Felix Salmon Scotches the Kanjorski Financial Armageddon Myth

Remember the point last September where treasury secretary, Paulson delivered a ‘secret’ message to congress that was designed to scare them into action? Many people have now seen the infamous clip where Democratic Representative Kanjorski explains what Congress was told (2 mins 20 secs into this clip):

“by 2pm that afternoon [18th September 2009], $5.5 trillion would have been drawn out of the money market system of the U.S., would have collapsed the entire economy of the U.S., and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it.”

Like the myth of Popeye’s spinach, which was due to a decimal point error in its iron content at a Chicago food fair, Kanjorski’s armageddon myth which will, no doubt, form a part of every conspiracy theorist’s armory for years to come, is based upon a quote of a misquote which exagerates the truth by a factor of ten and which Felix Salmon wisely and definitively demolishes:

“This is all, frankly, fiction, and it’s not clear where most of it came from, although maybe Kanjorski’s “friends” on Wall Street are the same people as Michael Gray’s sources at the New York Post. Thinking back to that crazy week it’s easy to get details wrong, especially when you’re speaking off the cuff on a call-in show. But let’s stop treating it as though there’s any substance to it.”

Thanks Brian Donovan.

Update: The FT’s Alphaville team are suggesting that there is substance to the Kanjorski meme, and that truth is somewhere in the middle i.e. $500 billion in panic redemptions were requested but Paulson persuaded them to be stalled.

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Schadenfreude week: BofA ‘One Bank’ excruciating U2 cover

One of the only redeeming features of Depression 2.0 is that a great rain has come which will wash away: famous for fucking, celebrity prostitutes like Paris Hilton; soccer team owning Russian celebrity gangsters; brand-name, soulless, celebrity chef restaurants and saccharine corporate/celebrity rock n roll mashups such as this piece of sickeningly un self-aware, acoustic shit.

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Schadenfreude week: GoldMan Sachs Holiday Party 1990

Forget DJ Tiesto and $200 cocktails, this is what a Goldman Sachs Investment Research holiday party looked like after the last recession. Outrageous decadent fun?

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Schadenfreude Week: ING Party

DJ Tiesto tweaks his knobs at an ING Bank Party last year. This year’s event will feature The Birdy Song and some old geezer’s melancholic saw playing routine.

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Schadenfreude Week: Models and Bottles

This week on S Telly, I’ll be posting horrid but typical clips of extinct bling-people. In this one a junior banking analyst that looks like he’s not of legal drinking age orders $200 cocktails and boasts about how much money and girls you need to get into a tacky Zoolander-like New York bar. Seeing as his postured existence looked shallow are miserable even with money, I wonder what its like now?

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Soros and Reflexivity

George Soros is the economics equivalent to Stephen Wolfram and physics. Wolfram is a wealthy businessman who discovered a big idea independently of others, that isn’t new or original but that appears to be correct – that the world is based upon algorithmic feedback loops rather than equations. Soros’ equivalent idea is Reflexivity a model of economics based upon feedback loops in an open system – money flows into a system held far from equiibrium which grows, becomes more complex and has periods of turbulence.

Until recently, Soros was considered a maverick, at least academically, proposing that the economy was an open system regulated by events which are provably unpredictable, if deterministic. The alternative and wideley accepted system of economics that people like Greenspan practiced was based on the idea of economics as a closed system which would tend to equilibrium in a free market. It assumed that turbulence was the result of external impediments to smooth free market influences.

When I found out that this was the case, I nearly fell off my chair. It meant that the economy was being run based upon scientific ideas that come from the age of steam engines.

The economy is an open system with a scale free system of interconnected attractors. It means, among other things that the current crisis was a statistically innevitable event and that another crash crash capable event is just as likely to happen tomorrow (just like having thrown a six in a dice throw does not reduce the chances of throwing a six again). This counterintuitive notion, is the same for earthquakes which were found to follow a pattern which was not the result of the release of built up tension and suggests that the economy is similarly susceptabe to events which are removed from simplistic chains of direct cause and effect.

Understanding these phenomena are crucial to our survival as a species, so we shouldn’t waste time even listening to people who are unaware of them. People like Greenspan or many other practitioners of economics, the dismal pseudo science. Soros, on the other hand, has economics ideas that are at least based on science which is less than 100 years old. Here he is at Davos, where James Bond villains hang out and decide how to run the world.

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Donald Duck, The Spirit of 43

A piece of US propaganda that argues against consumerism. In the spirit of 43, Donald Duck is caught between good and evil. The good is represented by a frugal Scot with a ‘Lassie Come Home’ accent and the evil is represented by a zoot-suited, big spender.

After the end of the War, in overshoot reaction to Communism, this view of good and evil was perhaps reversed, to the extent that consumerism was seen a part of the ‘non-negotiable’ American way of life, and with the consequences that are now apparent.

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What Hitler Wants – Soviet WWII Cartoon

In this cartoon, what Hitler wants is to help the Capitalists, apparently.

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Der Störenfried ( 1940 )

This cartoon is a piece of Nazi propaganda, which can be compared with the previous US ones. It has the same adult material wrapped up in a cozy children’s view of the world.

Two things of note here: in my opinion it is really not of the same graphic standard as US cartoons of the same era, which is interesting since much of what the Nazis produced was very sophisticated, graphically; secondly, I’m posting this from France where this video was blocked by Youtube (France has active censorship laws against Nazi material) and I had to access through a US proxy. An example of why application of censorship laws can be ridiculous, since the whole point of this German film was to learn from the mistakes of the past rather than approve of them.

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Coal Black And De Sebben Dwarfs

This week on Smashing Telly, I’ll be focusing on historically interesting cartoons. This one is a black take on Snow White, which on the face of it is an outrageous piece of racist stereotyping. The setting and colors used are the deep reds of a cartoon bordello hell, versus the pastel blues of Snow White and her angel choir backing singers. On the other hand, Coal Black’s world is positively swingin’, and perhaps just goes to show how clawingly saccharin ‘white’ culture really was.

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