Fail

So, health care reform is going to fail because the President has failed to express an underlying principle (is it cost reduction, or is it expansion of coverage -- the message is mixed up). Meanwhile, he has committed to a surge strategy in Afghanistan and we remain forever in Iraq. And the TARP banks are repaying despite the fact that they haven't shrunk enough to cease posing systemic threats to the entire world economy.

Oh, and new jobless claims were up again.

Fail.

Interviews

I hate job interviews. I believe I could sell anything, but when it comes to marketing myself, I have a full blown panic attack. The reasons for this remain elusive, but I am certain about one thing. If the goal was to be as self-critical as possible, I think I would be the best interviewee ever.

Intentional Ambiguity in Heraclitus

I have been pondering Heraclitus' first fragment all weekend. Commentary beginning with Aristotle points out the ambiguity in the first line: "Of this Word which holds forever men prove uncomprehending." Is forever modifying holds or men? The meaning is altered slightly depending on how you approach the grammar.

Yet, there is another ambiguity that puzzles me. Word, or Logos, can have two meanings. Logos has a metaphysical and an epistemological meaning. Metaphysically, Logos refers to the power of creation or to the act of creation. It also may refer to the power of the creator enduring into perpetuity. Epistemologically, Logos means science and reason. It can also mean prophecy and revelation.

The metaphysical and the epistemological meanings are almost inimical to one another. Creation becomes a subject of materialism, externality, and sensory perception. The epistemological meanings are about uncovering the hidden, transcendental knowledge, and abstract thought.

All weekend I have been asking myself, does Heraclitus mean Reason or Creation? Heraclitus is big on reconciliation of opposites. In the first sententence of the fragment, the philosopher uses a universal (Logos) and a particular (men). A universal is a type of extreme, so it must be reconciled with the particular. Likewise, a human is a discrete unit, and must be reconciled with the whole.

The fragment seems to express despair about human cognition. Some humans understand and thereby divide and classify (form particulars for understanding the Logos). Other humans experience life with the same transcience and Lethe-ward slackness of sleeping.

Though this Word is true evermore, yet men are as unable to understand it when
they hear it for the first time as before they have heard it at all. For, though
all things come to pass in accordance with this Word, men seem as if they had no
experience of them, when they make trial of words and deeds such as I set forth,
dividing each thing according to its kind and showing how it is what it is. But
other men know not what they are doing when awake, even as they forget what they
do in sleep. (from heraclitusfragments.com)

If Heraclitus is making a social commentary, then he is expressing a pro-science outlook. The world should be inspected and understood through a trial of words and deeds. This is a reasonable interpretation. But, this is the first fragment, and such a banal criticism would not befit the beginning of a book (now lost, of course) concerning metaphysics and logical paradoxes.

Rather, Heraclitus is laying the groundwork for understanding understanding, and for understanding the universe. Logos can be heard, but will not understood despite its manifest truth. In fragment two, Heraclitus argues that the Logos is universal, but people live as if each had her own received wisdom. Even those who attempt understand the Logos through inspection, argument, and experiment will fall short of total comprehension.

The great mass of humanity represents the particularity of the created world. The world is not created to understand itself. Men do not understand when they hear. Science and argument will not reveal the truth of creation. Passivity of thought will not naturally bring you to the origins of truth.

Like the Bhakti saints and Sikh Gurus two thousand years later, Heraclitus endorses understanding through introspection. The created world will not reveal the highest truth. How does Heraclitus know Logos: He sought the oracle inside himself (fragment 101). What he does not tell us, however, is whether his Logos is everyone's Logos or if he is trapped in the same folly as every other man, unknowing of the Words that endure forever.

Karzai and the CIA

http://www.nytimes.com/2009/10/28/world/asia/28intel.html?em

Whenever I talk to anyone who has had interactions with high level officials in foreign lands, they are always quick to mention who is on the CIA's payroll. At first I was skeptical. Having seen time and again those rumors and gossip statements ultimately proved correct, I conclude that the CIA is only covert in one country -- the USA.

He's Hot

I have a man crush on Martin Wolf:

http://www.ft.com/cms/s/0/9165b8b0-b82a-11de-8ca9-00144feab49a.html

I wish the US had just one MSM finance/economics writer with as much perspicacity. Lewis comes close, I guess.

But, to discuss Wolf's argument, he seems to suggest that nations should better utilize the Special Drawing Rights (or some other basket of currencies) for the purposes of international trade and reserve holdings. Makes sense. If the IMF governs the basket, it could be reweighted quarterly or annually to reflect changes in GDP. Hmm, the more I think about it, the more I like it.

Gold

I almost feel bad for the gold bugs. Don't they know they're riding high on a commodities bubbles fueled by Chinese stockpiling? Once the market discounts the inevitable Chinese pullback from minerals, gold will take a major hit.

So many of the gold bugs are buoyed not by market fundamentals, but by market principles. They mistake their politics for the way of the world. Sorry, fellas, they ain't gonna end the Fed. They ain't gonna go back to the gold standard. And, eventually, the hyperinflationary threat will be quashed and the dollar will find footing because America's capital markets will still be attractive.

Yes, I know, I've been saying it myself: the dollar will lose strength against most currencies. So what? Could be worse. Wait til the commodities bubble really bursts, then you'll see a lot more currency pain.

Deflationary Threat

Remember, here's the game. The financial system is on life support. We won't know the extent of the damage for at least two more years. Until then, the government will be lending free money to the banks (whether through the discount window at the Fed, or through purchases of agency debt -- which provides liquidity to the lending market). That's just how it's going to be.

To prevent dollar destruction, we will see propaganda against oil and we will see continued worry about deflation.

How to invest in this climate? Don't. If you must, just go beta.

See Mishkin's take:
http://www.cnbc.com/id/33308407