Thursday, May 21, 2015

Most cannot and never have been able to

Moral: Wherein we state the obvious: most (way above 50%) cannot (and never will) get their monies out of the ca-pital-sino due to many reasons which we will enumerate (ad infinitum).

Give us time. Essentially, the equity propaganda is based upon faulty models. The whole framework looks at the winners (one side of near-zero). In actuality, that very much larger set of non-winners (no, not losers - it is not a closed situation) is more important on the whole.

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In essence, someone of Janet's ilk needs to realize the importance of a reasonable interest rate applied to instruments that are safe and sound (in so far as is humanly possible to attain). To bring that about will require a re-look at the current basis of belief (of course, the accouterments that accompany the big pockets and "winners" in the current system make it difficult to get the conversation going in a proper manner - worse than a catch-22, if you would).

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Now, to be technical, for a moment, there are all sorts of analyses going on everyday. Much of this it yapped about ceaselessly all day (Lord, deliver us - yes, Cramer, you, too).

One that came to mind was Tobin's q (he is the Nobel winner). Skirting for the moment all of the questions of defining, and determining, value (about which we have been writing: 7oops7, Tru'eng, FEDareated), Tobin would have us relate the total sum of assets to the current market value. If the ratio is above 1, then things are (may be) puffy (as we see now, where bubble is more appropriate).

But, you know, the magical multiplier would have to be collapsed in order to get the proper market value. And, that, then, would settle the issue.

Tobin's q and
Market Cap / GDP
And, too, the whole notion of most not getting their claim comes from that little sleight of hand that has been accepted as the only way to do things (complete misuse of Adam).

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The VectorGrader site provides a graph of Tobin's q since 1950. But, notice all of the other valuation charts that are offered, like Market Capital to GDP which looks similar. For each, there is a brief description of how the chart is calculated.

Also, dshort.com provides a nice summary and discussion.

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So, let's back up. The motivation for this was a BloombergBusiness report about Tobin: Nobel Winner's Math is Showing S&P 500 Unhinged From Reality. The report discusses the case that the markets may be frothy. In doing so, it covers the following topics:
  • Dissenting Views - one of these says that worrying about the "q" would have kept one out of this market. Oh yes, that is the point being made here (if you got in, you have accumulated ill-begotten gains (enjoy them, quiet (if you can) your conscience) - not available to everyone).
  • Slow Spending - and we know about this; cutting costs (removing workers - working the remaining to an inch of their health) and hoarding money (also, buying your own stock to keep the price up) and ... What is equity for, anyway? The basis for gaming (financial manipulations) or a means to support real economic decisions?
  • Mean Reversion - Ah, investors? What about the people being screwed who are those with their hands in the dirt, who are keeping things afloat for the fat cats (riders of the system's magic carpet - coddled to the max), ...?
  • Bond Yields - oh yes, no where else to go but equity markets? Not. Somehow, a real economic view needs to be expressed here (Janet, et al, are too much of the game as defined to try to grasp the issues - Ben could not see the last downturn when it was starting to happen right under his nose -- but, he showed us that he had not run out of bullets - did we really say that?). 
All in all, it was a nice article, however it does not address the real issue. For that matter, who does (except for this blogger)?

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Too, we need to look at whether markets can be fair or not. Oh, sure. that argument reverts back to the fantasy of "efficient" market. While people argue and nitpick about that, others slave away or starve.

Remarks:  Modified: 05/20/2015

05/20/2015 --

Monday, May 18, 2015

Does it or does it not?

Moral: Wherein we start our own analysis, albeit that we had a big bubble day (with the DOW, et al, hugely inflated from Ben's/Janet's largess).

And the question? Look at this from a recent USA Today article: Despite tumult, stock-market tenets still ring true (which they took from the AZ Republic).

Oh? I am not picking on them. WSJ, too. Everyone was writing due to a report. Which was?

Ibbotson's. This thing that looks at a hypothetical $1 from 1926 or so and carries it forward. Say what? I wrote about that type of thing in March: FED gives Wall Street its wishes.

So, because of this Morningstar report the talking heads say that equity reigns. Why do they say that? Especially, when we look at ca-pital-sino, chimera, etc.?

Three years ago, Waggoner was saying that bonds had beat stock for the past 30 years (USA Today, again). Of course, who saw the bubble (many still do not)?

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One reason that there are such large collectors of bucks (and the resulting bifurcation within the populace in terms of pocket size) is that the game is stacked in the favor of the few (to be defined further - the masses have never been able to (in fact, cannot) partake in the growing economy - want to talk take-a-ways, for example?).

How can we show this illusory state? Well, give us time (I know, I don't have eternity). The thing is that most cannot take from the market scenario without there being serious depletion that results in the popping of that which is entailed by the magical multiplier (fictitious capital? know said that?). This needs to be explained in a way that everyone can see the truth of the matter. Now, per usual, there will be sides to the argument. At least, we can expose the "fraudulent" claim that these financial machinations are good for the populace, in general, rather than being mainly for the fat cats.

By the way, this is not to pick on anyone in particular. Did you know that a major brain in the early part of the 20th century said that there is no way to win in these games without insider information and manipulation thereby? Who? Bohr (on funds, and more).

So, how can a just society/economy be built upon this (type of) silly game?

Remarks:  Modified: 05/20/2015

05/20/2015 -- Well, finally, no, it does not. And, most cannot and never have been able to get their hands on that ephemeral bit of stuff that is so important to the fat cats.


Thursday, May 14, 2015

Dire, indeed

Moral: Wherein we let Steve do the talking.

See, 7'oops7, Talking to the choir. Without knowing the particulars, just look at the image, as if it were the psychological blot test.

Hey, that might be a good little exercise. As in, collect reactions.

Remarks:  Modified: 05/14/2015

05/14/2015 -- And so, after the post and content has been digested (does not imply absence of forethought), then epilog bits come to fore. The first half of that letter is what resonates. Then, Ben&Steve talking "incredible returns" in the stock market grates (harshly). For one, the thing, as run now, is a ca-pital-sino and very much can be characterized by near-zero (both terms have links in the text). Too, though, is the whole thing of the magical multiplier (wild expansion of value), of returns mainly for the early birds (connivers), and of enormous grabs (by some) that desires serious analysis (again, foreclosure - not in any way now profiting, nor in the past profited, from the gaming - whose main thing is to impoverish the masses). ... There will be a change in tone, thanks to Canfield (yes, he of the chicken soup thing). --- So, the diatribe series will stand as an example: so-called constructive looks, No. 1, No. 2, No. 3.

Friday, May 1, 2015

Near zero, again

Moral: Wherein we begin to re-look at an important concept.

Near zero? Yes, we first used that way back before Ben and Janet started and kept up their largess which Ben is now out defending (his blog and more - God, Ben, our view is from under the bus where you threw us - get off of your Olympian height).

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Say what? Well, "near-zero" now alludes to the fact of easy money policies (with the resulting financial types just gloating while they explode like pigs in a poke). You see, the interest rate that is paid to certain types (via certain media) is zilch or about as close as you can get.

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What I was using "near zero" for really has to due with the fact of the chimeric nature related to non-zero sum arguments. Yes.

Ben would need to have this explained to him in however long it would take him to understand. The bifurcation of the enriched versus the others has accelerated with his policy (well, he may not have started the split, but he sure enough worsened the problem - do they even see the reality of the people being trampled?). ...

We are now to where the so-called investors (meaning, of course, that the ca-pital-sino is more about gaming and gambling than investment - which does, everyone, have very much to do with the future -and not that immediate one of getting drunk/partying on gambling gains) are tightly bound to the teat of the FED. Janet is afraid to shake them loose.

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Wait, there are some normative issues that ought to be looked at. True enough. The answers are not easily found, nowadays. Yet, Ben persists (his push back to the WSJ).

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So, in essence, we will have to think up a better term (neo-near-zero?) for the concept first used in 2008 (a June 2008 post titled "counting oops"; place holder recognizing the use without definition dates to March 2009; a recap showing early uses in 2012). And, Ben (and ilk), it deals with a reality far removed from those whose hands never get dirty (the scum of the earth after whom the real people clean up - oh, but, then it's a job - yes, ..., that which Ben talks (as in, jobs) is a hold-over from warped capitalistic thinking).

Remarks:  Modified: 05/18/2015

05/18/2015 -- We have to include discussion of does it or not


Tuesday, April 28, 2015

Lessons can appear everywhere one might look for them

Moral: Wherein we consider the "life and lessons" of a non-poor janitor.

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The Washington Post, April 25, 2015 - column by Barry Ritholtz.

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Lots to say, at some point.

In short, though, they better sell quick, otherwise the air will escape.

Remarks:  Modified: 04/28/2015

04/28/2015 -- Now, a few hours later. His collection would be a good basis for a study. All sorts of questions loom. Say, what if he had died at 84 or 85? One can always hold and hope for a good price, assuming that you don't have something like the Lehman Brothers bit that he bought. Then, more than 1/2 of the collection might be expected to pay off. ... The key issue is that equity collections do not pay off for everyone; this payout (it would be good to know the specifics of the accounting) is an exception. Has anyone done this type of analysis? ... At least the talk now is how we've seen these things go sky high with little participation. Yes, indeed. That is the whole point.

Friday, April 10, 2015

Constructive look at economics III

Moral: Wherein we can the bile (Const I, Const II) and start over, albeit slowly.

No excuse, Sir (but, must have been recoiling from Ben's somber tone).

We all know of bullies. You know. some of the bullied turn out to be nerds. Some of the bullied turn out to be CEOs. But, are more CEOs of the bullying type than not?

Silly question? Depends upon your viewpoint, but, consider that it comes from decades of observation (and involvement - actually, at one point, I thought they were all idiots - immature - look closely at yourselves, CEOs and similar ilk, ever notice that babies exhibit the same behavior? - but, who is perfect?). One prominent guy is called a wizard (some seem to see that as sage-like).

For any, I like to bring in "near zero" (have since the beginning) which enlarges the scope (yes, the types that talk "big picture" have many limits to their view - how to bring this forward to their attention?).

Well, we have a major brain now saying that mankind needs (must have) compassion (in order to cope with the future - have one, in fact). Actually, I was happy to hear that (meaning, I do not know the specifics but have pondered some of the inconsistencies that lurk). What CEO has a compassionate bone that is not tied to money or fame or other types of self-interest?

Oh gosh, Did it, again? Well, that was the last of it. Let's be serious.

You see, at the core, we have issues that are age-old, extremely gnarly, and seemingly more troublesome in this day of technology (and STEM). So, what are we to do? Sit and ponder (well, some do take that route)?

Go out and grab (well, that is the jungle way, is it not?)?

Then, overlaying that swamp (all due respects to Mr. Wonderful and the shark mind) with technology brings things to a type of boil (yes, many connotations here) that is difficult to control. But, at the same time, technology is ridden with faults (oh, yes - is it hubris that keeps that from coming to general awareness?). Yet, given that a large set (still a small minority) reaps benefit. The larger set just endures and suffers.

But, compassion would make that apparent. Why does it not? Technology (STEM) also assigns a value of very little to those who do not fit into the mold (to be discussed). I know, how does one talk to a moron if one is of the ilk that conquers things like the SAT? Condescendingly, of course? Now, we can project, extrapolate and all sorts of other operations around that little bit.

In fact, part of the success of technology is that type of ability which maps well to the type of processing that computers can do. Talk about much "ado about nothing." We will have to lay out a careful explanation about this. Quasi issues are important. But, too, we have core and boundary specifics that come into play. I don't want to use "being" due to the bad associations that we saw from the mid-1900s in that regard.

We'll get back to that. But, for now, leave it that markets are exploitative, by nature. All of the machinations that Ben talks about (several variety, many dimensions) cannot do the trick. Even Janet talking the lack of ethics is not going to do it.

That is, what to do? Well, we can talk "near zero" for awhile. Any large accumulation (yes, Warren) comes from insufficient regard for true costs (what?). Ah, don't give me grief here, folks. There are so many examples of fat cat greed (and things like declining infrastructure) that the description could be fairly simple. Let's see if we can do that.

Remarks:  Modified: 04/10/2015

04/10/2015 --  With the tea ceremony, some felt that a spiritual basis could be established. That is, for the country (lot to discuss). What is the spiritual basis for the U.S.? For business? We have already seen animal spirits invoked (ala bulls, etc.). Given this early theme, mindfulness will come forth as something of importance, in this sense: running after money is not mindful (arguable point, indeed).





Wednesday, April 8, 2015

Constructive look at economics II

Moral: Wherein we continue a constructive approach, albeit slowly.

And, while we do so, the world runs on. But, we are not dabbling, real-time, in experimenting with people's lives and well-being, either. Ben cannot say that he was not a cowboy with his creative financing/monetary schemes. Too, Janet cannot say that she has not perpetuated the errors.

So, what is the basic problem here, folks? Well, academics are running the show when it comes to the FED. That would not be so bad if it were science, but we are talking a larger set of issues. Now, business management? Well, that domain has its set of problematics, too. How did this focus on the pseudo-quantitative come to fore?

Well, even since Nash (we'll get back to this) and the advent of computing (ubiquitously so), all hell has broken loose. Not that it was better before, since before then we had mostly the politicos and their warped views. Democracy? Have you noticed that things seemed to have descended to a state of having re-election as the focus for these elected ones?

So, who's watching the baby in the bathwater? Not the academics, folks. They're after papers and fame.

Is it hopeless? No. We can start by trying to understand what is going on.

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On the one hand, we have people, who are intelligent. All of them (even those of supposedly lower talents can, and do, know - we  need to get the academics/uppers to wake up to the fact that the universe did not give them brains (or whatever else is their talent) in order to make then the chief kahuna). And, these people (according to the US Declaration of Independence - if you say, it does not apply to you, then, just think of it generally) are endowed with rights, etc.

So, intelligence, and how we think of its use, needs some attention (later). Too, though, rights can conflict. That brings up an issue (the Wall Streeters have a right to get everyone else in hock - oh?).

Well, discussions about humans mostly devolve to idiocy (has always). When will we learn?

Some were happy to see STEM (and all things associated with it) advance in power (ah, politically oriented nerds - is that an oxymoron of some sort?). Yet, that which is behind STEM has problems. These are subtle, hence the conflicts that we see.

Yet, quasi-empirical notions are simple. We will start there. As, Ben has missed that boat. Janet seems to be wanting to impress the boys. Well, Janet, this boy sees those high-falutin' notions as suspect from a deep, foundation'al viewpoint. Of course, the FED deals with daily issues. Yet, it ought not do things like push us to a numeric purgatory (hell?) just because it wants to look modern and smart.

Same goes for the boys/girls playing with finances via computers. There are all sorts of issues that we need to recognize.

To wit: the idiocy of letting loose the wild-west of the web that led to commercial exploitation (all sorts of bad games - yeah, Nash) and insecure practices/states that entrap hapless people. And, a lot more.

That idiocy is not well understood but will be, at some point. That is, how can people who rate so well on standardized tests, and on other means of supposedly being the best, keep getting us, more and more, into more perdition-laden states?

Wait, there is an answer. But, later for that.

Remarks:  Modified: 04/09/2015

04/09/2015 --