Happy Halloween!

Cross-posted from Antidotes du Jour at Naked Capitalism

Cross-posted from Antidotes du Jour at Naked Capitalism

The European Deal Explained

Here is an animated version of all you need to know about the Grand Bargain Deal in Europe:

Europe - Are We There Yet?

Said simply, the answer is no.

Here are some images taken from various blogposts today:

Protesters in the Puerta del Sol, Madrid

From an Athens article today

Notice the Nazi uniforms and helmets

So where are we? Most of what you will read in the MSM is reporting that Angela pulled it off, or that Merkel and Sarkozy pulled it off - a complex diplomatic dance that finally arrived at a Grand Bargain solution: a three part deal combining a plan to raise bank capital levels, a voluntary restructuring of Greek debt, and an increase in the EFSF "bailout fund" from $440 billion Euros up to as much as $1.3-$1.4 billion Euros. The markets took off on Thursday, after the deal was announced, then gave up a bit on Friday. The Italian bond auction Friday was a mixed bag at best: the 10 year bonds had to be priced to yield 6.06% to sell, above the 6% "affordable limit" and higher than pre-deal.

What gives? The long and the short of it: no new money came in, over what had been pledged in July in the 440 billion Euro deal. Banks have been told to raise Tier 1 capital to 9% by June: indications are most will get there by selling assets or not renewing existing commitments, as opposed to raising fresh money. Holders of Greek sovereign bonds have been heavily strong-armed to take a "voluntary" 50% haircut, bringing Greek debt/GDP ratio to 120% in 2020. The just-finally-approved $440 billion Euro European Financial Stability Facility (EFSF) will be levered up to as much as $1.4 trillion Euro by using part of the original commitments to provide first loss credit insurance on new Italian or Spanish sovereign bonds. Additionally new money may come in from China or Japan, or both, to combine with a portion of the EFSF funding in SPVs (Special Purpose Vehicles) to buy new Italian or Spanish bonds.

So with no new money (until/unless China and Japan come in), we are supposed to solve the Euro crisis essentially with mirrors. Color me skeptical. Or more precisely, incredulous.

"Nein, nein, nein."

I simply cannot resist reposting this from Richard Cohen in a Washington Post op-ed piece today. I rarely laugh when reading op-eds, but this wiped me out:


"...Now we have the question of whether Romney, a Mormon, is actually a Christian. (He certainly looks like one.) I mean, who cares? How high should we build a border fence and should it be electrified? And what about Ben Bernanke and the Fed? Fire him, for sure. Close the place down. Right on! Does anyone disagree? Only Herman Cain, to a degree. It’s nearly unanimous. The motion is carried. Let’s move on.


To what? Not to a real discussion of the issues. Obamacare might or might not be a failure (it hasn’t even been fully implemented), but what should replace it? What should be the proper role of the U.S. in the world? What should we do about illegal immigrants? Can private enterprise alone create enough jobs, and what to do with an Everest of foreclosed homes? What would we do without the Fed? If TARP is such a failure, how come many economists think otherwise? Doesn’t anyone disagree about anything?  Not, for sure, Romney.  The old Romney thought for himself. The new one is a conservative apparatchik.


Dissent has been purged by a radically conservative media and like-minded voters in the primary and caucus state. The GOP is in thrall to dogma and ignorance, hermetically sealed against uncertainty, hostile to inquiry and inadvertently mimicking the leftist parties of old when communists, Mensheviks, socialists and other “icks” would beat the brains out of one another over some fine point of Marxist dogma. Is this the way to go?  As Karl Marx, a German, might have said by way of Herman Cain, “Nein, nein, nein.”

Europe - Update

A big and indecisive day in Europe today. These are pictures in Athens in the second day of the 48 hour General Strike, shortly before the Greek Parliament approved another tough round of austerity measures. This weekend was supposed to be decisive, with a Sunday meeting to declare and present the Grand Plan. But France and Germany cannot come to agreement on the Plan; so the meeting will be held, but the Summit where all things will be decided and revealed is moved to Wednesday.

It's a mess. A Big Mess. Strangely enough, our markets are still listening to the refrains of optimism. The S&P was up a tick today, although Europe was slightly down. No one knows what will come down; for now, optimism can still make its case.

If, for the moment, we leave out the fundamentals, the crisis has three parts that a Grand Plan must address: recasting the July deal on Greece, where bondholders agreed to a 21% haircut voluntarily (thus avoiding a CDS triggering credit event); recapitalizing European banks (estimates range from $80 billion to $400 billion); and finding a way to leverage the 440 billion euro European Financial Stability Facility (EFSF) to support Greece, the bank recap, and prevent sovereign defaults by supporting sovereign bond issues.

Lots to do. No real mechanism to do it. And disagreement among the principals. Will this all work out, if only at the last minute, like the painful, yet successful debt ceiling deal in the US? Possibly. Possibly not. If I had to bet, I would bet yes, but add that the likely "solution" will only be a bandaid, and the same crisis will shortly reemerge.

The Republican Debate

Did you watch? What did you think? Who would you feel comfortable with as President and Commander in Chief, particularly in an economic or national security emergency?

There are lots of qualities we want in a President, and I suspect there would be pretty fair agreement on the following: intelligence, experience, judgment, composure, courage and possibly less agreement on this last one compassion. Did anyone last night reasonably embody these qualities?

Even the unflappable Romney was seriously ruffled by Perry's attacks, though, on balance he came out the best in my view, although the bar was set way too low.

I was embarrassed: it was like watching a debate among angry adolescents. Very sad to think this is, in theory, about half of our political universe.

Here is just a few of the big questions that were not discussed (I know Anderson Cooper asked the questions, and encouraged the "bickering", but when has a politician not ignored the commentator and talked about whatever he/she wanted to say?):

     1. What's wrong with the President's jobs bill?

     2. Do we hope the Supercommittee succeeds or fails in reaching a budget deal?

     3. If they fail, will you honor the Summer 2011 agreement and carry through with the mandatory cuts to Defense and Medicare?

     4. Do you believe that Medicare must be thoroughly restructured, along the lines of the Ryan Plan? How about Social Security?

     5. Do you basically agree that the US can no longer afford its social safety net?

     6. Do you think Wall Street and the Banks are responsible at some significant level for the 2008 crisis?

     7. Do you support Tom Miller, Iowa's AG, who is trying to put together a multi-state foreclosure deal with the major banks, or do you side with New York AG Eric Schneiderman and Delaware's AG Beau Biden, who have pulled out of the talks, arguing the banks do not deserve a broad release from liability?

     8. Do you agree that the US recovery will not take off, until housing recovers? And that with up to 40% of US home mortgages underwater, or almost underwater only serious debt relief and principal forgiveness will clear up the logjam and get us moving?

     9. What's the greatest national security danger facing the US?

     10. What would you do differently from President Obama in dealing with this danger?

And so on. The issues are real, present; and we don't seem to be able to talk about them in any intelligent, respectful way.

OWS Continued

Here's the New Yorker cover for this week:

And a Calvin and Hobbes from the archives, still very on point:

Yesterday Doug Schoen had a very negative op-ed in the Wall Street Journal here. Schoen argued that Democrats were making a potentially catastrophic mistake by choosing to align with OWS, because their views were wholly out of step with mainline America. Numerous writers have criticized Schoen's characterization of his own research, including here. Today, the Journal Online published a clarification piece, repositioning Schoen's research, showing the group is much more mainline than Schoen claimed (here). This is the summary graf from the Journal article today:

"So the survey tells us that the Zuccotti Park protesters are underemployed at twice the national rate, lukewarm to warm on Obama and broadly in favor of taxing the wealthy and encouraging a Tea Party-style populism on the left."

 If you watched the Republican debate last night, you surely heard the cheers Cain received when he reaffirmed his criticism of the protesters, saying "If you are not rich, it's your fault", and "What do they want the Wall Street folks to do - come down and write them a check?" Today Representative King declared that if Martin Luther King were alive, he would condemn the protesters. Remarkable. Remember the spiritual truth: "What you believe is what you will see." Republicans and conservatives as a group are simply not getting it. If OWS proves to have legs, this will be costly.

For those of you really intrigued with this leaderless, structure-less, agenda-less movement (as I am), here are two serious, in depth articles from today:

David Graeber, former Yale prof, now teaching in London,has been in this "direct democracy" movement for a good while, and he wonders here why it looks like OWS will be/is successful, whereas earlier efforts had more limited success. A blogger called 

riverdaughter also reflects on OWS' success, and advises those who wish to participate to "go for a walk. or have a snack break" if the euphoric feeling of flow gets too strong and heady, because when you feel the high, you are so open that you can be vulnerable.

Riverdaughter tells us that there are beginning plans for a very large Central Park rally on 11/11/11...lovely symmetry.

Pay attention to this movement. Something is moving. Things that were not visible before are becoming visible. Some call this magic. Others call it awakening.

What do They Want?

It seems to be a mystery to almost everyone - what do they want? Why don't they give out a list of demands? How can they possibly think they will accomplish anything if there is no structure, no leadership, no plan? Who benefits from OWS - Republicans or Democrats? How could this possibly last more than a few weeks without leaders, specific goals, timetables, or organization?

If you were asked to write a short, descriptive note describing Occupy Wall Street, what would you say? Or try this: I will give a short list of questions about OWS. Try to answer them for yourself. And then I will give my perspective. This does not mean that I am right, that I know the right answer. Not at all. I will simply give you my personal perspective, in the form of my answers to my questions. Here we go:

          1. Have you ever been in a similar group, movement or protest?
          2. What do you most clearly remember from the experience?
          3. What was more important: the broad vision and dream or the specific goals and objectives?
          4. How did you generate commitment from group participants?
          5. Did the group hold together in tough times?
          6. Now, in the case of OWS, what are the "deep currents" that power the movement?
          7. Why don't they develop and present plans, specific demands?
          8. Why are there no leaders? no apparent structure?
          9. Is this class warfare?
          10. Shouldn't the protesters stop complaining, suck it up, and just get back to work?
          11. Who wins from this - Democrats or Republicans?
          12. Will any of this make any difference?

Occupy Wall Street - Update in Pictures

It's Saturday, October 15 and Occupy Wall Street is about one month old. Today protests sprouted up in hundreds of cities around the globe. Have collected a variety of images that help to portray the breadth, depth and diversity of the movement:

Rome, today, in front of the Coliseum

Rome, about 100,000 marchers. OWS connected to anti-austerity.

Julian Assange, speaking today in London

Elizabeth Warren

There will be a coming together of the spirit underlying Occupy Wall Street and this remarkable woman, Elizabeth Warren. She could be our President some day. Watch her new video bio:

Is There an Arc of History?

You remember that famous Martin Luther King quote Obama uses: "The arc of history is long, but it bends towards justice." Do you really believe that? I do, but I am not sure how many really agree with that lofty statement.

Neither King nor Obama were talking apocalyptically - in other words, they were not pointing to the End Times when believers affirm there will be a Reckoning and Justice will prevail. They were talking about our lived history - long, convoluted, painful, sometimes disastrous, but over the long span of time, according to King and Obama, there is a directional arc, a progressive flowing of events that leads towards increasing Justice.

This view certainly does not exclude the Divine's presence in the world; rather it says this must be present all the time, all along, in ways visible and invisible, and that we do not wait for the possible Final Reckoning to look for the thread of Progress.

"Are things getting better or worse," I sometimes ask folks. "From a broad view, do you think everything will work out, or will things fall apart?" These are essential questions. They shape our stance in the world - are we optimistic or pessimistic? Am I always scrambling to hold together what is trying, inexorably, to collapse? Or can I stand in the river and flow of things and participate, sometimes effortlessly, in what is wanting to emerge?

I am convinced that either case can be made effectively. Observers, even scientists, will always find evidence of what they are looking for, what they believe is there, and what they hope/expect to find. The unattached, objective scientist exists, but it is a much rarer phenomenon than we might want to believe.

So I will state unequivocally: I believe there is an arc to history, that it bends toward Justice, that progress does exist, and that the source of this progress is the evolutionary development of human consciousness that, over very long periods of time, raises our individual and collective awareness and capacity for compassion and connection. I enjoy looking for evidence to support this faith; but the evidence itself is not necessary. As Julian or Norwich said:

"All things will be well. All manner of things will be well."


As Wordsworth wrote:

"There is a dark, mysterious force that reconciles discordant elements, and causes them to work in one society."


I love the quotes. And I revel in the supportive examples I find. And I am not at all opposed to building fairly large philosophical and psychological systems to support my faith. But these are not, at least not any longer, required.

All that said, it is still marvelous when I come across a very convincing bit of evidence. And here is just such an evidentiary piece:  Steven Pinker "Violence Vanquished", which appeared as a Saturday Essay in the Wall Street Journal on September 24. Here is the, to me, startling chart Pinker based his essay on:

I find this most impressive, in fact, astonishing. The world is getting dramatically more peaceful. Wow! More soon.

Occupy Wall Street (2)

Yesterday I discovered the We are the 99 Percent Tumblr blog site. It contains short stories of folks who say, as the girl above does, "I am the 99%". New stories are put up everyday, all the time. Tumblr is a unique blogging platform where you can send your post in from any mobile platform, and it is posted directly to the website, without blog manager intervention. Once the invitation went out for folks to share their stories on nthe Tumblr site, apparently, the stories flooded in. And they are still coming. Moving. Deeply touching. Here are a few more from today's postings:

I found this site last night. And I simply could not get their stories out of my head. Mike Konczal at Rortybomb, a great economics site, where I found the Tumblr link, put the entire site through a data analysis program, and came up with important and interesting information about the posters and their messages. First, age distribution:

And now, message content:

These folks are worried about debt loads, especially student debt; family; unemployment and healthcare. Are these self-descriptions whiny complaints posted by folks who just aren't trying hard enough? My answer is a resounding NO! But you should go to the Tumblr site and read, then judge for yourself.

Theses folks are frightened, and given the problems presented, quite matter of factly, it seems to me, their fear is reasonable. They are discouraged and frustrated. Angry? Sometimes, but not invariably. When we read these postings we are hearing honest, deeply felt cris de coeurs from the heart of America.

Will we pay attention? Will we heed their call? I am an unfailing optimist, but over time, I believe we will.

I think this movement may well have legs, in answer to my question in the last post. If so, this could profoundly shape the political discussion in the coming campaign.

Occupy Wall Street

I hope Occupy Wall Street (OWS) has legs. I think it does, but am just not yet sure.

Have you seen their The Occupied Wall Street Journal yet? Here is Issue #2. Here is a picture from page one: do these folks look like deadbeats?

I am profoundly moved by all this. Our elites, mostly on the Right, have absolutely no method of understanding this, at least not at its roots. They can see it as anti-Wall Street, but have no felt sense of where the OWS energy comes from. It doesn't look like Reverend Wright's church full of anger and hatred; yet it must be the same, mustn't it?

Democrats have been a bit slow on the uptake, but beginning with Obama's words of understanding last Thursday, then Pelosi's full embrace Sunday, the DCC has moved to support the Occupation movement. In a show of extreme stupidity, Republican leaders have, to a man (no women, remember?), denounced OWS? I cannot for the life of me see why. They call themselves the 99%. They have no interest in being a "revolutionary fringe/vanguard". They are speaking for all those who have not been helped by TARP, or other bailouts. By attacking the protesters, Republicans are saying their opposition to TARP is not about the people who were not helped; it's just a continuation of their anti-big government battle in support of the moneyed interests. Dumb. Really dumb.

Democrats must not try to preempt this. OWS protesters are mad at Democrats too. The banks have not been held accountable by the Democrats, and that's an almost unforgivable screwup. So the President must not try to co`opt this movement. Support and affirm it - yes indeed. But make no moves to co`opt it. Just stand by and let insensitive Republicans skewer themselves. It's always more effective that way.

More on OWS soon.

Whither Europe?

I will post recent stock charts for the London Exchange (FTSE). Germany (DAX) and France (CAC). Stocks on each exchange took a beating in early August (US debt downgrade), and have been choppy since then. Yesterday and today they all moved up around 10% (charts from FreeStockCharts.com):

England: up about 10%, yesterday and today

Germany: about the same

France: a similar story

And here is the S&P500 for the last week:

The S&P has also moved up about 10% in the last two days. Since most analysts assume Europe is driving the markets right now, what's up? Have the problems been taken care of?

Positives:

1. Both the Bank of England (BOE) and the European Central Bank (ECB) announced quantitative easing/bond purchase programs today to inject further liquidity into the market.

2. There is clear recognition that European banks are poorly capitalized, though there is not an agreed upon plan on how to fix this. Germany's Merkel thinks sovereigns should fund this on a country by country basis. France's Sarkozy wants to use the new, almost approved funding facility, the European Financial Stability Facility (EFSF), fearing France might be downgraded, like Italy, and lose its AAA rating, if France had to provide new equity capital for its banks directly.

3. Trichet, in his final appearance as head of the ECB, said it might be possible to further lever the EFSF through market debt sales; but he said no to using the ECB.

Negatives:

1. Secretary Geithner told Congress in testimony today that Europe needs a significantly larger funding facility than the 440 billion Euros EFSF (2 trillion Euro figures have been discussed, which most analysts believe would be a "big enough bazooka" to handle weak bank capital and sovereign debt issues, if any form of market panic occurs). The ECB is the only entity with that kind of fire power, but Germans in particular strongly resist turning the ECB into a liquidity spraying machine (which is what our Fed did in 2008-9).

2. England and Europe's economies are slowing down. Greece, and today Portugal, announced they would miss their negotiated deficit targets for 2011.

3. There seems to be a complete absence of understanding of the dynamics of debt deflation: if the economy (Greece, Portugal,etc.) turns down, government revenues decline, and deficits widen. Cutting government spending to balance the budget takes demand/spending out of the economy; consumption and GDP fall, government revenues fall again, deficits and debt go up, debt service increases and you simply take matters from bad to worse. You just cannot get to budget balance through austerity when the economy is slowing. There has not been a single leadership comment in the Eurozone that recognizes this reality.

Conclusion:

Europe is still a bomb waiting to go off. I do not think half measures will be enough to defuse the crisis. The ECB has the fire power to provide the necessary liquidity to the banks, as and after they recapitalize using a combination of sovereign and EFSF equity infusion, and to buy sovereign bonds, directly or indirectly, in quantities sufficient to convince the markets that no sovereign will be unable to find market funding. If Mario Draghi, incoming ECB head, were to announce that the ECB stands ready to provide whatever bank and sovereign liquidity is needed (which is what the US Fed did), the markets would quiet, and this crisis would be over.

Will it happen? It's possible, but very unlikely, at least until after the bomb has detonated, and the crisis has hit. For the ECB, for Angela Merkel, for the Bundesbank, unlimited liquidity provided by the ECB would appear to be a bridge too far. If a crisis hits, and the anti-debt monetization/austerity program is thoroughly discredited, a change may become possible.

As of now, I am not holding my breath. This crisis may still take more time to play out. When and if it blows, a new, more  generative order becomes possible. I honestly do hope this moment comes sooner rather than later, so we can finally deal with the deeply dishonest capital structures of our own banks.

Steve Jobs - Spiritual Master

A Master has passed away. Listen to his own words spoken at the 2005 Stanford graduation:

"Death is very likely the single best invention of Life. It is Life's change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true. Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma — which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary."


Here are excerpts from a posting today by Andrew Sullivan at the Daily Beast titled Why Steve Jobs Matters:


"The reason he strikes such a huge chord with an entire generation lies, it seems to me, beyond his immense technical and business and design skills. It was because he became the bridge between the 1960s and the 1980s, the counter-culture and the counter-counter-culture. He was the hippie capitalist. He was the fusion of two great American forces - personal actualization and a free market. Listening to his Stanford Commencement speech above is a revelation, isn't it? He was a baby turned over for adoption by his biological parents. He dropped out of school. He was fired at the age of 30 by the very company he had founded. And in the face of early humbling, he focused on his own vision and his own passion - an individualist creed forged in the crucible of a sure knowledge of his own mortality, of his own death...


"These are the words of a man with great spiritual insight, and the courage to live it (because true spirituality requires extreme courage). His worldview was forged by an eery prescience of his own mortality. He got there long before his cancer diagnosis, which, perhaps, was why he transcended it with six of the most spectacularly creative and successful years of his life. And this fusion of counter-cultural courage with capitalist genius is what defines our time - as well as the fear-ridden reaction against it."


Sullivan is endlessly unafraid to engage terrain others will shun. He doesn't call Jobs a Spiritual Master, but he is calling us to see that Jobs' power must be sourced from a different and deeper dimension than business acumen, even genius. Jobs had embraced death and was no longer afraid. Each day mattered. Absolutely. AND it did not matter at all. He - Steve Jobs - was solely responsible for what he did with his days. This paradoxical combining of radical self-responsibility; acting, moment to moment, as if the right-here-right-now present mattered absolutely; and knowing simultaneously that it did not matter at all, that you could live with total abandon, fearlessly, as long as you never needed to "get it right" - this is the stance and the capacity of a Spiritual Master.

The West does not yet understand this. Over time, we in the West will come to some of the same realizations that have long been present in the East: there are stages of consciousness that lead to Mastery, Spiritual Mastery. They are not genetic aberrations or gifts. They are available to all. The path to Mastery is open to all. Jesus told us to "enter by the narrow gate", that "many are called, but few are chosen", that the "road to life is rocky and steep, and few find it".

The Path to Consciousness is difficult, endless. Most don't consider it, unless life has beaten them down big time. That's what happened to Steve. Over and over. And he chose the difficult and rocky path. And he attained Mastery. This could not guarantee Steve or Apple business success. But it can surely help.

Patterns We Don't See

My sweetheart (and wife!) and I went to see Moneyball last night, with Brad Pitt and Jonah Hill (above). It's the story of how Billy Beane (Brad Pitt) changed the face of baseball with the help of a just-out-of-Yale baseball fan and numbers geek (Jonah Hill). Jonah had spotted some underlying and hidden patterns in player stats that significantly affected the odds that a player would get on base. Getting on base was the key to getting runs which was the key to winning games. Pitching, power hitting, and fielding were important; but they paled in comparison to getting on base.

Some weak fielders and below average hitters had much higher statistics for getting on base than star fielders and hitters. Lots of them got there by walks. What the research showed is that it takes a certain kind of player, with extra special discipline, to wait and not swing when the ball is outside the strike zone. The world values "hitters" you see; not "walkers". But walkers get on base, and that, Jonah showed, is what made the difference is generating runs and winning games.

Walkers, it turn out, don't cost nearly as much as hitters; so Jonah helped Brad Pitt/Billy Beane build a winning team with a basement budget. Great fun. I highly recommend the movie.

But what I want to point to here is that there are often hidden patterns that we don't see. In fact, I will say this more definitively: there are always patterns that we do not easily see that represent what is emerging or what could emerge. And sometimes new realities emerge, and the precedent, foundational patterns are not visible until later, like historians coming to turning-point events years later and finding "new" patterns to explain what happened.

Science calls this "emergence", an important part of the study of complexity theory. How do complex systems change and evolve? What does the process look like? Can you make useful predictions in non-linear, complex systems undergoing transformative change?

The answer is a qualified yes. You don't have the predictability that you do in a linear relationship: cause leads to predictable and recurring effect. But you can make educated guesses, some (but not all) of which are worth betting on, as Brad and Jonah did in selecting new players for the Oakland As', a bet that paid off. Many complex, dynamic systems don't always present specific, high leverage quantities (like Moneyball's on base percentage), and you must look to broader, sometimes deeper tendencies in the system. 

Meg Wheatley in Leadership and The New Science and A Simpler Way points to three central characteristics of complex systems around which change tends to orient itself: identity (what is the deep intention, even yearning of the system to do or to be; in business terms, what is the system's mission?); relationship (what is the nature and quality of relationship within the system: optimism and trust support system-wide change; fear inhibits change); and information exchange (do people/units in the system have a free flow of information throughout the system and out/back in from the outside environment?)

So where might I go with all this? Nowhere with total certainty, but we might move towards several important places with at least a hint of looking at what's emerging with fresh eyes. For example, Europe: what is trying to emerge? Ever since the Enlightenment took away God's truth and intervening hand from our analysis of current problems and events, we have become analysts and engineers: what's wrong and how can we fix it? Sometimes the engineering mentality works well: what our problem analysis shows us to be the problem is, in fact, the fulcrum around which something new is trying to emerge. But quite often this is not the case.

I think something new may be trying to emerge in Europe, while most of us are fixated on identifying the problem. Some say the problem is too much debt and profligate spending by the GIIPS countries. Others say the problem is a single currency without a fiscal and political union: everything works when growth is strong; but the system pulls apart when demand disappears.

Solutions vary, as they always do, depending on your view of the problem: the "profligacy" analysts are certain fiscal consolidation (read austerity) is the answer; the "system itself is screwed up" folks say Europe must move to fiscal union or break up.

Complex systems' artists and artisans will have a different take: what is trying to emerge in Europe at the moment? Can we see shared intentions at work? What's the quality of the relationships between the various individual and state actors? Is there sufficient free-flowing information so that individuals and states which want to act together can be working from the same information base?

Quite honestly, I have no clear idea what is emerging, but I suspect it's a higher, more complex, more accepting of diversity form of union that is trying to manifest. Will it succeed in overcoming the good and disciplined North versus the bad and undisciplined South relational divide? I think so; but it is not for sure. The Germans in particular are mad at their southern neighbors. But I think that the intention to be a European Union, combining diverse peoples in a union where all are honored, will survive our current chaos, and the emergent organizational structures will do a better job of allowing and supporting diversity of economic capacity within the Union.

It's a bumpy ride coming up. The Union may appear to break apart for a time. But I predict movement to a more inclusive, diversity-supporting whole, quite possibly through a two-tiered structure (core and periphery, possibly with a second currency flexibly pegged and priced below the current Euro). We shall see.

I Choose Hope

Two videos. Very different. One is the President speaking at a Gay Rights Fundraiser. The other is a BBC interview with a trader, Rastani, whose self-referential, money-trumps-absolutely-everything focus so astounded the blogosphere that many were certain it had to be a hoax. But it wasn't. BBC checked it out, and the guy is real. Ask yourself: how much of our financial system works essentially within the parameters and as part of the ethos that Rastani unashamedly presents?

There is no logical connection between these two clips. For me, the one represents hope and life. The other infers a death-dealing self-reference. You choose.

For me, I choose hope.

To see video, click on the following link: Obama At Gay Fundraiser: Republicans Represent "Small America"

And here is Rastani: