Saturday, April 27, 2013

Social business

Moral: Wherein we continue the pause (last week, WSJ) and consider a USA Today interview.


Ben has been for the big guys, we all know. Too big to fail is how some of these guys are characterized. This, as if we need to bail them out time and again no matter their infatuation with moral hazards.

Too, is Ben's time short? He's not gracing the Tetons with his presence this year? Will they recover from the slight?


It was refreshing to read this interview with Muhammad Yunus. He got a Nobel Peace Prize for his work in showing another way to do business. The fact that he was dealing with supremely poor people and that he pioneered "micro-loans" is of interest. 

yunusYunus suggests that business can have some social focus versus that of pure profit motive. Where the latter came from (greed, profit, ...) and why it takes so much of our attention, we'll have to look at. But, the sacrificing of the common good to the benefit of the few (all sorts of ways to discuss this) cannot a sustainable economy make.

Yunus has brought his concepts to locations here, too, in the land of the free and the brave. Why was he needed for this type of thing to happen?

It's almost as if we have to import our conscience, given that the country's business leaders have descended to having no interest except for the pursuit of money. And, the finance industry's drive in this manner, raking in their supposed profits, is well-known.

We can very well drive the whole thing with a flavor of community service and utility.


05/09/2013 -- Ben needs to take off the training wheels and let the markets go where they may (falling mode, most likely) and let the seniors have a little stability (Slapped silly, again, yesterday).

05/06/2013 -- Yunus as saint, comparatively?

Modified: 05/09/2013

Sunday, April 21, 2013

Saturday WSJ

Moral: Wherein we stop to smell the roses, as does the WSJ each week.

We have to love the philosophical tone of the Saturday Wall Street Journal. That is, after the five days of paying attention to the races and watching the numbers, we can step back and ask questions. Of course, some of the questions are only to be pondered; others of the questions just might lead to insights and actions.

Now, given the focus of the WSJ's readership, that action may or may not be driven by higher ideals. Yet, it's nice to think that the whole thing could be looked at systematically and with an aura of justice, even if to a minute extent. And, then, we would have some type of improvement in an environment of non-contention.


This week, per usual, there are several re-looks, both of the past week and further, that make a lot of sense. Seeing these, one has to wonder why all of the clamor. As in, bring in that Saturday (or Sunday) hat to work and be a nice world citizen every work day.

Here are a couple of examples.
  • Spreadsheet slips - Bialik, a regular, notes the discussions about a spreadsheet error. From the verbiage, it looks to be a simple thing. Could the thing have been caught? Well, someone would have had to take time and energy to do it. From my experience, we are getting away from that (to our detriment). Checking seems to against the modern way (after all, Lean - we'll go on about that ad infinitum - says to do it right the first time). The whole notion of the "7oops7" blog deals with us getting ahead of ourselves (one of the comments stressed that some of the data was estimated -- ah, I'll show you higher-order systems feeding data from one sub-system to another as if these were obtained from sensor rather than being derived from some type of model estimate -- and similar examples). In fact, a recent post dealt with two banes: optimization and lazy evaluation. We can step up from a simple spreadsheet problem to one encased (encapsulated) in a modern development paradigm. These are hairy, folks, and can lead to contemplation of singularity (ala Kurzweil - no problem there due to undecidability). Then, we can get beyond the software and modeling and look at the basis for discussion. Economics has been known as dismal for a long while. Lots of mathematical apparatus has been overlaid on flaky foundations. Yet, we run off, during the five days of business, willy-nilly. We talk about these numbers as if they really mean something. They could, folks. But, it would require lots of effort (next bullet).  
  • Dark side - Schmidt of Google visits North Korea. He's from the open side, to an extent. There are some who would push it further out. Schmidt notes the mechanical (rote) use of the system during a demonstration by the troops. What we have in the west are cadres of peers all resident in a morph'd space to which they have to focus their zombie'd eyes. North Korea believes in top down. The guy is charge's worldview rests upon himself (and, perhaps, his ancestors). We see that in the west in babyhood. Most rise above that (except for ego-centric CEO-types - too many to name). Schmidt notes that the natural urge is to get access to internet-based material, in one's own way (perhaps, for the peer-pressured younger cohort - but, not in general), and that the consequence is expression of thought (ah so, all those intellectual tweets). His thoughts about the cost to control the "natural" flow is right on. Very costly. But, Schmidt needs to realize that what he sees applies here to finance, too. As in: since the financial industry seems to run on greed, to put in the proper controls - as in, lift the view to the sophomoric level, at least -- we need to have daily quiescence and review. The cost for this would be much more than the North Korea guy would have to face. Now, to what end would be the oversight system? The type of transparency that we would need in order to have a stable financial system whose risks are handled properly. All of this is to be discussed further. Yes, banks run by monks who are not driven by profit for themselves would be nice.  
As a final note, notice that we expect our military to be self-less. You don't agree? Go join up and see it up close and personal. Still don't agree? Were you of the O-class (then, try enlisted)? Now, those who make the sacrifice daily, hourly (by the minute), are expected to support a system where fat cats, egoists, and opportunists scalp the system for their own gain. Why do you think that there is the disparity that people complain about? This unbalanced situation is age old, but it has increased the past few decades (partly due to the computer issues that we'll continue to address). Ah, I'll continue to describe this situation. 

Give me a few of those smart military types, and we'll put in the utilitarian banking system that the U.S. needs in order to lead the free world to the future. What would be lost? Silliness where culpability is never assigned, losses are socialized, and much more.


Briefly: the cost to maintain a supervisory system for finance would be as much as the Great Leader would need to keep North Korean's in control. Obviously, to pay for such, pockets, such as Warren's, would be a lot smaller. 


04/21/2013 --

Modified: 04/21/2013

Wednesday, April 10, 2013

Chimera, chimera, on the wall ...

Moral: Wherein we consider that Ben (Largess, I, Largess II) has succeeded in inflating the markets as we see with the DOW floating above 14.7K today.

... chimera, chimera, on the wall, who is the fairest chimera of all? ...
                             (if you don't know, paraphrasing here - anyone can find the original) ...


But, to the meat of the issue. People, the DOW, and others, are soaring. To what end? Why? ... Silly games, for one (here is a link to an earlier post - note the 2009 time frame). Ben has hocked the future. He has also taken $100Ks from many savers (altogether, oodles and oodles of hard-earned money so that the fat cats can play their silly games) and says that he'll continue the thievery (expecting us to laud his self). Why does he do this? We'll get back to that.

Too, I keep hearing "gains" used. These are ponzi-like (more madoff-like - again, note 2008) increases, folks. That statement is to be explained, but the upward movement is from less risky to more risky buckets for folks who cannot afford such. Forget exuberance and think mania.

The following to be looked at thoroughly: what is the percentage who actually obtain the "gain" in the long run? The fact? It's less than you would think. Silly games, indeed.

Ben has essentially taken away the proper basis which would be steady gains (yes, these would map to actual progress along prospective fronts) that would pay over time. The equity casino? Can drop off a cliff at any time for several reasons (for one, those who run the game can take their big cut, ..., etc.).

That above query deals with near-zero which must be looked at further. The alchemists (yes, look for the book) favor those of their kind. The myriads of people take in on the chin. Yet, finance could run for the benefit of the most (stated like this to offset arguments about largess of other types - you see, it's okay for Ben to fund his fat cat friend -- what with his big office, et al -- yet, any consideration of a sustainable approach is suspect from the get go).


Soar, DOW, soar! Do not bubbles, and kites, fly? ...


07/31/2013 -- Ben cannot unwind or taper downhe has too many Doves.

06/22/2013 -- So, how many traded their paper gain (chimera) to solid debt with the downturn? Okay, forget the size of the loser set, how much went from illusory gain (backed by a promise to pay later) to real debt that has to be paid with blood and guts? Wait! Some of those doing the margin calls, and ilk, have some way to weasel (not disparaging the grand animal) out, not doubt.

05/09/2013 -- Ben needs to take off the training wheels and let the markets go where they may (falling mode, most likely) and let the seniors have a little stability (Slapped silly, again, yesterday).

05/06/2013 -- Image disappeared (think balloons, tops, ..., things that go up, spin, need help to not fall --- yes, Ben's efforts at creating perpetual motion)?

05/03/2013 -- As a sacked saver, one has to look at the chimera's giant sucking action and wonder how did this come about. Yes, it was (in terms of the DOW) above 14.7K a little bit ago. The S&P is climbing to new heights. It's too bad that all those in that game cannot get their money. No, only the early sellers will benefit (for the others it's hot air and paper that will fly away from their grasp). Ben, you need a framework for future payouts that is more stable (ever heard of savers?). You know, at some point, you'll be like us and will need your money. Would it be poetically just if you lost just when you needed your money? The savers would have been happy had you put a floor of 1% or so (that is, not break below the last integer). Please leave instructions thereby so that your successor will know. Okay?

04/21/2013 -- The view from Saturday.

04/17/2013 -- At the Seeking Alpha article, two of my comments were deleted. That's a first, so I'm unsure of the protocol. In one, I quoted a WSJ essay by EO Wilson in which he argued that great people do not work by mathematics, alone. The focus on STEM might even keep some resourceful, and creative, people out of the  mix. Now, to put an opinion here, the recent brain initiative ought to bring out how we wrap ourselves into viewpoints that are fostered by technology, thereby entrapping ourselves.

04/11/2013 -- See Alpha Seeking article. ... Also, rate of return fantasy.

04/10/2013 -- Housing bubble? Lots of evidence everywhere, Ben. Do you ever look? When rates do go up, all of those who are on the lending side of the equation will have to take a loss (immediately). What the hell kind of economy is that? Remember, folks, that loss is so that someone can have a low-interest, long-term mortgage. From whence comes all of this? Well, savers have been paying through the nose, for one thing. The turnaround will not bring back the losses given to the savers by Ben. Even in the equity markets, not ALL can recoup. It's a paper game (with chimerical "gains"), folks. Except, for those whose fingers are always pulling ill-begotten gains (and these people are considered by some as the smartest?) into their pockets.

04/10/2013 -- I was on the mark four and five years ago but with a little voice. At that time, I asked what would be the long-term effects of Ben's shotgun approach. You see, at some point, Ben may have wanted to have some semblance of being a scientist. When push came to shove, he succumbed to the lures of power (to wit, the necessity of corruption). The guy is probably to be more pitied than reviled. Obama could have changed the game four years ago. Oh well, hope went out the window at that time. Yes, indeed. Ben now has given us a wealth of data to look at ex post facto. Will it make us smarter the next time around? Do pigs fly? Wait, fat cats seem to fly, like those balloons used in the Macy parade.

04/10/2013 -- One professor says that a DOW of 18,000 or more may happen. Ben, no doubt, would gloat. Would (could) he consider the future side-effects? Those who are on the winning side would be gleeful, to boot. Yet, for each winner, there are many losers. That is the tale to tell. An economy cannot sustain itself without a solid basis that provides secured payments in the future. Gaming-centric approaches are bound for failure for all but the few. It's probably nice to be among the few who experience the bounty. Some views might say not, though. The other side (in want) has been the most common experience, by far.

Modified: 07/31/2013