Saturday, November 23, 2013

Stable value II: Seeding the chimera ...

Moral: Wherein we continue to argue the seminal importance of stable value, versus the chimera, to a sustainable economy.

... and feeding the game.
            (which is to bulge the markets, then pull off from the top,
                          and let the masses/poor suffer the consequences)

We might also say that this is a lesson for Janet, and for Ben, if it's not too late.


Motivation: For the past three years, I've marveled at how the markets would shoot up after a loss, as if seeding were taking place. Recent readings on AT (algorithm trading - includes a bunch of stuff, including high-frequency trading) are the basis for the following. We will summarize some of these. Too, we can look at how seeding keeps things going up enough to motivate the moms and pops (as we see now) to put in their real (as in, earned by other than ill-begotten gains) into the game. At which point, there'll be a massive sell off by those who will take their "gain" leaving the moms and pops holding the bag (depleted and shriveled, as it will be at that point). Of course, then the likes of Warren and other bottom feeders come to play.


Lesson one: If you have a stable-value asset, you can go and extract your principle at any point. Too, the principle does not diminish (insured - however, as we know from AIG, and its ilk, insurers are bosh, to boot). Now, if I'm in the chimera, and if I take early, I can laugh all the way to the bank. On the other side, if I am real long, perhaps way down the pike, I might make something.

Lesson two: How is that? Consider, when stock is sold higher (sold by an insider, bought by a stupid optimist), all stock of that ilk goes up. You see, money is pulled out of the air and reported. Ah, the DOW went up, it is reported (everything is gold-plated - skies are clear, the future rosy -- hah -- this, by the way, is where the rising water level really comes from -- except, we're not talking about something real, with water, like the Panama Canal). Okay, we see a lot of stocks changing hands, but does the whole mix of a type trade? No. This is why CHIMERA is very much apropos. Now, those running the game will talk value and pricing, etc. Yes, there are real things behind the stock (if it's legit - but, FB? wouldn't you say wishes are what's there?). These, depending upon the view, have value anyway exclusive of what the gamersters say (who do not add value). Too, we can talk about future earnings, and such. Yes, that's true. But, stable value would provide a better basis (we'll get to that) than the shaky basis (supposedly capitalism at its best via the ca-pital-sino).

Lesson three: Now, stable value can lose some. It can lose a lot. Yet, if done right, it is more apt to pay for all invested than the market and its chimera. You see, if stock is sold lower (several ways this might happen, such as insider as buyer), all of the ilk get the negative influence. The trouble is that when there is a downturn, the value (per) keeps dropping draining the water level substantially. Moms and pops are ruined (we know the stories).

Lesson four: ...


Now, as of yesterday, we're at the point were regular people are pulling their money from supposedly safe places (no such thing under Ben) into the chimera. That doesn't denote a bubble? Oh, things will be dire this time around.

Image obtained from Seeking Alpha,
see posts on this blog,
Source: Bernanke's put to expire
One of the money handlers did a report. Oh yes, ordinary workers can accumulate $1M by following a few rules, one of which, incidentally, is living beneath one's means (saving, and hoping to not be slapped silly by the Bens and Janets of the world). That's fine. Too, if your employer matches savings, well, get the money while the getting is good. Then, the problem is the experts argue for the necessity of the chimera.

That necessity argument is not true. We can show how following the rules, except for the chimera part, does work when using a good stable value approach (ratcheting, if you would). Yes, one can get up to 7 figures using tried-and-true techniques. However, it does require discipline. And, not keeping up with those Jones' and their arses is one thing that the money people didn't mention (why? ah, they're into luxury -- where is the money manager who will take a vow of poverty and simple living?).


The above-referenced articles talk about the research that needs to be done with regard to AT. Yet, these financial engineers (flim-flammers, in my opinion) have been allowed to spawn such off on the economy. That is, we have this ilk wrapping crap into gold (misusing-abusing mathematics and computing) and telling us that it doesn't stink. Silly games indeed.

Note: This is mostly done, except to map in pointers to posts from 2008, 2009, and onward talking this same stuff. Finance as fiction is very much still true - despite all of the suffering of the past few years. Do those intellectuals and fat cats ever learn that their actions trickle down more negatively than not?


By the way, the AT folks also use experiment and such. Dear rational folks, wherever you are, what parent, in their right mind, would experiment with their kids in a manner with severe negative consequences as a possible end? Wait, probably more than we would expect. How can we lift the maturity level of these gamerster who have been allowed to shroud themselves in a "market " aura while really they're mostly about the continual fleecing of the populace?

Remarks:  Modified: 01/15/2015

11/24/2013 -- The ACM has a review article on algorithmic trading that everyone ought to read. Essentially, if we use a plane as an example (consider what Boeing has had to do to get the 787 out and about), we would say that the financial folks are putting passengers on experimental aircraft with little regard to their safety and comfort. The whole notion is atrocious. How does it happen? They've coached things in mathematics and computerese, plus they've bastardized Adam Smith's ideas. Where is our sandbox, and where is the stable economic system that we can build?

12/03/2013 - Where would we be without Bing? This is too rich. In terms of the sons of Samuelson, we have to be looking at the entrapment being laid upon us by the technical pursuit of stupid goals. Yes, said that right. Because certain pockets are filled to bulging and particular "families" reap the reward for generations (as opposed to the general population - US, okay? - are being indebted to several generations out) is not grounds to claim that these methods are anything other than shortsighted and inimical, beyond imagination. ... Now, we're hearing that Janet is as clueless as was her predecessors. But, that is a whole other issue. ... For a time, there was consideration of changing the focus of this blog, but after a little elapse (and removal - such as, 48 hours unplugged from all things web and cloudish) it's obvious that the discussion needs to be held and the truth grappled with (dangled by choice). One new thrust will be a re-look at the Lord/serfs thing (especially, in the perspective of families who have held on to their trusts over many generational changes - see The Atlantic for an article that grates - we'll explain).

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

12/16/2013 -- HFT's contributions to the turmoil'd (froth'd) markets.

12/19/2013 -- Ben did his parting shot (whimper that it was); they're going to taper slowly, less than a 1/8th on the bond buy, starting next month. And, he's going to torture savers for another year or so. We'll have to see how the pieces fall. The markets got heavily seeded today in hopes of luring in the idiots and moms/pops (who cannot afford the pending losses). So, it's pop, fizz, ..., again. Too, we'll see more goo-goo talk to the immature markets and the addicted investors thereof. One of many technical issues that we'll have to get into: Nanex's view.

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.

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.

Thursday, November 14, 2013

Blogs on Janet's inquisition

Moral: Wherein we point to tracings left by those who are following Janet's ordeal.

I haven't paid attention. If I would have a chance to talk to Janet, I would bring up stable value and its usefulness as a concept (especially for those intellectuals who seem to dominate the economic realms - with their beliefs that data-driven is more real than illusive). Perhaps, Ben will learn something ex post facto as King Alan seems to suggest for himself.

Too bad that these lessons learned are not of use before the fact. Things don't look good for Main Street. Some are borrowing to play the market. Others, who were cautious before, are risking now their futures, again. Of course, of those who lost, many have not recovered (and will not recover).


Market Watch mentioned that Janet said that there is not stock bubble. If that is so, Janet, why is there a big void in the pockets of savers? You see, get outside the balloon so that you can see the expanding surface - let me explain.


These are two blogs that I saw mentioned on FB. I'll wait until after the fact to get into more detail

Yes, Janet, and pigs do fly (the stinker that we see now has been aerated more than a Macy balloon by you, Ben, and your ilk). 

as an imperative;
of what, though?
Look, Janet. You guys just hint at a taper (removing the narcotic), and the market goes crazy. Given what we saw then, perhaps the market (as represented by the DOW) ought to be somewhere around 10K.

From whence that added 5K of supposed, value? 

Savers, for one. These have been slapped silly.

Ben's effect is so bad now that U.S. bond holders (remember, savings bonds?) are paying to hold these pieces of patriotic jest. The joke is on those who ante'd during bond campaigns. That is only one of several deleterious effects. 

Anyone at the Fed care? Doesn't seem so as their eyes are on the contentment of the moolah crowd.

These market guys (those who run the game and are the chief players) cannot even go without their training wheels (yet, rake in the bucks?). Of course, that's on the backs of Main Street'rs.


By the way, stable value? I am not mentioning this as a type of fund. No. Just like you, Janet, go home to a stable environment (we would hope), people need similar with their money. There is no such nowadays. Why? Intellectual flim-flam, for one. Computerized conundrums for another (fed by the flim-flam). All around deterioration of any sense of value (intrinsic) that arises from moral thought. Ah, the list is long.

As said five years ago, finance as fiction. What have we learned? 

Remarks:  Modified: 12/29/2013

11/14/2013 -- There seems to be talk about no inflation. Hah! I can point to several aspects of daily life that are more expensive. The Fed guy arguing his data-driven methods is looking at the wrong thing with the wrong color glasses. The main bafflement for me? How can one look at the last year and not say that these market processes are not over-heated (ever heard of Minsky?)? As of now, the energy devoted to maxing out might push things upward yet, but those "earnings" are ill-begotten (so much ponzi/made-off that it would be laughable if it did not have such a harmful effect on the people (regular souls, okay? those who aren't puffing the pipe with whatever Ben put in the thing). Too, the higher it is allowed to go, the further the fall. As some are cautioning, the hurt will be much worse than the last time around. A slight bafflement is how the system allows the turkeys to trash things while pulling everyone else into the mire. A stable approach would isolate the players/gamers to a sandbox (yes, let them crap and clean their own diapers). And, the "stable" about which I am talking is as certain as the sun coming about every morning, clouds or not. The stupidity of the intellectuals? They've been  lured by mathematical chimeras into a corner and cannot (or will not) make the adult stand of admitting their mistake. Meanwhile, the real people abide (it's more than just the age-old issues of lord/serf, feudalism, and such - we're talking maturity - wait, that out of DC and Wall Street?).

11/14/2013 -- Dudley is funny. He's part of the pusher crowd. They are as much to blame as are the junkies (users). Moral banker? Not silly, but nowadays, it would be a rare thing to find.

11/17/2013 -- Last week, one of the politico wags asked Janet why she can't see that the current mode favors the pockets of the elite. Yes, the equity side is getting all of the beans masking over debt, leveraging, and such. Janet, being the trooper that she is, deflects the question by saying that the housing market is better or something like that. Quick on the feet, I suppose. Housing? While millions of savers are being slapped silly?

11/19/2013 -- Not exactly related to Janet following Ben, but it does have nice graphics. Too, it uses casino.

12/29/2013 -- Small change to the question for Janet. Also, this seems to have been a popular post. The chimera continues. Some may wonder why I use the term. Well, what we ought to have is a number based upon what people paid for stock with some reasonable increase. You see, with the current method of spreading the latest price everywhere (talk about density), we have, by definition, a made-off (remember, he -as in Bernard Madoff - replaced Ponzi by several measures) scheme (why is this allowed? - other than to attract the moms and pops who cannot afford to lose their little collection?). ... There was a little hiatus from which we'll be back. Hopefully, Janet's brain will prove to be different than Ben and his predecessors (and, don't cast aspersions this way of any sort related to ill-reputed mindsets- and, please, read the latest reported findings on gender differences in structural matter from which we would expect operationally framed divergences, as well, ...).

Saturday, November 9, 2013

Stable value I

Moral: Wherein we attempt a brief look at normalcy's lure.

What with twit-ville getting lots of press and money (into the pockets of the founder in a big way, then in a lessor amount - but still substantial - into the hands of some who work for the founder) plus the markets being volatile - one day down, then the next up - this past week plus continuing worries about Ben's largess coming to an end (the training wheels coming off, the teat being pulled from the lips of the brats, the narcotic being removed from the presence of the addicts, ..., what have you) plus a lot more, there is one major problem with today's world that we can correct.

Aside: About the monies flowing so greatly, these are ill-begotten and attained on the backs of workers, savers, rational folks, and more (about which we can expand as necessary).

One wag said that Ben has trashed all asset types but equities. That is not far wrong. But, it dances around the problem.

Want to know what the main issue is?

In our relativistic world (thanks Albert - of course, this guy bemoans the bastardization of what he pulled out of the unknown; yes, he did not invent; he merely described a portion of reality) - as seen by certain types of eyes and models, the economy is now such that attention goes to what is really a fool's game (sorry motley guys, you did not invite foolishness) at which we are to marvel and to whose players we are to bow as if they're the epitome of something worthwhile.

Say that again?

Allah           -              Moolah
Talk to any of the financial ilk (if you want to degrade yourself, okay?), and they'll spout off about mixes of asset holdings, principally based upon two biggies - namely, equities and bonds. Now, equities bounce up and down. They have only gone up, of late, due to Ben's largess to Wall Street and his slapping silly of the savers. At any moment, they can trash the landscape and impoverish many.

How? Look, if all holders sold, the mere fact of the sale will cause a downward motion of value. It's inevitable. The total sale cannot be instantaneously accomplished. There would be a sequence, with those in the early part of the sale getting more -- as in, much more -- then those in the trailing edge getting less and less -- this is true despite the billionaires and millionaires we see; why?; near zero - their gains are on the back of the hapless.

Aside: There is a point at which we have nothing left but losers. Of course, the vultures then come in and feed (ah, see below that this is not by necessity the way to run a modern economy - those with the power have fetishes that need to be brought out to the open).

Now, bonds? Well, as we saw this year, when the interest rate goes up, the price goes down. So, holders of these type of bonds -- said this way, as this need not be -- lose value when interest rises. The mere hint of Ben raising rates makes bond holders - of this ilk - quiver.


The fact of the matter is that the current model is arbitrarily defined, for the most part so as to enhance the sucking of monies from the hapless to the players. These players, then, add churn in order to keep their obvious necessity (ah so) known to the populace - and this has gone on for years.

Is there another way? Yes, always has been.

Take a "stable value" view. Yes, suppose that you could hold something that would pay you what you expect plus some increase - ignoring, for the time being, issues related to inflation. Would that not be desirable? That is, you would not have to worry about some player putting his/her hands in the till and removing what you need to feed yourself down the pike - by the way, as savers have experienced for the past few years with no end in sight for their suffering.

Oh, say the wags, you would not make enough to retire on. Not true. Stability is a boon, many different ways. There are plenty of examples for us to use.

We will go on about this. That's why the title says, Stable value I.


Ben does not see any use for stable value. I can understand that. But, he has to know that his slapping of the savers is not sustainable. Too, he has to know that he's aerated things in ways that are unprecedented and that recovery from which will add more pain - to the savers and Main Street . Ben is leaving, so Janet ought to know (and her ilk).

The economy needs to be based on a stable basis that allows us to have a better look at the future than the one that we have now that is (has been) beclouded - so that the odds lean in the favor of the finance community. That is the core issue.

Then, the ca-pital-sino can be allowed (in a sandbox with diapers on the players so that their crap stays in their little playground) so that those who need the titillation can find solace and comfort. The sandbox would wrap those higher-order, supposedly, instruments which have been so seductive to the players.


All of these themes have been addressed over the years in this blog and the related blogs -- at some point, perhaps, links will be provided; right now, this is just air clearing - Ben's been doing that enough.

Whether we address this further with "Cosmology of business" or otherwise is not certain at this time. The game gets its attention, and money, every week - Cramer gets his air aired, to boot. That the shitty nature of the current mode is felt in Main Street will not abate; yet, there is some urgency that is needed.

You see, the computer has exacerbated the problem. Not by necessity. Rather, some, who could - as in, are allowed - have exploited things willy-nilly by enshrouding things in complex ways. Sleight-of-hand, if you would. The stench is still there - the nose will be important to establishing stable processes.

Too, those, with numeracy in their pocket, have been allowed carte blanche. And, powers that be have gone along with the so-called best-and-brightest. Meanwhile, those with the proper talents are waiting in the wings. In fact, determining just what that talent might be will be on the plate.

Remarks:  Modified: 10/30/2014

11/09/2013 -- One Fed guy said that their decision about QE - Infinity and the interest rate would be driven by data. I supposed that this is to help establish an aura of scientific discipline; you see, economics being other than dismal? Isn't that a hoot? The guy (I ought to look up his name) is under the delusion that data are not suspect. Guy, whoever you are - I just saw a headline and didn't go deeper, conflict comes about from differences in interpretation of fact. Using "data" as some abstracted type of glorification of our common knowledge does not raise the issues beyond how humans deal with their world. Opinion? Obviously, the Fed is loaded with people who would rather suck up to the rich, trash the savers and the old-timers, and, generally, run amok since they have the power to do so; rather than what? Talk about Main more than the Wall (unnecessarily complicated in order to hide the extractions that occur regularly - how else the high life styles? ..., why the large bonuses that don't seem to have a reasonable basis? ...). Wait, don't they talk unemployment? Yes, that fetish of the Fed being able to push that string thereby effecting full employment. All the while jobs (never seen in the proper light) are pawned off to external regions under the guise of globalization when, in truth, it's exploitation to the extreme.

11/11/2013 -- The Fed ought to address computability issues with regard to monetary policy. Yes, the genie is out of the bottle, but we can regain some control.

11/24/2013 -- The ACM has a review article on algorithmic trading that everyone ought to read. Essentially, if we use a plane as an example (consider what Boeing has had to do to get the 787 out and about), we would say that the financial folks are putting passengers on experimental aircraft with little regard to their safety and comfort. The whole notion is atrocious. How does it happen? They've coached things in mathematics and computerese, plus they've bastardized Adam Smith's ideas. Where is our sandbox, and where is the stable economic system that we can build?

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?).