If I recall correctly VD was a big fan of Evan Williams.
Fifteen bucks, it turns out, can buy you some damn decent liquor. Our drinks correspondent brown bags it for the recession, with a recipe and a history lesson to boot.
1 Scepticism is effortful and costly. It is better to be sceptical about matters of large consequences, and be imperfect, foolish and human in the small and the aesthetic.Nassim Nicholas Taleb: the prophet of boom and doom (Thanks, Avi!)
2 Go to parties. You can't even start to know what you may find on the envelope of serendipity. If you suffer from agoraphobia, send colleagues.
3 It's not a good idea to take a forecast from someone wearing a tie. If possible, tease people who take themselves and their knowledge too seriously.
4 Wear your best for your execution and stand dignified. Your last recourse against randomness is how you act — if you can't control outcomes, you can control the elegance of your behaviour. You will always have the last word.
5 Don't disturb complicated systems that have been around for a very long time. We don't understand their logic. Don't pollute the planet. Leave it the way we found it, regardless of scientific 'evidence'.
6 Learn to fail with pride — and do so fast and cleanly. Maximise trial and error — by mastering the error part.
7 Avoid losers. If you hear someone use the words 'impossible', 'never', 'too difficult' too often, drop him or her from your social network. Never take 'no' for an answer (conversely, take most 'yeses' as 'most probably').
8 Don't read newspapers for the news (just for the gossip and, of course, profiles of authors). The best filter to know if the news matters is if you hear it in cafes, restaurants... or (again) parties.
9 Hard work will get you a professorship or a BMW. You need both work and luck for a Booker, a Nobel or a private jet.
10 Answer e-mails from junior people before more senior ones. Junior people have further to go and tend to remember who slighted them.
Remember when conservatives were saying there was a CBO report out debunking the claims of the stimulus plan's authors even though there was no such report? Ah, good times. Turns out that this information was broadcast at least 81 times on Fox News, CNN, MSNBC, CNBC, and the Sunday shows.
That's based on a study done by my ThinkProgress colleagues. And of course they had a limited number of media outlets they could monitor. There's no telling how many times this myth was pushed on local television or talk radio or newspaper columns and the like.
A major riot in a U.S. city
I made this prediction for end of 2009 way back end of 2007. It sounded crazy then. Not so much now. There are numerous potential drivers for a riot (shortages, bank runs, dollar collapse, general shock and disappointment that Obama is not the messiah), but I am thinking the odds are good several come together to drive people into momentary insanity. It is already happening in Iceland, Greece, and the Baltics. Iceland has been the canary in the coal mine for this whole global crisis. Odds are good the contagion of violence spreads to the the UK first, and from there to its former colony. Just pray China doesn't catch the bug.Shortages of Goods/Supply Chain Breakdowns
Between the turmoil mentioned above, waves of bankruptcies, and a breakdown in global credit finance, there is a very significant risk of breakdowns in global supply chains. Either suppliers in a specialized niche of a supply chain will disappear, or as has already happened in a few cases, buyers will be not be able to get the credit necessary to complete a purchase. Considering the complexity of modern supply-chains, a few broken cogs can lead to unexpected and chaotic outcomes. The risk of goods shortages is high, particularly in agricultural goods.
Pensions are the #1 financial crisis story
Pensions will be to 2009-2010 what the mortgage crisis was to 2007-2008. Most pensions are ridiculously underfunded, and the market events of 2008 destroyed what meager hopes some pension managers had for recovery. Public employee pensions, which have been much more generous to employees than their private counterparts for years, are in particular peril. CalPERS, the California Public Employees' Retirement System is a textbook case. There is simply not enough money in pensions to pay out anywhere close to what retirees are expecting. A battle is brewing between working people/taxpayers and retirees. Somebody is going to get the shaft. The media is still pretty silent on this crisis, but that will change, and pensions will start to steal the headlines. [The only good news is that most retired people are not up for rioting.]
If you follow economic blogs, there are ongoing debates about how this crisis will unfold. Will the government start printing money to make up for all the shortfalls leading to inflation (and maybe hyperinflation) or is the destruction of wealth so complete that we are headed for massive deflation? Personally, I have no idea. The wild card is the federal government, and since their economic initiatives seem to change daily, you need to be a Kremlinologist to even begin to discern the way things are going to play out.
Nonetheless, as a trader, you learn to think in terms of "spreads", the comparative price difference between two separate things. In that framework, it matters less whether the absolute price of A and B go up or down but how they behave in relation to one another. So here is my inflation/deflation theory. The price spread between goods is going to follow Maslow's hierarchy of needs. The more basic a good is for survival the better it's relative value is going to hold up. The more inane, luxurious, or superfluous a good, the more the relative value of the good will decrease. For example, the price spread between a used Ford F-150 and a new BMW 7-series will decrease. And so with a penthouse in Manhattan and a flat in Oklahoma City. A Cartier watch and a Seiko. Granite counters and laminate counters. Etc.
In short, I'm not sure if the price of gasoline will go up or down. But if it costs 25,000 gallons of gasoline for a BMW today, rest assured, the price of the BMW in terms of gasoline will drop over the next several years.
Russia goes nuts
Russia is going to step back on to the world stage in a big way in 2009. Their affair with Georgia and their recent tiff with Ukraine are just initial feints in what I expect to be a crazy and tragic year for Russia and its neighbors. Even as the country continues to hollow from the inside out, I expect it to become much more aggressive with its ex-satellites. Their tanks will roll again this year.
The Euro crumbles
2009 will be the beginning of the end of the Euro as a functional currency. I expect at least one country currently using the Euro to pull out. Once the first country (perhaps Italy) has the courage to do it, other countries will fall like dominos. This will set stage for a new era of intra-European squabbling, as the Irish realize they actually dislike the French and the Polish rekindle their fears about Germany and so on. The framework of the EU will slowly fall to pieces (although not until after 2009).
Crude trades above $100 again
If I was more certain of this one, I could make a lot of money, but my sense is that the recent fall in crude prices is a short-term anomaly and prices will rise again. Along with all other commodities actually. This again is a spread view - commodities, which are always needed and a limited resource, versus fiat currencies, which are being printed by the wagonful in Europe, and shortly, the U.S. I realize this contradicts my "no idea" statement above, and admittedly, this is very speculative. Nonetheless, given the choice now, I would trade my greenbacks for gold, an oil company, or a future delivery of food.War and more war
The House GOP's efforts to publicly solicit the names of economists opposed to the idea of an economic stimulus package is an interesting gambit. On the one hand, it reveals how crass and political John Boehner really is—he picked his policy position first, and then started looking for experts to back him second. Beyond that, it reveals how shallow the depth of opposition really is.
Brad DeLong observes that "no current or former member of the President's Council of Economic Advisers–Democrat or Republican, living or dead, sane or insane–has signed up for the Republican House caucus's list of economists opposed to the stimulus package."