Interesting map of just a few of the defense cuts on the block. However, before that a few words of wisdom and warning from former President and Supreme Allied Commander during WWII, Dwight D. Eisenhower. Not that I think the military industrial complex is being unwound (not by a long shot), it is interesting to hear Eisenhower’s words while catching a small glimpse of the current scale of the complex.
Found via ZeroHedge
This really sums it up.
Great quote about modern age apprenticeship from the book Mastery. I haven’t read the book but will add it to my ever growing to-read list.
***
Each age tends to create a model of apprenticeship that is suited to the system of production that prevails at the time. In the Middle Ages, during the birth of modern capitalism and the need for quality control, the first apprenticeship system appeared, with its rigidly defined terms. With the advent of the Industrial Revolution, this model of apprenticeship became largely outmoded, but the idea behind it lived on in the form of self-apprenticeship—developing yourself from within a particular field, as Darwin did in biology. This suited the growing individualistic spirit of the time. We are now in the computer age, with computers dominating nearly all aspects of commercial life. Although there are many ways in which this could influence the concept of apprenticeship, it is the hacker approach to programming that may offer the most promising model for this new age.The model goes like this: You want to learn as many skills as possible, following the direction that circumstances lead you to, but only if they are related to your deepest interests. Like a hacker, you value the process of self-discovery and making things that are of the highest quality. You avoid the trap of following one set career path. You are not sure where this will all lead, but you are taking full advantage of the openness of information, all of the knowledge about skills now at our disposal. You see what kind of work suits you and what you want to avoid at all cost. You move by trial and error. This is how you pass your twenties. You are the programmer of this wide-ranging apprenticeship, within the loose constraints of your personal interests. You are not wandering about because you are afraid of commitment, but because you are expanding your skill base and your possibilities. At a certain point, when you are ready to settle on something, ideas and opportunities will inevitably present themselves to you. When that happens, all of the skills you have accumulated will prove invaluable. You will be the Master at combining them in ways that are unique and suited to your individuality. You may settle on this one place or idea for several years, accumulating in the process even more skills, then move in a slightly different direction when the time is appropriate. In this new age, those who follow a rigid, singular path in their youth often find themselves in a career dead end in their forties, or overwhelmed with boredom. The wide-ranging apprenticeship of your twenties will yield the opposite—expanding possibilities as you get older.***
Found via Value Investing WorldAny questions?
Source: The Globe and Mail
If this blog was in existence during the 2008 financial crisis my disgust for enormous, too big to fail banks would be well documented by now. I might as well give you a flavor of that disgust here and now.
Below is an interesting interview with Iceland’s President Olafur Ragnar Grimsson on their approach to solving a banking crisis. Hint: it does NOT involve tax payer bailouts.
“These were private companies operating fundamentally like private companies, rewarding the bankers and the shareholders, so why when they fail should ordinary people, taxpayers, teachers, nurses, workers, pay the price and bear the burden?”
Why, oh why, is this approach isolated to Iceland?
There are in fact mechanisms in place (and have been for some time) to deal with banking crises. They involve the FDIC stepping in and taking the bank into receivership – during that time failing institutions can be restructured without any loss to depositors or counter parties. What the bail outs really amounted to was bailing out the bond holders of the banks (the investors that lent the banks money so they could leverage their bets 30:1 (i.e. for every dollar that the bank put in they borrowed $30).
Jon Hussman lays this out beautifully here. To use Hussman’s example to illustrate the point:
“Look at Bank of America’s balance sheet, for example. Reported assets are $2.261 trillion. Against that, liabilities to depositors amount to less than half that, at $1.038 trillion. Add in $239 billion for securities that they are obligated to repurchase, $129 billion in trading account and derivative liabilities, and $155 billion for accrued expenses. Now you’ve covered counterparties, as well as vendors or others who might have invoices outstanding. Even then, and you’re still only up to $1.561 trillion of the liabilities. The remaining 31% of Bank of America’s liabilities represent obligations to its own bondholders and equity of its own shareholders. This is well beyond what is sufficient to buffer any loss that the company might take on its assets, while still leaving customers and counterparties completely whole. To say that Bank of America can’t be allowed to “fail” is really simply to say that Bank of America’s bondholders can’t be allowed to experience a loss.”
This is very much an abbreviated solution to a banking crisis but hopefully you get the idea.
Looks like the long Lumber short Orange Juice trade would have made you a bundle in 2012. Was there anyone out there that saw that coming?
Also, it looks like the Japanese were much better at debasing their currency / inflating their stock market than their American counterparts. Oh well, better luck in 2013!
Postscript: it turns out the chart embedded below updates automatically, so it is no longer illustrative of the post above…
Not sure where they got the data for year 1 but it is adjusted for inflation and presented in 1990 dollars.
Photogenic Thoughts 