“I ask your indulgence if I close on a personal, existential note. We live in a time when we are flooded with information in every field of endeavor, a deluge from which Freud scholarship is not exempt. It has has become a veritable industry over which it is difficult to maintain even bibliographical control. The amount of sheer information increases incessantly. I confess that I have reached an age when I am haunted by the question of when information becomes knowledge. What I have presented here is only a special instance of that larger Angst. I am perhaps not yet old enough to seek the further line where knowledge becomes wisdom (Yerushalmi Series Z 1997).”

Flynn-Burhoe. 2000. ‘Memory – The Question of Archives’ Review of Yerushalmi, Yosef Hayim. 1997. Series Z: An Archival Fantasy’ Journal of European Psychoanalysis – Number 3-4 1997

Derrida’s presentation Archive Fever at the 1994 conference “Memory: The Question of Archives” was dedicated to Yerushalmi whose book Freud’s Moses had moved him. The conference was hosted by the Freud Museum and the Société Internationale d’Histoire de la Psychanalyse, London, June 3-5, 1994 and organized by Elisabeth Roudinesco. [Y.H.Y.]

Yerushalmi began his text with a Kakfaesque description of the archives’ doorkeeper. It is a thinly disquised reproach for the exclusivity of access to Freud’s archives, particularly to series Z. Yerushalmi was dismayed to find that access to Series Z, Freud’s archives in Washington, was severely limited to a group of insider scholars.

Yerushalmi notes the unique published citation by Freud where he used the term ‘archives,’ in an early paper (1898) on “The Psychical Mechanism of Forgetfulness” (Zum Psychischen Mechanismus der Vergesslichkeit). He writes:

Thus the function of memory, which we like to imagine as an archive open to any who is curious, is in this way subjected to restriction by a trend of the will…

Yerushalmi chose to focus his discussion only on archives. An archive is not a memory bank nor are the documents in an archive part of memory; “…if they were, we should have no need to retrieve them; once retrieved, they are often at odds with memory.”

Although Yerushami, the historian, has done research in archives in Lisbon, Madrid, Valladolid, Salamanca, Venice, Verona and Jerusalem but rarely in the Freud Archives.

Yerushalmi illustrated the persistence and continuity of the archivist as gatekeeper through the 1909 case of Robert Ross. Ross presented Oscar Wilde’s original manuscript of De Profundis to the British Museum on condition that it be sealed for sixty years to prevent it from falling into the hands of Lord Alfred Douglas, the agent of Wilde’s ruin. Through a 1913 libel suit Douglas, received a copy which he intended to publish. Ross speedily had his own copy published in New York which secured copyright. In 1949 Wilde’s son published the full and correct text but the British Museum respected Ross’ agreement and access is still denied.

Yerushalmi questions the logic behind restricting or forbidding access to certain documents well into the 21st century! He was not alone. Janet Malcolm’s 1984 publication “In the Freud Archives” made the inaccessibility une cause celebre.

Meanwhile, attacks against psychoanalysis, fused with assaults against the personal integrity of Freud himself, have by now reached an unprecedented crescendo of vilification. One result is a widespread belief that the real truth, for better or worse, is in the Archives, and that once they are fully accessible the truth will out. What both attackers and defenders of Freud have in common is a faith in the facticity of archives, in the archival document as somehow the ultimate arbiter of historical truth.

Yerushalmi traced the cult of the archive to the 1830’s and especially after 1860, when national governments eager to protect their collective histories, opened their archives to research. Lord Acton put the reason succinctly:

“To keep one’s archives barred against the historians was tantamount to leaving one’s history to one’s enemies.” Lord Acton

“The historians came, the writing of history (at least political history) was put on a firmer basis than ever before. It was the heyday of scientific history, full of optimism. The crisis of historicism was not yet on the horizon and the archival document seemed to herald a historiographical millennium. Paleography became a science and the archivist a professional, nowhere more superbly trained than at the École des Chartes, established in Paris in 1821. By the end of the century one spoke somewhat bemusedly in France of la fureur de l’inédit, the furor to publish the unpublished document.”

In “Monologue with Freud” Yerushalmi calls Freud’s archivists “zealous epigoni [who] have stationed themselves, like gnostic archons, to bar the way to the hidden knowledge.” (FM 1991:81)

By the late 20th century historians were more sophisticated; recognized the limitations of archival documents. And at that time series Z is unlocked. leading to anothfureur de l’inédit’. Yerushalmi questioned what that will change.

He described the ideal archival material:

  1. It should be naive, created for other purposes than research: the production, storage and maintenance of personal correspondence, tax records, contracts, deeds.
  2. It should be dusty from lack of handling. Half a century after the French Revolution a Prussian historian finally opened the dust-laden papers regarding the Reign of Terror, a proof of their legitimacy.
  3. The researcher recognizes that all archives are incomplete: not all documents are collected, archived and/or preserved. And any document requires contextualization by data both in and outside the archives and even the field of study.
  4. The “…archive is not a repository of the past, only of certain artifacts that have survived from the past, and we encounter them in the present. The contents of archival documents are not historical facts except on the most primitive level dates, names, places. The truly vital data in these documents do not become historical until, filtered through the mind and the imagination of the historian, they are interpreted and articulated.”

The zealous guardians of The Freud Archives including Anna Freud, Freud’s devoted daughter protected Freud’s reputation in the creation and maintenance of the archives. Yerushalmi compares these documents to “… André Gide’s journals, where one senses that as he writes one eye is gazing at posterity.” This contrasts with Kafka’s diaries, whose publication he never dreamed.

Freud’s papers have been handled regularly. Yerushalmi cites examples of discrepancies between Freud’s correspondance with Fliess and actual publications in which passages were excluded. “The most significant and irremediable gap in the Freud Archives is the result of Freud’s own doing. On two occasions [in 1885 and 1907], Ernest Jones observed, he completely destroyed all his correspondence, notes, diaries and manuscripts. The letter of April 28, 1885 to Martha, announcing his determination to thereby frustrate his future biographers, is too well-known to be quoted yet again.”

Yerushalmi concludes that “[n]othing in the Freud Collection nor in any other archive can possibly decide any of the major scientific or philosophical issues that have arisen in the ongoing controversies over Freud. No document can prove or disprove the validity of Freudian psychoanalytic theory nor the efficacy of psychoanalytic therapy. Infantile sexuality, the existence of the unconscious, the mechanisms of repression, and other central tenets of Freudian theory, are not subject to archival arbitration.”

“What do we really want to know, and how can the Archives be of help? My own order of priority would be: To understand Freud’s teaching; to understand the history of the psychoanalytic movement; to understand Freud’s life insofar as it relates to the first two goals.” “…[I]t entails coming as close as possible to his own intentions. This, as I have argued elsewhere must take pride of place. At least in his published works Freud was consciously trying to communicate various ideas to his readers. That these works, like all texts, also contain latent meanings of which he was unaware, that they can be approached with a variety of hermeneutic strategies, does not absolve us from rigorously seeking their conscious intentionality which, alone, can keep us from flying off the deep end. For that, not only is the value of a correct text self-evident, but any information relevant to its evolution, whether through variants or revisions, or through letters in which Freud discusses work in progress. It is in this sense that the letters in Series Z may make their most important contribution. But even then the archives are only an aid. Ultimately the student must bring to an understanding of Freud’s work his or her philological, literary, and historical instincts, and an entire culture derived from other fields. Philip Rieff’s Freud: The Mind of the Moralist (1959) remains, in my opinion, one of the most penetrating explorations of Freud’s thought. And Rieff never even consulted an archive. “

The history of the psychoanalytic movement (I have in mind only Freudian psychoanalysis). Here, surely, our men and women from many countries will have reaped abundant harvests. But how much wheat and how much chaff? Any history of the psychoanalytic movement cannot ignore the archives, but it must also transcend them. Once again all depends on how we conceptualize the problem. If we have in mind a historical narrative of its leading personalities, its congresses and schisms, its dispersal after the German catastrophe of 1933 and the Austrian of 1938, then certainly these and many other aspects will have been fleshed out by Series Z. But this kind of history remains business as usual. I shall take as an instance Phyllis Grosskurth’s The Secret Ring: Freud’s Inner Circle and the Politics of Psychoanalysis published three years ago to considerable acclaim. Assuredly the book contains new and sometimes vivid details Ms. Grosskurth had spent time in several archives, including the Rank papers at my own university, and she writes well. For me, however, the book, like so many others in the genre, represents yet another missed opportunity. That Freud’s secret entourage, the Committee was racked by dissentions, backbiting, competition for Freud’s imperious favor, was essentially known. The issue that is never addressed, is how this group of quite imperfect and in many ways incompatible men were able to sustain and propogate not only a therapy, but a teaching that became a vital component of Modernism around the globe. And, in a larger sense, is this not the issue for any history of the psychoanalytic movement worthy of itself not merely to describe its inner workings or proselytizing activities, but to ask what prior spiritual or cultural needs did Freud’s teaching fulfill that enabled it to spread from a small group of Jews meeting in 1902 at Berggasse 19, to become what W.H. Auden called after Freud’s death a whole climate of opinion?”
I come finally to the vexing question of Freud’s biography and here I am prepared to abandon my parable. I am only certain that the men and women from many countries will not find anything of significance about Freud’s childhood and adolescence. That stumbling block to biographers, especially those who are psychoanalytically oriented, will remain. Some information about Freud’s parents may perhaps yet be found in Moravian and Viennese archives. As for Freud’s mature life, for reasons already given I doubt that very much of a sensational nature will be found in Series Z, though of course one cannot be sure. Once again, however, I feel that the really important issues extend beyond the archives.

“The other issue is so vital and so complex as to require a conference of its own. I have in mind the relation between biography and a person’s achievement. How much of the former do we need to know in order to understand the latter?[…] How much about Freud’s life must we know in order to interpret The Interpretation of Dreams? Or would our interpretation simply be different, with less ferreting for biographical links and more concentration on what he was trying to teach us? […]Ironically, it may have been Freud himself who first opened this Pandora’s Box, but let’s not hold this against him. Rather, let us ask must we really know whether Freud slept with Minna? Those who want to discover that he really did, are gripped by an unstated and faulty syllogism: a) Freud presented a public image of a devoted husband; b) Freud comitted incest with his sister-in-law; ergo Freud is not to be trusted, and so neither should his work… “

“I ask your indulgence if I close on a personal, existential note. We live in a time when we are flooded with information in every field of endeavor, a deluge from which Freud scholarship is not exempt. It has has become a veritable industry over which it is difficult to maintain even bibliographical control. The amount of sheer information increases incessantly. I confess that I have reached an age when I am haunted by the question of when information becomes knowledge. What I have presented here is only a special instance of that larger Angst. I am perhaps not yet old enough to seek the further line where knowledge becomes wisdom.”


TEXT ONLY|
ARCHIVES|
BIBLIO|
BODLEIAN|
CITATIONS|
CHRONO|

HOME|
FREUD|
MEMORY|
PLATO|
YERUSHALMI|
FREUD’S MOSES|
PHAEDRUS|
AUTHOR|

Contact � Maureen Flynn-Burhoe 2000 for comments, corrections and copyright concerns.


“I ask your indulgence if I close on a personal, existential note. We live in a time when we are flooded with information in every field of endeavor, a deluge from which Freud scholarship is not exempt. It has has become a veritable industry over which it is difficult to maintain even bibliographical control. The amount of sheer information increases incessantly. I confess that I have reached an age when I am haunted by the question of when information becomes knowledge. What I have presented here is only a special instance of that larger Angst. I am perhaps not yet old enough to seek the further line where knowledge becomes wisdom (Yerushalmi Series Z 1997).”

“Collecting data is only the first step toward wisdom but sharing data is the first step toward community (Linux 2006 33-40)

Work-in-process: “Collecting data is only the first step toward knowledge but sharing data is the first step toward civilization.”

Shortlinkhttp://wp.me/p1TTs-6s


Mewburn, Inger. 2011-03-17. “Zotero vs Endnote 4: the battle is on!” In this post PhD student, Gabriel Oguda, who is studying for an MPhil in Health Promotion at the University of Bergen in Norway, argued in favour of Zotero.

There was a conflict between firefox and therefore zotero on the PC (Vista?) setup I began using in 2007 and continue to use. With the crashes, clean-up and switch I was forced back to Internet Explorer and “lost” the zotero library I had been slowing building. Since then I haven’t taken the risk of switching back to Firefox and I miss many of its features.

My Endnote librairies remained intact as I had backed them up in multiple spaces both virtual and really real.

Since the crashes, clean-up and switch, I have been drawn back to Endnote as the safety deposit box of my webliographies and bibliographies.

I am not comfortable being so dependent on a product I cannot update (since I am no longer affiliated with the academic institutions that provided me with access and or licensed software)
But EndNote is reliable, robust and ready-to-use. It is really like FoxPro’s dynamic query searching (relational query by example?) capacity.

End Note Search It lets me break the rules a little so I can use it to keep track of glossaries, timelines, biographies using their titles fields, etc in unconventional ways. It generates useful data such as my timelines in .html format. It lets me share my bibliographies seamlessly on my blogs.

It’s a bit like owning a very old Volvo (my licensed EndNote software dates from c. 2002-3? and will not support the http://www.myendnoteweb.com Alex so kindly recommended) that is ultra solid and dependable when I know I really cannot afford the repairs. Except that so much of my data is softwere dependent and there is always that concern that I might lose access to my own research as I did with FoxPro, ToolBook and Olympus. (Files no longer open because I am missing licensed upgrades). This was my motivation for experimenting with open source.

My original speechless page (2006-12-13) speechless >> web 2.0 >> Zotero vs EndNote has been attracting the most visits of all my posts lately so I have decided to update it as this post entitled “Zotero vs EndNote: 2006 – 2008”.

I would be really interested in Alex Liberzon’s experiences with http://www.myendnoteweb.com, http://www.CiteULike.org and LaTeX. See Zotero vs EndNote post (2007-01-23) has been finding out about . Says: January 23, 2007 at 7:52 pm e

Like Farrel Buchinsky (2007-02-17) I am looking forward to a seamless interface between Google docs, open source word processors and Zotero, Connotea or even Endnote (?) where citations and bibliographies will be automatically generated. My wish list/to-do-list continues to include a library database using Zotero that has compatibilities with free source like Google docs that worked like EndNote and the big name proprietorial software (BNPS) I became dependent on.

Since working with Google docs I have enjoyed the fact the my PC does not crash as it used to with the BNPS. But I still haven’t taken the time to learn how to integrate zotero with Google docs (or grant applications and manuscripts). Once I do I will post it. I use my own blog more as a How-did-I-do-that? not as a How-you-should-do-it?. There are better sites for the latter. I am a bricoleuse.

I would like to really use My EndNote Web as Alex Leberzon suggested but this service is only available for EndNote 10 licensed users. I’m EndNote 8. I have also started to investigate Cite-U-Like but I am discouraged by its academic criteria-based exclusivity. (I’m not even sure it accepts New York Times and Wall Street Journal articles? Concepts of authority (who can be a knower?) need to be re-examined in the era of Web 2.0+.) I still prefer deli.ci.ous. I have not been able to update my MySwickis and my Customized Google Search as much as I would like as these are invaluable resources for focused research.

Testing COinS Generator:

(Žižek, Slavoj. 2004. Organs without Bodies: on Deleuze and Consequences. New York/London. Routledge)

COins Generator


Digitage on Barbara Kruger's Nature/Culture Barbara Krueger’s (1983) “We Won’t Play Nature to your Culture” somehow comes to mind when reading Žižek on nature/culture.

During breaks I would walk through empty rooms to discover changes curators had made in their spaces. I was a teenager when I began to feel at home in the silent, often light-filled buildings that held public art collections. I was annoyed by, resented, then was intrigued by, read about, studied, spent time with pieces that came to be my favourites. Visual artists were deeply informed about and experimenting with emerging, complex theories, cultural studies, political philosophy . . . academics did their best to avoid them until it became impossible to do so.

Reading Slavoj Žižek’s Organs without Bodies is a lot like my non-linear NGC meanderings in the 1990s. His writing provokes me but there is enough brilliance there that makes me keep his book in the reading stand beside my monitor, opened at different pages on different days. He is not a lazy thinker. Each page is like a hypertext reader indexing a myriad of artists, philosophers, scientists and entrepreneurs. He discusses Hawkins, Hegel, Heidegger and Hitchcock with equal comfort because he has actually ‘read’ and analysed’ their work.

I was drawn to his chapter section on hyphen-ethics more because of the probing, unsettling questions it raises than because of his conclusions. It will be one of those recurring themes that will be part of my own lifelong teaching, learning and research.

“What is false with todays discussion concerning the ethical consequences of biogenetics is that it is rapidly turning into what Germans call Bindenstrich-Ethik, the ethics of the hyphen – technology-ethics, environment-ethics, and so on. This ethics does have a role to play, a role homologous to that of the provisional ethic Descartes mentions at the beginning of his Discourse on Method: when we engage on a new path, full of dangers and shattering new insights, we need to stick to old established rules as a practical guide for our daily lives, although we are well aware that the new insights will compel us to provide a fresh foundation for our entire ethical edifice (in Descartes case, this new foundation was provided by Kant, in his ethics of subjective autonomy). Today, we are in the same predicament: the provisional ethics cannot replace the need for a thorough reflection of the emerging New (Žižek 2004:123).”

“In short, what gets lost here, in this hyphen-ethics, is simply ethics as such. The problem is not that universal ethics gets dissolved in particular topics but, on the contrary, that particular scientific breakthroughs are directly confronted with the old humanist “values” (say, how biogenetics affects our sense of dignity and autonomy). This, then, is the choice we are confronting today: either we choose the typically postmodern stance of reticence (let’s not go to the end, let’s keep a proper distance toward the scientific Thing so that this Thing will not draw us into a black hole, destroying all our moral and human notions), or we dare to “tarry with the negative (das Verweilen beim Negativen),” that is, we dare to fully examine the consequences of scientific modernity with the wager that “our Mind is a genome” will also function as an infinite judgment (Žižek 2004:123-4).”

“The main consequence of the scientific breakthrough in biogenetics is the end of nature. Once we know the rules of its construction, natural organisms are transformed into objects amenable to manipulation. Nature, human and inhuman, is thus “desubstantialized,” deprived of its impenetrable density, of what Heidegger called “earth.” Biogenetics, with its reduction of the human psyche itself to an object of technological manipulation, is therefore effectively a kind of empirical instantiation of what Heidegger perceived as the “danger” inherent to modern technology. Crucial here is the interdepedence of man and nature: by reducing man to just another object whose properties can be manipulated, what we lose is not (only) humanity but nature itself. In this sense, Francis Fukuyama is right. Humanity itself relies on some notion of “human nature” as what we inherited and was simply given to us, the impenetrable dimension in/of ourselves into which we are born/thrown. The paradox is thus that there is man only insofar as there is inhuman nature (Heidegger’s “earth”). (Žižek 2004:124).”

Notes
Slavoj Žižek is a dialectical-materialist philosopher and psychoanalyst. He also co-directs the International Centre for Humanities at Birkbeck College. The Parallax View appeared last year.

Webliography and Bibliography

Žižek, Slavoj. 2004. “Against hyphen-ethics.” Organs without Bodies: on Deleuze and Consequences. New York/London: Routledge. pp. 123-132.

Titles >> Subtitles: Organs without Bodies >> on Deleuze and Consequences >> Consequences >> Science >> Cognitivism with Freud, Autopoiesis, Memes, Memes Everywhere, Against Hyphen-Ethics, Cognitive Closure?, “Little Jolts of Enjoyment”,

folksonomy: cultural studies, theory, philosophy, Deleuze, globalization, democracy, democratization, war on terror, Joan Copjec, biogenetics, hyphen-ethics, capitalism, Richard Dawkins, Jacques Derrida, Daniel Dennett, ethics, Ethical turn, Habermas, Kant, Laclau, Levinas, Lacan, Varela, religion, Pascal, Spinoza, The Quite American, Hegel, Heidegger, Massumi, Fukuyama, liberal democracy, Self, personhood, ethics, mind/brain, mind body, psychoanalysis, nature/culture, technology, mind and consciousness,

More by Slavoj Žižek:

Žižek, Slavoj. 2003. “Bring me my Philips Mental Jacket: Slavoj Žižek welcomes the prospect of biogenetic intervention.” London Review of Books. 25:10. May.

Žižek, Slavoj. 1999. “Attempts to Escape the Logic of Capitalism.” Review of Vaclav Havel: A Political Tragedy in Six Acts by John Keane.” London Review of Books. 21:21. October 28.

Žižek, Slavoj. 1999. ‘You May!’ London Review of Books. 21:6. 18 March.


Measuring and mapping the mind, soul and spirit by using mathematics with music, numerical codes on virtual palettes for colours . . .

TwitThis 

twittering

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Bell Lake reflections” #626C61″ | “#666666” | “#666699” | Iqaluit Rockface “#B1A08F” | Iqaluit Rockface “#AE8C8C” |
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Iqaluit sunset “#F2D895” Iqaluit sunset “#B58D67” Iqaluit sunset “#FFF6BF”
Iqaluit sunset “#DDA887” Iqaluit sunset “#BAA295” Iqaluit sunset “#FBE8C0”
Iqaluit sky at dusk “#4B4D65” Iqaluit sky at dusk”#525B7B” Iqaluit sky at dusk”#545B75″
“#B7A47C” Iqaluit sky at dusk “#2B3454” “#336699”
Bell Lake reflections” #626C61″ “#666666” “#666699”
Iqaluit Rockface “#B1A08F” Iqaluit Rockface “#AE8C8C” Iqaluit Rockface “#67606F”
Iqaluit Rockface “#DCB9B5” Iqaluit Rockface “#D5B4B1” Iqaluit Rockface “#EFD3D6”
Iqaluit Rockface lichen “#9FAD97” Iqaluit Rockface lichen”#577155″ Iqaluit Rockface lichen “#97A493”
Baffin aerial tundra “#49465B” Baffin aerial tundra “#C7BDCF” Baffin aerial tundra “#616079”
Baffin blue sky “#A8B8DA” Baffin blue sky “#246AD5” Baffin blue sky “#5D7DB3”
Baffin blue sky “#82ABD5” Baffin blue sky “#558AE8” Baffin blue sky “#5392E5”
“#99CCFF” “#66CCFF” “#33CCFF”
Azure “F0FFFF” Bisque “FFE4C4” “FFCC99”
Blanched almond “FFEBCD” Cornsilk “FFF8DC” Eggshell “FCE6C9”
Floral white “FFFAF0” Gainsboro “DCDCDC” Ghost white “F8F8FF”
Honeydew “F0FFF0” Ivory “FFFFF0” Lavender “E6E6FA”
Lavender blush “FFF0F5” Lemon chiffon “FFFACD” Linen “FAF0E6”
Mint cream “F5FFFA” Misty rose “FFE4E1” Moccasin “FFE4B5”
Navajo white “FFDEAD” Old lace “FDF5E6” Papaya whip “FFEFD5”
Peach puff “FFDAB9” Seashell “FFF5EE” Snow “FFFAFA”
Thistle “D8BFD8” Titanium white “FCFFF0” Wheat “F5DEB3”
White “FFFFFF” White smoke “F5F5F5” Zinc white “FDF8FF”
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Light grey “D3D3D3” Slate grey “708090” Slate grey dark “2F4F4F”
Slate grey light “778899” Warm grey “808069” Black “000000”
Ivory black “292421” Lamp black “2E473B” Brick “9C661F”
Coral “FF7F50” Coral light “F08080” English red “D43D1A”
Firebrick “B22222” Geranium lake “E31230” Hot pink “FF69B4”
Indian red “B0171F” Light salmon “FFA07A” Madder lake deep “E32E30”
Maroon “B03060” Pink “FFC0CB” Pink light “FFB6C1”
Raspberry “872657” Red “FF0000” Rose madder “E33638”
Salmon “FA8072” Tomato “FF6347” Venetian red “D41A1F”
Beige “A39480” Brown “802A2A” Brown madder “DB2929”
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Burnt umber “8A3324” Chocolate “D2691E” Deep ochre “733D1A”
Flesh “FF7D40” Flesh ochre “FF5721” Gold ochre “C77826”
Greenish umber “FF3D0D” Khaki “F0E68C” Khaki dark “BDB76B”
Light beige “F5F5DC” Peru “CD853F” Rosy brown “BC8F8F”
Raw sienna “C76114” Raw umber “734A12” Sepia “5E2612”
Sienna “A0522D” Saddle brown “8B4513” Sandy brown “F4A460”
Tan “D2B48C” Van dyke brown “5E2605” Cadmium orange “FF6103”
Cadmium red light “FF030D” Carrot “ED9121” Dark orange “FF8C00”
Mars orange “964514” Mars yellow “E3701A” Orange “FF8000”
Orange red “FF4500” Yellow ochre “E38217” Aureoline yellow “FFA824”
Banana “E3CF57” Cadmium lemon “FFE303” Cadmium yellow “FF9912”
Cadmium yellow light “FFB00F” Gold “FFD700” Goldenrod “DAA520”
Goldenrod dark “B8860B” Goldenrod light “FAFAD2” Goldenrod pale “EEE8AA”
Light goldenrod “EEDD82” Melon “E3A869” Naples yellow deep “FFA812”
Yellow “FFFF00” Yellow light “FFFFE0” Chartreuse “7FFF00”
Chrome oxide green “668014” Cinnabar green “61B329” Cobalt green “3D9140”
Emerald green “00C957” Forest green “228B22” Green “00FF00”
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Lawn green “7CFC00” Lime green “32CD32” Mint “BDFCC9”
Olive “3B5E2B” Olive drab “6B8E23” Olive green dark “556B2F”
Permanent green “0AC92B” Sap green “308014” Sea green “2E8B57”
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Viridian light “6EFF70” Yellow green “9ACD32” Aquamarine “7FFFD4”
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Sky blue “87CEEB” Sky blue deep “00BFFF” Sky blue light “87CEFA”
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Société Générale trader, Jérôme Kerviel, 31, was accused by the Société Générale, Paris of implementing an elaborate, year-long fraud that involved betting billions of dollars of the bank’s money on European stock index futures. Michel Histel, 62, a French retiree who is closely following the story argues that it is common knowledge that the Société Générale’s has played a leading role in financial derivatives products. Jérôme Kerviel was employed by the Société Générale and in his role as arbitrageur he was expected to hedge large bets on index futures. In a sense what he was doing is a logical conclusion of the irrational process of betting on potential but risky, uncertain and unguaranteed future stock values prices. The value gaps may be intelligently guessed but the risk of unforeseen socio-economic structural, geopolitical and/or environmental changes, is always there so that even real financial transactions are more virtual that really real. In this risk society there is a chance for (even and often) very young people with an intuitive grasp of gaming to win big on their wagers. But this is not the logic of a marketplace. Impatient money contributes hugely to the growing inequality between the ultra-rich who can afford to gamble and the deterioration of the quality of life in the lower quintiles especially those who are most vulnerable to social exclusion.

Folksonomy cloud

impatient money, hedge funds, private equity funds, arbitrageur, arbitrage, value gaps, financial instruments, fictitious trades, fictitious sales transactions, virtual, real, risk management, auditors, audit, futures contracts, index futures, one-way bets, “long” positions, very high total nominal amounts, real portfolios of stock index futures, European stock index futures, Dow Jones Euro Stoxx, DAX, FTSE, speculation, financial derivatives products, repackinging of risky investments, transparent versus veiled financial dealings, current crisis in confidence in the banking sector, interconnections between banks, hedge funds, high risk investments and pension and mutual funds, group think, market will correct itself, learned incompetence,

Timeline of events related to the Subprime Market

1965-2005 Between 1965 to 2005 there was no national US real-estate bust as home prices surpassed inflation by a percentage point or two on average. However local reversals have taken place and some cities have never recovered (Christie 2005).

1970s “The additional grades or risk have arisen from the willingness to underwrite mortgages for more risky borrowers, encouraged by the democratization of credit since the 1970s. Lending to more risky borrowers is, by definition, more risky. More loans to risky borrowers increases the total amount of risk to be sold in the marketplace” (Mason and Rosner 2007).

1973-5 US investors in the S&P 500 lost 14% in 1973 and 26% in 1974 but gained 37% in 1975 (Mann 2000).

1975 Foreign competition made its inroads into the North American economy. Corporations panicked with a knee-jerk reaction by implementing the first major layoffs which eventually spread and multiplied, in time destroying the notion of job security and the dignity of work in North America (Uchitelle 2006; Uchitelle 2007).

1983 Australia’s benchmark ASX 200 index experienced a long losing streak which would be unparalled until 2008-01-21 (BBC News 2008-01-21).”

1985 In Peoria, Ill. a more traditional area the average home price fell from $60,800 in 1981 to $51,400 in 1985 partially because of strikes and lay-offs at Caterpillar, the city’s biggest employer (Christie 2005).

1986 The “total pay of top managers in North America has increased from 1986 through 2006 to roughly 40 times the average and from 1966 to 110 times the average(Leary 1998:265).”

1987 Canadian families saved 20 percent of their take-home pay (Ed 2007).

1987 Oliver Stone’s and Stanley Weiser’s fascinating but soulless film entitled Wall Street about a young stockbroker, Bud Fox’s entanglement in white-collar crime through his mentor and hero, Gordon Gekko (Michael Douglas), an extremely successful businessman and Wall Street broker. in a speech by Gekko to a Teldar Paper shareholders’ meeting, a company he planning to take over, Gekko, and by extension, the Wall Street raiders he personifies, justifies his actions. He argues that he is liberating corporate America’s from its slothfulness and waste accumulated through the postwar years. He argued, “Greed is good” a slogan which symbolised the ruthless, profit-obsessed, short-term corporate culture of the 1980s and 1990s. These values became associated with neoclassical, anti-union economic policies that made slash-and-burn capitalism possible. Wall Street refers to the symbolic and geographical location in Lower Manhattan, the first permanent home of the New York Stock Exchange, center of New York’s financial district and the financial industry.

1987 Stock market crash

1987-19-20 London’s FTSE 100 experienced one of its worst days down 10.8% (BBC News 2008-01-21).

1987-10-20 London’s FTSE 100 experienced one of its worst days down 12.2% (BBC News 2008-01-21).

1987-10-21 London’s FTSE 100 experienced one of its best days up 7.9% (BBC News 2008-01-21).

1987-10-22 London’s FTSE 100 experienced one of its worst days down 5.7% (BBC News 2008-01-21).

1987-10-26 London’s FTSE 100 experienced one of its worst days down 6.2% (BBC News 2008-01-21).

1988 In “oil patch” cities like Oklahoma City prices plummeted 26 percent from 1983 to 1988. They only returned to 1983 levels in 2003 fifteen years later. In Oklahoma City, the inflation-adjusted price in 1983 was $196,600. Today, it’s just $135,100 (Christie 2005).

1988 Houston home prices fell 22 percent from $111,000 in 1983 to $86,800 in 1988 rebounded only in 2003. Counting inflation, the average Houston home, which cost just $159,700 in 2004, is actually worth less [in 2005] than it was [in 1983]. When, adjusted for inflation, a home cost about $219,000 in 1983 (Christie 2005).

1988 – 1990s Real estate prices fell in Northern California first followed by the rest of the state “as employers fled, incomes dwindled, quakes rumbled, sales fell and prices slipped. [. . .] Silicon Valley’s housing market crashed into recession along with the state’s economy (Perkins 2001).

1980-1990 In Los Angeles real estate was turbocharged for nearly 10 years (Christie 2005).

1989-90 The notorious price bubble of 1989-90 was linked to central banks specifically the Bank of Japan. “The Japanese economy continued to suffer during the early 1990s, and remained in recession until the end of 1993. Nominal GDP growth rates, which had been around 7 percent during the bubble period, fell beginning in 1990 and by 1991-93 were close to zero. Profits in the manufacturing sector fell 24.5 percent in 1991 and 32.1 percent in 1992. Bankruptcies began to rise starting in the latter half of 1990; by 1992, bankruptcies with debt more than Y10 million totaled 14,569 cases. Failures of real estate firms or of firms engaged in “active fund management” constituted more than half the corporate bankruptcies in 1991 and 1992 (Miller 2001).”

1991 Inflation-adjusted take-home pay in Canada froze to this level (Ed. 2007).”

1992 A new car in Canada cost $20, 000.

1992 – 2000 “Japan remained pretty stagnant in the last eight years, with the majority of the loss coming in the first two, when it eventually fell by more than 60%. There was never a big drop, just a constant and inexorable drift downward. Real estate prices plummeted, almost no Japanese company ended 1992 higher than it started 1990. In the interim, banks have failed (and if it weren’t for the financial props of the Japanese government, many more would have), and companies have had to reassess some of their basic assumptions, such as lifetime employment and large benefit packages” (Mann 2000).

1992-04-10 London’s FTSE 100 experienced one of its best days up 5.6% (BBC News 2008-01-21).

1996 There was a housing market reversal in Los Angeles with average house price dropping from $222,200 in 1990 to $176,300 in 1996, a loss of 20.7 percent. “Furthermore, those are nominal prices, not real values. To calculate the loss more realistically you would have to figure in the cost of inflation: $222,200 in 1990 would have been worth $266,700 in 1996 dollars, which means the actual loss for homeowners buying in 1990 and selling in 1996 was closer to 34 percent (Christie 2005).”

1994- 1996 “In 1994, [Japanese] banks wrote off non-performing assets of Y5.7 trillion, exceeding the previous high of Y4.3 trillion in fiscal year 1993. As yet, no major bank has failed, although a number have reportedly encountered serious difficulties. In December, 1994, the Bank of Japan supervised the takeover of two credit cooperatives, the Tokyo Kyowa Credit Cooperative and the Anzen Credit Cooperative, through the creation of a bridge bank with government support. The Bank’s decision not to let these institutions fail and pay off depositors under the deposit guarantee program was based, largely, on concern for the potential systemic effects of a deposit payoff on public confidence in the banking system in general. The “jusen,” or housing finance banks, suffered the most serious problems; these institutions, which were typically organized and sponsored by major commercial banks and staffed, in part, by former officials from the Ministry of Finance, lost tens of billions of dollars as a result of the collapse of the price bubble, and became one of the most contentious political issues of the day during 1995-86 (Miller 2001)”.

1996-12-05 “How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy? We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability. Indeed, the sharp stock market break of 1987 had few negative consequences for the economy. But we should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy. Thus, evaluating shifts in balance sheets generally, and in asset prices particularly, must be an integral part of the development of monetary policy.” Alan Greenspan (December 5, 1996)**

1998 There was a market correction in the United States in October of 1998.

2000 In Tampa Bay Florida, high risk adjustable-rate mortgages (ARM) made homes “seem affordable when wages stagnated as prices soared. They were just the ticket for cash-out refinancings and home equity credit lines that bought cars and swimming pools and paid off credit card debt. “What happened in a lot of expensive real estate markets is that first-time home buyers who felt they could not afford a home otherwise, took on a loan that had lower monthly payments than a traditional mortgage would have,” said Allen Fishbein, director of housing policy for the Consumer Federation of America. “They weren’t being underwritten on the basis of the borrower’s reasonable capacity to handle these loans.” The payments started out manageable, especially since many loans offered teaser rates. But borrowers are getting a lesson in what the word “adjustable” means. More than $130-billion in mortgages payments were reset in 2006″ In 2006 nearly a third of Tampa Bay mortgages were the high-risk varieties, up from 10 percent in 2003 (Huntley 2006).1992 – 2000 “Japan remained pretty stagnant in the last eight years, with the majority of the loss coming in the first two, when it eventually fell by more than 60%. There was never a big drop, just a constant and inexorable drift downward. Real estate prices plummeted, almost no Japanese company ended 1992 higher than it started 1990. In the interim, banks have failed (and if it weren’t for the financial props of the Japanese government, many more would have), and companies have had to reassess some of their basic assumptions, such as lifetime employment and large benefit packages” (Mann 2000).

2001-09-11 London’s FTSE 100 experienced one of its worst days down 5.7% (BBC News 2008-01-21).

2002-10-15 London’s FTSE 100 experienced one of its best days up 5.1% (BBC News 2008-01-21).

2002-07-02 London’s FTSE 100 experienced one of its best days up 5.0% (BBC News 2008-01-21).

2003-03-13 London’s FTSE 100 experienced one of its best days up 6.1% (BBC News 2008-01-21).

2004 British Columbia graduates from university have an average debt of $20, 000.

2005 Real-estate investing spiked, pressuring prices upward. In Phoenix, according to Bill Jilbert, president and COO of the Coldwell Banker brokerage there, investors from Nevada and California have invaded the Arizona market, and “affordable housing has been pushed to extremes (Christie 2005).”

2005 Market analyst Winzer (2005 cited in Christie 2005) warned that the housing market was high-risk as the boom has already gone on longer than expected. Low interest rates which means cheap mortgage rates extended the cycle of the real estate boom artificially creating higher demand and higher prices as all market levels (Winzer cited in Christie 2005). “Winzer assesses local market risk by taking into account economic and population growth, construction costs, vacancy rates, and, especially, income. He also considers such factors as density and access to open land. Prices in densely settled New York have always been higher than those of cities with lots of space for new housing (Christie 2005).

1991- 2005 “[I]ncreased complexity from increased grading of risk can also result in increased opacity. Risk that is more difficult to see, by virtue of complexity, is risk just the same. There are plenty of reasons to believe that the amount of risk in the marketplace has increased. Figure 3 shows that defaults on ABS and residential mortgage-backed securities (RMBS) increased substantially between 1991 and 2005″ (Mason and Rosner 2007).

2006-06-12. “Canadian Executives Indicate Human Resources and Rising Canadian Dollar are the Major Business Challenges.” CTV. June 12, 2006.

http://www.ctv.ca/servlet/ArticleNews/show/CTVShows/20060611/ctv_release_20060611/20060612

2006 Fitch Global Structured Finance 1991-2005 Default Study revealed that, “the overwhelming majority of global structured finance defaults over the 1991-2005 period were from the U.S., accounting for more than 97 percent of the total. While the 1,000 U.S. defaults were mainly concentrated in the Asset-Backed Securities._ (ABS) sector, the 27 international defaults were primarily from the collateralized debt obligations (CDO) sector.” See Mason and Rosner (2007) warn that risk continues to increase, as ratings agencies revise their loss expectations to account for the dynamics of the mortgage meltdown. For instance, on March 27, Standard & Poor’s raised its expectation for losses on 1.

2006 In Florida millions of homeowners were warned of the mortgage meltdown in which they will “face a financial nightmare brought on by a combination of higher interest rates, risky mortgages and a housing market gone cold (Huntley 2006).

2007-05-10 Desmarais, Paul Jr. 2007. “Private equity, public interest.” National and Global Perspectives . May 10, 2007. p. 16. Paul Desmarais, Jr., Chairman of Power Corporation of Canada warned of the structural impact on the industrialized world caused by the meteoric rise of private equity and hedge funds in the financial markets in a an article (2007) published in the Canadian Council of Chief Executives journal National and Global Perspectives. The current crisis in confidence in the banking sector is a direct result of the meteoric rise of private equity and hedge funds which transformed the mortgage market.

Is it not ironic that the principal investors in private equity and hedge funds – large institutional investors – are happy to put massive amounts of money in the hands of people who do not register with any securities commission, or have few, if any, governance regulations to adhere to and report on? (Desmarais 2007:16).

2007-05-10 Desmarais, Paul Jr. 2007a. “Chairman’s Address to Shareholders.” Power Corporation of Canada. May 10, 2007.

2007-06-14 Gandalf Group. 2007. “C-Suite Survey On The Role of Private Equity.” Report on Business. Globe and Mail. June 14, 2007. http://www.dwpv.com/images/C-Suite_June_2007.pdf In May and June, 2007 the 150 C-Suite executives from the top 1000 corporations interviewed by the Gandalf Group were generally optimistic about the Canadian economy (Gandalf Group 2007:4). Some expressed concerns about the increasing levels of foreign ownership in key sectors and about private equity firms hollowing out corporate Canada. 23% have concerns that private equity firms engage in too much short-term thinking (Gandalf Group 2007:32). Most executives now favour restrictions in strategic industries. “The strongest areas of consensus about the negative impacts of private equity relate to keeping the company Canadian owned and about the debt burden of the company. A substantial percentage of executives believe that private equity also has a negative impact on the economic contribution the company will make to Canada and to the community it operates in, on the labour relations of the company and on the governance of the company (Gandalf Group 2007:28 ).”

2007. “C-Suite Survey.” Globe and Mail, Report on Business. 18 June 2007: B5.

http://www.theglobeandmail.com/servlet/Page/document/video/vs?id=RTGAM.20070619.wvcsuite0619&ids=RTGAM.20070619.wvcsuite0619&hub=search

2007 Mason and Rosner (2007) warn that risk continues to increase, as ratings agencies revise their loss expectations to account for the dynamics of the mortgage meltdown. “Residential mortgage-backed securities (RMBS) market has experienced significant changes [from 1997-2007].” [T]hey caution that “structural changes in mortgage origination and servicing have interacted with complex residential mortgage-backed securities (RMBS) and highly volatile CDO funding structures to place the U.S. housing market at risk. This [. . .] could lead to prolonged domestic economic implications for U.S. standing in the world economic order [. . .] The potential for prolonged economic difficulties that also interfere with home ownership in the United States raises significant public policy concerns. Already we are witnessing restructuring and layoffs at top financial institutions. More importantly, however, is the need to provide stable funding sources for economic growth. The biggest obstacle that we have identified is lack of transparency.” (Mason and Rosner 2007).

2007-06-27 “In a Marketplace interview Amy Scott asked interviewees about the disturbing consequences of the interconnections between banks, hedge funds, high risk mortgages and pension funds. In June, 2007 two major hedge funds managed by the investment bank Bear Stearns, who purchased securities that were essentially a “repackaging of all kinds of risky mortgages” to tap into the subprime mortgage market are now verging on collapse as the number of borrowers defaulting on these mortgages increases. Joseph Mason explained that “this isn’t just a Wall Street problem. Your 401k or pension fund may be invested in similar mortgage-related securities.” The investor-base is broad and it is difficult to know who is at risk. “Investment managers don’t have to report their holdings. And unlike stocks, these securities aren’t quoted on an open market [. . .] Those hedge fund investment managers create investments that are bought by our pension funds and mutual funds. Charitable foundations are invested in these. It’s a broad investor base, and it’s not the rich versus the poor.” Mason has been a firm proponent of more transparency in financial dealings (Scott 2007).” See Democratization of Debt: Bear Stearn and Mortgage Meltdowns

2007-09-06 The U.S. subprime mortgage meltdown “Only 5% of mortgages in Canada are subprime compared to 20% in the US. And Canadian financial institutions are more prudent than their American counterparts insisting on mortgage insurance when appropriate and separate appraisals of a home’s purchase price to ensure they are not financing more than 100 per cent of a home’s value. In the US by late 2006 subprime lenders were going bankrupt and as many as 1.5 million Americans could lose their homes before the panic is over. In this under-regulated US industry, lenders partnered with hedge funds to make quick returns on investments then called in debts to avoid losses. Since we are all in some way linked to these investment portfolios, either through mortgages, pensions or insurance, we end up contributing to processes that are fuelled by high-risk, short-term, fast-profits thinking that enriches a few while causing havoc for most of us. See also http://www.cbc.ca/news/background/personalfinance/mortgage-meltdown.html

2007-11-27Staggering poverty report has province listening: A United Way report Losing Ground: The Persistent Growth of Family Poverty in Canada’s Largest City claims almost 93,000 Toronto, Canada households are raising children in poverty. That’s 30% compared with 16 per cent in 1990.” OECD, Policy Development, Public Policy, child poverty, del.icio.us, digg story, digg.com, economic efficiency model, how to be poor in a rich country, policy research, social exclusion, vulnerability to social exclusion

2007 Since 1991 inflation-adjusted hourly wages rose only 10 cents (Ed. 2007).”

2007 A new car in Canada cost $32,000 a 60 percent increase from 1992 (Ed. 2007).”

2007 Canadians collectively owe three quarters of a trillion dollars in personal debt. Canadian families not only have no savings, they draw on pension savings to make ends meet.

“The result of the easy credit is that an average family now owes far more than it takes in. That means we remain solvent only so long as the book value of our assets — things like our home, pension funds or investments — continue to increase (Ed. 2007).”

2007 British Columbia graduates from university have an average debt of $27, 000.

2007 It is now acceptable for Canadian families to pay 60 percent of income to pay monthly payments of their home mortgages (Ed. 2007).

2007 The British Columbia government will allow home owners who are over 55 to defer property tax payments for as long as they live. The government will claim unpaid taxes after you die or sell effectively placing the tax burden on the children (Ed. 2007).

2007 “The number of corporate failures in Japan rose for the third month in a row totaling 896 cases in December up 18.2%. November flops were up 6.5% and the number of companies going belly up in October were up 7.8%. The amount of debts the insolvent companies left behind were up 30.6% to 463.09 billion yen (Belew 2007).

2007 In March Bob Lawless reported in his blog that, “The folks at Automated Access to Court Electronic Records or AACER regularly collect data from all the bankruptcy courts for creditors and attorneys. They have a wealth of information that does not show up in the mainstream media. Most recently, they tell me that there were 58,640 total U.S. bankruptcy filings in February 2007 as compared to 55,088 total U.S. bankruptcy filings in January 2007. OK, that looks like a slight increase, but looks are deceiving. It’s actually a fairly hefty increase. The February filings were spread over only nineteen business days while the January filings were spread over twenty-one days. On a daily basis, the February filings were up 17.7% as compared to January (Lawless 2007).”
2007 Jayson Seth analysed data in National Association of Realtors (NAR) June 24, 2007 report. Seth argues that “America’s easy-credit, quick-flipping, borrow-now-and-forget-the-consequences lifestyle is coming to an increasingly painful, grinding halt” and the “confidence of homebuilders is at a 16-year low (Seth 2007).”

2007 Lawrence Yun, National Association of Realtors announced that the real estate market is softening due to psychological factors, tighter credit for subprime borrowers. NAR’s Lawrence Yun explained that since late 2006 housing sales have slowed as buyers double up with family, friends or just mortgage helper units in their homes to be able to pay for higher-priced homes.

2007 Mason and Rosner (2007) warn that risk continues to increase, as ratings agencies revise their loss expectations to account for the dynamics of the mortgage meltdown. For instance, on March 27, Standard & Poor’s raised its expectation for losses on 1. “Residential mortgage-backed securities (RMBS) market has experienced significant changes [from 1997-2007]” Furthermore they caution that “structural changes in mortgage origination and servicing have interacted with complex RMBS and highly volatile CDO funding structures to place the U.S. housing market at risk. Equally as important, however, is that housing market weaknesses feed back through financial markets to further weaken financial instruments backing today’s CDOs. Decreased housing starts that will result from lower liquidity in the MBS sector will further weaken credit spreads and depress CDO and MBS issuance. This feedback mechanism can create imbalances in the U.S. economy that, if left unchecked, could lead to prolonged domestic economic implications for U.S. standing in the world economic order [. . .] The potential for prolonged economic difficulties that also interfere with home ownership in the United States raises significant public policy concerns. Already we are witnessing restructurings and layoffs at top financial institutions. More importantly, however, is the need to provide stable funding sources for economic growth. The biggest obstacle that we have identified is lack of transparency.” (Mason and Rosner 2007).

2007 In a Marketplace interview Amy Scott asked interviewees about the disturbing consequences of the interconnections between banks, hedge funds, high risk mortgages and pension funds. In June two major hedge funds managed by the investment bank Bear Stearns, who purchased securities that were essentially a “repackaging of all kinds of risky mortgages” to tap into the subprime mortgage market are now verging on collapse as the number of borrowers defaulting on these mortgages increases. Joseph Mason explained that “this isn’t just a Wall Street problem. Your 401k or pension fund may be invested in similar mortgage-related securities.” The investor-base is broad and it is difficult to know who is at risk. “Investment managers don’t have to report their holdings. And unlike stocks, these securities aren’t quoted on an open market.” Mason has been a firm proponent of more transparency in financial dealings (Scott 2007).

2008-01-12 Should banks avoid investing in carbon-intensive projects? “Ceres is composed of and works with investors ($4 trillion) and environmental groups to address sustainability challenges. In their report Corporate Governance and Climate Change (2008) they argue that the banking sector needs to become aligned with GHG reductions.” read more | digg story

2007-01-20Globalization and the Rise of Inequality: The extremes of wealth and poverty threaten globalisation. North American companies lose jobs to the Chinese Special Economic Zone (SEZ) where factories often employ rural women to work in 19th century conditions to keep their costs low. Meanwhile the total pay of top managers in North America has increased from 1986 through 2006 to roughly 40 times the average and from 1966 to 110 times the average. Globalization “refers to the current transformation of the world economy the reduction of national barriers to trade and investment, the expansion of telecommunications and information systems, the growth of off-shore financial markets, the increasing role of multinational enterprises, the explosion of mergers and acquisitions, global inter-firm networking arrangements and alliances, regional economic integration and the development of a single unified global market. The phenomenon of globalization is accompanied by increasing international mobility, the migration of workers, the growth of tourism and the increasing ease of international travel (Leary 1998:265).”

2008-01-19 The Bush administration announce they are seeking “a stimulus package of as much as $145 billion”. However the stock market did not respond positively as investors were concerned that the looming American recession would trigger economic crisis that will span the globe. See (Jolly and Timmons 2008-01-21).

2008-01-21 Société Générale trader, Jérôme Kerviel, 31, was accused by the Société Générale, Paris of implementing an elaborate, year-long fraud that involved betting billions of dollars of the bank’s money on European stock index futures. Michel Histel, 62, a French retiree who is closely following the story argues that it is common knowledge that the Société Générale’s has played a leading role in financial derivatives products. Jérôme Kerviel was employed by the Société Générale and in his role as arbitrageur he was expected to hedge large bets on index futures.

2008-01-21 “Global stock markets tumbled, with European indexes set for some of their biggest losses in recent years, amid growing fears of a recession in the US (BBC News 2008-01-21).”

2008-01-20 “Global stock markets plunged on Monday as fears spread that the turmoil in United States mortgage markets is spreading. Indexes in Europe fell as much as 7 percent after a huge sell-off in Asia. “There’s something approaching panic in the market,” Holger Schmieding, the chief European economist at Bank of America in London, said by telephone. “There’s been a reassessment in the market of the U.S. economic outlook, with most people now thinking that there will be a recession,” and investors are starting to reconsider the idea that the rest of the world “will remain aloof from U.S. problems [. . .] The selling began in Sydney, with Australian stocks falling nearly 3 percent for an 11th consecutive decline. Major markets in Asia followed suit, with the benchmark Nikkei 225-stock average in Tokyo falling 3.9 percent, the Hang Seng in Hong Kong falling 5.5 percent and the benchmark mainland Chinese index falling more than 5 percent (Jolly and Timmons 2008-01-21).”

2008-01-21 London’s FTSE 100 index fell 4.5% to 5,637.3 (BBC News 2008-01-21).

2008-01-21 Hugues Rialan of Robeco France says we are in a panic mode and a crisis in consumer confidence as the banking sector’s reassurances that they were not overexposed to US mortgage-related investments, prove to ring hollow and false. The banking sector lost consumer trust when they lost of “billions of pounds on investments linked to the US housing and mortgage markets (BBC News 2008-01-21).”

2008-01-21 “Australia’s benchmark ASX 200 index closed down 2.9%, or 166.9, points at 5,580.4”, amid growing fears of a recession in the US. This is ASX 200 index’s “lowest level for a year. It was also the 11th consecutive negative day for the index, the longest losing streak in more than 25 years (BBC News 2008-01-21).”

2008-01-21 “There may be more downturns in store for Asia, particularly as banks report the fallout from their investments in the United States mortgage market. Companies “have not announced their year-end numbers yet,” Schuller, of Moody’s, said, and if they are holding subprime assets, they may need to write-off their value, she said. “They are going to be taking these 25 to 30 percent haircuts we’re seeing on Wall Street,” she said. “I think it is going to shock people.” [This article which appeared in the New York Times was written by David Jolly reporting from Paris and Heather Timmons from New Delhi. Tim Johnston contributed reporting from Sydney, and Martin Foster from Tokyo (Jolly and Timmons 2008-01-21).”

“Mustier explained that Kerviel’s role on the trading desk was that of an arbitrageur, which meant that he was entrusted to purchase one portfolio of stock index futures and at the same time sell a similar mix of index futures, but with a slightly different value. The object of arbitrage is to try to make a profit from these differences in value. Because the value gaps between similar financial instruments are usually very small and temporary, this type of activity typically involves trading in very high total nominal amounts. Kerviel’s fraud, according to the bank, consisted of placing sizeable, real purchases in one portfolio but creating fictitious sales transactions in the second, off-setting portfolio. This gave the impression to risk managers that the risks in the first portfolio were hedged, when in fact they were not. As a result, the bank wound up exposed to massive, one-way bets, or “long” positions. Instead of hedging, which was his job, Kerviel was effectively speculating with the bank’s money. Mustier said a review of Kerviel’s trading records showed that he first began creating the fictitious trades in late 2006 and early 2007, but that these transactions were relatively small. The fake trading increased in frequency, and in size, during the course of the year, he said, but the largest fictitious trades – involving futures contracts on the Dow Jones Euro Stoxx 50, the DAX in Germany and the FTSE index in Britain – were entered in early January. “Our controls identified from time to time problems with this trader’s portfolio,” Mustier said, although he declined to say when the first questions were raised by risk managers, saying that the bank’s auditors were still investigating. Each time one of Kerviel’s trades was questioned, Mustier said, Kerviel would describe it as a “mistake” and cancel the trade (Clark 2008-01-27).”

2009-01-21 Analyst Mike Lenhoff at Brewin Dolphin Securities predicts that the prospect of falling US interest rates announced by the US administration will have a positive effect on the market by January 2009 and the crisis mode of January 2008 and the drop in global indexes based on fears of a US recession will be proven to be a panicked knee-jerk reaction (BBC News 2008-01-21).”

Bibliography and Webliography

BBC. 2008-01-21. “Global shares tumble on US fears.” BBC News on-line. Uploaded 2008/01/21 16:10:48 GMT. Accessed 2008-21. http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7199552.stm http://news.bbc.co.uk/2/hi/business/7199552.stm

CBC News. 2008. “TSX plunges 500 points.” Last Updated: 2008-01-21:13:26 ET.

Clark, Nicola. 2008. “Société Générale reveals more details of €4.9 billion fraud.” >> International Herald Tribune. www.iht.com Uploaded January 27. Accessed January http://www.iht.com/bin/printfriendly.php?id=9534514

Jolly, David; Timmons, Heather. 2008-01-21. “Stocks Plunge in Europe and Asia on U.S. Recession Fear.” New York Times. http://www.nytimes.com/2008/01/21/business/22stox-web.html?_r=1&ei=5088&en=f84e22b0fa01257e&ex=1358658000&oref=slogin&partner=rssnyt&emc=rss&pagewanted=print

Leary, Virginia A. 1998. “Globalization and Human Rights.” In Symonides, Janusz (Ed.) Human Rights: New Dimensions and Challenges: Manual on Human Rights. Aldershot, UK: Ashgate Dartmouth Publishing Company Ltd. / UNESCO Publishing. pp. 265-276. 2007.

“Rich man, poor man.” The Economist. Jan 18th 2007. Accessed January 18, 2007.


Flynn-Burhoe, Maureen. 2008. “Risk Society: Unintended Consequences of Subprime Market.” >> Google docs. January 21. http://docs.google.com/Doc?id=ddp3qxmz_505grfcrtgjFlynn-Burhoe, Maureen. 2008. “Societe Generale: a Logical Conclusion of Impatient Money, Unregulated Hedge Funds and Private Equity Funds.” >> Google Docs. Uploaded January 28. http://docs.google.com/Doc?id=ddp3qxmz_510gwkhvrcs


Schmap is the latest of the web 2.0 technologies that heighten my connectivity on the Internet. One of my Creative Commons Flickr photos of Calgary’s Nose Hill Park was picked up by Schmap through Flickr’s powerful Search Engine Optimized tagging tools  – folksonomy for Flickr photo folks. We were planning a trip to the 12 Days of Christmas at Calgary’ Heritage Park. As I use Schmap to prepare for our outing this weekend, I feel somewhat like a 2.0 volunteer in my newly-adopted city.  

North Carolina-based Schmap has been operating since 2004 providing free digital travel guides for 200 destinations throughout the United States, Europe, Canada (with Calgary as one of its highlighted cities), Australia and New Zealand.

They also offer an innovative technology that lets bloggers insert schmapplets – a range of fully customizable map mashups and map widgets  on their personal blogs. I have tried to add the widget to Speechless but it didn’t work. Probably just as well as I am concerned that my WordPress blog is slow to open on machines that don’t have my images and files in cache.

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