Martin Armstrong’s latest on Dark Pools

http://www.zerohedge.com/…real-dark-pools

Martin Armstrong continues writing his typewritten letters (from a detention center in New Jersey) regarding ongoing economic and political events. I’m no expert on Armstrong though if you’ve not heard of him, he was detained (imprisoned) for some seven years for contempt of court and only went to trial when the judge who had been detaining him was removed from the case by the NY Court of Appeals (source: wiki). There’s a pretty reasonable chance that Armstrong did nothing wrong other than crossing the State.

Oh and Armstrong had a number of models and forecasts he used to predict the market, some of which were apparently amazingly accurate. Who knows.

Armstrong’s latest letter is available on ZeroHedge, a finance-centered blog that has quickly become one of the most cited and popular finance blogs out there. Interestingly, the ZH writers are anonymous, taking on the names of various characters in Chuck Palahniuk’s Fight Club. Recently, ZH took their site off of blogspot.com and moved it to offshore servers to further protect their anonymity and the site’s often whistleblowing content.

Getting to the point. The letter is about Goldman Sachs and what Martin calls the “club” on Wall Street. The “club” is a group of extremely powerful individuals who are out to make massive amounts of money via the financial system. Importantly, the “club” attempts to do this not by making better bets (as in, speculating), but essentially by rigging the system and creating the perfect trades. The “club” accomplishes this goal by controlling inside information.

The letter is pretty lucid and provides an interesting glimpse into what goes on behind-the-curtains of Wall Street. What struck me most about the letter is that Armstrong works to dispel the notion that there is some conspiracy theory across all central banks to control the world. What’s really going on is that the central bankers are trying to do their jobs and maintain economic and monetary order. Unfortunately, they are clueless academics. Martin realized just how impotent and lost the powers-that-be were back during the 1989 crash:

It had dawned on me perhaps when there was the 19889 Crash. I had carried two cell phones many times when the model was reaching critical turning points as it did in 1989. The markets were going nuts, and my one cell phone ran[g] that was used primarily for very special clients. it was one of the G5 Central Banks asking me outright what the model was showing and did I think they needed to intervene? As I was explaining the focus was in Japan and that there would not be any abnormal correction and thus there should not be concern about intervention, my regular cell phone rang. It was another G5 member asking the same questions.

What became very clear to me, was they truly had no idea what was taking place any more than the rest of the world. Everyone was struggling to comprehend the new world that was emerging. Communism seemed defeated, markets were crashing, and the general expectation was – Should we be rejoicing?

Most of the central banks have a lot of PHDs, with no real world experience. They have read books, but have not been in the trench to “feel” what it is truly like. This is why government employees rarely have anything worthwhile that will ever contribute to society. …

Armstrong has seen behind the curtain and knows that the authorities (in this case the central banks) are clueless, self-interested, and incapable of working together to effect change. Often, outsiders see these authorities and point out their ineptitude, understanding they are clueless academics. And that’s where outsiders go from insightful to crazy — they go on to conjure up theories of impossibly coordinated efforts by the same incompetent authorities.

In other words, it’s just like the South Park episode — Mystery of the Urinal Deuce.

So what is going on when we see Goldman Sachs making money hand over fist? Simple: they’re doing what they do best, exploiting their inside information, political connections, and their current monopolistic status on Wall Street. Is it all that surprising?

Max Keiser on Goldman Sachs

This interview with Max Keiser is fantastic. Keiser doesn’t hold back with regard to how he views Goldman Sachs as “scum” that has “co-opted” the U.S. government. He even goes on to say they are financial terrorists that effectively held the U.S. hostage by claiming that the world would end if they weren’t bailed out (essentially, Keiser is equating the likes of Hank Paulson, who was head of the treasury when the massive bailout was orchestrated and is an ex-Goldman CEO was basically working for Goldman in his role at the Treasury). And yeah, Max is an outspoken guy, but I have to wonder how many others out there on Wall Street are thinking something very similar but keeping their mouths shut (out of fear of retribution or whatever).

Regardless, you have to wonder: something is extremely wrong when an investment bank squeaked out of implosion a year ago thanks to a massive government bailout only to be the last man standing to reap the benefits of underwriting tons of equity as a quasi-bank-quasi-hedge-fund-with-supreme-access-to-the-U.S.-government and then makes enough money to pay all of their employees $300K+ in salaries/bonuses.

If that isn’t confusing, if that doesn’t make you scratch your head and say, “huh?” then just start looking around. There are a few people like Max, Barry Ritholtz, and, of course, Matt Taibbi (See his RollingStone article if you haven’t already) who are spreading the word.

And this isn’t about envy over a company being profitable. It’s about a company that is succeeding because they have massive influence in D.C. and with the Fed and Treasury. That’s not right. It’s not capitalism. It’s not a free market.

Ok that’s enough from me.

Born to Run by Christopher McDougall

Originally posted this review on Christopher McDougall’s Born to Run on birthdayshoes.com:

Christopher McDougall Born to Run
Christopher McDougall’s Born to Run

I challenge anyone to read Christopher McDougall’s Born to Run: A Hidden Tribe, Superathletes, and the Greatest Race the World Has Never Seen and not be inspired—to run, to be healthy, to be, well just, better.

Born to Run is about McDougall’s investigative adventure into the world of running, ultramarathons, the shoe industry, and the Tarahumara Indians, a seclusive group of “superathletes” known for their running endurance and speed. The tale begins with a question, “How come my foot hurts?” and ends with a race between a few elite ultrarunners and the Tarahumara Indians in the Copper Canyons of Mexico. In between are a number of answers, questions, and challenges.

It was difficult to put Born to Run down. The book is simultaneously thrilling and informative. It not only recaptures the excitement of past distance running races (like the 1995 Leadville 100), but it also tells the backstories of BtR‘s protagonists — Ann Trason, Ken Chlouber, Caballo Blanco (or “Micah True”), “Barefoot Ted” McDonald, Scott Jurek, Jenn “Mookie” Shelton and Billy “Bonehead” Barnett. Even still, the book serves as an indictment of the running shoe industry, specifically Nike, while also laying out a compelling case that human beings evolved to be runners—chasing prey down, out-enduring them via the persistence hunt. At under 300 pages Born to Run, like the runners and races it describes, covers a lot of ground quickly.

Perhaps one of the most inspirational paragraphs from Born to Run contains the book’s title:

Distance running was revered because it was indispensable; it was the way we survived and thrived and spread across the planet. You ran to eat and to avoid being eaten; you ran to find a mate and impress her, and with her you ran off to start a new life together. You had to love running, or you wouldn’t live to love anything else. And like everything else we love—everything we sentimentally call our “passions” and “desires”—it’s really an encoded ancestral necessity. We were born to run; we were born because we run. We’re all Running People, as the Tarahumara have always known.

Born to Run is one of those rare books that captures within its pages an authentic human experience and conveys that experience directly to the reader. It’s a book in which you are awed by superhuman athletes while still seeing their core humanity. And therein is one of McDougall’s primary takeaways: every human being was born to run, the design being coded within our DNA.

Since this book review is for the Vibram fivefingers fan community, I’d be remiss not to note that BtR gives a hearty mention regarding VFFs, specifically via Barefoot Ted, who apparently inspired Vibram USA’s CEO, Tony Post, to go for a run in his fivefingers. I’m guessing this was back in early 2006. “El Mono” (Barefoot Ted) also made use of his fivefingers at various times during his trek to race with the Tarahumara. And as previously noted on this site, Christopher McDougall seems to enjoy his fivefingers for running these days, too.

Conclusion: BtR is a fantastic read, and I whole-heartedly recommend it. More than anything, I expect this book to spawn the next generation of runners, and I’m optimistic that it will take barefooting (or pseudo-barefooting/minimalist footwear) mainstream. Born to Run is yet another step in a more general movement towards acquiring a higher understanding of what it means and requires to be human.

Thank you to Christopher McDougall for telling this tale: it needed to be told!

If you’d like to snag Born to Run, just click this link to pick it up from Amazon.com.

Exuberant Animal by Frank Forencich


Exuberant Animal by Frank Forencich

I read Exuberant Animal by Frank Forencich whilst vacationing in Jamaica and am just now (Actual date, not finish date per this review is July 9, 2009!) getting to review it. I’m going to have to limit my review to a few quotes that I enjoyed from the book, the first of which is one that actually describes the structure of the book:

Being bushy by nature, this book will not give you a linear, step-by-step formula for health and fitness success. IT won’t provide you with a prescription or a checklist. It won’t reveal a secret antidote for aging or a breakthrough discovery for instant weight loss. Instead, this bushy material will open your mind to new possibilities, relationships and ideas that you can adapt to suite your own purposes. Most importantly, the ideas in this book will help you develop a sense of depth and sustainability in your life of physical movement. You’ll begin to realize that the world of the body is far more than one of sets, reps and calories. It is immensely rich and endlessly fascinating-an ideal life-long study.

About two paragraphs up from this one was the following great sentence:

“Specializations have their place, but they inevitably lead to fragmentation.”

I couldn’t agree more. And Exuberant Animal takes you on a “bushy,” generalist route through the mind and body. Each chapter essentially stands alone, so the book reads a bit like a series of articles. It’s a great primer for anyone interested in getting back to the core of being human — a core that is fundamentally animalistic, and, well, exuberant!

Another quote I liked from a chapter titled “Learning learning:”

“I hear you,” agreed the philosopher. “The specialists have run amok. They do one thing really well, but they can never get to the other side of the oscillation. Fragmented disciplines, isolated studies. One trick-ponies. No one goes meta anymore. Conservatives are tightening the screws at every level. Multi-disciplinary studies are out of fashion and so no one can see the big picture. When you’re a specialist, taking the big view just isn’t part of your job description. and if you can’t see the big picture, you’re not going to adopt a rhythm. More likely, you’ll live and teach in a rut.”

And finally a quote from a chapter titled “Stop Drawing Horses:”

Find out your awkwardness. Figure out what you’re good at and then—Just Do the Opposite. Go towards your awkwardness, go towards your fear, go towards your instability, your errors and your ignorance.

All “bushy” quotes, no?

There’s a lot more in this book, and I’m giving this review short shrift simply because if I don’t get it out there, I’ll never get it up. If you’re at all interested in getting in touch with your humanity, I recommend picking up Exuberant Animal, a book about a holistic, mind-body life philosophy.

Frank Forencich has been at the forefront of the movement for humans to get in touch with their nature, and if you just want to plug in to what’s up to, be sure to check out his website:

http://www.exuberantanimal.com/

Constructive Living by David Reynolds


Constructive Living by David Reynolds

I picked up a used copy (the book is out of print) of Constructive Living by David Reynolds after reading a comment from James Hogan on Patri Friedman’s livejournal.

The book bills itself on the cover: “Outgrow shyness, depression, fear, stress, grief, chronic pain. Achieve the goal of Constructive Living—to do everything well.

At around 100 pages in length, the book is a quick read that essentially admonishes you to act your way into a better life. In keeping with my fascination/recent obsession with doing over thinking as well as Glasser’s Control Theory and Gilbert’s Stumbling on Happiness, CL was right up my alley.

Part of CL is about paying attention to your life. To some extent, it seems a bit like a “living in the moment” sort of mantra; however, I think the idea is much more poignant/specific than that. If I could sum up CL in one sentence, I’d clumsily suggest that constructive living is “Acknowledging your feelings and then taking control of what you are doing.”

It’s in the doing that you can outgrow your feelings. There’s a maxim somewhere in the book that has managed to stick in my brain:

“Doing wags the tail of feelings.”

To elaborate somewhat on this quote, we can’t control our feelings. And since I can’t control what I’m feeling, I also can’t control the feelings of those I care about. What I can do is control my behavior. I can do something—anything. By doing, I can change my situation, which will almost always ultimately change my feelings.

We are only what we do. So doing is not just about taking control, it’s also a rejection of wishing, wanting, can’ting, or any other type of behavior that is non-constructive. I can dream about wanting to be successful all day — those dreams may be fun to imagine, but they do nothing to advance my state.

Here’s a memorable quote from the book that somewhat deals with the idea of dreaming and doing:

The first step in changing reality is to recognize it as it is now. There is no need to wish it were otherwise. It simply is. Pleasant or not, it is. Then comes behavior that acts on the present reality. Behavior can change what is. We may have visions of what will be. We cannot (and need not) prevent these dreams. But the visions won’t change the future. Action—in the present—changes the future. A trip of ten thousand miles starts out with one step, not with a fantasy about travel.

Indeed!

Constructive Living includes a number of exercises at the end of the book that work to refocus your life on doing. Not surprisingly, one of the exercises is exercising. Exercising is a fundamental way to act in a positive way and can work to change your feelings. Incidentally, he also suggests preparing your own meals. It’s interesting (to me) that over the past couple years, amidst a number of things I could not control, two things I’ve returned to over and over again have been cooking and exercise, which are really two core things that make you feel like a competent and capable human being.

CL has a distinct buddhist undertone. Another maxim in the book is that “self-centeredness is suffering,” which is less about being selfish and more about focusing your attention outward instead of dwelling on your own feelings. CL is actually based on Morita Therapy, a treatment that emerged out of Japan.

For such a short book, CL is worth re-reading. Even in its simplicity it has a great deal to digest, and I’m pretty sure I missed a few things.

Coincidentally, Penelope Trunk blogged on How to have more Self-Discipline the other day, and I’d recommend her post for a complimentary expression of Constructive Living (though I have no reason to believe that Penelope Trunk has read this book, there is a lot of great overlap in her post, which is also much better written than this scribbled out book review!).

Twitter Power by Joel Comm

Twitter Power by Joel Comm

Finally adding a very small review about Twitter Power by Joel Comm. It was disappointing. In short, Twitter Power provides an overview of what twitter does as well as giving some general pointers on how to use twitter. It’s the tweeting basics, in other words.

The reason this book fails is because it is unlikely in the extreme that someone who knows nothing about twitter will by this book before taking a stab at twittering and learning either by trial and error or any number of free online resources how to do the sorts of things Joel Comm writes about in his book. And if you were like me and bought the book prior to it’s reviews, you might have thought “Hey this Joel Comm guy has a ton of followers and his book is callled ‘Twitter Power’, which strongly evokes the notion of a power-user. Let’s see what tips/tricks the big boys know!” That’s what I did anyway. And when I just now (writing this review some two months after reading the book! Today is June 26!) went to Amazon, despite the book receiving over four stars with 70+ reviews, what’s the second highest review of Twitter Power but this gem, which I whole-heartedly agree with:

I was disappointed with Twitter Power, especially after reading the many reviews that claimed this book would reveal many techniques for both beginners and pros alike. For anyone that has been using Twitter for more than a couple weeks, this book is really 101. It seems to be geared towards people that have never heard of Twitter or are just getting started. If that’s the case, this book will help you get your feet wet, but it doesn’t shed light on anything you can’t pick up on your own simply by using Twitter for a few days.

Twitter is real time with instant response in most cases, and you’ll find out what works for you and what doesn’t almost immediately. You can also pay attention to the power players and note their approach. The book just points you to the top users on Twitter anyways. Save your money and do a little homework.

Another problem with this book, which I should have anticipated having previously read Joel Comm’s The Adsense Code, was that books about the internet’s latest stuff, even when bought extremely close to their completion, have a decidedly out of date quality to them by the time they are read. In the case of The Adsense Code, I even took some of the information to bat regarding certain Google policies only to be rebuffed by a friend who informed me that their policy had changed. Oof!

With twitter, just look at this graph of twitter’s traffic from alexa.com.

Twitter Power came out on February 17, 2009. In other words, assuming Joel more-or-less finished this book a good month or so before it went to publish, the “twitterverse” about which he wrote is no longer the twitterverse we have today. Sure, much of it has stayed the same, but much of it has also changed.

My conclusion: the model of reading-books-about-the-Internet is broken.

Finally, and I’m sure Joel Comm is a super guy, but I follow @joelcomm on twitter in hopes of gleaning knowledge about how a pro tweets and even that disappoints. For some great examples of twitter-users worth following, check out @mikemueller or the fantastic @gregormacdonald.

But don’t waste your time on Twitter Power.

Michael Jackson’s Life a Disturbing Portrayal of American Culture

http://bit.ly/14TCLS

Note: I don’t normally get into celebrity deaths, but to say Michael Jackson was an icon would be an understatement. Despite any number of freak-things related to the King of Pop, he was still an amazingly talented individual who created some fantastic music. I can’t say he’ll be missed — he’s only missed insomuch as I could displace the good things about him from the bad. And that had become increasingly difficult if not impossible over the past ten years.

From Yahoo! Finance comes an article titled “Jackson lived like king but died awash in debt.” You probably already know the gist. Jackson created any number of fantasies, from his freak narcissim to Neverland Ranch. He lived a life of extravagance and died almost a half billion dollars in debt.

A few short descriptors that come to mind when I think about Michael Jackson:

  • He was an amazing talent and produced a veritable catalog of pop masterpieces.
  • His family was dysfunctional — often disturbingly so.
  • He went from lavish wealth to huge debt. He got foreclosed on with Neverland Ranch.
  • After things had started going downhill, MJ’s investment in the Beatles’ songs (owning the copyrights) kept him afloat. It has always struck me as odd that you could own someone else’s musical creation. Rent seeking off of intellectual property rights? Check.
  • Jackson was freakishly narcissistic and/or had an extreme case of body dysmorphic disorder, engaging in all sorts of plastic surgery endeavors that ultimately made him look alien/gross/non-human.
  • He had some serious demons with regard to his sexual identity. Whether he actually acted on these things or not, I don’t know — it doesn’t matter, really. He had problems and they related to his sexuality.
  • MJ was one of most obsessed-over celebrities ever. And look how that turned out — he made his kids wear masks in public.
  • He died young of a heart attack.

I submit that Michael Jackson’s life is one of the more disturbing examples of modern American culture. He was an extreme case, for sure, but his problems are not unique: too much debt, too much spending, rent-seeking off of other’s work, twisted narcissism, broken family, repressed sexuality, and dying young of a heart attack*, the end result of a life of stress and poor nutrition.

It makes me sad to make this connection, but it’s just too striking to ignore.

America, what have we become?

* I guess cause of death is yet to be officially ascertained, but we’ll roll with this for now.

Shoot first and ask questions later (And have kids even if you don’t want to) (Updated, sorta)

Below is a response to Patri Friedman’s recent post on his pro-parenthood bias:

I’m late to the party.

My first kid is about eight weeks from greeting the world (and piercing my ears for the first few months or years!), so I’ve been giving the whole parenthood thing a lot of thought over the past few months. Incidentally, though we intended to have kids eventually, it happened sooner than we were planning.

Such is the unpredictability of life.

Which brings me to a point that you didn’t make, one that Bryan Caplan has alluded to via some scrounged up surveys of parents. The data Caplan found indicates that almost no one regrets having kids. Most parents wish they had *more* kids than they end up having. And adults who don’t have kids also tend to wish later that they had reproduced (For sake of saving a few words or directing others, see this post on the data).

Even though this backward-looking data supports the argument to have children, I don’t think it’s necessary to conclude that you should reproduce.

We are apparently quite bad at predicting what will make us happy in the future. For a nice read on this subject, I recommend picking up Dan Gilbert’s “Stumbling on Happiness” (and if you are too busy to do that, just read my selected quotes from Stumbling on Happiness here). A theme of Gilbert, which is also a theme of books like Taleb’s “The Black Swan,” is that everything is much more complex than we make it out to be, and this complexity makes our grossly simplified forecasts fundamentally flawed — useless at best — harmful at worst. As applied to those people who choose not to have kids, as much as they think they know what will make them happy in the future, they are almost certainly going to be wrong about their predictions.

Accepting our inability to know what will make us happy but understanding that it is a biological imperative to reproduce and realizing that it will be much more expensive to reproduce past our reproductive prime, all signs point to shooting first and asking questions later.

Of course, to have kids or not is no simple binary choice. Procreating makes for an incredibly “bushy” (complex) life experience. Kids add randomness and depth to our lives in ways that we can’t possibly foresee but ways we will likely enjoy*. Sure, by having kids you’ll forgo some experiences as you engage life by yourself or with your significant other, but the experiences you’ll forgo by not having children are wholly new and unpredictable — the life of an entirely new human being: you, your significant other, and your kid(s).

In short, I liken parenthood to doing first and understanding later. This is a good rule of thumb to apply across almost all facets of life — lots of iterations make for lots of experiments through which we can learn about and enjoy life. Not having kids is a choice to have a drastically less-interesting, much more simplistic and sterile (literally and figuratively) life. I wouldn’t wish that on anyone I care about.

So I shake my head when friends make that choice.

Finally, I don’t really understand how anyone can understand humanity through the lens of evolution and not have children. Having kids means getting in touch with our core humanity — our biological nature — and living out the imperative coded in our DNA: to create life. Reject your hardwired nature at your own risk.

For my particular contribution to furthering human evolution, our kid is getting a mix of the DNA from a caucasion (me) and an Indian. Gene-swapping for the win!

* Another SoH idea is that we are better off charging into the unknown than doing nothing because our mental immune systems are better at justifying our decisions after the fact than they are at managing grief of what could have been.

** Not a brightline conclusion, I know — you can always adopt or potentially figure out other methods to have children after you pass your reproductive time.

Update: So despite my comment being one of the last out of the 170+ comments to Patri’s post, I got a couple shout-outs in follow-up posts by Patri (here and here). And I had to throw in one more comment, which I’ll copy below, which is more or less an application of Pascal’s wager to the decision to have children. So here’s my second comment:

Another point regarding the buyer’s remorse stats — if the majority of people who don’t have kids ultimately regret it, it seems highly likely that at least one person in a committed sterile-by-choice relationship will regret their decision. Yeah, people often select mates based on whether or not they want to have kids, but these same individuals also often change their minds about their choice (thus the tendency towards regret).

And this often leads to wrecked, otherwise fantastic relationships. I’m sure that I am biased in making this observation — I know someone who clearly regrets not having children. His spouse of twenty years, on the other hand, seems perfectly content. And it has put an enormous amount of unspoken strain on their relationship, not to mention, it is a point of intense sadness for this individual.

I see a slight parallel to religion here. Having kids because you expect it to be somehow fulfilling is a bit like hoping for a reward in heaven when you die — a life lived adhering to some arbitrary religious codes requires a lot of obvious work with less than obvious rewards, not unlike the decision to have kids.

Except that is where the similarity breaks down. With the choice to procreate, not only do we see the direct benefits of our own parents’ choice (as in, I am alive and I believe my life is not only good for me but also for my parents), we see the benefits accruing to our friends and relatives.

I mention all of this because the anti-procreation argument assumes that you know without a reasonable doubt that you will be happier/more fulfilled/better off without children. Not only is there a lot of observational/anecdotal/statistical evidence suggesting you might be wrong, there’s also the reality thatwe are very bad at predicting what will make us happy in the future. The cards, it seems, are very much stacked against those who believe they’re better off without children.

So even if you don’t want to now, have kids anyway. To me, this argument is a version of Pascal’s wager that actually makes sense.

“People are complicated!”

http://xkcd.com/592/

Love the latest xkcd comic:

people are complicated!

In three frames xkcd indicts central planning with the single line that, “People are complicated!”

Why is this simple truth so hard to understand? If people are complicated, so are all systems of human interaction (i.e. markets, government, relationships, etc.). And it doesn’t stop there, of course: all dynamic systems are complicated.

It shouldn’t be a surprise that the simple-minded solutions of central planners fail to manage such unpredictable complexity. So why are they even trying?

Chance Wins

http://www.blog.sethrober…what-causes-it/

This bit by Seth Roberts reminds me all at once of Nassim Taleb’s work (Status quo, the fed turkey, works until it completely implodes), Seth Godin’s “This is Broken” idea, and the dinosaurs going extinct.

Who is flying this plane? Do they really know what they are doing? Does chance win over purpose?

Seth’s blog post is centered around the broken U.S. healthcare system — a system which suffers both from a burgeoning status quo as well as no means of introducing alternative solutions. In other words, it is entrenched.

And just like the dinos, when that entrenchment ultimately leads to social upheaval, the failure may be catastrophic.

A robust system must be dynamic.

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