Thursday, March 26, 2020

why do we have stock markets

In the wake of two major bailouts, a decade apart, following on a crash in 200-2001 and overshadowed by the twin phenomena of de-industrialization and an enormous increase in wealth inequality that should be compared not to the U.S. in the twenties but to Ancien regime France in the 1730s, the question arises: why do we have stock markets?  And, more broadly, why have we allowed, or even encouraged, the burgeoning of financial instruments  in the post Bretton Woods period? The so called shadow markets, or the other kind as well, that advertise themselves as security for other financial instruments, but always not only fail in that responsibility, but always crash themselves, bringing about chain reaction crashes?

Peter L. Bernstein, who was an investor, journalist and economist in one, observed that stock markets have increased in the post-war period from around 50 in 1948 to around 125 in 1998. This speaks to something attractive in the current period about the stock market. He examined the common defense of the market in a great paper entitled Liquidity, Stock Markets and Market Makers, published in 1987 – on the brink of Black Monday, 1987, when the great Reagan stock boom crashed.

Bernstein considers the standard defense of the stock market – that it allows liquidity and is an instrument for efficiency. Stocks, in this story, reward innovation and that kind of efficiency that squeezes profits from enterprises, allocating capital accordingly. On the other side, they punish enterprises that stagnate and that fail to be “efficient”.

Bernstein does not leave the story there. In his paper, he notes that the stock market system is embedded in  and necessary to the corporation system: “One of the great features of that legal creature we call the corporation is how readily it facilitates transferring ownership in business. Perhaps the most impressive consequence of that feature has been the development of organized stock markets.”
From that premise, Bernstein considers a tension – what a Marxist would call a contradiction – between the two poles of efficiency and liquidity:

“There is a tension between liquidity – a market in which we can buy and sell promptly with minimal impact on the price of the stock – and efficiency – a market in which prices move rapidly to reflect all new information as it flows into the marketplace.”

Hark ye at the information talk. One of the fruits of the ‘cyborg revolution” (to use Phllip Mirowski’s phrase) was the recasting of managerial and speculative activity in terms of information. Bernstein’s essay quotes amply from a lecture by Fischer Black entitled “Noise”, which is permeated with the information paradigm. It refers to Claude Shannon’s distinction between signal and noise. Primitively, these terms are just what they seem: if you broadcast a message, there is an amount of static – noise – that adheres to it. If you write down a message, there is a distortion in your handwriting that may make it hard to read. “Noise” is the ‘friction of information. If you exchange information with a person, the tone of your voice and expression on your face, your properties in the socius, all of these come with that information. We realize this at some Piagetian point in youth. Five year olds know how to say ‘yes’ to their parents in a tone that signifies ‘no’ – this is the noise of raising a kid.

To return to the handy information paradigm in economics (and observe my restraint: for those worried that I would get on the warpath about Hayekian ideology, which rode piggyback on Shannon’s communication science, rest assured – that isn’t my concern here) – Bernstein usefully takes from Black the idea, paradoxical as it may seem, that ‘noise’ provides us with the practical solution to our contradiction. Noise traders are essential to the liquidity of the market. In fact, they are as essential as information traders. Noise traders (“who trade on noise as though it were information”) are essential for information traders to have to sell to or buy from: why? Because information traders are, as it were, grouped at the efficiency end. Their “information capital” restricts the incentive to trade “They are reluctant to trade with one another, because, as Black puts it, “a trader with a special piece of information will know that other traders have their own special pieces of information and will therefore not automatically rush out to trade.” The P.T. Barnum principle (there’s a sucker born every minute) has a systematic effect that often rewards suckers and makes them useful, unbeknownst to themselves.


Wednesday, March 25, 2020

Santa Monica 2012

What’s escape to the mapless girl
Lugging earbait on Wiltshire and Fifth
Jilling the edge of tonight’s magnesium splendor?
Disappear, baby, down the convenient alley
To end up in someone’s car.
All that suck n fuck machinery
-- Set in motion to produce this drop?
… as ratcatchers in prowlers come howling to a stop.
- Karen Chamisso

Tuesday, March 24, 2020

Rachel Kushner's Mars Room take 2

At the dawn of movie-making, there were no stars. Indeed, as film historian Michael Newton writes, the actors were:

“… puppets, mannequins, and not expected to reveal through their external image a complex inner life. Those early bioscope models were anonymous, subordinate to the piece of film itself; indeed, the earliest films were ‘performed by people who were anything but actors’, sometimes literally just folk picked up in a café.3 Erwin Panofsky remarks that the cast of a prestige 1905 production of Faust are ‘characteristically “unknown”’.

“Even then, however, the camera seems to pick out certain people. Newton cites a short story by Rudyard Kipling, Mrs. Bathurst, in which the narrator sees a film that documents a London crowd crossing a bridge and sees someone he knows, Mrs. Bathurst: ‘There was no mistakin’ the walk in a hundred thousand’ and ‘She walked on and on till she melted out of the picture – like – like a shadow jumpin’ over a candle.’ The film transmits the unique ‘blindish look’ she has, preserving in light that something that was hers, while not being her, merely a trace, both a mere picture and a mock-up of the real thing.”

It is a commonplace to say that Mary Pickford was the first star. Newton accords that honor to a French comedian, Max Lindner. It is clarifying,however, to remember 19th century  theater and opera, for definitely there were divas and “stars”. By the end of the 18th century, the great actor or actress had even become respectable. Before the 18th century, theater was, technically, a demi-monde for the Church – both Catholic and Protestant. In one of those moments in the French Revolution that seem to cast shadows down to us, the Assembly debated making actors and executioners full citizens – and ended up adding Jews to that list. Clement-Tonnerre made the speech introducing the civil rights bill.
Passing to actors, he demonstrated that, in their regard, the prejudice is established on what they are under the dependence of public opinion. “This dependence makes our glory and it flays them,” he cries. “Honest citizens can represent on the stage the chef-d’oeuvres of the human spirit, works filled with the healthy philosophy that, thus put in a position where every human can appreciate it, has prepared, successfully, the revolution that is now in operation, and you tell them: you are Comediens du Roi, you occupy the national theater, and you are criminal (infame)! The law must not let this crime subsist.”” (from Gaston Maugras’ Les comediens hors la lois).

What was the eeriness of the actor about? I’d suggest that we look at a doctrine made famous by Ernst Kantorowicz’s study, The King’s Two Bodies. The Sovereign was invested with a pollical body as well as one of flesh. Similarly, the actor is both the actor and the “part” – an uncomfortable parody, perhaps, of the miracle of the Eucharist. There was a “star system” in the 19th century, in which opera and theater were the great popular as well as high cultural arts, but it was metaphysically different from what happened with the movies. Though Rachilde [Proust’s composite portrait of the great diva] played the part of Berenice, people did not go to the theater to see Rachilde, they went to see Rachilde play the part of Berenice.

But in the movies, the character – with the character’s name – is swept up in if not identical to the actor. Even as the actor is more than the part. Jake Geddes is different from Jack Nicholson, but it is forgivable if people substitute Jack Nicholson for Geddes when they talk about the movie. A theater part lives on – Hamlet did not die with Garrick, nor with Olivier – but the movie part is a more ambiguous kind of aesthetic creature.
I am pulling all this out to try to explain my impression of the cinematic quality of Rachel Kushner’s novels. We still use the old Greek system for thinking of the novel, with the hero or protagonist and the secondary characters – the rounds and the flats, to use E.M. Forster’s terms. The roundedness is supposed to refer to some psychological completeness, some depth that can be evoked but not, if the round effect works, exhaustively shown. Myself, II think it might be more interesting and capture more of the way we read novels – or the way I read novels, given all the cultural syrop I’ve absorbed through every medium – by referencing the star system. I’ve read many novels with round and flat characters, but the novels that mark me with being of my time, so to speak, have stars. Both Reno in The Flamethrowers and Romy Hall (named for a star, Romy Schneider) in The Mars Room are bit parts, extras, but both are written as stars. The seem at once to be perfectly integrated into their parts and to be playing them – a sovereign shuffle. They are unknown celebrities.
I would like to be able to explain this quality by reducing ii to its devices. 

In The Man Without Qualities, an important Habsburg official, Count Leinsdorf, is shown in relation to Ulrich, the MWQ himself, and Diotima, his cousin, a socialite who is determined to be a “spiritual” force in Austria by holding a salon in which she mingled noteworthies of various types from finance, art, academia, and politics. Count Leinsdorf is the main attraction in the salon; he goes out of friendship, but, as well, because he thinks of Diotima as holding an “office”:
“Every person,” he would say, “performs an office within the state; the worker, the prince, the artisan, are all civil servants.” This was an emanation of his always and under all circumstances impartial way of thinking, ignorant of bias, and in his eyes even the ladies and gentlemen of the highest society performed a significant if not readily definable office when they chatted with learned experts on the Bogazköy inscriptions or the question of lamellibranchiate mollusks, while eyeing the wives of prominent financiers.”

The duality of the person and the office – which is extended here indefinitely – is structurally like the difference between the actor and the part in a movie, or like the “vehicle” and the gene in neo-Darwinism, or like the King in his body and the King as the body politics in early modern theory. There are enormous variations in the signifying of these dualities. For the novelist, there is always the temptation to make the character stand in for the type – to give the character, as it were, an “office within the state”. This way of reading character is mainstream among critics, I think, who suffer from an obscure embarrassment with regard to stories – it seems that the story can’t justify itself, except with children. The story has to be justified by reference to its “office” in the state – to its illustration of ethico-political principles.

There is that. And there is ordinary life, in which people do indeed take characters as role models, but mainly in terms of excitement: it is some taste of existential excitement that ordinary life craves in music, in movies, in novels, in poems.

Movies, I think, long ago became the central aesthetic object in the West due to the way that the part and the actor seem to merge and separate – the dancer could and could not be told apart from the dance, either on the screen or in “real” life, which unrolled like a movie itself, in celebrity-centered media.

The axis of the Mars Room is just this kind of duality: Romy Hall, as a stripper named “Vanessa”, attracts a mook, a fan, who becomes her stalker: Creepy Kennedy, as Hall thinks of him. How can we tell the stripper from the strip? Creepy Kennedy can’t: he can’t understand his own relationship, as stalker, to “Vanessa”.

Reno – another nickname, or star name – in The Flamethrowers takes a job at a film lab as a “China girl” – that is, she is used, filmed, in order to get the fleshtones right for films in something called a “film leader” – all artefacts of analogue film of the period. She is anonymous, her job consisting of looking as “representative” as possible – which means Caucasian and “comely”, in spite of the name of the “official function”.  

“Most people didn’t know China girls existed. The lab technicians knew. The projectionists knew. They had fovorites, faces of obsession, and evn if I liked the idea of my own fleeting by, I knew the technicians looked at the frames more closely, and I liked that, too. I was and was not posing for them. Pieces of film leader were collected and traded like baseball cards. Marvin and Eric preferred a polished look. “The problem with the girl-next-door thing”, Marvin said, “is that with recent Kodachrome its actually the girl next door. Her name is Lauren and we grew up together in Rochester.” The girls, mostly secretaries in film labs, weren’t exactly pinups, but the plainer-looking China girls were traded just as heavily. The allure was partly about speed: run through a projector they flashed by so fast they had to be instantly reconstructed in the mind. “The thing suppressed as an intrusion,” Eric said, “is almost always worth looking at.” Their ordinariness was part of their appeal: real but unreachable women who left no sense of who they were. No clue but a Kodak color bar, which was no clue at all.”

The China girl is the anti-star, the bit player par excellence; at the same time, the China girl, too, has a double existence – shares, on the most miniscule scale, the division between the actor and the part. This is the abyss – molecular, suppressed – which Kushner finds worth looking at, and elevates into a principle of character construction.

As well, into a principle of form. In the Flamethrowers, the form of the monologue – the characters are always telling stories, giving the novel a sort of “All about Eve” feel, without Eve here having any ambition at all – surrounds the substance, which is about an art scene in which film has a central role. The New York art scene of the 70s. In The Mars Room, while there are many movie references, the whole movie motif is absent. This is an underworld, a dangerous classes, novel, split up between the monologue and the quasi-indirect mode of discourse, which Pasolini hailed as an important resource of film. These characters are just the type who do not “fulfill” a state office, who flee from the office – strippers, drug dealers, chiselers, mooks, dopers, uncared for children, careless parents, growing up in the interstices of society and waiting – not to be discovered by Hollywood, but to be discovered by the Incarceration state, as they inevitably will be. 

Sunday, March 22, 2020

Rachel Kushner's The Mars Room - take one

Emily Rust, in “Hitting the "Vérité Jackpot": The Ecstatic Profits of Freeze-Framed Violence(Cinema Journal 2011) has remarked that:

“… a number of American films from the late 1960s and early 1970s conspicuously employ freeze-frames in scenes of protracted brutality. The documentary In the Year of the Pig (Emile de Antonio, 1968) as well as the fiction films Butch Cassidy and the Sundance Kid (George Roy Hill, 1969), Joe (John G. Avildsen, 1970), and The Parallax View (Alan J. Pakula, 1974), in addition to the primary subjects of this essay - Gimme Shelter and Night of the Living Dead (George A. Romero, 1968) - are but a few examples.”

Rust, shrewdly, conjoins violence at the highest levels – John F. Kennedy’s assassination as the prototype – to the popularity of this technique. The assassination films – in particular, the Zapruder tape – have been obsessively scanned and stopped, as though an explanation lurked in the absolute stillness imposed by the freeze frame. A stillness that, in good old high modernist fashion, comments on its own medium – since film is, after all, a sort of mirage, the movement being of the strip of film conveying a sense of the seamless jointing of the object. Zeno’s arrow at the boxoffice.

Rust’s makes a useful historical comparison, leaving adrift, however, the question of why violence and the freeze frame waited for the 60s:  “Like the slow motion and superimposition of experimental works of the 1920s, the early use of freeze-frames signaled the transformative power of cinematic vision, which promised to unveil alternatives to conventional perception and experience. Freeze-frames from the late 1960s and early 1970s share this revelatory spirit, but the relationship between photography and cinema that they mobilize also reflects and reaffirms the quest for authenticity that animates the period's preoccupations with ecstatic practices and violence.”

Left out of Rust’s catalogue of freeze frames in narrative film is Truffaut’s famous ending of The 400 Blows. In Truffault’s film the interest is less forensic than narrative – or, to make a distinction that is less confusing, the position of the freeze frame at the end of Truffaut’s film gives it a narrative weight that is absent from a freeze frame that allows us to gaze, say, at Kennedy’s head being blown apart. The motive force that drives the movie resolves itself here by – not resolving itself. The arrow stops, to reflect on the impossibility of its stopping.

All of this freeze frame rap has to do with something that isn’t a film: it is Rachel Kushner’s Mars Room, which I recently finished and am thinking about. As in The Flamethrowers, Kushner’s book ends with a woman going into the mountains and coming to some kind of endpoint to a theme in her life – to, in a sense, her narrative position in the story. All the references I’m making to 60s and 70s films are relevant to Kushner’s practice – her novels are startlingly cinematic, not in the sense that one feels that they are simply props for a future screenplay – which is what most action novels aspire to (I should say used to aspire to – now they aspire to being video games), but in the sense that they are thought through in a cinematic way. Just as the freeze frame in the sixties and seventies films so often meant: there’s nowhere else to go in this society – so, too, the ”freeze frame” that ends The Mars Room means: stories like these have an energy that finds no outlet – just as people like these have an energy that finds no outlet. Spinoza, somewhere, says that if a thrown stone could think, it would think, I'm doing this of my own free will. Imagine that stone having doubts. The story of Romy Hall, the main character in The Mars Room, is a correlative to the society of deaths of despair, which is the epidemic that was occurring, in the States, before our current epidemic.

I’m gonna continue this on another post.

Southern California Death Trip

    “He was kind but he changed and I killed him,” reads the caption of the photo of a woman in an old tabloid. She was headed to ...