Phronesis

In America, people consume. 70%, in fact, of our spending (GDP) is consumption. Euphemistically cloaked as aspirational, patriotic, or necessary; we buy to feel.

The problem is not how much we buy. The problem is how consuming makes us feel.

A brief portrait of capitalism: Intellect facilitates cheaper and better products through innovation, cooperation, and competition. Workers cooperate to innovate. Corporations cooperate with their customers to disseminate goods. Competition between corporations for customers inspires innovation.

So we get a lot of cheap staples and low-cost, high-quality products.
Prosperity ensues. Happiness eludes.

The problem is fast fashion. Corporations pursue this calculus to its marginal conclusion. H&M provides the semblance without the substance. And we buy it because it makes us feel good and its cheap.

Cheap is not a bargain. Value is a bargain. And value derives from a feeling of well being. Not contentment! Value is dynamic, kinetic, masculine, and protagonistic. Value derives from agency. Value is subjective truth in the demilitarized cone of objectivity.

Price is the only truth. It is the price of cooperation.

Without haggling, we have no agency. Fast fashion forces us to haggle with ourselves. We derive not the Truth but the subjective truth of the moment. The pleasure priciple.

It gives us no victory because we have bested only ourselves.

They're not all capitalist pigs...

Some are hipster douchebags!
Gerry Pasciucco, head of AIG's Financial Products division (the guys who brought down the firm)

-via Gawker

Hmm...

Regarding a request from AIG to invest last September:

“It’s like taking out a girl -- sometimes you know it isn’t going to happen,” Buffett said “The time pressures, the degree of uncertainty, the depth of the possible hole, the need to get it through a regulatory body,” he said. “It wasn’t going to happen.”

Not quite as pithy as his former aphorisms such as, "When the tide goes out, you get to see whose swimming without their suit," but equally revealing.

Update:

Today's Range on the Dow 6800-7200
The credit markets are extremely stressed, with the price of insurance on the riskiest companies setting records. This partially due to funding pressures at banks before they close their books at the end of the 1st quarter. The but the volatility has been low during the last few weeks as the stock market plunged. This suggests two things, sluggishness and lack of capitulation. This makes me think that everyone who owns stocks has either hedged against a further fall or has already decided to either bail or is resigned to lose more money. Therefore, absent the failure of a big bank, or some grave political uncertainty, the stock markets appear to be due a short term bounce of 20-30%. But the only certainty is that they will eventually have further to fall. We were too clever getting into this mess to get ourselves out so easily. And no one has given up completely yet. Everyone seems to think the stock market can't get any worse. Until everyone despairs, it will keep falling.

In inflation adjusted terms, 6800 marks the peak in 1966 and 4800 marks the peak in 1929. I personally believe that 4800 is where we are heading. (To see this chart click here) Below is a non-inflation adjusted chart showing the century long term trendline. According to this chart there should be support around 4800 as well.