“Despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression…” This advice from the Harvard Economic Society on November 2, 1929 illustrates that unbridled optimism in the capital markets was just as dangerous 80 years ago as it is today. Modern financial crises aren’t simply failures of regulatory oversight or inherent structural weakness. They’re a combination of the cyclicality of human behavior, the dangers of unbridled leverage, increased speculation by unsophisticated investors, and our complete lack of financial memory beyond 20 or 30 years.

While the world comes to terms with yesterday’s historic call for change, Nouriel Roubini and his team have pulled together a laundry list of the many great challenges that lie ahead…

“Spectacular episodes in financial history” come about more often than we might expect, and certainly more often than we remember. Harvard economist John Kenneth Galbraith wrote a brilliant primer on financial speculation in the early 1990s, suggesting that our memory for financial disaster was far more limited than our intelligence might otherwise suggest:

It’s no surprise that financial crises – like intercourse, pro sports, and agriculture – run in alternating cycles of boom and bust. Classical economic theory suggests that such cyclicality can be overcome through innovations in resource use, factor productivity, and leverage. Classical history suggests otherwise. In the following rant, celebrity economist Jeff Sachs tackles the two-headed plague of stagflation — part stagnant economic growth, part inflation — and offers the 1970s as an illustrative case study in how to keep a resource-hungry, debt-ridden, war-wearied hegemon from spinning its economic wheels…

As financial institutions continue to navel gaze in the aftermath of the credit crisis, confidence in their ability to self-regulate continues to decline. With little trust in their assets, their markets, or even their peers, these global banking titans have sworn off their independence and, like disenchanted teens, are returning home to be cared for by risk-averse, populist policy-makers and their never-ending pool of taxpayers’ dough. The danger here is that both sides are still reacting to deeds already done, and nobody has yet proposed a solution to avoid similar financial chaos going forward. With threats to global income in the order of nearly a trillion dollars, whoever ultimately grabs this hot potato better have pretty thick skin…

An expanded look at the role corporations and hospitable business environments have played in stabilizing the anarchic system of international relations. This work is based on an earlier paper which focused on the rise of the corporation as a key variable in the calculus of global peace and security…

This paper was written for quite possibly the best combination of professor and class I’ve ever experienced. If only all academic endeavor challenged so profoundly, surveyed so broadly, and bore as much intellectual fruit…
Hegemonic Stability and the Rise of Global Corporations
by Devin DeCiantis
“The logic of markets is borderless,
but the logic of politics remains bounded.”
- Louis W. Pauley, Who Elected the Bankers? Surveillance and Control in the World Economy, 1997

An indictment of the sedentary class, excerpted from an 1862 essay by Henry David Thoreau in The Atlantic…
I think that I cannot preserve my health and spirits, unless I spend four hours a day at least—and it is commonly more than that—sauntering through the woods and over the hills and fields, absolutely free from all worldly engagements. You may safely say, A penny for your thoughts, or a thousand pounds. When sometimes I am reminded that the mechanics and shopkeepers stay in their shops not only all the forenoon, but all the afternoon too, sitting with crossed legs, so many of them—as if the legs were made to sit upon, and not …

“Nationalism is like cheap alcohol.
First, it makes you drunk, then it makes you blind, and then it kills you.”
- Daniel Fried, Assistant Secretary of State, U.S. State Department
With a history of social chaos that spans most of human existence, it isn’t surprising that personal freedom is a fairly recent phenomena. This so-called “inalienable right” was only introduced in Holland, France, America and the fragile Ottoman Empire over the last few centuries, after years of philosophical introspection and ultimately bloody rebellion. Unlike the fall of the Roman and Greek empires — where authority was more regulatory than ascendant — these “populist” revolutions signaled not merely a new set of rules but also a radical shift in personal identity. Living …

November 23, 2006—More dour news about the coming financial apocalypse, this time by noted economic strategist Dr. Gary Shilling. The augur, once again, is a hyper-inflated housing market, driven principally by excessive leverage, scandalous consumer spending, and inexhaustible financial optimism. “And why not?” you might ask. Everyone and their uncle has made money in real estate over the past five years, from the slummiest crack house to the most decadent penthouse. The more money everyone has, the more money everyone spends, and most developed economies have profited handsomely from that arrangement.
To get a sense of why the experts are now tempering such myopic enthusiasm, and why these so-called “speculative episodes” are inherently not in the economy’s best interests, read some …

This piece in the OpEd section of the Wall Street Journal could be written about any despotic regime in the history of humankind…except, of course, for the satellite dishes. Regime change rarely trickles from the top down, and when it does, it’s more like regime swap than any true social progression. In the case of Iran, a country with 70 million people — the majority of whom are under the age of 30 and two degrees removed from the last major revolution — the status quo isn’t all that bad. Those in the best position to pressure the powers that be are still too caught up in their sumptuous Middle Eastern lifestyle to vocalize any meaningful dissent, and that’s as …

Another topical analysis from the team over at Stratfor. This time, they tackle a much older problem, the relationship between religion and fundamentalist war. When taken in context, the 14th century passage that has outraged Muslims around the planet is not so much a challenge to Islam itself as it is a warning shot across the bow of its more fanatical elements. If Friedman is right, Pope Benedict may have just done for the war-torn Middle East what his predecessor did for the Soviet Empire. If he isn’t, this might be the beginning of another global crusade…
Faith, Reason and Politics: Parsing the Pope’s Remarks
By George Friedman
On Sept. 12, Pope Benedict XVI delivered a lecture on “Faith, Reason and the University” …

A Nationalist Manifesto
There are too many elephants in the room. During our teens it was understandable, but this country is almost 140 years old. It’s time to stop ignoring the obvious. The 21st century might be filled with promise, but not if we don’t change course.

“I can calculate the movement of the stars, but NOT the madness of men.”
- Sir Isaac Newton, after losing a fortune (£20,000) in the South Sea bubble.
I’ve been meaning to write about the impending real estate crash for quite some time, but until I get around to it, this piece is worth a read. Roubini is a Professor of Economics at the Stern School of Business at New York University, and the work below is taken from his blog. Though the prose is somewhat awkward, anyone who produces “seminal work in international macroeconomics, global macro policies, financial crises in emerging markets and their resolution, and the reform of the international financial architecture” deserves at least a few …

Thoughts from the frontlines of the war in Lebanon. What I know I’ve included, and what I don’t I’ll leave up to you. Internet has been tough to find but I’ll try to keep things updated as often as I can. For more background on the conflict, check out our ongoing coverage of the Middle East…
Wednesday, July 12, 2006 | 12:01PM
Twelve plus hours after we landed in Beirut, the only civilian airport in the country was bombed by the Israeli Air Force. Apparently Hezbollah commandos crossed the Green Line last night and kidnapped two young Israeli soldiers, just weeks after a soldier was held for ransom by Hamas guerillas in Gaza City. Israel retaliated swiftly by taking half of the …

Few scholars have had such a profound impact on their field of study as Bernard Lewis, Professor Emeritus of Near Eastern Studies at Princeton University. In this recent Q&A, he addresses the untold roots of Arab rage, the complex challenges of expanding Western empires, the rise of the Islamic mullahcracy and the mystery of the Danish cartoons. Now into his 90s, the outspoken orientalist continues to search for the ultimate compromise, contrasting “a nation divided into religions” with “a religion divided into nations”. The transcript is a little bit lengthy but well worth the read…

“The time has come,” the Walrus said, “To talk of many things…”
- Lewis Carroll, The Walrus and The Carpenter, 1872
That Charles L. Dodgson was considered by many to be a serial pedophile had little to do with his celebrated creative legacy. After all, he was a distinguished Anglican clergyman, a pioneer in early photography, a gifted mathematician, and above all, a writer of great fictional prose. As he wandered through the English language over a hundred years ago, his literary and personal idiosyncrasies led him from subject to subject and metaphor to metaphor, spawning works that have continued to delight his readers ever since.
But perhaps his most enduring legacy comes from the lines of a little known poem called The …

In an attempt to explain the subtle but important distinction between cash flow, revenue and income, this article is the first in a series on basic investment strategy, and can serve as a primer for anyone interested in a more “rational” approach to financial research and analysis…
The first thing most people do when they hear about a new company is follow the ever-popular “share price” line of simple deductive enquiry (“Where’s it trading?” “Where was it trading?” Where will it be trading next week?”). In essence, these people are making the fairly respectable gamble that it really is “good news” that drives share prices up, and it really is “bad news” that drives them back down again. To be sure, …

Imagine learning for the very first time — contrary to public opinion and centuries of contemporary science — that the world was actually round. Imagine being that first group of scientists (regents and spiritual leaders) or politicians (again, regents and spiritual leaders) or shell-shocked shepherds who grazed for thousands of years through the countrysides of the known world, convinced that if they wandered just a little too far, they might, in fact, fall right off the edge of the planet.
Life in those days was distinctly two-dimensional. There were the heavens, and there was the earth, and never the twain should meet. Stars were but holes in a giant celestial blanket while various pagan deities pulled the moon and the sun through …

generation one: firepower
with the advent of gunpowder, modern military strategy made its impressive entrance into the arena of armed conflict resolution. can you imagine being a fighter in that very first army without guns, staring across the battlefield with your broadsword in hand at a wall of fully loaded muskets? in all likelihood, you wouldn’t even have time to spoil your polished chainmail britches before taking that first metal bullet in the face. as you can imagine, there weren’t many of these early lop-sided slaughters, but the resulting shift in combat tactics was actually quite enormous.
during that first generation of war, all that really mattered was: 1) access to gunpowder, and 2) access to manpower. the guy with the most …