Thursday, October 16, 2014

Weighing in

Moral: Wherein we stop to weigh in. At least, we got the memes right.

The context? We're now six days in to a string of losses in the U.S. markets. So, while things were going down from 17k to 15k (quick bounce) and back to 16k (lower realm), we had to wonder how long it would take for the coo-coo, goo-goo to start.

Well, it was later than expected. You see, the opinions of the blogger about the ca-pital-sino firm up on the downturns. Why? That is the time of the profit-takers.

Who pays for the upswing? Again, forget the cheshire multiple aspect. We know that some of this is from the hapless being pulled in by the media and other market sellers. Too, though, some type of pump priming goes on.

How to get to the bottom of this? Well, there is a lot of work to do.

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For now, let's just enjoy a take from Financial Times. They're talking "After QE." Then, they use stabilizers as the next thing needing to go to have a "real" market. As in, not one partying like mad as the Fed keeps spiking the bowl.

You see, too, the financials need (more than they admit) the government support. How is this different than the lowly ones being dependent upon government assistance?

The problem? These financial types rake in the dough as there is mis-allocation of capital (from the pockets of the hapless to that of the fat cats) on these upswings. And, their pockets bulge when there is the downturn (actually, their selling causes the downturn - profit taking, big time - we need to get back to the buyer-seller thing).

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Wait, today, too, we get the golden sacks head talking up the Fed. Sure, asking big daddy (or is it sugar mommy?) for continued handouts. How is that different from what we see of panhandling? Tell me, please.

Remarks:  Modified: 10/21/2014

10/16/2014 -- Sandbox in the players. Let the plumbers handle the systemic issues. 

10/17/2014 -- So, the St. Louis Fed guy talks coo-coo, and the markets soar today. One has to wonder whether we're seeing more suckers come to the table or if this is from a serious priming the pump attempt. In the case of the former, eventually, the sucker set will diminish to be of no help. The latter? Needs more study.

10/21/2014 -- Fed talking to Banks about their culture.

Monday, October 6, 2014

2010 to 2013

Moral: Wherein we weigh in, rationally.

Federal Reserve Bulletin, September 2014 (Vol 100, No 4 - pdf) has some juicy tales to tell. We'll just look at one and give our explanation. This Fed report looks at results from the triennial Survey of Consumer Finances (SCF) and provides us with their interpretation.

Nice. In fact, one section mentions "saving" (which is not a foreign concept - have we, perhaps too much, stressed the maltreatment of those who save? Not!). See Box 4 which looks at "Saving Behavior" and shows what we would expect. The more one makes, the more one can save. The less one makes, the less the savings.

Moral-oid: The less one makes, the more important savings are; too, playing the ca-pital-sino with one's hard won savings is not rational at many levels of these levels of income.

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There will be plenty to talk about in this report. First, though, let's remember that the 2010 SCF showed declines from 2007 for most. We will have to go back to look at that. And, we will relate what we see, to boot, to our start (August, 2009).

I pulled Table 2 out (see image) from the report. Now, some things strike me immediately (if it is not apparent, my interpretation will differ from that of the Fed Res -- and, my viewpoint is well-founded in both theory and practice and experience).

Please, look at the second grouping ("Age of head (years)"). Then, consider the age groupings. For one, "75 or more" represents the class of those who have been "flayed" by the policies of late. These are those who cannot use the ca-pital-sino, except in a limited sense, in a reasonable fashion (look, the majority of those in financial services/consulting - advisors? - need a lesson in "near zero" as part of their training). Many of this group who did try the ca-pital-sino lost and could not recover.

So, "75 or more" had losses from 2010 to 2013. Guess what? That is on top of what they had already lost from 2007 to 2010. If you look at the Fed's actions in supporting the fat cats, you ought to see that they need to understand the need for "stable" means to manage one's "wealth" (lots to talk about there, too). And, "stable" would cover much more than those age-sensitive strategies that we see touted so much.

But, notice, too, that the age groups of "45-54" and "55-64" also lost. An in-between group gained. Methinks that these are those who could delay their retirement (the inflated 401k types - virtual money, except many of these (early takers) will be able to get their little bit of gain - most will not).

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Enough for now. The report is worth a read or two (see above link). I am thankful that the Fed does this type of analysis on a regular basis.

Remarks:  Modified: 10/06/2014

10/06/2014 -- Banks proved themselves untrustworthy in this last downturn. Of course, they were bailed out; but, many who felt the ramifications of their misdeeds (said to be stupidity therefore not illegal - but, immoral?) were never compensated. Consider please. With the troubles of the cloud, and bankers, like Chase, being hacked, are we not in a worse situation than 2007 (thereabouts)? There is still much to discuss about computability (and beliefs thereof).

Wednesday, September 17, 2014

Considerable time?

Moral: Wherein we react, after news.

Ah, the goo-goo, coo-coo talking keeps going. Oh, the Fed has to continue to soothe the little ones (actually, overgrown idiots) who cannot go without their training wheels.

Imagine. If the Fed dropped those two words, thinks Janet (and her buddies - with two dissenting votes), the market vultures would panic and fly away from the lifeless bodies of the savers.

Yes. Is Janet afraid that those who are sucking the loudest would fear that a weaning moment loomed and would cry for help? Don't want that. Keep the addicts happy with their spiked punch.

Mixing all sorts of metaphors? Sure. But, then, who would have thought that we could have come to all of this just because the financial types just had to crash the system with their gaming the system, get bailed (as they expected) out over such a long period of time, and then fling mud in the face of those who cleaned up their diapers?

Wait! Of course, the Fed is of that ilk. And, it's mere playing with fiat money (and two funny controls); albeit, real people are getting hurt (at least, a couple of good-heart'd humans voted for some constraint to be put on the partying pigs).

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So, the flaying will continue (for a "considerable time"). Those savers who are still alive will have to stay hunkered as the chimera bubbles.

At some point, we ought to consider this type of thing (slapping of the face, flaying to the bone) to be a desecration of the dead (the landscape is scattered with savers who have been flayed to the bone) - has our society come to accepting that?

Remarks:  Modified: 10/09/2014

09/30/2014 -- So, now, Evans is talking. Great, guy. Keep the markets roaring in their frenzy. How is that to have an effect on employment? You know the game? Finances churn; each tick sucks money from the pockets of the hapless to that of the fat cats? This, the FED has encouraged for years now. Sustainable? You really think? Ever heard of savers? You ought to have come to the bank the other day when I was further flayed, slapped silly, and downright abused. 0.01% was their offer. ... Now, let's look at the ca-pital-sino (you still awake, Evans?). It's floating. The talking heads tout 401K uprisings. Pure imaginary gains. Why? The system (of which you, Evans, are a part) sucks out the value. This is some epitome of an advanced society? ... At least, all of that (this comment, until now) was written without Yellen ever being mentioned. Definitely, a great diversionary scheme (many senses).

10/09/2014 -- Tiptoeing to avoid a taper tantrum. This time, it would be mommy, rather than daddy, who started psychic meltdown. Ah, the poor lil ones.


Thursday, September 11, 2014

Capitalism and slavery

Moral: Wherein we consider a book review.

The WSJ, recently, had a review of E. E. Baptist's book: The Half Has Never Been Told. This look by Baptist rang true several ways. For one, lots of those who were heavy into slavery were out of the upper classes (even royal families) of the UK (Lords and Serfs -- from 2009, but still apropos even though it needs an update).

You see, the capitalist wants to keep all monies for th upper classes. Workers are assumed to be mere resources available for exploitation (even if found via out-housing). We are still waiting for some type of humanistic, univeralistic capitalism to emerge; as we see with the results of the FED's largess, ca-pital-sino is what we have.

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Slavery allowed severely unpaid labor on this side of the big pond. In the South. While in New England, there may have been attempts to establish slavery which never took hold. Superior moral character (not that they did have their own problems)?

So, let's just use a quote from the review:
    In the 1850s, the slave-based economy experienced a dramatic resurgence when a new wave of "Negro fever" doubled the price of slaves in relation to that of other goods. On the cusp of the Civil War, slavery showed no sign of dying a natural death, except in parts of Maryland and Delaware. Slavery remained, Mr. Baptist says, "both modernizing and modern" and its growth "muscular, dynamic."
    In his January 1861 State of the Union address, the pro-Southern president, James Buchanan, spent less time addressing the secession crisis in South Carolina than he did expressing his hope of acquiring Cuba for the United States—a longtime goal of slave owners and investors who saw it as the best opportunity for extending the reach of American slavery. Only civil war and hundreds of thousands of lives would finally put an end to the lucrative partnership between the cruel machine of Southern slavery and the roaring engines of capitalism.
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For many workers, their job experience can border on slavery. Then, when the push for loading up debt (40 million in the U.S. now shackled with educational debt, now?) is added in, one has to consider just much onerous debt is a form of slavery.

Most ought to be able to relate to the mental, and physical, strains associated with having such a ball and chain (perhaps, plural) with which to cope on a daily basis.

Remarks:  Modified: 09/11/2014

09/11/2014 -- 

Thursday, August 28, 2014

The chimera attracts a lot of attention

Moral: Wherein we look around at all of the viewpoints (as in, Janet's is only one of many).

First, a disclosure. There was the beginning of a re-look at finance/economics six years ago from two viewpoints (pointer to the first post on finance, both September, 2007): truth engineering, 7oops7.
  • The first blog has a more general theme which will be of more interest as things unwind (that is, when Janet deigns to let things take a "natural" course - she cannot keep her finger in the hole in the dike forever). As mentioned in that first blog (2007), things looked zero-sum at the time (even with all those talking win-win; too, remember all of those who said that we had "risk" trumped?). As time went on, near-zero became into focus (and will be explained further). As well, the whole gaming aspect makes one think of finance as basically a playground for the few (diaper'd set, for the most part, who we had to clean up after - idiots, and we'll go on about this). 
  • The second blog started with a focus on engineering issues. One hard problem is earned value. Essentially, that deals with knowing how well progress measures are showing real status. Okay? Just like accountants can cook the books, project people play with these types of numbers (or, let's say, have been known to; however, saying that glosses over a whole lot of issues). But, it became apparent, about this time, that the brains of finance had led us astray - what? again? Remember, my advanced academic work was done in mathematical economics, for the most part. But, I worked, during my career, with engineering problems. When I woke up to the fact of the dire straits (not personal), old Rip came to mind. WTF? And, look, brains, I still am asking that? ... So, you see, evaluations (establishing value - needs to be updated) are more commonly necessary than one might realize. That is, operationally, we need to do this. What has happened, though, is that a whole lot of this type of stuff is being applied mindlessly (sheesh, talk about a real need for mindfulness).  
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Today I ran across some writings by Doug Short (searching on evaluations). He started his blog in 2005 and found success: dShort Updates. Too, he has a data focus (with lots of nice charts). Too, he and I have some parallels, though I may be a little older. I like that he is autodidact in economics (there is a lot to discuss here). Actually, in any field, one has to follow one's own lead if venturing outside of the mainstream.

So, Doug is on the reference list that I need to build (early collection of blogs and miscellany). There will be more viewpoints added to the list.

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Aside: Look at my academic and career background. Note, please, Data-Driven Purgatory has a lot behind it. Of course, it is my responsibility to support and to argue for the position. But, for beginners, consider, please quasi-empirical imperatives (trutheng, 7oops7). Despite large numbers (and their gifts), we are being over-layed insidiously with pseudo-truths abetted via computation and its mathematical associates and ought to be quaking in our boots. Even the IEEE wrote about having jobs in big-daddy data (essentially, machine learning and statistical testing). Forget ISIS (they, at least, are true to their word). This is much worse since it poses with such a nice demeanor while plotting our demise (not physical, as ISIS would have; no, intellectual and spiritual death - much, much worse.

Remarks:  Modified: 08/27/2014

08/27/2014 -- 


Friday, August 22, 2014

The Tetons weep

Moral: Wherein we stop to see the posturing in the western hills.

Say what? 2013 - Transitions, 2012 - After all of these years, 2011 - Financial piracy, 2010 Chimera II.

We are in the time of the annual pilgrimage, again. If only it were a pilgrimage. However, to whom would the oracles bow and pray (I know, it is the age of selfies, Lord, deliver us)?

It is really a meeting of the inflated heads who control money as if their bailiwick is central to any economy. Hence, posturing and preening before their peers.

Folks (of the money supply), we could easily barter, if we had to. Get over yourselves. Money? It cannot be eaten, nor breathed, or used for hygiene, ... Whence so much emphasis?

You see, gal and guys, your thing is more like plumbing. If only you could see that. Distribute the water and collect the waste. Okay? What? Yes, a utility ought to be how you consider your work.

We could use the heart and blood; but, the rapacious doings of finance (abetted by you people) keep us from using that (heart - wonderfulness, to the extreme. Okay? That could be applied to anything of the FED?).

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William Gaston, in the WSJ, had some nice thoughts, which are below: 8/20/14 - Shared Prosperity Is a Moral Imperative. Perhaps, some day we could use moral in talking about the FED (will not hold my breath on this, though). To quote William:
    In recent decades, the gap between the compensation of corporate leaders and that of their workers has increased many times over. The surge of the financial-services sector produced a new tranche of packagers, traders and managers who enjoy almost unimaginable wealth. Meanwhile, middle-class families have been treading water, and many parents fear that their children will do worse. (emphasis mine)
Nice, William. But, will the FED listen? 

Let me add one thing, for Janet. The current policy is pushing people to play the ca-pital-sino (not this old guy, talk to me about reasonable economics) where there are several problematic issues. For one, it's aerated (only a small percentage get their bucks - beyond those taking the cream daily - do you really need a lesson here?). Yes, the boat is floated with gaseous matter. And, most people are heavier than can be sustained (except on paper). For another, William says "treading" (as if they have the energy to do so). The real fact is that most are trying to not succumb to the flaying that has been going on for so long (thanks Ben). 

Methinks that these people would love to be like Isabella and Mortimer, partying while poor Hugh was disembowelled (Note: the spectators had "delight and merriment" at his expense.).  



Remarks:  Modified: 08/26/2014

08/22/2014 -- Flaying the savers will not solve the "What recovery?" problem. Finance caused the problem; it got bailed out; the current mode just reinforces "moral" turpitude (wait! is that the goal? screw everyone worse this time around?). Having the low rate is supposed to put people back to work? Ben, at least, mouthed the need for fiscal approaches. We ought to have had a jobs program a long time ago (opportunity missed; just like we missed out on nationalizing those institutions that created the problem - namely, banks).

08/26/2014 -- Gosh, Trish Regan (USA Today) has it right. However, even those (most of them) who think that they are gaining only think that. The cheshire multiple (plus insiders raking off the cream and other manipulations and ...) says otherwise. And, it does not have to be this way. ... Much to discuss.


Tuesday, August 12, 2014

FAME

Moral: Wherein we look at FAME.

In short, Finance and Accounting MEmos. See, fame-jagazine.com.

Nice, like the business model which expends the effort to condense, summarize academic papers in order to present these little overviews in a coherent form. And, on-line access is free. The printed copy requires one to come up with money.

To date, there have been two publications. These will be the source for coming posts.

We will have to give a nod to editors and supporters. Great idea.

Also, we will upgrade our opinions (FEDaereated - the latest, 7oops7, Truth Enginneering).

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As an aside, CALPERS seems to want to downplay equities. Perhaps, they're seeing that the aerated property causes things like the Minsky dump.

Remarks:  Modified: 08/12/2014

08/12/2014 --