Spaces of Kyle

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However, there is a profound difference: the current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency. The periodic crises were part of a larger boom-bust process. The current crisis is the culmination of a super-boom that has lasted for more than 60 years.
Boom-bust processes usually revolve around credit and always involve a bias or misconception. This is usually a failure to recognise a reflexive, circular connection between the willingness to lend and the value of the collateral. Ease of credit generates demand that pushes up the value of property, which in turn increases the amount of credit available. A bubble starts when people buy houses in the expectation that they can refinance their mortgages at a profit. The recent US housing boom is a case in point. The 60-year super-boom is a more complicated case.
Every time the credit expansion ran into trouble the financial authorities intervened, injecting liquidity and finding other ways to stimulate the economy. That created a system of asymmetric incentives also known as moral hazard, which encouraged ever greater credit expansion. The system was so successful that people came to believe in what former US president Ronald Reagan called the magic of the marketplace and I call market fundamentalism. Fundamentalists believe that markets tend towards equilibrium and the common interest is best served by allowing participants to pursue their self-interest. It is an obvious misconception, because it was the intervention of the authorities that prevented financial markets from breaking down, not the markets themselves. Nevertheless, market fundamentalism emerged as the dominant ideology in the 1980s, when financial markets started to become globalised and the US started to run a current account deficit.
Globalisation allowed the US to suck up the savings of the rest of the world and consume more than it produced. The US current account deficit reached 6.2 per cent of gross national product in 2006. The financial markets encouraged consumers to borrow by introducing ever more sophisticated instruments and more generous terms. The authorities aided and abetted the process by intervening whenever the global financial system was at risk. Since 1980, regulations have been progressively relaxed until they have practically disappeared.
The super-boom got out of hand when the new products became so complicated that the authorities could no longer calculate the risks and started relying on the risk management methods of the banks themselves. Similarly, the rating agencies relied on the information provided by the originators of synthetic products. It was a shocking abdication of responsibility.
Everything that could go wrong did. What started with subprime mortgages spread to all collateralised debt obligations, endangered municipal and mortgage insurance and reinsurance companies and threatened to unravel the multi-trillion-dollar credit default swap market. Investment banks' commitments to leveraged buyouts became liabilities. Market-neutral hedge funds turned out not to be market-neutral and had to be unwound. The asset-backed commercial paper market came to a standstill and the special investment vehicles set up by banks to get mortgages off their balance sheets could no longer get outside financing. The final blow came when interbank lending, which is at the heart of the financial system, was disrupted because banks had to husband their resources and could not trust their counterparties. The central banks had to inject an unprecedented amount of money and extend credit on an unprecedented range of securities to a broader range of institutions than ever before. That made the crisis more severe than any since the second world war.
Credit expansion must now be followed by a period of contraction, because some of the new credit instruments and practices are unsound and unsustainable. The ability of the financial authorities to stimulate the economy is constrained by the unwillingness of the rest of the world to accumulate additional dollar reserves. Until recently, investors were hoping that the US Federal Reserve would do whatever it takes to avoid a recession, because that is what it did on previous occasions. Now they will have to realise that the Fed may no longer be in a position to do so. With oil, food and other commodities firm, and the renminbi appreciating somewhat faster, the Fed also has to worry about inflation. If federal funds were lowered beyond a certain point, the dollar would come under renewed pressure and long-term bonds would actually go up in yield. Where that point is, is impossible to determine. When it is reached, the ability of the Fed to stimulate the economy comes to an end.
Although a recession in the developed world is now more or less inevitable, China, India and some of the oil-producing countries are in a very strong countertrend. So, the current financial crisis is less likely to cause a global recession than a radical realignment of the global economy, with a relative decline of the US and the rise of China and other countries in the developing world.
The danger is that the resulting political tensions, including US protectionism, may disrupt the global economy and plunge the world into recession or worse.
The writer is chairman of Soros Fund Management

1月2日你接到一封匿名信，通知你本月市场会上扬。这后来被证实了。但你没把它当回事，因为谁都知道有一月效应这么一说(历史上股票都在一月份上涨)。2月1日你又收到一封，告诉你市场将要下跌。它又一次被证实了。3月1日你又接到一封信，情况跟以前一样。到了7月份，这位匿名人物的先知先觉打动了你的好奇心，他叫你向一项特种海外基金投资，你把所有的积蓄全部投入进去。两个月以后，你的钱全泡汤了。你趴在邻居的肩膀上向他哭诉，结果他说他记得自己也收到过两封这种神秘的信件。但是接到第二封以后就没有在接到这种邮件。他想起来，第一封信的预测是对的，另一封不对。

那个骗人的操作员从电话本里抽出1万人的名字。他向这些抽样人选当中的一半人寄出市场看牛的信，向另一半人发出市场看熊的信。下一个月，他选择那些接到了预测正确的信的人，这样的人有5000名。再下一个月，他向剩下的2500人做同样的事，直到这个名单最后缩减到500人。在这500人当中会有200人是受害者。投入几千美元邮资最后能带来几百万的收入。

　　生活的一部分时间给了网络游戏，比以前在网游公司上班花了更多精力，原因很简单，帮家人；但是越发觉得那是另外一个世界，给人空间错位感，原因是那个社会不是乌托邦的世外桃源，不是类似指环王似的人与魔的世界(指环王中描述的魔也是简单的)。
　　那是一个人类自建的所谓的理想国(构建者可能憧憬着美好的画面)，实者已经被人们的欲望功力心侵占了大部分，些许的善良和美好也只是流星闪现，唯独让人惬意的只是虚拟的草原、峡谷、山脊、海岸、星空，人类从来不会满足于美好的世界只有这些的，无论现实或是虚拟。
　　时间越长，看到的听到的有劳燕分飞，亲朋反目，更多是追求游戏中的虚荣，高人一等，任意支配，为所欲为；于此只希望是人们借助游戏来展现他们灰暗的那面，而在回归到现实中能够平和且知足且善待家人。
　　生活要继续。。。
　　TRY TO REMEMBER, OUR HEART SHOULD REMEMBER...

４月……