Killing it like a hooker in Hong Kong

Macro: Resource Bounded Expansion

I don’t often go into monologues about macro, about which I know very little, so this is a departure from my usual specific thoughts.

An article which I keep going back to is Jared Diamond’s 2008 Op Ed in the NYT, What’s Your Consumption Factor?

TO mathematicians, 32 is an interesting number: it’s 2 raised to the fifth power, 2 times 2 times 2 times 2 times 2. To economists, 32 is even more special, because it measures the difference in lifestyles between the first world and the developing world. The average rates at which people consume resources like oil and metals, and produce wastes like plastics and greenhouse gases, are about 32 times higher in North America, Western Europe, Japan and Australia than they are in the developing world. That factor of 32 has big consequence

Of course this is no different from Goldman’s emerging middle class consumption hockey stick, or any number of other theories in the market to justify the commodities boom.

Over the roller coaster course of the last 3 years, I’ve watched as the oil price peaked at 150, dropped down to 40 and now is back up at 80. The resources guys have been talking their book about the commodity super cycle, the China bulls theirs on how China is going to rule the world.

But again, I go back to Jared Diamond’s  consumption factor argument. What has basically happened with the advances in telecommunications and the internet, is that technological advances are now being communicated more or less instantly across the world. It took 60 years for the radio to become widespread around the world, 40 for the television, 20 for the Internet, and less than 5 years for the Iphone. This increase in the pace of technological advance basically means that technology derived competitive advantage has become a highly temporary phenomenon.

This also ties in with the “golden straitjacket” argument of Thomas Friedman, that policy choices between political parties has narrowed in all countries as a result of globalization.

The confluence of these factors implies that all nations, and all the middle classes of those nations, are reaching for the same goods that the West has enjoyed in the post WWII era.

This is what I am willing to believe will drive the commodity story over the next 20 years. It’s going to take a lot of coal, oil and copper to satisfy those masses.

July 16, 2010 Posted by | Uncategorized | , | 1 Comment

Jews are the new WASPs

Philip Weiss on the Kagan appointment:

The Kagan appointment means that we have entered a period in which Jews are equal members, if not actually predominant members, of the American Establishment. Obama’s two closest political advisers are Jewish, Rahm Emanuel and David Axelrod, and are said to be his foreign-policy braintrust. The economy is supervised to a large degree by Jewish appointees, Larry Summers and Fed Reserve Board chair Ben Bernanke (Time’s man of the year last year, a selection overseen by Rick Stengel, the Time magazine editor, who is also Jewish).

Recently a Jewish friend in the media said, “We’re the new WASPs,” referring to the patrician class that used to represent the elite in American society.

I’ve been thinking the very same thing for a while, and it’s pretty funny to hear someone else say it out loud.

When I was in Harvard, fresh from classless mass of Southern California, there was one thing I discovered. If you saw a smart white person, with dark hair, there was a 99% chance that he or she was Jewish.

Now this is not a commentary on the lack of blondes in the Jewish population, but merely that in schools like Harvard, which produce the American elite, Jews have been the new WASPs for quite a while, but have managed to be less visible than say Asians.

July 16, 2010 Posted by | Uncategorized | , , | 3 Comments