regimes, changing the faces and the rhetoric while maintaining the hard structure where possible. Profits would be significantly less than those of the "command and conquer" paradigm, but recylcing also in theory involved much less risk and promised a more sustainable option. Of course, when the revolution took a communist turn, NATO activated plan B (some say prematurely), and the rest is history. With the high-modernist recyclers out the door, a new paradigm emerged with the Iraq-Afghanistan corridor as its new test case: creative destruction. The logic behind creative destruction was that U.S. companies could reap massive profits by building up puppet governments, milking countries dry until it was time for the "demolition" phase, which involved a costly war, occupation and rebuilding project that would yield further economic gains for the pillar companies.
Recently, economists have indisputably proven that the cost of extracting, for example, the entire lithium reserves of Afghanistan over the course of 20 years as opposed to 50 would be tenfold, and thus, a steady reemergence of recycling has culminated in the events of this past month. Even the old hardliners have for the time being been willing to give recycling a second chance, no doubt secretly hoping that the revolutions take a theocratic turn.
Nobody is certain what the next few weeks will hold, and many are worried that the protests will veer too close to real revolution and once again the "Islamic card" will enter play. On this point, I must stress the need for patience. While the profits of creative destruction have been truly impressive, there is only so much space on the planet. We simply cannot continue to raze countries to the ground and rebuild them with the limited resources available in this day and age. Let's stop strip mining the planet and start farming it. Think of our children. Give recycling a chance.
Wednesday, December 1, 2010
Comcast, Comdown
While the recent WikiLeaks dump of diplomatic wires has revealed absolutely no information that would shock or surprise even the most naive of Americans, the reaction by those embarrassed by the contents of the leak has raised some concern. A few hours after the new diplomatic documents were released, Comcast internet was knocked out across most of the Northeastern United States. This questionable choice has raised an eyebrow or two. Of course, the region from New England to NorthernVirginia remains the only part of the country where anyone really still believes in the state as a positive social institution, and it makes sense that those impacted by the leak would instinctively seek to plug the ears of America's would-be middle class. However, this was a foolish decision for a number of reasons. First of all, we should not fear losing the allegiance of those who still believe in the state at this point, since there have been much more damaging leaks of information in the past. For example, the WikiLeaks documents on Iraq that made public the fact that the majority of those killed by U.S. troops were civilians was quite damning, yet they received little attention. These diplomatic wires are nothing more than celebrity gossip, so what's the fuss?
I've made this criticism many times, and I'll undoubtedly make it again. Many of us wealthy elites still have no concept of how the lower classes think, and thus, we are always foolishly trying to pull the wool over their eyes when something goes wrong. This is highly counterproductive and it is an insult to the human intelligence of the average American. I think it is clear that Americans - far from being ignorant - are completely aware of the reality and remain cynically complicit because they feel for any number of reasons that it remains in their best interest. Moreover, because most do not feel they are directly harmed or impacted by the scandals of state, they simply do not pay attention.
Nobody has claimed responsibility for the Comcast outage, but unless it was Julian Assange himself, whoever pulled the trigger has made a foolish error with potentially severe consequences. It was a very selfish and shortsighted move. Knocking out the internet may have delayed the spread of the WikiLeaks news and even distracted a few people from it; however, it grabbed the attention of millions of otherwise disinterested Americans who lost internet for a few hours. The last thing any of us need is for someone to start caring about these issues because it suddenly affects them personally. Moreover, this display of muscle, while somewhat threatening, was completely inappropriate. Now is not the time. Americans do not care that the state's actions actually oppose things like democracy, equality, etc. because most of them never really wanted or believed in that. Basically, whoever was behind the shutdown at Comcast needs to calm down. Much worse leaks concerning Xe, Mossad, and Saudi support for Al Qaeda are likely to surface, and it is imperative that we exercise extreme caution in responding so as not to alienate our cynical allies of the masses.
Thursday, November 4, 2010
All for One and One for All
In the wake of the most recent foreclosure boom, which has brought about one of the most rapid and unchallenged property transfers since Indian Removal in the 1830s, many are left asking: what can I do with all this bargain real estate? This question has become particularly pressing for those in the banking and investment industries who – contrary to the broader national trends – have experienced a rather substantial influx of capital relative to depreciating property values thanks to recent government reforms under the stimulus package.
The most immediate answer for many has been converting their newly acquired real estate into high margin rental properties and apartment complexes. This does make sense in large, booming cities such as New York and especially the nation’s capital where rising foreclosure rates have accompanied rapid cost of living increases and rising demand for rental housing, resulting in a unique opportunity to rent out foreclosed homes at a rate much higher than the monthly mortgage payments of the previous owner, who may very well become the new tenant, only now sharing half of his or her former home with another family. However, in smaller cities whose centers have been abandoned, many have explored other options and pursued creative solutions. I have heard of cases in which foreclosed inner city homes were converted into homeless or battered women shelters for tax purposes.
All of this is very pragmatic, but it is clear that very few property owners are thinking strategically and collectively about the issue. This is one case in which “every man for himself” seems an imprudent policy. We should be saying "all for one and one for all." Whole city blocks could be consolidated, and with unemployment where it is, it may even be feasible start building factories again for the first time in decades. This is just one of many options; however, it is imperative that we do something substantial and innovative with the opportunity we have created for ourselves. Some large conglomerates of bankers such as Bank of America have been leading the way, and my hope is that others will follow.
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