Merkel’s Law

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The Book of the Week is “Merkel’s Law, Widsom From the Woman Who Led the Free World” by Melissa Eddy, published in 2024.

This short, sloppily edited, chronologically disorganized, redundant volume described the highlights of the decades-long (beginning at the dawn of the 1990’s) political career of Angela Merkel in Germany.

As much as the capitalist Americans scream “socialist!” at many aspects of the culture of Europeans, the latter are superior in gender equality! In approximately the last fifty years, several females have served as world leaders; Angela Merkel, Margaret Thatcher and Golda Meir among them. But the United States has yet to elect a female president.

Interestingly, East Germany had a bigger selection of daycare centers than did West Germany at the time of this book’s writing. This meant a larger percentage of eastern German women (on whom the burden still largely falls to raise children and do housework) than otherwise, could have a career if they chose. It is still a myth that women can have it all, even in industrialized countries.

Additionally, the media pestered Merkel about various issues they wouldn’t dare have raised if she had been a male. They criticized her fashion choices. They treated her public appearances as a beauty contest. But Merkel did have a unique perspective, having grown up in East Germany under the yoke of Communism. She witnessed poor talent deployment under the crushingly oppressive system. Everyone was guaranteed a job, but there was wasted talent galore.

One behavior Merkel exhibited, for which a few male politicians have become known, was delaying making decisions until the last possible moment. There might have been various time-sensitive factors at work when she finally announced she was going to run for a fourth term as chancellor of Germany, that would begin in 2017. One factor included waiting to see whether American voters elected Donald Trump for president in 2016. Another was the possible influence outgoing American president Barack Obama had on her to run again.

On the other hand, making people wait is a control-issue. There is power in keeping information to oneself. The media has to monitor when an announcement is going to be made, and keeping viewers in suspense generates ratings.

Two major crises Merkel faced during her chancellorship, for which her reactions were lambasted– consisted of the overwhelming number of Syrian refugees coming into Germany beginning in the 2010’s, and the oversight of energy sources for Germany. Regarding the latter, Merkel chose to purchase more natural gas and stopped the use of nuclear energy after Japan became a cancer cluster from radiation. Japan suffered a meltdown of its nuclear plants from an earthquake and tsunami in spring 2011.

Many Germans thought Merkel sold her soul to the Russians on the energy front. However, all world leaders must make wrenching decisions for their nations in connection with goods and services (especially energy!), environmental friendliness (or not), economics, and diplomatic relations, because all kinds of issues are all interrelated and cannot be divorced from one another.

Nevertheless, the decisions of elected public servants tend to be selfish, as they always have their eye on reelection or their legacy. In a democratic country, the one exception is when a dictatorial leader’s decisions are all selfish– if they are in their last term due to term limits and they don’t care about their legacy.

Read the book to learn about Merkel’s career trials and tribulations, her strengths and weaknesses, and her legacy.

The Trading Game

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The Book of the Week is “The Trading Game, A Confession” by Gary Stevenson, published in 2024. This blogger highly encourages the reader to peruse the entire “Wall Street” and Economics categories of this blog in order to gain a better understanding of financial matters and economics.

In March 2007, the 1987-born author began working on the Fixed Income Trading Floor at the Short Term Interest Rates Trading Desk in the Foreign Exchange section of Citibank in its London branch. He had grown up in a tough, poor neighborhood in East London. He beat the odds for someone of his demographic group, considering the fierce competition in both getting accepted to a prestigious university and getting a job in currency trading.

Stevenson nurtured an aspiration to make lots of money. Fortunately, his talent and hard work in mathematics allowed him to score high on standardized exams. He attended the London School of Economics where he rubbed shoulders with mostly male, wealthy elitists whose fathers gave them a leg up in life, and whose futures were almost guaranteed to be bright. At school, when he won a game involving hypothetical securities trading, Stevenson’s life turned around. For, he won an internship which turned into a career.

After a few lucky breaks and bold moves on his part, the author was just hitting his stride in work-experience when he happened to be at the right place at the right time to earn extremely large financial gains from a triple-whammy disaster. In March of 2011, about twenty thousand people died in Japan due to an earthquake, tsunami and nuclear meltdown of three power plants. Amidst the resulting financial turmoil and previous turmoil of the 2008 worldwide financial crises, Stevenson made a percentage of the millions upon millions of dollars he earned in currency trading for Citibank.

Stevenson alone in his department had been correct in gaming the situation. Everyone else had been wrong and they lost money. Nevertheless, he was still emotionally troubled. He bore two major similarities with Alan Turing– another genius: social dysfunctionality, and indifference to how he looked and what he wore.

Stevenson was one of the proverbial three kinds of people (geniuses in the minority)– the kind who knew what was happening and made things happen. The vast majority account for the other two kinds of people– brainwashed, unwashed masses who watched what was happening, and then still wondered what happened.

In the early 2010’s, the author came to the realization that there would NEVER be economic recovery of any financially-struggling countries in the European Union while the Swiss National Bank kept interest rates at or below zero. The other traders in his department optimistically kept repeating that interest rates HAD to rise sooner or later, because they had bet wrong.

But, the tiny percentage of the super-wealthy, super-powerful people of the world sought to maintain the then-status quo, because it made THEM even richer, and the poor, poorer, as the cliche goes. The income inequality of the world would eventually result in a slave-based economy (as existed in ancient times) all over again.

Read the book to learn much more of Stevenson’s personal and professional life, and his times. As is well known, the United States is one of the major economic superpowers of the world, and its politics are part and parcel of that. Here’s a little ditty on its momentary political situation.

LET THE BEST TEAM WIN

sung to the tune of “Let the River Run” with apologies to Carly Simon, BMG Gold Songs C’est Music and Tcf Music Pub Inc.

[Spoken: We’re all on edge,
waiting for the savior,
gaping with alarm
at the immature behavior.]

Let the best team win.
Let’s all peaceFULly watch the changes.
Come the new, new Washington.

Brilliant ideas rise.
The media lies, about, and smears them.
And celebs get themselves in your face.

It’s asking for the taking,
blaming, deep-faking.
Oh, Americans are aching.
We’re all on edge,
waiting for the savior,
gaping with alarm
at the immature behavior.

Through the hate and all.
It’s who we are:
Place a trail of desire
on the White House lawn.

It’s asking for the taking.
Just hold on now.
Democratic convention will be a show
you’ve never even seen in political history.

Oh, Americans are aching.
We’re all on edge,
waiting for the savior,
gaping with alarm
at the immature behavior.

It’s asking for the taking,
blaming, deep-faking.
Oh, Americans are aching.
We’re all on edge,
waiting for the savior,
gaping with alarm
at the immature behavior.

Let the best team win.
Let’s all peaceFULly watch the changes [watch the changes]
Come the new, new Washington.

The (Honest) Truth About Dishonesty

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The Book of the Week is “The (Honest) Truth About Dishonesty, How We Lie to Everyone– Especially Ourselves” by Dan Ariely, published in 2012.

The author presented one way human beings think about ethical behavior in a given situation: the Simple Model of Rational Crime (SMORC). It says someone would do a cost / benefit analysis in order to decide, for instance, whether to park illegally because they’re late for a meeting. Of course, a major factor in their decision-making includes how likely they are to get caught, and if they are caught, how willing they would be to bear the consequences.

The author wrote that SMORC doesn’t take emotion and trust into account, so most people wouldn’t engage in that kind of moral reasoning. With only reciprocity as the sole consideration, an individual using SMORC would require contracts for almost every ethical dilemma. He would spend most of his life in legal battles and litigation; like, Howard Hughes, Ted Turner, and Donald Trump.

Although the author failed to distinguish between guilt and shame, he cited numerous behavioral-economics studies he and other professors conducted (on mostly American subjects) to learn the causes of dishonest behavior, and ways it can be curbed.

The author realized that in a matter of weeks, even he was getting brainwashed by the propaganda of his bosses, because he was receiving generous compensation for serving as an expert witness.

Two ways to reduce cheating included:

  • Having people read or sign an honor-code document (such as the Ten Commandments, or an agreement not to cheat on an exam, or a set of rules, which, if broken, would give them an unfair advantage) before completing a particular task, taking a test, or competing.
  • Having people put their signature at the top of a document, and then fill in the info (such as on an application or tax return), rather than fill in the info and then sign at the bottom.

Read the book to learn of additional ways society can spread more ethical behavior (yes, it can be contagious!) so as to stave off the collapse of modern civilization just a little longer.

Davos Man

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The Book of the Week is “Davos Man, How the Billionaires Devoured the World” by Peter S. Goodman, published in 2022. As the now-cliche joke goes, “You can tell Monopoly is an ancient game because there’s a luxury tax and rich people can go to jail.”

Yearly, about three thousand, super-rich people gather in Switzerland at a five-day conference called “Davos.” The least wealthy people there consist of journalists, academics, diplomats, entrepreneurs, activists and senior government officials. The billionaire-attendees (whom the author called “Davos Man”) pay lip service to the world’s social, economic and environmental problems, and behind closed doors, discuss how to profiteer in connection therewith.

In the last half century, Davos Man has enriched himself through making campaign contributions to politicians who have legislated:

  • monopolistic practices
  • tax cuts
  • excessive deregulation and
  • gutting of social programs.

The above favor powerful, rich people in Silicon Valley, New York City and Washington, D.C. Their propaganda campaigns brainwash the masses into blaming:

  • China
  • immigrants whom they believe are taking their jobs away, and
  • automation

for the working classes’ job losses.

The author argued that the common people in most industrialized nations of the world should blame DAVOS MAN and politicians, who are sometimes one and the same!

Davos Man– the modern-day Robber Barons– salve their consciences through philanthropic activities that are comprised of a tiny, tiny percentage of their businesses’ profits. Plus, the author contended that it is a Cosmic Lie that tax cuts pay for themselves by spurring spending.

During the COVID pandemic, the American Davos Man enriched himself through incestuous corporate / political relationships: “The United States had employed a Rube Goldberg contraption, with [Steven] Mnuchin’s slush fund [in the U.S. Treasury] funneled through Jamie Dimon’s bank [JPMorgan Chase], and Larry Fink’s firm [BlackRock] buying bonds on behalf of the Fed, allowing Steve Schwartzman’s private equity empire [Blackstone Group] to borrow for free.”

The English government convinced many of its people that through Brexit, their nation could decide its own financial fate. But Davos Man actually ended up collecting a boatload of their hard-earned taxes. Meanwhile, Argentina was defaulting on its loans for the tenth time in the last half-century. The aforementioned Davos Man, Larry Fink, blamed Argentina for the resulting disastrous losses of his clients at BlackRock. BUT– his firm was the sucker that lent it the money!

Anyway, read the book to learn of: Davos Man’s activities in various countries of the world– that resulted in skyrocketing wealth for him, and plummeting economic security for everyone else; why the author is still optimistic that the world can reverse the current, cold-hearted global financial climate in which inequality between rich and poor is ever-widening (hint: creative ideas on community cooperatives are in the air, but also– read Amy Klobuchar’s tome on antitrust issues); and the economic history explaining how Davos Man has become so rich and powerful.

Cuba on the Verge

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The Book of the Week is “Cuba on the Verge, 12 Writers on Continuity and Change in Havana and Across the Country” edited by Leila Guerriero, published in 2017.

After Cuban leader Fidel Castro died in November 2016, there was a slight relaxation of economic restraints on the common people. Under the one-party rule of Castro’s brother Raul, Cubans could engage in entrepreneurial pursuits– serving tourists through renting out their homes or turning their cars into taxis, supervised by the government. Americans have begun doing the same in the last two decades, but through centralized corporate entities such as Airbnb and Uber.

Ironically, under Fidel’s leadership, Cuba developed a reputation for literacy and affordable, quality healthcare; during which time, America developed a reputation for deleterious (greedy!) practices in education and healthcare.

At the book’s writing, Cuba required working mothers to take paid maternity leave halfway through their eighth month; the paid leave continued for four and a half months after the births. An additional year was optional, for which mothers received sixty percent of their wages. Further, abortions were not only legal, but used as a form of contraception, with neither shame nor emotional hysteria generated by political activists, attached. On the other hand, the Cuban government spies on its people 24/7.

Cuban children are taught sex education beginning in the fifth grade. So kids are sexually precocious, as they learn from their older siblings. They are casual about relationships, so there are no hard feelings when families become fragmented, but there are many latchkey children, and males dominate.

After the Soviet Union broke up, Moscow’s government no longer funded Cuba’s economy. Beginning in the 1990’s, this “Special Period” saw severe shortages of basic consumer goods such as health and beauty aids and clothing, not to mention food. Unsurprisingly, domestic violence spiked.

People sold their jewelry at government trading posts in order to survive. They received mostly Panamanian goods in return. They adopted casual dress all the time– flip-flops, shorts, T-shirts– even where formal clothing had been worn previously, such as the theater. Counterfeit big-name goods flooded the market, sourced mostly from Miami, Panama, Madrid and China.

Yet another cultural change included males’ taking on of domestic chores and child-rearing, as more women could earn money through prostituting themselves. Socially-skilled men collected and sold coconuts from private properties, or sought out sexual relationships with visiting of out-of-town women who paid their everyday expenses.

Read the book to learn of the numerous other ways Cuba changed in the 1990’s, and ways it hasn’t– such as in its practices of numerology and witchcraft and in its love of baseball.

The Education of A Speculator

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The Book of the Week is “The Education of A Speculator” by Victor Niederhoffer, published in 1997.

Born in 1943 in Brooklyn in New York City, the author sorted “market advisers and investment newsletter writers” into eight different categories, providing a brief description of their behaviors or personality traits. He classified himself as “The Other World Person” because he ignored the overpaid noisemakers and distractions of conventional media outlets that purported to convey information on which securities to buy, sell, or avoid.

The author’s two data sources for his commodities, currency trading and investing ideas consisted of the National Enquirer and his research results from testing all kinds of variables in statistics-calculations of past securities-market data using software. No other sources.

The mid-1990’s saw great advances in statistics software modeling that could process scads and scads of data; hence, market players could erroneously use past performance of investment vehicles faster than ever before for predictive purposes to help themselves and others lose their money faster than ever before. And those advances might have played a part in the scandals and financial crashes that have occurred with alarmingly increasing frequency in the last thirty years. Big Tech’s and Big Media’s incestuous oligopolies (fraught with political donations) just keep getting more hegemonic, so that power and money keep feeding on themselves ad infinitum. Globalization is yet another wrench in the works.

At the book’s writing, global trade had been maturing for decades, but capitalism was still in its infancy in many territories of the world; particularly in ones that were becoming politically democratic again, or for the first time in their histories. Many European countries were in the process of adopting cooperation rather than competition in their financial and economic dealings. A large proportion of them even voted to use one currency among them. The United States kept to itself, but more and more people around the world were starting to trade or invest in foreign securities, currencies and governmental financial entities, so chain reactions occurred more and more.

The Federal Reserve (aka Fed) has always been a major influence on America’s financial markets. The author contended that the Fed was just as clueless as the rest of the country about what effects its making of rate-adjustments would have on the nation’s economy. It is currently just as clueless. But its announcements are made with such confidence and arrogance, that a large number of their listeners are brainwashed into believing they are receiving valuable information.

The incumbents– known names pre-Internet–became the most influential voices in the financial sphere. The wiliest ones use propaganda techniques to paper over their wrong predictions. They never apologize for the losses stemming from their pronouncements. The walls of the author’s business office were lined with portraits of ones who had disastrous losses.

To be fair, the author himself told various anecdotes of his own failures. In 1992, he bought IBM stock for his own kids. That was an embarrassing mistake. He learned to cut his losses at a certain level of the total money he reinvested. And, he didn’t let his greed get out of control when he was winning.

The author was a champion squash player. One similarity between squash and speculating is externalities–opponents’ actions determine players’ actions in the game. So, for instance, in ten-pin bowling, there are no externalities. In squash, there are. In one college finals-match, the author moved his body in a way that tricked his opponent into thinking the ball was going to go in a certain direction, but it went the opposite way. Traders and investors play similar tricks in their communications in the financial markets. Conditions change rapidly so even the market propagandists’ winning streaks don’t last long.

The reason is:

First, independent thinkers make observations or find obscure data that works in making them money. Then software detects their trading tricks. So word gets around, and everyone else jumps on the bandwagon so that the advantage is lost.

Human beings want so badly— to believe they can predict the future, and love to fantasize about getting rich quick– that they tend to look for patterns and order where none exist. The author did provide one vast generalization that might be valuable, though. His statistical analysis between the years 1870 and 1995 inclusive showed that years ending in the digit 5 were good years, and those ending in 7 were bad, for the American stock markets. He didn’t speculate as to why.

However, politics is one major mover of markets, and the collective mood of the United States specifically, might be a bit more upbeat in years when political uncertainty is at a minimum. Presidents and other politicians begin or continue their terms during years ending in 5. The public might be unclear about their future policy directions, or weary of them by the years that end in 7.

Anyway, read the book to learn a boatload more about the author’s philosophy, his trials, tribulations and triumphs in the markets, his research results and comparisons between financial markets and: ecology, games and sports.