LifeGame

The Big Mess Financial Crisis Monster...

I am not a financial expert nor claim to be. I am, however, very interested in economics, human behavior, social behavior and so on. There's tons of (mis)information and it's hard to work out what has actually happened, and therefore impossible to figure out what is going to happen next.

Some interesting info that helped explain it:

The Giant Pool of Money: http://www.thislife.org/Radio_Episode.aspx?episode=355
George Soros' Book: http://www.georgesoros.com/creditcrisis08
The Black Swan: http://www.amazon.com/Black-Swan-Impact-Highly-Improbable/dp/1400063515/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1228100319&sr=8-1 (more general, but GREAT).

The general things you have to know is that basically if you lower the interest rates after a massive tech bubble you are telling banks to loan money to just about anyone... If you don't believe me, consider NINJA loans. That stands for No Income, No Job, No Assets. Hmm... that doesn't sound like a very conservative strategy. There's all kinds of really fun things that people came up with in order to keep pouring money into the economy. You can research CDOs(http://en.wikipedia.org/wiki/Collateralized_debt_obligation), CDSes(http://en.wikipedia.org/wiki/Credit_default_swap) and  MBSes (http://en.wikipedia.org/wiki/Mortgage-backed_security) all the leveredge associated with those.

Anyway, this is a passing interest of mine and rather than posting pages and pages of information, I recommend just reading the above and then keep digging from there. The key for me was figuring out that CNBC, CNN and FoxNews certainly don't explain it.

LifeGame -> [Start Here]

I enjoy many things.

In general I am obsessed with understanding the whys in life and how those things fit together with each other. I wouldn't say that I see life as a jigsaw puzzle because metaphors are dangerous, and can create false images in people's minds (which they anchor to).

Today I picked up the book "Influence" thanks to looking at the MIT business school site and seeing it on the reading list there. I hadn't heard of it before but I ended up driving down to Denver to pick it up (about 35 minutes or so). I'm only about 50 pages in, but it's worth the read.

I took my dog to the dog park this morning with a mind to read the book while Kiki jumped and ran around. It turns out that the book itself became a topic of conversation. The author (Robert Cialdini) should be happy as it has this huge white bold print on a bright red background. Since the book is about purchasing habits, that is very appropriate. I discussed consumer behavior with the people there: one was a wholesale car buyer/seller and the other was a woman whose job I didn't catch.

Nothing hugely came up in the conversation, but it was interesting to note how uncomfortable people get talking about consumer behavior. I think this is because we are not at all at ease with how programmed we are. We want to believe we are "rational agents" as economic theory tells us, making choices based on perfect information and rigid analysis. Obviously this isn't true, but it's going to be hard to get people to be smarter consumers if they are uncomfortable event TALKING about automated consumer response.