Friday, November 7, 2008

Stoïc

From: Gilles Prod'homme, "Preparing for happiness, The Way of the Stoïcs", Eyrolles 2008.

Another difficult notion for a contemporary thinker: the bloc-universe of the Stoïcs is not static. In effect, it evolves according to an eternal cosmic cycle: initially, the artist fire manifests the universe, which, like all that is alive, is subject to birth and death. In the view of the school of Stoïcism, the Universe appears only to disappear again in a sort of final fire. This is the universal conflagration. At the end of a cosmic night, impossible to evaluate in terms of human time, and in which God contemplates his own essence, a new reality becomes manifest. And everything begins anew since each one of us relives the same events: Socrates once more walks the streets of Athens, Plato again writes his dialogues. This is palingenesis. Let us note in passing that this cyclical form of creations and dissolutions shows deep similarities with the system of the Days of God or Manvantaras of hindu gnosticism. Nietzsche's notion of an eternal return also echoes, in certain aspects, the speculations of the pre-Socratics and first Stoïcs.

Wednesday, October 15, 2008

Sunday, October 12, 2008

FROM: THE NEW YORKER

On the other hand, this week, the New York Federal Reserve began to convene meetings to try to create transparency and liquidity in the global market for credit default swaps. These are essentially unregulated insurance contracts sold privately to financial institutions to protect them against losses in stocks or bonds. No government agency regulates credit default swaps. There is no official information available about the size of the market or the distribution of liabilities within it.

Maybe most of these contracts are sound, or balanced out in ways that don’t create huge systemic liabilities--let’s hope so. Published estimates of the nominal value of all credit-default-swap contracts in the world today are in the range of $55 trillion to $60 trillion. So here is a global private market whose products, combined, have a nominal value roughly equal to the total size of the world economy’s output in a year, and apparently no one in any government knows the full market’s shape, distribution, or true vulnerabilities. Gulp.

Thursday, October 2, 2008

Wednesday, October 1, 2008

Spiegel Finance

INTERVIEW WITH GERMAN FINANCE MINISTER PEER STEINBRÜCK

SPIEGEL: And is the United States completely to blame?

Steinbrück: The source and focus of the problems are clearly in the United States. There are many causes. After 9/11, a great deal of cheap money was tossed into the market. Apparently some of that money went to people with poor creditworthiness. This led to the growth of the real estate bubble. The banks embarked on a race over profit margins. Then speculation spun completely out of control…
………………………………………………………………………………

SPIEGEL: What, specifically, will you call for?

Steinbrück: A few agreements were already reached with the British and Americans within the G-7 in April. They include imposing new rules on the conduct of the rating agencies, tightening equity regulations and gaining a better handle on cross-border bank supervision. But as far I am concerned, it isn't enough for the industry to develop its own code of conduct. I also want to see the banks no longer allowed to sell all of their risks as they see fit. I think it as a dangerous systemic design flaw that not only loans, but also credit risk is 100-percent marketable. This can lead to uncontrollable wildfires, as we are now seeing...

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