Although it has some interesting stuff, it raised some questions as well. The author was refused a promotion before he resigned, which puts his moral concerns about the business in a different light. In order to prevent the elites from getting richer and the poor getting poorer, he suggests more regulation of the financial markets by the powers that be/elites.
That should make you stop and think. According to him, to get rid of too big to fail institutions, we need congress (those people that can not control their spending and borrow from their printing presses) control and regulate the financials. He also seem to have some hope that 115 regulatory bodies of the financial markets is not enough and 116 is going to make a difference. You can read the book about Madoff (Harry Markopolis) to see why regulation does not work (revolving door). The only thing that works is taking the way the gun on the head of the tax slave. Without the ability to dump losses on the tax slaves through the government power structure,
Given he asks for more power for the few, to fight the problems of too much power for the few, I rate this book as a solicitation for a job as a regulator, to become part of the few and stick it to GS, who passed him over for promotion. He also must have smelled that there exists a market for railing against the big banks.
The author reports about uncovering a tax payer funded, government enabled fraud through the SBA, of a company called Allied Capital through subsidiary BLX (Bussines Loan Express). The main idea is to hand out loans fast and furious witouth much scrutiny, take big commisions on these loans and keep them on the books as healthy, long after they have gone bad. Like buying rotten fruits and putting them in a box and let nobody look inside the box, selling the box on the stock market as a box with fresh fruit. Ofcourse only possible because the tax payer is on the hook in the end through the SBA.
Einhorn tracked this fraud down and decided to short Allied Capital stock and expose the fraud to the government.
Here is the surprising part. Einhorn is truly amazed to get little cooperation from the government to expose the fraudulent individuals, while it is the same government that enables the whole thing. He is even treated as an evil short seller suspect by them.
He claims suprise over 'individuals who have chosen to fight fraude as a profession' that showed little interest. He fails to recognize is that it should immediately be obvious that these crime fighters get their pay check through taxes. Which means that if you do not purchase their services, they drag you of to jail under threat of force. These people are not interested in uncovering crime. They gravitate to a position of power, to cash in on it. The official function of crime fighter is just a fence. It's a racket. It's like being surprised that paying protection money to the maffia, does not get you protection.
Quiet some good interviews with numerous hedge fund managers about the fascinating world of global macro investing, or in other words:How smart people profit from the insane dictates of our rulers, who create distortions in the markets that have to return to equilibrium.
I had some small problems about some people's hope on regulation to fix the risk appetite problems. Unfortunately benefit is expected to have some people rule with implicit threats of violence over other people. It seems unlikely to me that people in the government, dabbling with the involuntary obtained money of their serfs, are reliably constraining the risk taking of hedge fund managers. Instead through their central banks put a back stop in the losses of hedge funds, aggravating the risk appetite.
Other than that an interesting read if you are into this subject.
Interesting descriptions of events and descriptions of characters.
Unfortunately this book leaves one big thing out of discussing the sub prime mortgage debacle. Sure, mortgages were sliced and diced, mezzanined, collateralized, renamed blessed triple A by rating agencies and resold to ignorants, It recognizes moral decay in the industry, but it still leaves one big issue out.
The biggest question who is buying crap no matter how it is dressed up.It omits pointing out the moral hazard that causes people to take insane risks; the knowledge that there is a government to bail them out at tax payer's expense. That these people in government basically have a gun on the productive tax slave, who will have to pay or face jail, arrest or death on resist to arrest. As long as this group of people exist, able to manipulate ad force a whole population into obedience, people will take these risks. Not one time in this book Fanny Mae and Freddy Mac are named. These two Government Sponsored Enterprises are the elephant in the room, that is not to be named. They insured the bulk of the sub prime mortgages. They were the biggest sponsors of the politicians before the mortgage collapse, the politicians that could deliver the income of their tax slaves to them.
That is not to be named. The violence and threats of violence in the system that we all take for granted and call rule of law and democracy, HAS to remain untouched. Until it is named touched and pointer out, no progress is to be expected.
Every day therefor new scandals are created with the serfs of the presidents being forced to buy the products of his lobbiests at the point of a gun. Yet every time we act surprised as this turns out to be a faulty product or service and explain the problem with greed in the industry instead of with the violence we approve of ourselves from the people we name government.
It's a pity that although it has some interesting thoughts, even though some are rehashed from others, there is always a hidden job interview for a central planner in books like this:"Hire me, I have found an argument to put a sauce of scientific respectability over your grab of raw power over people."
After heralding the power of accumulated wisdom of freely trading individuals, he names cap and trade and all kind of government coerced programs of taxation as examples of free markets. He also blames the financial crisis on the foolishness of crowds, ignoring that a small elite is setting interest rates, inflating money supply and directing the masses with laws as central planners, being lavishly campaign donated by Freddy and Fanny just before these mortgage giants needed a bailout.
In the same line he ponders about how the hell to devise a reward scheme that is fair in the banking world, with all kinds of regulations, while ignoring the most obvious one:let them fail and don't throw in the bailout slaves at the point of a gun. But getting rid of power is not an argument that falls good in a job applications with the coercive elite, so more power to patch the problems of previous power is the rule.
After some interesting examples and speculations, the inevitable conclusion of the author is that humans are fundamentally broken and need help making the better decisions (nudging). This is of course to be executed by ..... humans. exactly. But the humans of the executive branch carry the name: 'state/institution' and are less fallible, like priests who could sell the peasants some holiness to get them into heaven. Institutions carry an excess of rationality that can be transferred to the underlings through their nudging machinery:'drones, guns, jails, tasers, taxes and bombs'
Institutions, he says act more slowly and deliberately, so more rational. Giving more power to less people (to people in institutions from people outside institutions), makes the whole situation more stable. That is unless the few that rule the many, turn out to be megalomaniacs that can not believe they make errors. If we look at Hitler,Stalin,Mao, and 200 million deaths by institutions in the past 100 years, it seems to me there is something wrong with the rationality of institutions.
Of course he makes the straw-men at libertarians that it requires rational, perfect people, but that real life, fallible people need to be ruled by ..... real life fallible people. But these people wear the institutional magical cloak, so what could possible go wrong?
Thus have we arrived at a situation in which the institutions are helping us to eat healthier and make better choices by the FDA, who raids organic food stores with drawn weapons, eehhh I mean nudging machinery, and all FDA posts are now occupied by Monsanto employees as much as all financial regulation is controlled by Goldman Sachs. Big parhma completely controls what drugs you use (more and more). But the government educates your children, so what do they know? Your money is counterfeited at a gigantic scale by the federal reserve institution, etc. etc.
The author concludes there is much interests among the world megalomaniacs to nudge according to his scientific method.
I'm positive he can look forward to ample research funds provided by the thieves that like to nudge their underlings.
If you too want to make easy money and don't mind licking the heels of those in power: Scientific justification of their hell fire nudging will keep the dough rolling in.
You are in for a treat. It gets a bit boring, like other reviewers said:not good for audio. But it has a lot of data in it, it is just a petty that the author can not make heads or tails of the data. He tries to see if certain countries default and others do not, but almost all governments have failed. He gets into a lot of problems mixing up countries and governments. If you say Spain defaulted 13 times, you better say the Spanish government defaulted 13 times. Because if you try to say that a government dumps the problem on the doorstep of the next government and you use the country name, you get: Spain dumps the problem on the doorstep of Spain. I think the failure to see government as a seperate group of people in a country, that has a monopoly of the initiation of violence, causes a alot of confusion.
He also tries to compare developing and advanced countries as an explanation, which also fails. Then he takes domestic debt into consideration, which also does not explain everything.
An interesting angle would be to see if governments that set up an empire fail more than those who don't. Controlling an empire is always financed with debt and fiat money, as direct taxation would bring revolt and put a stop to empire building. The Spanish empire collapsed and resulted in 13 defaults (so far, the next one is on the way). Hungary/Austria/Turkey had serious defaults. The UK not so much and the USA not so much as well (unless you count 97% devaluation since 1913 as a default), but these things take a long time to build up and a long time to unwind.
You might think from the title that this author get's competitive devaluations and the race to the bottom, the role of gold, Austrian economics and economic freedom, but don't be misled, he doesn't. His solution is a bigger power structure, because the smaller national power structures got corrupted. Of course this would never happen if you stack an even bigger power structure on top of that (who would try to influence them?). So basically he is a new world order shill, angling for a job in the new 1984 world power structure.
Less power is the answer, not more. Less people who decide for more people is not the answer. Everyone their own ruler, no slave/master relation ships.
If you love to have your firmly held believes shaken/challenged, this is probably your kind of book. I can smell out people that have done their research and these authors fit the bill. They first explain the standard narrative with good arguments, that make you say:"Yeah, that must be right" and then they debunk them. They must have had many discussions about this with other people, before writing the book, because they know all the standard objections that pop up in your head and have a good response. I'm not totally on board with everything, but they definitely have a good point.
I continue to be amazed about the cultural nonsense that is pumped in our brains, seemingly always resulting in a more violent society, while simultaneously giving you the idea it's getting more peaceful thanks to these same moral prophets (prepare to get Steven Pinker and Thomas Hobbs debunked). For thousands of years our presidents,priests and politicians have tried to eradicate private property, prostitution and promiscuity. All it resulted in was which hunts, massive wars, concentration camps and bloodshed and it always seems to come back.
The only philosophical problem I saw was the idea that early foragers
- did not have private property
- did have compulsory sharing
- were egalitarian
The word sharing implies property (would you like to have some of MY apples). There is no such thing as public property, because the public does not have hands to control property. There are people who claim control of property in the name of the public, but that is the same scam as those claiming control of property in name of god.
If they had compulsory sharing, there was someone coercing and someone being coerced, this is contradictory with egalitarian. They continue by saying this probably extended to sexual relations as well. But if you have compulsory sharing of partners, there is rape going on, which they would deny, I think.
What they meant is that there was a strong urge to share a lot and remember who reciprocated, to increase chances of survival.
Other than that, a great brain tickler that explains a lot of relation ship trouble going on in the world today and in a wider sense a lot of conflict and wars.
An interesting subject, from the perspective of the prosecutor on the Charles Manson murder trial. It deals with a lot of facts, but not very much with the psychological en philosophical side.
The author is surprised that young men/women can be so manipulated that they kill random strangers in cold blood. All this while the author works for the government, an organisation that manipulates young men and women to kill total strangers in cold blood.
He does mention the Nixon quote 'Manson is guilty' and Manson's response that Nixon was just as guilty of the hundreds of thousands killed in Vietnam, but you can notice this does not hit home with him. I guess that can not be expected from someone working for the government, who gets his pay check from coercion of tax payers.
If your real goal is to prevent these terrible things from happening, you have to get into the causes and not just react with violence against violence after the fact. You have to recognize that Manson was raised by the government seeing every juvenile facility, calling prison his home. It is unfortunate that we live in a world where showing a nipple during the super bowl, causes a panic, while violence is so well tolerated. Not only on TV, but also in society at large, where every problem is attacked with laws/jails/coercion/taxation/money printing/bans/mandates/obligations/scanners/camera's/strip searches/tasers and pepper spray.
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