The NYT has a very interesting article about a group of exotic, hard-living ski experts and sales people who stupidly decided to ski in the wild country rather than at a ski resort area and ended up causing an avalanche that killed several of these pros. What struck me the most was the various comments they made to the writer. They sounded exactly like the bankers and dealers who destroyed our banking system by taking grotesque risks which are well known to be very destructive during previous asset and lending bubbles.
The lessons we have to learn is, caution matters. Reckless disregard of probability of danger is OK if one is suicidal and harms no one else. But rescuers have to go to dangerous lengths to save reckless fools. And these fools destroy more than themselves, they can be very destructive. The addiction of ‘Wow, this is dangerous and fun!’ has no place in banking. Yet, this is the sort of childish personalities that were richly rewarded if they violated rules of caution.
As of recently, the NYT no longer lets links go through so if you wish to see the entire story, just google the headlines like I do and you get full access: Snow Fall: The Avalanche at Tunnel Creek – Multimedia Feature – NYTimes.com
But ski areas also see the potential to attract more ticket-buying customers, and more influential ones, by blurring the boundary lines. Many areas slyly promote not just the terrain inside their borders, but the wilder topography beyond, using the power of media and word of mouth — as Rudolph did for Stevens Pass.
This sentence shows how degraded our systems have grown. The writer explains how lawsuits and government regulations forced ski resorts to take safety measures which have cut down on deaths greatly. But this isn’t attractive. They want risk, not safety. Bloomberg Hates Boring Banking | Culture of Life News I discuss how this works in finance. Risks makes profits but also can destroy. So one has to regulate risks so profit taking doesn’t end up devouring all systems. In one of my previous stories, I explain how risky behavior can’t be constantly rewarded no matter what: THE CAVE OF WEALTH AND DEATH PT 3: WIZARDS | Culture of Life News
Back to the skiers who decided to ignore huge, big red warning signs at the top of the mountain saying this side of the mountain is very dangerous and prone to killer avalanches and landslides…they knew this was a deadly part of the mountains and has killed nearly 100 people over the years, most of them travelers caught below on the roads and train tracks.
On top of that, the weather service made it pretty clear, there was a huge danger of avalanches that particular day:
“I said to Dan, ‘Do you think Tunnel will be safe today?’” Michelson said. “He said something along the lines of, ‘Yeah, those guys know the best route down.’”….“We started asking questions,” Carlsen said. “‘Where are we going? Out of bounds?…”
As they discussed the warnings from the weather service that there was ‘Considerable’ danger of avalanches. One of the dead skiers, a man who made his living luring people there to ski, complained that the word ‘Considerable’ was a ‘gray area’ word. That is, not totally defined. Obviously, even a rather stupid person could figure out that this meant there is a huge chance of something going very wrong.
He wanted the word ‘Absolute’. Hedge fund people love that word! Absolute funds proliferated. They were extraordinarily risky but the sellers of these Piñata paper funds told investors they were perfectly safe. Exactly with these skiers. The experts told the others, they knew more than the weather man and they were absolutely certain ‘Considerable danger’ really meant, ‘Slight chance, perfectly safe if you are an expert.’
Natural forces work on banks as well as snow banks. It is the same thing: infinity is impossible. Once you reach a tipping point, things go from stable to an avalanche. Three feet of snow fell the previous two days on top of several feet of snow. This meant, there was now dangerous levels of snow built up on steep hillsides. Gravity dictates what happens next.
Instead of respecting natural forces, the reckless pro skiers wanted to have their jollies. They wanted the sense of danger so they could whoop it up. They wanted to show off their superior skills…sounds familiar? Exactly like the bankers who destroyed the banking system. It is still completely wrecked, you know. It limps onwards, at our expense. 0% loans are given to the bankers to keep them afloat while they charge us all much, much higher rates for loans. The spread is immense and bankers resumed their wayward course thanks to the central banks saving them.
Meanwhile, any money I save loses value due to inflation. The skiers thought they were being funny, going into danger. They also cynically knew someone would come and rescue them when they called for help. The signs said, they would be charged at least $1,000 rescue fee. But that didn’t stop them, they thought, they could use personal connections to avoid paying any fees like that, exactly like our bankers.
Wangen knew Tunnel Creek as well as anyone, having skied it since he was a boy. Jack traveled the world, scouting courses for extreme skiing. He knew how to avoid danger.
Stifter asked Jack about the avalanche report.
“He’s like: ‘Yeah, not to worry,’” Stifter said. “‘We’ll just do it slowly and safely and just stay in the trees.’”
Typical: here they were, seeking thrills and dangers. He had to assure them, there was no danger at all. They faced a very, very steep mountainside and he lied to them and said, they would be SLOW and SAFE. Right. The question is, what is the point of even going there in the first place???? Obviously, they feared what they chose to do and then listened to a delusional man deny reality. They thought they were being careful. When they were really being insanely stupid.
“It was kind of like, ‘All right, this group is getting bigger,’” Castillo said. “I wouldn’t pop in with a bunch of no-names, necessarily, and trust any of them, but the ones I knew were definitely qualified to go. And they’re not going to bring people out who aren’t.”
Ever watch penguins go into the ocean in Antarctica? They crowd the edge of the ice shelf and then when the pile in the back is too great, the ones on the edge are pushed into the water and then begin frantically swimming away from the waiting seals and killer whales. This, ‘I wouldn’t go with no-names’ is how all the bankers egged each other into taking grave risks.
When the top dogs all said, these risks were tiny, everyone then went into denial. Way back over a decade ago, I issued regular warnings about the historic dangers of asset and banking bubbles. History is utterly clear in this matter. Century after century, the same warnings are issued and the same stupid bubbles appear over and over again, too. They all pop. Nothing goes to infinity. Seeking ever more dangerous skiing leads to being killed. Infinity always zeroes out in death.
“The whole thing felt rushed to me, and it felt kind of like this covert operation,” Stifter said. “Which it kind of was, because you’re going out of bounds. It’s obviously acceptable, especially when you’re going out there with all these locals and the director of marketing. It’s not illegal or anything. It just had this rushed feeling from the time Chris walked out of the office, and he’s like, ‘All right, let’s go.’”
During asset bubbles, people feel rushed. They see things happening very fast. Everyone wants to jump in and then take their money back out again, very fast. The faster growing the bubble, the more desperate the participants. They act drunk. Like in this story where all the characters are drinking heavily, they meet in the bar before going off, the drunks on Wall Street saw more recklessness as they made things balloon ever faster. The graphs were all hockey stick graphs shooting to infinity. No time to think!
Dessert said. “I can tell circumstances, and I just felt like something besides myself was in charge. They’re all so professional and intelligent and driven and powerful and riding with athletic prowess, yet everything in my mind was going off, wanting to tell them to stop.”
Telling them to stop would not have worked. The weather service warned them to not do it. The signs at the top of the mountain gave huge warnings not to do this. History also warned them not to do this. But since they did this in the past when there was less snow, they figured they could do this with huge amounts of snow and it would be even more fun. And this, in a nutshell, is why we keep having screwed up economies due to reckless asset bubbles. They love doing this even though it can cause a century of agony afterwards or even the annihilation of the economic entity and the bankruptcy of their home state nations.
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‘Instead of respecting natural forces, the reckless pro skiers wanted to have their jollies. ‘
Indeed. I am so tired of the media focusing on ‘heroes’ that are involved
in sports / extreme sports/ MMA .
I say they are taking society down, in their own little way.
Here they were, seeking thrills and dangers. [yep, and they found both]
The question is, what is the point of even going there in the first place???? [you answered that in the sentence above]
I have heard of skiers who get lost very near the lodge and lose toes
or a limb due to frostbite.
That is quite a link. Much as I hate the Zionist NYT [see the website
‘Crimes of the Times] that is quite a bit of tech!
From the link:
The backcountry represents the fastest-growing segment of the ski industry. More than ever, people are looking for fresh descents accessible by helicopters, hiking or even the simple ride up a chairlift.
Before 1980, it was unusual to have more than 10 avalanche deaths in the United States each winter. There were 34 last season, including 20 skiers and snowboarders. Eight victims were skiing out of bounds, legally, with a lift ticket. And many of the dead were backcountry experts intimate with the terrain that killed them.
“It’s a cultural shift, where more skiers are going farther, faster, bigger,” said John Stifter, the editor of Powder magazine, who was a part of the group at Tunnel Creek in February. “Which is tending to push your pro skiers or other experienced, elite-level backcountry skiers that much farther, faster and bigger, to the point where there’s no margin for error…
A cultural shift, eh..
I have no sympathy for the dead in this case!
There are books like ‘Into Thin Air’ that relate dying at Everest.
Now, this is the kind of post of yours that I enjoy reading and don’t mind my nom de net being associated with. Got any more fanart of anime characters?
http://crazyeddiethemotie.blogspot.com/2011/07/elaine-meinel-supkis-uses-anime-and.html
Every year Grouse mountain get out of bounders who make the mistake of leaving the ridge line and ending up in a gulley bottom in a freezing stream made impassible by brush,a lot don’t make it out from there.
Yeah there’s signs all over the place.
The skier died. If I remember right you had a broken leg about a year ago, because a year ago I broke my ankle on a skiing trip to CO. I always try to look on the bright side, so I told myself I could’ve broken my neck instead. Since that moment I quickly made a decision to give up any risky behavior at my age. I haven’t broken anything since!
I had a broken tendon and some bone. It was very nasty. I can now walk uphill but can’t run still.
“And more, much more than this, I did it my way”. MY way, ME, MINE, MY WAY! Frank Sinatra, uh?
The fiat money system died, as the age of the Milton Friedman free to choose floating currency regime and liberalism came to an end December 20, 2012, as republics of carry trade investing fell lower from a seven month banking, debt and currency carry trade rally, introducing the diktat money system and the regime of regionalism and authoritarianism.
Anticipation of QE 4 quicked Inflationism in the last seven months, driving the World Banks, IXG, higher, which supported a risk on momentum trade in World Stocks, VT, VSS, VTI, EEM, VGK, EPP. Bank leaders over the last six months have been UBS, HDB, IBN, DB, SAN, WBK, RBS, LYG, BCS, C, BAC.
It is reasonable to expect that Argentina, ARGT, Banks, GGAL, BFR, BMA, and BBVA, will sell off quickly from their recent rally, as well as Puerto Rico Bank, BPOP, causing as sharp drop in the Emerging Market Financials, EMFN. And it is reasonable to expect that the Japanese Banks NMR, MTU, SMFG, and MFG, will sell off quickly from this week’s rally. The rise in the Japanese Banks, came as Toru Fujioka and Masahiro Hidaka of Bloomberg report, The Bank of Japan expanded its asset-purchase program for the third time in four months, and will reconsider its objectives for inflation as incoming Prime Minister Shinzo Abe urges more action to end price declines. The central bank increased the asset-purchase fund to 76 trillion yen ($906bn) from 66 trillion yen. Abe, whose party swept to victory in this week’s election, will have a chance to reshape the BOJ early next year when the terms of Governor Masaaki Shirakawa and his two deputies expire. He’s pressing for a 2% inflation target, compared with an existing 1% goal.
Destructionism is underway as the dynamos of corporate profit and global growth that supported the Milton Friedman Banker Regime are winding down on the exhaustion of the world central banks monetary authority.
Doug Noland communicates in article Recalling John Law, that Destructionism is the outcome of the fiat money system by providing these quotes:
“There are good reasons to think that the nature of money is not yet rightly understood.” John Law, 1720, with the collapse of the Mississippi Bubble.
“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” John Maynard Keynes, 1920.
“Since the time when President Richard Nixon broke the final tenuous link between the dollar and gold in 1971, no major currency, for the first time in history, has any connection to a commodity. Every currency is now a fiat currency.” Milton Friedman, 1991.
Ah, theyenguy,
I thought you might find a laugh(or cry) in something I wrote a few months ago re: the fiat oil trade money after I read an article on The Oil Drum:
Many of us have suspected for a long time that our petro dollar is based on shit, but never did I expect to get proof of this. From the Oil Drum, Hubbert’s Peak by Ken Deffeyes:
Most massive and nonporous limestones contain textures made by invertebrate animals that ingest sediment and turn out fecal pellets. Usually, the pellets get squished into the mud. Rarely do the fecal pellets themselves form a porous sedimentary rock. In the 1970s, the first native-born Saudi to earn a doctorate in petroleum geology arrived for a year of work at Princeton.
I used the occasion to twist Aramco’s collective arm for samples from the super-giant Ghawar field. As soon as the samples were ready, I made an appointment with our Saudi visitor to examine together the samples using petrographic microscopes. That morning, I was really excited. Examining the reservoir rock of the world’s biggest oil field was for me a thrill bigger than climbing Mount Everest. A small part of the reservoir was dolomite, but most of it turned out to be a fecal-pellet limestone.
I had to go home that evening and explain to my family that the reservoir rock in the world’s biggest oil field was made of shit.
Pingback: Republics Of Carry Trade Investing Fall Lower From Seven Month Banking, Debt, And Currency Carry Trade Rally, Introducing The Age Of Regionalism, Authoritarianism And Totalitarian Collectivism « EconomicReview Journal
I am right now recovering from rotator cuff surgery related to the skiing accident. It is painful.
ΩΩΩΩ
ELAINE: OUCH!!! My sympathies. Your tendons were really stretched. Take care and don’t overwork it when it begins to heal.
«the bankers and dealers who destroyed our banking system by taking grotesque risks which are well known to be very destructive during previous asset and lending bubbles.»
That’s a very optimistic view indeed, or pessimistic depending on the pooint of view.
The bankers and dealers took essentially no risks, they were operating knowing very well the outcome, they knew very weel that they become very rich by driving their businesses to bankruptcy, and that those businesses would be bailed out because they are national champions.
I have named after my nickname the “Blissex law of financial fraud” which is that all nontrivial types of financial fraud are cases of underdepreciation.
That is, they are all cases where the business fails to make provision against future event, for example by spending too little on maintenance of physical plant, or on reserves against potential losses.
In the overwhelming number of cases underdepreciation is deliberate, even if there are a small percentage of cases in which managers have misestimated the amount of depreciation necessary to keep the business a going concern.
Note: underdepreciation allows management to turn capital into phantom
profits.
Underdepreciation of maintenance or expected future losses has two very big advantages for financial fraud:
* It produces “profits” dollar for dollar: every dollar of underdepreciation gores straight to the bottom line.
* It is relatively easy to obscure: the right level of yearly depreciation is not something wholly obviopus, especially in businesses where most activities have both revenues and expenses over several years.
In financial businesses where 50%I of “profits” go into bonuses every billion of underdepreciation generates 500 millions of bonuses for insiders, a return on fraud which is amazingly good.
Therefore in the past 10-15 years financial managers and traders have been underdepreciating as much as they could get away with, in particular by sponsoring legislators and regulators to cut capital ratios, as capital reserves are the main source of depreciation against both future maintenance of physical plant or future losses of financial activities.
They have also been determinedly sponsoring accounting standards to bring forward the accounting of revenues, and delay the accounting of expenses, as much as possible, as that also helps underdepreciate.
This has been done also outside the financial system, with the clever device of vendor financing, which means lending to customers the money to buy products: it immediately boosts sales and results in potential credit losses years later.
Perhaps some Candides in the financial industry were not aware they were underdepreciating their businesses into bankruptcy, but underdepreciation, while obscure to the masses, is a very clear concept to top managers or at least their CFOs, and I can’t believe they were not aware of what they were doing.
There was no risk in their strategy: massive phantom profits now, turning into cash bonuses paid out, massive losses much later after everybody has collected those bonuses.
This game is very old, and Nassim Taleb pointed out that as far as we have records banking has never been profitable over the whole cycle, with the profits during the good times always lower than the losses during the bad times, because banking has always underdepreciated future losses.
The dead skiers get a Darwin Award. What about the banksters?
Hollowing out industries and whole countries is very lucrative.
Rhett Butler said it perfectly in Gone With The Wind, the book, that is.
He told Scarlett who said building a country is profitable: No, there is even greater profit in selling down and destroying a country. By far.
Maybe I should watch Gone With The Wind again. Sounds like a prophecy on America’s future…
What about reading the book? It is so much better than the flick.
fresh news:
TRUCKEE, Calif. (AP) — A 49-year-old California man died Monday after being buried in an avalanche while snowboarding at a Sierra ski resort, one of several avalanche-related emergencies in the Lake Tahoe area after recent storms dumped up to 3 feet of fresh snow.
Donner Ski Ranch, about 90 miles northeast of Sacramento, closed as rescue teams began their search.
The Nevada County Sheriff’s Department identified the man as Steven Mark Anderson of Floriston, an unincorporated community outside Truckee, after notifying his brother.
Read more: http://www.seattlepi.com/news/us/article/Snowboarder-dies-in-avalanche-at-Tahoe-area-resort-4144447.php#ixzz2G1pzIGrj
Elaine, I thought this was one of your most thought provoking essays of the year! Merry Christmas!
Hello Elaine,
“Tunnel Creek” is the drainage on the ‘back-side’ [Westside, e.g. too much sun for stable snow pack.] of “7th. Heaven” on ‘Cowboy Ridge’, within the boundaries of Stevens Pass Ski Area.
Several times each year of the 1970’s we’d whoop-it down to Tunnel Creek just to say we did it! But, the 4 mile walk back up US-2 to the ski area usually discouraged more than a few escapades each season.
Yes, we heard tales of avalanches and accidents, but no serious injuries or deaths from what I remember. I suspect changes in the freeze-thaw cycle in the Cascades over the past 30 years has exacerbated avalanche conditions.
I’d even go so far as to opine that TOO MUCH ASPHALT & CONCRETE in the Puget Sound basin absorbing the sun’s rays has raised the average temperatures, causing the afore mentioned change to the Cascade freeze-thaw cycles.
Ergo, what was once child’s-play has now become a deadly adult game; kindda like banking huh?
Regards,
PFO