get donkey!

Bruce Temkin (have I mentioned how useful his site is?) posts a link to an interview with former-McKinsey director Richard Foster (registration required). As Temkin points out, this interview is one of the best explanations of the current economic out there. The whole interview is worth reading, but here are some of the juicy points:

The granddaddy of cycles in this economy is the equity premium, which is the difference between the longer-term total returns to shareholders and the supposedly risk-free debt rate. It is the premium the equity investor gets for taking the equity risk. Looking back, we can see seven great cycles. During the boom times, when the equity premium goes way too high, everybody hocks everything to get in on the game, and this creates the conditions for a crash. When the crash occurs, the politicians come in and say it was this or that person’s fault. Then they create regulatory institutions, and virtually every one of those institutions—starting with the Federal Reserve, in 1913, as a result of the crash of 1907—has been quite productive for the nation in the longer term. This includes the formation of the Securities and Exchange Commission, in 1934; the Investment Company Act, in 1940; the beginning of the end of fixed commission rates in 1970; and the Sarbanes–Oxley Act, in the early 2000s.

So that’s where we were before the current meltdown. How did the problems occur?

Continue Reading “How we got here”

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Mixing a little eastern influence in with our western traditions… The Buddhist channel has an interesting piece entitled What Would the Buddha Buy?

What would the Buddha buy? Not too much, not too little. Picture him with his own reusable grocery bag slung over his shoulder, talking to a shopper about making mindful choices: “Do you really need it?” “Where does it come from?” “How will it affect the environment when you’re done?”

[snip]

The Buddha’s critique of mindless craving and needless suffering
pinpoints the precise moment during which real pleasure becomes
abstract desire – the want to want. In our addictive culture of
capitalism, it’s the exact same vital acupressure point that our basic
market economy capitalizes on. “Don’t get hooked,” the Buddha says.

Continue Reading “What Would the Buddha Buy?”

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