Tag: Latin America

Songs and Tweaking Our Understanding

In any public place, you’re likely to be surrounded by faces reflecting an unshakeable puzzlement of people who have sleepwalked through life. Songs capture this perplexity. Take “Hier encore” by Charles Aznavour, which has subsequently been translated into a myriad of languages and covered by many artists.

Yesterday, when I was young
The taste of life was sweet as rain upon my tongue
I teased at life as if it were a foolish game
The way the evening breeze may tease a candle flame
The thousand dreams I dreamed, the splendid things I planned
I always built, alas, on weak and shifting sand
I lived by night and shunned the naked light of day
And only now I see how the years ran away

Yesterday, when I was young
So many drinking songs were waiting to be sung
So many wayward pleasures lay in store for me
And so much pain my dazzled eyes refused to see
I ran so fast that time and youth at last ran out
I never stopped to think what life was all about
And every conversation I can now recall
Concerned itself with me, me and nothing else at all

Yesterday, the moon was blue
And every crazy day brought something new to do
I used my magic age as if it were a wand
And never saw the waste and emptiness beyond
The game of love I played with arrogance and pride
And every flame I lit too quickly, quickly died
The friends I made all seemed somehow to drift away
And only I am left on stage to end the play

There are so many songs in me that won’t be sung
I feel the bitter taste of tears upon my tongue
The time has come for me to pay for yesterday
When I was young
Young, young…

Notice that “Yesterday, when I was young” is a poetic conceit discussing his youth. Orbiting this thought is a song by Crosby, Stills & Nash, the first of which is “Wasted on the Way”, regretting the singers’ wasted lives. Another is “We May Never Pass This Way (Again)” by Seals & Crofts. These songs tweak our understanding by reminding us in a painful, yet melodious way, that we are all swept along by life’s pressures and events.

Imagine that one is aware of this trend early enough to avoid it and attempts to sidestep this fate. However, there’s a danger on the other side of mindless snarling rebellion, in the vein of Billy Idol’s “Rebel Yell”.

Finally, there are musical styles such as Portuguese fado, characterized by mournful tunes and lyrics that straddle the loss of one’s true love and the loss of Portuguese influence in the world, such as Latin America supplanting Portugal as the center of Portuguese culture. In all of these, the “once upon a time” is at the level of youth, one’s romance and eventually life, which “never comes again”.

Perhaps the most sobering line in popular music is “all we are is dust in the wind” (from “Dust in the Wind” by Kansas). One might benefit from a moment of quiet reflection on this lyric.

CMR Magazine on Article 6 Pilots, Carbon Pricing in Latin America, and More

Carbon Pricing in Latin America

Is Article 6 on the home stretch? In this issue [PDF] of the Carbon Mechanisms Review, we look at success factors for the negotiations, and analyze what is needed to make the Article 6 rulebook text ready for enabling up-scaled mitigation action. With regard to the ‘Latin American COP’ (taking place in Madrid), we cover the emerging carbon pricing landscape in the region while our cover feature reports on and analyses the current Article 6 pilot initiatives. An analysis of the latest CORSIA developments rounds off the issue.

[Archived PDF]

Education and “Then and Now” Thinking

Ben Shalom Bernanke was Chairman of the Board of Governors of the Federal Reserve System from February 1, 2006, to January 31, 2014.

In many interviews in financial and economic periodicals, he blurts out the fact that his guide in the years surrounding the Great Recession of 2008, in his decisions by the advice of Walter Bagehot of the Economist of London whose main book is called Lombard Street [Project Gutenberg ebook] from 1873:

Lombard Street is known for its analysis of the Bank of England’s response to the Overend-Gurney crisis. Bagehot’s advice (sometimes referred to as “Bagehot’s dictum”) for the lender of last resort during a credit crunch may be summarized by  as follows:

  • Lend freely.
  • At a high rate of interest.
  • On good banking securities.

(Nonetheless, other economists emphasize that many of these ideas were spelled out earlier by Henry Thornton’s book The Paper Credit of Great Britain [archived PDF].)

Bagehot’s dictum has been summarized by as follows: “To avert panic, central banks should lend early and freely (i.e., without limit), to solvent firms, against good collateral, and at ‘high rates’.”

In Bagehot’s own words (Lombard Street [Project Gutenberg ebook], Chapter 7, paragraphs 57–58), lending by the central bank in order to stop a banking panic should follow two rules:

First. That these loans should only be made at a very high rate of interest. This will operate as a heavy fine on unreasonable timidity, and will prevent the greatest number of applications by persons who do not require it. The rate should be raised early in the panic, so that the fine may be paid early; that no one may borrow out of idle precaution without paying well for it; that the Banking reserve may be protected as far as possible.

Secondly. That at this rate these advances should be made on all good banking securities, and as largely as the public ask for them. The reason is plain. The object is to stay alarm, and nothing therefore should be done to cause alarm. But the way to cause alarm is to refuse some one who has good security to offer… No advances indeed need be made by which the Bank will ultimately lose. The amount of bad business in commercial countries is an infinitesimally small fraction of the whole business… The great majority, the majority to be protected, are the ‘sound’ people, the people who have good security to offer. If it is known that the Bank of England is freely advancing on what in ordinary times is reckoned a good security—on what is then commonly pledged and easily convertible—the alarm of the solvent merchants and bankers will be stayed. But if securities, really good and usually convertible, are refused by the Bank, the alarm will not abate, the other loans made will fail in obtaining their end, and the panic will become worse and worse.

We have to ask ourselves: how is it possible that advice from 1873 (i.e., Bagehot’s Lombard Street [Project Gutenberg ebook] crisis-management for that time) can be applicable in 2008?

Does this confirm the off-handed comment in This Time is Different by Ken Rogoff of Harvard that there must be true-but-opaque deep rhythms in history including financial history? Otherwise advice would be useless due to the passage of time and useful patterns would not be discernible.

In fact, Lawrence Summers at Treasury “deluged” Mexico and Latin America with loans to avert an earlier banking crisis following Bagehot’s advice. The logic is that investors must sense that Mexico, etc. will be bailed out at all costs. The idea is to avert a “downward spiral of confidence” by means of visible massive interventions.

Education should always ponder these “then and now” puzzles as part of a beneficial “argument without end.”