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Messing with Numbers – The Psychology of the Con

Download I’m so confused. Was it 6 or 5?

Our “too smart to be wrong”  financial wizards (our oligarchy) were busy on April Fool’s Day. Check out today’s headlines!

  • Rules makers appeared ready to adopt guidelines…that give financial firms more latitude …(they can now) account for mortgage-backed securities and other assets based on their internal estimates….rather than relying on (actual) sales prices.
  • The Commerce Department said factory orders rose 1.8% in February after a revised 3.5% drop in January, initially reported as a 1.9% decline.
  • Housing starts rose to a seasonally adjusted annual rate of 583,000 last month, up 22% from a revised 477,000 in January.
  • The National Association of Realtors said that existing home sales rose last month to a seasonally adjusted annual rate of 4.72 million million units, up 5.1% from a rate of 4.49 million in January.
  • The Dow is above 8,000 for the first time since February!

I know what you’re thinking. You’re thinking maybe it’s time to get back in the game. Ante up what little you still have. You’re due for some good luck. Dabble in the stock market. Do anther re-fi. Spend that cash you started saving a few months back. Honest effort toward creating real value is not required. Step right up folks and let that money do all the work for you!

You gotta ask yourself, “Do I feel lucky today?”

Wait a minute! Remember? Just a short while ago the casino owners got too greedy and busted all their players. Their confidence game was unmasked. They had sucked up your cash, pillaged your retirement, got you to mortgage your homes, put your kids in hock, and sold your nation’s future to China. Your confidence in the game faltered. But the spirit of American free-market enterprise lives on! Tweak a few numbers and the half-empty glass starts looking half full. Your confidence improves.

You’ve been told that our economic crisis is not caused by our way of doing business. You’ve been told it’s all psychology—a crisis of “confidence”. Hear what’s being said. It’s a CON-fidence game! All they need is to get you back to believing that you and I and others can get something for nothing. If folks will just come back to the table and ante up, we can all get back to business as usual. You give them your money. They churn it. Heads they win, tails you lose.

The worst thing that could happen now would be for us to go back to business as usual. We need to get serious about changing the way we do business.

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