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Generational Dynamics Web Log for 23-May-2010
23-May-10 News -- Some humor that isn't really very funny

Web Log - May, 2010

23-May-10 News -- Some humor that isn't really very funny

Major offensive in Kandahar may be turning point in Afghanistan war

Barney Frank in 2005 discusses the real estate bubble

Earlier this week, Massachusetts congressman Barney Frank, head of the Financial Services Committee, appeared on CNBC, and bragged:

"I have always been critical of this effort to equate a decent home with homeownership. We should have done more to get affordable rental housing. My efforts have been towards affordable rental housing. I was very much in disagreement with this push into home ownership."

So the folks at CNBC dug out the following Barney Frank video from 2005:

This is very funny, except that it's not at all. I was writing about the housing bubble in 2004 (see "Greenspan uses circular reasoning on housing bubble"). I knew that there was a housing bubble, Alan Greenspan knew that there was a housing bubble, and other financial analysts did as well.

I just could never understand in 2005 why those politicians, journalists and analysts couldn't see that there was a housing bubble. And I still can't understand why they didn't see it.

Barney Frank's committee is investigating whether financial execs committed crimes by not knowing that the housing bubble would burst. Well, why doesn't he investigate himself? Why doesn't he investigate other politicians, Republicans and Democrats?

And here we have the CNBC article asking the following question:

"These conflicting statements raise the following question: Why should we believe Congress gets financial regulation right this time around when a guy who is unanimously lauded as extremely smart (whether you like him or not) can be so wrong about housing? And so revisionist of where he stood on the expansion of home ownership?"

Wow! Good question! But I could ask the experts at CNBC the same question: Why should we believe anything you say at CNBC, when you claim to have experts on your staff, and you change your opinion all the time?

At the end of 2006, I quoted one of CNBC's experts, a regular contributor, Jack Bouroudijian of the Brewer Investment Group, as saying the following:

"This has been a wonderful six months for the market. And the worst thing about it is that we underperformed the rest of the world. So it's really of question of whether we're at the beginning of a multi-year run in equities. I guess that's the big debate. When you've got these superstar fund managers like the Bill Millers of the world, that are underperforming that are still unbelievers out there, that makes me even more bullish than I am. And we see all this data coming out and this is absolutely everything that you want."

In that article ( "Financial analysts gush at stock market's meteoric rise"), I wrote this: I have to tell you, dear reader, that I just never cease to be absolutely, totally astounded by these statements. This guy probably makes a few million dollars a year in salary, and probably just received another few million in year-end bonuses. And yet, his gushing is one of the stupidest statements I've ever heard. Though really I should hedge this last sentence by saying that I can't be sure, since I've been hearing so many incredibly stupid statements by high-paid financial consultants. It's almost beyond belief.

I get criticized for calling people stupid, as if I should play the game and pretend that they people aren't liars and crooks. These people were saying anything that would get them more advertisers, more clients, and more fat commissions. Truth was irrelevant. It's disgusting, and that's why the Barney Frank video isn't funny.

A 'hilarious' video by Max Keiser

Michael "Mish" Shedlock's column on Saturday refers us to the following video of Max Keiser's report on Russian Television. It's 25 minutes long, but you don't have to listen to more than a couple of minutes of it. Shedlock suggests listening to the first few minutes of it because it's so hilarious.

I did not find it hilarious. Like so many things I run into these days, I find it to be extremely depressing. It describes in some detail the shell game that's being played among the central banks in the US and European countries.

A number of years ago, when credit cards were first becoming more widely available, I saw the poster that read, "Can I pay my Master Card with my Visa?" That was very funny at the time. Ha, ha, ha. But now we have central banks doing exactly the same thing.

I just can't understand this. Why is this funny? Why don't ordinary investors, journalists and politicians see what a disaster this is?

The FlashCrash

One day three weeks ago, the Dow Industrials fell almost a thousand points in a few minutes, before partially recovering. The period has become known as the "FlashCrash."

Here's how Time Magazine portrayed the situation:

The FlashCrash <font size=-2>(Source: Time)</font>

The FlashCrash (Source: Time)

In an article a couple of years ago, I posted the following joke from 1930:

"Did you hear about the fellow who engaged a hotel room and the clerk asked him whether he wanted it for sleeping or jumping?"

"No -- but I heard there were two men who jumped hand-in-hand because they'd held a joint account!"

Additional links

The war in Afghanistan may have a major turning point this summer, as the Obama administration launches a "go for broke" offensive in Kandahar. Washington Post

The U.S. and South Korea may raise their state of military readiness as tension continues to grow, following the South's report naming the North as the perpetrator of the sinking of the Cheonan warship on March 26. Guardian

Japan's Prime Minister Yukio Hatoyama has apologized to the people of Okinawa for ditching his campaign promise to move the US Marine Corps' military base off of the island. Washington Post

Liam Fox, Britain's new Defense Secretary, rejects humanitarian goals for the war in Afghanistan. "We are not in Afghanistan for the sake of the education policy in a broken 13th-century country. We are there so the people of Britain and our global interests are not threatened." Times Online

(Comments: For reader comments, questions and discussion, see the 23-May-10 News -- Some humor that isn't really very funny thread of the Generational Dynamics forum. Comments may be posted anonymously.) (23-May-2010) Permanent Link
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