Allow me the opportunity to add something to this thread, which isn't much, but it's something that's been brewing in my mind for a while.
It is this:
Back in Dec 2004, I took my two young son's to the beach for a surf. Not the sunny coast, where I learnt to surf as a young 'un, but a place in Asia where we lived. Not a lot of support in that part of the world if you needed it. Yet there we were, having a playful day in some pretty ok surf on the coastline of an enclosed sea. All good; two very young lads and their dad on a day at the beach. Nothing to it. Simple stuff.
We get back to the crash pad and on the tele there's half of Indonesia swimming in a sea of mud, inland. A fair proportion of Western Java and a lot of Thailand had been whacked by that tidal surge we've all seen on the tele. Over the coming weeks the world was inundated by sickening images of abject horror as that relentless, uncaring tsunami swept away whole villages. Children from the arms of parentsl a elderly German couple, vacationing in Thailand, stranded a few feet from the safety of that lovely hotel by raging brown muddy water that appeared out of nowhere on what was gorgeously green lawn. And then they were gone, just like that, swept away, dead, the images of each tragedy caught on someone's digital camera.
Being a bit east of the epicenter didn't hurt us any, but the what if shocked me into wondering how my life would've changed so fundamentally if we were on that beach, not a beach in Brunei. Ipswich and Grantham have now copped it, and I'm just amazed at how these things can happen. But they do, and we all get on with it. What's been a lasting theme for me to take from all this is this:
Life is precious. No great revelation there. As a simple truth, however, it's often overlooked in the heat of the battle where we try and make money to avoid the big struggle most of the world engages in on a daily basis, which is hand to mouth.
Anyway, in the hope of not drawing this out into a thesis or a mini-series, markets are "the" time-honored, proven and central focal point for any system to overcome the sort of grinding poverty and lack of communication found in the undeveloped world, the world where we find limitations to growth that retard the ability of a society to protect its people - to sustain life if you like, which we all agree is damn precious no matter where you live; Indo or Oz, Europe or the US, Brazil or China.
We have not had those limitations in the developed world for some time now. Take Europe as an example where...wait, this is going to be too long...ok, back to the theme of my contribution, which is this:
Sustaining life is the end game. It is worth pursuing. We all know this, I think. To sustain life requires growth, not decay. To sustain growth we need progress, not regress. To progress we need to develop our world through trade and commerce. For trade to flourish we need currency. And for a currency to work we need trust in that currency. There must also be free and open communication where the law can be pursued openly and fairly. But above all, there must be a market.
Long winded, I know.
You don't have to tell me that. I get it all the time and really struggle with the scythe one has to wield to cut down the flab of words, words, words that flow unfettered by imaginary word budgets until reality dawns and the reader simply turns off, the message lost.
I say the Fed has done an outstanding job.
Helicopter Ben is the guy I'd want anyday of the week out there attempting to buttress the dyke, hold back the wind, temper the storm or part the flood that threatens to overwhelm all of us. Sure the world is in a debt-fuelled overheated state from a decade of binging on credit and credit derivatives the likes of which simply did not exist in the ancient times a mere 10 years ago.
But collateralized debt obligations are here now, and their cousins the credit default swaps may not have existed before the year 2000, but they do now! If a word encompassed all of our current ills, it would be securitization. That monster must be unwound, and yes it could be argues the ogre has not been defeated, not even remotely. It could be argued the debt has largely grown, not withered, by way of sending securitization underground, away from the OTC market into the secret netherworld of hedge funds whose operations are largely opaque.
So unless I got a few points wrong there, none of the above is disputed. But to say we're in a corrupt, bankrupt, colluding and conspiratorial world of bankers whose ills have invaded our very fabric of society and should be, must be, brought down, along with the entire financial system, our free markets and, by default, our ability to protect and sustain life is difficult for me to accept.
Corruption has a face, but it isn't solely the face of a banker. It is your face and mine. We've all got the capacity to be corrupt. Conspiracy's exist. Never have they not, and they will always exist insofar as two or more people get together to form an outcome, as we are doing here.
Bernanke is a fair dinkum hero. He is doing what he can to save the world of finance which, in case anyone has missed my message, is the engine of growth and the oil of all industry and trade.
Why anyone would relish the collapse of the financial system in favor of a backward, growth-retarding system of bartering and the like is not just beyond me but an anathema to me. How anyone can see Bernanke as anything but a genuine article is also beyond my simple powers of understanding. What those that do disagree offer is a return to a system of what? Bartering of pigs and chickens for much needed corn, or metal tools?
Okay, sorry for the long-winded expose of my thoughts on what is primarily a technically based thread. There are few threads worth reading, and I've been drawn to this one because it is mathematically based, not ideologically based. So apols if I've crossed the line.
Hedgeie, JD et al, I'm not sure I understand where you're coming from, but I'm willing to learn. Here's to an on-going education, technically-based, of course.
If you have time, spare a thought for those in the Far North tonight. All the very best to you all, including Hedgie.
(20min delay)