I am currently reading The Master and His Emissary , which appears to be an excellent book. ("Appears" because I don't know the neuroscience literature well enough to say for sure, yet.) But then on page 186 I find: "Asking cognition, however, to give a perspective on the relationship between cognition and affect is like asking astronomer in the pre-Galilean geocentric world, whether, in his opinion, the sun moves round the earth of the earth around the sun. To ask a question alone would be enough to label one as mad." OK, this is garbage. First of all, it should be pre-Copernican, not pre-Galilean. But much worse is that people have seriously been considering heliocentrism for many centuries before Copernicus. Aristarchus had proposed a heliocentric model in the 4th-century BC. It had generally been considered wrong, but not "mad." (And wrong for scientific reasons: Why, for instance, did we not observe stellar parallax?) And when Copernicus propose...
The stock markets do have "circuit-breakers", I think they call them now, so that they shut down if it falls too much. I remember reading this in some notice on the Vanguard site. Ah, here we go: Circuit-breaker policies.
ReplyDeleteBut that's a NYSE policy, not (nominally) a government one. And remember, they have shut down the markets before due to panic. But that was a LONG time ago, like, a whole 20 years after I was born.
Shutting down the markets is too drastic, better to leave them open but institute a price freeze on stocks(until things calm down).
ReplyDeleteFor my sins, I work in banking and everyone I know is cock-a-hoop about this sloughing of all of their debts onto Joe "The Hapless" Taxpayer. Now all of their debts have been cleared, they can also now start lending irresponsibly again to take advantage of the high LIBOR rates! There are also many more morally hazardous Austrians within banking than you might realise and they are fully aware of the hyper-inflationary ramifications of all of this. But in the meantime, they will try to make as much money for themselves from this, as they can, before the roof falls in, and get as much of it as they can into gold and property, in a flight to real values.
ReplyDeleteThe ban on short selling will also not take too long to correct. Watch out for much more flexible Put Option contracts to be created, before the end of the week, in an attempt to fix the broken pricing system. Then watch for further interventions from the central planners at the SEC to ban Put Options.
And then watch the ongoing train wreck when the options derivatives market then collapses, thus ensuring a whole army of further interventions to keep the state from imploding.
Mises will once again be proved right. One intervention to break the pricing system (e.g. the ban on short selling) will necessitate another, and then another, until we finally end up with totalitarianism and the total eradication of the free market.
Expect these interventions to continue and to accelerate. What will these interventions be? Who knows. Even the fools in the central planning offices have no idea what they'll be cooking up next. Just expect less freedom of action and friends of the state to be bailed out at the cost of the rest of us.
We certainly live in interesting times.