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Yes, the candies are motivation, in part. Yet, we're talking a Miller and a Modigliani.
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Just as last time, the reference time frame was the 1880s, today's is of the past, too. Yesterday, I had in my hand an issue of the Economist from the early 1990s. To put things in perspective, the cover story was titled 'Here come the Russians' or something like that. The photo? A Brit-jaded viewpoint mockingly using a refugee family who were fleeing the Germans. Of course, it was of a mama and kids. Papa was off doing some slave labor for Stalin, most likely.
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At that time, Miller was being celebrated as having won the prize of all prizes. We have already opined on how this theorem has been mis-used. To quote the Economist, the theorem has stood up even with many of its axioms being relaxed.
- FEDaerated -- Near zero, mainly.
- Truth Engineering -- People (the basis of the economy), Leveraging (what M & M brings forth from the idiots), and Leveraging (ah, the attraction of junk)
- 7oops7 -- Savers sacked (see below), What the hell ... (incredulity persists at the power obtained by those who are seriously lacking in sense), Testing finance (Timmy's game)
So, we'll not berate that theme more, at this point.
Except for this. What we can grunge about in terms of Big Ben's idiocies is that he sacked the savers in an attempt to get people to put monies into the stock casino which then aerates into bubbles, almost by necessity. Look, Ben, 'near zero' does not in any way mean punishment, by design, for those who are the mainstay of the economy. To think that we've been 3 years under this regime (and, Obama could have made a change last year -- well, we ought to have nationalized the financial idiots, to boot, when there was a chance).
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Guess what was also the reality at that time? The DOW hovering around 1,800. Yes.
It got to 14K before the recent crash. It has been flirting with 12K of late. Is there anything behind this growth of the ca-pital-sino that is sustainable in the longer run? And, I should say, beyond it's current base? What base?
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Let's talk some level of growth that might be wise. Of course, all this is debatable. At a lower growth (around 3% or so), we would be talking a DOW about 5,000. Whence the increase that is well beyond twice that amount?
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Mind you, what has also happened is an increase in the disparity between those who have taken largely and those who actually do the work.
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'Nuf for now, except for this. Bloomberg quotes one of the richest men in China (you know who you are) as saying that he lives on $20 a day. Give me a break, guy. You might have a handle, in your mind (rationalization, okay?), about the impoverished in your country. Yet, let me take you around the U.S. (the dream land) and point out to you the perils of unconstrained capitalism. You guys may be good at the game; yet, the game is not the essence (even Adam knew that). One would hope that China would lead toward better lives for the masses; is that the real intent?
Remarks:
Gross seems to know the bankers well. Note that Big Ben (from our pockets) gave them (while sacking the savers) oodles of free money.
03/23/2011 -- The hopes spring, again, forgetting, of course, near-zero, all because of M&M. See the real story. But, Big Ben ought to know better.
03/22/2011 -- It's spring, and the garble uses gambling metaphors.
03/17/2011 -- New robber barons?
03/15/2011 -- As well, need to bring in Schervish's viewpoint.
Modified: 02/12/2013
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