Wednesday, October 29, 2008

Taggers (2) New and Insidious

Experts have made the following suggestions about these new age taggers.
  • These taggers are insecure people who crave for public recognitions.
  • Their tags symbolise who they are and what they stand for.
  • These taggers do not respect the property of other people. They are putting themselves forward because they want to be in a position where they have power to spend other people's money.
  • Many of the new taggers belong to gangs, but some are independent.
  • These people put up their tags all over the country that they wish to control. They are marking out their territory.
The new age taggers seem to prefer darkly painted walls, whereas the traditional taggers prefer whiter walls. It is not clear if this is a reflection of their character.

The worst aspect of the new age tagging is that when they gain power over their area, they will initiate attempts to outlaw all forms of tagging but their own. They want to achieve a monopoly over tagging. This smacks of hypocrisy. They want to stop others doing something they will still do themselves.

Tuesday, October 28, 2008

Taggers (1) Not HTML

Tagging with graffiti is a serious problem in our city. Here are some examples that I snapped as I was cycling to work.

Experts draw the following conclusions about taggers.
  • Taggers are insecure people who get their self-worth from public attention.
  • Taggers are drawn target any fence with a smooth surface.
  • They mark out boundary of the area they would like to control with their tags.
  • The tag represents the identity and personality of the tagger.
  • Some taggers belong to gangs and their tag identifies them with their gang.
  • Taggers do not respect the property of other people.
The following picture shows the orgin of tagging. Other species marked out their territory in a similar way to modern taggers.

Monday, October 27, 2008

No Parliament

God never gave Israel a parliament. He did not give Moses instructions on how to establish a congress. Was that an oversight?

The answer is that God gave us his law. This means that we do not need elected representative or parliaments to write laws for us. God did not give Israel a parliament, because they did not need one.

Neither do we.

Sunday, October 26, 2008

Focus on the Cause not the Symptoms (4)

Much modern prophecy is very shallow. Real prophets go deep to the heart of an issue. They are not distracted by surface issues and symptoms that that are not the real cause of what is happening. Prophets press in deeper until they get to the crux of the issues that are shaping the heart of their nation.

Abortion is an example of this problem. Most Christians realise that abortion is a terrible sin. Some get really stirred up about it, but this prevents them from seeing the real issues affecting their nation. Abortion is not a legal issue, but a manifestation of a much deeper spiritual malaise. Something is seriously wrong with the spirit of nation when many young women feel compelled to destroy their future (their children).

Prophetic people are wasting energy when they attempt to make abortion illegal, because banning abortion deals with the symptoms of the problem, but does not change the underlying cause that is rooted deep in the culture. The prophetic task is to expose the cracks in the heart of the nations that are manifesting through abortion. The solution is not a change in the law, but deep-seated repentance, a renewed world view, and powerful healing by God.

Abortion is just one manifestation of an impaired spirit. The Left Behind phenomena is another manifestation of the same core flaw. Many Christians have lost confidence in the future and are looking to Jesus to come and rescue them soon. They have no confidence in the ability of the Holy Spirit to establish the Kingdom of God. This lack of faith puts them in danger of being cut off from their future, just as the young woman who has an abortion cuts off her own future. Abortion and rapture obsession are manifestations of the same spiritual blemish.

Division is another surface issue that can distract us. Many Christians are concerned about the powerful divisions that are wracking America. It is true that a house divided cannot stand, but division is never the root cause. Division is just a symptom of a far deeper defect that should to be exposed by the prophets.

Many Christians are stirred up about homosexual marriage, but again they are focussing on the symptoms and not the root cause. Christian prophets will realise that homosexuality is a symptom and not the real crack in the heart of their culture.
Ezekiel understood this issue well. When he describing the sin of Sodom, this is what he said.

Now this was the sin of your sister Sodom: She and her daughters were arrogant, overfed and unconcerned; they did not help the poor and needy (Ezekiel 16:49).
Sodom’s root sin was not homosexuality, but arrogance, laziness and refusal to care for the poor. It seems that when a society makes and idol of comfort and pleasure, it descends into a promiscuity that eventually manifests in homosexuality. What Lot found in Sodom was just the natural outcome for a society that worshipped comfort and wealth.

Lot saw the symptoms of the problem and like many Christian was upset about what he saw. Ezekiel looked much deeper and realised that the key issue was a love of comfort and pleasure. We need more prophets like Elijah who can see deep into the heart of our nation.

Saturday, October 25, 2008

Prophecy to a Nation (3)

This problem is worse with prophecies to a city or nation or state. These entities have a strong tendency to turn away from God, so they rarely need encouragement and mostly need warning and correction. Christians living within them need a clear trumpet sound, so they know what they should do.

If the trumpet makes an uncertain sound,
who will prepare for battle? (1 Cor 15:8).
To often, Christian’s who have learned their craft bring encouragement in personal prophecies try to step up and bring prophecies to their nation. If they do not understand the difference and make a transition to the different level of operation, they will oftenbring spiritual warm fuzzies when the nation really needs a clear trumpet call.

When I assess a prophecy to any nation, I expect to see at least a couple of the following questions being answered.
  • What is going on in this nation?
  • Has the season changed?
  • What do the people of the nation or its leaders need to do to turn things around?
  • What is God doing in the nation?
  • What do the people of God need to do, to be a part of what the Lord is doing?
Some will be surprised that none of these questions refer to predictions about the future? The truth is that I would sooner know what God is doing now and what his people should be doing now, than what will happen in the future.

Knowing who will be the next President will not help us at all, if we do not understand what is happening in the nation that has caused God to give us that particular President.

Most prophecies for a nation that I read on the internet do not measure up. They just carry on the encouragement model that is typical of personal prophecy. This provides plenty of spiritual warm fuzzies, but a clear trumpet call is rare.

I probably sound like I am hard to please, but choosing to speak for God is a serious business. He is not honoured by spiritual mush.

Friday, October 24, 2008

Prophecy to a Church (2)

A problem occurs when a person who is fluent with the gift of prophecy and experienced with personal prophecy moves up to the role of bringing prophecy to a church. If a church is growing in the obedience to the Holy Spirit, it will be filled with such a buzz that it does need much encouragement. If a church is wandering away from the path, it will need correction. An example of this is the seven letters to the churches in Revelation 2,3.

I remember one incident when a prophetic word was spoken during the meeting of a church and all who were present fell on their knees and wept. This was a long time ago, but I believe that we need to see this more often.

The problem is that most prophecies to churches are brought pastoral people who are skilled in bringing encouragement to people through personal prophecy (I am ignoring the people who have fallen out with the church leaders, because their words are not usually heard). These pastoral people carry over the same method and standard and proclaim encouragement to the church, so they struggle to bring a word of correction.

The other problem is vagueness. This is also a crossover from personal prophecy, where spontaneity is the standard. There is nothing in the scriptures that says that that a spontaneous prophecy is superior to one that is pondered over time and edited to sharpen the delivery of the message.

I expect that many prophecies to churches would be clearer, if they were reviewed and edited by the prophet and other prophetic people. I have heard many prophecies that were spot on for the first few sentences, but then the speaker lost the plot towards the end. The speaker should probably have put the editors pencil through the last few sentences.

Thursday, October 23, 2008

Personal Prophecy and Encouragment (1)

Personal prophecy should be mostly encouragement. Gene Redlin suggests that prophecy should be 95% encouragement and 5 percent warning. This is probably true of personal prophecy. Most Christians lack confidence in themselves and their abilities, so they need encouragement. The gift of prophecy is for strengthening, encouragement and comfort (1 Cor 14:3), so it is just what most Christians need.

If a Christian is going the wrong way, they are unlikely to be turned round by the gift of prophecy. A warning is more likely to be received, if it comes from a friend or elder who is trusted (Gal 6:1). David accepted correction from Nathan, because Nathan was his friend (2 Sam 12).

Personal prophecy can often be quite vague. However, Christians should not be living their lives in detailed obedience to the prophetic, so it does not matter if the words are fuzzy. We should be walking in obedience to the leading of the Holy Spirit and just getting confirmation, illumination or encouragement from the gift of prophecy. Therefore the prophetic words we receive do not need to be absolutely precise. (One reason for the vagueness is that most personal prophecies tend to be given spontaneously without much forethought or editing.)

Most personal prophecy conveys a standard message.

God is pleased with you.
Keep on doing what you are doing.
God has a million ways of saying these words, but each one is perfect for the person who receives it. The important thing is that the word of prophecy is accompanied by the Holy Spirit moving in the heart of the hearer, so that the encouragement digs deep down into their soul and changes their attitude to life.

Some people are full of encouragement. They are great to be around. People with a pastoral calling should be full of encouragement, so they need to be fluent in the gift of prophecy. The irony is that regular anointing in the gift of prophecy may be a sign of a pastoral calling and not a sign of a prophetic calling.

Wednesday, October 15, 2008

Inflation and Stupidity

Jeremy Lang of Liontrust provides a very clear explanation of the reasons for the credit crunch in the UK Telegraph. He contrasts the old boring banking model with the new flashy one.

The modern banking model is broken. But first the old model; how did it work? Banks should be conservative ventures. They rely on trust and permanence to work. Banks persuade enormous numbers of people to trust them with their cash. They then lend that cash to other people, trusting them to pay them back. They earn money by charging more to lend than it costs for them to borrow. Simple.

.......So the old banking model relied on two things. First, successful banks made sure they had a comfortable buffer of their own cash for the inevitable times of stress. Second, successful banks made sure they lent carefully, so most people who borrowed from them would eventually pay them back. So far so boring.

Investment banking is not boring. Investment banking is deal making and product innovation and high risk taking. Investment banking built the modern banking model.
Read the full article here.

Bonanza Gospel

The dominant story in Western culture is one in which “the good guys ride out to shoot up the bad guys and rescue the pretty girl”. In this story, the Kingdom of God will not come until Big Jesus returns on his white horse with is his six shooter and beats up the bad guys. In the interim the Kingdom of God is just a nice dream.

A good western needs a character who uses the “turn your other cheek method”, but he always proves to be the noble fool. The third person of the Trinity is just like Little Joe in Bonanza. He is a nice guy with good intentions who blunders into situations, but he has to wait for big brother Hoss to come and sort things out.

We seem to have enormous faith the ability Jesus to establish the kingdom by returning and waving a big stick, but no faith in ability the Holy Spirit to establish the Kingdom by changing human hearts.

Sin and evil really messed up this world. If Jesus dealt with sin and evil, then everything should change. Yet the gospel I often hear says that nothing much will change until Big Jesus returns. Unfortunately, a gospel that does not change everything, it is a pretty pathetic gospel.

I am not interested in a big stick gospel or a six shooter gospel.

Tuesday, October 14, 2008

Financial Fuss (12) - Banking System

The modern banking system is rotten from the inside. Banks function by borrowing short and lending long. This means that most of the time they are illiquid and only a small decline in the value of their assets makes them insolvent. Modern governments have foisted on their people a banking system that does not work. They have done this because they gain the benefits that come from being able to print money. Until the people demand something better, the financial system will remain unstable.

This full series can be found here.

Monday, October 13, 2008

Financial Fuss (11) - Debt Debt Debt

Chris Ortiz takes issue with a writer who made the following claim.

Credit, the lifeblood of capitalism, ceased to flow.
Chris say this writer is deadly wrong.
Credit is not the lifeblood of capitalism--only modern capitalism. Productivity, frugality, saving, and sound investing are the lifeblood of real capitalism. I'm not being "capitalistic" because I take out a 30-year mortgage, a five-year car loan, and pay with a major credit card. Capital is created for me by doing the opposite. I'm accumulating capital by being productive, avoiding wasteful spending, and saving. Then, I can invest in equally sound business ventures, and through my tithing, create Christian social institutions that deal with the immorality of my neighbor and the danger that represents to a stable social order.
Modern society is based on debt. The US Government debt is enormous. California depends on debt. General Motors operates with debt. Debt is normal for most households. Consumers buy Ipods using debt.

Christians culture should not be a debt culture. Our culture should be based on diligence, frugality, saving and wise investement in the future.

Sunday, October 12, 2008

Financial Fuss (10) - Leverage

Modern banks are highly leveraged. This has been normal practice since central banks became normal last century. Central banks are supposed to protect depositors, so most governments have allowed capital asset ratios to fall dramatically. Modern banks have capital asset ratios less than 8 percent. Some European banks have ratios as low as 2 percent. This was great for profits during the boom years, but the chickens are now coming home to roost.

Capital or shareholders equity provides a buffer if things go wrong. If borrowers default on loans, the hit is on bank capital. If a bank faces defaults on loans that are greater than its capital, it becomes insolvent, with loans exceeding deposits. When loan defaults exceed bank capital, deposits are eroded and the bank collapses. Many modern banks simply do not have sufficient capital to absorb the losses that they currently face.

Banks prefer to be highly leveraged, because this boosts profits. High leverage amplifies profits. High leverage also amplifies the losses. Strong capital is the best protection for depositors, but that has been forgotten.

Saturday, October 11, 2008

Financial Fuss (9) - Limited Liability

The limited liability created by government law is an enormous issue. It allows banks and other businesses to run risks and reap all the profits without carrying the full risk of their actions. They can earn enormous dividends during the good years by taking very high risks, but limit their losses during the bad years that usually follow.

The reality is that liability cannot be limited, just as risk cannot be fully mitigated. Limited liability does not eliminate liability, it just allows the liability to be shifted to innocent parties. The shareholders of the investment banks and hedge funds who have taken enormous dividends would have put far greater constraints on their mangers, if they knew they were liable for all possible losses of their companies. The profits that they took in the good times would no longer be sheltered in the bad times.

People would have far more confidence in banks, if they knew that their owners were liable for all the liabilities of the bank, even in bankruptcy.

Friday, October 10, 2008

Financial Fuss (8) - Perfect Storm

Almost no one expected what was coming. It’s not fair to blame us for not predicting the unthinkable.— Daniel H. Mudd, former chief executive, Fannie Mae
The clever people are now saying that they were caught our by abnormal market conditions. They are not to blame, but deserve to be rescued, because they have been hit by the perfect storm. This is just a crazy excuse for their foolishness.

The fall in house prices is not an abnormal market condition. It is what normally happens at the end of the boom. The collapse of a bank that is leveraged to the point where its liabilities are thirty to forty times greater than its capital is not abnormal. It was inevitable.

The credit crunch is not a perfect storm. It is the normal functioning financial markets after period of irrational exuberance. It is what normally happens when government agency stuff things up.

Thursday, October 09, 2008

Financial Fuss (7) - Fostered Foolishness

Many people are blaming greed, but this is not really the issue. The world will always have greedy people and many of them will find their way into banking.

The financial system has come under pressure, because over the last decade greed has not been tempered by fear of failure. The actions of the government and the Federal Reserve over the last three decades have minimised the risk of failure for most of the financial sector.

This goes back a long way. It probably started with the 1987 share market crash when the Fed minimised the damage by pumping their money machine. The message was reinforced during the Savings and Loans crises of the 1990s. These institutions had moved into new areas of business and made unwise and foolish loans. When things went wrong, the government came to their rescue.

The rescue of Long Term Capital Management is another example. This company had used clever mathematical modelling to enter what proved to be foolish trades. The Fed rescued LTCM, so the clever people learned nothing their failures, except the need to be more clever.

When the dot-com bubble collapsed in 2000, the Fed boosted the money supply to prevent the markets from falling to far. Although this led to the housing boom, the government is riding to the rescue again.

Some parents rescue their children again and again, even if they keep on making the same mistakes. However, rescue without repentance reinforces rebellion.

The current rescue of the American financial system is creating the conditions for the next crisis, which will lead to calls for an even bigger rescue.

This full series is here.

Wednesday, October 08, 2008

Financial Fuss (6) - Bad Judgment

The current problems are the result of bad judgement or foolishness. This foolishness has been widespread through the economic and political system. I have described the full cast of fools in Credit Crunch Characters.

American households paid ridiculous prices for houses, because they assumed that house prices would keep going up forever. Some took on huge mortgages, assuming rising prices would eliminate the risk. Congress made banks lend to people who could not afford mortgages. Investment banks bought credit default swaps, assuming there was no risk of the counterparties defaulting. Banks relied on credit rating agencies, assuming that they would never get thing wrong. Hedge funds bought CDOs, assuming the clever mathematical models had eliminated all risk. Investment banks boosted their profits by being leveraged up to thirty to one, but never thought about the consequences of a decline in asset values.

Foolishness and stupidity were rampant and pervasive in the financial system. Good times make fools appear wise, so they gave no thought about what they would do if markets turned down.

Here are some examples of bad judgement, or should I say foolishness.

It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions. - Joseph J. Cassano, a former A.I.G. executive, August 2007

We have a good deal of comfort about the capital cushions at these firms at the moment. — Christopher Cox, chairman of the Securities and Exchange Commission, March 11, 2008.
Foolishness cannot be eliminated regulation. Regulations cannot stop foolish behaviour. The only cure for foolishness is experiencing its consequences.

Tuesday, October 07, 2008

Financial Fuss (5) - Regulation will Fail

Many commentators are claiming that the American financial system needs stronger regulation. They are totally unrealistic.

Government regulators will never be able to keep ahead of clever bankers. The current crop of regulators did not foresee the current problems. Only a few weeks ago, they were saying that the financial system was fine. If they were not clever enough to predict the credit crunch, how would they be able to come up with regulations that would have prevented it?

Most government regulations are designed to solve the last problem that occurred. They are usually incapable of dealing with the next problem, because they regulators do not know what it will be. You cannot regulate something that you cannot predict.

Monday, October 06, 2008

Foolish Virgins

I love parables. William Anderson has a great version of an old parable at the Wise and Foolish Virgins.

Financial Fuss (4) - Normal Banking Practice

The normal process by which a bank decides whether or not to make a loan is relatively straightforward. Two questions are asked.

  1. Will the borrower be able to repay the loan and any interest when it comes due?
  2. What assets is the borrower offering as collateral for the loan?
These questions have been forgotten over the past decade. Banks have lent to people who had no possibility of paying back the loan. They have lent to investment banks and hedge funds offering security of unknown value. Those days are over, and not too soon.

Banks will go back to asking the old questions. Businesses and households that demonstrate an ability to make the repayments will be able to get finance. Interest rates will be higher, but those who get over the higher hurdle will get funding. Borrowers with good security will be able to get finance. A ninety percent mortgage on a house will not be considered good security. In many areas, a twenty percent deposit will not be enough. A collateralised debt obligation that has had the risk sliced and diced a thousand ways according to a mathematical model will not be adequate security.

Applying these rules will dramatically change the finance sector.

Sunday, October 05, 2008

Financial Fuss (3) - Less Debt

The volume of credit available has declined. This should not surprise anyone given that we have just experienced a decade of easy credit. That flush of credit produced the housing bubble, the commodity boom, and previously the dot-com bubble, so it is a good thing that it has come to an end. However, the end of easy credit will change many things for many people and businesses.

Banks will be more cautious about the way they issue credit. Home owners will no longer be able to obtain ninety or one hundred percent loan-to-value mortgages. They will not longer issue “no documentation” mortgages. Thirty or forty percent deposits will become the norm for home buyers. This is not a problem, but sensible banking practice. A return to sound banking practice will be good for households and businesses.

The American economy and American people have too much debt. A decline in the availability of credit is good for both. People will have to start saving for their future and saving to buy the things they need. Businesses will have to start investing their surpluses, rather than paying out big dividends and relying on credit to fund their expansion. Everyone will have to become more responsible.

Saturday, October 04, 2008

Financial Fuss (2) - Credit Squeeze

There is now less credit available. Americans have been poor savers for a long time and have relied on people in other nations to make up the short fall. I suspect that foreigners are now not so keen on that role. Worse still, some of the money that used to be available for lending has been wiped out by “write downs” and losses by various banks. The collapse of leverage has also reduced the amount of credit available.

In a normal world, declining availability of credit would not be a problem. Interest rates would rise to ration the available credit to the most efficient users. However, the Fed is holding interest rates down at a level where demand exceeds supply. This makes it seem like there is a shortage.

When supply declines, some of those who would previously have received credit miss out. Marginal businesses will find credit more difficult to obtain. Homebuyers with only a small deposit will find a mortgage more difficult to obtain. This happens as banks become more careful about allocating credit. However, credit is still available for good businesses. Statistics show that commercial and industrial loans by commercial banks are still at very high levels.

Veep Debate

We got to see a few snippets of the American Vice President debate on the news last night. Sarah Palin is attractive and articulate, but she talks faster than she thinks. I doubt that she has the intelligence to be the leader to the American empire.

The debate about her ability to cope with the demands of high office is distracting attention from John McCain. He has hardly made our news at all in recent weeks. Sarah Palin is drawing a lot of attention, but it may not translate into votes for John McCain.

I do not get to vote, so my observations do not really matter. However, if I am getting this impression, I presume that many American voters are drawing the same conclusion.

Friday, October 03, 2008

Financial Fuss (1) - Market Queues

The latest financial fuss has brought out the usual range of confused economic thinking.

Commentators are suggesting that there is a shortage of credit. This is really an economic fallacy.

A shortage can only occur in a market, if the authorities get involved in price setting and keep the price too low. This happened frequently in Communist Russia. The government kept the price of bread low to assist the poor, but this produced frequent shortages and people would queue all day to get a loaf of bread, because the shops could be empty for days on end. If the price of any good is set too low, consumers demand more and producers produce less and shortages follow. When governments stay out of markets, prices rise and fall until the market clears and shortages and surpluses disappear.

This is what is happening in the financial markets. The Fed is keeping interest rates low, at a time when a new perception about financial risk has emerged.

Financial experts are saying that banks are unwilling to lend to each other. This is misleading. Banks are unwilling to lend to banks that might be bad credit risk. That is not a problem, but just good credit management.

The real problem is not a shortage of credit, but that investment banks with shonky assets on their books are unable to obtain credit at the cheap rates they paid in the past. They can still obtain credit, but they were unwilling to pay an interest rate that included sufficient risk premium to cover their likelihood of default. Some of the worst banks might have to pay “loan shark rates”, but that it what happens to those on the bottom of the heap. I presume that is why they are screaming about credit crunch. They really mean that they cannot obtain credit at the price they are willing to pay.

This full series is here.

Thursday, October 02, 2008

Genesis and Creation (18) - Wait

In these posts, I have covered just a few of the flaws that exist with modern theories about life and the universe. I am not going to ditch Genesis One for the sake of unproven theories with known flaws. I know that God exists. I know that he created the universe.

I also know that, if scientists study the universe within a theoretical framework that does not deny him or the spiritual dimension, they will eventually arrive at a cosmology and theory of origins that is consistent with Genesis One. If they continue with a biased theoretical framework, their flaws will eventually be exposed, how previous experience shows that this can take up a long time. Scientists will often prop up there favourite theory for a long time, before it finally collapses.

I am quite happy to wait for that to happen. Until that happens, I am not prepared to sacrifice God’s revelation for the sake of improvable theories.

On the other hand, I do not feel the need to defend any Christian view of creation that goes beyond the Genesis One. I am quite happy knowing what I do not know.

This full series is here.

Wednesday, October 01, 2008

Genesis and Creation (17) - Apes

Here is a random thought to wind up this series.

I have a friend who is an atheist and believe that mankind evolved from the apes. Yet when I look at him, I see more evidence of the image of God than of the image of an ape. He is intelligent, articulate, logical, honest and loyal. He loves his family and provides for them. He has a strong sense of right and wrong. I see him as proof that mankind was created in the image of God.

As I watched a clip of a gorilla on television last night, it occurred to me that it looked like it was created in the image of man. That got me thinking. When I looked at Genesis 1, I discovered something that I had not seen before. There is no record of God creating the great apes. On the fifth day, God created the sea creatures and every living thing in the seas and rivers. He also created the birds that fly in the sky. On the sixth day, he created the living creatures on the earth. He created the quadrupeds (four legged animals) and the creeping things. Apes that move on two legs are not mentioned.

I have noted that the world massively effected by the fall. Satan used the opportunity to create many evil species like wasps and house flies. Actually he does not have the power to create species, he can only modify specifies that God has created.

I wonder if the great apes were part of his misguided handiwork. Maybe he took genetic material from humans and put into some other animals to develop a breed of humans that would be totally loyal to him. His efforts failed, and he ended up with species vastly inferior to humans, although they appear to be “created” in the image and likeness of man. That could be why their genetic make up is very similar. Maybe Satan left these species on earth to strengthen his theory of evolution that would emerge many years later.