What Did Karl Marx Predict?
Here's a terrific piece by John Lanchester on what Karl Marx got right, what he got wrong, and what he managed to get right even by being wrong.
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The Hamster Wheel Recession
John Lanchester, writing in the LRB, takes a look at the state of the British economy. Here's his prediction for the near future: At the moment, thanks to the subjective mildness of the recession, we are still in denial. Next, as the full extent of the bill becomes clearer, there will be anger, especially since the hard times will have next to no effect on the bankers and politicians who, in the public mind, caused the crisis. Then there will be a helpful-for-the-government period of inflation. Then interest rates will shoot up in an attempt to control inflation, and at the same time we will see tax rises, [...]
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Your Depressing Read For The Day
Here's John Lanchester reviewing the new Michael Lewis collection. As is always the case with Lanchester's writing about the financial crisis (and usually with Lewis as well), you will find yourself quite entertained throughout, and then you will finish it and think, oh God, we're SO SCREWED.
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Recommended Reading: John Lanchester, "It’s Finished"
I'm a little late on this one, but John Lanchester's lengthy London Review of Books piece on the financial crisis makes for phenomenal reading. It is by necessity oversimplified in certain places, and, given its place of origin, skews more toward the British side of the story, but it is one of the best pieces I've seen so far. Fair warning: It does not end optimistically.
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How Short-Selling Works
"Short-selling is on the decent-sized list of practices which seem bizarre to civilians but to insiders are a routine feature of how modern markets work. A short-seller borrows shares in a company, and then sells them, with the intention of buying them back at a cheaper price, returning them to the lender, and trousering the profit. Say you decide that, to take one purely hypothetical example, News Corp is overvalued because – oh, I don’t know, just to make something up – because all its senior management are going to go to jail. The current price is $15.80 and you reckon it’s heading for ten bucks. So you find a [...]
