Chimera: sellers and buyers

Moral: Wherein we re-visit the sucker/sacker dual as we clarify a few points.

Chimera? Yes, not entirely. Consider that the concept was used somewhat jovially (not entirely in jest). The first metaphor was a train leaving the station, way back. You see, both "chimera" and "train," in this case, refer to something that has substance at its basis. The question is always how much of the basis is real (we'll continue to pursue this theme). Something has happened the past few years, goosed by Ben. But, if you look closely, it (the train) is still in the station making a bunch of noise and smoking up a storm.

Why say that? A recent article in the WSJ says that 50% (at least) of the US population has not benefited from the current mania (Ben, would you recognize risk if it was under your nose?). What we have is the top tiers raking off value (what else is new? but, that does not a sustainable economy make). Those bubbly affairs that benefit Wall Street (we'll call this Wall and ilk) do not trickle down, necessarily.

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Train day,
Saturday closest to May 10th

Aside: Train day was a few days ago. Real trains do real work. If truth were to be told, a reputable train would not want to be used as a symbol for what the Wall and ilk represent (leeching off the industrial activities of others). They ought to find some other symbol, such as a balloon (my image disappeared from this post??). Or, how about a zeppelin (general sense, hence lower case) given the last downturn from which we have not recovered?

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So, to the matters. The ideal (in the senses preferred by financial types) is to match up sellers and buyers. We all know that sellers want as much as they can get, even to the point of being sackers (we'll go on about this, to boot). But, for the seller to get the desired amount, there has to be a buyer, even to the point of being a sucker. Evidently, with the DOW going above 15K, with no end in sight, there are many suckers. Let's look at the dynamics, from a very foundation'al sense (ignoring, for now, guns and butter, real economic growth, etc.) before we get to the real essence of the matter (again, no schedule for this; PTIME issue).

Match up? Yes, that is what markets are to do. Nowadays, though, lots of potential buying is nothing more than a computer testing the waters with fictitious (Karl Marx is laughing up a storm) buy offers. Can you believe that this is considered to be normal for a mature economic society?

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Aside: Thanks to the actions of Ben during the turmoil, we'll have plenty to study. We can call it after-Ben (my face still smarts from being slapped silly last week, Ben), perhaps. Hopefully, after all of the analysis, real lesson could be learned. But, what are the chances of that?

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In short, we have three states of being (Which can be expanded further, but why do that now? Our problem is that the sophisticated have run amok -- we need to teach them respect for mathematics) related to the market (we'll have to detail this phenomenon further; and intend to).

• Seller -- The goal from this end, for the most part, is to get more than paid out (there are all sorts of nuances, but, altruism is not a characteristic of the Wall and ilk). Right now, sellers are raking it in. That is what occurs on the upside. It also gets people to leverage stupidly. That is, they go into hock to get money to buy stock in order to get gains (which are questionable from the get go). Do sellers, as a set, run out? Sure, but that's another story as things to sell can magically appear. In fact, some of the fictional buying, IMHO, is there to spawn off activity (in some cases, seeding - from whose pocket?, we ought to ask). 
• Buyer -- Of course, the idea would be to get the best deal (even for free -- ah, we'll have to go on about that -- out of air extractions, of which there are many examples in finance). But, the buyer has to have the motivation to do the transaction. A lot of energy nowadays goes into separating people from their assets (in many cases, one might get a better asset; yet, cyclical realities show that these things are more detrimental than not -- no pessimism here, rather truthfulness). And, losses are not easily recouped (without finagling - nod here to the accounting profession's part - their necessity to be ethical and more). But, buyers on the up side don't lose (immediately). There are small takes, as we see with those dealing with arbitrage (most buyers nearing the peak are not of this type). As we see next, buyers eventually become hard to find (at the demand price, lemon lesson applies).  
• Up and down -- The up side comes from there being buyers to match up with the sellers sufficient to keep things afloat. And we know, many times the buyers turn out to be suckers (even when being professional money managers -- sheesh). How far can up go? Well, we'll have to give Ben his credit (or not -- future analysis will tell if he's loved or not -- remember King Alan?). At some point, buyers start to thin out (it's not an inexhaustible set, folks, though some leeches seem to think so -- of course, there may be a lot more suckers waiting in the wing -- DOW 25K?). When there are no buyers (and, a recent WSJ article made that point - who will buy if things start to drop and we're past the point that the late comers want to get into the game?), prices fall (and fall). About the seeding (see prior bullet): even that must hit some limit at some point. As we saw with the past downturn, at the bottom (which is not known a priori), those who are in the position to exploit the game buy and do so heavily. Between the up and the down, we have those sideways movements where either side is not clear. 

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Aside: How much ought one have in reserve in order to be an adult and to meet obligations (future types)? In the WSJ, the estimates ranged from 3 years to 6 to 8 years. That is quite a range. Those who leverage think less than 6 months. Note, please, that reserve means some place where value is known. You see, if you have to sell in a down market, you lose. Now, Ben et al, a sustainable economy would provide a means for stable-value decisions. Okay? Too, one cannot time the market (as a game). The amount needed may not even be possible to attain when one has to sell low.

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Somehow, things have gone awry in the market mentality (not recognized by those doing the taking - as in the big pocket'd who have benefit -- gains? hah! funny connotation). The speed of this has been accelerated with the advent of automated means. Just because people can hack what they think of as algorithms is no reason to turn these loose upon the economy and its peoples. Actually, we ought to have many types of sandboxes.

But, it's not a simple thing, folks. Enough for now. We'll let the chimera run its course and not rail about the idiocy that is implicit in the whole affair. After all, science would say to observe not interfere. Ben has interfered as he's the cowboy let loose without any constraints. Yet, that which prompts the philosophical remarks will not be repressed.

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Any thoughts on the peak and how far the drop? Actually, what would cause the buyer (sucker) set to dry up? Too, can the seeding effect be studied (hint, malfeasance of a major sort here)?

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Post note (added after initial publishing): We need to look further at buying and selling of stock. With the increase of computer-assisted means, the past few years, there are added uncertainties. In the old days, there was a role in the market activity, that of being a buyer of last resort. That is, the stock specialist ate the loss, for which loss there were planned reserves. Of course, the advent of options trading added wrinkles. Then, with the algorithmic trading mess of late, who will be the buyer of last resort? This question has been asked. Who will buy? Will we have a stalemate'd market (think huge tie-up) that is much worse than a liquidity freeze? Ben, the sooner we see this thing, the better (would not you think?). Forget the flash crash sort of thing. A type of solidification would be difficult to unravel.

Remarks:

05/21/2013 -- If Ben, or one of his buddies, talks, in a goo-goo (poo-poo?) language, the babies of the market gurgle and giggle (like today's rise). If they pull the babies away from the mammary gland, the babies cry. Now, who are these babies? Many say the rich getting richer. It's the set of takers (guaranteed, almost) suggested in the Remarks of 05/17/2013. ..., Now, I'm off to larger things, thinking about the impending effects that will result from potential singularities (yes, plural) inherent in what the babies are feeding off of (whatever it is, Ben has added nutrients galore). That is, in another view, we will have to deal with patched-up computational systems (and pseudo-algorithms) that have no "science" behind them; they also are much less stable that a house on sand. ... FEDaerated posts will continue; however, Ben may be gone. Even if he does not leave, his role will be more ceremonial, than not, in terms of how the unwinding will impact the larger populace (again, those from whom the takers (above) get their so-called gains). Whoever picks up the mess will have plenty of challenges. So, we'll be dealing with a post-Ben world henceforth. Did he far exceed Alan's  influence, albeit over a shorter time frame?

05/20/2013 -- About singularity (05/19/2013 Remarks), it's a serious argument that will be presented. In the meantime, see the post on Closer to Truth.

05/19/2013 -- In regard to the post note, where "solidification" is used one could think of this as resulting from a type of singularity that prevents unraveling (gosh, Ben does not know that he can unravel - each tick of the clock entangles things more). An analog would come from the several cases that we have seen of failures (product, in one case -- major catastrophe, in another) where experts could not determine a cause. In terms of the product, there was a redesign with an accompanying rigorous test phase. In terms of the bad event, things are still up in the air. In mathematics, the ancient endeavor (okay?), proofs are difficult and tedious yet they are strong when attained. What has finance (other than some realm in which those who have access and means can opportunistically leech off the systems)? Running amok, really - daily watched by all of the talking heads and video cameras - silly). So, when there are singularities (minor type to be defined further - but, dealing with dynamics within all of those computational spaces that perturb matters in a growing manner - out of control, to say the least), what means is there to extract some stable state? Forget the supposed illiquidity of 2008 (which was really lemon peddlers stepping back to assess where they would play next - stroked with bailouts -and more)? Note, please: in one country, accounts are still frozen, 5 years later -- yet, in the US, all sorts of maneuverings have been allowed without seeming regard for future consequences.

05/17/2013 -- Macke (read his text - not in the video) makes a couple of points related to this post. First, the above look at the seller/buyer mix does not consider what is being sold. It's a general look that is part of an on-going discussion. So, what we have seen is that the act of companies buying back their stock does a couple of things to the price: (1) reduces the amount of things to sell (hence, provides an upward force on price) and (2) raises the price (they wouldn't want to buy at a lower price in an up-market, would they now? Oh, altruistically?). Price? Macke mentions how this has traditionally been handled (expected future flows, etc.). Second, at the end, Jeff makes a comment that needs a response: I can sell every stock in my portfolio for within 1% of the price you see quoted. That's fact. Of course, he can as could some of his buddies. But, after that profit taking started, Jeff knows that everyone could not sell at a profit. The real fact (and Jeff knows this) is that there is a point at which those trying to sell are guaranteed a loss (and, not just those who bought late). Whatever that point is, things above it tend to more and more froth (albeit, early takers get a lot of cream). Hence, bubble phenomenon come to mind. A better test, right now, would be for Ben to raise the interest rate to 3% and to unwind all QEs (ah, cannot be done - but, think if it could); that level of the market would probably be more to the truth (what say you? around 8K for the DOW?). One of Ben's buddies is saying that interest rates ought to go lower (Kocherlakota -- his Wiki page). Say what ? This guy like slapping the savers silly? Note that his argument relates spending to acquiring debt (the interminable pit hole that we all have found now with Ben's hocking of the future).  Has he not heard of saving to buy? Back to the theme: the less there is to sell and the more the demand, the more the seller can ask. Buyers? It's for them to determine whether they REALLY want something so bad. Gaining bad money from this market potentially bears a whole of of bad karma for a lot of folks (on both sides of the equation). 

05/15/2013 -- To be complete, one could turn the seller/buyer roles around such that the buyer is the sacker and that the seller is the sucker. In terms of stock, one selling too soon could be a sucker; however, if their amount of "gain" is significant, why wait to get a little more? Also, selling under value is a problem. How could this happen? Forced, or rushed, sale (all sorts of examples). It's harder for an average buyer to be a sacker. But, it's not so hard for someone with the proper amount of clout. Like someone on the other side of a forced sale (remember, politicos were doing this for their friends). The trash-talking naked/short sellers could be an example (was that a short-lived phenomenon?). The thing is that "falls" happen since no one is buying (at the demand price). The seller has to come down. Now why this happens is of the topic of discussion. That it's natural for these things to cycle is well known; what about the upward trend (bullishness) that has been expected (is this where Ben's largess comes into play?)?

Modified: 05/21/2013

Leveraging toward the exit

Moral: Wherein we report that leveraging is on the increase and that the WSJ says that Ben is mapping out his long overdue exit.

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• Leveraging? Yes, it's like looking for perpetual motion, from a finance sense. "Something from nothing" is another way to characterize this. Actually, there is a better way. If you gambled with your lunch money, and lost, what would you eat? Of course, you could double your money. But, if you lost, would you go steal from some other person, would you beg for someone to share their lunch, or do any of the number of things that are not very much flattering to your person? What does this have to do with leveraging? Well, one lesson, supposedly, from the big crash of the 1920/30s, was to not let people borrow money in order to buy stock. Somehow we lost that. Why (about hedge funds, below)? Margin operations are of the same ilk (the nose knows) even if the big boys do this on a regular basis (did we not have to bail out the idiots?).
• Exiting? Yes, taking off the training wheels, finally or at last (when?, we don't know -- see about the tease, below). But, we have asked Ben to do this (unwind) many times; he does not know about savers (see Slaps in the face), evidently.

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The chart has been published before. This recent one (Note: I had to scan in the paper version) was in the WSJ, recently. Note that peaks in the margin curve seem to go along with market peaks.

WSJ 05/10/2013

Aside: Before someone raises the idiocy of causal connections, please consider that, as in any modern analysis, we are looking for things that relate. Trying to go toward "cause-effect" is error-ful, many times. You will not find such searches here.

So, what we see, based upon these three drops that ought to be vivid in everyone's minds, is that the market peaks get (post note on 5/14/2013 -- notice, if you would, that I didn't use "cause") ordinary people to do stupid things. You see, the graph does not show what the big guys are doing (as in, those whose pockets fill no matter which way things go -- and, as we've seen, those to whom the government loves to push out big bucks).

Again, these peaks show the euphoric glow that goes along with what the media has been saying (and say every time there's a peak) as they go gaga about the 15K DOW (Chimera, remember?). Yes, DOW 25K is imminent? Now the behavior that we're talking here does occur with the big guys, but they do it all the time (the lesson, hedge funds are for the rich; ponzis are for the poor).

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WSJ on-line 05/11/2013

This image is from the on-line version of the WSJ (wsj.com) and requires a subscription to be read. Now, only seeing a few words can be like a tease. But, Ben's little group even thinking of this means something. However, they have been discussing this for a long time (just not so that we can see, okay?).

Why can't they see that they're stifling adulthood with their continued emphasis that we need training wheels? At the same time, why do they keep trashing the lives of people like the retirees?

Ben's focus on the risky types of financials is troublesome. I can show him lots of alternatives.

Aside: Too, I'll show him that we ought to have a sandbox for those boys (and girls) who want to play risky. Have fun, people, in your little playground. Leave the world to the adults (by the way, whom are these?).

I wonder what side of Ben's mouth comes this; he has stressed many times that the training wheels will stay on until he says to take them off (until hell freezes over, it seems to the savers). He got his 15K DOW. What else does he need?

Remarks:

05/14/2013 -- All of the talking heads as saying to get into the market (as in, equity). Oh yes. It's that a sign, to boot, of approaching peaks. My response? Please, let Ben give savers, and those who would prefer a small, steady gain, a better interest rate. What he is doing is wrong on so many counts, as the future will tell us. Meanwhile, though, we doddering, older folks will have to bear up with those idiots.

05/11/2013 -- One type of leverage was the idiocy called the tranche. There are many others. Like said before, leveraging, in and of itself, is not bad. Think of it this way: many times, a leverage (multiplied even) is smart work (all sorts of examples). In finance, leveraging has no real basis, hence it de-evolves to froth (Minsky's work). In terms of JERKS (as in, higher-order derivatives but applicable to those who run after pretty balloons), there are all sorts of conditions required to support the higher-order. Finance is bonkers from the get-go. Why? It descends real quick to dealing with the more base aspects of people (and, I'm not talking greed, necessarily). Ah, the computer has us screwed when the idiots think that they look like geniuses just because they can form nicely hone graphics based upon an interminable set of numbers (not necessarily sufficient to support the higher-order). One guy wrote out names, and means, from an advanced statistical book and said: knowing this makes me smart enough to not make mistakes (ah, remember the risk handlers? -- think back to 2007 and before - if you don't remember, don't worry, as we can survey/analyze that realm in depth ex post facto).

Modified: 05/14/2013

Gigantic sucking sounds

Moral: Wherein we consider the benefits of social business (not Zuck's realm), the chimera's loud calling, and more.
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The subject? Back in the days when inter-border (USA and its southern neighbor) economic relations were being discussed in terms of allowing more flow (yes, are the benefits as good as we were told that they were going to be? -- massive influx of undocumented?, ...), some argued about things being sucked south (say, jobs).

Well, what we have now is this Wall Street thing (the Wall being used to represent, basically, market-oriented activities that are, many times, not necessary) which is growing quickly while sucking value from the pockets of the hapless, such as savers (and many others).

Why Yunus and the chimera in the introduction?

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Well, it's not that Yunus is a saint, yet he knows more about what business is (ought to be) all about than do many from western cultures. Yet, it's those latter that we have to deal with in our western world. Alas.

Chimera? The large sucking machines are getting a lot of attention, more than their problematic basis (to wit, ca-pital-sino) suggests is reasonable. It's an arguable point, of course. But, how can Ben continue to trash the lives of so many folks?

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Who are these folks that Ben has thrown off the train? Consider these two types, please:

• Profligate - works, but spends more than is made; the difference is handled by debt which increases with each stroke of the clock. At what point is the debt paid? As we've seen, many have had their debt forgiven and paid by banks (reimbursed the pockets of taxpayers). But, many more have not had their debt paid, and it is still there when they croak. Again, at that point, there may be creditors losing out, yet the person's estate suffers, too (nothing for the dependents and so forth). 
• The non-profligate - works, spends, but less than income; the difference goes into savings (either for a rainy day, for a major purchase, or for the later years -- all sorts of ways to characterize this). Yet, to what (where) does that extra money go? The mattress? Gold (even with this, where is it stored?)? Ben (thanks, guy) has fed (pun intended) the mechanisms that do the gigantic sucking. For what reason, I'm still puzzling. His publishing the talks from last year does not explain much (see my notes, please, Ben). 

Ca-pital-sino

Of these types, which is more important to an economy? Notice, please, they both spend. The former does so way out of proportion to what can be paid back. Is that something that we would want all to do? Who would pick up the tab, ultimately? 

The major problem is that Ben has closed off any access to means for the latter (the non-profligate, Ben - those whom you do not seem to know even exist) to put their savings that has any semblance of "gain" (as Ben, evidently, wants, mainly, the ill-begotten type). The thing that Ben wants is for all of us to play the casino (yes, why not add russian roulette, Ben?) that gets such attention every business day (media up the wazoo, all day). 

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In terms of magnitude, Ben is into the pockets of savers for billions. How do we get a proper accounting of this (note the take on Jamie way before he got in a hot seat)? And, he says that he'll continue (or even up the ante) for years more.

Remarks:

05/09/2013 -- Ben needs to take off the training wheels and let the markets go where they may (falling mode, most likely) and let the seniors have a little stability (Slapped silly, again, yesterday).

05/07/2013 -- So, those two categories (profligacy focus, motivated by the Biblical story) are a broad-brush look. Of course, there are all sorts of nuances which (by the way, I can handle; if anyone has any doubt, deal with me directly) need a look. [Aside: you see, the push to differential (stochastic) systems comes from the inherent complexity (which has been overdone, okay?).] Debt, in itself, is not bad, especially if it's tied with collateral (and I don't mean those fantasies behind some higher-order finance - sheesh - abstract'd synthetics). One can even think of leveraging (a natural state of affairs as we learned way back with the Greek mind) in a rational sense in the context of liquidity. Yet, there are two other concepts that are apropos: source and sink. Debt? It's more of the latter. Except, the way we saw the idiots use houses as ATMs (and all sorts of parallels exist here, folks - Hawker comes to mind - recent bankruptcy, etc. [I had an upclose look, closer than many, okay?]), debt does put money into the pockets of some. Government deficits do this, too. They extract from sources. What Adam was suggesting was that spirits are natural sources (actually, this whole area is where I can weigh in with a newer theory - in time). But, we don't have perpetual motion (look finance smarties, be a little more thermodynamic, please) anywhere (again, big M and T come into play here). The truth? We cannot have sustainability where we have more sinks than sources. Jamie? Your ilk are sinks, okay. You don't have to be, but this is how you have been allowed to evolve. Let's get theme memes back in order, folks. ... Later.

Modified: 05/09/2013

Social business

Moral: Wherein we continue the pause (last week, WSJ) and consider a USA Today interview.

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Ben has been for the big guys, we all know. Too big to fail is how some of these guys are characterized. This, as if we need to bail them out time and again no matter their infatuation with moral hazards.

Too, is Ben's time short? He's not gracing the Tetons with his presence this year? Will they recover from the slight?

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It was refreshing to read this interview with Muhammad Yunus. He got a Nobel Peace Prize for his work in showing another way to do business. The fact that he was dealing with supremely poor people and that he pioneered "micro-loans" is of interest. 

Yunus suggests that business can have some social focus versus that of pure profit motive. Where the latter came from (greed, profit, ...) and why it takes so much of our attention, we'll have to look at. But, the sacrificing of the common good to the benefit of the few (all sorts of ways to discuss this) cannot a sustainable economy make.

Yunus has brought his concepts to locations here, too, in the land of the free and the brave. Why was he needed for this type of thing to happen?

It's almost as if we have to import our conscience, given that the country's business leaders have descended to having no interest except for the pursuit of money. And, the finance industry's drive in this manner, raking in their supposed profits, is well-known.

We can very well drive the whole thing with a flavor of community service and utility.

Remarks:

05/09/2013 -- Ben needs to take off the training wheels and let the markets go where they may (falling mode, most likely) and let the seniors have a little stability (Slapped silly, again, yesterday).

05/06/2013 -- Yunus as saint, comparatively?

Modified: 05/09/2013

Saturday WSJ

Moral: Wherein we stop to smell the roses, as does the WSJ each week.

We have to love the philosophical tone of the Saturday Wall Street Journal. That is, after the five days of paying attention to the races and watching the numbers, we can step back and ask questions. Of course, some of the questions are only to be pondered; others of the questions just might lead to insights and actions.

Now, given the focus of the WSJ's readership, that action may or may not be driven by higher ideals. Yet, it's nice to think that the whole thing could be looked at systematically and with an aura of justice, even if to a minute extent. And, then, we would have some type of improvement in an environment of non-contention.

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This week, per usual, there are several re-looks, both of the past week and further, that make a lot of sense. Seeing these, one has to wonder why all of the clamor. As in, bring in that Saturday (or Sunday) hat to work and be a nice world citizen every work day.

Here are a couple of examples.

• Spreadsheet slips - Bialik, a regular, notes the discussions about a spreadsheet error. From the verbiage, it looks to be a simple thing. Could the thing have been caught? Well, someone would have had to take time and energy to do it. From my experience, we are getting away from that (to our detriment). Checking seems to against the modern way (after all, Lean - we'll go on about that ad infinitum - says to do it right the first time). The whole notion of the "7oops7" blog deals with us getting ahead of ourselves (one of the comments stressed that some of the data was estimated -- ah, I'll show you higher-order systems feeding data from one sub-system to another as if these were obtained from sensor rather than being derived from some type of model estimate -- and similar examples). In fact, a recent post dealt with two banes: optimization and lazy evaluation. We can step up from a simple spreadsheet problem to one encased (encapsulated) in a modern development paradigm. These are hairy, folks, and can lead to contemplation of singularity (ala Kurzweil - no problem there due to undecidability). Then, we can get beyond the software and modeling and look at the basis for discussion. Economics has been known as dismal for a long while. Lots of mathematical apparatus has been overlaid on flaky foundations. Yet, we run off, during the five days of business, willy-nilly. We talk about these numbers as if they really mean something. They could, folks. But, it would require lots of effort (next bullet).  
• Dark side - Schmidt of Google visits North Korea. He's from the open side, to an extent. There are some who would push it further out. Schmidt notes the mechanical (rote) use of the system during a demonstration by the troops. What we have in the west are cadres of peers all resident in a morph'd space to which they have to focus their zombie'd eyes. North Korea believes in top down. The guy is charge's worldview rests upon himself (and, perhaps, his ancestors). We see that in the west in babyhood. Most rise above that (except for ego-centric CEO-types - too many to name). Schmidt notes that the natural urge is to get access to internet-based material, in one's own way (perhaps, for the peer-pressured younger cohort - but, not in general), and that the consequence is expression of thought (ah so, all those intellectual tweets). His thoughts about the cost to control the "natural" flow is right on. Very costly. But, Schmidt needs to realize that what he sees applies here to finance, too. As in: since the financial industry seems to run on greed, to put in the proper controls - as in, lift the view to the sophomoric level, at least -- we need to have daily quiescence and review. The cost for this would be much more than the North Korea guy would have to face. Now, to what end would be the oversight system? The type of transparency that we would need in order to have a stable financial system whose risks are handled properly. All of this is to be discussed further. Yes, banks run by monks who are not driven by profit for themselves would be nice.  

As a final note, notice that we expect our military to be self-less. You don't agree? Go join up and see it up close and personal. Still don't agree? Were you of the O-class (then, try enlisted)? Now, those who make the sacrifice daily, hourly (by the minute), are expected to support a system where fat cats, egoists, and opportunists scalp the system for their own gain. Why do you think that there is the disparity that people complain about? This unbalanced situation is age old, but it has increased the past few decades (partly due to the computer issues that we'll continue to address). Ah, I'll continue to describe this situation. 

Give me a few of those smart military types, and we'll put in the utilitarian banking system that the U.S. needs in order to lead the free world to the future. What would be lost? Silliness where culpability is never assigned, losses are socialized, and much more.

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Briefly: the cost to maintain a supervisory system for finance would be as much as the Great Leader would need to keep North Korean's in control. Obviously, to pay for such, pockets, such as Warren's, would be a lot smaller. 

Remarks:

04/21/2013 --

Modified: 04/21/2013

Chimera, chimera, on the wall ...

Moral: Wherein we consider that Ben (Largess, I, Largess II) has succeeded in inflating the markets as we see with the DOW floating above 14.7K today.

... chimera, chimera, on the wall, who is the fairest chimera of all? ...
                             (if you don't know, paraphrasing here - anyone can find the original) ...

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But, to the meat of the issue. People, the DOW, and others, are soaring. To what end? Why? ... Silly games, for one (here is a link to an earlier post - note the 2009 time frame). Ben has hocked the future. He has also taken $100Ks from many savers (altogether, oodles and oodles of hard-earned money so that the fat cats can play their silly games) and says that he'll continue the thievery (expecting us to laud his self). Why does he do this? We'll get back to that.

Too, I keep hearing "gains" used. These are ponzi-like (more madoff-like - again, note 2008) increases, folks. That statement is to be explained, but the upward movement is from less risky to more risky buckets for folks who cannot afford such. Forget exuberance and think mania.

The following to be looked at thoroughly: what is the percentage who actually obtain the "gain" in the long run? The fact? It's less than you would think. Silly games, indeed.

Ben has essentially taken away the proper basis which would be steady gains (yes, these would map to actual progress along prospective fronts) that would pay over time. The equity casino? Can drop off a cliff at any time for several reasons (for one, those who run the game can take their big cut, ..., etc.).

That above query deals with near-zero which must be looked at further. The alchemists (yes, look for the book) favor those of their kind. The myriads of people take in on the chin. Yet, finance could run for the benefit of the most (stated like this to offset arguments about largess of other types - you see, it's okay for Ben to fund his fat cat friend -- what with his big office, et al -- yet, any consideration of a sustainable approach is suspect from the get go).

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Soar, DOW, soar! Do not bubbles, and kites, fly? ...

Remarks:

05/09/2013 -- Ben needs to take off the training wheels and let the markets go where they may (falling mode, most likely) and let the seniors have a little stability (Slapped silly, again, yesterday).

05/06/2013 -- Image disappeared (think balloons, tops, ..., things that go up, spin, need help to not fall --- yes, Ben's efforts at creating perpetual motion)?

05/03/2013 -- As a sacked saver, one has to look at the chimera's giant sucking action and wonder how did this come about. Yes, it was (in terms of the DOW) above 14.7K a little bit ago. The S&P is climbing to new heights. It's too bad that all those in that game cannot get their money. No, only the early sellers will benefit (for the others it's hot air and paper that will fly away from their grasp). Ben, you need a framework for future payouts that is more stable (ever heard of savers?). You know, at some point, you'll be like us and will need your money. Would it be poetically just if you lost just when you needed your money? The savers would have been happy had you put a floor of 1% or so (that is, not break below the last integer). Please leave instructions thereby so that your successor will know. Okay?

04/21/2013 -- The view from Saturday.

04/17/2013 -- At the Seeking Alpha article, two of my comments were deleted. That's a first, so I'm unsure of the protocol. In one, I quoted a WSJ essay by EO Wilson in which he argued that great people do not work by mathematics, alone. The focus on STEM might even keep some resourceful, and creative, people out of the  mix. Now, to put an opinion here, the recent brain initiative ought to bring out how we wrap ourselves into viewpoints that are fostered by technology, thereby entrapping ourselves.

04/11/2013 -- See Alpha Seeking article. ... Also, rate of return fantasy.

04/10/2013 -- Housing bubble? Lots of evidence everywhere, Ben. Do you ever look? When rates do go up, all of those who are on the lending side of the equation will have to take a loss (immediately). What the hell kind of economy is that? Remember, folks, that loss is so that someone can have a low-interest, long-term mortgage. From whence comes all of this? Well, savers have been paying through the nose, for one thing. The turnaround will not bring back the losses given to the savers by Ben. Even in the equity markets, not ALL can recoup. It's a paper game (with chimerical "gains"), folks. Except, for those whose fingers are always pulling ill-begotten gains (and these people are considered by some as the smartest?) into their pockets.

04/10/2013 -- I was on the mark four and five years ago but with a little voice. At that time, I asked what would be the long-term effects of Ben's shotgun approach. You see, at some point, Ben may have wanted to have some semblance of being a scientist. When push came to shove, he succumbed to the lures of power (to wit, the necessity of corruption). The guy is probably to be more pitied than reviled. Obama could have changed the game four years ago. Oh well, hope went out the window at that time. Yes, indeed. Ben now has given us a wealth of data to look at ex post facto. Will it make us smarter the next time around? Do pigs fly? Wait, fat cats seem to fly, like those balloons used in the Macy parade.

04/10/2013 -- One professor says that a DOW of 18,000 or more may happen. Ben, no doubt, would gloat. Would (could) he consider the future side-effects? Those who are on the winning side would be gleeful, to boot. Yet, for each winner, there are many losers. That is the tale to tell. An economy cannot sustain itself without a solid basis that provides secured payments in the future. Gaming-centric approaches are bound for failure for all but the few. It's probably nice to be among the few who experience the bounty. Some views might say not, though. The other side (in want) has been the most common experience, by far.

Modified: 05/09/2013

Ben's largess, again

Moral: Wherein we look at how Ben has stiffed the savers (see Ben's largess, I).

A couple of years ago, we were just beginning to hear Ben say that there would be no limit. Some got to calling the program, QE Infinity. It would be funny, if it were not so sad.

Ben was before his supervisors recently. He said that his largess helped the world's economy. Oh? Does he know that he's breaking the patriotic backbone. Yes, I've said that he's slapping the savers silly, but there many ways that he is doing this that need to be brought ought.

Why is there not outrage for what follows? It's a table of values related to Savings Bonds bought in 1997. Why that year? Well, we could go into that, but let's just look at the numbers. In this case, let's say that there were twenty-four bonds bought over the year. At the end of the year, $1,800 was spent to buy the bonds.

Now, think of the purchase as being related to a bond sale that had a patriotic flavor. These used to be common occurrences. The intent was to get money set aside to help the government. For this money, there would be interest paid. The bonds would go on for thirty years and pay out something at that time.

You see, the bonds, too, were said to be good for grandparents to give to their grand kids. Foster patriotism. Too, help our good old Uncle Sam. A lot could be discussed here, but let's just look at the numbers.

By 2006, the bonds were worth around $2,500. That's not a bad return (again, arguable and it will be). By 2008, the value was up to almost $2,800. But, look at the value at maturity. It had grown to be of interest to most reasonable people.

Then, Ben's long-term coddling of those who were responsible for the problems began to sink in. Notice, two things, please. The incremental value (Yrl Chng) diminished from 2008 to 2013. Then, there was a negative impact on the maturity value. That, folks, is one of the many ways that Ben is eating into the pockets of those who can least afford it.

Ah, so much that we could say, but won't for now.

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In a discussion, some wise guy said: well, those people could adjust their portfolio. Again, I will hold the tongue. As Adam Ferguson, what reasonable person would subject themselves to the vicissitudes of the gaming table that is the market. He, by the way, was a contemporary of Adam Smith. Will get back to these two.

Yes, Ben wants us to put our money in the game. Where it can be lost by someone talking. Please see the article on Einhorn at Bloomberg's Businessweek. Chimera, indeed.

The image is from the article and show stock dropping or rising about the time of Einhorn's comments about the company or things related to their operations or any number of other things.

For me, it's patently ridiculous to say that this is how our monies ought to be handled let alone think that such is capitalism at its best.

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There is a lot to talk about here. We'll be back at it, from time to time.


Remarks:

04/10/2013 -- Soar, DOW, soar.

04/01/2013 -- Ben as the new Central Planner.

03/30/2013 -- The whole thing makes a mockery of U.S. Savings Bonds. It's just one of those little side-effects that Ben must think of as minor. Perhaps it is to him and those high-falutin'. If he looked at it closely, he would see that one avenue for building a small nest egg has been trashed. Thanks, Ben. You want everyone to reach for the glory of riches by the chimera. Tsk, tsk!

03/29/2013 -- See comments at this Seeking Alpha article.

Modified: 04/10/2013