THINK MENTAL MODELS

I remember when I was a bigger fan of Warren Buffett and Charlie Munger and read the graduation speech Munger made outlining how students should have a "latticework of mental models" I was so smitten by the brilliance and simplicity of the concept that I kept repeating the words in my head over and over.

You get an PhD. in the game of life if you can learn the concepts and models outlined in this site.

A neat illustrative story at the end demonstrates how these models blend together in how you are talking about playing bridge or playing baseball. Interesting parallels in terms of mind-set.


Think Mental Models website:
http://www.thinkmentalmodels.com/

“The better decision maker has at his/her disposal repertoires of possible actions; checklists of things to think about before he acts; and he has mechanisms in his mind to evoke these, and bring these to his conscious attention when the situations for decision arise.”
(Herbert Simon, Nobel Laureate)

How the exceptional mind works

According to Warren Buffett, his business partner, Charlie Munger has ‘the best 30-second mind in the world. He goes from A to Z in one move. He sees the essence of everything before you even finish the sentence’ (Forbes, January 22, 1996).

How does he do it?

Well, fortunately, Mr. Munger has explained his approach in lectures and books. Essentially, he thinks by using the BIG IDEAS from disciplines as diverse as physics and psychology. He has a list of these ideas (mental models) in his mind and quickly picks the one(s) applicable to the given situation, much as a pilot automatically goes through a checklist prior to take-off.

This website, inspired by the work of Charles Munger, provides over 100 models that can be brought consciously to mind to aid the thinking process.

Each model is described by at least one distinguished user. Examples include Warren Buffett, Richard Feynman, Robert Rubin and Peter Drucker, among others.

Wikipedia defines it as follows:
http://en.wikipedia.org/wiki/Mental_model

A mental model is an explanation of someone's thought process about how something works in the real world. It is a representation of the surrounding world, the relationships between its various parts and a person's intuitive perception about their own acts and their consequences. Our mental models help shape our behaviour and define our approach to solving problems (akin to a personal algorithm) and carrying out tasks.

A mental model is a kind of internal symbol or representation of external reality, hypothesized to play a major role in cognition, reasoning and decision-making. Kenneth Craik suggested in 1943 that the mind constructs "small-scale models" of reality that it uses to anticipate events.

FROM CAPITALISMMAGAZINE.COM:
http://www.capitalismmagazine.com/culture/books-non-fiction/4669-Latticework-Mental-Models.html

Excerpt from Chapter I of "Investing: The Last Liberal Art" by Robert G. Hagstrom

A Latticework of Mental Models

How does one achieve worldly wisdom? To state the matter concisely, it is an
ongoing process of, first, acquiring the significant concepts--the models--from
many areas of knowledge and then, second, learning to recognize patterns of
similarity among them. The first is a matter of educating yourself; the second
is a matter of learning to think and see differently.

He challenged the students to broaden their vision of the market, of finance, and of economics in general; to see them not as separate disciplines but as part of a larger body of knowledge, one that also incorporates psychology, engineering, mathematics, physics, and the humanities.
In this broader view, he suggested, each discipline entwines with, and in the process strengthens, every other. From each discipline the thoughtful person draws significant mental models, the key ideas that combine to produce a cohesive understanding. Those who cultivate this broad view are well on their way to achieving worldly wisdom, that solid mental foundation without which success in the market--or anywhere else--is merely a short-lived fluke.

To drive his point home, Charlie used a memorable metaphor to describe this interlocking structure of ideas: a latticework of models. "You've got to have models in your head," he explained, "and you've got to array your experience-both vicarious and direct-on this latticework of models." So immediate is this visual image that latticework has become something of a shorthand term in the investment world, a quick and easily recognized reference to Munger's approach.

from the book: Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger
http://www.poorcharliesalmanack.com/intro3.html

The quotes, talks, and speeches presented here are rooted in the old-fashioned Midwestern values for which Charlie has become known: lifelong learning, intellectual curiosity, sobriety, avoidance of envy and resentment, reliability, learning from the mistakes of others, perseverance, objectivity, willingness to test one’s own beliefs, and many more. But his advice comes not in the form of stentorian admonishments; instead, Charlie uses humor, inversions (following the directive of the great algebraist, Jacobi, to “Invert, always invert”), and paradox, to provide sage counsel about life’s toughest challenges.

Charlie also employs historical and business case studies to great effect. In these presentations, he makes his points with subtlety and texture, often using a story-like context instead of abstract statements of theory. He regales his audience with humorous anecdotes and poignant tales, rather than with a blizzard of facts and figures. He well knows, and wisely exploits, the traditional role of the storyteller as purveyor of complex and detailed information. As a result, his lessons hang together in a coherent “latticework” of knowledge, available for recall and use when needed.

It is clear throughout these talks and speeches that Charlie places a premium on life decisions over investment decisions. His mental models, drawn from every discipline imaginable, recur repeatedly and, in no way, focus on “business portfolio strategy” or “beta” or “Cap M.” Rather, they center on fundamental truth, human accomplishment, human foibles, and the arduous path to wisdom. Charlie once said, “I wanted to get rich so I could be independent, like Lord John Maynard Keynes.” Independence is the end that wealth serves for Charlie, not the other way around.

HANDLING LOSSES IN AN ENVIRONMENT WHERE WINNING IS IMPORTANT:

"After all is said and done, learning to handle losses will be your greatest triumph." -- Robert Prechter.

More from Prechter:

There are many denials of reality which automatically disqualify millions of people from joining the ranks of successful speculators. For instance, to moan that "pools," "manipulators," "insiders," "they," "the big boys" or "program trading" (known today as "high-frequency trading" -- Ed.) are to blame for one's losses is a common fault.

Anyone who utters such a conviction is doomed before he starts. [My] observation, after eleven years "in the business," is that the biggest obstacle to successful speculation is the failure merely even to recognize and accept the simple fact that losses are part of the game, and that they must be accommodated.

The perfect trading system does not exist. Expecting, or even hoping for, perfection is a guarantee of failure. Speculation is akin to batting in baseball. A player hitting .300 is good. A player hitting .400 is great. But even the great player fails to hit 60% of the time! He even strikes out often. But he still earns six figures a year, because although not perfect, he has approached the best that can be achieved. You don't have to be perfect to win in the markets, either; you "merely" have to be better than almost everybody else, and that's hard enough.

---

I read an investment article recently from the Hussman Funds titled "Why Warren Buffet Plays Bridge" and it is especially appropriate to the craft of hitting in baseball in addition to long-term success in investing.

FROM HUSSMAN.NET:
http://www.hussman.net/wmc/wmc061127.htm

The reason relates to the story Buffet's mentor the legendary investor Benjamin Graham tells about the game of bridge. Focus on the process not the results.

"I recall to those of you who are bridge players the emphasis that bridge experts place on playing a hand right rather than on playing it successfully, Because as you know, if you play it right you are going to make money an d if you play it wrong you lose money - in the long run.

There is a beautiful little story about the man who was the weaker bridge player of the husband-and-wife team. It seems he bid a grand slam, and at the end he said very triumphantly to his wife 'I saw you making faces at me all the time, but you notice I not only bid this grand slam but I made it. What can you say about that?' And his wife replied very dourly, 'If you had played it right you would have lost it."

The author rightly observes that it takes restraint to play the game " the right way", with an established "discipline" or approach and let the law of averages work out in your favor. You don't try to win every hand. He describes having the right "temperament" to execute the "approach" and not deviate from it.

The same temperament and approach leads to success in baseball.

----

"Anytime you and I question the schemes of the do-gooders, we're denounced as being against their humanitarian goals. They say we're always "against" things — we're never "for" anything. Well, the trouble with our liberal friends is not that they're ignorant; it's just that they know so much that isn't so." - Ronald Reagan

Trader Dan's Market Views: FOMC gives Precious Metals Bulls reasons for cheer

Even when things go entirely your way on a day like today (Thanks Uncle Ben), it does have all the makings of a Pyrrhic victory. If being on the right side means that -- as that old scag-bag Charlie Munger says, "Even if it works, you're a jerk" -- then I guess I'm a jerk. So be it.

Given what seems to be going on at the House of Buffett lately maybe it takes one to know one. Sliding Sokol out the door on the day of Bernank's presser is a work of PR genius. You guys are really slick over there.

http://www.zerohedge.com/article/and-so-billionaires-turn-each-other-sokols-lawyer-accuses-buffett-lying

From Trader Dan Norcini's blog in words much more eloquent than I can manage to muster at the moment, but whose sentiment I echo 100%.



Trader Dan's Market Views: FOMC gives Precious Metals Bulls reasons for cheer:

"Thanks Ben and thanks to all the Fed governors whose foolish, inept, and short-sighted idiocy has set this nation on a path that will make the IMF prediction of its sliding into second place behind China, indeed come to pass. No nation ever kept its place of economic ascendancy by deliberately killing its own currency. An economically strong nation, with a solid manufacturing sector, the rule of law, an ethic of thrift, low taxes, reasonable regulation, etc, will by default have a strong currency.

The plight of the Dollar is now a commentary on the decline of our beloved nation. It speaks with a more pure voice than any analyst could ever aspire to and what it is crying is disheartening to an extreme for those with ears to hear it.

History has the advantage of being relatively objective in its analysis as it is removed from the passions of the era. It is with that in mind that I can confidently say it will render a harsh and severe criticism of those who led our nation and its monetary policy during this period as they presided over its decline."

YOU GO UNCLE BEN, YOU GO.... Your plan has been working so well.

Open Letter to Warren Buffett - Drop Dead!! and take Congress with you

As if the recent comments of Buffet's little sock-puppet Charlie Munger to "let them eat cake" comments were not bad enough, we have to put up with this self-serving drivel from "The Oracle" himself.

First Buffet's letter to Uncle Sugar in Washington, who bailed out these self-described geniuses.

They will get the free government handouts and you will get the bill.

And then to top it off, the guy complains that he may have had to endure Thanksgiving at McDonald's? Oh, the indignity!! Mr. Buffett has to go to McDonald's to eat!!!

What happened to the populist "Everyman" image you and CNBC worked so hard to craft while you slimeballs were feeding at the public trough? Are you too good for McDonald's now?

All this while people across the country are still suffering and NOT receiving bailouts from Uncle Sugar Daddy in DC.

Are you serious?

FROM THE NEW YORK TIMES:
http://www.nytimes.com/2010/11/17/opinion/17buffett.html?_r=2&hp

DEAR Uncle Sam,

My mother told me to send thank-you notes promptly. I’ve been remiss.

Let me remind you why I’m writing. Just over two years ago, in September 2008, our country faced an economic meltdown. Fannie Mae and Freddie Mac, the pillars that supported our mortgage system, had been forced into conservatorship. Several of our largest commercial banks were teetering. One of Wall Street’s giant investment banks had gone bankrupt, and the remaining three were poised to follow. A.I.G., the world’s most famous insurer, was at death’s door.

Many of our largest industrial companies, dependent on commercial paper financing that had disappeared, were weeks away from exhausting their cash resources. Indeed, all of corporate America’s dominoes were lined up, ready to topple at lightning speed. My own company, Berkshire Hathaway, might have been the last to fall, but that distinction provided little solace.

Nor was it just business that was in peril: 300 million Americans were in the domino line as well. Just days before, the jobs, income, 401(k)’s and money-market funds of these citizens had seemed secure. Then, virtually overnight, everything began to turn into pumpkins and mice. There was no hiding place. A destructive economic force unlike any seen for generations had been unleashed.

Only one counterforce was available, and that was you, Uncle Sam. Yes, you are often clumsy, even inept. But when businesses and people worldwide race to get liquid, you are the only party with the resources to take the other side of the transaction. And when our citizens are losing trust by the hour in institutions they once revered, only you can restore calm.

When the crisis struck, I felt you would understand the role you had to play. But you’ve never been known for speed, and in a meltdown minutes matter. I worried whether the barrage of shattering surprises would disorient you. You would have to improvise solutions on the run, stretch legal boundaries and avoid slowdowns, like Congressional hearings and studies. You would also need to get turf-conscious departments to work together in mounting your counterattack. The challenge was huge, and many people thought you were not up to it.

Well, Uncle Sam, you delivered. People will second-guess your specific decisions; you can always count on that. But just as there is a fog of war, there is a fog of panic — and, overall, your actions were remarkably effective.

I don’t know precisely how you orchestrated these. But I did have a pretty good seat as events unfolded, and I would like to commend a few of your troops. In the darkest of days, Ben Bernanke, Hank Paulson, Tim Geithner and Sheila Bair grasped the gravity of the situation and acted with courage and dispatch. And though I never voted for George W. Bush, I give him great credit for leading, even as Congress postured and squabbled.

You have been criticized, Uncle Sam, for some of the earlier decisions that got us in this mess — most prominently, for not battling the rot building up in the housing market. But then few of your critics saw matters clearly either. In truth, almost all of the country became possessed by the idea that home prices could never fall significantly.

That was a mass delusion, reinforced by rapidly rising prices that discredited the few skeptics who warned of trouble. Delusions, whether about tulips or Internet stocks, produce bubbles. And when bubbles pop, they can generate waves of trouble that hit shores far from their origin. This bubble was a doozy and its pop was felt around the world.

So, again, Uncle Sam, thanks to you and your aides. Often you are wasteful, and sometimes you are bullying. On occasion, you are downright maddening. But in this extraordinary emergency, you came through — and the world would look far different now if you had not.

Your grateful nephew,

Warren

FROM BUSINESSINSIDER.COM
http://www.businessinsider.com/warren-buffett-if-the-bailout-didnt-happen-i-would-be-eating-dinner-at-mcdonalds-2010-11#ixzz15Y6xIq00

Then he dropped this line, which sounds like an exaggeration:
"If the government hadn't acted, I would be eating Thanksgiving dinner at McDonald's."

A lot of these guys should be more concerned about swinging from a lamp post than where their next Thanksgiving meal is coming from.

Nothing but a bunch of thieves and liars masquerading as geniuses.

Dear Mr. Buffett:

DROP DEAD YOU RAT BASTARD!!!

1) Don't thank the government, when it is we, the taxpayers, who will ultimately pay the bill to save your sorry ass.

2) We remember what you fail to mention in your letter -- that the financial bailouts predominantly benefited the elite, the ruling class and their cronies -- who were responsible for getting us into the mess in the first place.

3) We do know that we -- "the McDonlad's eaters" were not aided in any way. In fact, quite the opposite. Millions unemployed, tens of thousands losing their houses and / or life savings. And you complain about having to eat at McDonald's?

You and your fellow thieves, like Charlie Munger and Lloyd "Doing God's Work" Blankfein, had better pray that if as expected, QEII is as big a failure as QEI was, the "Torch and Pitchfork 2.0" crowd doesn't make a detour to Omaha on its march to Washington DC.

You act like "Thanksgiving at McDonald's" would be the worst inconvenience you could suffer. When people across the country are truly suffering, every day of the year?

Happy Thanksgiving, you arrogant, self-absorbed POS. Don't choke on a wishbone or anything.

The Slav

BERNANKE TESTIMONY JUNE, 2009:
http://www.federalreserve.gov/newsevents/testimony/bernanke20090603a.htm

Instead of addressing the twin towers of fiscal irresponsibility that the Federal Reserve Chairman Bernanke outlined in his testimony to Congress in June 2009 -- the annual budget deficit and the total national debt load -- Congress and the administration did what it does best, NOTHING.

To paraphrase von Mises, they took the cowards way out.

Nearly a century ago, the great economist Ludwig von Mises observed that massive central bank easing is invariably a form of cowardice that attempts to avoid the need to restructure debt or correct fiscal deficits, avoiding wiser but more difficult choices by instead destroying the value of the currency.

Like rats deserting the Titanic, they ignored saving the least fortunate among us, instead filling the lifeboats with those in America who were the most blessed.

COWARDS, LIARS, THIEVES!!! THE WHOLE BUNCH OF YOU.

They were however getting richer while most Americans were getting poorer. Incomes increasing, wealth exploding higher. Is that the reality for most households across the country since 2008?
It is in D.C.

Just like Buffet, these guys benefited and prospered while the rest of the country suffered.

FROM THE ECONOMIC COLLAPSE BLOG:
http://theeconomiccollapseblog.com/archives/12-facts-that-will-blow-your-mind-federal-employees-and-members-of-congress-are-getting-rich-while-those-of-us-who-pay-their-salaries-suffer

Median household income in the United States fell from $51,726 in 2008 to $50,221 in 2009, and yet the personal wealth of members of Congress and the salaries of federal workers (especially at the higher levels) continue to explode. A lot of corrupt politicians and federal fat cats are raking in stunning amounts of cash, and we are the ones paying the bill. There is certainly nothing wrong with making a lot of money, but does it seem right that so many of our "public servants" are getting filthy rich while so many of the rest of us are barely getting by?

#1 According to an article in the Hill, House Speaker Nancy Pelosi's net worth soared from $13.7 million in 2008 to $21.7 million in 2009.

#2 In 2005, 7420 federal workers were making $150,000 or more per year. In 2010, a whopping 82,034 federal workers are making $150,000 or more per year. That is more than a tenfold increase in just five years.

#3 More than half of the members of the U.S. Congress are millionaires.

#4 The total compensation that the U.S. government workforce is going to take in this year is approximately 447 billion dollars.

#5 Today, all members of Congress earn at least $175,000. This is far, far more than the average American makes.

#6 60 percent of the federal government workforce is represented by labor unions.

#7 The median wealth of a U.S. Senator in 2009 was 2.38 million dollars.

#8 In 2005, the U.S. Department of Defense had just nine civilians earning $170,000 or more. When Barack Obama took office, the U.S. Department of Defense had 214 civilians earning $170,000 or more. In June 2010, the U.S. Department of Defense had 994 civilians earning $170,000 or more.

#9 Insider trading is perfectly legal for members of the U.S. Congress - and they refuse to pass a law that would change that.

#10 According to a recent study conducted by the Heritage Foundation, federal workers earn 30 to 40 percent more money on average than their counterparts in the private sector.

#11 When you factor in such things as retirement and health care benefits, the compensation gap between federal workers and private sector employees gets even larger. Just consider the following quote from the Heritage Foundation study mentioned above....

"Including non-cash benefits adds to this disparity. The average private-sector employer pays $9,882 per employee in annual benefits, while the federal government pays an average of $32,115 per employee."

#12 The personal wealth of members of the U.S. Congress collectively increased by more than 16 percent from 2008 to 2009.

And so while Mr. Buffett exhales in relief and pays homage to the gods he worships that he doesn't have to lower himself to dine at a McDonald's on Thanksgiving, let's take a look at how the "other half" lives in Amerika today on the week before Thanksgiving.

FROM THE ST. PETE TIMES:
Gulfport man tries to kill himself as bank forecloses on his home
http://www.tampabay.com/news/humaninterest/article1134965.ece

The bank sent someone to drill through the lock. It was 9:02 a.m. when the drilling stopped. The busted lock hit the floor inside.

That's when they heard the gunshot.

The man not only tried to kill himself, he succeeded. But to listen to ass-wipes like Warren Buffett, perhaps we should be thankful that the criminal banskters, the stocks of many of whom Buffett owns in his Berkshire Hathaway portfolio, are made whole and protected.

God Bless America this Thanksgiving.

But just in case, be prepared for "TORCH AND PITCHFORK 2.0". In this case I trust, the sequel will be so much better than the original.

HAPPY THANKSGIVING MR. BUFFETT. YOU ARROGANT, SELF-ABSORBED PIECE OF SHIT!!

-------
FROM THE DAILY BELL:
http://www.thedailybell.com/1535/What-Kind-of-Freedom.html

Start with Buffet. Here is a man who constantly campaigns for increased taxes to be placed on US citizens, identifies himself as a Democrat and is worth something like US$50 billion. He poses as an investor, but really he makes "investments" in businesses that have hidden economic advantages, usually via regulatory loopholes. Of course Buffet may seem free-market oriented in the sense that he has made a fabulous fortune in the "investment game" – but when one examines his criteria for picking companies, it becomes obvious that one of them is mercantilism.

This means that Buffet values companies that in some way have developed access to the US government at state or federal levels and can pull levers of power available to no one else. Buffet is thus not investing in companies that necessarily have a better widget. He is putting his money into companies that are interacting most efficiently with government. He is not in his investing making a principled stand for entrepreneurialism or free markets but seeks out firms that have best exploited the current socialist and leveling environment of the US. It is difficult to reconcile this investment philosophy with freedom.

Tea Party as Third Party or the Torch and Pitchfork Crowd personified?

This will be the long-term future direction of the Tea-Party IMO.

The RINO's will regroup and reclaim their position within the GOP and push out the "Tea Party element" within the GOP.

They will be joined by the Blue Dog Dems -- who also feel out of place withing their own party -- and some Independents.

The D,I,R and TP's will each corral about 25% of the electorate.

The Crist's and Castle's and Murkowski's and Arlen Specter's of the world show a disgusting sense of entitlement and "how dare they toss me aside" attitude that people find disturbing.

The government as a whole has a sense of "how dare you question the methods by which we deliver you government" through this behavior and the continued foot-dragging on issues such as auditing the Fed. Regular folks and businesses cannot turn down an opportunity to be audited by government officials like the IRS or the SEC. But government routinely avoids having the light of day turned to their activities and the people are now suspicious as well as angry.

The government and the Fed is now afraid that if regular folks become embedded in their little country club setting and give the people an inside look at what goes on in Washington that their would be a revolution. Hopefully, it's a peaceful one.

From Gallup:

PRINCETON, NJ — Americans’ desires for a third political party are as high as they have been in seven years. Fifty-eight percent of Americans believe a third major political party is needed because the Republican and Democratic Parties do a poor job of representing the American people. That is a significant increase from 2008 and ties the high Gallup has recorded for this measure since 2003.

We can see the seeds being planted in the following stories from the past week.

Trouble to the right of me.

from publiusforum.com

http://www.publiusforum.com/2010/09/18/country-club-rino-republicans-throwing-temper-tantrums/

Country Club, RINO Republicans Throwing Temper Tantrums

September 18, 2010

-By Warner Todd Huston

One of the interesting things of this election cycle has been to see what sore losers RINOS and country club Republicans are becoming. Since the Tea Party Movement has been throwing establishment GOPers out right and left (or maybe that’s let and left) some of them have responded with petulance instead of accepting the will of the voters.

In fact we’ve been seeing quite a few little tantrums thrown by the RINO set as voters have been turning against them.

Recall that “Benedict” Arlen Specter had to jump parties because Republican Pat Toomey was encroaching on the privilege that Specter assumed he’d earned. Once it became clear that Toomey was the GOP choice, Specter petulantly snubbed him and no support was forthcoming from
supposedly life-long Republican Specter.

Are all these temper tantrums really all an effort to support the “most electable candidate,” i.e. the RINO? Or is this a RINO protection racket we are seeing? All I know is that in many cases this year the voters are speaking for the Tea Party-styled candidates, those candidates that stand for real conservative values. Yet the country club set, the RINO faction is standing in the way of the will of the voters.

And trouble to the left of me.

from Fox News

http://www.foxnews.com/politics/2010/09/22/blue-dog-democrats-use-health-care-overhaul-campaign-punching-bag/

Blue Dog Democrats Use Health Care Overhaul as Campaign Punching Bag

When House Speaker Nancy Pelosi let 30 Blue DogDemocrats break ranks to vote against the controversial health care overhaul in March, she probably didn't expect them to go the extra mile and campaign against it in the fall.

But for several of these fiscal conservatives, the bills they didn't vote for have become far more important to their campaign message than the legislation they supported.

Members of the so-called Blue Dog Coalition are railing against the health care bill, and other Democrat-sponsored spending packages, in a bid to highlight their independence from the Washington establishment. In a year when spending is a top voter concern and incumbency can translate to liability, Democrats in moderate-to-conservative districts are using their ads, websites and public appearances to condemn their party's marquee legislative achievement in the closing weeks of the campaign.

"The majority of the American people are against it. I believe that our nation can't afford it. And I didn't vote for it," Rep. Gene Taylor, D-Miss., told Fox News in reference to the health care bill.

Taylor last week went further than any of his Democratic colleagues in speaking out against the law. He joined dozens of congressional Republicans in calling for a repeal of the package, the first Democrat to do so.

The good news is that slowly but surely, some on the left are starting to see the light.

EVEN CHRIS MATTHEWS -- WHO USED TO GET A TINGLE UP HIS LEG WHENEVER OBAMA SPOKE -- IS NOW CORRECTING THE ANOINTED ONE.

Important Distinction: Giving People Tax Cuts Is NOT Giving People Money; It's ***THEIR*** Money

http://mjperry.blogspot.com/2010/09/giving-people-tax-cuts-is-not-giving.html




The bad news is some are still woefully ignorant. This statement, from someone who I used to admire and respect, shows we still have a long way to go. This kind of ignorant statement makes Republican Senator Jim Bunning look compassionate.

WARREN BUFFET'S RIGHT-HAND MAN SHOWS CONTEMPT FOR THE "LITTLE" PEOPLE WITH HIS STUNNING "LET THEM EAT CAKE" REMARKS.

"SUCK IT IN AND COPE" - SHOWS THAT ARROGANCE AND GREED DO NOT KNOW PARTY BOUNDARIES.

THESE GUYS OPENLY SUPPORTED, CHEERED AND PROFITED FROM THE BAILOUTS, STIMULUS AND FEDERAL RESERVE TINKERING IN THE ECONOMY.

from MISH'S Global Economic Trend Analysis Blog:

http://globaleconomicanalysis.blogspot.com/2010/09/amazing-arrogance-gall-chutzpa-and.html

Amazing Arrogance, Gall, Chutzpa, and Unmitigated Effrontery from Berkshire Hathaway
Posted: 20 Sep 2010 08:07 PM PDT

It's hard to know exactly the precise words to describe the arrogance and unmitigated effrontery of Charles Munger, the billionaire vice chairman of Berkshire Hathaway, who today rattled off an insane barrage of insensitive comments regarding the bailouts.

Charles Munger, the billionaire vice chairman of Berkshire Hathaway Inc., defended the U.S. financial-company rescues of 2008 and told students that people in economic distress should “suck it in and cope.”

Munger's quotes:

Charles Munger, the billionaire vice chairman of Berkshire Hathaway Inc., defended the U.S. financial-company rescues of 2008 and told students that people in economic distress should “suck it in and cope.”

“You should thank God” for bank bailouts, Munger said in a discussion at the University of Michigan on Sept. 14, according to a video posted on the Internet. “Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies.”

“Hit the economy with enough misery and enough disruption, destroy the currency, and God knows what happens,” Munger said. “So I think when you have troubles like that you shouldn’t be bitching about a little bailout. You should have been thinking it should have been bigger.”

Germany was unable to stabilize its financial system in the 1920s, and, Munger said, “We ended up with Adolf Hitler.”

“Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies.”

So we should all thank God that our government is around to steal money from the middle class, the savers, the people who did things right -- in order to to bail out the wealthy, the profligate spenders and gamblers who bet their own money and lost and now want a subsidy from the rest of us so they can keep playing the game? That money was not manna from heaven, it was money begged, borrowed and stolen from the American taxpayer, you braying jackass.

If there's one thing that the Tea Party movement is all about is that people FINALLY are beginning to recognize what is going on and are not just saying NO, they are saying HELL NO!!!

They are tired of these intellectual snobs in Washington -- don't let the door hit you in the ass on the way out Larry Summers -- telling regular folks that they know better and the voters are too stupid to understand these complex issues they've screwed up.

They are tired of these people spitting in our faces and then trying to convince us it's raining.

What they don't get is the Tea Party is the torch and pitchfork crowd personified, and they are tired of being ignored, not listened to, lied to and stolen from.

FOR FURTHER READING PLEASURE:

From The Daily Bell

US Fed Gains Power, Loses Credibility?
Saturday, September 04, 2010 – by Staff Report

http://www.thedailybell.com/1346/US-Fed-Gains-Power-Loses-Credibility.html

Libertarian Congressman Ron Paul (R-TX) recently asked for an audit of the gold in Fort Knox. The mainstream media pooh-poohs such demands as paranoia. Yet the Fed and its enablers have resisted thorough ongoing scrutiny as well. Instead the institution has received significant additional powers. See the pattern? On the one hand, the Fed resists accountability. On the other, Bernanke et al. present an apologetic front and vow they will do better next time.

This is the kind of crisis control that the power elite practiced in the 20th century; it is today the kind of crisis control being applied to such failed dominant social themes as global warming. But we wonder if it will work in the 21st. In our view, people have already seen too much, know too much and are too upset. When it comes to the law and legislation, Bernanke and Congress may be in the right. But the law can only go so far. Sometimes, such ventures begin to look questionable regardless.

When people know too much, the law itself can begin to seem suspect; and this is how societal upheavals are created. This is in fact an inflection point for the powers-that-be. Creating fear-based promotions in order to generate societal consent for ongoing concentrations of power and wealth – the manufacturing of an authoritarian society in other words – has worked well for the PTB. But when the promotions begin to fail (due to information on the Internet in our view) and the elite continues its programs regardless, then the potential for social tension increases dramatically.

The Mind Conspirators
Saturday, September 04, 2010 – by Nelson Hultberg

http://www.thedailybell.com/1347/Nelson-Hultberg-The-Mind-Conspirators.html

More and more Americans today are coming to understand the terrible truth about our Federal Government -- that it seeks to dominate us as citizens, to mold us into a society of dutiful Stepford Wives totally beholden to the wishes of elite politicians, bureaucrats and bankers. Those who study history, independent of the public school system, understand that this state aggrandizement process has been under way for the past 100 years in America in one form or another, and that it is taking place because too many of our citizens sanction such dictatorial usurpation and actually work diligently for its implementation.

‎"Anyone going to his neighbor's home and taking his money at gunpoint, regardless of all the wonderful, selfless things he promised to do with it, would be promptly arrested as a thief. But for some reason it is considered morally acceptable when government does that very thing." -- Ron Paul, The Revolution: A Manifesto, 2008

What we get from our leaders versus what we need

What we get is more "throw-weight", more B.S., more legislative "look what we've done on your behalf" posturing and less effectiveness.

ILLUSTRATION ABOVE AND ARTICLE TO FOLLOW FROM MARK PERRY'S CARPE DIEM WEBSITE:

http://blog.american.com/?p=16950

‘I Didn’t Have Time to Write a Short Bill, So I Wrote a Long One Instead,’ Part II

By Mark J. Perry

July 16, 2010, 8:05 am

Back in December, Nick Schulz helped put the size of the 2,074-page healthcare bill into some historical context by comparing its length to some previous bills that rank among the most consequential in U.S. history, like the 82-page Social Security Act of 1935 and the 74-page Civil Rights Act of 1964.

Now that Congress has passed the “Dodd-Frank Wall Street Reform and Consumer Protection Act,” it might be a good time to compare the 2,319-page financial reform bill (245 pages longer than the healthcare bill) to the previous bills listed below (and see graph) that are considered among the most consequential legislative acts for banking and finance.

1. Federal Reserve Act (1913) - 31 pages.

2. Glass-Steagall Act (1933) – 37 pages.

3. Interstate Banking Efficiency Act (1994) – 61 pages.

4. Gramm-Leach-Bliley Act (1999) – 145 pages.

5. Sarbanes-Oxley Act (2002) – 66 pages.

Like Nick said, the numbers pretty much speak for themselves, but I can’t resist making just a few comments:

1. It took only 31 pages of legislation in 1913 to create the nation’s central bank and establish the entire Federal Reserve System, with a Board of Governors and 12 district banks, as well as creating a single new U.S. currency. In comparison, just the table of contents (15 pages) and the list of definitions (11 pages) in the Dodd-Frank bill is almost as long as the entire Federal Reserve Act, and the total Dodd-Frank bill at 2,319 pages is almost 75 times longer.

2. One of the most major acts of banking reform in U.S. history, the Glass-Steagall Act of 1933, which overhauled America’s banking system following 9,000 bank failures in the early 1930s, took only 37 pages of legislation or 1.6 percent the number of pages in the Dodd-Frank bill.

3. The combined size of the five previous major banking bills listed above comes to only 335 pages in total, or about one-seventh the size of the whopping 2,319-page Dodd-Frank bill.

4. Many critics of the 61-page Sarbanes-Oxley Act argued that it could more accurately be called the “Accountants’ Full Employment Act of 2002.” Harvey Pitt, former SEC chief, has already referred to the 2,319-page Dodd-Frank bill as the “Lawyers’ and Consultants’ Full Employment Act of 2010,” and adds that “this legislation fixes nothing, accomplishes nothing, yet promises everything.”

What we need is more old-fashioned common sense and values. What a concept.

COMMON SENSE!!! VALUES!!! THE GOLDEN RULE!!!

Instead we seem content to continue on this path of calling the arsonists who set the fire to come in and put out the fire. That doesn't seem to make a whole lot of sense. Maybe we should have the burglars investigate and solve the crimes. Oh wait, we do have that in Washington. My bad.

Warren Buffet's self described right-hand man Charlie Munger gets right to the heart of the matter when he spoke before a group of USC Law students many years back.

USC Law: Speaker Charles Munger encourages a lifetime of learning

“The safest way to get what you want is to try and deserve what you want. It’s such a simple idea – it’s the golden rule, so to speak,” Munger said. “You want to deliver to the world what you would buy if you were on the other end. There is no ethos, in my opinion, that is better for any lawyer or any other person to have. By and large, the people who have this ethos win in life.”

Even Sen. Dodd while taking his victory lap of interviews for passage of this legislation -- that will do nothing but provide an appearance of accomplishment -- admitted that this bill will do nothing to prevent the worst elements of human behavior (greed, gluttony, avarice, coveting) to creep in and create a new crisis in the future. What is that line coaches often spew, "Don't mistake activity for accomplishment"?

Thanks, once again, for nothing Senator.


For an analysis of the plusses and minuses provided by the legislation, I give you the most recent article published by Mish Shedlock, who blogs at Mish's Global Economic Trend Analysis

http://globaleconomicanalysis.blogspot.com/2010/07/financial-reform-bill-was-stunning.html

Financial Reform Bill was a Stunning Success

To fully appreciate how amazingly good this piece of legislation was, we must look at the pluses (what the bill accomplished), the minuses (objectives the bill failed to meet along with any damages done), and the critical issue (reasonable expectations as to what the bill might have accomplished). Let's start with the minuses.

Financial Reform Minuses

Glass-Steagall: Paul Volcker supported provisions that were hopelessly watered down, so much so that they can accomplish nothing. This was a complete failure.
Derivatives Reform: Banks successfully lobbied for derivative exceptions big enough to drive the planet Jupiter through. They succeeded. Derivatives reform is meaningless.
Too Big To Fail: The reform bill did absolutely nothing to rein in the widely recognized "too big to fail" policies of the Fed. This was a complete failure.
Preventing the Last Crisis: There is not a single thing in the bill that can possibly be construed to have prevented the last crisis. This was a complete failure.
Preventing the Next Crisis: There is not a single thing in the bill that can possibly do anything to prevent the next crisis. This too was a complete failure.


Financial Reform Pluses

None. The bill accomplished virtually nothing.


No doubt quite a few inquiring minds will be wondering how a financial reform bill that failed at 100% of its objectives while accomplishing virtually nothing can possibly be considered a "stunning success".

This is where it pays to consider the crucial point: reasonable expectations.

Reasonable Expectations

The best way I can explain reasonable expectations is via an analysis of the Medical Reform bill, promoted, passed, and signed by President Obama even though a majority of US citizens were dead against it.

Medical reform did nothing to promote competition between states, nothing on tort reform, nothing to allow drug imports from Canada that would lower prescription costs and most importantly, nothing on reducing costs any step of the way.

That's the positive side of medical reform.

The negative side of the balance sheet is that medical reform will cost a trillion dollars while increasing costs on small businesses at a time we can least afford to make that critical mistake. Furthermore, the bill panders to public unions and their luxury 100% paid for plans that put upward pressure on healthcare costs.

Medical Reform vs. Financial Reform

Medical reform not only accomplished nothing, it actually made matters substantially worse.

In sharp contrast to medical reform, I cannot come up with any financial reform provisions that make matters substantially worse.

Given the absolute best we could ever expect out of a major piece of legislation supported and promoted by Obama is nothing, and given that nothing was accomplished with no major detriments making matters much worse, the financial reform bill must be considered a stunning success.

Indeed, we should all be thrilled by it.