Friday, January 29, 2010

Big Ben redux

Moral: Wherein we consider that our use of Big Ben (does have some appeal: sits proudly in the skyline, wakes up now and then and bongs, towers over its architectural mates, etc.) might be too casual since it is used in reference to someone whose chief role is to keep our beans safe, provide stability, and keep bankers in control.


So, after a congratulatory nod, let's look to the future.

We may begin, shortly, with another moniker for Mr Bernanke who has an important role to play (actually several roles). Poor guy, as his task may be impossible, from the getgo, due to issues of fiat currency.

Let us ask? From whence comes Ben's wisdom? To what direction does he turn for guidance? Theory? These are important questions as he deals with an entity that is inherently dismal.

Ben was confirmed yesterday for his second term. Perhaps, now that he's not following another (Lord Alan), doesn't have to worry about the next time (not for a few years), is independent, and continues to want to do a good job, he'll raise the rates and listen to the little people.

Even though the Fed Reserve was set up for the bankers (fat cats, by definition?), this might be a chance for Ben to set history straight.

We are starting a new series, soon, that will look at the Fed, its place in history, bankers (can we ever get away from them?), the current situation, how we got here. We'll look at the Fed's actions over the past few years, and much more.

Thanks to Congress, we can use Ben's newly obtained position, again he did it on his own, for an analysis that is essential.

At DAVOS, it is said that sustainability is a key idea.
  • How about some attention to 'sustainability' notions for finance (meaning, keeping our beans safe)? Seems to me that the mental gymnastics needed for a 'greenish' view can lead quite readily to dropping the 'ergodic' myth behind the efficient market mania that perpetrated the current messes (ca-pital-sino, indeed). We always have real problems to resolve, yet we've allowed a couple of generations of the best-and-brightest to essentially run us off the cliff through 'un-managed' gaming.
We'll look at asset classes thoroughly, in a new light. We agree with Volcker's assertion that banking needs to be split into the utility (piggy bank) and investment (sandbox). But, we disagree with the view that risk being rewarded is the prime concern for Ben and any of us dealing with beans, not without some qualification.

Would you have wanted your mother to risk your butt (unnecessarily) when she was carrying you? Oh, that doesn't apply? We'll go into this thoroughly (philosophy of economics).

We can apply insights from Minsky (Oops and truth) and, perhaps, quantify a spectrum that is usable. In this regard Ben needs to educate himself on the need for savers to know that they will have when they need it. That is, 'risk adverse' is not stupid; the analog here is innumeracy which, again, supposedly is stupid (well, we intend to show otherwise: the numerants have muddied the waters and pilfered the till).

Okay, savers got sacked by Big Ben, continue to get sacked, and are considered unessential. That is a basic economic error, folks. We'll show this. As, risk can be managed only so far, then it needs to be avoided; so, gaming has to be cordoned off into its own sandbox. What will this look like?

My hope is that Ben's re-up vote will motivate him to lead a re-educating process in regard to things economic. Actually, jawboning about these issues is one of his roles.


03/23/2012 -- Ben is doing a series of four lectures on his, and the FED's, role.

01/27/2012 -- Ben will continue to sack the savers; he must love the ca-pital-sino.

01/19/2011 -- For the most, things are dire, not by necessity.

09/02/2010-- The FED just had their hoe-down.

05/14/2010 -- Oh yes, smartest guys in the economy. Thanks, big guy.

03/20/2010 -- Big Ben says that bailing out the big banks was (or is it is?) 'unconscionable' yet was this not what he did?

02/01/2010 -- NYTimes reports that AIG's shell game wasn't on the fringe. Ben said no. Wake up, big guy. Please do your second term with your eyes open to keep them stupid capitalists in line.

Modified: 03/23/2012

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