gray: the rational color of cash

The melting down, in the cold grey mornings of late Fall and early winter: society, religion and feeling. Ultimately one’s own sanity. Is there anywhere to run in the cover of shrinking daylight that is safe, a refuge from personal apocalypse. For much of the world’s humanity, the world we were born and raised in is dead. Ashen dead. And the one we currently compose with feels flimsy and unstable. rational in its irrationality. Everything is gray. The gray of a decomposing corpse, left unclaimed in the morgue for a fortnight, no rightful owner stepping up to claim a connection, or the glimmer of a new dawn,a faint light at the end of the tunnel or the carbon monoxide poisoning out of a car tailpipe?

David Teniers the Elder. Read More:

Well, the struggle between light and dark is simply obliterated into gray. Something irritating, stuck in the throat; a place between chaos and creativity, a space between stasis and transformation, gray is the symbol of a failed alchemy, a magic gone wrong. Imagine bankers spreading gray ash on their head, as it is a traditional gesture of mourning; an identification with the victims of the financial system and all its misogyny and consumerism.No, they are just identifying with themselves, those who will not perish in misery. No doubt dust to dust, but they die fighting a whole different cause…

Kandinsky: An attempt to make yellow colder produces a green tint and checks both the horizontal and excentric movement. The colour becomes sickly and unreal. The blue by its contrary movement acts as a brake on the yellow, and is hindered in its own movement, till the two together become stationary, and the result is green. Similarly a mixture of black and white produces gray, which is motionless and spiritually very similar to green….

---Durer's brooding figure, posed in an attitude of dejection and frustration, with a sad, leaden, downward cast, may be interpreted as an embodiment of the alchemical searcher after the ephemeral Stone -- or, in a wider sense, as the seeker after wisdom -- in a mood of temporary defeat. The atmosphere of lassitude and gloom is intensified by the tolling bell, the quiescent infant, and the lean and passive hound. Despite the opening keys and the light-giving lamp, knowledge comes, but wisdom lingers." Yet, "we fail to rise, are baffled to fight better." In the distance, dispelling the black bat, night, shines the sun over the Saturnine Sea and if, like the Saturnine symbols of alchemy, the winged genius of Melencolia broods with darkened face.---Read More:

The overall usefulness of the Occupy protests? A certain disdain, a Society of the Spectacle to some degree, a path of least resistance; the future marketing to the Occupy culture. Still, the issue of inequality is significant ,  a near crisis problem that needs far more attention than is given to it. Also, inequality is exasperated  by a financial and business class  elite that has for decades understood how to “game”  the banking system and market system. So, Wall Street is the is a correct and authentic target of mass protest. But not the unique one. Also, consistent public gatherings- like old photos of no loitering signs- are important in their own right. In a country like Canada, elected power both liberal and conservative have no qualms on exercising illegal state power against dissenters as the occasion arises. So, its almost a civic duty to exercise the right of assembly on a regular basis, for any reason as it suits the public whim.


---Joseph Heath:Self-deception is one answer. In the case of marriage, it is a fairly persuasive explanation. You are in love. You’re not thinking straight. Emotions are clouding your judgement. But what about small businesses? Perhaps entrepreneurs are just incurable romantics. Yet isn’t it strange to think that our economic system might depend upon this sort of irrationality? John Maynard Keynes was not one to shrink from this conclusion. He argued that an essential ingredient of entrepreneurship was what he called the “animal spirits” of investors. The typical business plan contains about as much wishful thinking as the prospectus for “an expedition to the South Pole,” he said. “Individual initiative will only be adequate when reasonable calculation is supplemented and supported by animal spirits, so that the thought of ultimate loss which often overtakes pioneers … is put aside as a healthy man puts aside the expectation of death.” The phenomenon that Keynes put his finger on is by now quite well documented. It is referred to as optimism bias. People tend to paint a rosy picture of things. To say that we all suffer from this tendency would be misleading, simply because “suffering from it” may well be an essential component of psychological well-being. Read More:

…But while green, yellow, and blue are potentially active, though temporarily paralysed, in gray there is no possibility of movement, because gray consists of two colours that have no active force, for they stand the, one in motionless discord, the other in a motionless negation, even of discord, like an endless wall or a bottomless pit. (Kandinsky ) Read More:

Andrew Potter:In an essay in the latest issue of The American Interest, Tyler Cowen offers one of the most original analyses I’ve seen about inequality. What he does is flip the argument upside down, arguing that the effects of income inequality are not that big of a deal. What we should worry about, he argues, is the dynamic that is causing it. As he sees it, rising inequality is almost entirely due to the functioning of the financial markets, in particular the strategy of “going short on volatility”. This allows bankers to rack up profits in normal times,

then socialize all the losses during abnormal (crash) times.

The upshot of all this for our purposes is that the “going short on volatility” strategy increases income inequality. In normal years the financial sector is flush with cash and high earnings. In implosion years a lot of the losses are borne by other sectors of society. In other words, financial crisis begets income inequality….

Occupy Oakland. Fence Sculpture. Frank Ogawa Park. ----Consider the earlier dust-up over stock options and executive compensation. A person of Machiavellian temperament looking at this would be inclined toward the view that CEOs were just ripping off shareholders, taking advantage of information asymmetries and collective action problems that resulted in weak oversight. Since this analysis happens to coincide with the verdict of common sense, many people would be surprised to discover how strongly it was resisted by academics in economics, finance and corporate law. What the apologists for CEO pay—and they are legion—proposed instead were all sorts of baroque schemes through which these compensation arrangements could be seen as in the best interests of all. Corruption, for instance, was interpreted as merely an implicit form of executive compensation, and therefore part of the “tacit” employment contract agreed to by shareholders. Read More:

Worse, it isn’t clear what to do about it:

For the time being, we need to accept the possibility that the financial sector has learned how to game the American (and UK-based) system of state capitalism. It’s no longer obvious that the system is stable at a macro level, and extreme income inequality at the top has been one result of that imbalance. Income inequality is a symptom, however, rather than a cause of the real problem. The root cause of income inequality, viewed in the most general terms, is extreme human ingenuity, albeit of a perverse kind. That is why it is so hard to control.

Cowen goes on to suggest that this might just be the price we pay for a modern economy. The unanswered question, I think, is whether the macroinstability of this system in the financial realm translates into instability in the political realm. Cowen doesn’t appear to take political instability seriously, largely because he seems to think that Americans are generally ok with the system they see.Read More:

David Teniers painting. Kafka diaries:Perhaps one might expect that I was educated somewhere out of the way? No, I was educated in the middle of the city, in the middle of the city. Not, for instance, in a ruin in the mountains, nor by the sea. Until now my parents and their retinue were covered by my reproach, and gray; now they easily push it aside and laugh, since I have drawn my hands away from them to my forehead and think: I should have been that little inhabitant of the ruins, listening to the shrieking of the jackdaws, glanced over by their shadows, cooled down under the moon, burnt up by the sun that would shine on me amid the rubble all around my ivy bed, even if I were weakened in the beginning under the pressure of my good qualities, which would surely have sprouted up in me with the strength of weeds. Read More: image:

ADDENDUM: What’s your opinion on the financial protests? It seems too big to call it “Occupy Wall Street” any more.
Michael Lewis: I felt the same outrage for three years working on The Big Short. Although I had this Wall Street background, I hadn’t paid very much attention to the financial world. Until I started digging around and asking questions, I couldn’t believe how bad it had gotten. When I published The Big Short, I sensed a level of outrage in this country that I had never felt before. I’m surprised it has taken this long for the political energy to develop, because it’s so obviously outrageous what is happening. There are people at the top of the financial sector who think that the financial sector is out of control. The Chairman of the Federal Reserve has said he is sympathetic to the protesters.

---The implosion on Wall Street was therefore a source of considerable embarrassment. Imagine an art historian, invited to offer impressions of a long-lost work by Duchamp. After waxing poetically for several minutes about its “transgressive” and “post-auratic” qualities, the historian is informed that a mistake has been made, and that the work in question is actually just a urinal. ... Until recently, the dominant view of markets was that they were rational and efficient. These two virtues had always seemed to go together, like faith and hope. And yet in the fall of 2008 it became clear that financial markets had failed to perform efficiently. Two obvious explanations presented themselves. Some people, among them former U.S. Federal Reserve chair Alan Greenspan, suggested that banks had simply gone crazy. According to this view, rationality and efficiency are still an inseparable duo; it is just that banks and investors failed to act rationally. Read More: image:

What impact do you think the protests will have on President Obama?
Obama is going to have trouble, because he has pursued much the same policy in relation to the Wall Street firms that the Bush administration did. My feeling is that these people are more likely to energise the candidacy of some outsider, for example Elizabeth Warren, who is running for senate in Massachusetts. Her career could get very interesting very quickly, because she’s been basically right about all this, yet she’s been ostracised by the political system. She has this outsider, third party-ish aroma about her….

…Do you think the protests will have any long-term financial impact?
I’ve wondered why people haven’t floated more specific goals. I don’t mean “Let’s define this movement”, but all those people in the streets could agree to ostracise the big Wall Street firms in the same way, say, that tobacco companies were, or South African countries before the end of apartheid. They could say, “We are going to call attention to politicians who take money from these firms. We’re going to boycott any businesses that invest in them or have their money managed by them.” That could be devastating. I can’t believe that anyone would disapprove of that either. It’s only a matter of time before they create a more pointed attack on the “too big to fail” firms. Read More:

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