Boom Howard Quotes

Not entirely fair?" His voice became that of the inferno: a rushing, booming howl of icy evil that flew around the great cavern, as swift and cold as the Wendigo on skates. "I am Satan, also called Lucifer the Light Bearer..." Cabal winced. What was it about devils that they always had to give you their whole family history? "I was cast down from the presence of God himself into this dark, sulfurous pit and condemned to spend eternity here-" "Have you tried saying sorry?" interrupted Cabal. "No, I haven't! I was sent down for a sin of pride. It rather undermines my position if I say 'sorry'!

When guns boom, the arts die.

The easy way to see this is that in boom times, the highest returns often go to those who take the most risk. That doesn’t say anything about their being the best investors.

Many Chinese have grumbled to me about the unbearable stresses and tensions of daily life back home, and about the lack of rights, the deficiencies in the rule of law, and injustices of every kind. A few even spoke to me with deep skepticism about the soundness of China’s booming economy and its implicit promise of future prosperity. But very few questioned China’s actions in geopolitical terms, easily buying into the state’s line about the country being a new kind of nonhegemonic power, unlike the West; a genuine and sincere partner of the “developing world.

By 1636, civil authorities on the island decreed a rule that became common in chattel systems throughout the hemisphere: slaves would remain in bondage for life. In 1661, with the island now amid a full-blown sugar boom, the authorities formulated a fuller set of laws governing the lives of slaves, a Black code that one historian has called “one of the most influential pieces of legislation passed by a colonial legislature.” Antigua, Jamaica, South Carolina, and, “indirectly,” Georgia adopted it in its entirety, while the laws of many other English colonies were modeled after it. The law described Africans as a “heathenish, brutish and uncertaine, dangerous kinde of people,” and gave their white owners near total control over their lives. The right of trial by jury guaranteed for whites was excluded for slaves, whom their owners could punish at will, facing no consequences even for murder, so long as they could cite a cause. Other rules barred Black slaves from skilled occupations, thus helping to reify race as a largely impermeable membrane dividing whites and Blacks in the New World. With steps like these, tiny Barbados became an enormously powerful driver of history, not only through the prodigious wealth it would generate, a wealth hitherto “unknown in other parts of colonial America,” but by its legal and social example as well. The island colony stood out as a pioneer in the development of chattel slavery and in the construction of the plantation machine, as the originator of codes like these, and later as a crucial source of early migration, both Black and white, to the Carolinas, Virginia, and later Jamaica. Here was the seed crystal of the English plantation system in the New World, or in the words of one historian, its “cultural hearth.

The received wisdom is that risk increases in the recessions and falls in booms. In contrast, it may be more helpful to think of risk as increasing during upswings, as financial imbalances build up, and materializing in recessions.

Rather, the themes that provide warning signals in every boom/bust are the general ones: that excessive optimism is a dangerous thing; that risk aversion is an essential ingredient for the market to be safe; and that overly generous capital markets ultimately lead to unwise financing, and thus to danger for participants.

As you can see from the above, virtually all the conditions on which the GFC was built were endogenous to the financial system and the credit cycle. The developments that constituted the foundation for the Crisis weren’t caused by a general economic boom or a widespread surge in corporate profits. The key events didn’t take place in the general business environment or the greater world beyond that. Rather, the GFC was a largely financial phenomenon that resulted entirely from the behavior of financial players. The main forces that created this cycle were the easy availability of capital; a lack of experience and prudence sufficient to temper the unbridled enthusiasm that pervaded the process; imaginative financial engineering; the separation of lending decisions from loan retention; and irresponsibility and downright greed.

The economic theory propounded by John Maynard Keynes in the 1930s dwelled heavily on the role of governments vis-à-vis cycles. Keynesian economics focuses on the role of aggregate demand in determining the level of GDP, in contrast with earlier approaches that emphasized the role of the supply of goods. Keynes said governments should manage the economic cycle by influencing demand. This, in turn, could be accomplished through the use of fiscal tools, including deficits. Keynes urged governments to aid a weak economy by stimulating demand by running deficits. When a government’s outgo—its spending—exceeds its income—primarily from taxes—on balance it puts funds into the economy. This encourages buying and investing. Deficits are stimulative, and thus Keynes considered them helpful in dealing with a weak economy. On the other hand, when economies are strong, Keynes said governments should run surpluses, spending less than they take in. This removes funds from the economy, discouraging spending and investment. Surpluses are contractionary and thus an appropriate response to booms. However, the use of surpluses to cool a thriving economy is little seen these days. No one wants to be a wet blanket when the party is going strong. And spending less than you bring in attracts fewer votes than do generous spending programs. Thus surpluses have become as rare as buggy whips.

In an economic system not rationally planned for human need, but developing fitfully, chaotically out of the profit motive, there seemed to be no way to avoid recurrent booms and slumps.

I fear that people may look back at the decline of 2008 and the recovery that followed and conclude that declines can always be depended on to be recouped promptly and easily, and thus there’s nothing to worry about from down-cycles. But I think those are the wrong lessons from the Crisis, since the outcome that actually occurred was so much better than some of the “alternative histories” (as Nassim Nicholas Taleb calls them) that could have occurred instead. And if those incorrect lessons are the ones that are learned, as I believe they may have been, then they’re likely to bring on behavior that increases the amplitude of another dramatic boom/bust cycle someday, maybe one with more serious and long-lasting ramifications for investors and for all of society.