I was asked by Laurel why I think that out of the clear blue sky we've had two days that were larger in magnitude than any of last for years. My immediate response was they can't take it down permanently so they wish to have a violent move so that they can let it to go back to where it's going to be without losing money and making everyone panic.

The violent moves are the ones that always come when it's going the other way. When they want to take it one way, they keep you in. It is sort of like the frog that's put in cold water that is gradually heated up. They couldn't take it down the way they did last year in May because they don't have the Israeli war and the increase in good faith in their hip pocket. So they had to do in one week, much earlier and sharper, what they accomplished in three months. That is to say a doubling in volatility and a decline of 90 points, because they can't keep it here with stock returns 11 or 12 percent and bond yields just 4.5 percent.

The stuff about sub prime is part of the dynamic nature of capitalism. These companies get compensated for accepting risk. Some years they win and some years they lose. Their return is probably like ours, with a nice little something for the risk they take. We can only expect the sage to say something like it's terrible that so many take risk like that when there are only certain insurance companies who are genetically programmed to take it at double the rates, taking account of the complete likelihood in their rates of total meltdown, like this should be. And it's terrible that there's a derivatives market that allows those who don't wish to take such risks to offset them, as these companies have so much risk. But of course all this must be tested.

Laurence Glazier adds:

The Sage did make some interesting remarks to his favorite CNBC interviewer Liz Claman. For example that it was wrong for him to be paying a lower rate of tax than his receptionist and that the very significant rise of the market is in the long term inevitable and born out by history.

I enjoy the Sage's interviews, something warming there. CNBC has many good points. I like the literary asides from Mark Haines. He often quotes Poe, "the tintinnabulation of the bells," during those August ceremonies. 

Sam Humbert remarks:

The Sage has spent his entire career sedulously arranging his affairs to minimize taxes — and now bemoans paying too little? This brings to mind the boy who slew his parents, then pled for clemency because he was an orphan.

I would have awarded extra points for 'artistic merit' if the Sage had made these 'interesting remarks' in Pinch's famously untaxed newspaper…

Vincent Andres adds:

From a violence specialist: "La force d'une armée, comme la quantité de mouvement en mécanique, s'évalue par la masse multipliée par la vitesse." ["The strength of an army, like power in mechanics, is the product of the mass by the velocity (speed of action)."] Napoléon I


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