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January 29, 2009

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Ronald Boyd

Again you have come up with an outstanding post. Thank you.

Kent @ The Financial Philosopher

Thank-you, Ronald. I appreciate your kind words and you for reading.

Cheers...

Kent

Iqbal Latif

This is very fascinating read.
I may be on complete tangent but your articles always provoke some nodes, allow me to express Sir..
Nothing in life is an ultimate truth; human cycle in my two cents worth is the name of constant deception, new stuff take over old ideas.
We have to judge events from realities of present; sometime making judgments of an event outside the restraints of the time when the event happened is kind of worst deception we tend to engage in flagrantly.


On the CNBC issue in my humble opinion we are prisoner of our own limitations. We have restricted ‘truth’ by straitjacketing facts within the time frames of the market hours, the GS analyst who thought oil at 200$ is a reality may be right in 5 years but his call led to a hedge fund frenzy that destabilised the entire commodity pricing structures.


Last ‘June’ the riots in the world were based on rising prices and inflationary pressures, today we are looking at falling prices. The problem I see is that we try to interpret normal span of human life associated economic cycle within 5 hours of market frenzy trading.


Time is a function of movement. ‘Solar time’ moves slower than’ universe time’ that is based on light years. We are already on verge of shortening the slower moving solar time to restrictions of our market timings.


Crisis of confidence in ABS, CMBS and in the global financial system is a result of streak of instant gratification based on market hours, the reason that every company listed on the market exchanges look for the next quarterly earnings result onto spinning of facts and manipulation of our abilities.
Predictions of global warming, commodity shortages and deflationary 1930 turndown are all made within context of market sessions, therefore it appears that a constant ‘deception’ is going on. We are victims of our shortened time span; our normal human life span is short enough if seen in context of universe light years however the demands of the market has led to even this shortened time to be further deflated. Our ancestors just few thousand years ago would live with understanding of not days but seasons now we have grasp of nano nano seconds, what is truth in a span of 10,000 years may be false in the blink of 20 years. Similarly what is true for five market sessions is false for extended one year.


There is no ultimate truth and no ultimate false, the guys who thought we will die of shortages will be proven wrong so will be those who think oil can stay at 30$’s, in between lies a position of moderation, we have just rocked the boat of moderation, our calamities are self inflicted, in medium to long term we see our levels, the reason we have extreme of volatility in the market and like of case of LTCM break the limits of risk is demands of the markets to perform in shorter span of time.

Satyam disaster is a result of demands to perform every quarter, one quarter disaster led to snowballing of the crime, Madoff greed was based on beating the market year on year, we have raised the bar and a result truth is the first victim.


An evolutionary cycle that takes 16 billion years from big bang to become self conscious cannot meet the pressures of the further shortening of time, we can run below 9 seconds a 100 meter dash but natural evolution is at the limits of compression, the deception and spin that we see on CNBC is indication of are suffering from this compression of time. Definitely you summed it very well..

"If I can assign names as well as pictures to objects, the right assignment of them we may call truth, and the wrong assignment of them falsehood." ~ Socrates

Kent @ The Financial Philosopher

Iqbal:

I like how you doubt things. To add to our dialogue, I would say that the act of doubting actually supports the existence of truth...

"Everyone who observes himself doubting observes a truth, and about that which he observes he is certain; therefore he is certain about a truth. Everyone therefore who doubts whether truth exists has in himself a truth on which not to doubt.... Hence one who can doubt at all ought not to doubt about the existence of truth." ~ St. Augustine

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