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Another one bites the dust
Mar. 24th, 2009 12:19 pmAnd so another middle-aged man, who never married, with no children, kills himself. Kind of makes you worried for your own prognosis, doesn't it? Or, to put it another way, how many of the poor bastards are out there who feel like ending it all, but, because of various impediments, carry on living instead?
Is it the alpha male thing? Some kind of deep-rooted hard-wiring, man echoing the "failed males" of animal groupings who crawl off somewhere to die while the successful reproducing male of the group gets all the female attention? Most of the males slope off to the side and feel sorry for themselves, while a few march off into the wilderness, never to be seen again.
For Nicholas Hughes there wouldn't have been many social impediments to suicide. His mother Sylvia Plath killed herself; Ted Hughes' next partner killed herself. As with the Bridgend suicides, the more you see it, the less there is a social stigma attached to the act.
Curious, though, that concern about the social niceties could affect the act of ending one's life, isn't it? I mean, it's hardly the kind of thing where you would say to yourself "but what would people think?" And yet I suspect that for a number of people (let's move away from the middle-aged blooke who has never married and has no kids -- that's too depressing) the "but is this kind of thing socially ok?" is a significant factor.
The Times reported that "he was a loving brother, a loyal friend to those who knew him and, despite the vagaries that life threw at him, he maintained an almost childlike innocence and enthusiasm for the next project or plan". And yet, there he was, hanging himself. Appearances can be deceptive.
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I was reading through my blog for 2008, and it struck me that if I had actually followed my own financial recommendations with all my heart, I would have made an absolute fucking fortune. The "big wins" were the prediction that the dollar would rise and that the price of oil would fall. Big misses were a failure to spot that equities would dive by nearly half (although I did say that I wouldn't touch bank shares with a barge pole) and a failure to see that interest rates would be cut as far as they have been. Curiously, I made a reasonable bit of money from the fall in the price of equities, but nothing from the fall in the price of oil. The rise in the value of the dollar was so good for me personally anyway (since a chunk of my money is in dollars) that gambling on it happening as well would just have been greedy.
I should currently either be going long on sterling or cashing out dollars v quickly, as I suspect the short-term weakness of the dollar after last Wednesday's QE announcement will be more than short-term. There's a distinct correlation at the moment between stockmarket strength and dollar weakness, not least because of the huge amount of "bringing it all back home" (i.e., "deleveraging") that took place late last year. So I should be withdrawing money from the dollar accounts and shoving it into equities. However, Authers this morning observed that "we have been here before". He claims that the Geithner plan is flawed because it assumes that the basic problem is one of liquidity, rather than one of solvency. I really have to disagree with Authers here. The plan does not assume this. What it assumes is that part of the problem is one of lack of liquidity, not that it's the core problem, and certainly not that easing liquidity will vanish away the entire problem.
What Authers fails to deny is that, even if the core problem is now systemic recession, rather than one of liquidity, part of the solution is to ease liquidity. Authers seems to be putting forward the line here that much of these toxic assets haven't got a price on them at the moment because they will turn out to be virtually worthless and that, as a result, many of our financial institutions are de facto insolvent. The Birks view is far less pessimistic -- along the lines of the LTCM situation -- that most of these toxic assets are far from worthless and that investors will end up getting something in the region of 90 cents on the dollar or more, even if they are currently trading at 45 cents to 70 cents on the dollar.
To me the justification for this line is simple common sense. There's a hell of a lot more derivatives than there are absolute assets underlying them. If you have a trillion dollars of derivatives flying around representing $100bn of assets, and the $100bn of assets turns out to be worth only $50bn, how much are the derivatives worth in total?
This is a fascinating question, entering arcane worlds of derivative valuation, but in essence the solution is simple. If $50bn in assets have been lost, then the final settlements of all the derivatives after they unwind will be minus $50bn. Because the total loss on the derivatives can never be greater than the loss on the physical properties underlying the derivatives. However, within that net loss, there might be $500bn of losses and $450bn of gains. You can therefore print headlines about half a trillion dollars being "lost". But it hasn't really been lost in the sense that it's disappeared -- it's just been transferred from losing gambler A to winning gambler B. So, in one sense, Authers is right -- it IS a question of solvency (or lack thereof), because some huge sums are going to be lost (and won) as these positions unwind. But, on the other hand, it is not one of systemic insolvency. Because a lot of money will be won to counterbalance the money that has been lost. If that money isn't paid over, well, so it goes, it won't be the first time you've failed to collect. However, if it IS paid over, then you have to do something with it. The Geithner plan actually subsidizes you to do something with it rather than put it under the mattress.
_______________
___________
Is it the alpha male thing? Some kind of deep-rooted hard-wiring, man echoing the "failed males" of animal groupings who crawl off somewhere to die while the successful reproducing male of the group gets all the female attention? Most of the males slope off to the side and feel sorry for themselves, while a few march off into the wilderness, never to be seen again.
For Nicholas Hughes there wouldn't have been many social impediments to suicide. His mother Sylvia Plath killed herself; Ted Hughes' next partner killed herself. As with the Bridgend suicides, the more you see it, the less there is a social stigma attached to the act.
Curious, though, that concern about the social niceties could affect the act of ending one's life, isn't it? I mean, it's hardly the kind of thing where you would say to yourself "but what would people think?" And yet I suspect that for a number of people (let's move away from the middle-aged blooke who has never married and has no kids -- that's too depressing) the "but is this kind of thing socially ok?" is a significant factor.
The Times reported that "he was a loving brother, a loyal friend to those who knew him and, despite the vagaries that life threw at him, he maintained an almost childlike innocence and enthusiasm for the next project or plan". And yet, there he was, hanging himself. Appearances can be deceptive.
++++++++++++++
I was reading through my blog for 2008, and it struck me that if I had actually followed my own financial recommendations with all my heart, I would have made an absolute fucking fortune. The "big wins" were the prediction that the dollar would rise and that the price of oil would fall. Big misses were a failure to spot that equities would dive by nearly half (although I did say that I wouldn't touch bank shares with a barge pole) and a failure to see that interest rates would be cut as far as they have been. Curiously, I made a reasonable bit of money from the fall in the price of equities, but nothing from the fall in the price of oil. The rise in the value of the dollar was so good for me personally anyway (since a chunk of my money is in dollars) that gambling on it happening as well would just have been greedy.
I should currently either be going long on sterling or cashing out dollars v quickly, as I suspect the short-term weakness of the dollar after last Wednesday's QE announcement will be more than short-term. There's a distinct correlation at the moment between stockmarket strength and dollar weakness, not least because of the huge amount of "bringing it all back home" (i.e., "deleveraging") that took place late last year. So I should be withdrawing money from the dollar accounts and shoving it into equities. However, Authers this morning observed that "we have been here before". He claims that the Geithner plan is flawed because it assumes that the basic problem is one of liquidity, rather than one of solvency. I really have to disagree with Authers here. The plan does not assume this. What it assumes is that part of the problem is one of lack of liquidity, not that it's the core problem, and certainly not that easing liquidity will vanish away the entire problem.
What Authers fails to deny is that, even if the core problem is now systemic recession, rather than one of liquidity, part of the solution is to ease liquidity. Authers seems to be putting forward the line here that much of these toxic assets haven't got a price on them at the moment because they will turn out to be virtually worthless and that, as a result, many of our financial institutions are de facto insolvent. The Birks view is far less pessimistic -- along the lines of the LTCM situation -- that most of these toxic assets are far from worthless and that investors will end up getting something in the region of 90 cents on the dollar or more, even if they are currently trading at 45 cents to 70 cents on the dollar.
To me the justification for this line is simple common sense. There's a hell of a lot more derivatives than there are absolute assets underlying them. If you have a trillion dollars of derivatives flying around representing $100bn of assets, and the $100bn of assets turns out to be worth only $50bn, how much are the derivatives worth in total?
This is a fascinating question, entering arcane worlds of derivative valuation, but in essence the solution is simple. If $50bn in assets have been lost, then the final settlements of all the derivatives after they unwind will be minus $50bn. Because the total loss on the derivatives can never be greater than the loss on the physical properties underlying the derivatives. However, within that net loss, there might be $500bn of losses and $450bn of gains. You can therefore print headlines about half a trillion dollars being "lost". But it hasn't really been lost in the sense that it's disappeared -- it's just been transferred from losing gambler A to winning gambler B. So, in one sense, Authers is right -- it IS a question of solvency (or lack thereof), because some huge sums are going to be lost (and won) as these positions unwind. But, on the other hand, it is not one of systemic insolvency. Because a lot of money will be won to counterbalance the money that has been lost. If that money isn't paid over, well, so it goes, it won't be the first time you've failed to collect. However, if it IS paid over, then you have to do something with it. The Geithner plan actually subsidizes you to do something with it rather than put it under the mattress.
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___________
