Curiositech

Update:  I really must read the whole thing before I comment.  I agree with what he says – the rest of the article points out how ephemeral such a ‘consensus’ must be.

“There is a consensus in the northern latitudes of the Western Hemisphere that the US Federal Reserve under chairman Ben Bernanke will magically solve the markets’ woes.”

 I don’t know what he’s thinking – there most certainly is NOT consensus that the Fed will solve the problem.  Lending and monetary policy cannot solve problems stemming from poor credit rating and poor lending practices.  Bernanke will not clarify the value in poorly-rated CDOs, and he cannot pay mortgages for those who borrowed more than they could afford.  Short a major correction in the mortgage market, and all of the clarifications that Fitch, Moody’s, and S&P will be issuing in the near future, the problems will not go away.  [Unless of course he takes on all of the CDOs and mortgages himself, and makes them all go away.  That would be a bailout of massive proportions, amid moral hazard writ large.]

 More here, if you must read it.

So, I wanted to find some blogs that would give me a spiritual boost each day, as I read through my feeds. I went looking through the ‘bloggernacle’, as it’s called. Talk about a disappointment. Pretty much everything I found was either debate over church organization and functioning, or some (at least semi-) contraversial aspect of church history. The only site I’ve found that’s reliably focused on faith (that I seem to agree with) is Scriptorium Daily. It’s a good blog, focusing on Christ and matters of faith. Not run by a member of the LDS church, but that hasn’t been a problem yet. I haven’t run into any doctrinal differences yet, but I’ve been somewhat spotty on the articles. Let me know what you think.

If you’re not paying attention to the causes behind the current financial collapse, you should know this: many people are criticizing the subprime lenders for selling to people who didn’t qualify for loans at all. But, know this – if the major credit rating agencies (Moody’s, Fitch, and S&P) had done due diligence in rating the CDOs and other mortgage derivatives in the first place, the subprime lenders would have been stuck with their bad loans on their own books, instead of everywhere in the financial world. These guys didn’t do their jobs. Rather, they did the equivalent of financial alchemy, and turned junk-grade debt into investor-grade – literally claiming that the riskiest loans had the least risk of all. In so doing, they were certainly willing to take the money and pretend they had done their jobs.

Now they are getting attention. I hope they do, and the raters who slacked get royally roasted for being the dishonest scum they showed themselves to be. I don’t believe everyone at the big three are culpable – I do think they have honest gentlemen (and -women) among them. But also among them are those culpable for the current financial collapse. I hope they roast in their own juices.

I often feel like I’m not doing enough to help clean up around the house, so this was an interesting and useful read. Don Aslett, the man I think of as ‘Mr Clean’, comments with Sandra Phillips (don’t know her) about how to make up your home so it takes less cleaning to start with.

The NYTimes’ Mark Lilla writes a feature-length article on his formulation of the ’separation of church and state’. It’s a fascinating read, as a well-written persuasive argument.

It isn’t pretty to say, but the least painful way out of this mess is to realize that we have an entire group of borrowers who absolutely, positively must lose their home, because they never should have been allowed to purchase it in the first place. Prices are going to fall regardless of whether borrowers are bailed out or not — and a bailout might actually exacerbate the pricing problems we need to face. The sooner this is recognized – by regulators, by legislators, and by money managers — the sooner we can begin working on strategies that can really help those who will be impacted, and the sooner money managers can begin adapting their risk models to something resembling reality.
Read it here

Normally, I associate a quote like “shared principles provide the foundation for legitimacy” with a discussion on democracy. And the following is such, of a sort.

See here for a discussion of international legitimacy, the UN, and a League of Democracies concept that’s starting to appear more and more places.

From http://www7.nationalgeographic.com/ngm/0707/feature5/text5.html :

“I’ve applied what I’ve learned from the bees to run faculty meetings,” he says. To avoid going into a meeting with his mind made up, hearing only what he wants to hear, and pressuring people to conform, Seeley asks his group to identify all the possibilities, kick their ideas around for a while, then vote by secret ballot. “It’s exactly what the swarm bees do, which gives a group time to let the best ideas emerge and win. People are usually quite amenable to that.”

In fact, almost any group that follows the bees’ rules will make itself smarter, says James Surowiecki, author of The Wisdom of Crowds. “The analogy is really quite powerful. The bees are predicting which nest site will be best, and humans can do the same thing, even in the face of exceptionally complex decisions.” Investors in the stock market, scientists on a research project, even kids at a county fair guessing the number of beans in a jar can be smart groups, he says, if their members are diverse, independent minded, and use a mechanism such as voting, auctioning, or averaging to reach a collective decision.

Take bettors at a horse race. Why are they so accurate at predicting the outcome of a race? At the moment the horses leave the starting gate, the odds posted on the pari-mutuel board, which are calculated from all bets put down, almost always predict the race’s outcome: Horses with the lowest odds normally finish first, those with second lowest odds finish second, and so on. The reason, Surowiecki says, is that pari-mutuel betting is a nearly perfect machine for tapping into the wisdom of the crowd.

 …

Such thoughts underline an important truth about collective intelligence: Crowds tend to be wise only if individual members act responsibly and make their own decisions. A group won’t be smart if its members imitate one another, slavishly follow fads, or wait for someone to tell them what to do. When a group is being intelligent, whether it’s made up of ants or attorneys, it relies on its members to do their own part. For those of us who sometimes wonder if it’s really worth recycling that extra bottle to lighten our impact on the planet, the bottom line is that our actions matter, even if we don’t see how.
 

(H/T: Slashdot)