Sunday, January 27, 2008

George Soros – Financially Right, Reflexively Wrong in Davos
…and everywhere else for that matter

George Soros is an interesting man. He has made billions of dollars for himself in the capital markets of the United States and around the world. He himself credits much of this success to an investment philosophy called Reflexivity. Long story short—his Reflexivity approach dictates that the value or worth of any market is determined by the person or group that is doing the looking and, in fact, the market has no value at all until it is determined by the “looker.” Basically, it means that we bring biases to the table and that those biases amplify market fluctuations. This approach is based upon a European philosopher named Popper and shares several theoretical principles in common with Quantum Physics. Heady stuff indeed—but not a bad approach for a man who cut his teeth in the arbitrage cellars where exploiting perceived value discrepancies is the order of the day.

His biography includes some other notable entries including his support for the Polish Solidarity Movement (a good thing) and advocacy for the Revolution of the Roses in the country of Georgia (also pretty good) along with his successful and eponymously-named Soros Funds.

More recently, Mr. Soros has become notable for his unabashed financial support for Liberal causes, the Democrat party in general, and for various “we are the world” and “America is not very special” type causes. He is quite the celebrity in the halls of Davos.*

Last week Mr. Soros took the opportunity to pontificate in the Financial Times regarding the credit, stock market, and housing corrections taking now full shape. Fair enough. But in the mind of George Soros we are suffering not from a traditional series of market corrections. Rather, we are in the middle of “the worst market crisis in 60 years” and the “…relative decline of the US…” as an economic power. Hmmmm….

Certainly I do not wear rose-colored glasses—it is my firm opinion that the United States is to spend a little market-cycle time in the economic woodshed receiving our just due. And I have no doubt that China—with its 1.2 billion souls and pseudo-capitalist structure—will become an economic powerhouse. But the “end of the American era” was predicted to happen in the 60’s, all throughout the 70’s (stagflation), during the market crash of the late 80’s, during the pop of the Tech Bubble in 2000 and the ensuing post-911 recession, and at every point of currency fluctuation over the last century.

America left a decades-long period of raising interest rates and entered a decades-long period of declining interest rates in the early 1980’s (secular trend). By all accounts we are entering a long-term raising trend once again. This requires adjustment. Such transitions always do and always will. America’s dominance may one day end—but a few years of more difficult times will not be a factor when it does.

I think that Mr. Soros misses another key point. It is a reasonable suggestion that the rest of the world has not improved economically in spite of America, but because of it. China would likely be a nation of one billion starving peasants had it not adapted some of the capitalist structures we designed and then built products that we want to buy. Europe would likely be a fascist serfdom of economic repression without our military intervention, Truman-doctrine economic aid, the continuing blanket of our protection during the cold war, and current (mostly friendly) competition in the marketplace. The rest of the world is mostly in ascendency, yes; but America had a part in that and we will continue to do so. John F. Kennedy once famously said that “A rising tide lifts all boats.” The other ships of state would be wise not to curse that tide.

George Soros is no doubt a very bright man who has made his mark in the world. These days, however, his Liberal One-World’er bent is distorting the way he is looking at America. To put this in his own terms, Mr. Soros’ valuation of the US is deeply affected by his incumbent biases which feed on themselves and cause him to short-sell America’s place in the world. He will understand if the rest of us look beyond his biases and invest in the underlying strength.

Be well,

* Davos is the traditional location of the World Economic Forum:

Thursday, January 24, 2008

Rage, Thought I

"Rage, thought I to give to thee
Escaping when released by me
For who am I, that rage should I
Thus held within, a cage gone by

So vengence then, did I pursue
To lie within that cage for two
Taking back, what now I lack
Re-gift the favor of your attack

One way makes a slave of me
The other of both I and thee
Left only is that I forgive
So as a slave, I shall not live"

It is worth mentioning that the concepts behind this piece are self-focused--meaning that they apply when we seek our own satisfaction upon personal harm. He who seeks justice on behalf of others might justly be governed by concomitant philosophy.

Be well,

Sunday, January 13, 2008

Iraq War a “Clean Shoot,” and History Will Be The Judge

Recently, a regular contributor to, Frosty Wooldridge, rehashed a bunch of old rhetoric regarding the Iraq conflict ( ). Mr. Wooldridge’s comments are rather easy to sum up: “Bush lied and people died.” Certainly he will find a clutch of readers who will eagerly agree with those sentiments—no matter how threadbare they have become. It’s not the first time ‘Ol Frosty has pitched in this way, and not likely the last. Go get ‘em Frosty. But I am sure that his stated dedication to Constitutional principles will compel him to allow a bit of reasoned decent.

Picture, If You Will
Picture, if you will, a darkened alley late at night in the most gang and crime ridden part of town. This night has been especially violent with innocent citizens and police officers mowed down by the senseless violence haunting the area. You are a cop on patrol and come upon a known felon in that darkened alley. He has a long rap sheet, has dodged prosecution on a series of heinous crimes, and has even taken a shot at you once or twice in the past. He is a known fellow gang member of another criminal who, just earlier today, committed a mass murder—and now he is crouching behind a dumpster in a darkened alley on your beat.

You pull over your squad car and call out to this man. He rises from his hiding space—his hands firmly stuffed in his pockets and talking tough. You draw your service weapon and order the man to show his hands—he does not. You call out to him, “show your hands and get on the ground or I’ll shoot.” Your orders are ignored and somewhere in the next few moments of shouting and furtive gestures—within the context of the suspicious bulge in his pocket, the dangerous neighborhood, and the reputation of the man who opposes you—an invisible line is crossed and you fire your weapon.

Which brings us to a few questions
If we are to judge the character and professionalism of this officer:

  • Does it matter whether or not the suspect had an actual weapon at that time?
  • What if he had a weapon that was jammed or broken—whether he knew it was broken or not?
  • What if it was a toy weapon?
  • What if he had a pocket full of bullets and no gun? Or a gun with no bullets?
  • What if he had nothing but a pocket comb and a bit of loose change?
  • What if….

The Investigation
The Internal Affairs Department will undoubtedly investigate this shooting and everything will be reviewed in the glaring morning light that filters though the blinds of third-story legal offices as a fresh cup of coffee leaves occasional brown rings on the dog-eared pages of official reports. But one hopes that—after the posturing, positioning, and appeals have dogged the system through the process—only one determination will come from the juries and peer reviews. This was a “clean shoot."

Can one imagine a darker or more violent alley than the Middle East or a homicidal sociopath more unpredictable than Saddam?

There are those who will attempt to parse this analogy to suit their own opinions, but an honest reading must at least give pause to partisan blanket statements, character assaults, and ad-hominem accusations. The fullness of history shall be the jury and final review of our seemingly graceless times and all of us who lived in them.

Be well,

Sunday, January 06, 2008

Where, Oh Where Has Good Old Huck Been
For the Last Two Months?

Glad that you asked....I've been working my literary and literal tail off, that's what!

Holy mackerel, but I have been busy. Just before the holidays we had tons of deliverable items at the office leading up to the end of the year and I had research baked up so I must have read nearly a million words over that 60-day period. We are still busy, but I should have time to post now and again because things are on a more even keel.

And just as I was about to post selections from my annual Christmas message to this little section of cyberspace, my PC saw fit to dampen the Holiday spirit by granting me the "blue screen of death" (yes, I am a Windows user) and thus freezing me out of the online universe until I gained access once again through my company PC and the new Sprint wireless broadband service (I like it--fast and stable).

For a brief time I considered returning to stone and chisel to carve out my rambling missives. At least if that method "crashed" I would have a pile of rubble to show for it (and likely a broken foot). There is something very depressing about having written a bit of content and then--when your technology does not work--it's just not there at all. I need a Prozac or something.

My PC holds all of my images and articles in process (for this blog and the news sites I regularly contribute to) so until that is finally repaired, there may be a few additional gaps in content production. These are all of my excuses and I am sticking to them.

On from here.

I promise that I will post again soon. Until then, be well,