Friday, June 11, 2010

Why Writers Write & "White Swan" Warning: Crash Dead Ahead. Sell. Get liquid. Now.

(EXTRA: If anyone could make a contribution to my PayPal account (or otherwise - contact me for further info), it would be sincerely appreciated as I've just gone off the cliff financially. I really appreciate everything that my kind readers have done for me in the past financially and otherwise. Now . . . back to your regular viewing.) Amidst the flurry of very bad worldwide economic/financial warnings, I wanted to write a small essay on why writer's write (having noticed a lot of discussion about that in blogtopia lately - and, no, it's not just for money), but found that Sir Lesley Stephen (literary historian of Victorian England and father of Virginia Woolf) 's epic tome on Dr. Johnson had beat me to it. He also includes the history and influences of the greats in the British Isles (and how damn hard it was to make a living). (And wasn't Sex and the City 2 a guilty pleasure? Ah, to be a writer worth millions - in fantasy anyway. I'll get back to my opinion of where Abu Dhabi got all that construction money later.)

"No man but a blockhead," said Johnson, "ever wrote except for money." The doctrine is, of course, perfectly outrageous, and specially calculated to shock people who like to keep it for their private use, instead of proclaiming it in public. But it is a good expression of that huge contempt for the foppery of high-flown sentiment which, as is not uncommon with Johnson, passes into something which would be cynical if it were not half-humorous. In this case it implies also the contempt of the professional for the amateur. Johnson despised gentlemen who dabbled in his craft, as a man whose life is devoted to music or painting despises the ladies and gentlemen who treat those arts as fashionable accomplishments. An author was, according to him, a man who turned out books as a brick-layer turns out houses or a tailor coats. So long as he supplied a good article and got a fair price, he was a fool to grumble, and a humbug to affect loftier motives.

Johnson was not the first professional author, in this sense, but perhaps the first man who made the profession respectable. The principal habitat of authors, in his age, was Grub Street - a region which, in later years, has ceased to be ashamed of itself, and has adopted the more pretentious name Bohemia. The original Grub Street, it is said, first became associated with authorship during the increase of pamphlet literature, produced by the civil wars. Fox, the martyrologist, was one of its original inhabitants. Another of its heroes was a certain Mr. Welby, of whom the sole record is, that he "lived there forty years without being seen of any." In fact, it was a region of holes and corners, calculated to illustrate that great advantage of London life, which a friend of Boswell's described by saying, that a man could there be always "close to his burrow." The "burrow" which received the luckless wight, was indeed no pleasant refuse.

Since poor Green, in the earliest generation of dramatists, bought his "groat'sworth of wit with a million of repentance," too many of his brethren had trodden the path which led to hopeless misery or death in a tavern brawl. The history of men who had to support themselves by their pens, is a record of almost universal gloom. The names of Spenser, of Butler, and of Otway, are enough to remind us that even warm contemporary recognition was not enough to raise an author above the fear of dying in want of necessaries. The two great dictators of literature, Ben Jonson in the earlier and Dryden in the later part of the century, only kept their heads above water by help of the laureate's pittance, though reckless inprudence, encouraged by the precarious life, was the cause of much of their sufferings. Patronage gave but a fitful resource, and the author could hope at most but an occasional crust, flung to him from better provided tables.

In the happy days of Queen Anne, it is true, there had been a gleam of prosperity. Many authors, Addison, Congreve, Swift, and others of less name, had won by their pens not only temporary profits but permanent places. The class which came into power at the Revolution was willing for a time, to share some of the public patronage with men distinguished for intellectual eminence. Patronage was liberal when the funds came out of other men's pockets. But, as the system of party government developed, it soon became evident that this involved a waste of power. There were enough political partisans to absorb all the comfortable sinecures to be had; and such money as was still spent upon literature, was given in return for services equally degrading to giver and receiver. Nor did the patronage of literature reach the poor inhabitants of Grub Street.

Addison's poetical power might suggest or justify the gift of a place from his elegant friends; but a man like DeFoe, who really looked to his pen for great part of his daily subsistence, was below the region of such prizes, and was obliged in later years not only to write inferior books for money, but to sell himself and act as a spy upon his fellows. One great man, it is true, made an independence by literature. Pope received some 8000 pounds for his translation of Homer, by the then popular mode of subscription - a kind of compromise between the systems of patronage and public support. But his success caused little pleasure in Grub Street.

No love was lost between the poet and dwellers in this dismal region. Pope was its deadliest enemy, and carried on an internecine warfare with its inmates, which has enriched our language with a great satire, but which wasted his powers upon low objects, and tempted him into disgraceful artifices. The life of the unfortunate victims, pilloried in the Dunciad and accused of the unpardonable sins of poverty and dependence, was too often one which might have extorted sympathy even from a thin-skinned poet and critic.

Illustrations of the manners and customs of that Grub Street of which Johnson was to become an inmate are only too abundant. The best writers of the day could tell of hardships endured in that dismal region. Richardson went on the sound principle of keeping his shop that his shop might keep him. But the other great novelists of the century have painted from life the miseries of an author's existence. Fielding, Smollett, and Goldsmith have described the poor wretches with a vivid force which gives sadness to the reflection that each of those great men was drawing upon his own experience, and that they each died in distress.

The Case of Authors by Profession to quote the title of a pamphlet by Ralph, was indeed a wretched one, when the greatest of their number had an incessant struggle to keep the wolf from the door. The life of an author resembled the proverbial existence of the flying-fish, chased by enemies in sea and in air; he only escaped from the slavery of the bookseller's garret, to fly from the bailiff or rot in the debtor's ward or the spunging-house. Many strange half-pathetic and half-ludicrous anecdotes survive to recall the sorrows and the recklessness of the luckless scribblers who, like one of Johnson's acquaintance, "lived in London and hung loose upon society."

There was Samuel Boyse, for example, whose poem on the Deity is quoted with high praise by Fielding. Once Johnson had generously exerted himself for his comrade in misery, and collected enough money by sixpences to get the poet's clothes out of pawn. Two days afterwards, Boyse had spent the money and was found in bed, covered only with a blanket, through two holes in which he passed his arms to write. Boyse, it appears, when still in this position would lay out his last half-guinea to buy truffles and muchrooms for his last scrap of beef.

. . . Authors in such circumstances might be forced into such a wonderful contract as that which is reported to have been drawn up by one Gardner with Rolt and Christopher Smart. They were to write a monthly miscellany, sold at sixpence, and to have a third of the profits; but they were to write nothing else, and the contract was to last for ninety-nine years. Johnson himself summed up the trade upon earth by the lines in which Virgil describes the entrance to hell; thus translated by Dryden: -

Just in the gate and in the jaws of hell,

Revengeful cares and sullen sorrows dwell.

And pale diseases and repining age,

Want, fear, and famine's unresisted rage:

Here toils and Death and Death's half-brother, Sleep -

Forms, terrible to view, their sentry keep.

"Now," said Johnson, "almost all these apply exactly to an author . . . ."

And now you understand why writers write. (No. No one really does.) From MarketWatch's Paul Farrell we hear the undoubtedly unvarnished truth about the Wall Street shenanigans in an article that is only three weeks ancient - seems much older doesn't it? Settle in. It's not going to be a pleasant journey.

But will Main Street exit? Will we ever learn? No. The Wall Street casino makes mega-billions for insiders like Blankfein and the Goldman Conspiracy. Yet "The Casino" is still below the 2000 record of 11,722. So after accounting for inflation, Wall Street lost over 20% of Main Street's 401(k) retirement money between 2000 and 2010. Yes, Wall Street's a big loser the past decade. Their advice is self-serving. Period.

Given their miserable track record, only a fool would bet with Wall Street.

. . . Money manager Jeremy Grantham recently said the market's overvalued 40%. That could mean a collapse to 6,600. Last week in Reuters' "Markets Could Be Derailed Again," George Soros echoed a "game over" warning with a "stark warning ... that the financial world is on the wrong track and that we may be hurtling towards an even bigger boom and bust than in the credit crisis."

Now Dow Theory's Richard Russell is warning the public of an imminent crash: "Sell ... get liquid ... by the end of this year they won't recognize the country."

. . . What's coming could be worse than the 2000 dot-com crash and the 2008 meltdown combined, a "Super-Bubble" says Soros. And the biggest reason, Nouriel Roubini and Stephen Mihm tell Newsweek, is that "the president's half-measures won't fix our failed financial system" because he refuses to "bust up the too-big-to-fail banks."

Hell, I haven't recognized it (Wall Street) for over a decade. Crazy people getting back in the fraudulence-ridden stock market because they heard somewhere that "it was a good buy now." Good bye? (And if you are faint of heart, please, never, never, never read Paul B. Farrell who writes a column on behavioral economics. He's also the author of nine books on personal finance, economics and psychology, including The Millionaire Code, The Winning Portfolio, The Lazy Person's Guide to Investing. Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. He has a Juris Doctor and a Doctorate in Psychology.) P.S. - This is how insiders talk to each other (emphasis marks added - Ed.). And, yes, I think a bigger stimulus (as Paul Krugman and Joe Stiglitz agreed at the time) would have helped immeasureably to have avoided what seems to be dead ahead as it would have stimulated employment, bailed out the housing market and helped in pulling us out of this Trough of Despond. No. I have no faith now that another one will avoid lots of unpleasantness for the masses. It just seems to be very late in the game for partial remedies.
Warning: Crash Dead Ahead. Sell. Get liquid. Now.
'Game's in the Refrigerator.' Power's Turning Off. Dow Sinking Below 6,470.
By Paul B. Farrell May 25, 2010 "MarketWatch"

- ARROYO GRANDE, Calif. - "This game's in the refrigerator! The door's closed, the lights are out, the eggs are cooling, the butter's getting hard and the Jell-O is jiggling . . . "That was legendary Lakers' radio announcer Chick Hearn's signature way of calling a game early, telling fans the home team won . . . you can head for the exits before the final buzzer. Chick wrote the book with popular sports phrases like "slam dunk," "air ball," "charity stripe," and a "bunny hop in the pea patch" for a traveling violation.

No, no, "it's a buying opportunity," says another legend, hedge fund manager, Barton Biggs. Buying opportunity? For who? Remember, Biggs isn't advising Joe Lunchbox about what to do with his little 401(k).

Biggs' customers are mega-millionaires in his $1.5 billion Traxis Partners Fund. Main Street investors like Joe are prey in his casino.

Read on, you decide: As you stare from high up in the nose-bleed bleachers watching the game, staring at a Dow that not long ago was above 11,000 and heading for 12,000. Now the Dow's sitting on the bench, ready for the showers, weak after a couple air balls around 10,000. No more timeouts. "This game's in the refrigerator."How bad is your bookie's point spread in this game? A blowout? Will the Dow drop below 9,000 again? Now that it's broken technical supports, will it drop below 6,470, where the last bull rally started in early 2009?

Can you handle the nerve-racking volatility generated by Wall Street's high-frequency traders playing the game at warp-speed with algorithms making thousands of micro-bets in milliseconds, betting billions daily?

So who should you listen to? Barton and I arrived at Morgan Stanley about the same time. He stayed decades longer, became one of the world's leading strategists, advising the kind of high-rollers who also bet at private tables in a Vegas casino. You remember Biggs: In his book Wealth, War & Wisdom, he advises his high rollers to prepare for a "breakdown of the civilized infrastructure." Buy a farm: "Your safe haven must be self-sufficient and capable of growing some kind of food ... It should be well-stocked with seed, fertilizer, canned food, wine, medicine, clothes, etc. Think Swiss Family Robinson." Biggs is not advising small investors on what to do with their 401(k)s.

If you're gambling at Wall Street's casino, folks, the odds-makers are betting against Biggs. It's "game over." Main Street lost 20% last decade ... yet like sheep keep going back. Yes, if you're channeling Chick, here's your "mixed metaphor" cue card: "This game's in the refrigerator ... Wall Street won (proof, Goldman's $100-million-profit trading days and Blankfein's $68 million bonus) ... Main Street's headed for another losing streak ... Congress' lights are out ... the refrigerator door's closing on financial reforms ... the lobbyists are laying some rotten eggs, poisoning capitalism ... the Tea Party-of-No-No ideologies are hardening ... the bull's Jell-O is jiggling to a flat line ... and this market's going into hibernation, with the bears ... run, don't walk, to the exits, folks."

. . . Yes, Congress will pass something. But unfortunately, as reported on MSNBC, Senator Dodd, the reform bill's sponsor, is a turncoat, working overtime with Wall Street lobbyists "to weaken financial reform," leave us vulnerable to a new, bigger crash in the near future. And Wall Street lobbyists are spending hundreds of millions to kill reform.

'White Swans:' 2000 and 2008 crashes were predictable, next one too.

Recently Roubini was interviewed by Charlie Rose in BusinessWeek. His message confirms the worst. Roubini was questioned about his new book, Crisis Economics.

Rose began by asking, "What have we learned from these crises of capitalism?" Roubini could easily have said, "Nothing, we learned nothing."

His actual reply:"The first lesson is that crises are not 'black swan' events ... they're not just random outcomes. They are the result of a buildup of financial and policy vulnerability and mistakes - excessive risk-taking, leverage, debt, and so on." They are 'White Swans' "because these events are predictable. But generation after generation, we seem to forget the past. When there's a bubble, there's euphoria. There's irrational exuberance. Consumers can use their homes like ATM machines. Governments and policy makers are happy because they get reelected. Wall Street makes billions of dollars of profits. Everybody's delusional."

Sound familiar?

Yes indeed, in "This Time Is Different: Eight Centuries of Financial Folly," economists Carmen Reinhart and Kenneth Rogoff pinpoint the key signal that will blow the whistle and call the game: The "90% ratio of government debt to GDP is a tipping point in economic growth." For 800 years "you increase it over and beyond a high threshold, and boom!"

Warning, fans, the numbers on the game-clock are flashing wildly. America's ratio is now 92%, thanks to Obama's $1.7 trillion budget, future deficits, exploding debt. Soon, Ka-Booom! Another great nation bites the dust. Depression follows. Goodbye retirement.

Warning: 800 years of history are calling 'game over' but can't we change destiny? Or are Dodd, Congress, Obama, Wall Street, the Party of No-No and 300 million Americans all just playing their parts in a historical script well-known to historians like Reinhart and Rogoff, Kevin Phillips, Niall Ferguson and others? The message of "This Time Is Different" is very simple:"We have been here before. No matter how different the latest financial frenzy or crisis always appears, there are usually remarkable similarities from past experience from other countries and from history. ... no country, irrespective of its global importance, appears to be immune to it. The fading memories of borrowers and lenders, policy makers and academics, and the public at large do not seem to improve over time, so the policy lessons on how to 'avoid' the next blow-up are at best limited."So please listen closely: All the TARP bailouts, stimulus debt and Fed loans won't work.

It's a pretty depressing piece of work, but read the whole article if you want to get the original flavor (and believe me, I'm going mild here). The Greeks Get It and so does Chris Hedges.

Here's to the Greeks. They know what to do when corporations pillage and loot their country. They know what to do when Goldman Sachs and international bankers collude with their power elite to falsify economic data and then make billions betting that the Greek economy will collapse. They know what to do when they are told their pensions, benefits and jobs have to be cut to pay corporate banks, which screwed them in the first place. Call a general strike. Riot. Shut down the city centers. Toss the bastards out.

Do not be afraid of the language of class warfare - the rich versus the poor, the oligarchs versus the citizens, the capitalists versus the proletariat. The Greeks, unlike most of us, get it.

The former right-wing government of Greece lied about the size of the country's budget deficit. It was not 3.7 percent of gross domestic product but 13.6 percent. And it now looks like the economies of Spain, Ireland, Italy and Portugal are as bad as Greece's, which is why the euro has lost 20 percent of its value in the last few months.

The few hundred billion in bailouts for other faltering European states, like our own bailouts, have only forestalled disaster. This is why the U.S. stock exchange is in free fall and gold is rocketing upward. American banks do not have heavy exposure in Greece, but Greece, as most economists concede, is only the start. Wall Street is deeply invested in other European states, and when the unraveling begins the foundations of our own economy will rumble and crack as loudly as the collapse in Athens. The corporate overlords will demand that we too impose draconian controls and cuts or see credit evaporate.

They have the money and the power to hurt us. There will be more unemployment, more personal and commercial bankruptcies, more foreclosures and more human misery. And the corporate state, despite this suffering, will continue to plunge us deeper into debt to make war.

It will use fear to keep us passive. We are being consumed from the inside out.

But pay no attention to the man behind the curtain. It's all a game. And we are the game ball. Suzan ______________

2 comments:

Bustednuckles said...

Apparently, I am a block head.
I write for nothing.
Saudi Arabia just opened it's air space to Israel to facillitate a bombing run on Iran, the economy is going to implode and people think I am an idiot for stock piling some food.
When the full impact of the oil killing the Gulf sets in, I am going to look like a genius.
Thought I would stop by and say howdy honey, ain't see ya in a while.
Start putting some food and water away, things are going to get ugly here in a bit.

SMOOCH,
Busted

Suzan said...

You? Never, sweetie!

Genius is much more likely.

I am not only a blockhead though, but an increasingly more desperate one if the economic climate continues down its "merry" path of further devastation of those on the bottom.

I would gather can goods, etc., if I could, dear, but my car is full already of stale crackers, etc.

Hope we'll make it through this one.

We're been so lucky so far.

Love you!

S

P.S. I've been rather busy with my sister's terminal cancer treatments so it was nothing personal.

No further comment.

At this very bad time.