bernanke

All posts tagged bernanke

WAR is truly everwhere. At home Xstine and I are havin’ a blast playing Warhammer Online: Age of Reckoning, and almost every itch we had from leaving WoW has been epicly scratched. And boy were we itchy because the end-game in WoW left some unhappy scabs.

Outside of our world of epic vritual battles, one has already been fought an lost on Wall Street. Some friends have asked for my perspective on the bail-out mess, and I want to use a WAR analogy. In WAR lore, the evolution and advancement of warriors comes from the endless combat between the legions of Order and the minions of Chaos. A great story and its great heroes can only be made with this precarious balance. Too much one way is complacency, too much the other way is anarchy.

You may think it’s far-fetched to compare a fantasy video game to financial crisis in this way, but there’s one thing to consider. In Jared Diamond’s Guns, Germs and Steel he recounts his finding that over the historic rise of civilizations, what built the greatest ones was a combination of geography and natural resources that promoted an optimal state of controlled competition. To have less was complacency, to have more was anarchy. Sound familiar?

Now look at the bail-outs. Chaos has lost, if you believe the anti-free-market crowd. Order has failed if you know better than to believe the Fed. The problem was that Order assisted Chaos, and vice versa. No one knew their roles. The Fed answers to the market now. The market believed the Fed would save them.

What I’m trying to say is that a healthy distrust between the private and the public was lost, Freddie and Fannie being prime examples. What we face now is an extreme reaction as the Fed and Paulson nationalize the market. Chaos has learned that losing the battle means being saved by Order. Where’s the impetus to fight?

Now, I give the Fed credit for not bailing out Lehman brothers, as they knew the books were probably so toxic nothing could be done. And F&F? Ok, sure, they were a GSE, blah blah. But bailing out AIG? An insurer? Forcing BoA to take on Merrill Lynch? And now hints at extending help to foreign banks? Unlimited Sec. of Treasury power? For those who think cash is safe, I’ll point out that the (maybe) $45 billion left in FDIC divided by the $100,000 insured per account is not a happy number. Plus each of these banks going under have tons of employees; Lehman alone has 26,000+. NY is depressing. I can’t even make a conhesive paragraph out of all of it.

And somehow Bernanke is in the back saying a recession is imminent if there is no bail-out. Hello, the recession has arrived, but the punishment for misdeeds has not. Will not? Well that depends on how many tax-payers realize it’s angry mob time.

I haven't time to comment much on the economy recently, thanks to Super Smash Bros. Brawl and… oh who am I kidding… I didn't even do a portfolio postmortem for last year. We are clearly in a recession right now, something I predicted in 2005 after much research, and my wishes go out to everyone in the American workforce… except those in the game industry! We don't need it! We are recession-proof! Hah!

Well, predicted sounds arrogant… I didn't predict a recession, I just tried to point out the mountain of evidence that it would happen. It's no surprise to me that games are recession-proof, though. Entertainment in general follows different fundamentals than other industries. Games often get compared to film, but there are two key differences that have made us an industry that has begun to intimidate Hollywood in size. …

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Interesting stuff happening this week…

  • Michael Bay ruins the Transformers movie even more with his go-for-broke misinterpretation of Megatron's design. Whether this image is legit or not, who knows, but AICN was asked to take it down shortly after it was first leaked there. All I know is, it's an utter abomination, destroying the iconic visage of the Decepticons with all the over-embellishment of a pre-ejaculatory teenager subconsciously twisted by last year's anime.
  • Ben Bernanke finally says something that I can agree with, that protectionism needs to end. Of course, the market replies with a loss in enthusiasm. Really, it's the market that turns him into a bad guy, it's not like slowing housing growth and inflation haven't been right under Wall St.'s nose for a long and obvious time.
  • Also, Penny Arcade has a big surprise at PAX, which incidentally enjoys a skyrocketting attendance figure thanks to the demise of E3 (rightfully so IMO). This article leaks the secret into our parched mouths- they have hooked up with Hothead Games to develop an episodic adventure game based on their comics. Very. Very. Cool. I used to think the indie community in the world of games couldn't stack up to that in film, but I'm starting to think the seeds have been sown to make me very very wrong, and very very happy. This is just damnably grassroots, this wonderful success fable in a fairy land where suits don't make ALL the games.