Thoughts From a Patron On a Saturday Afternoon

Jesse posted a good comment from a reader of his blog, along with the latest video from Chris Hedges.

From Jesse's Cafe:

From a reader:

"The Hedges video is superb. He is referring to this article, as I’m sure you’re aware: Why the Occupy Movement Frightens the Corporate Elite

The article indicates that he has far better answers than anyone else at this point in my opinion. The Elite have significant weaknesses. They are psychologically stunted, adolescent and in effect if not actuality sociopathic, as you have made clear with your posts and links. And corporations are artificial, fictional people, created by the state, which can be as “easily” undone as done, a stroke of the pen.

So long as people see themselves as things, “labor”, metabolic lumps without meaning, we are lost because the Darwinian model, which is the bastard progeny of Materialism, prevails.

Nihilism is an appropriate description of the world, the point being that those who have bought into this worldview have no underlying motive to act unselfishly, and not for immediate gain or sensation. They sometimes, perhaps often, lose themselves in alcohol, drugs, TV, pornography, greed, the lust for power, or suicide to escape. Terminal violence is easily justified if we are simply disposing of things.

I think I know that you understand this through your lens of Christianity. I also have a very strong belief, knowledge in God, but “He” is far less well defined and far more powerful and all-encompassing, truly incomprehensible, in my world than Christian dogma would describe. Nor are we apart from "Him". In my humble view, we will not find our way successfully through this travail without a thorough reexamination, and new understanding of, both politics and faith, and the true nature of the human condition.

http://jessescrossroadscafe.blogspot.kr/2012/10/thoughts-from-patron-on-saturday.html

Charles Hugh Smith: Japan And The Exhaustion Of Consumerism

A good post by Charles Hugh Smith.  I don't think Korea is immune from the reality he describes.  We have to remember that the young generation is the hardest hit in the midst of global economic slowdown.

From Of Two Minds:

Japan is known for artful handcrafts, high-tech gadgets and outlandish fads. All modern economies depend on fads and fashions to drive consumption, and so Japan's leadership in fads reflects its advanced state of consumerism: it is a very wealthy nation, and its wealth has been distributed widely enough that the vast majority of its citizens have access to the "good things" produced by modern industrialized economies.

What few seem willing to acknowledge is the solipsistic, narcissistic nature of this reliance on public display of consumerist fantasy for self-identity. All consumerist fashion is based on superficiality and self-indulgence, of course; but if we look at the energy, money and attention "invested" in fashion lifestyles in Japan, we might conclude it is strong evidence that there is plenty of "money and time to burn" in Japan. While that is certainly true, this reliance on consumerist excess for self-identity and pastime is also evidence of a deeply troubled economy and society.

Young people have money and time to burn on outlandish costumes because few earn enough to have their own families or flats. They work part-time for low wages and live at home or in tiny one-room apartments. Few own cars because they 1) don't earn enough to support a car and 2) they're uninterested in acquiring status symbols or prestige signifiers.

This is not just a generational shift: it reflects a realistic understanding that opportunities for secure, high-paying employment have diminished over the past 20 years. There are plenty of low-level jobs, but few with the guarantees that their parents took for granted.

Sound familiar? This reality is playing out in Europe and the U.S. as well.

Is it any wonder that in the face of such a bleak and maladaptive future, young people seek identity, community and solace in a fantasy world of fashion? When an economy is dominated by a Savior State that issues unsustainable promises, and a society is dependent on a consumerist frenzy of ceaseless fads, status signifiers and shopping for identity and what passes for community, then narcissism, restless emptiness and the aloneness mentioned yesterday in The Hidden Cost of the "New Economy": New-Type Depression are the inevitable results.

Beneath the surface of Japan, Inc., bullet trains, cute robots and exuberant fashions, this is the Japan few outsiders understand: the exhaustion of consumerism.

http://www.oftwominds.com/blogoct12/exhaustion-consumerism10-12.html

Google Shares Fall on Premature Earnings

From the Wall Street Journal:

Google Inc. GOOG -8.01%prematurely released its quarterly earnings midday Thursday, reporting that profit declined 20% as total costs jumped and advertising prices continued to slide.

The unexpected release, via a filing with the Securities and Exchange Commission, triggered a selloff in Google shares. The results missed expectations and the company released its results several hours earlier than expected.

The stock dropped about 9% before trading was suspended and weighed on the broader Nasdaq Stock Market NDAQ +0.41%. The stock resumed trading around 3:20 p.m. ET and ended down 8% on the day.

http://online.wsj.com/article/SB10000872396390443684104578064671358259436.html

Clive Boddy: Paper on Destructiveness of Psychopaths in Business and Government

Another good post by Jesse.  I’ve stressed that it all boils down to social responsibility and moral choices.  It’s a joy to find and read someone’s writing which articulates so eloquently what I’ve been thinking about.

From Jesse's Cafe:

While there are always a certain small portion of the population who have the sorts of destructive bent as described here, normally society acts to restrain them and their more vile impulses.

However, from time to time, the small percentage can gain enough power through ruthlessness and deception to foster an atmosphere that not only tolerates their excesses, but actually holds them up as an example for the young as well.

I think some of this is the winner's curse. A society that enjoys a long period of prosperity begins to think of itself as exceptional. They become so enchanted with who they think they are, that they just simply forget their own past, and begin to believe in myths and illusions. And human memory and education being what they are, they fall victim to the frauds and deceptions and darker impulses that have plagued them in the past.

Conversely, a society that has been through a series of terrible ordeals can often become simply desperate, almost bestial. They make take a similar path but much more cynically. It is not that they are deluded, they simply do not care.

When the power of greed in business finds a suitable match in the lust for power in the political arena, that partnership can seem almost unstoppable for quite some time. It becomes increasingly difficult to effect reform from within because so many of the more effective elements of society become corrupted and cynical to the point of apathy.

In a word, the governance of society becomes an organized hypocrisy engaged in systematic destruction, of not only others but also of society itself, especially as the others either resist more effectively or collapse from sheer exhaustion.

As I have mentioned before, in discussing this with some older fellows who have a bit of a broader personal perspective, and in reading deeply in history and its cycles, it seems as though the West entered into such a cycle, in the 1980's. It is merely reaching its full flower today.

The consequences on society as a whole, if history is any guide, will be profound, even more so than we have seen so far.

Journal of Business Ethics
The Corporate Psychopaths Theory of the Global Financial Crisis
By Clive Boddy

An understanding of Corporate Psychopaths as expressed in a recent series of papers in this journal and in others, and based on empirical research, has helped to answer the question of how organizations end up with impostors as leaders and how those organizations are then destroyed from within (Boddy, 2005, 2010a, Boddy et al., 2010a, b).

The event of the Global Financial Crisis has hastened an already changing climate in business research. Commentators are no longer willing to assume that all managers are working selflessly and entirely for the benefit of the organization that employees them, and the study of dark, dysfunctional, or bad leadership has emerged as a theme in management research (Allio, 2007; Batra, 2007; Boddy, 2006; Clements and Washbrush, 1999).

The onset of the Global Financial Crisis has thus led management researchers to be increasingly interested in researching various aspects of dark leadership in an attempt to explain the current financial and organizational turmoil around the world. Numerous papers on dark leadership have, for example, been recently reviewed by this author for this journal and it is evident that there are commentators with a deep knowledge of individual types of dark and dysfunctional leadership and with views on how these people have contributed to the current crisis.

Corporate Psychopaths are one such type of dark manager, and this paper investigates their possible influence on the companies involved in the Global Financial Crisis. This is important because when large financial corporations are destroyed by the actions of their senior directors, employees lose their jobs and sometimes their livelihoods, shareholders lose their investments and sometimes their life savings and societies lose key parts of their economic infrastructure. Capitalism also loses some of its credibility.

These corporate collapses have gathered pace in recent years, especially in the western world, and have culminated in the Global Financial Crisis that we are now in. In watching these events unfold it often appears that the senior directors involved walk away with a clean conscience and huge amounts of money.

Further, they seem to be unaffected by the corporate collapses they have created. They present themselves as glibly unbothered by the chaos around them, unconcerned about those who have lost their jobs, savings, and investments, and as lacking any regrets about what they have done.

They cheerfully lie about their involvement in events are very persuasive in blaming others for what has happened and have no doubts about their own continued worth and value. They are happy to walk away from the economic disaster that they have managed to bring about, with huge payoffs and with new roles advising governments how to prevent such economic disasters.

Many of these people display several of the characteristics of psychopaths and some of them are undoubtedly true psychopaths. Psychopaths are the 1% of people who have no conscience or empathy and who do not care for anyone other than themselves.

Some psychopaths are violent and end up in jail, others forge careers in corporations. The latter group who forge successful corporate careers is called Corporate Psychopaths. Who psychopaths are and who Corporate Psychopaths are, is discussed further below

Evil does exist, and its power ebbs and flows. Or rather, evil exists, but as the absence of something else, the deficiency of goodness and humanity. So it can remain resilient through long droughts because it has no substance of its own to sustain, but awaits only for the weakness or indolent apathy of society to rise again.

One can see this clearly in history, although the skeptic will be quick to point out that all seems dismal, since nothing human is ever perfect.

Still, there are degrees in all things, and the weight of goodness often restrains the impulse of evil, although evil seems to remain ever resilient, never conquered, only sleeping to take a turn another day.   Consider the instances of genocide and widespread impoverishment in the last century alone for example, if you will like to see the corridors in which true darkness dwells and the madness is unleashed upon the world.  And then tell us of the natural goodness of men and their works.

Goodness is not a constant state, or even an end in this world, but a way to an end. It is not an objective to be reached, but a way of life that requires continual attention and remembering.

"...Far be it from any of us to be of those simple ones, who are taken in that snare which is circling around us! Far be it from us to be seduced with the fair promises in which Satan is sure to hide his poison!

Do you think he is so unskillful in his craft, as to ask you openly and plainly to join him in his warfare against the truth? No; he offers you baits to tempt you. He promises you civil liberty; he promises you equality; he promises you trade and wealth; he promises you a remission of taxes; he promises you reform.

This is the way in which he conceals from you the kind of work to which he is putting you; he tempts you to rail against your rulers and superiors; he does so himself, and induces you to imitate him; or he promises you illumination, he offers you knowledge, science, philosophy, enlargement of mind. He scoffs at times gone by; he scoffs at every institution which reveres them.

He prompts you what to say, and then listens to you, and praises you, and encourages you. He bids you mount aloft. He shows you how to become as gods. Then he laughs and jokes with you, and gets intimate with you; he takes your hand, and gets his fingers between yours, and grasps them, and then you are his."

J.H.Newman, The Times of Antichrist

http://jessescrossroadscafe.blogspot.kr/2012/10/clive-boddy-two-papers-on.html

'Shadow Banking' In China

From Zero Hedge:

Xiao Gang, Chairman of the Bank of China, took on the issue of “shadow banking,” recently in an op-ed. Chinese finance is undergoing dramatic changes which are not yet widely understood. Historically (mainly before 2008), the vast majority of lending in China was done by the normal banking sector in the form of loans.  The process was a cornerstone of the government’s control over the economy.  The vast majority of banks in China are controlled by the government, so the “who and when” of lending was firmly in the hands of China’s leaders. But, the years 2008/9 will be remembered as watershed years for Chinese finance, as two trends appeared – an economy relying increasingly on debt creation for growth, and that debt creation becoming more and more complicated and obscure - making it is easy to see why so many officials and analysts are worried about the 'hazy and complicated area of finance' out of teh government's direct control.

http://www.zerohedge.com/news/2012-10-17/shadow-banking-china

As Far as the Eye Can See: Stagnation

I've read Jesse's blog for some time.  He grew up in the U.S. and has international business experience in different continents.  I appreciate his insight and wisdom stemming from Christian humanism.

From Market Shadows:

Ilene: Jesse, thank you for doing another interview with me. I’m continually learning from your rational, and brilliant, insights into the markets, and more importantly, the human nature upon which they are built. It’s always a pleasure to explore your thoughts as events unfold.
Previously, when we discussed ‘flations, you believed we were heading into a stagflationary period. Not hyperinflation–you didn’t think prices would spiral up uncontrollably. Has the Fed’s new QE-Infinity program changed your mind?

Jesse: No, not at all, QE infinity was always within expectations, because of the way in which it has been constructed, in addition to the failure of the fiscal side of the house. The President and the Congress control fiscal policy, and the Fed controls monetary policy. “Fiscal” is how the government obtains and allocates money. It also involves setting priorities, tax policies, tariffs, etc. Fiscal policy is failing to do its part to reform the system that caused the financial bubble and collapse in the first place, and the Fed is manipulating monetary policy and its regulatory powers largely in the service of the financial sector.

Ilene: Would you describe the economic condition as “stagflation” now?

Jesse: Yes, given the very low GDP and employment growth, and the inflation. The inflation, while not presenting itself broadly, is rather high in necessities like food, healthcare, and energy. It is not very pronounced but that is what I would call it. I would also accept “stagnation” for those who are fussy about how to measure inflation.

Ilene: You’re not very optimistic that a true reformer will show up and begin the process?

Jesse: No, and I am increasingly concerned that the powerful few are going to provoke a false flag or some draconian response to even modest and non-violent demonstrations. That will remind us that the reforms of the 1930s were born out of some serious conflicts that we have not seen in the US in quite some time. Typically these historical cycles overshoot, and this case looks to be no different.

http://www.marketshadows.com/2012/10/16/another-drink-with-that-stagnation-jesses-cafe/

Why Intel Better Not Be Economic Bellwether This Time Around

From Zero Hedge:

For those who missed it earlier, Intel reported results that were just slightly better than expected, and yet the stock tumbled over 3% after hours. The reason is because despite a weak quarter which had been pre-guided down by the sellside community every so effectively, the semiconductor manufacturer saw even more weakness in Q4. Those who wish to read the details can do so here. For everyone else who is more of a visual learning bent, we present the following chart which shows the year-over-year change in Intel revenue, which shows that for the first time in 12 quarters, INTC reported a decline in annual revenue. Furthermore, there is virtually no question that Q4 will also see a revenue decline: the only question is whether it will be greater than Q3's 5.5% Y/Y drop.

http://www.zerohedge.com/news/2012-10-16/why-intel-better-not-be-economic-bellwether-time-around