“I’m so bored. I hate my life.” - Britney Spears

Das Langweilige ist interessant geworden, weil das Interessante angefangen hat langweilig zu werden. – Thomas Mann

"Never for money/always for love" - The Talking Heads

Wednesday, November 21, 2001

Limited Inc has passed the thousand hit mark. We probably passed it a while ago -- we only put a site meter on this page a month after we started it. Of course, the site meter also reads our own visits to the page, so subtract that from the total, add the unknowns that might have visited here, and we figure the sum is close to a thousand. If we had money, I guess we'd have the more sophisticated meter tool that would discount our visits, and make useful statistical chop suey for our marketing department, and suggest fabulous ways to promote ourselves. And would even, in its spare time, write these damn posts.
Unfortunately, as noted in a previous post, we are going through a bit of a famine. In terms of money. In terms of lack of money. In terms of not being paid for our work. In terms of thinking that maybe, all the checks that should be winging our way crossed with anthrax soiled mail, and have been thrown away. So we can't afford another site meter, or even a pair of running shoes, or a steak dinner, or a bottle of tequilla, at the present moment.
Such is fate. Happy Thanksgiving, everybody in the house!

Steven Glover in the Spectator discusses what we didn't know and when we didn't know it in Afghanistan. Points for dispassion -- the current fashion in punditry seems to require that the writer bark, whine and growl on the page, and finally pee on his foes, all the better to show you his convictions. This has arisen from the point-counterpoint tv format for mixing together ideas and viewer interest, I suspect. Glover remarks that the press almost universally gave the Northern Alliance no chance, and credited the Taliban with a great, mystifying resilience. Both of those positions have been overturned by circumstances. He also claims that the bombing was much more efficient than the anti-war side gave it credit for being.

The latter is the only part of his article with which I have a problem. To assess how good the bombing is, one would have to get through the great blank thrown up by the American military. Actually, one would also have to have the desire to get through that great blank; given the servility of the press corps towards all things military since 9/11, this would be to expect supererogation on the part of some journalist, and honesty in his editor, which is the kind of fortunate conjunction we just haven't seen since, well, the high 80s. Those who did press into the country carried back pictures of kids and old people wounded by high explosives dropped continuously by American airplanes. Perhaps those high explosives did some military good in the beginning. And it might be the damage so inflicted on the Taliban was irreparable. One thing we can surely say about the Taliban is that it has no depth. Or rather, its resource was Pakistan. Cut off from Pakistan, it crumbled. Did the bombing hasten the collapse? If we rely on previous situations -- if we take Kosovo as a guide -- we'd have to say that bombing without let up a civilian population that is closely integrated with a military organization can lead to a military breakdown. But there might be a question of costs yet to arise -- because that kind of destruction can leave in its wake consequences that will bite our ass. There are advantages to processing territory by way of traditional soldiery that aren't considered by the TAC people in the Pentagon. One is that a population is more likely to consider its opponents honorable if they can see them.

In any case, it is worth pondering Glover's last graf:

"My feeling is that almost all of us �reporters, pundits, academics and politicians � know much less about Afghanistan than we think we do, and perhaps less than we give the impression of doing. Let us be frank: most of us had never heard of Mazar-i-Sharif until a few weeks ago, and yet we have been pontificating about its strategic significance as though we were familiar since childhood with the curve of its hills. In the absence of detailed knowledge, we have fallen back on theories and fragments of history about the Northern Alliance recycled by journalists who probably do not know what they are talking about. In short, we have been peering through a glass pretty darkly. The lesson I will draw from the rout of the Taleban is that none of us has much idea what is going to happen, and that the Sun�s celebrations may therefore possibly be premature."

Tuesday, November 20, 2001

Gretchen Morgenstern's column this morning begins with the impressive run up in the stock market. She notes, as Rob Walker at Slate did on the 15th, that the market is up 20% over its post 9/11 low.

Here's a quote that is at the heart of her article:

"James Paulsen, chief investment officer of Wells Capital Management in Minneapolis, is of two minds on the recent rally. "Part of me says, how often does an equity investor have everybody from the Bank of Japan, the United States Congress, the European Central Bank and the Fed working day and night to get equities up?" he asked. "That's a hugely bullish thing to bet against. I don't disagree we're going to get a bounce and the recession will end, but I wonder how strong the recovery will be."

Mr. Paulsen is particularly concerned about the financial position of American consumers, many of whom have binged on borrowing and now face unemployment. Even though mortgage rates fell a few weeks ago, they have backed up again, reducing the potential savings from refinancings for many consumers."

Walker's piece mulls over a commonplace of Wall Street. Walker is too smart a fella to fall for it, but he does put the conventional wisdom in a nutshell (and you thought only oak trees and other vegetables could put things in nutshells, right? well, journalists put things in nutshells for Limited Inc to crack, with its big parrot like beak. So, don't ask any more tedious questions, or I'll throw some more cliches at you):

"One school of thought has long held that the stock market is not quite the reactive thing we often imagine it to be, but rather that it anticipates events. The crash of 1929, for instance, did not cause the Great Depression, but rather predicted it. One recent articulation of these ideas was the book The Message of the Markets, by CNBC anchor Ron Insana, published last year. One of the anecdotes in that book is Insana's recap of the market's reaction to the Jan. 17, 1991, launch of Operation Desert Storm. The Dow rose 105 points, and "the greatest bull market to ever take place on Wall Street got its start on the day the Gulf War began." Insana's point, and the theme of the book, is that while many experts at the time were predicting all manner of doom and gloom, the collective wisdom of the markets simply "knew better" and knew it sooner."

The idea that the stock market encodes information, and that that information is somehow predictive, is one of those nice ideological sleight of hands that tries to make a silk purse out of a sow belly future. In the last week, Limited Inc has been reading a history of the market, Toward Rational Exuberance, by Mark Smith. We found the parts about the early twentieth century pretty engrossing. Just as 9/11 seemed to signal the beginning of world disorder, and was followed by a equities suicide leap, the assassination of Archduke Ferdinand was followed by a market collapse. But in 1915 and 1916, American companies discovered the wonders of modern warfare. The money that flowed into American coffers was magical. If this happened today, what you would see is a bigger spread between price and earnings. What happened in 1916 was just the reverse. The ratio of the price of stock to the amount of the dividend went down, eventually hitting a historic low of 4 to 1 in 1916. Why? Well, this is one of the mysteries, kids. If we put on our explorer hat (a pith helmet, actually. We always write these posts accoutered - or would one say haberdashed? - in a pith helmet, but otherwise naked), we would have to venture into the psychology of expectation. In those days, those far off days, stocks were considered, with reason, to be a much higher risk than bonds. So the dividend on stocks had to be serious. So from the earnings end, that ate at the P/E ratio. At the stock end, there was the competition with bonds, which to the generation of 1910 seemed a much more secure financial instrument. This has reversed in our day, starting in the late fifties. That something like this can reverse is itself curious -- how does the horizon of expectation, which is a composite of different expectations, suddenly transform itself? And how are those expectations encoded into the price level of individual stocks? In spite of the Efficient Market Hypothesis people, it is hard to see where the market is getting its 'extra' information from. We aren't going to offer our own theory on this - we have delusions of grandeur around here, but we aren't crazy. But it does seem that traders, right now, are reading each others price levels much more than they are reading the extra-market indicators. In literature, this is referred to as post-modernism. In finance, it is the royal highway to a bust. Which makes sense - pomo is what happened when modernism, which tried to refer to everything in the world, all of history, the cavemen and the Minoans as well as aviation daredevils and occult fads, found that it couldn't. It couldn't cohere. So our advice to traders is: read the last cantos of Ezra Pound, those jagged fragments, and beware, beware.

Sunday, November 18, 2001


The question of the day, reader, is what ever happened to Maureen Dowd.
The Maureen Dowd of the ancien regime, circa 1999, was, to use a reviewer's phrase (one of those phrases that emerge, in the last minutes before the review has to get off in the mail, from the lumber room of previous blurbs, blurbs which the reviewer has vowed never, ever to use, which the reviewer has said to himelf, in the depths of the reviewer night, the midnight hour, the hour of ghosts and conscience, at least I have never written a word that could be mistaken for something written by Roger Ebert -- Limited Inc has been there, child) compulsively readable. Or at least her compulsions were our compulsions. Dowd had some kind of x-ray power she could turn on the Clintons, with all their bumptious sex and it takes a village sweet talk. There's a kid's game called Battleship -- it is still being sold out there, I believe, in the mall universe into which Limited Inc so rarely ventures. In the game, both players attach little plastic ships to pegs punched in a square space that is divided into a numbered and lettered grid. The little plastic ships are of various sizes, and in the ships there are holes. The number of the holes gives you the practical value of the ship. Above that square there is a screen, which reproduces the square space. That screen is blank, and represents your opponent's space: that square into which he has plugged his plastic ships. A hostile tabula rasa, except of course, for your opponent, it isn't a tabula rasa -- his ships populate it, his tabula is occupied. Each player has little plastic pegs, which count as torpedos. A Player "shoots" at another one by announcing a position - say A6. If the other player's vessel is not on A6, it is a miss, but if the plastic vessel is anchored there, you have to say, hit. Hit is the ritualistic word. Every torpedo is plugged into the blank screen, and so gradually a pattern emerges. Even the misses, then, are important, because you begin to see gaps, you begin to see possibilities, shapes emerge -- the battleship, the cruiser, the submarine. A version of that game is also played, to a large extent, by the press corps in D.C., who are always aiming at a grid that they can't see until they hit something. That grid is the government.
Dowd's hits were extraordinary.
Lately, Dowd's hit percentage is way down. Her column today is bottom of the barrel. Here's how it begins:

"It is hard to fathom how a part of the world that produced Cleopatra � who perfumed the sails of her boat so men would know she was coming and ruled with elegant authority, signing one tax decree "Make it happen" � could two millenniums later produce societies where women are swaddled breeders under house arrest"

Say what? "Don't know much about history/don't know much about geography..." That beach boy's song, our secret national anthem, seems apposite here, where Egypt and Afghanistan are jumbled up, and we are supposed to be surprised that, in the space of a mere two thousand years, cultures change. Obviously, Dowd wants her Cleopatra reference desperately enough that she is willing to go to any lengths to get it. That she could have used, oh, I don't know, Benazir Bhutto as a current reference seems to have escaped her, partly because that would tangle up our cultural stereotypes -- after all, that Bhutto was the leader (a very bad leader) of a Muslim nation contrasts in an odd way with the US's resolutely male line of presidents.
Obviously, Dowd didn't flunk out of her high school history course, even if today's column might make you wonder. Her problem is that she doesn't want to 'hit' - she is giving a pass to Bushypoo's reign. This is a game that depends on hits, however. Although inertia on the NYT op ed page can get you a career a la William Safire, it is a shame to see a woman who can file her teeth with the best of em allow herself to be practically veiled. Tear that veil off, Maureen. Plug in. Try G8, or E7. Get back in the game!.