Tuesday, August 31, 2010

Chimera II

Moral: Wherein we muse about the games currently named the 'markets' and about their inability to give most any fair deal (Image: derivative traders beseech the altar).

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The gaming abstraction really took hold in the latter part of the 20th century as computational systems improved. Trouble is, the machines took over, for various reasons, but the prime reason is that machinations by the best-and-brightest to, essentially, milk off the top back-fired, upon them and us.

And, Big Ben, and his crew, have not been able to unwind the situation. In fact, Big Ben, you have put the US taxpayer on the hook for trillions. And, in that wonderful environment of Jackson Hole, you just promised to put us further in hock, just to please the gamers.

Ah, the gamers rallied for a day, did they not? Granted Adam talked the 'spirits' as being of importance. But, the current spirit is so far removed from any reality that no one knows how to get the top spinning again.

Well, Megan provides a pretty good overview of what not to expect in this article: The Great Stock Myth. Actually, she makes the issue pretty clear.

From whence, new royalty, did you get the notion that you could make 30% per year? Divine right of kings?

The key is to save and to protect, not just milk the system. And, funding of future payouts has to get some attention. That is, the mode of only getting to within 60% of some goal and then expecting returns to make up the difference was idiotic, has always been idiotic, and could never hold up, in the longer run. We have to fund further than that.

However, once there is the accumulation, where, then, is there safety (that is, absence of malfeasance) so that the funds are available when needed? The equity markets, as currently played so boisterously every day, are not the place.

We can easily note that people have chased after unsustainable returns for some time now. Did they always? Well, in the past 20, or so, years, the illusion was fostered by machinations founded upon computer systems (this we can get control of, truth engineering, essentially).

What is sustainable? That number is something that we can discuss, and define. The concept of near-zero would apply. That is, no excessive return comes about without deprivation of another's position. All the talk about non-zero sum rests upon what one might consider a suspect world view (it is a simple matter similar to that of there not being perpetual motion - or, in other words, continuing the surrealism of economics and its dismal domain).

Actually, what is a return? Making money on other people's bellying up for some stock is not a return even though we let that sort of thing happen now. Yes, on the tele the other day, a trader was bragging about how they are making money: buying low and selling high (part of the milking process that ought not be allowed). Too, we have seen the few with multiples of take beyond imagination.

Yet, the types of returns that we see with the games (or current markets) are a strong equivalent of those associated with the Ponzi notions. Or, ought I say Made-off? As, his computational system put out sufficient reports (actually, trash, as we know in hind-sight) to make a whole bunch of people think that they were just raking it in.

In many cases, we have exported colonialistic entrapment, and exploitation of workers, to elsewhere. Of course, the goal was to obtain cheap products to sell; however, huge returns were another goal. That whole thing, definitely, is not sustainable in the long run.

How can the US have jobs when the main thrust of those in charge is to push exploitation overseas? But, the US worker wizened up,over time. Hence, the offshore focus. So, it's time to consider a Magna Carta for business. For people to spend, they need much more than access to unending debt. And, the new kings need to be put under some type of oversight beyond the 'yes' man scheme that is now in vogue.

By the way, the US economy, as a whole, needs to wake up to debt issues, to boot.

Remarks:

12/15/2012 -- Coase, on the subject.

10/05/2012 -- Yes, yes, chimera it is.

08/04/2012 -- I can hear it: with the DOW over 13K, what are you talking about using 'chimera'? Well, look at the dire warnings, for one. Are you looking at FB as a poster boy? We'll get technical and explain the problem. Do we have a solution, at this time? Yes, essentially.

02/24/2011 -- People matter.

01/27/2011 -- The chimera shines.

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

11/02/2010 -- Over a year later, the message is the same, except some changes have occurred. But Big Ben continues in his ways. Of real note is that the jobless rate is high; out-housing really set up for that. Also, we need to re-look at that learned from the 'vons' guys, Ludwig and Friedrich. See Near Zero.

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

Modified: 12/15/2012

Saturday, August 21, 2010

New royalty

Moral: Wherein we muse about topics that are old yet always seem to have a new place at the table due to open issues, such as, only the favored (not any more royal than any of the rest) getting a fair (supposedly) deal. Image: King John signs.

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As Jim at the New Yorker says, the very, very rich (0.01%) are pulling away, in terms of accumulative multiples, from the very rich. What we need to look at is the reality of near-zero (excessive takings, of any type, are lop-sided and are really not much different in character than exorbitant taxings (used to support the leisurely life of the royal set, in many cases) - not arguing against a larger percentage tax for super earners, by the way).

This blog is about the dismal field that is so little understood in practice (yes, theory abounds, that there is a lesson) as to be comical (think Keystone cops) except that the consequences suffered by some is dire, indeed. Those in control are looking at each other wondering how to get things moving; there is real pain at the main parts; and, has anyone seen an end to the mess?


By the way, what is a 'royal' in the discussion here? Anyone with an out-sized sense of entitlement; the 'new kings' are more in the set than the lowly worker trying to make a living (usually subsistence). Again, reminder: those dealing with money, and its control, ought to have taken some equivalent of the vow of poverty (as evidenced by simple living).

Those trying to create a proper economic realm could look at what a Magna Carta for the system's role players might look like. Workers would get more respect and support, perhaps lessening the motives behind unionism.

That focus would help alleviate some of the mania attached to capitalism (yes, Adam's little system, so much mangled). Also, the artificial (as in, that basis which has been allowed to grow under the guise of interloped mathematics) would be constrained. Currently, these systems, and those who ride herd for their daily takings off the top, seem to run things, mostly in an amok manner.

Labor needs respect; those who touch matter are of far more importance than the modelers, and gamers.

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Each generation seems to try to relearn what was known before. But, were things known, or do we impose notions through historical, and other ex post facto, views?

The question ought to be pondered in the context, as an example, of how change has been the most prevalent component in computational spheres, with deleterious effect.

Ah, is there some type of slate that is wiped clean from time to time? Technology, and its progress, seems to have this type of effect.

Or, is it that we, as a kind, have never been successful, across the board, of inculcating the best into our progeny. Of course, there have been families that have excelled long periods of time. Can this be considered the norm?

Yet, the young folk, starting early, spend a significant part of their year, and each weekday, in a milieu, that does include some element of indoctrination.

What are they learning early of economic realities? How are they attaining knowledge that debt, and perpetual accumulation thereof (oh, yes, like the US currently), leads to the state not unlike that of the indentured servant, of old?

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'Nothing new under the sun' is the adage. That events of 800+ years ago are still of interest, and utility (capitalism has usurped this notion along with many), will be a continuing theme. The 400+ of those issues being brought to this side of the pond is the motivation.

Remarks:

07/25/2015 -- We're about six weeks after the June look back at 800 years ago (Magna Carta). Too, though, poster boys have popped out of the woodwork, including Zweig.

03/16/2015 -- Let them eat cake.

07/31/2013 -- Ben cannot unwind or taper downhe has too many Doves. We'll have to get back to the king thing (yes, the divine rights of the CEO, new royalty, in other words) and dampening of these types by a new outlook (Magna-Carta'√≠sh).

03/25/2013 -- The Atlantic had an article about King Abdullah II. Now, he is an example of a doer, from several angles. What I liked when I read it was that while being educated in Massachusetts, he bussed tables. What that means for those who don't know is clean up dirty dishes and such. When I, as a young man, was in the US Army, we had still had KP duty which included such types of things. Another task that ought to be tried once by everyone: cleaning the grease pit.

01/14/2013 -- Jamie, the banker, talked about some running around like children. Worrying about their career, when things fell out with the "whale" deal (remember that?). Well, Jamie, it's the childish stuff that pushes people to be like yourself, attention seeking, et al. How many really wise people rise to that level? Not, as it takes incompetence to even make the first step. Now, these folks are the new princes, princesses, and kings and queens. Yes, indeed. Their may be some necessity for the ilk; playing games is one of them. The more I read on the type (as epitomized in the royals of Europe -- elsewhere, to boot, but, let's just keep to one continent), I see fratricide, maniacal maneuvering, and more. Gosh, are we doomed from the get go, a cynic (which I'm not) might say.

01/13/2012 -- We'll go more into why the need for the Magna Charta, this year.

10/20/2011 -- The spawn'er of the new royals.

10/07/2011 -- Magna Carta, the celebration thereof.

09/21/2011 -- On Wealth and the CEO MVP.

05/25/2011 -- Lemons problem, dark pools, ... Oh, so much to look at!

05/09/2011 -- This needs to be looked at in terms of doers.

04/04/2011 -- Need to look at some background.
01/03/2011 -- Ah yes, now there are demands. The question remains: what growth other than the pockets of these types?

12/05/2010 -- Raj Patel has the proper grasp on the 'financial madness' that is threatening us.

11/01/2010 -- von Mises' thinking applies here.

09/21/2010 -- Facebook, as metaphor.

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

08/31/2010 -- The chimera needs to be dismantled and rebuilt. Those running the money systems need to take a vow of poverty and simple living (period).

Modified: 07/25/2015