Money

Money’s at the center of too much, in my opinion. Yes, it’s a means of exchange, a store of wealth and a way of keeping score, but it’s not much more. So why do we surreptitiously equate it with worth, usefulness, value and even intelligence?

The fashion for these things comes and goes. Boom times, say, like the 1890s or the 1980s/90s beget a fetish for wealth as a measure of everything. Money, or the perception of someone who has some, replaces qualities such as integrity, character, insight, perception, knowledge, thoughtfulness and wisdom. No. A mere accumulation of cash or assets implies none of these, although such a pile might – stress, might – be a result of some or all…but the correlation is on an individual basis only. Plenty of poor people have demonstrated the above-listed personal traits, so money is not the determining factor.

I listened to a wonderful CBC podcast on George Orwell recently. Orwell, Eric Arthur Blair, was a teenage hero of mine, a man who could write with insight and clarity like few others. He hated and fought communism with a fervor beyond his strength. He reminds me of the lay intellectual from the early to mid-twentieth century. Some working men and women were readers, thinkers, talkers and people of genuine original thought. They revered books and discussion of ideas, taking comfort in the beauty of considered contemplation.

Contrast today’s shallow shiny triviality that passes for public life. In the absence of respect for higher aspirations beyond mere cash, money floats to the top as the mindless way for the mindless to categorize others. It’s the last resort grading system, the test that everyone understands.

Jobs Blow

My job is at the center of stuff to change. That and figuring a way to make central banks irrelevant.

My job sucks because I have no control over anything. Responsibility. Requirements. Duties. All of that side, but none of the input allowing for improvement. In current parlance, we’d call it an asymmetric arrangment – I get the work, they get the symmetry.

The lesson is clear. I have seen really well-paid jobs, and really poorly paid jobs. They are both unsatisfying in their own way, which tells me that the money is only a by-product. What I really want is to make my own way.

My idea about jobs is different now too. One can create a job in which self-determination is integral. Some folks need the security of others taking responsibility, but can do wonderful, creative, productive hours of work within that framework.

There’s a goal: to start a business in which people work for me, but are motivated by the way they can also satisfy their ambition.

Last Hurrah Saloon

The goal of Janet and Friends is to force us to buy stocks.

They’re gonna make it so that keeping cash will be so expensive that there will be no alternative. They’re gonna punish people for buying sovereign bonds. They’re gonna whip anyone who is debt-free.

Somehow we have arrived at the day when unelected pinheads, using trillions of printed money, under the auspices of supine politicians, have backed us into this no-choice corner. And how do stocks react? Well, they’re going down.

The missing link is there somewhere. With interest rates at near-zero, why isn’t every man and his parakeet borrowing to buy houses? Why aren’t they renovating their own homes? Why aren’t they borrowing on margin to buy useless biotech stocks?

Do central bankers even consider these questions?

Public v Private

Boring to most people, the yield curve tells us much about the financial world.

The yield curve is a line joining the current rates of interest for money borrowed for specific periods, and the most used curve is that joining so-called risk-free interest rates, those for US federal government debt. That is the debt raised by the feds – money borrowed – to pay for Solyndra and presidential vacations.

The Federal Reserve fixes the very short end, meaning the cost of money lent overnight between banks. That’s more-or-less the oil in the financial gearbox. As we know (oh, don’t we know) this rate is now around .25%.

Longer-duration borrowing is market-traded, and free to move. The best expression of the thirty-year treasury bond and the ten-year treasury note is the price of front-month futures. There’s a bunch of jargon for you. In short, this is where the market ie: anyone from speculators to mortgage issuers to life companies to banks can easily express their views on the future direction of rates in a trade.

Since the fed raised their part of the curve, guess what happened to the rest? Rates have declined. Markedly. The long end is now heading toward all-time lows. In other words, while the fed raised the cost of short money, the cost of long money is declining.

There are other reasons than simply the cost of money for this. One possible reason is that people are buying US govt backed paper as a safety haven. Remember that “risk-free” business. As stock markets look iffy, owning even this stuff for very little return looks attractive. Another is the dollar, which still looks relatively strong.

The effect is the same. Borrowed money is still cheap. Cheap money is low productivity money. There is little competition for money. It’s all very low energy.