Outside The (Cardboard) Box - Yves Smith for Dummies

March 10, 2010

Yves Smith for Dummies

Outside The (Cardboard) Box endeavors to provide our readers with practical information that will aid you in navigating the Modern Economic Depression. To that end we often invoke, quote or otherwise direct you to salient voices offering useful points of view. One such voice is that of Yves Smith.

Ms. Smith (a pseudonym) is a dynamic and insightful Financial Services Industry veteran who writes and edits the influential financial blog Naked Capitalism and who has recently authored a book on the roots of the financial crisis titled Econned. Naked Capitalism is a daily read here at OTCB’s global headquarters shed and we highly recommend it.

However following her recent appearance on Canada’s Business News Network with Reuters columnist Felix Salmon, it occurred to us that Ms. Smith’s pearls of wisdom may occasionally be undecipherable to those who have not worked extensively in finance, government policy nor are graduate students in economics. For example, in the 13 minute BNN interview, Ms. Smith uses the word ‘paradigm’ no less than three times. That’s some weighty verbiage! So as part of our Cardboard Translations Series, we are pleased to bring you the OTCB “Common English Conversion” for Yves Smith.

For this installment of Cardboard Translations, OTCB has culled through the BNN interview for a sampling of Ms. Smith’s numerous verbal “smart bombs” and will forthwith translate them into a more common vernacular. The original interview is here. Ms. Smith joins the anchors at 3:50.

For our part, OTCB will provide an original statement from the interview made by Ms. Smith followed by our precise interpretation.

Yves Smith: The focus initially is on the Economists….and the argument is that the Crisis is actually rooted in bad economic theory.

Translation: Milton Friedman was a shill. They have been feeding us bullshit since this started in the 70s. It became a massively bigger pile of bullshit in the Reagan years. We are now at the pinnacle of the Himalayas of bullshit. Domestically speaking, we’re at the summit of the Mount freakin’ McKinley of bullshit.

Yves Smith: What undergirds all of economic theory right now is the presumption of equilibrium.

Translation: Economist, schmonomist; It’s all bullshit.

(Editor’s note -we just LOVE it here when Yves says ‘ u n d e r g i r d s ’. That is SO HOT!)

Yves Smith: Financial markets have no propensity to equilibrium. They fundamentally have a predisposition to boom-bust cycles.

Translation: Financial bullshit always hits the fan.

Yves Smith: By contrast, if you assume stability, that means that all you have to worry about is efficiency. And all the moves that we have had, that have had the effect of increasing efficiency, have increased riskiness.

Translation: They buried us in bullshit, took all of our money, pissed on us and then turned on a ginormous fan. It’s an unbelievable mess, it’s still blowing and we’re too broke to clean it up.

Yves Smith: People now are becoming increasingly aware of the fact of how much the Obama team, not just philosophically but from a practical standpoint, is hostage to the financial services industry.

Translation: For the first time in history, B.O. and B.S. are synonymous.

Yves Smith: Well the notion that you’ve got a group that has so much influence over policy and yet they’ve wrapped it in a scientific mantle which makes it immune to criticism by normal people…..

Translation: It’s all a bunch of bullshit. And then they wrapped it and put it over your fireplace.

(Editor’s note – we’re not sure if we’ve got this translation quite right. Sometimes even we struggle over some of the brilliant utterances emanating from Ms. Smith. But we are positive about the ‘bullshit’ part.)

Yves Smith: We’ve basically run-out a paradigm that couldn’t last forever……. in fact it was a paradigm that was inherently self-limiting.”

Translation: The party is officially over. Welcome to future generations spent deeply immersed in bullshit soup.

(Editor’s note – observe the double-pump use of ‘paradigm’ in the passage. AWESOME!)

Yves Smith: You’ve got to look at the frame that we’ve had from the 1930s onward.

Translation: They got it right after the ‘30s. We’ve got it wrong. This is some serious bullshit.

Yves Smith: The belief we’ve had in deregulation, and you can argue its benefits to the goods markets, that’s a, that’s a different kettle of fish, but in financial markets its led to increased concentration, because markets have strong network effects, and, uh, the, and, uh also a shift in the structure of the industry away from businesses that had a very safe fee income to ones that are increasingly dominated by trading.

Translation: Felix, in answer to your point, let me say the following: bullshit, bullshit, bullshit, bullshit, bullshit, bullshit and bullshit. Now let’s go have some fish, split a couple bottles of vino and talk about the goods markets. You’ve got the goods. And I’ve got your market r i g h t h e r e….

Yves Smith: To say that economists didn’t play an important role is just counterfactual.

Translation: Felix, you lying little minx! Why don’t you put on those nerdy little glasses of yours and come on over here and sit on momma’s lap. I’ll show you what I can do with your Laffer Curve…..

We hope this exercise has been helpful and will aid you in gaining greater comprehension and thereby a fuller appreciation of Naked Capitalism and the writings and public utterances of Yves Smith.

Be sure to watch for our next installment of Cardboard Translations where we attempt our most ambitious conversion effort to date: ten-term California Congresswoman Maxine Waters. Our team of translators have commenced the project using the Congresswoman’s recent Subcommittee interaction with Federal Reserve Board Chairman Ben Bernanke and have already unearthed some truly revelatory information. Here’s an excerpt from the upcoming Cardboard Translations: Maxine Waters.

Maxine Waters: The last thing I heard before I came here this morning was a prediction by some of the analysts on television that in about one month we can expect that there will be an increase in interest rates on mortgages and home loans.

Translation: How do I get paid on this?

Maxine Waters: And everyone that I’ve talked to believes that this change that you’ve made in the Federal Funds rate is what’s going to trigger that.

Translation: HOW ABOUT A LITTLE CONSIDERATION PAL? I’M TRYING TO RUN A REELECTION CAMPAIGN HERE!

Be sure not to miss Cardboard Translations: Maxine Waters coming soon.

OTCB – We make it up, you decide!

2:58pm | URL: http://outsidethe-cardboard-box.tumblr.com/post/439576967/yves-smith-for-dummies

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