Skeptonomics: Progress and the Deflation of Monumental History

More questions:

Was there really any such thing as capital?

Is it possible to have a capitalism with multiple caputi?  A cerberus, or a body with a soul or a mind in many places?

Observe:

"In the last years of the reign of the ever more melancholic King Ulászló, Hungary experienced the most bloody and ferocious rural revolt of her history.  The economic and social situation of the peasants had begun to deteriorate in the late fifteenth century, when Hungarian landlords, like their fellows in Poland and Bohemia, started to impose restrictions on their tenants.  One of the reasons was that the lords, wanting to profit from the rise of food prices on the European markets, wished to enter the marketplace with foodstuffs extracted from their serfs.  Seigneurial dues in kind, together with the tithe (mostly rented by the landlords from the church), and different traditional taxes gave the seigneurs control over a considerable amount of marketable produce.  Laws of the late fifteenth century confirmed their right to trade in these commodities free of taxes and customs duty." ---From "Rural revolt and the Laws of 1514" in A History of Hungary

A commodities bubble caused one of the great peasant revolts of the early modern period.  The bubble was caused by free market protectionism, and feudal exemption from taxation -- all instigated under the passive oppression of a melancholic and ineffectual sovereign.  Sound familiar?  

He continues:

"While one day of robot counted as a quite heavy obligation in the preceding century, three days weekly was not rare 1520."

Robot here performs precisley the same function as central banking interest rates under the monetarism of the contemporary banking class:  increase wealth by maximizing the percentage of worker production which will be paid directly to you.  Contemporary economics has never succeeded in being anything other than a technology for optimizing this strategy.  Indeed, all it has contributed is the ability to create inflationary bubbles at will, resulting in an intensification of robot, by using the printing press to expand the monetary base at just the right moment.  But in this, if in nothing else, Marx is even more dishonest and unhistorical than Keynes, for, even in 16th century Hungary, it is the bourgeoisie, Marx's own class, which is the revolutionary class.  The burden of performing an abject surrender to theological brutalities always falls on them, is always a function of their cosmopolitanism: 

"The growth of the market towns, with their limited but promising liberties, seemed also to have threatened seigneurial interests, and beginning in 1492 Diets revoked the right of peasants to transfer from one lord to another or from village to market town."

So, if, in this history of kings and classes, a caput can be found always elsewhere and again, what can be said of all the forces which seem to work against it?  And what can such an "against", such a contra, mean where these kinds of revolutions appear to be the turnings of gears within a single robot?

I think they almost get it...

Marketwatch is headlining this story as "Shoppers on Strike": exactly.  See the "general strike..." post below.

Surrogate Intercorporeality: Urbanization and the growth of the ?world-wide inter-web, as you call it?

It seems like the curmudgeony insistence on the alienating effects of the internet must be both right and wrong. In Dreyfus? ?On the Internet?, this notion seems to emerge out of a certain reading of Merleau Ponty, in which ?intercorporeality? is a taken as a concept of limits. We need our bodies to interact with the people we interact with. The limits implied by the emphasis on this type of intercorporeality signify that bodily interaction is not possible over the internet. And yet, if studies have found that internet usage decreases connectivity in families and communities, if people seem to be bodily compelled to hang out online day and night instead of using their bodies to communicate with their ?actual? location, then we must pose two skeptical marxist questions:

1) Can we be so certain about the non-intercorporeality of internet users with each other?
2) And may not the information-seeking public be actively deploying a tough therapy for a previously existing alienation?

The very concepts of surrogacy and the urban suggest that we need not touch, see or even hear each other in order to participate fully in intercorporeality. Surrogacy means that we can act as each other: my bodies can be you across space, and be for you. The urban means a closeness beyond the epistemic positing of presence: we live close together, in an infinity suggested only by the perceptual experience of finite multiplicity. The play of metaphore involved in surrogacy dominates experience, for even direct investigation is given over to the gestures of all our others. Taken together with the fact that even the particularity of our egos is still a we composed of all names, faces and unknown bodies, and it becomes clear that even cats have internet, and that it has probably been theorized since at least 6,000 BCE.
And the second question tomorrow...

The Sublation of the General Strike

The question whether the general strike is a partial reality, or only a product of popular imagination, is of little importance. All that it is necessary to know is, whether the general strike contains everything that the Socialist doctrine expects of the revolutionary proletariat.

- George Sorel, Reflections on Violence

Since violence is clearly illegible as violent, we may as well admit that the type of violence known as "resistance" and "anti-capitalist" struggle will work with as much insipid, invisible, globe-engulfing force as anything like "capitalism".  Keeping in mind that the "capital" of Das Kapital is more an arche-principle of any organon, than the designation of any specific economic system, it might seem as if violence itself were in any case anti-capitalist.  The specific illegibility of violence as violent (our inability to identify all possible consumption as violent, for instance) leads us to the same equipollence we find surrounding so many concepts, such as sovereignty, perpetrator, terrorism, and roguishness.  So, of course, capitalism is auto-immune, as Marx and so many others have pointed out.  But, further, if its violence has failed to live up to the stupidity of our concept of the "event" as irruptive, as violent, then so, by any argument, must its self-violence.  

It is for this reason that the violent destruction of aggregate demand in "advanced" economies must be judged along the same lines as the violence of the general strike once was: not does it "work" (as if we could know what this means), but is its futurity proletarian?  Does it expect an aneconomy of the other, not knowing what it will be? In this way, and only in this way, is the myth of the general strike growing out of its long, long infancy...

Early halloween post: Skeptical Ethics and the Deflation of the Uber-bubble (Crashes of 1873 & 1893)

Wikipedia (the moment of telos of human intelligence) tells us:

That in May of 1873, just as the global economy collapsed, barbed-wire was invented, and Jesse James carried out the first successful train robbery.

[Aneconomy: What is taken, is also taken.]

and that in 1893: "The huge spike in unemployment, combined with the loss of life savings by failed banks, meant that a once secure middle class could not meet their mortgage obligations. As a result, many walked away from recently built homes. From this, the sight of the vacant Victorian (haunted) house entered the American mindset."

[Many are still vacant (in Philly, say); many more vacancies are being added (in Stockton, say). As long as territories (dwellings) multiply faster than people, the periodic bubbles will only continue to deflate the larger bubble of monumental history.Nice to think the spectrality of the haunted house as the hope of abandonment, rather than the abandonment of hope. Lets add the McMansions to the ranks of the scary-beautiful!]

How classist was the ideology driving the inflation of the debt bubble?

Not answerable beyond the simple affirmative, of course: "It was extraordinarily classist."  But still worth a comment.  The dominant, driving assumption (yes, assumption is drive, assumptions after all are assertive) was that the the species-being of humanity was a certain becoming-American and, distinctly, a becoming-European.  (The overarching becoming-Western doesn't work, as the mutual transatlantic contempt continues to alter these bourgeois territories enormously.)  It based the mechanism of this becoming on the continuing-to-be-American of British and American consumers specifically.  The desires of these particular joe-the-plumbers were to drive them to increase a debt-emburdenedness which they would, stupidly, honor.  This piggish consumption would cause the Chindians to engage in similar debt-based contractual obligations as they increased their consumption of meat, oil, and received opinions.  Instead, the Yanks defaulted and the Chinese saved.

No-recourse

This system broke down at so many points that it now appears with the arrogant, brutish naiveté of a medieval political theology.  You cannot secure against default and the withering of desire for tat; least of all by deploying a doctrine of human nature as deluded and constrained as that of original sin.

Yes, but will it succeed?

Feudalism, Hyper-capitalism, Socialism or Utopian Star Trekian paradise? Who knows.

In a move that could only possibly make sense for Britain (since it has an independent currency and Britain is the only country in Europe with no economy beyond banking and financial services), the ECB has declared economic war on the rest of the world's wealthy elite, and socialized the future bad investments of the wealthiest European elites by guaranteeing all interbank lending. If the coordinated move stokes inflation fears in Europe, fails to lower the TED spread, or even fails to boost the Euro in the near term, the dollar could go through the roof. Whether this will happen depends on several factors. If European banks start lending to each other, they will recapitalize themselves and each other by making bad insured investments - a backdoor recapitalization. In this case there could be a race between banks and countries within the Eurozone to make as many bad investments as possible. Sound familiar? Yes, because that's how we got here. If it works, inflation internally all around. But inflation of what? Commodities of every stripe have proved themselves too vulnerable to demand-contraction, housing is going to go into oversupply in the very near future - yes, even in Europe. At first, the tech profits look too hypothetical to re-bubble, but...Energy? Yeah probably. Energy: now there is some tech with material, non-hypothetical (and yet metaphorical) teeth behind its profits. And a sector that European xenophobes will love, because it can sustain a certain discourse of 'independence'. Or maybe they will just horde it all, and everyone will start fighting over benefits. We'll see.
If it doesn't work, and credit markets don't "unfreeze", the move is going to look both desperate and indestagflationary. The economy will look so bad in Europe, and everyone will assume that banks are so unstable, that money will flee to the dollar, especially if the economic news in the states continues to be bad, and if Paulson and friends opt not to inflate and socialize their way out of the crisis (the republican illiterati will almost certainly get their way with this).
All this in freak reaction to last week's markets: the worse the news in America, the worse the news in Europe, the better the dollar did against the Euro and the Pound. Gordon Brown and the ECB are trying to break this logic. Very risky considering how complete dollar hegemony is, and how deep the hatred for Europe is in an administration that is determined to have as much affect as possible while it remains in power.

Wither

If the withering of demand produces the withering of production, what produces the withering of demand?  Efficiency of production leads to the exhaustion of consumption.  Over time all production simply conquers demand. Some commodities never really recover from this.  Like parsnips and housing.  Other commodities, like prostitutes, energy and digital media storage, we have not yet had our fill of.

Most prominent among this later category is the commodity "service".  What is service?  Well, genealogically it can be nothing else than the entire terrain of the infantile, when we infants were being absolutely served, and when we were not being served, we were absolutely alone, and absolutely helpless.  This at any rate is the dominant experience dynamic of the terrorized, anxiously-attached, neglected modern infant.

So a technology that deflates service can only be therapy, and not just a cure for bougy neurotics, but one that makes them better parents....

Housing might never recover...thank God

There are signs that lenders are planning on never securitizing mortgages again, which would be in line with a general deflation of the sector a la media in the 16th and 21st century, food in the twentieth century, and textiles in 16th century.  UBS has given up on it entirely.  

Makes you wonder:  there was once a time when a text was tactile, was a  textile, literally.  And, of course, when the literal could be taken literally, as concrete and authoritative; and of course also a time or times when the author wielded authority, when he was a surety.  Surely these times are still now, and these things are still what they were, and not...but the materiality of their coding is not always understood...

How to force them to nationalize the rest...

I will be working mostly on finishing a philosophy project for the next two weeks, so I won't be posting that much...

But its worth reemphasizing how heterodox, how Maoist, and indeed even Hericlitean, the logic of this collapse is becoming.  The more money in, the more money out.  The greater the decoupling, the more hot coupling.  Inflation continually driving deflation, coordination leading to economic warfare between states.  The epistemic arrogance of economics is splintered and buried, based as it was on induction and non-contradiction.  

And to add more devilish, proletarian glee and suburban pride to the picture, here is more sunshiny news from the state that murdered capitalism.

Fragility of concept "europe": spectres of an era thought gone

The financial warfare taking place between European states at the moment (battling for foreign deposits, threatening snap independent bailouts and recapitalizations) has startling echoes of the trade disputes of previous centuries. Strategically, this could be important to Warschington if investors begin to perceive the Euro as a captainless ship. This would back the possibility of a scenario where we see a hyper-inflationary depression in Europe, and a deflationary collapse in the states. This becomes all the more likely, the longer Europe seems to trend down ahead of the US. Of course, the thought of recapitalizing the US banking system by printing dollars and then treating Europe like a gigantic corporate costco would be very appealing to certain elements, especially after the recent humiliations of the iraq war, etc. The ECB is somewhat hog-tied in its ability to respond, at least with inflation still looming. The Krug-monster is arguing that the virality of the crisis is essentially financial rather than commodity-trade-based. If he is right, it should be extraordinarily easy to write everything off on the US debt side and sabotage the Euro.

Money headed for energy, education, and tech areas of US

Shows us that the exceptions to economic demise look to be split between low-regulation "flatlands" like central texas, and highly skilled tech futropolises like SJ, ABQ, Denver, etc.  Also pickled northeastern brain vats like New Haven and Cambridge.  Also strong energy/processing zones like eastern texas.  Watching for a new bubble here will be interesting.  Everything contributes to the vague impression that what money there is is (I love using "is" twice to each other in a sentence) channeling itself toward a green, energy-bound messianism, while continuing to build exurban honkey-tonk sprawls where it is still cheap to do so (say, central tex).  Looking for both these trends to spread geographically as oil and commodities drop back out of the ether.

The next indeflation: NYT calling for a "localized energy" bubble

"By 2012 to 2013, our profits could be higher than many Fortune 500 companies."

Who could possibly be thinking this way in a month like this?  The article suggests that the venture capital surrounding green technology companies is a likely destination for non-risk-averse cash fleeing the bloated popped-corpse of real-estate. While it has landed mostly in commodities for the moment, it will flee, just as it has oil, as we see global demand for these commodities drop.  When it does, maybe it will indeflate this bizarre, intangible, inadequately theorized, and altogether ontologically-suspect "stuff" called energy.

House Prices and God

In keeping with the theme of anarchiving onto-theologico-political economy, consider this article from Wikipedia on MLEC  (Master Liquidity Enhancement Conduit).  An important excerpt:

The mark to model process is similar to certain tactics used to support the Enron accounting fraud, where assets were assigned values that benefited the company's bottom line. Many of the securities' valuations can be found in the company's financial report as illiquid and hard to value level 3 assets.

Krugman insists that the new bailout will be the same:  a fraudulent inflation of values.  Which values? Well, first of all, MBS (mortgage backed securities), and thus mortgages, and so houses themselves, the land under them, the immigrants who build them, etc.  The spectrum is quite broad...but the bottom line is that, like Enron, the federal government is trying to pervert and obstruct the progress of the deflation of value, by deploying the hegemony of a fictitious, and in every other way malignant, "model" of corporate and banking assets.  As JEBM describes, only by artificially engineering unaffordability can the labor market and economy continue to function in all its magnificent brutality.  If home prices return to traditional price-to-rent and price-to-income ratios, capitalism will lose the ground of its new feudalism:  the ground itself.  Land, and housing.  

The good news:  this keynsian idiocy can find no purchase (pun intended) in the current environment.  France is showing the future misfire of this technique best.  France cannot hope to inflate its housing market by pissing liquidity into banks, because the market has too much downward inertia, and there is no demand for overpriced mortgages in most of the country.  We will soon, I think, see that the same is true in the US, and that the attempted inflation of housing will not keep up with production of houses.  Why?  Because, as far as I can guess, much of the liquidity provided to banks, as well as any recapitalization through federal overpayment for their toxic assets, will be lent out to builders and landowners desperate to get to work again, and willing to work and build very very cheap, and en masse.  It will lead, perhaps, not to an inflation of housing, but a resurgence in building.  Banks are not stupid enough to inflate a no-recourse housing market ever again.  They will however invest in the growth of new, cheaply-built, squalor-contemporary communities in loosely regulated no-man's lands, with highly modular design, thereby turning the American housing market into a gigantic Malwart - the only difference now is that the Walmart is smaller than it will, and it more expensive than it should be. (it is target;)  

So coming back to political theology:  we are witnessing a skeptical crisis in the mythology of the infinite value of the dwelling, with millions of ticky-tacky houses as empty as an English church...

Nothing Succeeds Like Success: Prediction Markets, Democracy and Performativity

The performative logic of economics (I.e. that econometrics are determined by and in the analysis and perception of them, and through their market valuation, so that stock prices, for example, do not and cannot reflect anything like a "true value") has been obvious to anyone who is not so deluded by their own stake in the objective validity of their investments that their narcissistic defenses border on the far side psychosis.  All Soros' theoretical papers add up to this point, and one can assume that it is fairly well understood, in a fairly repressed way, by most economics professors around the world.  It is increasingly obvious that this performative logic is less appropriate as an object of passive, gazing, curiosity, and instead seems to be taking on an inertial quality which would seem to demand an aggressive, furrowed (itself performative) analytic.  In the interest of taking a step in this direction, we should observe how the U.S. presidential campaign polling data is beginning to behave like the prediction markets (like the IEM) that have been established to speculate on these campaigns:  No sooner does a candidate look certain to win, than his poll numbers start going up.  This is why, as these hilariously elderly gentlebloggers point out, the prediction markets have been more accurate than polls in recent years, while polls seem somehow to lag themselves. In this way, the campaign and the speculation regarding the campaign are aligned and both behaving like markets, and in fact not behaving like markets, but as markets, and indeed in a sense as a single market.  While it is by no means necessary that democracy should perform itself according to prediction, it seems now to only destine the future as an ecstasy of prediction: a will to make the likely happen.

The strange apparent difference between this and the stock market used to be the election rhetoric's apocalyptic tone, it's orientation toward the mad decision of an Armageddon on election day, over and against the the general economy, and the stock market in particular, the players in which focused on an infinite expansion of a few particular numbers taken to signify the possibility of potency (think of the cheering of the upness of the up on the trading floor).  No longer.  (if ever?)  These two previously distinct number cults (distinct, and yet recently so united against all justice) have aligned themselves toward armageddon.  Both slave ships turn and lose themselves sailing into a stormy sunset.  The arrogance of imaging that they can destroy themselves after all their crimes is immense.  Democracy knows its own fraudulence and terminal safety in the face of its performativity, does economics?

A (profoundly dubious) teleological futurism...

It was only a matter of time until housing deflated (like textiles, tulips, food, and media, etc.), as a result of efficiency, modularity, and better cost-structures (think Home Depot in every town, developments in previously unimaginable places).  This deflation was bound to be precipitated by a bubblicious hyperinflation that drove the systemic innovation that eventually lead to a glut, high vacancy, etc.  This trend will only increase as technology makes more and more of the vast empty earth livable, and as modularity decreases the production costs of housing.  Housing is finished as the principle asset of the US economy.

Vacancy rates are soaring.  While they may go back down in the next two to three year, the armies of cheap labour will keep building until there are two houses for every man, woman and child.  The more we speculate, the more power reason gains to obliterate our greed...

Eurozone on the brink of fragmentation of central bank control?

The Telegraph says so:

"Mr Redeker said the latest alarming twist is a move by banks to deposit €28bn in funds at the European Central Bank in a panic flight to safety. This has jammed the mechanism used by the authorities to shore up the financial system in a crisis.

"The ECB is no longer able to inject liquidity because the money is just coming back to them again. This is extremely serious. If monetary policy is no longer working, there is a risk that the whole system will blow up in days," he said. "

If it becomes quite clear that the ECB cannot produce enough liquidity to protect even smaller banks, the larger "too-big-to-be-saved" banks (like Deutsche) will be in real trouble - since no single government is big enough to even attempt to rescue them, the ECB could itself become insolvent if it has absolutely no influence over the speed of the bank failures.  The question we must ask is where is this exposure to failing European and US MBS?  The answer is very probably "everywhere".  And the farther house prices drop, the more the trouble will spread to zones (again, like Germany) where there supposedly was no housing bubble.  The notion that housing couldn't possibly deflate any further in these zones is preposterous... just look at Detroit.  At some point in the near future, Asian economies will learn how to produce and export their own howling monstrosities and fascist-fetish mobiles.  Then?  Behold...the Michigan of East.

German Finance Minister Peer Steinbrück admits that Marx was right!

Although he demonstrates only the most vulgar understanding of him.  He here gives us a dictum in response to Spiegel which should be deployed by anti- and post-capitalists as much as by the overlords themselves:

SPIEGEL: One cannot regulate morality.

Steinbrück: No, but that too is dialectics. The elites must understand that it is a matter of self-protection, of developing a sense of the right balance or allowing judgment to prevail.

Deflation will deploy itself as a waiting just like this:  a balanced futurity open even to the possibility of a strategic judgement, despite the obvious peril, the suspension of suspension, strategic essentialisms, decisions shot through with undecidability, etc.  

Phenomenological Economics

Two articles to be read together.  One locates a revolutionary "investerly" practice at the heart of the "real" economy, namely, a gigantic put option on housing being exercised by the poorest 70% of the American public.  The other argues in the opposite direction, saying that research  "has shown that the financial and non-financial sectors experience quite independent changes, especially over the short and medium term."  In short, that the depression will not be substantially felt by the vast majority of people who already have very little in the way of assets.  If these two analysis bare out over the next 18 months or so, we will be able to look back to the financial crisis as one of the great proletarian shifts in history.  

No bankruptcy reform? Horse-shit.

The bailout does not allow judges to re-write the terms of mortgages.  Without this provision, the danger of a resurgent feudalism triples.  If people's homes, broadly classified in capitalist logic as 'private property', are not protected from seizure by our wealthy overlords, we inch closer to a universal renter society.  

This may cause such immense agitation that it fundamentally alters thinking of construction and dwelling, but I think that the short-term consequences will be a very large stake in real estate for the duopoly of banks that survive nationalization.

My main lady from ohio takes up the issue with rhetorical flare we haven't seen in congress for generations.

The other unknown is the future of US builder confidence:  If the contractors get back to work with reduced overhead, and clear of crippling debt, and work-armies of cheap labour, before the housing supply contracts, then the deflation of housing will be so magnificently underway that no one will be able to stop it.  Increasing numbers of foreclosures and speculation can help this process by driving down sales prices.  Housing will finally be priced on a "parts + labour" model.

In the states, anyway.  Considerable difficulties face countries as disparate as, say, Britain and China, where high population density is constructed as a necessity.  In Britain in particular, this density is enforced by regulatory apparatai that not even the government itself can break through (a little like Northern California).  The government here has missed its building targets massively and repeatedly.  The unknown in this context is what effect the total collapse of financial services will have on accession-country immigration and the UK budget.  The trickle-through of high-end job loss to the cheap labour market, its impact on London-affordability, and the benefit system, will take several months to become apparent, and several years to finally sweep through.  From observation, its quite clear that the City Boys are being so rapidly replaced by Roma in East London that it might just be a decent place to live in a few years time. A deflated, flat-ass broke London is perhaps even more attractive to people who have already survived political and economic armageddons never dreamt of in Western Europe.  This at any rate seems to be true in California, where most immigrants are very far from leaving to go back home.

Glaze: De-coupling After-all: Watching deconstructs Gaze and Glance

It might seem as if like our indestagflation theory may not be equal to events in the midterm:  America and Britain are decoupling into defaltionary and inflationary collapse/ebullition, respectively, that is, apart.  The indestagflation phenomena is too non-dialectical for the moment, and, talking to a friend yesterday,  I am persuaded that the spaciality of Europe may favour a multidirection, neodiasporic euphoria that will crack any fears of right-wing resurgance.  

So what will it mean, after all prices have been discovered as some form of "zero" and after all the write-downs are done with, if it is revealed that Far Western Europe (so excluding Germany) has an economy (and we can only use this word as a sarcophagus now) with money and "no" materiality, no thinginesses?  (This is of course where it has been for perhaps fifty years, as becomes more and more clear.) I would argue that, in order to answer such a question (which is nothing less than the question of what a general deflation of services, on par with the general collapse of the industrial complex in the previous era, will look like), we had better watch rather than gaze or glance our way into a discussion of the artifacts at hand.  Moreover, since it is precisley artifacts which will begin to show their lack so much more flirtatiously, even the notion of a process, irrupted as an evental subtraction, should be observed in play.  Such watching gains a certain handy futurity at the loss of the specificity of memory, but, since the deflation of such an economy of loss is precisley what is at issue, we should not simply be anxious about this, even in Europe where the right haunts and animates so many "progressive" consciences.  Everyone watch in any case, and even America watchs.  For such observations, action, reaction, event, and becoming are as feckless as value, clarity, and nihilism.

Market>Commodity>Dollar

Its finally universally understood that money fleeing the market dives into oil and other commodities before hiding in the dollar.  For months some of the more charming popular economists maintained a mystical veneer around their denials that speculation could have anything to do with surging oil prices.  The point wasn't well-argued on either side.

In this third round of deflation we should see a small spike in commodities before a steep drop and then a somewhat stronger rise in the dollar as other economies eat shit - depending of course on how many trillions of dollars the Treasury prints this week.  We'll see.

It will take years for that cash to come back out and play, and by the time it does, a "techmoddity" economy may well have replaced financial services, where vehicles will have to be as efficiently modular as the concepts in which they invest.

(Technological) Increases in Efficiency are Drops in Aggregate Demand

In psycho-philosophical terms, the chief difference between Keynsians and Neo-Austrians has always been, respectively, drive vs. organization.  For Keynes, monetary policy had a semi-mystical well of power over our experience of materiality as long as aggregate demand stayed high, as long as the economy was subject to its own drives, to expansivity.  For Austrian and Neo-Austrian economists, the anxiety of a closed syteme prevails.  Where the organon looses functionality, or fails to coordinate with other components, the larger organon of the economy is in danger of malfunction.  The difference here between these perspectives can clearly be oversimplified as vitalistic over and against the machinic.  

Both fail to see the looming predominance, phenomenologically obvious to non-economists, of energies and powers beyond the disciplinary discretion of economics which feed against the procedures of metaphoric and metonymic exchange upon which all economic analysis is based.  Taking the "technological" as an example of such an energy, a much more "aleatory" exchange takes place as it haunts zones like trading and commerce.  Instead of simply "facilitating" such economic activities, it drives them into a universality in which they are proliferated beyond irrelevance and into non-entity.  As Marx observed and Sohn-Rethel, Adorno/Horkheimer and Heidegger reiterated, exchange and value had become part of the tapestry of alienation, and reason (as a techne) had put them there.  But technology had already pushed much further than this, and had already participated in so many self-violations, so many debasements of the property and propriety it had helped establish, that it had in turn, been ascribed an auto-immune, revolutionary essence.  Now, it seems, again, there is play absences:  A vanishing of aggregate demand corresponding precisely to the steep upside curve of market efficiency.

The Promise of Star Trek TNG

I grew up wondering how I would provide the house, the video games,
the car, pay the bills; I arrive at adulthood knowing that I can
build a house, and a windmill, grow my own food and steal a life's
worth of culture off the internet. I wondered how I would get famous
- now only a very few marginal politicians and porn stars are famous
in the way we once thought of it. So many sundered anxieties have
been wrecked on the shores of the general deflation since the 15th
century, the anarchiving ocean of the multitude, that one almost no
longer fears swarms.
It actually feels quite a bit like star trek, but with more art and
violence...
It almost seems as if property and the proprietary have revealed
themselves as a type of penetration, a having-in, that was bound to
violate the sovereignty of certainty and arrogance much more than
abet them...

Dis-traction I

Now that what has previously been so clear has become simply and concretely true, it is much more difficult.  And, since the least likely messianism is the one which we do expect, we must be patient with ourselves amidst its offensive obviating.  Flinging her nipple-tassels, the slow deflationary collapse of Capitalism is giganticised in a withering tango with Capital itself.  Last week saw the demon-masks of potentas fall off even the most plausible bandits (Bernanke, Paulson, Boosh), revealing looks of joyous terror and the glow of Rapture.  More important even than wishing open aleas on our destinies, or measuring the wrecked machinery, we should look again at what libido will mean, what it has already long meant.

Elsewhere, and especially in my Kant lectures soon to be published on BEP, I have tried to analyze a certain traditional causal economy in terms of the diode contradiction - non-contradiction.  Likewise, I have tried to reencounter metaphysics as a discrete termporalizing according to the stylistic principles of something called non-contradictarianism. To the extent that non-contradictarianism was the repression of an indiscrete temporality which knew nothing of causal, inductive proprieties, it was ever an economy of displacement, of wounded attachments.  To the extent that it most manifestly was not this, i.e. to the extent that it represented a healthy and intensely modular (adaptable) abandonment of attachments, it seemed at times to be precisley the moving-into-futurity one would require to live anything like a post-economy.  

It is this second, high-functioning aspect I wish to focus on for a minute.  If we are to see a turn, an event which moving along the line of its circularity both arrives and departs, we shall be tempted to say that it does all this "at the same time."  This moment of Revolution being what it is in the dry-eyed cynicism of almost everyone, we should be careful to reiterate our operative uncertainty about how such a futurity, rooted everywhere as a history, defying the life-death discretionary economies, makes of libido itself a messianic force.  This deflationary play must be reckoned against (in the most positive way) all the control apperatai that seem this week to have preceded it, as well as against the post-contradictarian observer (super-ego).

Capital and Techne; Deflation and Peritropy

Thesis:
All market fluctuations are 'noise', except for that which is
calculated as a lowering frequency.

Starting this Fall, this blog will try to elaborate a futuricist
"aneconomy of the other".

Over-production

This week's IMF Global Outlook Report leaves little doubt that economists have absolutely no operative understanding of what is going on around them. Forecasts have been massively revised downwards.  Still, it is difficult for anyone to ignore the rising bubble in commodity prices.  This bubble, economists speculate, must either be speculative or demand driven.  Either it must be "artificial" in the sense of being created by bastards with money buying up commodity futures, or it must be "natural" in the sense that it is driven by consumer demand, i. e. we are using so many commodities that a supply-side shortage causes prices to rise.  The fallacy of this dichotomy can be seen by looking at the housing collapse:  In this situation, demand was speculation, and speculation was demand.  People demanded "ownership" of more and more homes; the Fed printed money to give to banks to lend out for this purpose.  This demand was shifted onward to global investment vehicles.  At no point was there any firewall between demand and speculation.  

Now take commodities.

If Chinese production massively outstrips American demand, it might make very little difference what is driving commodity prices right now:  the speculation bubble will burst as a result of lowering demand.  So far in '08, the reverse has predominated in housing:  lowering demand (speculation) (and deterioration of consumer sentiment) as the result of an apparent burst of a speculative bubble (housing).  Seems more and more likely that commodities will deflate now in the other direction.  Its going to keep falling like a feather rather than a rock.  The emergent commodity bubble is just more Fed printing money with an eye to growth.  And indeed, Americans now store more commodities in their driveways, gas tanks, and bodies than at any other time in history.  Remember, the commodity bubble is literally a bubble:  round american tummies need a correction more than housing ever did!

If American demand for commodities drops off, and God-help-our-ailing-arteries it should, the next bubble will be in services, and only the non-manufacturing indexes will begin disclose what the new economy will look like.  

The Conflation, Destagflation, and Indeflation (pronounced Indy-flation) of Monumental History

Would deflation in housing cause inflation elsewhere (money toward mortgages redirected to rent/general economy), and might this (plus piddling tax rebates) balance out  the death of the HELOC/home investment spending?  If so, nothing could be worse for the Admin than a fall in oil prices.  

If the admin thinks that the death of the HELOC means a deflationary collapse basically just before an election, then it would have every reason to perform, as subtly as possible, an intervention similar to the 1933 Agricultural Adjustment Act, wherein food was destroyed in order to keep prices high, doing violence to production.    If  high oil prices, along with the lesser and temporary effects of a commodity boom, are the only things preventing a deflationary spiral, might this explain a breakdown in peace/cooperation agreements between the Al-Maliki government and the Mahdi Army on the one hand and Sunni Awakening Councils on the other, and the subsequent attacks on oil pipelines?  More sinister things have happened.  

Still, on the other hand, one cannot exclusivise the occurrence of inflation and deflation, nor can the relationship between them be strictly described as one of causality.  Take housing again as an example:  the inflation of housing happens as a function of its deflation, and vise versa.  Credit markets tighten (inflation) as prices drop (deflation); these phenomena feed each other until price drops mean that we no longer need credit to buy houses - or in any case to be housed (rent).   This might best be described as a paradox of value:  something worth an infinite amount is in fact worth nothing - it is priceless.  We might call this synergy "conflation."  And we might even call this conflation of everything with nothing, their infinite and impossible exchangeability, an aneceonomy.  This process can only be arrested by the active destruction of value through an increase in price, an inflation produced by a counter-technologically-induced privation: credit lending.  The recent housing bubble happened in just this way.  However, global political discourses are far too confused in their ideological thrusts to intentionally engineer such an arrest on a macro-economic level.  As it stands (as a sort of sarcophagus, saluting its own absence), this indeflation of a certain type of history seems to be marching ahead.

Now, if this expansion of the sphere of the priceless is continuing to accelerate under the pressures of a global technological modernity (this is very much in question as the raw materials required for production seem to dwindle), then what we can hope for int he barren climbs is the growth of the aneconomy, rather than the economy, where power, still hesitating, will will no longer believe it can restrict itself.

Jefferson on Depression: Fictitious Capital and The General Revolution of Property

Jefferson's letters to Gaillatin often offer that strange, mechanical, almost binocular, insight by which one of the world's greatest hypocrites sustained his equipollence: 

At home things are not well. The flood of paper money, as you well know, had produced an exaggeration of nominal prices and at the same time a facility of obtaining money, which not only encouraged speculations on fictitious capital, but seduced those of real capital, even in private life, to contract debts too freely. Had things continued in the same course, these might have been manageable. But the operations of the U.S. bank for the demolition of the state banks, obliged these suddenly to call in more than half of their paper, crushed all fictitious and doubtful capital, and reduced the prices of property and produce suddenly to 1/3 of what they had been. Wheat, for example, at the distance of two or three days from market, fell to and continues at from one third to half a dollar. Should it be stationary at this for a while, a very general revolution of property must take place. Something of the same character has taken place in our fiscal system.  --   Dec. 26, 1820

Interesting that Jefferson calls the outcome of deflationary trends a "general revolution", especially seeing that he would not have used the term lightly since he knew that his entire legacy would rest solely on the continuing stature of the concept of "revolution."  He reveals a bit more about the precise mechanics of such a revolution nearly twenty years earlier, in another letter to then-treasury secretary Gallatin:

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.  --  1802

Jefferson is so clearly describing the current situation, in the same terms which are used today, that it needs almost no explanation.  So absolute are the correspondences, that all we need say is that the "false capital", at our particular moment, masks housing, while threatening to extend its aura to commodities.  Again, there is a spectre of scarcity and depletion (or value) where there is plenty (the housing market is in fact overbuilt, commodities are produced in absurd excess).  Jefferson has here exceeded himself, and the whole earth on which the game of capitalism stands, by accidentally calling into question the existence of true capital. The "aura" of "false capital", which is nothing other than the anxiety of privation (an over-determination of nothingness)  and its corresponding predatory drives, threatens to create a perpetual debt which will, he thinks, accumulate property in the hands of a few bankers: a capitalist "general revolution" which will leave homeless those (genocidal maniacs) who conquered the Continent.  Fool though he may be, Jefferson was always a thinker of growth (intensive and expansive) and was never an economist, and only rarely allowed himself the luxury of openly dialectical thinking.  Is this in part because he knew that "general revolution" had even further, unforeseeable affects, beyond the apparent accumulation of all property in the hands of a few bankers?  What, for instance, happens to Jefferson's libertarian-agrarian post-slavery utopia when markets deflate to zero, or near zero?  When the bankers begin to cannibalize each other, as in the margin calls Jefferson describes in 1820 or the Carlyle collapse of last week, it is far from clear that the end product is "true capital" accumulation among "true capitalists" (see earlier post on "America's Communist Landlords").  The problem with any economic thinking (revolutionary, distopian or otherwise) is the fabulation of competent "agents" with the technical ability to perform a "general revolution of property."  This is not the way history lives.  Technicity itself lives a much more active and fearless life than any agent of capital; and so little is known of it that we can only say that it is the name of the deflation that always exhausts and infinitley exceeds the anxiety that inflates the world to "value" through the terror of its loss.

St. Patty's Day Massacre

Well, I can't say I am sure it will happen - a good pyrrhonien would never admit this publicly - but I could say that its non-occurrence has been utterly unforeseeable to me for a long time.  One could even make this visibility of the invisible a central hypothesis of Skeptinomics:  Act at the sight of the fullest Nothing.  

Now we on the left will begin to worry about the margins of the economy, the masses lucky enough to be exploited by us; it will hurt them first.  Maybe.  It will hurt us more.  We in the far west are unprepared for this type of deflationary collapse, specifically one which involves the long term inflation as one of its most difficult components.  Commodity prices are high and getting higher, and are unlikely to collapse as money flees the stock markets.  This is very different than the situation in the 1930's.  Most of us couldn't raise even a small part of our own food supply, and the government won't be knocking down farmer's doors in order to destroy excess supply.  Quite the opposite.  America and Western Europe are far more vulnerable than places that have been less infantilized by their own narcissistic sense of entitlement.  Still, because of this weakness, these places are often quick to socialize the food supply in times of crisis (remember government cheese?).

Possibly, the global financial markets are about to foreclose on the America.  If they do, they will implode the same way the banks have after foreclosing on borrowers.  The total refusal of any collectivism, the automation of auto-preservation, is revealing itself as autoimmune in a classic Derridean sense.  

The question is:  Will the trace of this lost thing called Capital, this lost capital, remind us of times we had long forgotten?  And how long forgotten will these memories be?  Back beyond feudalism, beyond the hope of socialism, to a steppe, perhaps?  Or maybe even the trees?  Perhaps to an open fundamentalism, that finds its grounding wherever and whenever it looks...

Fannie mae and fredd-I-raq: At what point will the Us Government's general insolvency force a withdrawal from Iraq and Afghanistan?

Unlike previous financial crises, which tended to be EITHER
inflationary or deflationary (the stagflation of the seventies is no
exception to this history), this one seems to show spiraling and
indeed semi-permanent trends in both directions. As such, the
traditional economic therapies such as inflating your way out of
recession, or deflating prices to preserve the value of the currency,
will not work. Likewise, under these circumstances, the notion that
all economies, under all circumstances, benefit economically from a
"good war" is exposed for lacking even the faintest to tether to
reality. While the second world war may have "helped" depressed
economies by stimulating 100% employment under a highly socialized
militarism, the wars of the current administration not only decrease
overall employment by draining funds out of more peaceful, less
expensive public sectors like health and education, but, more
importantly for the current argument, it contributes greatly to the
overall insolvency of the debt-laden federal government. There have
been a few prominent treatments of the effects of the iraq war on the
economy, but the notion that the cost of the war could ultimately
contribute to the destabilization of the banking system has largely
been over looked.
If, as seems increasingly clear, median house prices will drop to
approximately 3 times annual median income from its current level of
4, with large metropolises in the west dropping from a multiple of 10
to something like 6, banks will demand, as they in fact already are,
that government sponsored enterprises like fannie mae and freddie mac
step in, with help from the federal reserve, to back their worthless
assets with taxpayer money as the deflationary collapse progresses.
At what point, I wonder, would the treasury be forced to make the
very difficult choice between bailing-out over-privileged multi-
billionaires and funding their pursuit of imperial, neo-colonial
enterprises overseas? If loses in the property market sneak toward 5
or 7 trillion from current levels it is difficult to see how the
government could fail to step in on a quite massive scale. On the
other hand, its own debt is already so immense as to only really
exist at the most sublime level of abstraction. Likewise, the
american taxpayer is leveraged to the hilt, and in most cases won't
see a real wage increase for at least fifteen years. Fucked from
every direction, we may have long ago squandered the money necessary
to continue the wars. This, of course, will only start to become
apparent when the treasury fails to intervene at the collapse of some
major financial entity, and when federal funding to everything
outside the military complex suddenly seems to be drying up.
Military enterprises will certainly be the last to fall, but it may
not be after a general deflationary commodity collapse.

Aestheticization of Banking

"current-coupon indexes represent the average of yields for the two groups of bonds with prices just above and below face value, the ones that lenders typically package new loans into."

Perhaps those who have absolutely no understanding of this sentence have a better understanding than those who do.  As the mortgage bond market slides into chaos, ensuring the deflationary collapse to come, it is becoming increasingly clear just how florid and expansive the lives of financial "structures" had become.  Now, drained of all choloric, the lock-step poetry of their lives, vast skeletons dripping onto islands, can be explored.  History, certainly, will make something  of this.  It will probably compare it to the "Baroque."  Not wrong, and certainly appropriate in that, like most criticism of the Baroque itself, it will miss the "spiritual" simultaneity of its material with its thought, accepting subject-object distinction, concepts of viewership, etc. (deleuze's book on Leibniz is a great example of these limitations).  This at-the-same-time of its materiality and its thinking spirits through the structure at hand.  With regard to the "miniature" baroque at hand in the deflationary panic, this spirit is now on horseback at a swift gallup.

Now that the show is on the road, we'll start making another attempt to understand what is passed down to us from these carcases....

Now we are getting somewhere...

This week, the economic debate centres on the question of whether inflation exists (here and now), whether we are in the presence of inflation, what inflation's presencing would be, etc.  The difference between this debate and previous discussions of inflation (say in the early 90's or the the 70's), is that it is inspired by a rising awareness of an intensification of the radical absence of inflation in the housing market.   The deflationary trend has dominated both policy-making and media discourse up to this point in 2008.  Now, with the re-emergence of concept of inflation (hoisted by statistical rhetoric asserting its presence here and now in the economy), the debate has taken on the semblance of a Blakian  theological structure in all its speculative anxiety, with Inflation at the top and Deflation at the bottom, and stability for an earth, with heaven and hell constantly trading places.  The problem is, of course, that no one can coherently argue for either a general deflationary trend or an inflationary trend.  A similar torsion in the 70's - spurred by a mysterious combination of stagnation and inflation - brought us the somewhat retarded word stagflation (sounds like jerking off a male deer).  Again and again, the phenomenal expansiveness of life demolishes economic understanding.  The entire terrain of the possible expands far into the impossible (without making it less impossible), and all the dismal science can do is reapply the up-down binary.  Well, if writing about economics means provisionally accepting this binary for purposes of strategic understanding, then so be it, and in fact I will do more:  I will take sides, and commit my efforts absolutely, not to a heavenly balance of controlled inflation, or to a karmic cycle of rises and falls, but to the absolute conquest of deflationary tendencies, to the loss of all value, and even the concept of value itself.  For purposes of writing, anyway.

ISM Nonmanufacturing Index Will Narrate Deflationary Collapse

This index of the performance of financial services, real estate, the
entertainment business, and construction, dropped off a cliff
yesterday, and is certainly the one to watch for signs of radical
deflation. Having no faith whatsoever in its "accuracy" should not
deter us from reading it for nervous volatility, and even signs of
aphasic silences. The reason is that this index seems to track a
peculiar variety of dying simulacra in the global economy. What do
real estate, financial services, hollywood, and the construction
business have in common? They rely for their livelihood on
controlling access to "skills" and "values" that are either mired in
crisises of self-doubt or are rapidly democratizing as we speak;
respectively: location (real estate), capital growth (financial
services), entertainment (obviously), craftsmanship (construction).
If learning to live means learning to be skeptical enough about these
"skills" and "values" to be able to chose either to become good at
them or resist their hegemony, then this whole sector will be well
and truly done-for - at least in its current modality.
What of manufacturing, then?

Impossible Probabilities

The Street reminds us this week of one of the great historical torsions of methodological skepticism:  Although we suspend judgement by thinking in probabilities instead of outcomes, the certainty that "probable" outcomes predominate historically is never interrogated: 

"Consider future market action in terms of probabilities, not outcomes. For example, assume that some causative factor resulted in a specific event (X --> Y) seven out of nine times. The most you can say is that when "X" occurred in the past, it has resulted in "Y" approximately 78% of the time.

But remember, there is a huge difference between historical occurrence and future likelihood. In the example above, this does not necessarily even mean that since "X" has just occurred, there is a 78% that "Y" will happen. Consider: was the first X/Y occurrence really a 100% or zero? Did the second one become 100%, 50%, or 0%, then the 3rd 100%, 66%, 33% or 0%?"

Did an event like the '29 crash follow 7 times out 9 similar historical situations?  Of course not. The temptation is to say that this is because such a situation had never before existed, and that this radical differentiation was a chaotic exception within a larger, well-established inductive order distributed along the economic history of modernity.  Sociologically, it is very interesting to see how this sociological presupposition about the predictability of human behavior collapses so predictably in times of crisis.

Present market data yields a very strong indication (and in a way it yields nothing else) of just such an emergent volatility.  As the best indicator of a psycho-social event in the performative logic of economics, the instability of "predictive comportment" is what we should be paying the most attention to.

Bullish on Depression

From the Post Opinions:

"But overall, subprime loans were designed for, and snapped up by, the poor. According to a recent study from United for a Fair Economy, 55 percent of subprime loans went to African Americans and 17 percent to whites. Among whites, they went far more frequently to low-income people than to the wealthy -- 39 percent compared with 24 percent."

What do you call it when the poorest people in society cost the elite over 2 trillion dollars in a few short months?  When they cause so massive a deflation that houses become affordable for the first time in a generation?

Localize food and energy production(oil scarcity may yet do this on its own), globalize cultural production (internet, etc.) and its all over.  The economy - if we can even call it that - would be wholly unrecognizable.  Feudalism or a green and free utopia?  Neither, probably.  

Things are suddenly looking slightly more Jeffersonian than Marxian - which makes me very nervous.

Music, Weed, Movies, and now...Housing?

Another step:
At some point, the nightmarish history of capitalist accumulation,
driven by a frenzied terror of scarcity and alienation, will dream
itself out of anxiety and sober up. But when? When? ALREADY.
The rapidly-evolving deflationary crisis, which has only begun to
terrorize the Bastards in High Places, may be evidence that a
revolution of sorts has already occurred. This goes against one of
the more obviously false pre-suppositions of political economy: that
revolutions (whatever they are) are the generally well-understood,
well-planned, products of enterprising (if often sociopathic) minds.
The truth of course is that revolutions are never understood in
advance, or even as they are occurring (highly planned and post-
modernized ones like the Romanian Revolution not excepted) They only
ever really live in the creative histories they set in motion. Given.
Could it be that with the expansion of renewable energy sources, the
collapse in real-estate property "value", the decriminalization of
mind-altering substances, the ungovernability of the global
metropolises, the collapse of the credit system, and the emerging
insolvency of the culture industry, we may see a trace of living
concepts already born beyond the proper terrain of the commodity-form?

Step Two: Accelerate Losses Through Radical Passivity

As markets seem to recover, optimists will engage in  increasingly bold displays of ignorance.  The San Francisco Chronicle, for instance, seems to think that the median income of the Bay Area is over six hundred thousand dollars per year:

"The proposal would allow Fannie Mae and Freddie Mac to buy loans up to 125 percent of an area's median income - up to $729,750 - well above their current $417,000 limit. While the new limit would vary based upon how expensive an area is, almost all of the Bay Area would automatically merit the $729,750 cap by virtue of having medians above $600,000."

(In fact, the Bay Area county with the highest median income is Marin, hovering around the 100K mark)

At what level of inummerate vulnerability are the middle classes operating?  If, as seems likely, there are even more severe losses for banks in 2008, if the housing market continues a steady decline in valuation of up to 30% from its current level (see Merrill Lynch's most recent forcasts), why should we expect there to be any loans for Fannie Mae and Freddie Mac to buy?  

At no point is the performative logic of the economy more obvious:  if the banks are as wildly, stupidly bullish as small investors are, if indeed they can be stupid together, then they can persist in the fantasy of rising, booming absolute valuation of property.  But (and here the deconstruction of the performative is important) this performance, even at the apogee of its self-fulfillment, can never aspire to what we so comically used to call "reality."

Die Erotik der Macht

Having, paradoxically (and peritropically) predicted and diagnosed
the ungovernability of Ecoverse, as well as the unknowability of its
futurity, it is time to move on to more serious matters.
In order to carry out the revolutionary aspirations of the
Foreclosing Classes, several nominal adjustments within the Ecoverse
must be completed in short order. I will elaborate a few of these
long term goals over the next few weeks:

1) A new social physics of commonality must be expressed
aesthetically. We have possessed the theory of such an understanding
(Spinoza) for at least three centuries; and perhaps we've never lost
the understanding itself; however this theory and this understanding
must throw itself on banality and produce a film.

Happy in Post-Capitalist America

History will probably see the Bush Depression, as well as the Bush
Wars, as minor blips in the very gradual descendence of capitalism.
However, it is the much more interesting transition from market
capitalism to state capitalism which, from where we write (at a desk
outside on the corner of a bridge over that little river runs through
the outskirts of downtown Santa Fe, NM), we are likely to already be
witnessing too closely for comfort. Excluding some of the not-simply-
xenophobic-horse-shit discussions of sovereign wealth funds, and
their role in re-capitalizing the banks in the wake of the subprime
crisis, we can already see the sprouting of a very old seed of state
capitalism in Bernanke's rescue efforts. It has actually always been
there, or at least since the codification of the Federal Reserve's
legally-defined categorical imperative: "You shall achieve maximum
employment." In other words, make them work. Everything we see the
Fed doing today, in terms of printing money in the form of discount
inter-bank loans, is aimed at creating a situation in which the
American people will "be employed" "maximally". The better the
superstructure is understood, the more diabolical and anti-populist
the "maximal employment maxim" seems.
The central banks by and large have a mandate to create the kind of
liquidity in lending institutions which allow them to inflate and
control commodities (like say housing) in such a way that people will
have to work for them. This is the nature of a boom. Tempt the
masses with the dream of accumulation; allow them to believe they are
the "smart money"; just keep them working to pay down the interest.
In what is taking place now, we can already see a dawn beyond the
ascendence of state capitalism: when people see beyond the social
stigma of the debt they have so idiotically elected to hoist on
themselves, and walk away from their loans en masse. It won't happen
this time, but someday it will. And there will be very little the
state can do about it.

Anarcho-Capitalists in Elaborate Daughter-swapping Ritual

As if we needed any more proof that executive workers (the new lower-middle class of Western Europe) were close to achieving a level of self-victimization comparable to what they inflict on others, The Guardian reports:

""Tales of Student Prostitutes shock france

France's education minister has vowed to improve student financial support after a series of accounts by undergraduates working as prostitutes.

A memoir by a 19-year-old language student and a book of interviews with undergraduate sex workers has shocked France, lifting the lid on a practice which appears to be increasingly common. A new study showed a large online market for student prostitutes, describing how male clients, who are often rich, married executives, advertise online for young, undergraduate "escorts" whom they prefer to street prostitutes. These clients pay on average €400 (£300) for a two hour meeting with a student, including sex and "time to talk".""

The self-exploitation is clearly intensifying, and it is clear that these modalities are, like most violence, intra-familial:  financiers securitize their own mortgages, driving prices even farther up for their older children, while soliciting each other's university age children.  

After all, as we all know, no one is rich unless their children are poor.

Informational Frictions

The Executive Summary of "informational frictions" from the Federal reserve reads like a catalogue of skeptical chasms from Sextus Empiricus.  In fact, the term "informational frictions" seems to be a somewhat casual appropriation from the lexicon of information theory, deployed as a euphemism for the global collapse of inductive certainty along the entire chain of the mortgage lending and securitization process.  Clearly, there is no longer any effective analytic apparatus for assessing either credit-worthiness of borrowers, or the overall risks of investments in general.  (This raises the interesting skeptical question of whether there ever was.) The fact that there are no clear winners in this situation should at least prompt some of the analysts and managers, who have so much to lose by misunderstanding these things, to at least try to conceptualize where all the "lost" money has run off to.  I'm not just talking about lost value in terms of stock prices, but of lost money lent out to subprime borrowers who had purchased homes in a vastly inflated housing market.  First of all, it did not go to the folks who bought the house and took out the mortgage.  It went, by and large, to the people from whom they bought these properties.  These homeowners had, in recent years, seen the value of their property driven up to the skies by this very same process of excessive and reckless lending.  So, if you're interested in a more phenomenalogical reading of the subprime crisis (which you should be even if your interest is profit-driven), then it is important to investigate the event outside the framework of pure loss - keeping in mind that real money did change hands, and was spent, reinvested, etc.  This kind of research has the potential to generate new and more sophisticated understandings of concepts like gentrification, foreclosure, and insolvency, which could easily appear as subtle (if unconscious) proletarian mass-strategies.  Strangely, this process isn't being discussed as being part of the lineage of Kafkaesque "mystical bureaucracy".

America's Communist Landlords

There are so many amazing turns recently in the continuing saga of capitalist accumulation. Now, among many devilish twists of irony that Marx could never have foreseen, the chinese government is providing most of the capital backing to the largest securitized mortgage structure in the world. (http://www.ft.com/cms/s/0/c6eb81e0-c083-11dc-b0b7-0000779fd2ac.html) In other words, the resources of American and Western European ultra-capitalists are now accumulating to a purportedly communist government. Having lost close to half-a-trillion dollars in the subprime crisis, having had this money kicked out of them by a swiftly-defaulting proletariat, the creditor class of self-described capitalists is being forced to sell on large stakes of its future profits to self-described communists. The "Communists" are acquiring these distressed assets at a massively discounted rate. But this is exactly the process of capitalist accumulation that Marx describes so exhaustively in the first volume of Das Kapital - only it is going in exactly the opposite direction. So, were we to believe even for a second (and, in any case, we do not) that the communists in this narrative were communists, and that the capitalists were capitalists, we would truly have a revolution on our hands - one in which the entire stream of modern political economy suddenly began to flow backwards. (To end on a nice Derridean note:) Of course, this is just more testimony to the no longer and not yet conditioning of communism - and perhaps even of capitalism? Is it possible that chinese communism is the spectre of a capitalism hitherto unseen? A capitalism to come?