"We saw a lot of road kill and thought of you." —my sister
For more information on oil prices, click here. Podcasts of My Intro Economics lectures (in .wma format) For my 2005 Radio Economics MP3 podcasts, go to the bottom of the page that lists the lecture podcasts.
Canada
United States
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My email address:
EclectEcon@gmail.com My 2005 post about the housing crisis, before it happened, is here.
There was considerable discussion at the Rocky Mountain Economic Summit about "tapering", Fed Chairman Ben Bernanke's term for reducing the amount of quantitative easing that it expects to carry out over the next year. As I have posted before (also see the links at the end of this posting), Plosser would like the tapering to begin soon, whereas Bullard would prefer a more wait-and-see position.
Here is someone, nominally qualified, who clearly misunderstands some of the things that are being debated and considered by the Fed (ht MA). In some portions of his piece, he is quite right: the Fed is having an impact on the economies of some emerging markets. I doubt if the Fed is having as big an impact as some people think, however.
But he wants the Fed to return to focussing on monetary aggregates. Actually, so do I, but I'm not sure how or what to do about them.
Monetary aggregates, such as M1, M2, M3, M4,... M16 (or whatever) do not mean what they used to, 30 years ago. Many, many other assets are so liquid that movement between them is much easier than it used to be.
So much of global liquidity is created by shadow banks, both in the US and elsewhere, including China. How much? I have no idea, but it seems like a lot to me based on my readings of the role of the shadow banks in creating the housing bubble and the ensuing financial crisis. This liquidity has little to do with US Fed monetary aggregates. Or more precisely the linkages between high-powered money and global liquidity are much less clear than they used to be.
Also, "tapering" means a slowdown in the rate of quantitative easing. It does not mean tightening as he says,
I am surprised that so many economists and market analysts so blithely accept Ben Bernanke's assurance that the tapering of bond purchases by the Fed – and ultimately a halt to QE – is not "tightening". It shows how far monetary analysis has fallen out of fashion in the US and in the City that they fall for such flummery.
It isn't flummery. It is clearly an announcement that at some point in the future, probably before year-end and possibly within the next month or two, the Fed will begin to slow the pace at which it is expanding the monetary base. A slowdow in the rate of expansion is not a tightening even if someone says it is.
When and whether the Fed should begin tapering are legitimate, difficult questions, but let's not confuse things by calling "tapering" tightening. And let's make sure we understand that the monetary mechanisms are much different now than they were 30 years ago.
My attendance at the summit was supported by several sponsors, including the Department of Economics at The University of Regina.
During an interview at the Rocky Mountain Economic Summit last week, James Bullard, President of the St. Louis Fed, said something to the effect of
"Just in broad terms, we have to hope that Europe comes out of its recession soon and there will be at least some growth there, and we have to expect that the slowdown story in China only has a certain probability attached to it, and most likely China will meet its target growth rate of 7.5%."
Fortunately Bullard is a flexible guy who seems to be able to adjust; it is not at all clear what the actual rate of growth will be over the next year or so in China. From Foreign Policy,
Chinese economic growth slowed to 7.5 percent in the second quarter of the year amid efforts by the country's new leaders to rein in credit and pivot toward reforms.
Monday's economic figures are the second straight quarter of weaker economic growth in what is the world's second and largest economy and came on lower investment and declining trade figures....
But there is no sign from the Chinese central government that they plan to intervene in the economy and inject more stimulus. The government has set a growth target for 7.5 percent for 2013, and Monday's economic news raises the spectre that the country could miss it [emphasis added]...
"I think the second half will be even weaker. The government's tolerance for slower growth is definitely higher," Zhu Haibin, a JP Morgan economist, told the Financial Times. "Seven per cent is probably the growth floor."
But that's not all. There has long been some doubt about the accuracy (and veracity) of China's growth data. From a fascinating Forbes article (ht Jack):
What is the real growth figure? Seeking Alpha thinks it is around 6.7%, but even that figure is high. Among other factors, the severe contraction of aggregate financing in June, the marked fall in exports in May and June, and the evident shrinkage of the manufacturing sector throughout the quarter all point to an economy growing in the low single digits.
Moreover, it is unlikely that NBS, in releasing the Q2 number, had made proper adjustments to account for two phenomena. First, Beijing’s official statistics have not been adequately adjusted for inflation, as Standard Chartered ’s Stephen Green has pointed out. Second, fake trade invoicing substantially inflated GDP numbers. Rampant falsification has resulted in the simply unbelievable report of 14.7% export growth in April, the first month of the just-ended quarter. Although some say export growth was about 6% then, it seems like it was actually closer to 3%.
The most intriguing Q2 indications, however, are the comments of China’s finance minister, Lou Jiwei. Mr. Lou, speaking in Washington on Thursday, said growth in the first half of 2013 was probably less than 7.7%, “but not too far from it.” Then he spoke these words: “Our expected GDP growth rate this year is 7%.” ...
The National Bureau of Statistics has been issuing obviously incorrect data since the fourth quarter of 2011, but so far most everyone has largely bought the official storyline. Yet there is always a tipping point. Soon, Seeking Alpha will be right, and the issuance of obviously false data will trigger a collapse in confidence in China’s economic management. Beijing’s haphazard censorship of Lou Jiwei signals that the collapse could be soon.
China did not grow anywhere near 7.5% in Q2, and signs of leadership discord tell us this number is the biggest fib of the year.
There is much more in the Forbes article. Read the whole thing! And this morning, Paul Krugman writes in the NYTimes,
All economic data are best viewed as a peculiarly boring genre of science fiction, but Chinese data are even more fictional than most. Add a secretive government, a controlled press, and the sheer size of the country, and it’s harder to figure out what’s really happening in China than it is in any other major economy.
Yet the signs are now unmistakable: China is in big trouble. ...
Concerns like these should raise some important questions about the assumptions on which the Fed is basing its decisions.
My attendance at the summit was supported by several sponsors, including the Department of Economics at The University of Regina.
Your objectives are your goals -- what your character
wants -- and your actions are the things that your character does to achieve
those goals. Every acting teacher whose work I have read says that no
matter what your character says or does, there must be a reason for choosing
one option as opposed to another. The action or speech may seem stupid to you,
the actor, and so you must try to understand the character to figure out why
the character would say or do what s/he says or does.
Your
character may have several objectives and try several different actions to
achieve them. Often you will see an actor who seems "one note," or
repetitive. This usually stems from
either picking a single objective and trying only one action to achieve it, or
from picking no objective at all and only playing actions that have no meaning,
since there is no reason for them.
A simple example: I open the window. Maybe I do it
because I am hot; maybe I do it because I want to speak with someone outside;
maybe I do it because I want some fresh air; maybe I do it because I burned the
toast and the smoke alarm will go off if I don’t clear the air quickly. The
reason will not always be clear from the script, though, and you must study your
character to understand why s/he opens the window.
A
more complex example: You will probably find that most of the time you can
find an objective in the script. Try to
find the most concrete thing you can, though.
"I want love" is hard to play; "I want Jim to tell me
that he loves me" is a stronger choice. The reason that the second phrase
is easier to play is that it is possible to come up with actions to accomplish
it. Your character could try being really nice to him, or seducing him, or making
him jealous, or whatever else the script holds.
Be
careful, though. The most important
thing about actions is not to overplay them.
If the action you have chosen isn't helping you to achieve your
objective, try another tack. Often, in
real life, you will use several different actions in the course of pursuing a
single objective. Try the same thing as your character.
Sometimes
(again, as happens often in real life) there are characters who say and do the
exact opposite of what their objective is, and there are also many different
kinds of objectives. You may even find
that your objectives change during the course of the play.
The worst
thing to do if you don't know what your objectives or actions are is
nothing. When in doubt, just try
something, the first thing that pops into your head even. The worst that can happen is that it won't
work, and you'll have to try again.
Often, though, the choice you make naturally is the right one after all,
or else it will show you what is! And
after all, isn't that what rehearsals are for?
Based on
work by Joshua Marchesi, San Francisco Shakespeare Festival
Well, it worked yesterday. I closed up my computer and read Calico Joe. So I thought I'd give it another go today. I've had The Ghosts of Manhattan by Douglas Brunt sitting around for a couple of months; it was sent to me by someone wanting me to review it.
I hated didn't much care for it.
A bright young man, without really knowing why, takes a job at Bear Stearns. By the time he is 35 years old, he is well into the life of alcohol abuse, cocaine, strippers, hookers, infidelity, and rulers: whose is longer, metaphorically speaking. That's what most of the book is about. It was shallow, sensationalist, and trite, despite the pangs of conscience felt by the hero, Nick Farmer. At rare instances, it has some fakey cloak-and-dagger stuff about the run-up to the Bear Stearns melt-down in 2007, and that is what I had hoped to enjoy, but even that was disappointingly weak.
I don't know what it was, but from the beginning there was something about the writing style that made it hard for me to concentrate on The Ghosts. As I read it, I was reminded of my dislike of The Bonfire of the Vanities, which I gave away after having read only the first third or so. At least Bonfire was well-written.
Furthermore, maybe it's just me, but I don't really enjoy reading about people spiraling to destruction, as was the case in Bonfire. At least in Ghosts, there appears to be some hope for the man.
If you really want read about life on Wall Street, and if you want what you read to be gripping and well-written, go back to Liar's Poker by Michael Lewis, which I still highly recommend. I'd give The Ghosts of Manhattan a miss.
I have no idea what the readers who gave it more than one star saw in this novel. I pretty much agreed with the Amazon reviews (which I read AFTER I read the book) that gave it one or two stars.
Two weeks ago I sliced off a small piece of my thumb. My previous post about it and photos of it are here. I won't repost the photos here because they aren't all that pretty.
The instant I cut myself, I put direct pressure on the site. I then applied a plastic, waterproof bandaid with some tightness to maintain the pressure. I didn't find the flap of skin I had cut off until maybe 10 or 15 minutes later.
I didn't remove that bandaid for two days, at which time I washed the area, and that's when I took the photos that appeared in the earlier posting.
For the next week, I changed that bandaid every other day, but I kept the wound covered with slight pressure the whole time. Apparently it was good treatment, the right thing to do. Here is what it looks like today, two weeks later.
It has healed remarkably well and remarkably quickly. There will undoubtedly be a small scar there, but it won't be serious.
MA and I have been corresponding lately about health care in Britain, the US, and Canada. I had thought the Brit system might be acceptable to the extent that it allowed private insurers to operate and people could opt to pay more to use private facilities. Apparently it doesn't really work that way. What's more, the NHS, with increasing amounts of gubmnt money being thrown at it, is delivering worse and worse healthcare.
A report published yesterday by Sir Bruce Keogh, the medical director of NHS England, delivered damning verdicts on the standards of care and mortality rates of 14 NHS trusts, 11 of which were so bad they are being put into special measures. ...
The article concludes with a powerfully libertarian message:
But the real lesson of the Keogh report is that the NHS is too important to be entrusted to politicians, or their stooges.
Also see this and this. The latter piece highlights some horribly unethical, I'd say criminal, mistreatment of very sick patients, leading to their premature deaths. I wrote about it here.
[Let me add, however, that the emergency health care I received in Eastbourne a few years ago was spectacularly good.]
When the US Federal Reserve increases the money supply, in the short run that puts downward pressure on the nominal rate of interest. The lower rate of interest induces investors to shift out of US Treasury bills and bonds into something else, seeking more preferable risk-return combinations. Some of that money will eventually find its way into investment spending, but in the meantime many investors look around for some other financial investment that will offer better risk-adjusted returns.
That is what happened, in part, with the financial crisis as people snapped up those inappropriately rated AAA mortgage-backed securities via the shadow banks.
Nowadays, this short term money (sometimes called "hot money" because it is moved quickly in response to changes in interest rates, exchange rates, and expectations) is flowing into and out of the financial markets in other countries. It is, after all, a global market.
Catherine Mann (Brandeis University) presented numerous charts showing some tendencies in the market for this to happen. Unfortunately I'm not able to find a link to the charts; I'm hoping they will become available soon here.
Her emphasis was on the problems faced in emerging markets that result from quick and sudden short-term cash flows into and out of their economies. I wasn't entirely convinced by her graphs and data, but I'd like to have a closer look at them at some point. All the same, her point is one I hadn't considered before: short-term movements of very large amounts of financial capital into and out of a country can play havoc with that country's attempts to control its own monetary positions.
A priori, this position makes some sense. One of the reasons for the phenomenal growth in the MSBs was the massive inflow of financial capital to the US pre-2007. At the same time, though, emerging markets face different problems. Massive inflows of financial capital can distort the local economy, putting considerable downward pressure on short-term interest rates. When that financial capital moves elsewhere, there is then pressure that causes the short-term interest rates to rise.
I viewed this phenomenon with less of an "ain't it awful" perspective than was hinted at both by Catherine Mann and in this piece by Patrice Hill, a media bench partner at the Rocky Mountain Economic Summit. Instead, I see it as a healthy flow of capital. It is this ebb and flow of capital throughout the world markets that tends to equalize the risk-adjusted interest rates and which sends signals to investors about the global cost of capital.
If the large-scale movement of short-term funds can wreak havoc on a local economy, the players in that economy are not adequately accounting for these potential movements in their decision-making. If you get a bunch of short-term money injected into your economy, there is no guarantee it will stay there for long. Counting on those funds as being anything other than short-term funds can lead to bad decisions.
My attendance at the summit was supported by several sponsors, including the Department of Economics at The University of Regina.
I usually detest the spectacles called all-star games. When I was a kid, I loved seeing all the stars in a game, but by the time I reached 20, the thrill had gone. And as the years passed, the spectacle part became especially distasteful as:
mediocre players from bad teams were added to the all-star teams to fulfil the quota that there must be a player from each team
managers selected far too many players from their own teams (e.g. Cito Gaston!)
the game's outcome determined home-field advantage for the World Series.
the size of the rosters grew so that the teams are far too large.
For some odd reason I decided to watch the game last night. If the temperatures had been lower here in London, Ontario, I'd have gone to watch the local team play instead. Also I think that because the Blue Jays had four players there, that created a bit more interest for me.
I'm sort of glad I did. It was a well-pitched, well-played game. It helped that we didn't watch much/any? of the pre-game hoopla. It also helped that although the Blue Jay batters made outs all the time, the Blue Jay pitchers did well in their brief appearances. It helped, too that the Tigers players generally played well.
But overall I actually enjoyed the game. And that surprised me.
Today I decided not to spend every waking moment on my computer. I shut it down to read Calico Joe by John Grisham, and I'm glad I did. I have plenty of e-books, and I like reading books on my phone or on my iPad, but I also find with e-books that I keep checking my e-mail, blogs, and Facebook far too often. This was a good break for me.
Calico Joe is about a baseball player, a young phenom who made it to the bigs but didn't last very long. The story is told in the first person by Paul Casey/Tracey, the son of a sometimes-okay pitcher for the Mets. The story really is about Paul and his father Warren as much as it is about Calico Joe.
Calico Joe is VERY well-written. The word choice, the flow, the subtle humour, and the human warmth of the novel all made it a very enjoyable read. It does not have nearly the suspense of, say, Bleachers by Grisham but it has the same human appeal told in a similarly retrospective manner. And it doesn't have coming-to-grips-with-life phase that is in Playing for Pizza, also by Grisham, and yet it has much of the same love of living that was in that book, which I reviewed here.
I like most (not all) of Grisham's novels. He has a captivating style for sure. Like many of his mysteries, Calico Joe is set primarily in the South, but much of the reflection is about the life of the Tracey family in White Plains, NY, as well. Grisham's admiration for the hominess of the south comes through, as does his wariness of small town living, where everybody knows your business.
The book is really about "the code" in baseball, a set of unwritten rules about how one must play the game, and what must be done to enforce those rules. It is also about the depth and shallowness of human relationships.
I really liked Calico Joe. I liked it as much as I liked Bleachers or Playing for Pizza. Taken as a group, they make an excellent sports trilogy from John Grisham.
Back when I was an undergrad and again when I was teaching money and banking, we taught that the Fed had three tools it could use to control monetary policy for the United states:
Open market transactions
The discount rate
changing the reserve requirements of commercial banks.
My, how times have changed.
Listening to the Charles Plosser and James Bullard, presidents, respectively, of the Philadelphia and St. Louis Feds, it now appears that the Fed has three different tools of monetary policy:
the Federal Funds rate (the rate charged in the overnight lending market... most likely an evolutionary development from the discount rate). The Fed has to engage in open market transactions to manipulate this rate.
Quantitative Easing. These are just open market transactions, but instead of the Fed's buying (or selling in some instances) Treasury Bills in the open market, QE is done with longer term Treasury Bonds and with Mortgage-Backed Securities [ 8-( ]. The latter is also referred to as the "asset purchase program". It has had the effect of keeping long-term interest rates below what they might otherwise be. It has also had the effect of bailing out the holders of many of the MBSs and of keeping the interest incomes of widows and pensioners depressed. This is the tool/policy about which there seems to be considerable "discussion" at the Fed Open Market Committee meetings, with some members wanting the programme wound down soon (e.g. Plosser) and others wanting to take more of a wait-and-see stance (e.g. Bullard).
Through "forward guidance," the Federal Open Market Committee provides an indication to households, businesses, and investors about the stance of monetary policy expected to prevail in the future. By providing information about how long the Committee expects to keep the target for the federal funds rate exceptionally low, the forward guidance language can put downward pressure on longer-term interest rates and thereby lower the cost of credit for households and businesses, and also help improve broader financial conditions. [EE: groan. Fed policy should be monetary stability, not providing lower cost credit. Transparency might help with stability by cushioning against the effects of regime change.]
Following their December 2012 meeting, Federal Reserve policymakers indicated that they anticipated that a target range for the federal funds rate of 0 to 1/4 percent will be appropriate at least as long as
the unemployment rate remains above 6-1/2 percent,
inflation between one and two years ahead is projected to be no more than 1/2 percentage point above the Committee's 2 percent longer-run goal, and
longer-term inflation expectations continue to be well anchored.
Those are the thresholds that Presidents Plosser and Bullard were mentioning and about which I posted yesterday.
Not mentioned was one of the big killers that the Fed used and which has created all that soaked up liquidity in the form of banks' excess reserves: paying interest on reserves held at the Fed. Changing this rate could have a really big impact on the money supply, price inflation, and aggregate demand.
My attendance at the summit is supported by several sponsors, including the Department of Economics at The University of Regina.
Acting is more than learning lines. Learning lines is
necessary, but just learning lines isn’t enough. How you act and deliver
the lines is what conveys the entire message. Consider the following brief
dialogue:
Smith: Do you want mayo with that?
Jones: No.
Here are some options for what “No” might mean in this
context:
"No" you have asked me that every weekday
for the past 7 years, you moron.
"No" you have asked me
that every weekday for the past 7 years; I like this little ritual we play with
each other.
"No" it just reminded me of a horrible
infectious pimple oozing.
"No" can't you see I'm flirting with this
person right now?
"No" my shrink advised me to do something
daring and different each day.
"No" I'm worried about my cholesterol.
“No” I’m afraid you’ll give me Miracle Whip instead of
real mayo, and I’m embarrassed that I might look picky if I ask about these
things.
“No” I don’t like mayo.
“No” don’t bother me; I’m depressed and don’t want to
talk with anyone.
“No” I’ve given up mayo for Lent.
Etc.
As you can
see, just a simple “No” will not suffice. Jones has a reason for saying
“No”, and that reason will affect how “No” is said. It will also affect Jones’
body language, tone of voice, and mannerisms
For every
line you have, please consider why your character says what s/he says.
Or, conversely, I sometimes find that when I experiment with saying lines in different ways, emphasizing different words and with different nuances, I then discover different subtexts and meanings. Doing this is a very useful exercise even if you feel comfortable with the subtexts you have already decided upon because it encourages you to look even more deeply into the character.
The
explanations that follow the word “No” are referred to as subtext by
many acting instructors. But you will also run across many other terms for
essentially the same concept.
This sort of thing worries me. And with medical costs and queues growing astronomically as the baby boomers age, I'm sure it won't go away. Here's the link [ht MA] and here's the intro to the piece:
According to advance reports, the Government will announce today the end of the deeply controversial Liverpool Care Pathway.
The LCP was written as a treatment programme for doctors and nurses when looking after people who are dying.
Such a programme was deemed necessary because of the all-too-common instances of neglect or inappropriate treatment which dying people were being forced to suffer.
However, the scheme became mired in bitter controversy after relatives and patients claimed that the LCP was being used to accelerate death, or even to kill patients who were not dying at all by starving and dehydrating them until they did, in fact, die.
And from the conclusion,
This obscene brutalisation of attitudes cannot be addressed by tinkering with procedures, by yet more Whitehall directives, nor even by the firing of culpable staff (not that that last outcome ever seems to happen).
We are simply facing nothing less than a moral breakdown: a fundamental collapse of decency, compassion and simple kindness.
These have been replaced in too many cases by hatchet-faced self-interest, an arrogant and unchecked abuse of professional power and a brutal utilitarianism which has substituted a tendentious judgment of usefulness for innate respect for human life.
That this has occurred in the NHS, Britain’s supposed temple of caring, does not merely explode that particular claim for the humbug that it is. It is also a judgment upon a narcissistic society which, in sentimentalising the NHS in this way in order to admire its own compassion and altruism, has, in fact, developed a cruel and callous hole where its own heart should be.
At the Rocky Mountain Economic Summit last weekend, both James Bullard (President of the St. Louis Fed) and Charles Plosser (President of the Phildelphia Fed) discussed thresholds and triggers. They were referring to the view that the Fed should stop its asset-purchase programme (one part of quantitative easing) when the US unemployment rate gets down to 6.5%. They also mentioned a rate of inflation of 2.5% as a separate threshold.
The question that neither of them answered satisfactorily, though, was "what should the Fed do when the unemployment rate does get down to 6.5%? Is that threshold a signal something should change? or is it a hard trigger that will set off some action?"
These questions reminded me of the old "rules vs. discretion" arguments that were so common between the old-school Keynesians and Monetarists. The monetarists wanted the annual rate of growth of the money supply (measured as M2) to be set at 2%, while the Keynesians wanted the Fed to obfuscate use its wisdom to decide what to do.
The modern day version of that debate might be among supporters of using the Taylor Rule on one hand, versus those who want the Fed to have more flexibility on the other.
What perplexed me about the presentations of the two Fed Presidents was that neither had very good or very clear answers about what the Fed should do regarding the 6.5% threshold, though it seemed that Plosser favoured a harder trigger than did Bullard.
If everyone believes the 6.5% threshold is widely regarded as a trigger that will set off a slowdown in quantitative easing, then as we approach that threshold, there will be great speculation in both the press and the markets about if/when the Fed will take action the next month, or the next, or soon. Using the threshold as a trigger can be somewhat destabilizing, if anything, during those months during the approach to the threshold if people believe it is a hard trigger that will set off some kind of action.
Quite likely, despite language to the contrary from both the Fed Presidents, [e.g. Bullard: "a line in sand has to mean something"], neither one of them would favour using the 6.5% unemployment rate as a firm, hard threshold that would set off a huge change in monetary policy. Rather they would more likely (judging from the nuances of their answers to our questions) favour a policy that would begin slowing the asset purchases more the closer the unemployment rate gets to the threshold.... a kind of gradualism. But then, of course 6.5% is meaningless as a threshold. When should the change begin? and how much should be done as the economy approaches this threshold? And given the fuzziness, why even mention a threshold at all?
Plosser would like to begin winding down the asset-purchase programme now and Bullard would like to wait longer because he is concerned about the low measured rate of inflation. But if they're going to start now or next quarter, again it doesn't make much sense to call it a 6.5% unemployment rate a "threshold".
What does make sense, though, is trying to approach something like the Taylor Rule. I realize that the Taylor Rule itself would also create speculation about what the numbers would cause the Fed to do, but that is the case for every reaction function the Fed is seen to exercise. My major variation on the Taylor Rule would be somehow to incorporate expected inflation (derived from the TIPS data) and not use only measured, past inflation for that portion of the rule. As an added plus, these data are available in real time and would not cause the market gyrations during the lead-up and announcements of other economic data.
My attendance at the summit is supported by several sponsors, including the Department of Economics at The University of Regina.
One of the things I enjoyed so much up on Snow King Mountain were the wildflowers. They were in abundance in many places. This photo was taken along Josie's Ridge Trail.
After my doze near the summit, I looked over and was quite taken with this:
I really like these little white flowers; I took photos of them on Thursday, and here is another:
And there was something that looked like a huge, oversized dandelion.
I knew from past experience that going down would be painful. In fact I seriously considered the suggestion from Larry Morgan that I take the chairlift down. But I didn't.
At the same time, I didn't want to walk back down the way I had hiked up. I'd seen those views several times. Also, I remembered that on Thursday I had really enjoyed the views and scenery to the west of the chairlift terminus. So off I went, back up to the chairlift terminus, check the maps, and head off to take the trail called "Josie's Ridge."
It was fabulous!! I loved the wind-swept openness. It reminded me so much of my first experiences with wind-swept openness on Plateau Mountain maybe 25 years ago, followed by hiking in the Yorkshire Dales three different times and most recently in the coulees in southwestern Saskatchewan.
But what I like may not show up very well in the photos.
It was glorious. It was wind-swept. It was open. And there were no other hikers AT ALL on this portion of the trail. I sat on this rock and just soaked in the experience as much as I could.
It was a very successful hike for me. The sun was out much of the time. I was able to make the climb both up AND down. My muscles are a bit sore today, but it isn't bad. And the scenery, especially the type I like, was great.
After having hiked up the trail to near where the chairlift ends, I still had a ways to go to get to the very summit of Snow King Mountain. The last photo from the previous post shows the rest of the hike that awaited me:
As you can see, the summit is covered with communications towers.
and there are no-flippin'-trespassing signs there. Argh.
So I stopped. Took some more photos. And took a nap.
Here are some of the photos I took.
Looking toward Jackson and the Tetons (already topped with clouds):
Looking south from near the summit.
And looking west from near the summit. You can see the chairlift terminus and maybe even the windsock (with luck) in this photo.
Since I was not allowed to go the last 20 feet to the summit and was quite tired, I lay in the "meadow" (weeds?) rested, dozed, and maybe even slept a bit. It was very pleasant.
I did it. I was so upset with myself for NOT having hiked up Snow King Mountain in Jackson, Wyoming, on Thursday that yesterday I walked up the main trail and then on to the summit. The elevation change was about 1700 feet, about the same as the hikes I've done to each of the Three Peaks in the Yorkshire Dales. Here is what the hill looks like from below (actually I took this photo on my way back from having come down on a different trail).
The chairlift goes up the main clearing, but the trail goes off and up through the trees quite a bit.
It's a well-used trail, especially on weekends. I wasn't the slowest person on the trail, but mighty close. I stopped often to take photos and to drink water from my 3L camel pack water bag. I was so slow that some of the people who passed me going up, passed me again as they were coming down while I was still on my way up. Here are a couple of the too-many photos I took:
I was not very far up in the above photo. Here is probably the best photo I took of the Grand Tetons. It had rained earlier in the morning, and the clouds had not yet covered the mountains (as they did later in my hike).
Here is look back down the trail from about halfway up. That's Snow King Resort at the bottom of the hill.
Once I got up to near where the chairlift had taken me on Thursday, I saw this. Why didn't I remember my kite for this trip???
But instead of going in the direction of the chairlift, I wanted to ascend to the summit. I still faced this:
The old weather-worn sign says, "Road Closed. Alternate Route" with an arrow pointing to the right. I could look up and see the road was very steep and looked almost washed out, but I could also see that if I wanted to reach the summit then I still had a ways to go.
I'll cover that in the next posting. But first, (of course)
Notice that this brief is called “learning lines”, not “memorizing lines.” Everyone I know says that it is easier to memorize lines if you learn them in the context of the actions and the character’s intentions for each situation. One of the best devices for learning your lines is to study your character. Be sure to explore the questions distributed in the previous brief, and use your answers to help you understand the context of each line.
First, learning lines takes time and work. Few people are able to do this without an investment of considerable time. Begin early by highlighting your lines and actions and by working on character development all the time.
Actually, I don't highlight the lines anymore. I just highlight the name at the beginning of each line and every time it appears in connection with some action.
Second, some people find that using tape recorders helps; others like to bounce lines off a partner who reads the cues. If the technique you’re using doesn’t work, try something else. When I was commuting to work, I found that reading my cues into a voice recorder and pausing before reading my own lines worked well. I then worked with the recording while I was commuting. Now that I no longer commute, working with my wonderfully helpful and insightful wife has been a great help.
But not all people like this approach. Norman Schwartz says, “I very much disagree with the usual method which asks the actor to immediately set about memorizing the text line by line. I find that "learning by rote," as it is sometimes called, is not the best way. Rather than memorize by rote, I suggest that you begin by KNOWING the character by imagining [him or] her.” .... which is why that first brief was about getting to know the character.
He continues, “As you answer these questions [those in brief #1], you will by necessity have to summon up some vivid images of the life of the character, and even create a short history. The answers to these questions are not necessarily to be found in the script, of course. Essentially, they are in your imagination and your sense and knowledge of life. The more you exercise these muscles of imagination, the more you KNOW. This is a good way to put it: "exercise the muscles of imagination."
“It has been my experience that the more you know, the easier eventual verbal memorization becomes. While some actors memorize easily, many others—some of the greatest -- have great difficulty. Whatever your case, you will not be [and probably were not] chosen for [any role because of] your facility at memorization. (No one has ever won an Academy Award for that!) If you are chosen to play [a given role], it will be because of your ability to convince the director and his/her staff that you are the character they are looking for …”
Finally, you must continually re-read the play and review your lines, even if you think you know them. Doing so will have two benefits: (1) you will keep studying the characters, not just yours, and, as a result, you’ll give a deeper, richer performance; (2) you will relearn lines that you’ve learned incorrectly.
Once you have a reasonable grasp of the lines, you can cement them even more by running them in funny accents and voices, running them while pottering around the room, standing on your head, or working out on a treadmill, and running them with your friend repeating only the last five words of every cue line without any intervening text. [digression: an agent in Toronto once told me that when you see someone walking down the street talking to themself, you know they're either crazy or an actor.] Make up other games as you like. This should help prevent the following exchange from ever occurring in rehearsal:
You: But last night I knew my lines backwards!
Director: And that's exactly how you said them.
If you find that you are having consistent trouble in certain spots, you may need to work with your director to break through the block. Unless it is a very badly written play, there is probably a clue in the text itself or the surrounding text that you are missing. Once you have a better sense of the line's meaning and purpose (and its relationship to the previous line, whether yours or someone else's), the block should disappear.
Sometimes the problem is that a character's lines are written in a rhythm very different from your own [many actors find this to be the case with Shakespeare, Marlowe, et al.]. In that case, you have to first acknowledge the problem, and then will yourself to overcome it. I don't know of any tricks that will magically make that particular difficulty disappear, though perhaps someone else will have some good ideas.
Sometimes the problem can be solved with an adjustment of physical business (perhaps your blocking, perhaps something you are doing with a prop), but again, you need to work that out with your director. Do check to make sure that you are properly relaxed and centred, and that your weight is evenly distributed except when it absolutely needs to be on one foot. You'd be surprised how many line problems are solved by shifting your weight to the correct foot or evenly to both!
Same for breathing--don't forget to do it! Although not all playwrights are as generous (and brilliant) as Shakespeare in providing you with organic internal breathing cues (so that you can breathe in a natural place and come in on cue without leaving large pauses for trucks to drive through), in most plays you can usually find good places to set yourself up with a good breath if you study your cues as thoroughly as your lines. That helps line memorization, too, by removing one more obstacle to making sense and keeping pace (rhythm, not speed) up, to say nothing of getting oxygen to your brain.
Don't forget basic mnemonic devices. If your lines contain series of words that you keep getting in the wrong order, try to find something you can use as a mental map to get you through. Do the words occur in alphabetical order? Or skip from A to D to B to E? Do they range from weakest concept to strongest? Relate to big objects, then small ones? From containers to the things contained? These don't have to make sense to anyone but you. Just pick some aspect of the words as words that you can relate to a consistent theme of some kind, whether spelling, grammar, rhetoric, number of syllables, flavour, smell--whatever.
The 5th Annual Rocky Mountain Economic Summit was excellent. The speakers were good, and they came packed with information and ideas. What they said may not have been new to everyone there, but much of it was new to me.
The presentations provided enough information that I'll want to see about acquiring some of the power-point slides so I can study and look at the material with more leisure and in depth. The organizers provided a good, tight schedule. And the various forms of entertainment (including a magician working with the Governor of Wyoming) was generally good fun.
Great thanks to David Olsen for inviting me to attend the Summit.
Now to review my notes and start looking for some relevant websites.
My attendance at the summit is supported by several sponsors, including the Department of Economics at The University of Regina.
No, I didn't. But there were about five of them around yesterday. In the morning, I had my picture taken with one of their new sedans. Rolls Royce had brought 2 of these to the Summit, and there are only 4 of them in the world.
Then last evening, during the cash-bar reception hosted by Rolls Royce, I sat in one of their convertibles. List price "about $500,000. With all the options, it could get up to about $570,000."
Yes, the doors do open that way. It's much easier to get in and out of the car with doors opening like that.
And behind the wheel (I felt as if I should have been wearing a tam):
One topic I didn't have a chance to pursue and that has puzzled me and led to some discussion among friends has to do with savings in China, the flow of capital into the US (and the west in general).
We have seen this phenomenon at work for quite some time. There have massive capital inflows into the US as China exports more goods in exchange for coloured pieces of paper.
In the interview session, I asked Jim Bullard, "Why have global interest rates been so low for so long?" He said "I honestly don't know for sure, but we can go back to Alan Greenspan's statement that there has been a glut of savings in the world, and it started in about the year 2000." In other words, he attributes the long period of low interest rates to a dramatic increase in the supply of lendable funds.
When I asked Charley Plosser the same thing, he looked at the demand side instead. He said that there are just no better options out there. This is consistent with the position of many people who see the US gubmnt debt as a safe haven, which I guess it is in comparison with so many other economies.
But what will happen if/when China faces a credit crunch, as seems possible if not likely? One of my former students who works in finance told me that won't be a problem because the world is SO awash with liquidity from everywhere that even if the funds from China are diminished, it won't make much difference.
I'm not sure I agree. I see a potential black swan out there. If China were to suddenly face a big liquidity crunch, that would affect not only them, but would withdraw a sizeable chunk of liquidity from the US and other economies, which would surely drive interest rates up. The only question is, "how much?"
And to that extent, I'm not nearly so optimistic for the long run as many of the speakers were at the summit.
My attendance at the summit is supported by several sponsors, including the Department of Economics at The University of Regina.
I was surprised that up until the last presentation there had been little mention of the relationship between the Chinese and US economies. There was some mention of China now and then, but it was generally only in passing.
Michael Drury on China. A fun presentation with lots of surprise statements.
The CPI in China is near 2%; also the PPI is low, too, near zero. Inflation has not run rampant there....yet.
Growth is slower than expected and than it has been. That shows up in real GDP, rail shipments,
electricity production.
"The people in power in China are not all that different from those in Russia. It’s a kleptocracy." Whoa. Yes, he really said that. And then he followed it up with,
"Don’t invest in the Chinese stock market because it doesn’t
really exist."
As a result of these observations, he is skeptical about the effectiveness of proposed banking
reforms.
It is and would be a difficult project breaking up the state-owned
enterprises. There are too many vested interests.
Environmental controls are really important. Pollution in the major cities is serious and Chinese officials are trying to do something(s) about it.
Fun concluding note (paraphrased):
The most important price in the world is not the price of oil. It is not the price of gold. It is the price of pork
in China, which affects the world price of corn. The two move together.
My attendance at the summit is supported by several sponsors, including the Department of Economics at The University of Regina.
The interview sessions with Jim Bullard and Charley Plosser occurred right after their formal session, and went on for quite awhile as about six members of the media asked questions. As a result, I missed some of the final session of the day which was directed toward investment strategy. So here are a few cryptic notes:
Martin Barnes on Investment strategies
Bonds aren’t good. Cash isn’t good. Stocks may not do any
better unless profit margins continue to grow.
A stunning (though I guess I'd known it) fact: Some institutions require funds to pay out 5%/year. ARGH. Encourages too
much risk-taking. Why would anyone require annual payouts higher than the real rate of interest. It has to erode the working capital.
Stockmarkets will be fine if/when/as interest rates go up SO LONG AS at the same time the economy is stronger and growing.
On a return basis alone, it looks as if buying stocks from Japan, Spain, Uk, Italy, might be good, but of course there are greater risks, too. Well, duh. Australian stocks might be a better value over the long term, but he thinks the US still looks like the best bet of bad lot. Near the end, he presented a great graph on long-run real commodity prices, showing constant long-run decline (recalling for me the famous Julian Simon-Paul Ehrlich bet.
Kozo Koide again. Japanese Economy and implications for
investment.
Koide's second presentation seemed to be a presentation defending Abenomics, interestingly, Catherine Mann had said she doesn't subscribe to during her morning presentation. Too bad they weren't on the same panel!
Japan has suffered from recession, slow growth, and deflation, but Koide forecasts there will be positive cpi growth, lessening the deflation and eventually moving to a positive rate of inflation of possibly as much as 1.5% in two years.
He presented fairly compelling graphs comparing the purchasing power parity [PPP] exchange rate with the foreign exchange [FX] rate. For the past 20 years, the Yen has been overvalued and
Korean currency undervalued when PPP rate is compared with FX rate.
In one of the first mentions of China all day, Koide said China faced rapid CPI (as he constructed it) increase before
wage inflation, which has caught up.
In another graph, he showed that real labour earnings in business in
Japan are the same today as they were in 1985.
My attendance at the summit is supported by several sponsors, including the Department of Economics at The University of Regina.
Jim Bullard is a young-ish economist who has made quite a name for himself in the financial press. He is friendly, and he boils things down to levels that most non-economists can understand.
His presentation followed Plosser's, and so several times he was able to make reference to things Plosser had said. Of course they both had a good idea what the other was going to say since they have both been with the Fed for a number of years.
From my notes:
Bullard's theme is that there is more optimism now about future economic conditions,
and that optimism, more than anything else, is likely what has caused interest rates to rise over the past two months.
He presented a great chart showing that real yields have risen and are now
positive, even for long-term gubmnt bonds. He followed that with another great chart showing how expectations about Federal Funds [FF] rates
have risen considerably over the past two months.
Bullard explored three distinct hypotheses about why interest rates have risen in the past two months:
Past data indicate a strengthening economy, leading to a higher demand for lendable funds.
Inflationary expectations have risen, leading (via the Fisher Equation) to higher nominal interest rates.
Increased optimism about the economy has led to an increased demand for lendable funds.
Bullard argued that the first two were either not correct or were less likely to have been important than the third.
Economic data from past 3 quarters (going back to last fall) has notbeen all that good.
Not the reason for rising rates. The labour data are mixed with the unemployment rate falling, albeit slowly, but the labour force participation rate continuing to decline; also, real growth has been slow.
Have inflation expectations Increased? No. We are not going to see a run up of inflation with Europe in recession
and China slowing. I wanted him to go further on this but he didn't.
Growing optimism has led to rising rates. Many, but not all, of the factors that slowed the economy are waning.
In the question period, both agreed the Fed needs to be ruled based and less "we'll have to wait to see how things shape up." They both said that discretionary monetary policy creates confusion and the Fed should make its reaction
functions clearer. Hungh. Easy to say.
In the post session interview, interestingly, Bullard disagreed with Plosser, who believes the Fed should begin unwinding its asset acquisition programme slowly now or soon. Instead Bullard wants to wait until the next quarter to make sure the economy is continuing on its path to recovery. To be blunt, Bullard says "rules" but he seems to favour discretion. He would likely respond that his rule is a bit more complex and more conditional; at least it seemed that way in the interview session.
My attendance at the summit is supported by several sponsors, including the Department of Economics at The University of Regina.
I had a chance to speak with Charles Plosser later in the evening at a reception. During the afternoon interview session, I had asked him why interest rates are so low. He said then that basically demand for lendable funds was low. He did not mention the glut of funds from Asia as a contributing factor.
But in our later conversation I asked him more about the Fed's policies of quantitative easing and producing tonnes more high-powered money. He said then, elaborating on points he had made in his talk and in the interviews, that the banks are holding a LOT of excess reserves. [Note to David Laidler et al: isn't this a key feature of a liquidity trap?] Then, and this was one of the points I was hoping to get to, I asked him if all those excess reserves wouldn't cause inflation over the next 5 to 10 years, and if so, why markets weren't building that into their inflationary expectations and driving up long-run interest rates.
He agreed and expressed concern about all the excess reserves. He said, somewhat in bureaucratese, that the Fed's view is that as demand for lendable funds increases, things could get out of control quickly, but that the Fed has assured everyone that as that even begins to happen, the Fed will implement policies to soak up those excess reserves. It was clear he doesn't swallow this story 100%.
A photo I tried to take from the distant media bench during his presentation:
My attendance at the summit is supported by several sponsors, including the Department of Economics at The University of Regina.
Plosser is a distinguished economist who became known for his work on "real business cycles". That work fits nicely with the views he espoused this afternoon. My notes:
It is time to exit our asset purchase programmes. And return to "normal monetary policy."
The views among the members of the Fed Open Market Committee [FOMC] look a lot like those of the audience shown here in the poll taken just before he spoke. Plosser thinks this is probably a a good thing. He seems to like the pluralism that exists on the committee.
With the Federal Funds rate near zero, the Fed bought long treasuries and Mortgage backed securities [MBS]s to put downward pressure on long
rates. [EE: of course it nothing to do with bailing out the holders of those MBSs who were in big trouble at the time.]
As might be expected, Plosser emphasized the importance of expectations. The FOMC
statements affect these. Plosser calls these FOMC statements “forward guidance”. [EE from a rational expectations (or any other expectations) perspective, credible advance notice of a regime or policy change will affect people's behaviour today].
The FED adds $85b to its balance sheet each month. Most people in the audience took this in stride. I gasped audibly.
One of the rules Plosser would like the FOMC to be clear on: At 6.5% U, FOMC will consider raising Federal Funds [FF] rate.
Favours a more rule-based approach to discretionary
decisions. This makes it clearer to decision-makers what they can and cannot count on.
Plosser implied that he disagrees with policy that continues to ease,
albeit at a lower rate, as the economy grows. He argued that the 10 year bond rate began to rise back when the May %U rate came out, and not just in June when Bernanke's statements caused some market concerns. In an interview afterward, he said long rates were low because economies were in recession, and they began to rise as people became more optimistic about the future for economies.
He projected the unemployment rate in the US would drop to 7% by end of year. And he went on to argue that the FED must slow asset
purchases soon and cease them by the end of the year. Otherwise they will face greater difficulties unwinding the programme (which involved buying long-term gubmtn bonds and MBSs) and that could lead to higher than desired inflation.
Plosser said there is too little discussion concerning the risks of keeping accommodation
(asset purchases) in place too long. “Just because the financial markets like
what we are doing at the present time doesn’t mean that what we are doing is
good for the economy in the long run.” Also, he dislikes the distortions introduced into the financial markets by the asset purchase programmes.
He cautioned, though, that managing expectations is easier said than done. And
credibility is important if forward guidance is to work. You can't announce one policy and then not carry it out.
A big problem, said Plosser, has been that the FED has offered a variety of changing targets and forward
guidance (EE: this is what academic economists call "regime uncertainty"). E.g. changing dates for when FF rate might
change. FOMC says “Thresholds are not triggers.” Plosser says “Effective
forward guidance requires credible commitments.” He lamented that since 2008 the rulebook was
thrown out. Discretion was the rule.
To what should the FED commit and how?
Wind down asset purchases by the end of this
year. The costs now (and expected) outweigh benefits.
FOMC should commit to its forward guidance re FF.
E.g. when U is 6.5% it must not be easing so much if at all; or if the rate of inflation is 2.5%, the Fed must tighten.
And this is crucial to his views, which he emphasized in an interview: Provide information on what will happen after
the triggers are reached. Be clear about what the FED will do.
During the question period he said: "long and variable" is
replaced by "slow and unpredictable." I got a chuckle out of that, but it's probably an economics inside joke. Over 40 years ago, when someone asked Milton Friedman about the length of the lags in monetary policy, he said "long and variable."
He also pointed out that the difference between the tech and
housing bubbles was leverage. No foolin'.
And (in his mind) FED is concerned about
reflating bubbles.
Overall, a careful but very informative speaker.
My attendance at the summit is supported by several sponsors, including the Department of Economics at The University of Regina.
Before the afternoon sessions began, the roughly 150 [update: closer to 220] members of the audience were polled once again, this time on their views about the Fed.
1. How clear do you think the Fed has been about its policies?
42% extremely clear
45% Not sure. Seems a bit fuzzy.
13% I don't understand what they're doing, but I know we have a mess.
2. By December 31, 2013, the Fed should
36% leave interest rates and policies unchanged.
44% raise interest rates and reduce the monetary stimulus.
3% lower interest rates and expand the Fed's balance sheet.
18% I don't know.
3. What do you think the Fed will actually be doing by December 31, 2013?
47% leave interest rates and policies unchanged.
27% raise interest rates and reduce the monetary stimulus.
8% lower interest rates and expand the Fed's balance sheet.
This second session was about banks, with two presenters: David Hemingway (Zions Bankcorp) and Axel Weber (UBS/Booth School).
Hemingway is from a large regional bank. He noted that older clients prefer branches, younger ones use the internet and wonder what branches are for. His bank tries to maintain both. He resents an apparent large tax break that credit unions have. He sees regional banks as successful in relationship banking and in niche banking. Zions has a profitable credit card business, but doesn't solicit new customers via mail. Quote of the Day: “The biggest waste of trees on the planet is
junk mail for credit cards.”
Axel Weber addressed in a very general way the problems facing banks that are subject to many different local, regional, and national regulations. One example: the capital requirements in Switzerland are 19% but only 10% generally in the rest of the world. He says UBS is winding down its proprietary investment banking including its proprietary derivative positions. His expectation that doing so will create less appearance of a conflict of interest.
My attendance at the summit is supported by several sponsors, including the Department of Economics at The University of Regina.
The first session this morning was about economic conditions. Three of the four were excellent. But the first presentation by Paul McCullin was bizarre, and horrid.
According to McCullin, we went into a liquidity trap in 2007. I know lots of economists who would deny that (including me). He then made the impossible assertion that the Fed policies bailed us out of the liquidity trap. Huh? Monetary easing won't work if we're in a liquidty trap, so either we weren't in a liquidity trap or quantitative easing didn't work. The guy has a great presence, but I was disappointed.
The next three presentations had massive information overload. Julian Callow (Barclays) was superb. He presented numerous charts to show that while the private sector in the US has been deleveraging, the public sector hasn't. His main concern, however, was the high unemployment rate in southern Europe, and doesn't really see an easy way for those countries to grow fast enough to deal with that problem, especially given their debts, their aging populations, and their very unfavourable investment climates.
Catherine Mann (Brandeis) presented material showing that quantitative easing in the US has led to big swings in short AND long term financial capital flows into emerging markets. So long as it leads to foreign direct investment, that's not so much of an issue, but it puts a strain on the developing economies otherwise, and much of the movement from the Fed's 2nd futile attempt at "operation twist" was what she termed "hot money" -- very short term flows.
Those three were followed by a brief presentation by Kozo Koide (DIAM) who presented tonnes of data about the Japanese economy. Big points: the credit multiplier has shrunk dramatically, meaning that the big increases in the monetary base have been more than offset by a drop in velocity. He concluded with some indications that inflationary expectations have turned upward and are moving up toward zero.
My attendance at the summit is supported by several sponsors, including the Department of Economics at The University of Regina.
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