A regular reader (eh) wondered if we are throwing a recession, but all the market bears are refusing to come to the party. My thinking is as follows:
Before anyone chimes in with accusations of pinko-bolshism, forget it. The Cold War is over and we won, so move on. What I am observing is plain old hubris. In 2000 it struck the hoi polloi, today it is striking the princely class. It's their turn to get struck down, that's all...
___________________________________________________________
(*) Here is an example from today's news: Lehman repackaged a bunch of risky LBO loans into an entity called Freedom (make your own snide remarks about the name) which then issued bonds of its own, conveniently rated A by the usual suspects. Lehman then took those new bonds to the bend-over-backwards-to-oblige Fed as collateral and...presto: cash. Feel free to bulge your eyes in incredulity and scream, if it helps.
- Unlike the 1999-2001 period when everyone got hit with stocks-on-the-brain, stocks today are mostly owned by the super-rich, many through a variety of hedge and private equity funds that won't sell until they have to (fees, you see..), plus by corporations through buybacks and LBOs of an unprecedented scale. Those types of well-heeled and (supposedly) sophisticated stockholders can hold on to positions longer, even if they show losses.
- There is definitely a lot of contrarian double-think going on amongst those players. Their theory is that, if we are already in a recession, then we will come out of it in another 6-8 months because of the Fed's largesse* and thus the time to buy is now. Also, there is admittedly way too much negative sentiment on the economy and markets (this blog included), usually a sign of a bottom. Putting those two together, "sophisticated" investors and speculators are betting on a bottom.
Before anyone chimes in with accusations of pinko-bolshism, forget it. The Cold War is over and we won, so move on. What I am observing is plain old hubris. In 2000 it struck the hoi polloi, today it is striking the princely class. It's their turn to get struck down, that's all...
___________________________________________________________
(*) Here is an example from today's news: Lehman repackaged a bunch of risky LBO loans into an entity called Freedom (make your own snide remarks about the name) which then issued bonds of its own, conveniently rated A by the usual suspects. Lehman then took those new bonds to the bend-over-backwards-to-oblige Fed as collateral and...presto: cash. Feel free to bulge your eyes in incredulity and scream, if it helps.
Hellasious,
ReplyDeleteOh goodness, the American markets have been in a 7 year bear market in real terms since the dot.com bubble. Any international investor who put his money in US stocks would have lost due to the fall in the US$.
American stocks are cheap. They have been falling for 7 years in Euros....as share buy backs and earnings growth shrank the P/E ratios.
The reason there is not going to be a "recession bear market" is because you're already in a bear market....things are cheap and they got cheaper recently.
I think you should close your pessimistic blog - it has served its purpose to warn people of the crisis. The crisis is somewhat defused and there is some silver lining - the global economy hasn't fallen apart and I think Bernanke did a great job.
I am an asian crisis survivor - we had worst debt levels, bad asian govts, a currency crisis, stock market that collapse 60%, bank failure etc etc. Things were alot worse in Asia during the Asian crisis and we survived. Compared with the Asian govts at that time, the Federal Reserve is doing a great job. Your suggestion to allow banks to fail and criticism of the Fed for its role as a lender of last resort is unjustified, during the Asian crisis, a number of govts took the advice of the IMF to allow bank failures and tighten spending - the result was a disaster that too several years turnaround. A number of papers and studies showed that if the govts had prevented those bank failures and provided stimulus to the economy - recovery would have been faster.
The US economy is either in recession or entering one. The subprime crisis itself is very much over thanks to prompt actions by the Fed. The challenge now is to keep the recession short and shallow. The Asian economies will not enter recession because of infrastructure spending that will keep things going for the next 3 years....this will help to limit the downside for the US economy.
"princely class." .........?
ReplyDeleteYou're so charitable....!
Best regards,
Econolicious
luckysingaporean
ReplyDeleteIt is true that the secular bear market in western stock markets began in 2000 but that does not necessarily mean it can not fall further. Anyone who lived through the 1973-4 stock market crash will know that prices can fall a lot further and faster than people imagine.
About the secular bear market beginning in 2000...
ReplyDeleteTo use a "fractal" notion (thai is going to love this) looking at just the SP500 is very misleading in assessing the 2000-03 bear market.
What happened was a massive 75% drop in NASDAQ (Great Depression-type decline) and a much smaller drop in most large and midsize companies unrelated to the tech and telecom sector.
The -75% obviously impacted SP500 on a mathematical average basis, but it is wrong to say that the BROAD market had a big decline.
It was like the market's "feet" were frozen in liquid nitrogen (-330F) and its "head" was at a relatively comfy 50F. Averaging it out at -280F would be misleading..
:-)
ReplyDeleteHell, we both very much agree that "IF" we see major market corrections (hard to predict as you are really prediciting overall future 'trust' or 'faith' in our social wealth network), it will be the rich that get killed this time (everyone else's schadenfreude moment will finally come).
To further support your point: in order for social cooperation to work, we have to have 'trust' of 'faith' in one another (remember TIT for TAT?).
If you think about 'trust' or 'faith', it is really a form of optimism.
Studies show human primate brains have a clear bias towards optimism (we must or the 'trust' necessary for TIT for TAT with its non-zero sum economic benefits could not exist).
Remember, human optimism is intimately intertwined with our heuristics ('rules of thumb' our minds uses to sove problems/make decisions/etc...).
Research using data from Google's internal prediction market (the largest prediction market in the world) shows a clear 20% predilection towards optimism (i.e. we are wrong 20% of the time simply because of our optimism)... As an aside I would love to know if anyone has ever done research showing whether the societies with the most trust or optimism' (no suprise the wealthiest societies in the world-- Sweden, Singapore, etc...) also tend to be the most wrong from their optimism (would be a fascinating research project)
Don't get me wrong I'm as much for optimism as the next guy (probably more so since I honestly believe cooperation is our only hope as a world), yet I also know 'inaccuracy' (whatever its cause) is VERY expensive when it comes to money/life.
"Let me put it this way: in this bear market it will be the super-rich that will lose big."
ReplyDeleteI'm soooo glad to hear someone else finally say this out loud. Everytime i think through the ramifications of this mess, it's the big boys who have got their private parts on the chopping block.
They keep trying to scare the rest of us into hocking our children to save them, and my hope is that TPTB are simply too incompetent to accomplish it.
meli
Good job on calling out your own pessimism.
ReplyDeleteYour footnote regarding Lehman leaves no doubt the Fed's TAF's are socializing losses.
I would prefer those managers get perp-walked for their mistakes, but the notions of personal accountability and responsibility are a convenient fiction.
In the Bushco/Orwell world war=peace, green forests=clear-cutting, clean sky=more pollution, ergo freedom=yerscrewed.
ReplyDeleteOh and LuckySingaporean thankya for supportin Murica when we needja.
Anon, I completely agree. Is is disgusting what the Fed is doing (I actually wrote my congressman about it recently I was so angry)...
ReplyDeleteAND my liberal democratic congressman (Chris Van Hollen) SEEMS to look at what the Fed is doing as:
1. Necessary to protect 'innocent' low income homeowners
2. A black-white social justice issue (I am sure you have see the graphs of which communities in the US are most hard hit by the subprime fallout)
He does not see how the Fed is 'saving us' by destroying another of our most precious commodity (trust).
What are we trying to save? Who are in our 'kin' boundaries? Who are outside those boundaries and should be allowed to fall?
@Marcus: do you see our world as Orwell or as Huxley? For my own part, I tend to see Huxley as the more prescient author.
I would like to see some factual or statistical comparison to what LuckySingaporean asserts that this crisis is not as bad as the Asia in the 90's. This would be very useful information.
ReplyDeleteThai,
ReplyDelete"America doesn't torture."
Its pure mathematics. Take what the administration says, hit the inverse function, and voila you have the truth.
"America's economy is strong"
Lehman then took those new bonds to the bend-over-backwards-to-oblige Fed as collateral
ReplyDeleteThe Fed is nearly out of treasuries to trade for garbage.
When they do run out they get to monetize the junk that they already have since they won't be getting their treasuries back from soon-to-be bankrupt entities.
Or will they monetize the entire system for decades in order to prevent anyone from failing?
Holy hell the dollar will be toast...
P.S. Wouldn't it have been easier to let the fools fail and allow the wise men to pick up the pieces and start over?
Data abt. lucky's assertions
ReplyDeleteYes, if you look at things percentage-wise, for some measures the US mess is not as bad as what happened in Asia ten years ago.
But (ahem) size matters... As I just commented in RGE on current account deficits, the US's ~6% CAD is $770 billion. Iceland's 17% is $2.2 billion.
People can easily get fooled by statistics. No one has to finance a percentage.
Do you have a link?
ReplyDeleteHell,
ReplyDeleteWhat you said about lack of bear market are more emotional statements than scientific observations. Most sectors of the market did correct substantially. What is holding the market at this point is the commodities sector. I reviewed them in my blog - http://greenscam.blogspot.com.
People are piling into commodities and commodity-related stocks due to two reasons:
(i) they believe Fed's bailout will destroy the dollar, whereas Trichet of ECB and other central bankers will not make the same mistake,
(ii) they think rest of the globe will be unaffected, and people in India and China will continue to have voracious appetite for commodities.
Both are wrong in my opinion. When the commodities and global sectors go, and luckysingaporean is too embarrassed to post any more, we will see the true depth of the problem.
another way of saying the same thing is in terms of euro, SPX had a very serious bear market. But so far bulls believe the problems will be 'contained' within US.
ReplyDeleteWe heard that before, haven't we?
If you think the price of shares will be maintained at present levels even as earnings crater, think again.
ReplyDeleteAs for your assertion that Bernanke is doing a great job, luckyS, well, if you believe that taking on collateral that is likely worthless in exchange for U.S. sovereign debt, and thereby weakening the central bank's position to the point of endangering its very existence, amounts to doing a great job, then yes, he is.
Now please hold for the helicopter drop.
On the Lehman transaction with the Fed - did that occur on the same day that Bernanke "blamed" the rating agencies for the credit crunch?
ReplyDeleteNice.
I think there were many more bargains in stocks in 2000 (outside of the bubble areas) than currently (For example, they were giving REITs away in 1998-2000).
ReplyDeleteI don't think this market is remotely close to "bear market bottom" cheap, especially with earnings estimates still far too high (witness GE) and the consumer falling apart.
Plus most of the go-go earnings of recent years the Financials "made" due to their orgy of leveraged risk-taking will not be repeated again in our lifetimes.
"The crisis is somewhat defused and there is some silver lining - the global economy hasn't fallen apart and I think Bernanke did a great job."
ReplyDeleteI'm quite surprised at this kind of thinking. This crisis happened while there was no recession. I.e., things were so precarious that a small rise in foreclosures brought on by a leveling of home prices (that by itself had little to no affect on the economy) severely damaged the credit markets. But even a mild recession is a 100 times worse than a series of home foreclosures in California.
How can anyone think the market will weather a hurricane after a small gale has blown gaping holes in its infrastructure, now hurriedly patched with duct-tape and plywood?
Edwardo,
ReplyDeleteI see you are beginning to accept the possibility of the Fed monetizing losses. Previously I think you had dismissed it because of bond market reaction. On a couple of prior posts I had cited an item from BusinessWeek that GSE's had pumped $800billion into the mortgage market but Hell assiduously avoided commenting on them.
Well a couple days ago AmbroseEvansPritchard of the Telegraph said that figure had gone up to $900billion. I don't pretend to know where that much money can come from and why it has not caused more dislocation but I haven't read anywhere how CountryFried has disposed of the $50+billion loan it got from the FHLB of Atlanta. Another odd snippet not attracting more attention is the non-borrowed reserve figure of negative $60+billion. Total rquired reserves are only in the mid $40billion range and the banks have borrowed almost $20billion in excess of that.
It seems not even the Fed can figure out yet which way this crisis will break. I'm sure they want to avoid hyper-inflation (or something close to it) but they won't know which will be the less devastating course until they're well down it. Hyper-inflation destroys savers and derails the economy but liquidates the national debt (both personal and govt) which is not payable otherwise.
Deflation bankrupts borrowers and allows foreign holders of massive amounts of dollars (upwards of ten trillion) to move in and buy up assets at a deep discount. It's hard to imagine that the govt would allow the country to slide into serfdom to foreigners. The only positive in this scenario is that the dollar might retain its position as reserve currency. I don't know that it would be worth it.
"It's hard to imagine that the govt would allow the country to slide into serfdom to foreigners. "
ReplyDeleteWhat are talking about? They already have.
Bush grew up serving the Saudis, he's used to it.
The US debt situation assures that which you doubt.
lucky,
ReplyDeleteare you aware that the Asian financial crisis was preceeded by evident real economy slowing in a number of the region's countries, i.e. that the change in financial flows lagged?
No doubt that IMF prescriptions exacerbated preexistent problems which, ex Japan, I think first became overtly evident in S Korea in 1995 (though Thailand's export growth had effectively collapsed between 1995 and 1996, from 23% to 0.3%, a circumstance that led to firings and labor unrest).
There really is such thing as overaccumulation of production capital and, at base, this was causal, leading into the more strictly, and not strictly national, financial crisis.
Likely no accident that nonfinancial corporate profits in the U.S. turned down from 3Q97 as the world's most dynamic region (Asia) had been weakening well before that time and then, another two years before the extreme overvaluation of U.S. equity markets really began to be noticed and repriced - Mr market has proven to be an inefficient discounter.
Kar-Yiu Wong provides a 1990-1999 GDP growth rate table at:
http://faculty.washington.edu/karyiu/Asia/forecast.pdf
"Feel free to bulge your eyes in incredulity and scream, if it helps."
ReplyDeleteAAAAAAAAAAAAAHHHHH!!!!!
AAAAAAAAAAAAAHHHHHHHHHHHH!!!!!!!!
@%^@$%^^%@#$%@%^#$%^&#%^^@%#!!!!!
"A number of papers and studies showed..."
LuckyS, your enthusiasm and faith is astounding. BTW, my dad was in the Navy 20+ years and spoke glowingly of his trips to Singapore. It was a very clean and lawful place filled with kind and educated citizens. Have you ever visited the US?
yoyomo-
Well written post. Frightening post. Is 800B a typo? Even 80B doesn't seem possible.
Thai/Marcus-
Until big Pharma manufactures Soma I think we're stuck on the Animal Farm.
Yoyomo, I agree with Dink, very well said!
ReplyDeleteWell, yomomo, I've always entertained the possibility of hyper-inflation, but as you correctly observe, due to its deadly effect on the bond market, I have been dismissive of its likelihood.
ReplyDeleteMy view is that deflation, generally speaking, is a far more palatable outcome as far as the bankster class is concerned, since under such conditions they can buy up items for pennies on the dollar. But as you point out, it's furriners, specifically the Chinese who hold the massive stores of dollars, not the locals, who are broke. So, perhaps there will be an attempt, not neccessarily successful, to set up the foreigners as bag holders of worthless federal reserve notes as the authorities embark on a mad, printing spree.
But the Chinese, rumor has it, are behind a lot of shenanigans in the silver market, and I suspect they are ready for whatever we pull. They could, as Jim Sinclair suggest be waiting for just such a manuever by us to set up a hard asset backed currency and replace the dollar as the world's reserve currency in record time. We should probably expect the unexpected in what will be a high stakes game of Chess.
Dink,
ReplyDeleteI doubt both BW and Ambrose E-P of the Telegraph would both be reporting the same erroneous info (BW Feb18 p6 "Stealth Bailout"). Countrywide got a $50+billion loan from the FHLB of Atlanta last year and since then I haven't read anywhere that they've paid it back and that's only one loan to one bank.
Edwardo,
I agree with you about the Chinese, for the past 3 years I've been trying to figure out what their back-up plan for converting out of $ without getting scalped. Your scenario is the most plausible IMO. Any losses they take on conversion can be offset with even bigger gains on a hard-currency yuan.
I was hopping around some other blogs and someone made the comment that Americans have become victims of their country's foreign policy, just some more Third Worlders. It's sad to see the decline but if it forces the demilitarization of economic and foreign policy perhaps some good may yet come of it.
The key to understanding American society is recognizing the modus operandi has always been to spread blame around and then focus on 'the other guy's' contributon.
ReplyDeletePeople just don't change until things get painful.
I tend to think we will borrow our way out of this forever until the rest of the world just refuses to loan anymore. Once the money spigot does stop, the US will:
1. Try to partially deflate its debts away
2. 'Renegotiate' the debts with lenders (default).
The CPI will show only mild inflation or mild deflation and no citizen/politician need ever look in the mirror to recognize their own contribution to the problem.
The angry crowds will demand a pound of flesh at the inconvenience of
1. Not driving Hummers as often
2. Having to recognize Fibromyalgia wasn't developed by the medical profession so people could get paid to take percocet and watch TV all day
3. Having to study something other than golf course management on the 6year track
Rightfully we will all:
1. Blame our President
2. Blame the other political party
3. Blame the former Fed Chairman
Of course, once the turmoil settles down, the band will play on.
Lucky, you should read up on Bretton Woods II and the ramifications the sliding dollar shall have on the Asian tigers. You may not be as lucky as you think!
ReplyDeleteAs for U.S. markets, ultimately the price of stocks rests upon the underlying fundamentals of the companies. GE fell by the most since the 87 crash Friday and that's with an outlook that doesn't look conservative enough (eg their industrial assumptions are too bullish).
You imply that overseas investors are dumb because with their currencies they see bargains. No, quite the opposite, earnings estimates shall finally come down on hoards of U.S. companies and even to a European, or a Singaporean many "bargains" will suddenly look expensive. Unless they have a financial death wish you can bet that money flows into Wall Street will suffer once there's a more realistic view of earnings growth, or really contraction going forward.
You also forgot to factor in CRE. Will the JP Morgan $80 trillion derivatives book tolerate the more than apparent falling domino of commercial/retail real estate... better read up on that too.
It isn't going to be pretty.
Yoyomo "It's sad to see the decline but if it forces the demilitarization of economic and foreign policy perhaps some good may yet come of it."
ReplyDeleteMy hope exactly, the silver lining in the alcoholic type of deficit spending by this government.
Get out of the ME, get your oil the old fashion way--pay for it--and let Alqueda focus on toppling Saudi regime,then cut the military budget in half.
Americans can no longer afford guns and butter, and I think butter will win.
Hell,
ReplyDeleteThe super-rich never lose big.
Jason B
Jason, this is one of the most blatantly inaccurate things I have read on this blog.
ReplyDeleteJust go back and look at ANY textbook of the 20th century: remember the overhaul of the social order in China, The Holocaust and deline of German dominance in the world, the fall of the British Empire and the relative decline of American economic supremacy relative to the rest of the world, etc...
The same math that gives us fractals is VERY clear: risk and uncertainty are scale invariant.
Just like energy is ALWAYS conserved in the universe, so too risk is ALWAYS conserved in the information universe (another truly bizarre concept). It is this fact that gives us 'black swan's' and guarantees that uncertainty always exists.
By definition the super-rich ALWAYS lose big, when they lose.
ReplyDeleteHell or Lucky,
ReplyDeletedo you have a link that compares our current situation with Asia in '98? I haven't found anything with Google searches.
Dear Hellasious,
ReplyDeleteThere seems to be one industry that is recession-proof:
http://www.liveleak.com/view?i=0ab_1207948795
The rich make the rules, because of their influence and resources. If they start losing, they change the rules so they win again.
ReplyDeleteIts not like this will be the beginning of a new social order.
Jason B
Jason, you can repeat that again!
ReplyDelete(but one question: who do you define as rich? Who are their kin? What are their 'boundaries'?)
There is now and will forever be only one solution: "cooperation".
Even Tit for tat was recently beaten... No suprise, by a group of cooperating programs.
Do you see the fractal?
Thai,
ReplyDeleteYou made a reference to Germany's decline. If there was a decline, then it was temporary because the German economy is one of the largest in the world. (top 5)
Thai,
ReplyDeleteViolence for social change rather than cooperation is a lot more successful.
The US will not leave Iraq with a cooperative and compliant populace. he violence there will voice the US out. Ireland would have gone on for decades more without change if not for the terrorists actions. The only reason the world is focused on the subjugation of the Tibetans by the Chinese is because of violence.
The non-violent examples are notable as exceptions that prove the rule.
Thai/Jason-
ReplyDelete"Once two Southampton players recognized each other, they were designed to immediately assume "master and slave" roles -- one would sacrifice itself so the other could win repeatedly."
I guess voluntarily losing could be considered cooperating....
Marcus-
"When you vote, you're exercising political authority. You're using force. And force, my friends, is violence, the supreme authority from which all other authority derives." (Heinlein)
Non-violent protest could be seen as a coy way of saying "See how many of us there are?". It does allow the "enemy" to save face by pretending to change their policies due to morality instead of avoidance of a violent conflict.
Anon-- Germany is big, but its relative position in the world is nothing like it once was.
ReplyDeleteThe West's economic Zenith vs. the rest of the world occured around 1890, we have been in relative decline ever since (even though on an absolute basis we are far wealthier than we once were).
Marcus-- I certainly agree that people will not change unless they become 'uncomfortable'. Further the difference between violence and 'uncomfortable' is often unclear to me-- but I don't necessarily agree with you that the kind of violence I think you are suggesting is 'more effective' than other forms that cause 'discomfort'.
And just to make my point, if you think on it, the violence you are suggsting is really a form of cooperation.
Dink-- what do you think good cop/bad cop is? Successful management teams pull this fast one over their employees all the time (keep the leader pure, use 'the bad guy' to make the necessary changes, blame the bad guy as everyone gets angry-- fire the bad guy with a big severence check-- company now restructured and 'healthy', pure leader still in place).
Dink-- doesn't this look a little like the Southampton strategy?.
ReplyDeleteNever underestimate the power of cooperation.
Thai-
ReplyDeleteRegarding Southampton, I was thinking more on the lines of Brave New World where the gov whispers slogans to the gammas when they sleep. I suppose the modern day equivalent would be "Math is for nerds!" to make sure the gammas are perversely proud that they're not leaders.
The Dalai Lama is in town talking compassion. I'll give a shot at this optimism thing later today maybe. But first, a thought. How can we cooperate if capitalism forces us to compete? BTW, "Dink" is a character from a sci-fi book forced into battle school. He rebels against authority by cooperating (with the few others who haven't been brainwashed into being sociopathic jackals).
"The only thing that will redeem mankind is cooperation.” (Bertrand Russell quote used in "Shaun of the Dead")
Dink,
ReplyDeleteThanks for conjuring Bertrand Russell, one of my favorites:
"Many people would sooner die than think; In fact, they do so.
Patriotism is the willingness to kill and be killed for trivial reasons.
The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts.
I would never die for my beliefs because I might be wrong."
And some paradoxical statements for Thai:
"Mathematics, rightly viewed, possesses not only truth, but supreme beauty - a beauty cold and austere, like that of sculpture.
Mathematics may be defined as the subject in which we never know what we are talking about, nor whether what we are saying is true."
After receiving the Nobel Prize in 1922, the Danish physicist Niels Bohr invited friends and associates to a celebration party at his country cottage North of Copenhagen. The event was also well-attended by members of the press. One reporter, noticing a horseshoe hanging on a wall, teasingly asked the famous physicist, "Can it be that you, of all people, believe a horseshoe will bring you good luck?" Bohr replied:
ReplyDelete"Of course not,
but I understand it brings you luck
whether you believe it or not."
:)
Dink said " How can we cooperate if capitalism forces us to compete?"
ReplyDeleteAny sports coach could answer this one-- we cooperate in order to beat the competition!
Most people think the competition is 'the other guy' because we see a world with limited resources (that boundary issue again) and worry 'who will get it'?
Our competition was always against existence itself.
If we cooperate and overcome the obstacle of a limited resource and the problem gets better for all of us for a while (until the next limited resource issue pops up).
In fact, whether he understood this or not, this is always how I have viewed Hell's call for a 'new world energy order'. Which I agree with him on.
Marcus-
ReplyDeleteYour welcome. I'm always glad to provide quotes that either amuse me or ring of some universal truth. Here's one that does both:
"Before I came here I was confused about this subject. Having listened to your lecture I am still confused. But on a higher level."
Enrico Fermi
Thai-
Nice Niels Bohr story. I imagine the reporter couldn't think of anything to say after that:)
As for competing against existence, I worry capitalism is dividing Team Human and treading on us. I got to the part in Origin of Wealth where the Cold War is over and Wall St hedge funds have sucked up all the Sandia (US) and Russian mathematicians/scientists and turned them into "quants". These are the people that should be pioneering the new world energy order!! And what a waste of time for everyone to spend hours a week monitoring their stocks when they should be curing cancer and genetically increasing longevity!
Not that I have any idea what would be more effective and fair that capitalism... Hopefully someone will come up with something soon.
Dink, this whole capitalism vs. 'anything else' never was real, the major religions of the world always were right... Neither capitalism nor anything else can protect us if we refuse to cooperate. This was the most chilling lesson I took away from Lindgren's 'game of life/prisoner's dilemma' model (if you have read that far in OOW).
ReplyDeleteThere are cooperating and non-cooperating networks, the rest is just the rules we all agree to play by.
No system of man will ever get away from issues of faith, trust and integrity, ever.