September 6

question: how do we know where we're heading if we don't even know where we are? or where we've been?

there's no economic road map; back in 2006/07, few people recognized that we were in a boom; many, including Ben B., didn't recognize the housing bubble for what it was, much less recognize that there was also a debt bubble; if we (collectively) can't even recognize a boom/bubble of such proportions while we are in it, how are we to recognize where we are in the midst of its aftermath? where are we now??

wasn't there talk not too long ago about policy-makers having tamed the economic cycle? no more booms and busts, eh? what hubris!

the so-called smoothing-out of the business cycle was a function of continuously leveraging up the economy, thereby kicking the can down the road; the downside of all past slumps was mitigated, or, rather, postponed, by using debt to "cure" those ills; can that solution really be applied persistently indefinitely? that which is unsustainable won't be sustained

so now we're supposedly in the "new normal"; but what exactly is normal? were the 1990s and early 2000s really normal? compared to what? historical precedent? were those decades anything like the majority of historical precedent?

can we return to normal? if by doing so we mean reverting to the 1999 or the 2006 versions of normal, chances are not; if each dollar of economic growth over the past 25 year continually cost increasingly extra dollars of debt growth, then is that progress? debt growth represents the pulling-forward of consumption; by increasing debt, we do so to increase current consumption at the cost of future consumption; sooner or later, future consumption has to be depressed in order to pay for that excessive past consumption; if not now, why not?


What If “It” Doesn’t End With a Bang But With a Whimper? Cognitive Dissonance, zerohedge.

Layers of Self Deception

It makes it so much easier to deal with life’s ugly inconsistencies when we can sweep them under the intellectual rug. And it all happens in seconds with barely a blip in our blood pressure. The really tough dissonances might take a little longer, but never underestimate our capacity for self deception. And this cognitive tango is always running in the back ground with very little conscious awareness. Unless, of course, we train ourselves to see what’s going on. But who’d want to do that?

Since recognizing these cognitive gymnastics and then compensating for them requires self examination and personal courage, is it any wonder the average Joe’s worldview is distorted? It may come as a shock to learn that for all of us, our worldview isn’t affected so much by a lack of information as our lack of desire to (re)examine, update and accept it. The only information vacuum we live in is the one we create between our ears....

We all own a pair of rose colored glasses that are completely customizable and personalized. One might say that denial is self inflicted propaganda for it serves the same purpose as corporate and governmental propaganda, that of spinning the (ugly) truth into something more palatable.

As we grow, and as needed to survive and thrive, we modify and alter our beliefs to accommodate “the real world”. But we do this begrudgingly and only when we’re left with little or no choice....

Think of using denial as a holding pattern while we attempt to land new information for assimilation. The problem begins when we become trapped in the holding pattern and are unwilling to accept the differences or reject incorrect beliefs. We then become mired in the muck of our rigid belief system and denial is no longer used as a bridge but as a dam.

Why the end of the equity cult means trillions in upcoming outflows from stocks. Robert Buckland, Citi, via zerohedge.


other fare:

I love these videos by RSA Animate: The surprising truth about what motivates us. Dan Pink talk via RSA Animate via YouTube.

Dick Cheney's oily dream. Washington's Blog.