— Why Can’t Men Be Friends? | Wesley Hill (via ayjay)
I imagine a future in the church when the call to chastity would no longer sound like a dreary sentence to lifelong loneliness for a gay Christian like me. I imagine Christian communities in which friendships are celebrated and honored—where it’s normal for families to live near or with single people; where it’s expected that celibate gay people would form significant attachments to other single people, families, and pastors; where it’s standard practice for friends to spend holidays together or share vacations; where it’s not out of the ordinary for friends to consider staying put, resisting the allure of constant mobility, for the sake of their friendships. I imagine a church where genuine love isn’t located exclusively or even primarily in marriage, but where marriage and friendship and other bonds of affection are all seen as different forms of the same love we all are called to pursue.
By shifting our practice of friendship to a more committed, honored form of love, we can witness—above all—to a kingdom in which the ties between spiritual siblings are the strongest ties of all. Marriage, Jesus tells us, will be entirely transformed in the future, barely recognizable to those who know it in its present form (Matt. 22:30). Bonds of biology, likewise, are relativized in Jesus’ world (Mark 3:31–35). But the loves that unite Christians to each other across marital, racial, and familial lines are loves that will last. More than that, they are loves that witness that Christ’s love is available to all. Not everyone can be a parent or a spouse, but anyone and everyone can be a friend.
"When I got my library card, that’s when my life began." — Rita Mae Brown.
The financial crash of 2008 surprised almost everybody—the investment banks, the government, and the Federal Reserve, not to mention millions of American homeowners. In The Big Short, Michael Lewis tells the story of a handful of investors who saw it coming, who read the tea leaves in the mortgage market, recognized that it was unsustainable, and decided to bet against the system. They earned hundreds of millions of dollars off one of the worst economic collapses in history.
Lewis dives into the underworld of mortgage backed securities (MBS), collateralized debt obligations (CDO), and credit default swaps (CDS), explaining them all in incredible detail. Despite the technical discussion, if you stick with it Lewis rewards you: he manages to weave a story so fascinating that it reads like a thriller novel. I devoured it in just a few days.
There were a lot of players involved in the system, some who knew what was going on (to a degree), and others who were just cogs in the machine with no understanding of its inherent fragility: the banks that realized they could originate crappy loans and sell them on the secondary mortgage market; the ratings agencies (S&P and Moody’s) who competed against each other to get paid by the investment banks to rate their products highly—and thus did so without appropriate understanding or incredulity; the investment bankers who packaged up sub-prime loans into securities and got them rated as AAA assets that were considered to be literally risk-free when they were actually ticking time bombs; the same bankers who sliced and diced those securities even further and managed to turn the very worst of the sub-prime turds into seemingly shiny gold; the very small group of traders and investors who scoured prospectuses and other esoteric financial documents to discover that the emperor had no clothes, and so decided to buy up the equivalent of insurance that would pay out if (when) the markets crashed.
One hedge fund manager, who had gained respect with his genius stock picks, stumbled onto the sub-prime problem and bet against the market. The problem was that he couldn’t get anybody to understand what he was doing, angering his clients who thought he was destroying their capital and almost giving him a nervous breakdown. When the chips fell and he ultimately won them billions, literally nobody called him to congratulate him or apologize for doubting. He almost had a nervous breakdown and shuttered his fund shortly thereafter.
Three guys with zero investment experience somehow stumbled into an understanding of the state of the market. The problem was, they were novices, and none of the “experts” grasped what these guys were seeing, so they kept second-guessing themselves. Ultimately, however, they bet big and won even bigger.
Reflecting on the financial crisis in the 1980s, to which he had a front-row seat, Lewis writes:
"The market might have learned a simple lesson: Don’t make loans to people who can’t repay them. Instead it learned a complicated one: You can keep on making these loans, just don’t keep them on your books. Make the loans, then sell them off to the fixed income departments of big Wall Street banks, which will in turn package them into bonds and sell them to investors." (23-24)
To be fair, some of the Wall Street folks operated the way they did because they simply hadn’t worked in an environment when real estate wasn’t increasing in value; they were short-sighted, to be sure, but not nefarious. But there were plenty of others looking to screw over poor Americans by giving them loans that could never be justified by their credit history or annual incomes, enticing them with “teaser” interest rates that would skyrocket in a couple years and force them to either default or refinance—the latter of which would bring in new profits from fees. As long as the market continued to go up, the house of cards stood. The system became so overleveraged that the whole thing could potentially crash not because of an actual drop in market value, but simply a decrease in the rate of growth!
Because the government bailed everybody out (except Lehman Brothers, that is)—even those who didn’t need it—Lewis points out that the distinguishing characteristic of this financial crisis is that none of the worst players were punished. CEOs who oversaw debilitating losses stayed employed or left with huge bonuses; one Morgan Stanley trader lost $9 billion all by himself, and walked away with millions.
Lewis doesn’t attempt to explain the fundamental reasons for the build-up and crash. The closest he gets is to disagree with his former boss (and a former investment bank CEO), John Gutfreund, who thought the cause of the financial crisis was “simple”:
'Greed on both sides—greed of investors and the greed of the bankers.' I thought it was more complicated. Greed on Wall Street was a given—almost an obligation. The problem was the system of incentives that channeled the greed.
He comes so close, but doesn’t seem to want to dig for “the incentives that channeled the greed.” The answer, as best I can figure, is this: Pressure by the federal government (beginning in the 90s) to drastically degrade lending standards in pursuit of reducing poverty and increasing home ownership among the poor, combined with cheap money from the Federal Reserve and an implicit guarantee of Fannie Mae, Freddie Mac and even the “too big to fail” corporations. The U.S. government was the root source of the moral hazard that enticed the financial markets to systematically pillage the American economy. This fiasco is a resounding affirmation of economist Henry Hazlitt’s warning about watching out for the unintended consequences of policies undertaken in good faith and benevolent intent.
Dana Loesch: “Poverty is a choice.”
Never heard of this lady before, but she nails it.
Jackson is apparently incapable of uttering a coherent sentence—and when he does manage to dribble out something grammatically correct, it’s race-bating demagoguery. How pathetic and embarrassing to have this man as a spokesman and supposed authority on racial issues.
I would rather have a mind opened by wonder than one closed by belief.—
Gerry Spence, How to Argue & Win Every Time (via scu)
File this under #non-sequitur. This isn’t even a coherent thought.
As Chesterton said somewhere, the purpose of an open mind is to close it on something solid. When it comes to belief, it’s not whether but what.
Nickel Creek on Austin City Limits tonight, streamed live on YouTube. Great stuff.
Nickel Creek is live tonight on Austin City Limits. Should start in about 2 minutes.
So what is the best way to discourage [a company like] Goldman Sachs from taking foolish risks that will lead to its bankruptcy? Two main alternatives: (1) the federal government could write rules of incomprehensible detail and complexity to try to account for every possible eventuality and so prevent collapse at Goldman Sachs or rescue it before it collapses; or, (2) the government could clearly and consistently maintain the policy that the companies and executives that take risks in the hope of future benefit get to enjoy those benefits if they succeed, but must bear the weight of the consequences if they fail. The first option would almost certainly destroy the institution being regulated. The second option, however, would create market discipline, which is the greatest regulator, because it aligns incentives correctly. It strengthens and clarifies the key market signal. Any secondary regulations imposed by government should strengthen that key signal—namely, that you gain when your risks pan out, and you pay the consequences if they fail. At the very least, it should not interfere with it. Unfortunately, this commonsense market regulator has been mostly scrambled and subverted by a government preference for option number 1—our old friend, the moral hazard. (225)—
"Market discipline is the greatest regulator because it aligns incentives correctly."
Gilder truly is a visionary, one of the most interesting and (small ‘p’) progressive thinkers of our time.