Wednesday, November 23, 2011

The Sarcasm Report v.141

The following economic theory comes from Bermuda Commercial Bank's treasurer Dan Commissiong. I've got to tell you. It's a whopper.

November 19, 2011
‘Prosperity was illusion created by global credit bubble'

Part 1 The Illusion of Prosperity

To even the casual observer of the global economy it is painfully obvious that all is not well economically, both here in Bermuda and abroad.

Daily economic headlines in our local newspapers and websites read almost verbatim with headlines found in overseas publications. News reports of economic dysfunction are rife, with almost daily reports of layoffs, bankruptcies, business relocations to other jurisdictions, intractable government budget deficits, falling asset prices, high levels of private indebtedness, and highly volatile capital markets.

Throughout the western developed economies average middle class people are at a loss to explain what is happening to their living standards (in Greece especially I imagine), having never experienced this level of economic fallout before in their lives.

Even elected political leaders and senior government finance officials in these countries are at loss to explain how their economies have managed to arrive at the precarious position they find themselves at today.

I believe that the best explanation is simply that a great deal of the prosperity experienced since the early 1980s was an economic illusion created by a global credit bubble that burst in 2008. The fallout from that burst is what's driving today's headlines of economic dysfunction.

There's not a rational creature on this planet who would believe this illusion of prosperity theory. It's just crazy talk!

Stagflationary Mark's Dog - Believer Since 2004

That's not proof. My dog Honey irrationally believes everything I tell her. She's overflowing with magical thinking.

We use ritual acts most often when there is little cost to them, when an outcome is uncertain or beyond our control, and when the stakes are high—hence my communion with the fuselage. People who truly trust in their rituals exhibit a phenomenon known as "illusion of control," the belief that they have more influence over the world than they actually do. And it's not a bad delusion to have—a sense of control encourages people to work harder than they might otherwise. In fact, a fully accurate assessment of your powers, a state known as "depressive realism," haunts people with clinical depression, who in general show less magical thinking.

Fortunately, the public has access to advanced ritualistic free trading tools that help us in these uncertain times. It gives us a sense of control. It makes the average investor smarter than the average investor. And let's be perfectly clear here. We're talking tens of millions of retail investors doing hundreds of millions of online trades generating billions in revenue for tens of thousands of highly compensated financial executives. The stakes don't get much higher than that.

I searched for "free trading tools" in Google and only got 2.34 million hits. It's one of Wall Street's most closely guarded magical thinking secrets. Everyone can be a
trend line master! It doesn't even require any information on the economy. How cool is that?

It's not a coincidence that man's best friend has mastered the art of magical thinking. We stick with what works! Without magical thinking, we'd all be victims of a clinical great depression by now. There's nothing worse than
depressive realism to ruin a perfectly good party.


Who Struck John said...

Thank you for identifying my problem: not enough magical thinking.

Stagflationary Mark said...

Who Struck John,

Just put your 1970s heart into it!

mab said...

I searched for "free trading tools" in Google and only got 2.34 million hits.

Only 2.34 million? Wow, that seems really light. I think you're definitely onto something here. If we could get 10x that many I think we could put this depressive realism behind us.

As usual, the solution is another Gov't program. How about a Gov't (trading) program! Along with food stamps, we could issue a trading cards - (credit) trading cards of course!

nanute said...

It was a cute "baby" turkey, right? You have my permission to share it if you like.

Audrey said...

I'm speechless. (Well, not really.)

Now I have something to tell myself when I am at Thanksgiving dinner today with extended family. They have the "Illusion of Control". My "depressive realism" only gets me all worked up and makes people mad and/or ignore me. I've learned it's better to talk about the weather, but sometimes I forget.

Struggle... The worst part is that if I successfully avoid discussing reality, I end up being polite and agreeing with the magical thinking verbally. Luckily I have various sources of blogs where I can afterwards re-confirm that I am in fact more in touch with reality than they are. (As far as I can tell.)

Happy T-day. I gotta go have the internal battle. Events are going to go on regardless - later, if I'm lucky, I'll have an internal battle over whether to say I told you so...


tj and the bear said...

Happy Thanksgiving, Mark!

Same to all your loyal followers!!

Great find on that Bermuda guy's quote. You won't find that kind of clarity anywhere in the MSM.

fried said...

To you, Honey and your SO...Happy Thanksgiving. And, many thanks for your blog.

Stagflationary Mark said...


As usual, the solution is another Gov't program. How about a Gov't (trading) program! Along with food stamps, we could issue a trading cards - (credit) trading cards of course!

Genius! I'm picturing an ultra-rare Indentured Servant card.

They were not paid cash. It was a system that provided jobs and—most important—transportation for poor young people from the overcrowded labor markets of Europe who wanted to come to labor-short America but had no money to pay for it.

Labor-short America! What a hoot!

Stagflationary Mark said...


Where on earth did you get that baby turkey picture? Hahaha!

I wouldn't feel comfortable sharing it without being able to reference the source. For all I know it was photoshopped! ;)

Stagflationary Mark said...


I gotta go have the internal battle.

I have a magical thinking solution.

Just change "internal" to infernal!


Stagflationary Mark said...

tj and the bear,

Great find on that Bermuda guy's quote. You won't find that kind of clarity anywhere in the MSM.

Top 10 Conspiracy Theories: No. 06 - Bermuda Triangle

According to theorists, supernatural elements are responsible for the disappearances. Some say extraterrestrial beings are to blame, while others point to the mythical lost continent of Atlantis.

And now we've got people blaming the illusion of prosperity? Where will it end? ;)

Stagflationary Mark said...


And, many thanks for your blog.

Just wait until I team up with the pharmaceutical companies! Only then will I be creating a truly fun environment with creativity and fun!

Antidepressant Realism Capsules™

Combines blissful ignorance of the illusion (blue pill) and the painful truth of the reality (red pill) into one gel-coated easy to swallow capsule.

Fritz_O said...


Would you consider doing a "Stimulus Physics Update #5"?

It's been about a year and a half since #4. I could not find a #5.

Stagflationary Mark said...


I renamed the series once I felt the physics was being replaced by stagnation.

August 22, 2011
Stagnationary Prediction Update

In hindsight, the chart I did on June 25, 2010 (as seen within the link) is still holding up reasonably well.

I thought the DJIA would flatline at 10,500 back then (just a guess). 17 months have passed. It's now trading at 11,232. That's a 7% gain (4.9% annualized).

In any event, the upward momentum has slowed significantly.

Stagflationary Mark said...


I'll post a new chart shortly. Perhaps physics does still apply. :)