Tyrant of Syracuse

I just finished attending my 40th reunion. One of my classmates mentioned that she was tired of the politics on Facebook and commented that I was one of the worst. Sorry, but guilty as charged. I will try to do better as I remember the story of the Tyrant of Syracuse and the old woman.

Dionysius was a terrible man, known for his cruelty. He held the ancient office of Tyrant of Syracuse, a city in Sicily. Prayer was offered to the Gods for his death as he fit the title of his office well, but one old woman prayed for his health and a long life for him.

Impressed, the Tyrant sent for her. He asked about her prayers. The old woman said that when she was a young girl the Tyrant back then was terrible. She was pleased when she heard of his death. But his replacement was worse than he was! She suffered under this tyranny, he was after all the Tyrant, and prayed for new leadership. Her prayer was answered in her middle years. The new Tyrant was even worse than the old.

This was why in her old age the woman prayed for Dionysius’ to have a long reign and good health. She knew that his replacement would only be worse. Dionysius was too embarrassed and ashamed to punish her.

As we get excited and head unto this most importantest election ever, remember the Tyrant of Syracuse.

A Dark Personal Secret

I think that it is important to be completely honest so I felt it is important to reveal a deep dark secret about myself that no living person but me knows. It is time I came out of the closet. I used to play the Ukulele. 

Although my skills were limited to "Yes Sir, That's My Baby" and "5' 2 Eyes of Blue," the shame goes on. 

Now I need to be ashamed no longer. 

90% Fake

The stock market is 90% computers trading with each other. So says this guest on Capital Account. That means that most of the part of the "free" market that is represented by stock trading is artificial.

Normally I try to avoid talking too much about one subject--especially economics as the number of people reading the blog drops off noticeably. But this interview and yesterday's interview fit hand in glove. We do not have anything close to a free market. The stock market is a combination of rigging (yesterday's interview), and robots trading as if they were real people (today's interview).

When the system has a crisis, and it will, do not think that this is a crisis of capitalism. It is a crisis of our mixed system that can best be described as a form of fascism.

Charles Smith has blogged on this issue. 

Do We Have a Free Market?

No doubt if you watch much on the news you have seen the “failure” of the free market discussed. But in reality we do not have a free market. Do not misunderstand. Yes, there are areas where the market does not work well, environmental issues for example. But this is not what the pundits are talking about. The crisis was not caused by deregulation—after all, Banking is the most regulated industry we have. I am not saying that Glass-Steagall’s repeal was a good idea, it wasn’t. 

The crisis was caused by a combination of fraud, rigging of the market, government interference, excessive debt, and excessive government spending. It is like the old Harold Brown joke, the government breaks your leg and then expects applause when they give you crutches. 

How rigged is our market? No one really knows, except for those that are doing the rigging. Add in the weird regulations of the market, and you have a mess. 

While I do not want to lose my libertarian creds, it seems to me that plunge protection teams, as they are called, are a good idea. These secret government groups intervene in the market when there is a massive failure of the market—smoothing out the market, often caused by programmed trading. Recently a programming mistake led to a several hundred million dollar loss by one firm. The program was supposed to buy at, for example, 17.24 per share and sell at 17.25, massive micro trading. This is not all bad, as it smooths out the market. Instead the program was selling at 17.24 after buying at 17.25 or higher. Oops. 

This interview is interesting as it explores the rigging of the market that everyone knows is occurring. Is the rigging as large as Chris Powell on Capital Accounts thinks? I do not know. I fear he is right. At some point such rigging fails. We may live to see that failure in 3 to 7 years. 

Spirit In The Sky?

I remember this song. It was the stereotypically "one hit wonder" by the artist who also did 'The Eggplant That Ate Chicago." I am told Greenbaum retired to raise goats. This is not that version but a cover a decade later. Odd lyrics, strange guitar effects and a very odd video. Enjoy!