Wednesday, May 29, 2013

To computational hell and back

Moral: Wherein we pause our look at foundations and consider a collateral subject: the mess that we are in.

What mess? The DOW hit a record recently. Isn't that special?

Well, as Ben knows, such milestones don't really put any bread or butter on the table of a whole lot of folks. Rather, the game enriches the few (comparatively --- to those who would quibble, ever look at the 60-percent level -- more or less -- and below?).


And, to hell? Yes, let's hope that we can get back.


Business offloaded customer support, with a process that started a long while ago. Any idiot (such as myself)  knows when there is more to communication than a common language. I got to the point where I don't talk to the person unless I perceive some understanding of the American way (we'll go into this later, at detail).

Now, some of the better businesses have been bringing things back. For American consumers, that would be a good thing. As, that means jobs.

Along with the off-shoring, business have been spawning off computational processes (and apps) without any feedback from the users, except ex post facto. I'm talking specifications here, folks, But, the elite might say that such thinking is out-moded. As in, let the money drive things (we'll get into this, too -- Note: 05/30/2013 - people say that we're being driven by machines (which are out of control); one way that this happens is that the big software people (you know who you are) push out changes to which we have to adapt - the notion is that it's a market-type choice - nothing could be further from the truth).

Doing systems correctly would create American jobs. We can discuss this. And, doing them as is really needed will be costly. The trouble is that the market (which is what? little players (meaning, character - they have bucks galore) who must have their training wheels in place - put there by Ben, of course) and its apparent success seems to work against the reality. Until, there is a crash. But, then, the same old crap starts again (Note: 05/30/2013 -- not only are people supposed to bend to the whims of systems, and their purveyors, we're to pick up the crap when they fail -- and building giant sucking machines upon quaky foundations leads us (always) to just that: regular clean-up of the diapers).

I'm talking from a framework that is outside the crappy part, folks. The financial industry does not want to look at matters from that perspective - it's too much fun rolling in the dough as is happening now with Ben's input (and largess).


That lead-in touched on one type of hell. Others are there and abound. One example is the credit handling via the Big-3 (Equifax, et al). Just recently, I ran across a case where someone is seen as dead by these Big-3 (idiots?). The reason is that one creditor reported the guy as such. What had happened is that the guy's wife died. In the process of notifying creditors of such, one of them took the person who was deceased to be the guy, not his wife. From that little thing ensued turmoil that has lasted months.

I talked to one of the Big-3 today. They can see that they're getting reports monthly from this guy's creditors about his activity. The account at the one who has him dead had been inactive for a long while; so, there was no activity to report there anyway.

In terms of process for the user, this Big-3 member ought to be able to let the guy dispute the error on-line. But, they won't do that without him proving who he is (soc sec card, et al). You know why this is stupid? The guy is a Viet Vet, was born here, lived here, paid taxes here, raised his kids here, and so forth. Too, he's  getting a Soc Sec check every month. The bank that gets that deposit knows this. Do they help the guy? No, they say that the Big-3 drive things.

Okay, Big-3, and bosses thereof. If you are going to be so central, should you not do it in a user-friendly manner that is fair, secure, and robust? (Now, all of you wags that are rolling on the floor, behave yourselves - they, the Big-3, cannot be total idiots - after all, they did get themselves a shared monopoly) Where the heck is the Consumer Financial Protection Agency (Note: 05/30/2013 - they never responded to me on FB -- usual government modus operandi?)?


You see, the whole thing harks back to the time when people believed what the computer said. That went on for awhile. Computers don't error, was the thought. Then, there was the realization of garbage in/garbage out. That is, junk begets junk. Don't laugh, folks. That forward step took awhile.

Now, it seems, that we're back to the belief stage. As in, the computer is the reality. It's a map/territory problem. Why this fall back? Complication, essentially. This will be a central theme to expand upon here. As things mix up, it causes so many to put their heads into the sand (do what the "man" says).

Aside: If it is not obvious, note that I've been in this industry for awhile in roles that were multiply varied, multi-disciplined, and, for the most part, of highly technical focus - with some back slapping as is the want of the likes of Jamie, and his ilk. We're in deep doo-doo, now. The kids (Zuck and the like - keep putting out things that flash - what is their basis? -- oh, I don't need to know, you say?) are perturbing things in ways that will have future implications. Singularity potentials are piling up (see Remarks 05/21/2013).

Mind you. There has been real progress (we'll go into that, too). After all, a lot of good comes from the networking methods, the cloud, and such.


For many, all of the flash and toys are entrancing (hence, zombies and more). Yet, you would expect, for these, some maturing event, at some point, unless they're completely washed out (possible as we have seen with drugs that alter the body's workings too far). Others have already seen, and experienced, the hell.

But, we could say that it's more like purgatory (look it up) at this point. The hell will result if matters continue to de-evolve as they are.

What do I mean? You know why the web was labeled wild west early on? What was the wild west? You know, too, that it's the largest-held romantic view of the US's history. Who doesn't seem to want to be a cowboy? Not all of us; we ask for acknowledgement the rights of the Natives who were here before. The thing was that misfits, a lot of times, from the east came out here and shot up the place. Law and order was not the norm. It took awhile for this to be established.

Forgetting the conflict with the Natives, when did law and order get set here in the West? Pinpointing around 1900 would be pushing it. We could probably point to the period after WWI and before WWII. Now, at what point is the "wild west" of the web? I don't see us further than right after the Civil War. In fact, have we not even had the Civil War (if you must, think of the free vs not conflict as an analog)?

From whence would come some type of structure and security?


With the Big-3, we have them pulling together stuff on us. For those of us who can, we can monitor their activity. Many cannot. Too, though, they do idiotic things like this deceased error. Actually, they ought to offer the guy a membership (30 days would do - or more until errors were properly handled) with which he could challenge their errors.


07/26/2015 -- This has had some recent reads. Lots going on, including poster boys coming out of the woodwork. We intend to get back to this topic: consumer as central to things economic (metaphysically sound).

10/20/2013 -- As of a couple of weeks ago, Equifax seemed to have caused another problem. Idiots. This type of thing, folks, foretells dire consequences for the ordinary populace. That is, entrapped by stupidly developed and released systems will be a common state.

07/08/2013 -- The bank responded to the CFPB query and changed their database. In June. The Big-3? For this little error, they say 90 days. Let's look at what needs to be done with computationally driven systems and processes.

06/04/2013 -- Last week, when the Big-3 problem was first looked at, I sent a note to the bank, Elizabeth Warren, and the CFPB (which is a new organization). I heard from the bank's PR people fairly quickly which is to be expected. Just today, a week later, heard from the CFPB. They sent information about their complaint process. Elizabeth? Nary a peep, yet.

06/03/2013 -- There is a log of activity the past week, on FB.  It's funny about Equifax. I've been trying to raise them via FB, but they haven't made a peep. You see, they could override the death entry and allow the guy to get on-line with their system. We tried this the other day. On result? The Equifax computer system sent a notice about a credit card being renewed after we tried to sign in the guy as a new member. That is, the database sees the activity; the humans only look at the fact of the death. Why? Well, they do have their jobs on the line if they make an error. Too, the process might be too rigid; that is, where some common sense (experience?) might understand an error and suppress it, then it ought to be allowed. Of course, with suitable documentation to allow re-trace (and further correction, even a back-out). Methinks that those who do logic, and mathematics, many times have an unrealistic belief in their prowess (if only they knew --- by the way, singularities, again, are the key item in this and related cases). And, their poor users bear the cost and the pain. ... We'll get back to this (if you're so smart, why aren't you rich?).

06/03/2013 -- On Friday, it was determined that Capital One/ HSBC has sat on paperwork for four months. That is, the error was done by HSBC in Oct, 2012 (erroneous reporting to the Big-3); the error was noticed in Jan, 2013; the error was brought to the attention of Capital One (by mail) in Jan, 2013. It was the end of May before the error was noticed by HSBC, via to a phone call.

05/31/2013 -- The focus might have to be on the Big-3. In cases like this, they ought to allow an override that is quick, as is necessary for the computational age. For some reason, they like to lumber along. Did some bureaucrat lead them to believe this? Now, quick changes can create a hellish situation. Yet, many times, an override by a human will resolve a hellish situation. Both a paradox and a dilemma. The irritating thing is that a little bit of garbage in a database in having real world effect. An override (are you listening Equitfac, etc.) would allow change of that piece of crap, with an explanation, and rationale. Okay? In my case, I'm a member of Equifax (have been since 2005). They know who the heck I am. If I say that someone is next to me and is undead, then my word ought to be taken (verified later, okay?) so as to free up the bottleneck. Sheesh.

05/31/2013 -- When one considers the cost of the necessary framework, that would allow security and sustainability, people have kicked the thing around (WSJ talked about how to control the idiot of North Korea; what about reining in the financial manipulators?). However, the minds are so entrenched in this illusion about which Marx laughed (fictitious capital, for one), it's hard to express a rational stance on the matter. You see, people are experimented with big time. It's really analogous to that concept so familiar from warring, namely cannon fodder. We have our great leaders mouthing platitudes about how they want to help the little guy; most of their efforts seem to move more toward entrapment; take droning (in other than a defensive mode) if you need something to grasp here).

View from 2008 
05/30/2013 -- A case in point about off shoring, saw yesterday that some mortgage foreclosure work was being sent to India (Tata was one contractor). It was said that this work was too tedious for Americans. Now, these foreign brains weren't going to make judgments (Tata's words, paraphrased). No. The thing was to get all the paperwork together, verified, and provided to a banker in the US who would do the dirty deed. That whole rationale was bothersome. For one, those there in India only need to look outside their office (even if it's isolated in a privileged environment) to see their 3rd world fellow citizens. Of course, doing American work lifted out a few. But, the majority? Besides, these types of roles could very well be performed by people here. ... Not anti-outhousing, rather putting this here as we'll have to address the whole phenomenon while looking at foundation'al issues.

05/29/2013 -- Singularity? Yes, this will be an important subject. You know what? I don't think that Jamie (and his ilk -- who, by the way, was vindicated according to the WSJ) would understand the concept. The fat whale (whatever) was a small incident compared to that which we need to put our attention.

Modified: 07/26/2015

Wednesday, May 22, 2013

Cosmology of business

Moral: Wherein we start anew; after all, at some (near future) point, we'll have post-Ben's largesse.


Foreword: A cosmology? Yes, think of those dealing our questions about Nature and our part of it. The normal progression, as humans, is toward thinking about why rather than the how. Fortunately, only a few move toward the spaces of abstract'd nonsense, yet we do get little nuggets from that interest from time to time that is exploited, for better or for worse (we'll go into this, too). So, from this rarefied view, one sees a lots of prancing around like a guru, or more humble presentations that express the necessary awe, or even some views that if they were expressed on Main street would get one institutionalized (oh wait, many of these characters are part of our grandest of institutions -- but, you get the drift).

Which then brings in business which is an extreme form of opportunism. As thinking people know, there is business as it is and business at it could be (ought to be, several connotations of all of this are problematic). Our banes from this whole set of endeavors? Well, human nature is one, but we can learn to lean toward sustainability, in the longer run. There are many more (we'll get into this, too). Must mention one, though: business as is provides a firmament for the "Jamie" types of the world to shine (ah, as if we're to be bedazzled). Having written, have to almost juxtapose here and mention Golden Sacks (lots of mentions of them). When I feel comfortable with them as a wonder poster boy, they throw out a new wrinkle: support for mini-loans (changing spots?).

Not that there haven't been thoughts expressed about what we'll cover, that is, theories abound (economic, financial, etc.). Many of these are considered to be classical. But, with the advent of the 21st century, we can now do a re-look. And, there have been re-looks; none have the flavor to be expected to be expounded here.

The word: There has been some effort at preliminaries the past few years. For instance, the series dealing with capitalism is apropos. Too, Ben has been an interesting subject, though we couch things more in terms of post-Ben, than not. Things will get technical, from time to time (more than to date). Ca-pital-sino, as a concept, will be updated.

Aside (we'll have lots of these): As we all know, OKC had a natural event which was tragic. These happen; people, and their economy, pick themselves up, clean up, and go on with their lives (perhaps, learning something). It's been that way for the duration of mankind's existence. And, we all help. We ought to expect it. Like the National Guard being called for security, etc. Too, we have government agencies. Which, by the way, can be cut. Yet, our responses to these tragedies ought to have high priority. There was a case of a business being hit by a tornado, suffering damage, but recovering in the matter of a weekend with no loss in their work flow (not excessive damage, and no machinery was put out of commission - a hit, nevertheless). One paper showed some Congressional members talking about the largess (overly) give storm victims. Yet, we have now five (count 'em) years of largess to business (of certain types) with no end in sight. Yes, largess to the business buddies is find; forget the little people (who loom larger than many think, we shall show). You see, what is intended with the cosmological view is very much timely.

Afterthoughts: Speaking of time, what is the schedule of this grand undertaking? Well, it has already started and will continue. The comments, earlier, about PTIME apply (half in jest). We will be challenging the views of those who have misused our prowess; that is, all sorts of incidents lurk; some of these can be talked about in the sense of the existence of singularities. Think of it this way. It's okay for the likes of Roger Penrose, (no criticism of the guy; his take on cyclic cosmology resonates) and others, to talk about their statistical studies. Why? They wouldn't have anything without that type of manipulations. Besides, it allows them to be pseudo-scientific in regards to observation and measurement. Also, what they work with are various measure of things that go back to natural phenomena. But, for business types to think that they can rest useful (beyond exploitation, okay?) arguments on similar techniques is way off base. And, to then run things by computation is way out of line. We'll show this (patience - we're not after helping people grow their pocket size).


Brief start; it'll continue. It's interesting that the D.O.W. and its companions lost footing after Ben spoke. If only it was due to those in the game considering things wisely. Rather, the slippery slope titled a little. No doubt, we'll see Ben rush to their rescue (that is, pick things up, check the training wheels, etc.) within the next few days.


08/28/2013 -- Cosmology has been mentioned several times in post this year: Transitions, Zeno in the modern context, Ben and the taper, and others. We will get  back to this topic and build constructively from principles.

06/05/2013 -- Singularities (understanding how and why these arise, how to manage) will be of extreme importance. Hint: related to computability but concerned more with what might be termed "vertigo" (subtle, yet not).

05/30/2013 -- We have several themes to address, not the least of which is the growing computational hell that may very well be exacerbated by outhousing.

Modified: 08/28/2013

Wednesday, May 15, 2013

Chimera: sellers and buyers

Moral: Wherein we re-visit the sucker/sacker dual as we clarify a few points.

Chimera? Yes, not entirely. Consider that the concept was used somewhat jovially (not entirely in jest). The first metaphor was a train leaving the station, way back. You see, both "chimera" and "train," in this case, refer to something that has substance at its basis. The question is always how much of the basis is real (we'll continue to pursue this theme). Something has happened the past few years, goosed by Ben. But, if you look closely, it (the train) is still in the station making a bunch of noise and smoking up a storm.

Why say that? A recent article in the WSJ says that 50% (at least) of the US population has not benefited from the current mania (Ben, would you recognize risk if it was under your nose?). What we have is the top tiers raking off value (what else is new? but, that does not a sustainable economy make). Those bubbly affairs that benefit Wall Street (we'll call this Wall and ilk) do not trickle down, necessarily.


Train day,
Saturday closest to May 10th
Aside: Train day was a few days ago. Real trains do real work. If truth were to be told, a reputable train would not want to be used as a symbol for what the Wall and ilk represent (leeching off the industrial activities of others). They ought to find some other symbol, such as a balloon (my image disappeared from this post??). Or, how about a zeppelin (general sense, hence lower case) given the last downturn from which we have not recovered?


So, to the matters. The ideal (in the senses preferred by financial types) is to match up sellers and buyers. We all know that sellers want as much as they can get, even to the point of being sackers (we'll go on about this, to boot). But, for the seller to get the desired amount, there has to be a buyer, even to the point of being a sucker. Evidently, with the DOW going above 15K, with no end in sight, there are many suckers. Let's look at the dynamics, from a very foundation'al sense (ignoring, for now, guns and butter, real economic growth, etc.) before we get to the real essence of the matter (again, no schedule for this; PTIME issue).

Match up? Yes, that is what markets are to do. Nowadays, though, lots of potential buying is nothing more than a computer testing the waters with fictitious (Karl Marx is laughing up a storm) buy offers. Can you believe that this is considered to be normal for a mature economic society?


Aside: Thanks to the actions of Ben during the turmoil, we'll have plenty to study. We can call it after-Ben (my face still smarts from being slapped silly last week, Ben), perhaps. Hopefully, after all of the analysis, real lesson could be learned. But, what are the chances of that?


In short, we have three states of being (Which can be expanded further, but why do that now? Our problem is that the sophisticated have run amok -- we need to teach them respect for mathematics) related to the market (we'll have to detail this phenomenon further; and intend to).
  • Seller -- The goal from this end, for the most part, is to get more than paid out (there are all sorts of nuances, but, altruism is not a characteristic of the Wall and ilk). Right now, sellers are raking it in. That is what occurs on the upside. It also gets people to leverage stupidly. That is, they go into hock to get money to buy stock in order to get gains (which are questionable from the get go). Do sellers, as a set, run out? Sure, but that's another story as things to sell can magically appear. In fact, some of the fictional buying, IMHO, is there to spawn off activity (in some cases, seeding - from whose pocket?, we ought to ask). 
  • Buyer -- Of course, the idea would be to get the best deal (even for free -- ah, we'll have to go on about that -- out of air extractions, of which there are many examples in finance). But, the buyer has to have the motivation to do the transaction. A lot of energy nowadays goes into separating people from their assets (in many cases, one might get a better asset; yet, cyclical realities show that these things are more detrimental than not -- no pessimism here, rather truthfulness). And, losses are not easily recouped (without finagling - nod here to the accounting profession's part - their necessity to be ethical and more). But, buyers on the up side don't lose (immediately). There are small takes, as we see with those dealing with arbitrage (most buyers nearing the peak are not of this type). As we see next, buyers eventually become hard to find (at the demand price, lemon lesson applies).  
  • Up and down -- The up side comes from there being buyers to match up with the sellers sufficient to keep things afloat. And we know, many times the buyers turn out to be suckers (even when being professional money managers -- sheesh). How far can up go? Well, we'll have to give Ben his credit (or not -- future analysis will tell if he's loved or not -- remember King Alan?). At some point, buyers start to thin out (it's not an inexhaustible set, folks, though some leeches seem to think so -- of course, there may be a lot more suckers waiting in the wing -- DOW 25K?). When there are no buyers (and, a recent WSJ article made that point - who will buy if things start to drop and we're past the point that the late comers want to get into the game?), prices fall (and fall). About the seeding (see prior bullet): even that must hit some limit at some point. As we saw with the past downturn, at the bottom (which is not known a priori), those who are in the position to exploit the game buy and do so heavily. Between the up and the down, we have those sideways movements where either side is not clear. 

Aside: How much ought one have in reserve in order to be an adult and to meet obligations (future types)? In the WSJ, the estimates ranged from 3 years to 6 to 8 years. That is quite a range. Those who leverage think less than 6 months. Note, please, that reserve means some place where value is known. You see, if you have to sell in a down market, you lose. Now, Ben et al, a sustainable economy would provide a means for stable-value decisions. Okay? Too, one cannot time the market (as a game). The amount needed may not even be possible to attain when one has to sell low.


Somehow, things have gone awry in the market mentality (not recognized by those doing the taking - as in the big pocket'd who have benefit -- gains? hah! funny connotation). The speed of this has been accelerated with the advent of automated means. Just because people can hack what they think of as algorithms is no reason to turn these loose upon the economy and its peoples. Actually, we ought to have many types of sandboxes.

But, it's not a simple thing, folks. Enough for now. We'll let the chimera run its course and not rail about the idiocy that is implicit in the whole affair. After all, science would say to observe not interfere. Ben has interfered as he's the cowboy let loose without any constraints. Yet, that which prompts the philosophical remarks will not be repressed.


Any thoughts on the peak and how far the drop? Actually, what would cause the buyer (sucker) set to dry up? Too, can the seeding effect be studied (hint, malfeasance of a major sort here)?


Post note (added after initial publishing): We need to look further at buying and selling of stock. With the increase of computer-assisted means, the past few years, there are added uncertainties. In the old days, there was a role in the market activity, that of being a buyer of last resort. That is, the stock specialist ate the loss, for which loss there were planned reserves. Of course, the advent of options trading added wrinkles. Then, with the algorithmic trading mess of late, who will be the buyer of last resort? This question has been asked. Who will buy? Will we have a stalemate'd market (think huge tie-up) that is much worse than a liquidity freeze? Ben, the sooner we see this thing, the better (would not you think?). Forget the flash crash sort of thing. A type of solidification would be difficult to unravel.


01/15/2015 -- At last, a series that will establish the basis and extensions, as required. We are going to go back to some simple and come forward to the modern, complicated economy. Why? My long chain of ancestors (inherited via Prof. Lucio Arteaga) is one motivation.

10/30/2014 -- Where are we? For one, let's talk how most are losers, okay (due to idiotically applied multiples)? This can be ignored when their reality is pushed outside of common awareness. So, we have the top tier (0.001 or less) gaining under the present scheme (even with it being stopped, QE, that is, the latest of it). The other? Dire straits, indeed. Yet. the talking heads chase the DOW daily, as if it has meaning (ah, why this?).

10/16/2014 -- We need to get back to this. Today, we have seen six days of selling off. So, when will the Fed pipe up with its little cacophony of coo-coo, goo-goo? Well, it started today. Also, golden sacks talks nicely about the Fed. Panhandling?

09/17/2014 -- Yes, she did. The coo-coo, goo-goo goes on. The landscape is strewn with the lifeless bodies of the savers. Thanks, Janet.

12/05/2013 -- If only Ben would put a shot across the bow.

08/15/2013 -- Nice viewpoint. Farce, indeed (chimera). Buyers and sellers are Investors (sometimes).

08/07/2013 -- Over the weekend, Motley Fool had an article that asked how high could the DOW go to which we made comment (post that was precipitated by the article). So, here are a couple of things to discuss, especially since there seems to be some worry of the taper, of late. First. How do we determine the price at which loss is guaranteed? You see, losses like we've see with the two recent swoons (May/June/July, and the one of the past couple of days) are not shared by all sellers. That is, losses that are not paper only, since losing ill-begotten gains is not a real loss. The loss manifests when you sell. So, as a market tumbles down, those who can still make a profit can bail out to a certain point. That is, they can sell before they lose what the put in. Again, ignore ill-begotten gains, please. If we look closely, that price is not as low as we might think. In a sense, equity holdings will lose money. All the talk about the equity markets rising, over time, do not consider the accumulative losses during the period, nor do they look at the side-effects of inflation (and structural changes like we see now where most jobs are essentially glorified indentured slavery). I know, the trick is to use constant dollars; yet, the total picture is not painted. How do we do that? In short, this problem applies to bond markets, too. Second. For anyone to sell there has to be a buyer. But, to buy, there has to be a seller. Prices goes up as buyers try to get in the game. As we saw with FB recently, prices can jump quite a bit (leaping for the stars - usually without a tether). As markets, like  the DOW, go up and up, there has to be some implosion point (as in, the thing collapses due to the unnatural states that accumulate). Let's say that you run out of buyers. Well, that was handled, in the older times, by the specialist who was the buyer of last resort. Guess what? With these modern schemes, we have seen where there was not a buyer (as in, the game runners want it one way: their continual gain - loses go to the public). So, with no buyer of last resort (and, Ben is being just that for bonds), how long can the market just sit there and churn? Now, there are many ways that people might decide to sell. The fall in price, like the going up, will be faster if there are no buyers to catch the thing. How far can we fall? Guess what? Now, they stop the stupid market. Why not let the stupid thing go down to some low number, say what it was in 1990? No, the thing has to ratchet down. Supposedly, that would remove insanity and allow jaw-boning time (by all of the idiotic heads that yap every day) to bolster people's confidence to get back in to the game (which, we know, as ca-pital-sino, is a loser's game). Or some such. ... Now, we could bring in a third (and more) thing related to the churning caused by all of the algos (errant computation) and other crap (greedy worldviews). Stock would increase in value with real accumulation of wealth (whatever that is) over time. However, how can we see such with the dark pools (idiocy) and other murkiness (just the whole thing of perturbing trades that are meant to lure the foolish to their financial death)? Ben, address that, please.

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

07/30/2013 -- The future: economy and technology.

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.

06/20/2013 -- Can Ben stand quiet? Some charts show that Ben has turned over (morphed, whatever) every time there was a downturn. He would come up with something new to tell the chimera addicts. And, then we saw a rally; there are several charts (and articles) that show this. The net result is that we're at a point where those in the game had their tongues wagging as they awaited another bone. But, there wasn't one. Now, this downturn might just be like messing on the carpet to show displeasure. ... Look, who is selling? I would bet that it's those who bought in long ago, so they've got a gain (ill-begotten, remember?) there. The losers, if they need to sell now, will be the later buyers. ... We really would learn something to see how this settles without Ben's intervention. Would he have to wait for the next opportunity? Not really. But, can he keep from playing hero? ... Too, Ben is not there to inflate the markets. ... Of course, Ben does have to hear what people like the Speaker say about him. Poor guy. Ben pleases the idiots/addicts when he's loose (as he has been for years now). When he talks maturity (like play a fair game, don't expect rigging in your favor, don't look for handouts, ...), does anyone of the idiots listen? ... But, Ben, you've slapped the savers silly now for a long time. You can't hear their groans?

06/11/2013 -- CDOs and tranching, once again.

06/05/2013 -- Singularities (understanding how and why these arise, how to manage) will be of extreme importance. Hint: related to computability but concerned more with what might be termed "vertigo" (subtle, yet not).

06/05/2013 -- Today, a drop. Not that much, compared to, say, what happened in Oct of 1987. However, it does allow an opportunity to point of that those who bought in, of late, are immediate losers. I still intend to get back to this, but there is a curve that we could draw which shows a gain versus lose demarcation. One wrinkle is that the late buyers are getting in due to sellers who bought a long time ago. That is, there is a massive amount of profit (ill-begotten, okay?) taking along the line.

05/30/2013 -- We'll get back to this, but I want to sketch out a view that depicts equity's main problem (we'll follow up with numbers and charts). We have seen a resurgence of interest in equities (moving toward risk since Ben has cut off more reasonable avenues), even though we have seen, in quick succession, busts that cost people lots of their worth. That is, the equity market, as being run today, guarantees a set of winners and a set of losers. Those with the ability to play the game (topmost of the winners) always win. Those who have to sell in order to have access to their worth always lose. In between, we have graduated levels of winners and losers. Why is this split of people? Guaranteed loser? Yes, one thing that keeps people from jumping in is their gut knowledge of the chimera. Yet, there are those who want people in the game (like Ben has been pushing - for awhile now -- take off the training wheels, guy). We'll get into all this. Basically, the equity theory is warped; why? Derivatives, and computation, have drawn the dynamics into a whole different space from that expected by theory. Of course, there are those who want to rationalize the casino aspect. You see, they're of the set that gains. Also in that set are those who run the thing. ... My one goal is to lay out the rationale necessary to show that the market view is bogus. Has always been. Bogus? When there are the little millionaires at places like Microsoft, Google, and such? Yes, as you see, part of the problem is that a few gain excessively; the most do not. So what? One might ask this as it may seem to be morally driven. No. It's sustainability that I'm after. The chimera/capitalsino cannot be the basis going forward; that is, not in its present configuration. What ought it look like? Well, if you really want to know, go to where the fat cats are squealing the loudest. Actually, Jamie is one to watch in this regard (his little flurry of trying to thwart oversight - yet, he is right in a sense - but, he ought to know that the methods to control his ilk will be costly -- payable out of his pocket, to boot). But, we'll not go there and build the proper view constructively. When? Won't be tomorrow, okay?

05/23/2013 -- Poor Ben, those addicts just don't get it. Just having the headline, Ben Stumbles, indicates a whole lot that is wrong. By the way, not with Ben, but with the system and its leeches.

05/22/2013 -- Need to apologize to all babies (past, present, future) for the rant yesterday (Remarks 05/21/2013). After all, baby-hood is a natural state of affairs. And healthy babies wean toward independence. What was being characterized for the thing called "markets" (which is an euphemism for something that needs to be looked at closely - with new eyes, okay?) is more addiction-like; as in, those types are heavy users of what the FED is feeding out (Ben as pusher). He, and his ilk, look at inflation (erroneous measurement), in part. They have no way to see "froth" as of now (we'll work on that - it's obvious, when handled correctly). But, as said before, we will have to step back and isolate out the influences of technology for the past 50 years, first (also, address the nonsense of comparing the equity inflation against bonds (long term - where we're all dead, USA Today yesterday, $1 grow to 3K+ versus 130+ (bucks), respectively). Then, we'll look at what might be called the "cosmology" of business (no, not starting with the egos, like Jamie, okay?). Measurements and observations? Yes, up the wazoo. ... Penrose talks about statistical manipulations (without any shame - ah, from whence this? -- we'll get back to the quasi-empirical needs -Closer to Truth) that are made possible by computation. Actually, he's more into symbol permutations of the normal variety (as in, using his head, okay?) more than computing (which brings up some type of dis-jointness - that will be characterized further- gosh, business having some "meta" purpose?). Also, we, too, need to think of computability issues (see comment at the top of each blog page). ... Too much fun!

05/21/2013 -- If Ben, or one of his buddies, talks, in a goo-goo (poo-poo?) language, the babies (see apology, 05/22/2013) of the market gurgle and giggle (like today's rise). If they pull the babies away from the mammary gland, the babies cry. Now, who are these babies? Many say the rich getting richer. It's the set of takers (guaranteed, almost) suggested in the Remarks of 05/17/2013. ..., Now, I'm off to larger things, thinking about the impending effects that will result from potential singularities (yes, plural) inherent in what the babies are feeding off of (whatever it is, Ben has added nutrients galore). That is, in another view, we will have to deal with patched-up computational systems (and pseudo-algorithms) that have no "science" behind them; they also are much less stable than a house on sand. ... FEDaerated posts will continue; however, Ben may be gone. Even if he does not leave, his role will be more ceremonial, than not, in terms of how the unwinding will impact the larger populace (again, those from whom the takers (above) get their so-called gains). Whoever picks up the mess will have plenty of challenges. So, we'll be dealing with a post-Ben world henceforth. Did he far exceed Alan's  influence, albeit over a shorter time frame?

05/20/2013 -- About singularity (05/19/2013 Remarks), it's a serious argument that will be presented. In the meantime, see the post on Closer to Truth.

05/19/2013 -- In regard to the post note, where "solidification" is used one could think of this as resulting from a type of singularity that prevents unraveling (gosh, Ben does not know that he can unravel - each tick of the clock entangles things more). An analog would come from the several cases that we have seen of failures (product, in one case -- major catastrophe, in another) where experts could not determine a cause. In terms of the product, there was a redesign with an accompanying rigorous test phase. In terms of the bad event, things are still up in the air. In mathematics, the ancient endeavor (okay?), proofs are difficult and tedious yet they are strong when attained. What has finance (other than some realm in which those who have access and means can opportunistically leech off the systems)? Running amok, really - daily watched by all of the talking heads and video cameras - silly). So, when there are singularities (minor type to be defined further - but, dealing with dynamics within all of those computational spaces that perturb matters in a growing manner - out of control, to say the least), what means is there to extract some stable state? Forget the supposed illiquidity of 2008 (which was really lemon peddlers stepping back to assess where they would play next - stroked with bailouts -and more)? Note, please: in one country, accounts are still frozen, 5 years later -- yet, in the US, all sorts of maneuverings have been allowed without seeming regard for future consequences.

05/17/2013 -- Macke (read his text - not in the video) makes a couple of points related to this post. First, the above look at the seller/buyer mix does not consider what is being sold. It's a general look that is part of an on-going discussion. So, what we have seen is that the act of companies buying back their stock does a couple of things to the price: (1) reduces the amount of things to sell (hence, provides an upward force on price) and (2) raises the price (they wouldn't want to buy at a lower price in an up-market, would they now? Oh, altruistically?). Price? Macke mentions how this has traditionally been handled (expected future flows, etc.). Second, at the end, Jeff makes a comment that needs a response: I can sell every stock in my portfolio for within 1% of the price you see quoted. That's fact. Of course, he can as could some of his buddies. But, after that profit taking started, Jeff knows that everyone could not sell at a profit. The real fact (and Jeff knows this) is that there is a point at which those trying to sell are guaranteed a loss (and, not just those who bought late). Whatever that point is, things above it tend to more and more froth (albeit, early takers get a lot of cream). Hence, bubble phenomenon come to mind. A better test, right now, would be for Ben to raise the interest rate to 3% and to unwind all QEs (ah, cannot be done - but, think if it could); that level of the market would probably be more to the truth (what say you? around 8K for the DOW?). One of Ben's buddies is saying that interest rates ought to go lower (Kocherlakota -- his Wiki page). Say what ? This guy like slapping the savers silly? Note that his argument relates spending to acquiring debt (the interminable pit hole that we all have found now with Ben's hocking of the future).  Has he not heard of saving to buy? Back to the theme: the less there is to sell and the more the demand, the more the seller can ask. Buyers? It's for them to determine whether they REALLY want something so bad. Gaining bad money from this market potentially bears a whole of of bad karma for a lot of folks (on both sides of the equation). 

05/15/2013 -- To be complete, one could turn the seller/buyer roles around such that the buyer is the sacker and that the seller is the sucker. In terms of stock, one selling too soon could be a sucker; however, if their amount of "gain" is significant, why wait to get a little more? Also, selling under value is a problem. How could this happen? Forced, or rushed, sale (all sorts of examples). It's harder for an average buyer to be a sacker. But, it's not so hard for someone with the proper amount of clout. Like someone on the other side of a forced sale (remember, politicos were doing this for their friends). The trash-talking naked/short sellers could be an example (was that a short-lived phenomenon?). The thing is that "falls" happen since no one is buying (at the demand price). The seller has to come down. Now why this happens is of the topic of discussion. That it's natural for these things to cycle is well known; what about the upward trend (bullishness) that has been expected (is this where Ben's largess comes into play?)?

Modified: 01/15/2015

Saturday, May 11, 2013

Leveraging toward the exit

Moral: Wherein we report that leveraging is on the increase and that the WSJ says that Ben is mapping out his long overdue exit.

  • Leveraging? Yes, it's like looking for perpetual motion, from a finance sense. "Something from nothing" is another way to characterize this. Actually, there is a better way. If you gambled with your lunch money, and lost, what would you eat? Of course, you could double your money. But, if you lost, would you go steal from some other person, would you beg for someone to share their lunch, or do any of the number of things that are not very much flattering to your person? What does this have to do with leveraging? Well, one lesson, supposedly, from the big crash of the 1920/30s, was to not let people borrow money in order to buy stock. Somehow we lost that. Why (about hedge funds, below)? Margin operations are of the same ilk (the nose knows) even if the big boys do this on a regular basis (did we not have to bail out the idiots?).
  • Exiting? Yes, taking off the training wheels, finally or at last (when?, we don't know -- see about the tease, below). But, we have asked Ben to do this (unwind) many times; he does not know about savers (see Slaps in the face), evidently.

The chart has been published before. This recent one (Note: I had to scan in the paper version) was in the WSJ, recently. Note that peaks in the margin curve seem to go along with market peaks.

WSJ 05/10/2013
Aside: Before someone raises the idiocy of causal connections, please consider that, as in any modern analysis, we are looking for things that relate. Trying to go toward "cause-effect" is error-ful, many times. You will not find such searches here.

So, what we see, based upon these three drops that ought to be vivid in everyone's minds, is that the market peaks get (post note on 5/14/2013 -- notice, if you would, that I didn't use "cause") ordinary people to do stupid things. You see, the graph does not show what the big guys are doing (as in, those whose pockets fill no matter which way things go -- and, as we've seen, those to whom the government loves to push out big bucks).

Again, these peaks show the euphoric glow that goes along with what the media has been saying (and say every time there's a peak) as they go gaga about the 15K DOW (Chimera, remember?). Yes, DOW 25K is imminent? Now the behavior that we're talking here does occur with the big guys, but they do it all the time (the lesson, hedge funds are for the rich; ponzis are for the poor).


WSJ on-line 05/11/2013
This image is from the on-line version of the WSJ ( and requires a subscription to be read. Now, only seeing a few words can be like a tease. But, Ben's little group even thinking of this means something. However, they have been discussing this for a long time (just not so that we can see, okay?).

Why can't they see that they're stifling adulthood with their continued emphasis that we need training wheels? At the same time, why do they keep trashing the lives of people like the retirees?

Ben's focus on the risky types of financials is troublesome. I can show him lots of alternatives.

Aside: Too, I'll show him that we ought to have a sandbox for those boys (and girls) who want to play risky. Have fun, people, in your little playground. Leave the world to the adults (by the way, whom are these?).

I wonder what side of Ben's mouth comes this; he has stressed many times that the training wheels will stay on until he says to take them off (until hell freezes over, it seems to the savers). He got his 15K DOW. What else does he need?


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.

06/11/2013 -- CDOs and tranching, once again.

05/22/2013 -- Need to look at the cosmology of business (Remarks this day).

05/14/2013 -- All of the talking heads as saying to get into the market (as in, equity). Oh yes. It's that a sign, to boot, of approaching peaks. My response? Please, let Ben give savers, and those who would prefer a small, steady gain, a better interest rate. What he is doing is wrong on so many counts, as the future will tell us. Meanwhile, though, we doddering, older folks will have to bear up with those idiots.

05/11/2013 -- One type of leverage was the idiocy called the tranche. There are many others. Like said before, leveraging, in and of itself, is not bad. Think of it this way: many times, a leverage (multiplied even) is smart work (all sorts of examples). In finance, leveraging has no real basis, hence it de-evolves to froth (Minsky's work). In terms of JERKS (as in, higher-order derivatives but applicable to those who run after pretty balloons), there are all sorts of conditions required to support the higher-order. Finance is bonkers from the get-go. Why? It descends real quick to dealing with the more base aspects of people (and, I'm not talking greed, necessarily). Ah, the computer has us screwed when the idiots think that they look like geniuses just because they can form nicely hone graphics based upon an interminable set of numbers (not necessarily sufficient to support the higher-order). One guy wrote out names, and means, from an advanced statistical book and said: knowing this makes me smart enough to not make mistakes (ah, remember the risk handlers? -- think back to 2007 and before - if you don't remember, don't worry, as we can survey/analyze that realm in depth ex post facto).

Modified: 06/22/2013

Monday, May 6, 2013

Gigantic sucking sounds

Moral: Wherein we consider the benefits of social business (not Zuck's realm), the chimera's loud calling, and more.

The subject? Back in the days when inter-border (USA and its southern neighbor) economic relations were being discussed in terms of allowing more flow (yes, are the benefits as good as we were told that they were going to be? -- massive influx of undocumented?, ...), some argued about things being sucked south (say, jobs).

Well, what we have now is this Wall Street thing (the Wall being used to represent, basically, market-oriented activities that are, many times, not necessary) which is growing quickly while sucking value from the pockets of the hapless, such as savers (and many others).

Why Yunus and the chimera in the introduction?


Well, it's not that Yunus is a saint, yet he knows more about what business is (ought to be) all about than do many from western cultures. Yet, it's those latter that we have to deal with in our western world. Alas.

Chimera? The large sucking machines are getting a lot of attention, more than their problematic basis (to wit, ca-pital-sino) suggests is reasonable. It's an arguable point, of course. But, how can Ben continue to trash the lives of so many folks?


Who are these folks that Ben has thrown off the train? Consider these two types, please:
  • Profligate - works, but spends more than is made; the difference is handled by debt which increases with each stroke of the clock. At what point is the debt paid? As we've seen, many have had their debt forgiven and paid by banks (reimbursed the pockets of taxpayers). But, many more have not had their debt paid, and it is still there when they croak. Again, at that point, there may be creditors losing out, yet the person's estate suffers, too (nothing for the dependents and so forth). 
  • The non-profligate - works, spends, but less than income; the difference goes into savings (either for a rainy day, for a major purchase, or for the later years -- all sorts of ways to characterize this). Yet, to what (where) does that extra money go? The mattress? Gold (even with this, where is it stored?)? Ben (thanks, guy) has fed (pun intended) the mechanisms that do the gigantic sucking. For what reason, I'm still puzzling. His publishing the talks from last year does not explain much (see my notes, please, Ben). 
Of these types, which is more important to an economy? Notice, please, they both spend. The former does so way out of proportion to what can be paid back. Is that something that we would want all to do? Who would pick up the tab, ultimately? 

The major problem is that Ben has closed off any access to means for the latter (the non-profligate, Ben - those whom you do not seem to know even exist) to put their savings that has any semblance of "gain" (as Ben, evidently, wants, mainly, the ill-begotten type). The thing that Ben wants is for all of us to play the casino (yes, why not add russian roulette, Ben?) that gets such attention every business day (media up the wazoo, all day). 


In terms of magnitude, Ben is into the pockets of savers for billions. How do we get a proper accounting of this (note the take on Jamie way before he got in a hot seat)? And, he says that he'll continue (or even up the ante) for years more.


03/15/2015 -- Finally, getting around to the pending business.

05/22/2013 -- Need to look at the cosmology of business (Remarks this day).

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).

05/07/2013 -- So, those two categories (profligacy focus, motivated by the Biblical story) are a broad-brush look. Of course, there are all sorts of nuances which (by the way, I can handle; if anyone has any doubt, deal with me directly) need a look. [Aside: you see, the push to differential (stochastic) systems comes from the inherent complexity (which has been overdone, okay?).] Debt, in itself, is not bad, especially if it's tied with collateral (and I don't mean those fantasies behind some higher-order finance - sheesh - abstract'd synthetics). One can even think of leveraging (a natural state of affairs as we learned way back with the Greek mind) in a rational sense in the context of liquidity. Yet, there are two other concepts that are apropos: source and sink. Debt? It's more of the latter. Except, the way we saw the idiots use houses as ATMs (and all sorts of parallels exist here, folks - Hawker comes to mind - recent bankruptcy, etc. [I had an upclose look, closer than many, okay?]), debt does put money into the pockets of some. Government deficits do this, too. They extract from sources. What Adam was suggesting was that spirits are natural sources (actually, this whole area is where I can weigh in with a newer theory - in time). But, we don't have perpetual motion (look finance smarties, be a little more thermodynamic, please) anywhere (again, big M and T come into play here). The truth? We cannot have sustainability where we have more sinks than sources. Jamie? Your ilk are sinks, okay. You don't have to be, but this is how you have been allowed to evolve. Let's get theme memes back in order, folks. ... Later.

Modified: 03/15/2015