Near the end of his life, the Roman Stoic philosopher Seneca wrote beautiful insights into letters to his friend.

This letter is on the subject of saving time but contains wisdom on how we squander it as well.

Greetings from Seneca to Lucilius

Continue to act thus, my dear Lucilius—set yourself free for your own sake; gather and save your time, which til lately has been forced from you, or filched away, or has merely slipped from your hands. Make yourself believe the truth of my words—that certain moments are torn from us, that some are gently removed, and that others glide beyond our reach. The most disgraceful kind of loss, however, is that due to carelessness. Furthermore, if you will pay close heed to the problem, you will find that the largest portion of our life passes while we are doing ill, a goodly share while we are doing nothing, and the whole while we are doing that which is not to the purpose. What man can you show me who places any value on his time, who reckons the worth of each day, who understands that he is dying daily? For we are mistaken when we look forward to death; the major portion of death has already passed. Whatever years lie behind us are in death’s hands.

Therefore, Lucilius, do as you write me that you are doing: hold every hour in your grasp. Lay hold of today’s task, and you will not need to depend so much upon tomorrow’s. While we are postponing, life speeds by. Nothing, Lucilius, is ours, except time. We were entrusted by nature with the ownership of this single thing, so fleeting and slippery that anyone who will can oust us from possession. What fools these mortals be! They allow the cheapest and most useless things, which can easily be replaced, to be charged in the reckoning, after they have acquired them; but they never regard themselves as in debt when they have received some of that precious commodity—time! And yet time is the one loan which even a grateful recipient cannot repay.

                  George Washington

vigor now is better than a perfect solution applied ten minutes later.

Teamwork is being abused rather than used by managers who don’t want to act. They want to avoid leadership in times of crisis — times that call for action and commitment to a direction despite opposition and ambiguity. Teamwork is fine — when you can afford the time it takes to achieve consensus.

“Be more concerned with your character than your reputation, because your character is what you really are, while your reputation is merely what others think you are………….” John Wooden

Louis D. Brandeis

                        Author uncertain

Abraham Lincoln

John Scully

(Source: Wellspring Seminars)

believed until it is officially denied.’

“Learn to ask for what you want. The worst people can do is not give you what you ask for — which is precisely where you were before you asked.”
-Peter McWilliams

-Cicero

You cannot teach a man anything; you can only help him discover it in himself.”
Galileo Galilei

all your estates among them.” –Benjamin Franklin

Federalist No. 45

-Will Rogers

—Father Edward O’Brian, USMC

But if you can get the relationship back on track, chances are it will be a good one.

Peter Bernstein

– Pope John Paul II

-Daily Reckoning / Mark Skousen

John Hussman, May 7, 2005 weekly insight

“Things fall apart; the center cannot hold; mere anarchy is loosed upon the world, the blood-dimmed tide is loosed, and everywhere the ceremony of innocence is drowned.” – William Butler Yeats

You can develop the kind of charisma that opens doors for you by going to work on yourself, consistently and persistently, and becoming the kind of person everyone can admire and look up to. That’s what charisma is all about.

7. Are there people I admire who have made major mistakes but still achieved great success?

“The natural progress of things is for liberty to yield and government to gain ground.” –Thomas Jefferson

Mark Twain

John Hussman, weekly commentary June 27, 2005

John Hussman, weekly commentary July11, 2005

“People are always blaming their circumstances for what they are. I don’t believe in circumstances. The people who get on in this world are the people who get up and look for the circumstances they want, and, if they can’t find them, make them.” — George Bernard Shaw, “Mrs. Warren’s Profession,” 1893

—Thomas Jefferson

~ Christopher Morley ~

Adopt the pace of nature: her secret is patience.
Ralph Waldo Emerson

Marc Faber in Daily Reckoning

“Opportunity is missed by most people because it is dressed in overalls and looks too much like work.” – Thomas Edison

—Socrates {}

 -Aristotle

– George Eliot

– Pete Seeger

— James Wilson (Chisholm v. Georgia, 18 February 1793)

“Consult not your fears but your hopes and your dreams. Think not about your frustrations, but about your unfulfilled potential. Concern yourself not with what you tried and failed, but with what is still possible for you to do.” Pope John XXIII

By the way, isn’t it interesting that politicians make noise when oil and gas prices rise too quickly … and complain when other commodity prices, such as corn and wheat, go too low?

Early to Rise Sep. 30, 2005

–      C.S. Lewis

From “The Pocket Buddha Reader,” edited by Anne Bancroft,

“One thing about a police state, you can always find the police.” —L. Neil Smith {}

— Candidus (in the Boston Gazette, 20 January 1772)

– Henry Hazlitt

-John Kenneth Galbraith

– Michelangelo

When meditation is mastered, the mind is unwavering like the flame of a lamp in a windless place. In the still mind, in the depths of meditation, the Self reveals itself. Beholding the Self by means of the Self, an aspirant knows the joy and peace of complete fulfillment. Having attained that abiding joy beyond the senses, revealed in the stilled mind, he never swerves from the eternal truth. He desires nothing else, and cannot be shaken by the heaviest burden of sorrow.

-Bhagavad Gita 6:19-22

In the beginning mindfulness takes away worries and fears about past and future and keeps us anchored in the present. In the end it points to the right view of the self.

-Ayya Khema, “Be an Island”

As the great financier J.P. Morgan once said, ‘If you see someone who’s making a lot of money, do what he does.’

Ralph Waldo Emerson

Take heed that when effort is too strenuous it leads to strain and when too slack to laziness. So make a firm determination that you will adopt the middle way, not allowing yourself to struggle or to slacken, but recognizing that faith, energy, mindfulness, concentration, and wisdom are the fruits of a calm and equable way.

-Theragatha

If there’s no wound on the hand,
that hand can hold poison.
Poison won’t penetrate
where there’s no wound.
There’s no evil
for those who don’t do it.

-Dhammapada, 9, translated by Thanissaro Bhikkhu

“There is no armor against the arrows of fate.” ~ Old Chinese Proverb

They live in freedom who have gone beyond the dualities of life. Competing with no one, they are alike in success and failure and content with whatever comes to them. They are free, without selfish attachments; their minds are fixed in knowledge. They perform all work in the spirit of service, and their karma is dissolved.

-Bhagavad Gita 4:22-23

“The trouble with weather forecasting is that it’s right too often for us to ignore it and wrong too often for us to rely on it”.  ~Patrick Young

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“The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds.”

The more original a discovery, the more obvious it seems afterward. – Arthur Koestler

Good intelligence is nine-tenths of any battle. – Napoleon

What ails the truth is that it is mainly uncomfortable, and often dull.  The human mind seeks something more amusing, and more caressing.  – H.L. Mencken

Order and simplification are the first steps toward the mastery of a subject. –Thomas Mann

Life can only be understood backwards; but it must be lived forwards.  –Soren Kierkegaard

Losing an illusion makes you wiser than finding a truth. –Ludwig Borne

For me the greatest beauty always lay in the greatest clarity. –Gotthold Lessing

Discovery consists in seeing what everybody has seen and thinking what nobody has thought. – Albert Szent-Gyorgyi

It ain’t so much what people know that hurts as what they know that ain’t so.  – Artemus Ward

The same thing happened today that happened yesterday, only to different people. – Walter Winchell

It may be that the race is not always to the swift, nor the battle to the strong—but that’s the way to bet.  Damon Runyon

It is not who is right, but what is right, that is important.  –Thomas Huxley

Great works are performed not by strength, but perseverance. –Samuel Johnson

The best way to manage anything is by making use of its own nature. –Lao Tzu

Facts do not cease to exist because they are ignored. –Aldous Huxley

I know of no way of judging the future but by the past. –Patrick Henry

 To think is easy.  To act is difficult.  To act as one thinks is the most difficult of all. – Johann Wolfgang Von Goethe

As a rule, I always look for what others ignore. – Marshall Mcluhan

Above are Chapter quotes from “What Works on Wall Street” by James O’Shaughnessy – (Cornerstone Growth/Value funds)

Conquer your foe by force, you increase his enmity; conquer by love, and you will reap no after-sorrow.

-Fo-Sho-Hing-Tsan-King

Fulfill all your duties; action is better than inaction. Even to maintain your body, Arjuna, you are obliged to act. Selfish action imprisons the world. Act selflessly, without any thought of personal profit.

-Bhagavad Gita 3:8-9

“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” —Ronald Reagan

_____________

Don’t cling to anything and don’t reject anything. Let come what comes, and accomodate yourself to that, whatever it is. If good mental images arise, that is fine. If bad mental images arise, that is fine, too. Look on all of it as equal, and make yourself comfortable with whatever happens. Don’t fight with what you experience, just observe it all mindfully.

-Bhante Henepola Gunaratana, “Mindfulness in Plain English”

_________________

..Let me tell you what we teach. When a monk sees a form with the eye, usually a feeling of liking or disliking comes into being. The monk then understands that liking or disliking has arisen but that either one is not inevitable but is conditioned and dependent on causes. So he heads for a state in which there is equanimity and finds that in so doing the liking or disliking has vanished and he sees things as they are. That is how he controls his senses. That is what we teach.

-Majjhima Nikaya

____________________

“All man’s miseries derive from not being able to sit quietly in a room alone.”

Blaise Pascal

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A gem is not polished without rubbing, nor a man perfected without trials.
– Chinese proverb

Do you have the patience to wait
till your mud settles and the water is clear?
Can you remain unmoving
till the right action arises by itself?

Lau-tzo

Time opens every door to him that waits.

Chinese proverb

Only by avoiding the beginning of things can we escape their ending.

– Cyril Connolly, The Unquiet Grave

Get the facts or the facts will get you.

Thomas Fueller

If defeat has more to teach us than victory, then perhaps a defeat is victory unto itself?

Miron Stabinsky

In walking, just walk,
In sitting, just sit.

Zen master Yun-Men

Wait for a good pitch to hit.

Ted Williams

Good warriors prevail when it is easy to prevail.

Sun Tzu

Plan before acting. Fight only when you know you can win.

Zhuge Liang

When you see the enemy to be empty, proceed; when you see the enemy to be full, stop.

– Zhuge Liang

The enemy advances, we retreat; the enemy camps, we harass; the enemy tires, we attack; the enemy retreats, we pursue.

Mau Tse-tung
[Akin to: “Be fearful when others are greedy, be greedy when others are fearful”]

Perhaps we must always advance a little by zip-zags.

Theodore Roosevelt
[Akin to Graham/Buffett’s message to ignore market quotations]

He who fears being conquered is sure of defeat.

Napoleon Bonaparte

Make sure you’re right, then go ahead.

Dave Crockett

Whoever has form can be defined, and whoever can be defined can be overcome.

Sun Tzu II
[Akin to the need to understand qualitative elements rather than relying simply on quantitative screens]

===
Most important thing… is premium hands… If a bet’s good enough to call, you’re in there raising. Tight but aggressive.

Kevin Canty, from the movie Rounders
[Akin to Buffett’s concept that he’d rather add more weight to his best ideas rather than have “diversification” by buying additional ideas of which he is less certain]

===

A sense of effortlessness in performance reveals the mastery of one who has become one with his or her work… The flow of Itzhak Perlman’s violin is in this sense not much different from Chris Evert’s tennis game. The years of practice have flowered to a stage where it all just occurs.

– Arthur Sokoloff
===

If you seek vengeance, dig two graves.

The way of the wise man is to act and not compete.
–, shared by Arpit Ranka.

_________________

A monk can be very gentle, very peaceful, while there are no hard words to assail him. But when hard words are directed at him, it is then that he must be really gentle and peaceful.

-Majjhima Nikaya

There is no baser folly than the infatuation
That looks upon the transient as if it were everlasting.

-Tirukkural 34: 331

Excerpted from the Tirukkural, translated by Satguru Sivaya Subramuniyaswami. Copyright Himalayan Academy Publications, www.himalayanacademy.com.

Indeed, a good part of Berkshire’s success over the years is in sticking to what they know. Munger added, “We know the edges of our competency better than other people know theirs.” This helps limit mistakes, though all investors make mistakes and lose money at times.

One of the great pieces of advice Buffett and Munger gave was in how they would manage a small amount of money – say, several million, instead of tens of billions: Go to your best idea and measure everything against that. That’s because it is very rare to find an idea that’s going to give you 20% per year for 40 years. In the real world, you have to go with the best ideas you have. And they may not, and are probably not, the best ideas you will eventually uncover. Things change. (As the newspaper saga shows, once-thought bulletproof franchises can suffer major reversals of

fortune.)

Buffett sprinkled his talk with lots of other investment wisdom, too. In another instance, he invoked one of the key ideas of his famed mentor, Benjamin Graham: You are right because your facts and reasoning are right and not because somebody agrees with you. This goes back to the idea that you can’t let the market sway you. “Make the market serve you,” Buffett advised, “it’s not there to instruct you.”

And this is one key difference between a bottoms-up (micro) investor and a top-down (macro) approach. The top-down, macro approach takes its cues from the market — hence, the common use of charts. This is very different from the approach in Capital & Crisis and the approach Buffett is expounding.

“A long life may not be good enough, but a good life is long enough.”

When a lute is played, there is no previous store of playing that it comes from. When the music stops, it does not go anywhere else. It came into existence by way of the structure of the lute and the playing of the performer. When the playing ceases, the music goes out of existence.

In the same way all the components of being, both material and nonmaterial, come into existence, play their part, and pass away.

That which we call a person is the bringing together of components and their actions with each other. It is impossible to find a permanent self there. And yet there is a paradox. For there is a path to follow and there is walking to be done, and yet there is no walker. There are actions but there is no actor. The air moves but there is no wind. The idea of a specific self is a mistake. Existence is clarity and emptiness.

-Visuddhi Magga

From “The Pocket Buddha Reader,” edited by Anne Bancroft, 2000. Reprinted by arrangement with Shambhala Publications, Boston, www.shambhala.com.

The master goes about his business
With perfect equanimity.

He is happy when he sits,
Happy when he talks and eats,
Happy asleep,
Happy coming and going.

Because he knows his own nature,
He does what he has to without feeling ruffled
Like ordinary people.

Smooth and shining
Like the surface of a vast lake.

His sorrows are at an end.

-Ashtavakra Gita 18:59-60

From “The Heart of Awareness: A Translation of the Ashtavakra Gita,” by Thomas Byrom, 1990. Reprinted by arrangement with Shambhala Publications, Inc., Boston. www.shambhala.com.

If you want to get rid of your enemy, the true way is to realize that your enemy is delusion.

-Kegon Sutra

From “The Pocket Buddha Reader,” edited by Anne Bancroft

To those who have dispelled all doubt and perceive Truth,
Heaven is nearer than earth.

-Tirukkural 353

If you have a reason, you don’t need to shout.

-Zen proverb

“Man, once surrendering his reason, has no remaining guard against absurdities the most monstrous, and like a ship without rudder, is the spot of every wind. With such persons, gullability, which they call faith, takes the helm from the hand of reason and the mind becomes a wreck.”

Self-control will place a man among the Gods,
While lack of it will lead him into deepest darkness.

-Tirukkural 13:121

I come from the East, most of you [here] are Westerners. If I look at you superficially, we are different, and if I put my emphasis on that level, we grow more distant. If I look on you as my own kind, as human beings like myself, with one nose, two eyes, and so forth, then automatically that distance is gone. We are the same human flesh. I want happiness; you also want happiness. From that mutual recognition, we can build respect and real trust of each other. From that can come cooperation and harmony.

– the Dalai Lama

“Learn as if you were going to live forever. Live as if you were going to die tomorrow.” – Mahatma Gandhi

To carry yourself forward and experience myriad things is delusion. That myriad things come forth and experience themselves is awakening.

-Dogen, “Actualizing the Fundamental Point”

Sakka asked the Buddha: “Do different religious teachers head for the same goal or practice the same disciplines or aspire to the same thing?”

“No, Sakka, they do not. And why? This world is made up of myriad different states of being, and people adhere to one or another of these states and become tenaciously possessive of them, saying, ‘This alone is true, everything else is false.’ It is like a territory that they believe is theirs. So all religious teachers do not teach the same goal or the same discipline, nor do they aspire to the same thing.

“But if you find truth in any religion or philosophy, then accept that truth without prejudice.”

-Digha Nikaya

From “The Pocket Buddha Reader,” edited by Anne Bancroft, 2000. Reprinted by arrangement with Shambhala Publications, Boston, www.shambhala.com.

It is not that anger and desire are inherently evil or that we should feel ashamed when they arise. It is a matter of seeing them as the delusions that they are: distorted conceptions that paint a false picture of reality. They are negative because they lead to unhappiness and confusion.

-Kathleen McDonald, “How to Meditate”

“Whoever I am, Thou knowest, O God, I am thine”

-Dietrich Bonhoffer, end line of poem “Who am I”

“None of us can go a little way with a theory.  When it once possesses us, we are no longer our own masters. It makes us speak its words, and do violence to our nature.”

We also often add to our pain and suffering by being overly sensitive, over-reacting to minor things, and sometimes taking things too personally.

-His Holiness the Dalai Lama

“If we would be humble enough to admit that no human being even knew 1 percent of the great and universal God, then we would be able to say that maybe we can learn something from someone else,” he says. Templeton, who had once dreamed of being a missionary to China, says his current mission is to revive the world’s religions by helping them increase their knowledge and relevance. “I worry that religions have become old-fashioned because they have not discovered new things every year,” he said. “I want to reveal the increasing mysteries… encourage new inquiries and new experiments.”

-John Templeton

God created suffering and heartache, so that joy might be known as their opposite. Hidden things become manifest through their opposites. But God has no opposite; so he remains hidden. Light is known as the opposite of darkness. But God’s light has no opposite. Thus we cannot know him through our eyes.

-Rumi, “Masnawi”

“To give encouragement, to impart sympathy, to show interest, to banish fear, to build self confidence and awaken hope in the hearts of others – in short, to love them and to show it, is to render the most precious service”
– Bryant S. Hinckley

I’d also be thrilled if you would sign your organ donor card.

To love and serve others is to be, in Saint Francis’ words, an instrument of peace. That goal makes sense to me, despite my numerous faults. The Buddha taught that we’re empty of a separate self – that what we call self is comprised of nothing but non-self elements. So to take good care of others is ultimately to take good care of yourself. Christ basically asked two things – that we love God, and that we do toward others what we would have them do toward us.

Will love and service to others lead them to make you happy? Maybe. Maybe not. But the source of happiness isn’t in what others do anyway. It’s in the habit of taking nothing for granted, taking a few minutes each day to enjoy just breathing and smiling, and to appreciate life. Maybe even to leave a good mark on the world.

If you wonder what would be in that for you, keep in mind that even profit is based on service to others. As Zig Ziglar often says, you can have everything in life you want, if you’ll just help enough other people get what they want. Take that idea seriously and it’ll change your life and your career.

Start where you are. Look, we all have our faults, but we also have our actions. To the extent that we’re able to choose those, we all have the ability to change our lives.

Best wishes,  John

Overcoming attachment does not mean becoming cold and indifferent. On the contrary, it means learning to have relaxed control over our mind through understanding the real causes of happiness and fulfillment, and this enables us to enjoy life more and suffer less.

-Kathleen McDonald, “How to Meditate”

To everyone of us there must come a time when the whole universe will be found to have been a dream, when we find the soul is infinitely better than the surroundings. It is only a question of time, and time is nothing in the infinite.

-Sai Baba

Our mind and our delusions are formless and colorless. However, our ignorance believing in true existence is harder than a rocky mountain. Our delusions are harder than steel.

-Lama Zopa Rinpoche, “The Door to Satisfaction”

Just as the word chariot is merely a means of expressing how axle, body, wheel, and poles are brought together in a certain relationship, but when we look at each of them one by one there is no chariot in an absolute sense; and just as the word house is a way of expressing how wood and other materials stand in relationship to each other in a certain space, but in the absolute sense there is no house; and just as the word fist is an expression for the finger and thumb in relationship, and tree for trunk, branches, leaves, and so on, but in an absolute sense there is no fist or tree–in exactly the same way the words living entity and person are but ways of expressing the relationship of body, feeling, and consciousness, but when we come to examine the elements of being, one by one, we find there is no entity there. In the absolute sense there is only name and form and the mystery which they express. Such ideas as “I” and “I am” are not absolute.

-Visuddhi Magga

“Would it not be better to simplify the system of taxation rather than to spread it over such a variety of subjects and pass through so many new hands.”

— Thomas Jefferson (letter to James Madison, 1784)

Those who see all creatures in themselves
And themselves in all creatures know no fear.
Those who see all creatures in themselves
And themselves in all creatures know no grief.
How can the multiplicity of life
Delude the one who sees its unity?

-Isha Upanishad

Before you speak, ask yourself, is it kind, is it necessary, is it true, does it improve on the silence?

-Sai Baba

This mind is like a fish out of water that thrashes and throws itself about, its thoughts following each of its cravings.

Such a wandering mind is weak and unsteady, attracted here, there and everywhere. How good it is to control it and know the happiness of freedom.

-Dhammapada

What is meant by nonduality, Mahatmi? It means that light and shade, long and short, black and white, can only be experienced in relation to each other; light is not independent of shade, nor black of white. There are no opposites, only relationships. In the same way, nirvana and the ordinary world of suffering are not two things but related to each other. There is no nirvana except where the world of suffering is; there is no world of suffering apart from nirvana. For existence is not mutually exclusive.

-Lankavatara Sutra

The Collapse of Complex Societies

If you do not want to see the movie (Apocalypto), you should at least read the book. And that book would be the pathbreaking 1988 work The Collapse of Complex Societies, by Joseph Tainter. No, I do not believe that The Collapse of Complex Societies actually formed the basis for Mel Gibson’s screenplay, as the previously noted The Jesuits in North America in the 17th Century formed the basis for Black Robe. But in Tainter’s remarkable study of the history of collapsed civilizations, including the Mayan, he listed four concepts that help to explain how and why societies collapse:

1. Human societies are problem-solving organizations.
2. Sociopolitical systems require energy for their maintenance.
3. Increased complexity carries with it increased costs per capita.
4. Investment in sociopolitical complexity as a problem-solving response often reaches a point of declining marginal returns.

Tainter explains that the “number of challenges with which the universe can confront a society is, for practical purposes, infinite.” But complex societies seem to have a sociopolitical inertia that keeps on increasing their level of complexity in order to survive new challenges. In the early stages, societies in the ascendancy can afford to throw resources at their problems. But this cannot go on indefinitely. Or at least, no other society in history has ever managed to pull it off over the long haul.

According to Tainter’s thesis, there comes a time when what he characterizes as “investments in additional complexity” produce fewer and fewer returns over time, until, eventually, the whole construct reaches a point of precarious stability due to diminishing return. That is, society cannot muster enough energy continuously to fuel its inherent complexity. Past that point, it is only a matter of time before the inevitable collapse occurs. When a new challenge comes along, whether it is exhaustion of a critical resource, climate stress, outside invasion, or some other set of circumstances, the overly complex society will be unable to muster the resources necessary to deal with the crisis. And at this point, society collapses.

If an overly complex society is fortunate, it will merely deconstruct itself and revert to a much simpler form. And if it is not fortunate, the representatives of an unsustainably complex society will encounter a few ships belonging to foreign explorers, anchored offshore and sending small boats toward the beach, just like in the movies. The rest, as they say, is history.

“What you get by achieving your goals is as important as what you become by achieving your goals.”

As that noble bard of yesterday, James Russell Lowell, eloquently stated:

Once to every man and nation
Comes the moment to decide,
In the strife of truth and falsehood,
For the good or evil side;
Some great cause, God’s new Messiah,
Off’ring each the bloom or blight,
And the choice goes by forever
Twixt that darkness and that light.

A man’s faith is not perfected till his mind is perfected.

– Ibn Gabirol, Mibhar HaPeninim

According to Buddhist psychology, most of our troubles are due to our passionate desire for, attachment to things that we misapprehend as enduring entities. The pursuit of the objects of our desire and attachment involves the use of aggression and competitiveness…These mental processes easily translate into actions, breeding belligerence. Such processes have been going on in the human mind since time immemorial, but their execution has become more effective under modern conditions. What can we do to control and regulate these “poisons”—delusion, greed and aggression? For it is these poisons that are behind almost every trouble in the world.

-His Holiness the Dalai Lama

Your son is at five your master, at ten your servant, at fifteen your double, and after that, your friend or foe, depending on his bringing up.

– Hasdai ibn Crescas

As cited in “Jewish Wisdom” by Rabbi Joseph Telushkin.

February 5, 2007

It’s All Fun and Games Until Someone Gets Hurt

John P. Hussman, Ph.D.
All rights reserved and actively enforced.

One ought to become concerned about risk when investors become convinced that it does not exist. There are certainly times when it appears easy, in hindsight, to make money in the stock market. The difficulty is in keeping it through the full cycle. The fact that over half of most bull market advances are surrendered in the subsequent bear doesn’t sink in until after the fact. It’s all fun and games until someone gets hurt.

As great as the infinite space beyond is the space within the lotus of the heart. Both heaven and earth are contained in that inner space, both fire and air, sun and moon, lightning and stars. Whether we know it in this world or know it not, everything is contained in that inner space.

-Chandogya Upanishad

“I have the wherewithal to challenge myself for my entire life. That’s a great gift.”

Even as the sun shines and fills all space
With light, above, below, across, so shines
The Lord of Love and fills the hearts of all created beings.

From him the cosmos comes, he who teaches
Each living creature to attain perfection
According to its own nature. He is
The Lord of Love who reigns over all life.

-Shvetashvatara Upanishad

Although the limitations of the world disappear for one who knows the Self, they are not destroyed, because they continue to exist for others.

-The Yoga Sutras of Patanjali, 2:22

Each penitent thought is a voice of God.

– Baal Shem Tov

“How wonderful it is that nobody need wait a single moment before starting to improve the world.”

In order to worship God, you must know God. In order to know God, you must recognize his unity. In order to recognize his unity, you must deny any possibility of describing how God is present, where he is present, and when he is present.

-Junayd: Tawhid

“It is largely the fluctuations which throw up the bargains, and the uncertainty due to the fluctuations which prevents other people from taking advantage of them.”

That one, to me, just sums up the whole essence of the investment problem. In order to actually be a half-decent investor, you have to do something that is different. Far too many people today are busy worrying about their tracking error and their distance from benchmarks, rather than worrying about whether they’re buying good or bad businesses at reasonable prices or at ridiculous ones.

Quote is from Keynes

Those who look after widows and the destitute are equal to the ones striving in the way of Allah and, in my eyes, the same as those who worship all night and fast all day.

-The Prophet Muhammad (SAW), as reported by Abu Hurairah

Grief clouds thought and reason, and harms both the soul and the body; so you should repel it, or reduce it as much as possible. This can be done in two ways: you can strive to prevent grief from occurring; and you can banish grief when it does occur.

-Razi: Kitab al-Muluki

“How much more grievous are the consequences of anger than the cause of it.”

Illness is not cured by saying the word “medicine,” but by taking medicine. Enlightenment is not achieved by repeating the word “God” but by directly experiencing God.

-Sankara

from “The Wisdom of the Hindu Gurus,” edited by Timothy Freke, published by Godsfield Press. 

I believe that he is the true warrior who does not die killing but who has mastered the mantra of living by dying.

-Mohandas Gandhi

The highest person is he who is of most use to humankind.

-‘Ali bin Abi Talib, “Masters of the Path”

What can be gained by thinking about the scriptures? What fools! They think themselves to death with information about the path, but never take the plunge!

-Ramakrishna

It is not sufficient for religious people to be involved with prayer. Rather, they are morally obliged to contribute all they can to solving the world’s problems.

-His Holiness the Dalai Lama

Whatever decision we think we are making is actually being made for us, because the decision is the end result of a thought and we have no control over the arising of the thought.

-Ramesh Balsekar

What is the cause of the cosmos? Is it Brahman?
From where do we come? By what live?
Where shall we find peace at last?

What power governs the duality
Of pleasure and pain by which we are driven?

Time, nature, necessity, accident,
Elements, energy, intelligence–
None of these can be the First Cause.
They are effects, whose only purpose is
To help the self rise above pleasure and pain.

-Shvetashvatara Upanishad

“If men were angels, no government would be necessary.  If angels were to govern men, neither external nor internal controls on government would be necessary.  In framing a government which is to be administered by men over men, the great difficulty lies in

this: you must first enable the government to control the governed; and in the next place, oblige it to control itself.”

If given with love, a handful is sufficient.

-Telugu Proverb

“It is the wisest who grieve most at the loss of time.”

 ‘Man’s mind, once stretched by a new idea, never regains its original dimensions’”

“How did I come to know what I know about the world and myself? What ought I to know? What would I like to know that I don’t know? If I want to know about this or that, where can I get the clearest, best and latest information? And where did these other people about me get their ideas about things, which are sometimes so different from mine?” – H.G. Wells

Edge 208

April 25, 2007

(11,000 words)

This EDGE edition, at 11,000 words with video, graphics, and links, is available online at http://www.edge.org/documents/archive/edge208.html

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THE THIRD CULTURE

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In the Middle Ages, we were told what we knew by the Church; after the printing press and the Reformation, by state censors and the licensers of publishers; with the rise of liberalism in the 19th and 20th centuries, by publishers themselves, and later by broadcast media – in any case, by a small, elite group of professionals.

But we are now confronting a new politics of knowledge, with the rise of the Internet and particularly of the collaborative Web – the Blogosphere, Wikipedia, Digg, YouTube, and in short every website and type of aggregation that invites all comers to offer their knowledge and their opinions, and to rate content, products, places, and people.  It is particularly the AGGREGATION of public opinion that instituted this new politics of knowledge.

WHO SAYS WE KNOW

On the New Politics of Knowledge

You are one and the same
In joy and sorrow,
Hope and despair,
Life and death.

You are already fulfilled.

Let yourself dissolve.

-Ashtavakra Gita 5:4

Voltaire was one of history’s great skeptics. He was skeptical of the revealed truth of the Church, skeptical of the divine right of kings, skeptical of the wealth and position of the aristocracy, and skeptical of the “wisdom” of the common man.

“Doubt is an uncomfortable position,” said Voltaire, “but certainty is an absurd one.”

You would do well today to heed Voltaire’s advice – and be rightly skeptical of economic forecasters, market timers and other investment soothsayers.

There’s another saying that comes from Pascal which I’ve always considered o­ne of the really accurate observations in the history of thought. Pascal said in essence, “The mind of man at o­ne and the same time is both the glory and the shame of the universe.”

And that’s exactly right. It has this enormous power. However, it also has these standard malfunctions that often cause it to reach wrong conclusions. It also makes man extraordinarily subject to manipulation by others. For example, roughly half of the army of Adolf Hitler was composed of believing Catholics. Given enough clever psychological manipulation, what human beings will do is quite interesting.

In 1981, I was invited to speak about bonds at a gold conference that had attracted over 500 participants. Just one person came to my presentation. (September 1981 saw the end of the bond bear market, which had begun in 1942.) A small audience can sometimes be distressing for a speaker, but at such times they would be wise to remember Victor Borge, a Danish pianist with a sharp mind and humorous bent, who fled to the United States in 1940 and made a name for himself with his brilliant blend of musicianship and humour. One evening, in Flint, Michigan, Borge performed to a sparse audience. The sight of so many empty seats might have discouraged the average performer, but the witty Borge looked out over the audience and exclaimed: “Flint must be an extremely wealthy town. I see that each of you bought two or three seats.” (Lateral thinking at its best!)

As an investor looking for guidance from newsletters, blogs, financial publications, and conferences, I would also be mindful of Ralph Waldo Emerson’s words: “Do not go where the path may lead; go instead where there is no path and leave a trail.” Unfortunately, in today’s high-liquidity driven global investment environment, I find it hard to identify an asset class “where there is no path”. There are far too many smart — and not so smart — treasure hunters who have bid up every imaginable investment class right around the world. It is only in the most unusual places that I can find true value (often, however, in assets that are difficult to invest in), as opposed to relative values, which certainly do exist. The problem for investors is that, as the German theologian Dietrich Bonhoeffer wrote, “If you board the wrong train, it is no use running along the corridor in the other direction.” (Bonhoeffer opposed Nazism and was executed in prison for his involvement in a plot to overthrow Hitler.)

-Marc Faber in April 2007 Whiskey & Gunpowder article

Three men went into the jungle on different occasions and saw a chameleon. “A chameleon is red,” said the first man. “No a chameleon is green,” said the second man. “Nonsense, a chameleon is brown,” said the third man. Those who disagree about the nature of God are like these three men.

-Hindu Teaching Story

The world is apprehended by way of the mind
The world is acted upon by way of the mind
And all good things and bad
Exist in the world by way of the mind.

-Samyutta Nikaya

The world is indeed a mixture of truth and make-believe. Discard the make-believe and take the truth.

-Ramakrishna

From “Teachings of the Hindu Mystics,” © 2001 by Andrew Harvey.

All tremble when there is a weapon,
Everyone fears death;
Feeling for others as for oneself,
One should neither kill nor cause to kill.

-Dhammapada

From “The Pocket Buddha Reader,” edited by Anne Bancroft, 2000.

Focus,
not on the rudenesses of others,
not on what they’ve done
or left undone,
but on what you
have & haven’t done
yourself.

-Dhammapada, 4, translation by Thanissaro Bhikkhu.

The Three Jewels of Buddhism

“The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse.”

— James Madison (speech in the Virginia constitutional convention,

When religion masquerades as science, both religion and science are disserviced, and reasonable discourse is thrown to the wind.

Modelers have been wrong before. One of the most famous modeling disputes involved the physicist William Thompson, later Lord Kelvin, and the naturalist Charles Darwin. Lord Kelvin was a great believer in models and differential equations.

Darwin was not particularly facile with mathematics, but he took observations very seriously. For evolution to produce the variety of living and fossil species that Darwin had observed, the earth needed to have spent hundreds of millions of years with conditions not very different from now. With his mathematical models, Kelvin rather pompously demonstrated that the earth must have been a hellish ball of molten rock only a few tens of millions of years ago, and that the sun could not have been shining for more than about 30 million years. Kelvin was actually modeling what he thought was global and solar cooling. I am sorry to say that a majority of his fellow physicists supported Kelvin. Poor Darwin removed any reference to the age of the earth in later editions of the “Origin of the Species.” But Darwin was right the first time, and Kelvin was wrong. Kelvin thought he knew everything but he did not know about the atomic nucleus, radioactivity and nuclear reactions, all of which invalidated his elegant modeling calculations.

Charles William Happer Testimony to Senate Energy Committee Page 9 July 10, 2002

I keep hearing about the “pollutant CO2,” or about “poisoning the atmosphere” with CO2, or about minimizing our “carbon footprint.” This brings to mind another Orwellian pronouncement that is worth pondering: “But if thought corrupts language, language can also corrupt thought.” CO2 is not a pollutant and it is not a poison and we should not corrupt the English language by depriving “pollutant” and “poison” of their original meaning. Our exhaled breath contains about 4% CO2. That is 40,000 parts per million, or about 100 times the current atmospheric concentration. CO2 is absolutely essential for life on earth. Commercial greenhouse operators often use CO2 as a fertilizer to improve the health and growth rate of their plants. Plants, and our own primate ancestors evolved when the levels of atmospheric CO2 were about 1000 ppm, a level that we will probably not reach by burning fossil fuels, and far above our current level of about 380 ppm. We try to keep CO2 levels in our US Navy submarines no higher than 8,000 parts per million, about 20 time current atmospheric levels. Few adverse effects are observed at even higher levels.

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They asked her: ‘When sinners repent, does God accept their repentence, or not?’ She replied: ‘Sinners can only repent if God gives them a spirit of repentence; and when God gives people this spirit, he accepts their repentance. But if people try to repent without receiving this spirit, he will not accept their repentance.’

-Attar, “Rabi’a”

From “366 Readings From Islam,” translated by Robert Van der Weyer.

When you are with someone you love very much, you can talk and it is pleasant, but the reality is not in the conversation. It is in simply being together. Meditation is the highest form of prayer. In it you are so close to God that you don’t need to say a thing–it is just great to be together.

-Swami Chetananda

Happiness and suffering come from your own mind, not from outside. Your own mind is the cause of happiness; your own mind is the cause of suffering. To obtain happiness and pacify suffering, you have to work within your own mind.

-Lama Zopa Rinpoche, “The Door To Satisfaction”

Since the seed does not contain anything other than the seed, even the flowers and the fruits are of the same nature as the seed: the substance of the seed is the substance of subsequent effects, too. Even so, the homogenous mass of cosmic consciousness does not give rise to anything other than what it is in essence. When this truth is realized, duality ceases.

-Yoga Vasishtha

I see all the different religious traditions as paths for the development of inner peace, which is the true foundation of world peace. These ancient traditions come to us as a gift from our common past. Will we continue to cherish it as a gift and hand it over the the future generations as a legacy of our shared desire for peace?

-His Holiness the Dalai Lama

The truest and highest stage of worship is to see God face to face, and to receive his guidance from his own mouth. Those who attain this highest stage, choose for themselves whatever God chooses for them. Their entire characters are transformed by God. They are God’s friends; so they no longer discriminate between people, but regard all people as friends. Wherever they go, they go from God; wherever they arrive, they arrive at God. Whatever they do, they do for God; whatever service they perform, they perform it in God. The self has been truly annihilated.

-Junayd, “Tawhid”

Explaining many profound dharmas is easy; living them yourself is hard.

-Adept Godrakpa, “Hermit of Go Cliffs”

Don’t forget to bring the good experiences of meditation into your daily activities. Instead of acting and reacting impulsively and following your thoughts and feelings here and there, watch your mind carefully, be aware, and try to deal skillfully with problems as they arise. If you can do this each day, your meditation will have been successful.

-Kathleen McDonald, “How to Meditate”

Copyright Wisdom Publications 2001. Reprinted from “Daily Wisdom: 365 Buddhist Inspirations,” edited by Josh Bartok

The body is false,
And so are its fears,
Heaven and hell, freedom and bondage.

It is all invention.

What can they matter to me?

I am awareness itself.

-Ashtavakra Gita 2:20

“Nothing so strongly impels a man to regard the interest of his constituents, as the certainty of returning to the general mass of the people, from whence he was taken, where he must participate in their burdens.”

— George Mason (speech in the Virginia Ratifying Convention,

17 June 1788)

“It should be your care, therefore, and mine, to elevate the minds of our children and exalt their courage; to accelerate and animate their industry and activity; to excite in them an habitual contempt of meanness, abhorrence of injustice and inhumanity, and an ambition to excel in every capacity, faculty, and virtue. If we suffer their minds to grovel and creep in infancy, they will grovel all their lives.”

Do you want to understand? The whole world is one of your eyes, the body produced by your parents is a cataract. All ordinary people ignore the indestructible, marvelously clear, unfailingly mirroring eye, and cling fast to the dust cataract produced by the relationship of their father and mother. Therefore they take illusions for realities, and grasp at reflections as the physical forms themselves.

-P’u-an

From “The Pocket Zen Reader,” edited by Thomas Cleary, 1999.

So much fear and desire come from that commitment to ‘I am’–to being somebody. Eventually they take us to anxiety and despair; life seems much more difficult and painful than it really is.

But when we just observe life for what it is, then it’s all right: the delights, the beauty, the pleasures are just that.

-Ajahn Sumedho, “Seeing the Way”

I’ve been involved, and fortunate and privileged to be involved in inventing markets over the last 30 years, and I heard the same thing about the acid rain program in 1990. It wouldn’t work and how can you prove it? And what are the difficulties? And it will never fly. And then I’ve heard the same thing about interest rate futures. I was thrown out of every bank in America saying interest rates don’t fluctuate. How can you possibly hedge? It tends to be what Arthur Schopenhauer, the German philosopher, said, “The truth passes through three stages. In the first stage it is ridiculed, in the second stage it is opposed; and in the final stage it is accepted as self-evident.” And emissions trading was ridiculed first. Now it’s kind of opposed, but now with three presidential candidates …

Richard Sanfor, president of Chicago Climate Exchange – he created many of the Chicago futures markets in 70’s and 80’s

Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well armed lamb contesting the vote. – Benjamin Franklin

“The happiest moments of my life have been the few which I have past at home in the bosom of my family.”

The threshold between right and wrong is pain.

-His Holiness the Dalai Lama, Imagine All the People

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Anger that has no limit, causes terror. Kindness that is inappropriate, does away with respect. So do not be so severe with others, as to terrify them; and do not be so lenient with others, as to make them take advantage of you.

-Sadi: Gulistan 8

Reprinted from “366 Readings from Islam,”

_________________________

A thousand Philistines were once slain by the jawbone of an ass. It remains just as dangerous a weapon

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Anger deprives a sage of his wisdom, a prophet of his vision.

– Simeon b. Lakish, Talmud: Pesahim 66b

Reprinted from ‘A Treasury of Jewish Quotations,’ edited by Joseph L. Baron, Jason Aronson Inc.

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Before he died, Rabbi Zusya said: “In the world to come they will not ask me, ‘Why were you not Moses?’

“They will ask me, ‘Why were you not Zusya?'”

– Legend about Hasidic Rabbi Zusya of Hanipoli

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“In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.” -Eric Hoffer

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“To get something you never had, you have to do something you never did”
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The purely righteous do not complain about evil, rather they add justice. They do not complain about heresy, rather they add faith. They do not complain about ignorance, rather they add wisdom.

– Rav Abraham Isaac Kook

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“The further the spiritual evolution of mankind advances, the more certain it seems to me that the path to genuine religiosity does not lie through the fear of life, and the fear of death, and blind faith, but through striving after rational knowledge.”– Einstein

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Books constitute capital. A library book lasts as long as a house, for hundreds of years. It is not, then, an article of mere consumption but fairly of capital, and often in the case of professional men, setting out in life, it is their only capital.

Thomas Jefferson

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Do you want to know who you are? Don’t ask. Act! Action will delineate and define you.

Thomas Jefferson

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Daily Action

I’ve often noted that in most things, success isn’t the result of monumental leaps, extraordinary insights or excruciating efforts – it’s the result of daily action. You find a set of actions that you believe will produce outstanding results if you follow them consistently, then you follow them consistently.

Among my daily actions are those that align our investment position with the current combination of valuations and market action (the “Market Climate”), and which take daily opportunities to buy attractively situated securities on short-term weakness and sell less attractively situated holdings on short-term strength. If the action of buying low and selling high is an element of long-term investment success, then that practice absolutely has to be an element of daily action as well.

If you choose and control your daily actions carefully, the results will come, though not always on a predictable schedule. In contrast, if you try to control outcomes without focusing on daily actions, you’ll find yourself constantly reacting and overreacting to insignificant deviations from what you think you “should” be achieving. There is no such thing, in a world of randomness and uncertainty, as exquisite control of outcomes.

In short, the objective is to control day-to-day actions, not day-to-day outcomes. Good results are just the accretion of small, careful actions that you believe will produce success if you take them consistently. The Buddha said, “joyful is the accumulation of good work. Hold not any deed to be of little worth, thinking ‘this is little to me.’ The falling of drops of water will in time fill a water jar. Even so the wise man becomes full of good, although he gathers it little by little.”

John Hussman

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A government big enough to give you everything you want is a government big enough to take from you everything you have.

Gerald R. Ford

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It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat.

Theodore Roosevelt

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Bill Bonnerism’s

(about US dollars)…

like prostitutes on the rue St. Denis, there are as many as you

could want… just waiting for when you need them. (Bill Bonnerism)

———–

As near as we can tell, democracy offers no particular

improvement over monarchy or theocracy, or even

dictatorship. Every system separates citizens from their

money, bosses them around to some degree, keeps delinquents

in line and generates its own statues, myths, and holidays.

————

You see, dear reader, while we pretend to be

hard-headed financial analysts, we have a heart too. And on

certain occasions, it pumps.

At some point, a man has to stop thinking. At least, that

is the thought that we pondered as we watched the finale.

He has to stop because no amount of thinking can get him

where he needs to go – such as, to the altar. Getting

married is not a rational act, it is a desperate one. He

has to feel his way to it.

“Look, it’s not something you can figure out by trying to

figure it out,” we vaguely recall saying to a young man

later in the day. “You can make money by figuring things

out. But if you spend all your time figuring things out,

you’ll never figure out what you can’t figure out by

figuring.”

Bill Bonner, Daily Reckoning

—————

The future is unknowable. But so is the past. As we

described above, there are an infinite number of

complications. You can never “know” more than the bare

essentials… and then, barely.

Still, people love to think they know something. So they

invent myths of history that help them misunderstand both

the past and the present… and usually lead them to make

bad guesses about the future.

Knowing anything at all takes an investment of time and

energy. When people spend their whole lives getting to know

something… rarely will they admit that the time was

wasted. Once invested in an idea, a religion, a stock, or a

career – a man can’t help but believe in it. He damns the

man who questions his thinking. If he has the power to do

We do not think that our fallibility is a possibility here

at the Daily Reckoning; we take it as a certainty. We are

just bit players in the whole Public Spectacle. But what is

our role? Are we the tragic hero? The villain? We doubt it.

Instead, the role we play is that of the fool. In all old

English drama, the fool was a stock character. Often, he

could see what other actors could not; he kept himself

apart from the main plot. He was neither good guy nor bad

guy… an observer, not a player. He never got the girl, in

other words, but he didn’t get killed either. The Fool just

Once a public spectacle gets underway, its initial

intentions, premises and causes are soon lost. Events take

on their own logic and run to the end. There is no stopping

them, no arguing with them, no trying to make sense out of

it, or trying to salvage a purpose to justify the expense.

Quo fata ferunt. Public spectacles of the financial and

political sort begin in comedy and end in farce. Those that

involve armies and war typically begin as farce and end in

tragedy. Nothing can be done to change the course of

history; all the individual can do is to try to recognize

when the spectacle nears its end… and slip out the exit

3/16/05 DR

Stephen Roach thought these three bits of bad news might mark March 16th as a “tipping point” for the U.S. economy. If zero percent financing by an auto company isn’t such good business, maybe zero percent financing for an entire nation is not such a good idea either. General Motors provides more than $8,000 worth of incentives to get one of its big SUVs into someone else’s hands. The Fed provides zero percent financing too – for the whole economy. In real terms, the Fed’s key lending rate is about zero (netted against changes in CPI.) Both financing schemes increase consumption. It’s a consumer economy, say the policymakers. “We’re stimulating consumption!”

But consumption is not America’s problem. The nation is good at consumption. People consume with their eyes shut. We’re the best consumers in the entire world. When it comes to buying things we don’t need with money we don’t have – no other race comes close.

America’s problem is that it is too good at consumption. We consume so much there is nothing left over. The savings rate has dropped to 1.5%. (It was over 8% when Ronald Reagan won the White House.) Without savings, people need financing – which is why zero percent rates are so attractive

– in order to continue to live beyond their means.

If only consumption could make you rich! The problem is consumption doesn’t make you rich; it makes you poorer.

On Religion…

Something to the effect of “People don’t Practice what they Believe, they Believe what they Practice”

No one ever proposed that America become an empire, but it did anyway. No one ever suggested that the nation drown itself in debt, but it is up to its eyeballs already. Things happen that no one particularly wants or especially encourages. And the average man goes along with whatever humbug is popular – with no real idea where it leads or why he favors it.

Each person plays the role given to him; everyone believes what he needs to believe to play the part.

Alan Greenspan was famously against paper money un-backed by gold – when he was a libertarian intellectual. When he became a government functionary, his views conveniently changed. He came to believe what he had to believe in order to be the head of the American empire’s central bank – the Federal Reserve. The empire needs almost unlimited amounts of credit – to carry out its foreign wars…while making bread and circuses available at home. Alan Greenspan makes sure it gets what it needs.

Expensive foreign wars…expensive bread…expensive circuses – these are, of course, what bankrupted almost every empire from Rome to London. But that is just the point; institutions play their roles, too. One grows; another decays. One is young and dynamic; another is old and decrepit. One has to die to make way for the new one to take its place. One has to ruin itself so that another may flourish.

Americans could cut their military budget by 75% and still have the biggest, most advanced army in the world. They could trim their household spending by half…and still live well. They could drive less, in smaller cars…they could cease mortgaging their houses…they could “make do”

with last year’s clothes and yesterday’s laptop. But how could they ruin themselves if they put on the brakes before getting to where they are going?

Alan Greenspan’s easy money policies – the Fed has been lending money at a rate at or below the level of consumer price inflation for more than two years – do not merely lure Americans to borrow and spend. They also grease the skids of history, permitting one empire to slip away while another slides in to take its place. The main beneficiaries of the present gush of globalization are the Asians. As American consumers turn to Wal-Mart to buy more and more things at Everyday Low Prices, they find products from China and Malaysia on the shelves. Were it not for Greenspan’s low lending rates, they would not have found it so tempting to borrow. Were it not for Greenspan’s low rates, they would not have found it so alluring to spend.

Were it not for Greenspan’s low rates, they would not have bought so much from Asian manufacturers, the Asians would have made less money and would have built fewer new factories and trained fewer new workers. Were it not for Greenspan’s lending policies, in other words, Asia would not have grown so quickly and would not now pose such a competitive threat to the rest of the world’s industries…and Americans would not owe Asians so much money.

On the other hand, the scenery was spectacular. But by late afternoon, half of our intrepid party was worn out. They had seen enough snow-capped mountains, rows of plain trees, vineyards and cattle ranches for one day.

There are no magic levers…no miracle knobs. Instead, there is only a footnote in the Policymakers’ Manual: “Warning, despite your conceits and delusions, you usually get what you’ve got coming.”

*** Mommas don’t want their babies to grow up to be cowboys or factory workers because there’s no money in it…and probably no future. The money is made in finance…on Wall Street!

One of the big changes in the last 30 years in America (and most of the developed nations) is that the rich are getting richer, and there is apparently less economic mobility. We are a little suspicious of the whole idea of mobility. We grew up in a house without running water much of the time. We were about the poorest people we knew. We can’t remember anything that would have kept us from getting ahead…except ourselves.

“But that was a long time ago,” said Elizabeth. “Now, it’s much harder to get into a good job. You have to go to a top business school to get a job at Goldman Sachs, for example. And you can’t get into a good business school without going to a good college. And it’s hard to get into a good college if you don’t go to the right secondary schools.”

We did not go to the right secondary schools; at the time, we didn’t even know there were “right” secondary schools. We just went to the local high school with the other sons of tobacco farmers and Chesapeake watermen. But it didn’t seem to make any difference.

We wonder, in fact, if all the time we spent in school was not a complete waste of time. We learn by reading, watching, listening and thinking.

The top 25%, on the other hand, saw their portion raise more than two percentage points – from 62.45% to 64.86%. And the top 1% gained an average of $63,040 in purchasing power.

The poor people at the bottom made little economic headway. While earnings rose over the 10-year period, prices of energy, housing and health insurance soared. In the last two years, average earnings have actually gone down in real terms…with annual gains in income less than inflation.

…

*** Another way to look at this phenomenon is this:

When an economy is young, dynamic and open, anyone can get ahead. All it takes is luck and pluck, as they say. That is when the economy is growing richer, and people are producing things they can sell at a profit. But when an economy becomes old and rigid, it shifts from making to buying…from earning to borrowing…from G.M. to Wal-Mart…from Detroit to Wall Street…from manufacturing to finance…from savings to debt…from ability to status…from what you know to who you know…and from how much you’ve learned to where you went to school.

Worth Quoting: “How did America become an empire?”

“How did America become an empire? We don’t recall the question ever coming up. There was never a debate on the subject. There was never a national referendum. No presidential candidate ever suggested it. Nobody ever said, ‘Hey, let’s be an empire!’ People do not choose to have an empire; it chooses them. Gradually and unconsciously, their thoughts, beliefs, and institutions are refashioned to the imperial agenda.”

Mercy Otis Warren on the ratification of the Constitution in 1788:

We have nothing to add to investors’ concerns this morning. We are happy to see them sweat – if only briefly and only slightly. It takes a load off our own shoulders; let them do some of the worrying.

Instead, we pass along some of our thoughts from this weekend.

The thoughts began with an innocent request. “Would you sew a button on our coat?” we asked Elizabeth.

“I’ll ask Angelica, the cleaning woman from Colombia, to do it,” came the reply.

“OK…but it looks like it needs a button on the other side, because the fabric is getting pretty weak.”

“Well, then, we better take it to a tailor and get it done right.”

We had just come back from church. The excursion had cost an amazing amount of money. Nearly $50 in cab rides, to and from, plus the $10 we put in the collection plate (which made us feel like a miser in comparison to the cab ride), and then we stopped and bought a magazine, shoe polish and a brush to put it on with. By the time we got home, we were lighter by about $90.

“Wait a minute…if you send it out, it will cost at least $5…maybe $10.

Can’t you do it yourself?”

“I just don’t have time…”

When we were young and poor, we wouldn’t have thought twice about it. Our own labor was cheap. Capital was dear. Almost whatever it was, we did it ourselves. But now, times have changed. Capital is cheap. It is labor (or time) that is dear. We might even prefer to do the job ourselves, but we don’t have the time. We’re too busy. So, we pay someone else to do it – even at rates that take our breath away.

As you get older, you have less and less time left. But if you’ve been lucky, or saved your money, you have more capital available. And if you’ve been on the ball, you should also have accumulated some skill, or wisdom that makes your time and capital worth more, because you know what to do with it. You can no longer afford to spend your time washing the car or painting the living room, for example; your time is too valuable. Those jobs are given out to people who have more labor and less capital than you do. (If you want to paint the living room, you have to count it as a leisure activity, knowing that someone else could certainly do it cheaper – when you add in the cost of your own time – and, probably, better.)

Take China, a poor country. A few years ago, maybe still even today, it had so much labor and so little capital it had to build its roads by hand.

Instead of expensive earth moving equipment, hundreds of workers pitched in with shovels and wicker baskets.

In Nicaragua, also a poor country, trenches are still dug by hand. “It costs about the same as having a back-hoe do the work,” explained our friend, Antonio. “But this way at least people get to work.”

North of Nicaragua, on the other side of the Rio Grande, is a mature, rich country. Gringo labor is expensive. Like an aging capitalist, Norte Americano is forced to depend on its wisdom, skills, and capital. This seems to be working for the rich there. They’re doing OK, according to most reports. But a few rungs lower on the economic ladder, where people get paid weekly, often in cash, the average American has no more real skills – maybe less – than his average counterpart in India or China. What does he know how to do? Operate a car and a TV remote? Maybe.

The average man in a poor country has gotten used to living without money; he’s learned how to do things himself. He learned how to “make do,” and treasure every bit of capital that comes his way. The average man in America, on the other hand, has gotten used to having money…and credit.

The word “billion” is thrown around an awful lot – and it is such a big number that it’s hard for most people to wrap their head around. Realizing this, our friend, Bill Murphy from LeMetropolecafe.com posted some helpful statistics on his site:

“The next time you hear a politician use the word ‘billion’ casually, think about whether you want the politician spending your tax money.

“A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into perspective in one of its releases.

“A billion seconds ago it was 1959.

“A billion minutes ago Jesus was alive.

“A billion hours ago our ancestors were living in the Stone Age.

“A billion days ago no one walked on earth.

“A billion dollars ago was only 8 hours and 20 minutes, at the rate our government spends it.”

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“Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of Government except all those other forms that have been tried from time to time.”
— Winston Churchill

“You have enemies? Good. That means you’ve stood up for something, sometime in your life.”
— Winston Churchill

“Men stumble over the truth from time to time, but most pick themselves up and hurry off as if nothing happened.”
— Winston Churchill

“The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery.”
— Winston Churchill

“You have been given the choice between war and dishonor. You have chosen dishonor, and you will have war.”
— Winston Churchill to the English Parliament, 1938 after the English Parliament’s 1938 appeasement in Czechoslovakia

“There is no worse mistake in public leadership than to hold out false hopes soon to be swept away. The British people can face peril or misfortune with fortitude and buoyancy, but they bitterly resent being deceived or finding that those responsible for their affairs are themselves dwelling in a fool’s paradise.”
— Winston Churchill