Cambridge, MAThere is a nice exhibit at Harvard Natural History Museum on the evolution of nests. It started with twigs being spread on floor to provide warmth and shelter but has evolved so that the eggs can be stored for hundreds of years without danger from the elements or predators. One wonders what the evolution of nesting in markets is like. Does a nest provide the same shelter for prices at an incipient stage? How about the market at 700 a few months ago. Do nests start with double and triple bottoms the way the old time point and figure charts were supposed to work and then turn into much more complicated places of absorption with multiple places for prices to rest before flying into the sky? What other applications of nests are there?

The scene at Harvard shows that a butterfly in Brazil can affect things elsewhere, as multiple empty stores and for rent signs litter Mass avenue, the most populated street through the wealthiest institution in the world. One could understand why 20% of Madison avenue stores are vacant, and the goodness knows how many more are hanging on by their nails, but one is surprised to seeing the decline in wealth affecting Harvard so directly. The main question I have had about the finances of that august institution for 5 years is not when they were going to suffer the cataclysm, but how they managed to hoodwink all the smart profs there and pay their endowment managers so may tennies while they were on the upswing. Even during a year of loss of 50% they were able to justify many multiple millie bonuses. Apparently the idea of randomness and symmetry in performance never entered an overseers mind, i.e. that by randomness someone's going to throw more heads than tails, but if you pay the ones that make the more heads,( bonds last year), but don't take away from the ones that throw the more tails ( everything else), you're left with the same distribution of sub normal performance guaranteed as the fof's.

A visit to USS Constitution is always in order and one learns much about piracy and the influence of economics on the war of 1812 on the growth of the Republic from such a visit, and finds oneself revisiting all the stories about Jack Aubrey as the events and customs really happened. How Constitution was able to win all those battles with untrained volunteers compared to the professional service remains one of those mysteries of chance like the occasional rogue wave, or spike in a commodity market.

On another subject, the stories about the companies and lobbyists lining up at the Federal Reserve and Capital create the sordid impression that the main ability for an executive these days is to know how to beg. Perhaps the best training for executives is really a class in English Literature where they read the stories of Dickens and Brecht and John Gay about beggars. Perhaps a reading of Following the Equator or a visit to the old India where I understand that begging was still common and had developed into an art.





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2 Comments so far

  1. douglas roberts dimick on July 21, 2009 9:37 pm

    Borrowers to Beggars

    I recall: “…the moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; those who are in the shadows of life; the sick, the needy and the handicapped” (Last Speech of Hubert H. Humphrey, November 1, 1977, Washington, D.C.).

    Executives of MNC’s with affiliated automotive, insurance or commercial and investment banking conglomerates do not fall within the scope of the stated standard, which tracks back to Aristotle.

    Beggars in America appear to be passive, disconnected to either “the system” (as my dad called it during the early stage of his Alzheimer’s) that excludes them or their own dysfunctionalism that includes them within their base demographic. This distinction seems to be true to some degree be it Miami, New York, the District of Columbia, Dallas/Houston, LA, Seattle, Chicago, even Portland, Maine.

    Here in China, though, I am limited to observe and understand… That said, following three years, I venture to say that begging here is directed and often concerted, just as I image it is with what many consider to be the bailout-sucking suits in D.C.. Here also in China as I read about in D.C., beggars persist in their plaintiff attempts (Chinese particularly with foreigners as executives with Congressmen).

    I estimate that there are three classes of beggars here in China, a country where supposedly (according to the constitution that) the people (95%) own the wealth and resources via the state, which happens to be controlled by one party (5%). Those three classes are migrant, challenged, professional.

    I have read reports that there are some 200 million migrant workers who wander about China. They build the buildings, the roads, bridges, and assorted infrastructure systems. I have also seen them beg. They seem more American; perhaps they know there is the security of the next job site, perhaps they believe in their own inestimateable worth. Whatever the reason(s), this type of beggar does not pursue or pretend to offer something of value. They are looking for that edge, catching someone who is in the mood to give. As with speculators, they follow the rules of probabilities though in a nonsystematic manner, thereby excluding them from classification as professional.

    The challenged Chinese beggar has a handicap: mentally, physically, emotionally. Some sell trinkets with written disclosures that they are challenged. They are neither persistent nor superficial in their presentment; they are working. I find myself giving to this group. I do the same elsewhere, to include home in the states. The idea of helping those who are weaker in some manner but still working to help themselves to the best of their abilities originates from mother and father volunteering and contributing throughout their lifetimes.

    Then there are the pros. During my first term of teaching here in the spring 2006, I remember (as if it was yesterday) two children, 10-ish like urchins, who appeared before me at a street corner in Wuhan, looking and acting as brother and sister. They were begging a traditional style: sitting on the curb, look up at passersby, helpless and hopeless.

    I got my Chinese friend (teacher and colleague) to go with me to investigate. My thought, of course, was adoption. She (my friend) could not believe how naive that I appeared in this instance. Sure enough, we watched from afar; the two kids had a handler. Perhaps a parent, a relative, or someone who works for the Black Mafia that organizes such rings of beggars: point was, like the old people who canvas subways, buses, and market squares, the children are a commodity in this industry sector.

    Note: Black Mafia constitutes the crime syndicates. Red Mafia is the police, who coordinate (with the Black Mafia) the gray areas of Chinese law – I estimate 100% if you a member of the Communist Party, 35% (market/command economic ratio) for other Chinese people. Both Black and Red compete to do the bidding for party and government and corporate entities; however, each has designated areas of enterprise, which is grayed by that very (gray) nature of a legal system that does not operate by rule of law.

    During a late night of celebrating July 4th 2007 in one of Shanghai’s touristy entertainment areas, I had two children wrap their arms around my legs upon exiting an ATM room. They would not let go; only upon a flash of cash challenge to a running contest did they free me for the prospect of winning. Alas, I ran away and, yes, without paying (as I was faster, so they did not catch me, again).

    Then there is almost the daily occurrence here of elderly people, often more than one. They bow with hands out or present a cup. They tend to flow with walking traffic, which is why I classify them as professional; they have a honed sense of human direction (and perhaps distraction). I always think of my mom and dad, which I am sure is a calculated effect – took me some time to inoculate myself here, though one may never really become unsensitized to poverty and despair, I imagine.

    Upon first impression, as only an eight-month phenomenon, my inclination is to classify what many Americans consider to be kneecap-sucking CEO’s in D.C. as pro’s — though their social-economic status precludes them from my cited categories. Nevertheless, they demonstrate resolve; they are persistent, often tenacious. Like professional beggars, they also look for advantages, real or imaginary. Also a sign of the emotional-less pro, they exploit weakness and amplify strength.

    The crime (here in the sense that there is a perversion of justice and equity (as a concept of common law) is twofold. First, as our societies and the governments (constituting American and China respectively) merely tolerate if not perpetrate homelessness, disenfranchisement, and financial destitution, one of the effects is begging. Most beggars would chose not to beg, at least I so maintain from my observations. There are sufficient resources, albeit political doctrines, in both countries to preclude if not prevent the need for begging.

    Second, there also appears to be a perversion of governmental assistance with the massive bailouts currently in place by both governments. In the US and EU, consider the hundreds of millions who have lost their jobs during recent years of globalization and industrial realignment; why are they not entitled to a bailout? I recently read that it is estimated that the US Government’s bailout of the financial sector equates to $80,000 per family in America. Why did the Administration and Congress so quickly trust the same executives who lost the money subsequently required with the bailout but not empower individual citizens direct payments?

    Here in China, the recent “stimulus” money is actually nothing more than the vig being paid to prevent the Communist’s financial and industrial (SOE) network from seizing up into defaulting on debt with the country’s four, already insolvent banks, which would ultimately turn to the government for bailing out, again from already existing (US GAAP) standard accounting positions of illiquidity.

    All this time… only to now know that an MBA stands for Masters of Begging Amalgamated. dr

    Ps. I fear that training of executives with courses in literature will only invite more creative thinking a la legal, accounting, and financial standards and practices. I beseech, no, I beg that one so refrains.

  2. vniederhoffer on July 22, 2009 4:05 am

    one is ennobled by such a Menckonian, Nockian piece. v. humbert


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