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By Michael M. Thomas, who figured out Wall Street was not all it was cracked up to be before most of you were born
I can’t recall which divine agency wafted me to the shores of Naked Capitalism, or when it was (I’m guessing late 2008, when I was writing occasional pieces for Forbes.com on aspects of the financial crisis that struck me as distinctly odd), but once ashore I stayed. Every morning now, the first thing I read is Yves Smith’s absolutely indispensable website. Without it, the way things have gone in the realms of postmodern, oligarchic finance capitalism, together with the noxious exhaust fumes produced by the caravansaries rumbling along the gold-paved highway to Hell that runs between Wall Street and Washington and back again, would have reduced me to a blithering idiot, seeing much, comprehending little, blinded by fury and deafened by cant.
I went to work on Wall Street in 1961, was a partner and co-head of corporate finance at Lehman at the turn of the 1970s, did the same at pre-Milken Burnham & Co. in the mid-1970s, consulted for a while and then started writing about Wall Street in 1980, a process that has produced eight published novels (Hanover Place was deemed by Louis Auchincloss to be one of the ten best American novels about finance) and God knows how much journalism. I’m now working on a ninth novel, titled Fixers, about Washington, Wall Street and the financial crisis. In aid of this effort, I have perhaps 5000 items in my Evernote clippings file. Of these, I can confidently say that a good 20% come directly or indirectly from Naked Capitalism.
Why should this be so? Well, more than any other forum, Naked Capitalism consistently suggests and proposes new ways to bridge what I consider the abyss that will one day sink us all if Koch brothers-style politics and capitalism have their way: the chasm that lies between what we need to know and what we have been (and will be) allowed to know. This is largely because Yves Smith’s posts and links are, unlike those on offer on roughly 90% of financial websites, rooted in a process that combines scientific and procedural rigor with moral conviction. If she “talks her book,” and she does, her “book” isn’t a portfolio or an investment strategy, but certain ideas about right and wrong, words both Wall Street and Washington long ago forgot how to spell, let alone live by. This is all very well provided one understands and gets the arithmetic right, but many if not most don’t, in which case their adjurations are worthless. Not only can Yves do the math, she brings to the website other posters who do as well. Yet her site conspicuously lacks the philosophical and technical self-congratulation, the egregious algorithmic bullying and, above all, the nasty “insiderness,” that mars better-known and statistically more widely viewed financial blogs and websites. You can take this as gospel, because it comes from someone who’s been “inside” places these creeps, with their pathetic fantasies of fifteen minutes in the Charlie Rose spotlight, can only dream of.
I have often complained that the trouble with the Internet is that it has given literally tens of thousands of people with nothing to say a place to say it. Naked Capitalism invaluably shoves common sense, technical knowledge and moral passion down the throats of that twittering rabble and silences their nonsense. When I read Naked Capitalism, I am reminded of one of my favorite quotations, one of those apothegms that, once read, sticks barnacle-like to one’s awareness. It goes like this:
In around 1912, a professor of Moral Philosophy at Oxford addressed the students in his course to the effect that what they were about to study would have little utilitarian application to the works-and-days, getting-and-spending lives they would lead once they went down from the university. “Save only this,” he told them, “that if you work hard and diligently, at the end of this course you will have a good idea of when another man is speaking rot, and that, in my opinion, is the main if not the sole purpose of education.”
It pleases me to think that were he living at this hour, Professor John Alexander Smith would have become as devoted and (in every sense) as constant a reader of Naked Capitalism as yours truly. And I hope you’ll join its devoted readers in supporting this beacon of sanity.
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40 comments
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“Every morning now, the first thing I read is Yves Smith’s absolutely indispensable website. Without it, the way things have gone in the realms of postmodern, oligarchic fiancé capitalism…”
You know, I feel the same way about zerohedge. For me, NakedCapitalism is an aider and abetter of the status quo, simply because it will almost never question the fundamental assumptions that underlie the nature of this corrupt system. And by never questioning them it implicitly endorses them, which in the end serves the purposes of crooks like Lloyd Blankfein and Ben Bernanke just fine.
I read zerohedge devotedly, too. My take on ZH is that it defines “corruption” in a more narrow monetarist sense. I’m a liberal arts-humanist guy. I don’t think we can reintroduce the kind of moral outlook we desperately need to reinvigorate by going back on the gold standard – but I have plenty of good friends who do.
Yeah, Mike, just what is needed, a re,turn to the gold standard. You obviously fail to comprehend the fact that economic growth requires a growing supply of money. Reduced money growth never stimulates economic growth.
Growth for the sake of growth is the ideology of cancer.
You do realize that returning to a gold standard tommorrow would severly crash the economy, don’t you?
Inflation is not a problem right now, not even close.
Charles, please reread Michael’s comment. He DOESN’T advocate a return to the gold standard; his friends do. Secondly, also read Pete’s very astute observation. It has become apparent that a new paradigm must replace the existing one, otherwise we’re ALL doomed.
I want to second your point. I seldom comment myself, the reason being that I read comments and the first thing I note is that many commenters, like Charles Fasola, are like Pavlov’s dog: a phrase (“gold standard”, “QE”) sets them slavering and they don’t bother to read for context or accuracy, but simply take the buzzword as an excuse to set down their idees fixes.
We are long past the end the end of real economic growth in the official market economy; and it’s only monetary games from central bankers that are even making the crappy nominal growth we are getting possible.
You might as well get it into your head now that growth as economists define it is pretty much done and over. So start making appropriate preparations. If you can do that then you’ll be saved a lot of pain, suffering and hardship in the near future, I promise you.
Too true, but it’s more than just ‘rot.’ The individuals at the centre of the financial political nexus have managed to carry out a moral inversion with very few historical precedents. Greed, pathological selfishness, the worship of power and money and the glorification of violence and war have been placed at the centre of cultural life. At it’s worse the new corporate polticial system degenerates into a cult of the flag and nation, a kind of sickening idolatry that’s reminiscent of the declining days of imperial Rome. A competition in barbarity now exists between representatives of the corporate state at the ‘holy’ altar of the Fatherland, with politicians competing in displaying their inhumanity and chauvanism.
Simple moral values – compassion, decency, solidarity and useful work, are now regarded as aberations of the profit system, and vices to be extirpated. Unless efforts are made to overcome these horrendous developments the likely outcome will not be god.
‘Humanitarianism is the expression of stupidity & cowardice…success is the sole earthly judge of right and wrong’ Adolph Hitler
Zerohedge started out being interesting. It has since devolved into a mire of conspiracy theorists and rants. Any gems are well hidden. I gave up on it.
Each to their own, I guess.
Steve
ditto, can’t take the thing. Zero Hedge is also pretty much in your face pushing gold. Not a healthy mix of Gold Will Go to 3500, and Wall ST is Corrupt.
HFTs, LIBOR, gold, and silver manipulation were only “conspiracy theories” in the not so distant past too. And yet you believed the MSM when they were dismissed as being only “conspiracy theories”, eh?
There are some gems there:
“[Charlie] Chaplin explains what REAL normal human behabior is.
http://www.youtube.com/watch?feature=player_embedded&v=B1IY_KmZ2Ok
“Stop believing that Social Darwinism is scientific. It’s not. It’s a pseudo-scientific construct by the oligarchs. It’s Madison Avenue S&M cheap psychology con artist crap to convince you that Sadism is natural for the top position and Masochism is natural for YOU (i.e. the bottom position). BULLSHIT! It also conveniently pits you against your fellow slaves in a dog eat dog envy contest to get to be a top sadist. That is the ‘method’ in oligarchic madness.
“Cooperation is far more important among species in nature than predation. That is the part that the Gilded Age assholes conveniently left out when they ‘adopted’ (coopted is more like it!) the Theory of Evolution tenet labelled ‘survival of the fittest’ to explain their brutality and inhumanity to man and the biosphere. These suicidal fucks are doing away with our life support system and calling it science!”
http://www.zerohedge.com/news/2012-10-03/guest-post-its-not-america-anymore#comment-2853365
I don’t comment much here either, but Thomas is right, J. Gordon’s remark is all about goldbuggery, and it’s wrong headed. Go look at the record of the later 19th century in the US. It was a long deflationary grind with more frequent “panics” than we have now. And who did that help? The wealthy bankers. The folks at ZH have it backwards: the system they want would hurt the little guys and help the rich even more than the current one.
Oh, and the other fantasy about the gold standard is all wrong too, that it is inviolate. Again, go acquaint yourself with the historical record. Countries cheated on the gold standard all the time, by reseting the value of their currency in gold terms.
In this I am in favor of Sharia law. By all that is just and right, anyone who uses money to make money, i.e, “usury” should suffer the ultimate punishment.
Also, you lied about my being a goldbug, since I’m not one. Now go on: because of that lie, which four letter noun that starts with L and ends with R can be legitimately applied to you now?
You can quibble about nomenclature, but this is what you wrote:
“that everyone and his mother would be insane not to cash out of the system this instant and get ahold of whatever physical commodities he can lay his hands on.”
The view that physical commodities are stores of value underlies the goldbugs’ belief system. Nothing you have said thus far sets you meaningfully apart from them.
“Goldbug” has a very specific meaning. And I do not meet the definition of one. By the simplest rule of logic there is, you are a liar my friend.
Which fundamental assumptions do you feel Naked Capitalism does not question?
J, my boy, perfect disinformation.
Every unsupported charge in this post is diametrically opposite the truth. Charges presented as reasonable judgement. Which is then elaborated to reasonable-sounding consequences. Complete ad hominem, complete Big Lie, complete confusion.
Use the word ‘kleptocracy’ and you’re on the DHS watch list. NC’s where most of us heard it first, which means it’s likely on the gold plan.
And, false conflict among different perspectives opposed to the kleptocrats. Zerohedge allows goldbugs and debt panic mongers, but it also just posted an article from Counterpunch that is probably the most complete takedown of the kleptocracy in one place. None of it’s a surprise to NC readers, but it is nice to see it all it one place.
Different isn’t inevitably opposed, it’s just different. The old toast, ‘Confusion to our enemies!”
Beautiful smokescreen. If you’re not on the payroll, you’re giving work to billionaires.
http://www.counterpunch.org/2012/10/26/capitalism-and-the-hole/
Dear scraping_by,
My belief is that due to various factors society is going to collapse soon and that everyone and his mother would be insane not to cash out of the system this instant and get ahold of whatever physical commodities he can lay his hands on. That includes, solar panels, rabbits, and ammo.
Having said that, I have just assured you pretty convincingly that I am not on the payroll of any billionaire thank you very much. In fact, I think you must be on their payroll, since you are trying to instill a sense of complacency and faith in this system that’s primed for collapse.
You have an armchair understanding of what a collapse scenarion looks like. Gold is no protection. Enough acrege to grow enough food to sustain yourself might be. Oh, and the other sure fire survival strategy is being a doctor. Everyone will barter with you for treatment when they need it, and everyone needs doctors now and again.
For instance, women in Vietnam often kept a lot of their wealth in the form of gold beads (as in necklaces). During the war, there would be periods where sections of the countryside were pretty much cut off from the rest of the world. The women would be forced to trade their gold at a huge discount from its supposed value for medicines and food.
With permaculture, even a small urban lot has enough “acerage” to feed a family. I’m sorry but you just don’t know much about anything you’re talking about.
I don’t understand what you are saying Yves will not allow to be written here.
Do I not go on and on about the global inherited rich, accumulated private ownership of property and such? Are these not fundamental assumptions?
Just what fundamental assumption do you think need to be questioned?
And secondarily, has Yves kept you from expressing your thoughts?
I appreciate this forum and wish it continued success. It gives me a place to exude my textual white noise and read others’ as we watch the world around us crumble.
Reminds me of one of my favorite quotes from Joan Robinson.
”The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.”
Yves,
Any plans for a second book? Something to steer us into the future based on what you’ve been collecting here at NC? What would you do if you were the one and only economic advisor in the White House? (for a president who worships your every footstep?)
I’d like to do a second book but don’t know how I can find the time or energy. ECONNED was a death march.
But I want to write one on the bigger social/political implications of t the crisis and the new financial order.
“the new financial order”, now that is the book I want to buy! I understood the old one; I see, from daily reading of NC, where we are now, and am convienced that we aren’t going back there anytime soon. So how, Horacio?
new feudalism.
I look forward to reading whatever you write next. I’m sure it will come to you in time.
Yves,there is another way.
Roughly work out a theme and direction and then hand it over to your trusted and well-beloved minions,and become an Editor.
Michael M Thomas,
I presume that the formulation “fiancé capitalism” is the result of a spell-check gremlin? At any rate, thanks for putting the voice of Nicolas Cage’s H.I. from “Raising Arizona” in my head.
Thanks, fixed. Speaking of post-modernism….
lol, sorry you fixed it. I rather enjoyed that one.
You’re not just telling us what we want to hear, are you?
Yves or Michael M Thomas,
“a process that combines scientific and procedural rigor with moral conviction”
Care to elucidate on the topic?
Well said!
NC is an indispensible part of my morning, and of my ongoing education. Happy to help.
I don’t comment here much, but I surely appreciate the quality of the articles provided by NC. Started reading this thing sometime in ’08. I was led here by links in the “implodes” (anybody remember Mr. Mortgage?)
I also read on a regular basis:
-Barry Ritholz/TBP: An honest capitalist POV with the emphasis on honest. Sometimes a bit technical/wonky though (as is NC)
-ZH: It’s like the National Enquirer & WSJ combined – tabloid-y, techy & schizoid (GW, WB7,nanex & what the hell is VWAP?)
-Mish: In spite of his rabid anti-labor views, he has provided some of the best analysis of the world-wide ponzi scheme going on right now.
-Jesse(cafe americain): where else can you find a progressive/liberal/christian/goldbug?
These sites have also led me to Steven Keen, William Black, Matt Taibbi & others who dare to speak up about the emperor’s “new” clothes.
I think I’ll do something I’ve never done before & make a donation to a website…
Thanks for a good article.
Just saw yo-yo on TV last night. I was so impressed in him as a person,… I thought, “this is the kind of person I admire most” his responses, his genuine heart, his kind face. Looks like the kind of person you aspire to be like. This world would be a better place. Good going, Yo-Yo. You have lifted my spirit and belief that there are still great wonderful people out there in the world. Sincerely….