Tuesday, December 31, 2013

Summary, 2013

Moral: Wherein we take a look at 2013.

The blog got its start in August of 2009. As of today, there have been 209 posts with 22 categories.

The image shows the order of post reads for the Past 30 days and All time. Compare with last year's.

Past 30 days                                           All time

The differences are interesting and may suggest where to focus for the coming year. For one, "chimera" is the correct use. Too, let's hope that Janet addresses early the unwinding's back effects. The sooner, the better. Ben will be able to watch from afar the unfolding of the detrimental impacts (yes, big guy that he is).

Does it have to be this way? No, but everyone is chasing after accumulations, it seems. Bigger pockets. Where is the economist who isn't after such things? The WSJ had a couple of Nobel winners bragging (gloating) about their big pockets (sheesh).

Now, we have the suckers bringing their money into the equity bash; of course, the game runners are raking in their gains (we can allow the term, but remember: ill-begotten) from this. One thing to emphasize is that the  motivation (attitude) here is not influenced by other than the need to look at the picture from outside the craziness that money brings out (the politicos who salivate at the sight of a buck are an example).

Remarks:  Modified: 01/02/2014

12/31/2013 --  

Thursday, December 19, 2013

Money, again

Moral: Wherein we look, again, at money using bitcoin as motivation.

First, what is a bitcoin (WSJ video)?


Perhaps, the post is a little late. Two recent views from the WSJ are a good starting point. Fortunately, both of these are open to public reading. So, let's start there.
  • How much is that burger? (12/15/13) -- Brian Wesbury looks at some of the challenges facing the adoption of things, like bitcoin. We all know about money's need to be useful in facilitating exchange and storage of value. But, money needs to be safe, as well. The technology behind Bitcoins must have a little more scrutiny. There are several things to discuss in that regard. 
  • Evangelist sees cashless society (12/19/13) -- Michael J. Casey quotes the techie view: We are at the Mosaic stage of bitcoin. So, all sorts of things can ensue from this start.  
From talk at
Gresham College, UK

One thing to say about bitcoin is that it demonstrates another type of currency alternative. What we use now is fiat money (jaw-boning by a central banking system establishes the policy (oh yes, the Fed does other things, like buys bonds - as we see with QE (requiring tapering), however we also have fiddling of knobs and levers going under the names of things like LIBOR). 

Another thing to consider is that fiat money has no physical basis (one reason that we can have leveraging up to 100s of multiples behind which there seems to be no sanity - beyond short-term profiteering). Many attempts have been made to establish such a basis for money, to wit the gold standard. Some have suggested an energy-based model (see A Prosperous Way Down - a 2012 presentation - Emergy).
source to be identified

Aside: Note the inverted pyramid from this 2008 report. The image still applies after all this time. It is a modification of the image shown here. Inverted triangle showing the chimera from yellow up. Note the quote: the thing doesn't collapse, rather it evaporates.

One might claim that the use of bitcoin would be more natural than a gab-standard'd approach like we have now, given its mathematical framework. The energy-oriented approaches would require heavy computing, as it may very well be that money, if handled appropriately, would be computationally framed (ah, all sorts of things to discuss there). However, issues, such as those raised by Wesbury (above) would still apply. And a whole lot more comes to mind (will be of continuing interest). 

Remarks:  Modified: 12/19/2013


Friday, December 6, 2013

New economy

Moral: Wherein we ignore Ben's role (with his unending put) and look at the real source of an economy (while pausing our cosmological musings).

DC and its CherryBlossoms
Yes, it's as simple as people having fun, enjoying the grandeur of their lives (implying metaphysical imperatives), worshiping through their work (again, meta, meta), being healthy/wealthy (ah, so much more than the Wall Street crowd could consider - Blake, the visionary, comes to mind), and wise; of course, there is much more (which we intend to elaborate through time - remember, we have no time constraints). But, the message is not new (let's say the invisible hand has more to do with the unfolding human potential than with capitalists' pockets).

Adam could not quite grasp what he thought that he was seeing (many factors, to be considered, are involved with this). But, he is much chagrin'd at all of the misinterpretations (malfeasance under his name, so to speak).

Aside: A focus on people does not imply anything like a consumer-driven state of affairs. Wise people know that controlled spending portends more to happiness than does spendthrift'y ways even if you can afford it - can't buy you love.

So, the new economy? Well, this post is motivated by Rick's thoughts. There is a lot of uncertainty about what we might know as it pertains to our influence on the future. After all, have we not, meaning mankind, screwed things up royally (in the past, now, and, definitely, into the future)? One could be bleak in thought, indeed.

Aside: Google or Amazon or whoever in control of our minds and lives and selves (yes, the all-knowing friend says Scientific American - we can broach this subject from a more healthy framework)?

And economics, in particular? Why can't we get it right? In regard to good times and bad, some argue for creative destruction's necessity? Ah, again, that proposal was a sign of a time. From another view, in essence, growth ought to be as natural as the expectation of spring on a snowy, cold day.

And, just like our model Earth shows us, we would have cycles, yet all would not be in dire straits at one time. Too, as we know how to endure the challenges of winter (think of Prince Harry traversing in the cold, to the south), we would master the cyclic reality of things economic.

Wait. As the financial people demonstrated recently, too many abusing Adam's thoughts, and more, can bring us to the brink. So, how can something so basic be out of whack?

Aside: As Bohr suggested awhile ago, only finagling makes for endless winners (as in, bungling biases to be in one's favor). Of course, we all know that (hence roles like Rick has at the moment).


As we have said, before, quasi-empirically, mathematics, as misused in computation, is at the core. Ah, we can remove biases that we have learned over the years it is argued. Yes, expect us to get into the fact that biases streamline decision making in ways that we ought to be more insightful about. Too, we can model without waste. Again, let me show you things like engineers feeding output from one model into another as if the data were obtained via senors (or other measurement).

By the way, that last remark is about one large fault of economics. Being dismal (we all know that - yet, there are sciences that can close the gap - we'll get to that, too).

Also, Ben, and his crew, keep talking that they are data driven. Ah, guy, where's the wisdom? Big data is a big mess, afloat. Give us a break, please.


Someone (one of the big bankers who is worried that their board was basically thief laden - meaning, no thought give to ill-begotten) was bold enough to use moral in the context of finance, this year. That will be part of the discussion, to boot.

Remarks:  Modified: 12/16/2013

12/06/2013 -- If only Ben would put a shot across the bow. Or, say a little mea culpa.

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

Thursday, December 5, 2013

Parting shots

Moral: Wherein we review Ben's put given his imminent departure.

What parting shots will we see in the next two meetings? More slapping silly of the savers? What will Janet do?

It's obvious that Ben's view is tuned more to the fat cat bankers than to the economy as a whole. You see, he may say that he's playing with his knobs in order to get employment up. But, in reality, what we see directly follows his decisions and actions. And, his disinterest in how things are different now, than in the '30s (his bailiwick), can be troublesome.

All he has to do is look at how computation has changed in the past decade and how it influences (actually, drives -- yes, Ben, DRIVES). Given that look (assuming that he sees), he would say, wait a minute. But, we can't just stop the wheels. You see, the stuff stinks (to high heaven - unethical to the core).

Well, we could have in the 2007/8 time frame. I would bet that things would not be any worse off than they are now had banks been nationalized. In fact, things may have been better. But, that wasn't to be since there is this strong belief in the invisible hand (oh yes, Ben's was more visible than was Alan's) plus the fetish that came from kissing up to Friedman (several senses: this one plus the notion of the FED pushing string as being analogous to applying control).


Now, the image shows things from early to now. That is, from the 2008 focus, and panic (when some thought that Ben has shot his wad), to the heady days of an inflated (granted, overall, there is an inflation gradient that is less than desired - however, with equities having the attention, these markets have been able to shift money from savers to gamblers) market (yes, Ben showed how clever he could be in his manipulation of what is the public's trust). Yet, the Bens and the Janets of the world see no issue (oh yes, the guy who looks at houses - big name - says that he sees no bubble, but there is froth - what the heck is froth? is it not mostly air?) with that (slapped silly for five years with no end in sight - torture?). Ben talks a little taper; the addicts go insane; Ben, then, talks goo-goo to calm them down. Savers (besides the usual set, there are those who have to plan future payout using minuscule returns - a whole set that includes pensions, insurance companies, and such)? Well, savers are being trampled by those who are lining up for almost ad infinitum easy money. Of course, that money is not free; at some future point, there will be cries of anguish as debt load becomes intolerable.

Aside: Let me tell you about one saver. Not only has there been nothing earned for his little accumulation, but he has a  mortgage that he has kept up payments on. By the way, there has been no thank you from anyone in that regard - namely, five years of on-time mortgage payment plus paying the banker a little over 5.0% on the principle owed. For the accounts that the same bank has of the guy's money (as in, being on the credit and not debit side), there has been payout less than 0.5%. Yet, the guy endures since he believes in supporting the economy, even when those like Jamie get the attention (oh wait, some of his gold has lost its luster, of late). Yes, none of the bailout initiatives are of use. The thing isn't under water (good planning on the saver's side - except for not thinking about the likes of Ben). Too, except for paying off the mortgage, there is no other gain (why entrench into another yoke?) that can be done. From time to time, the saver has heard of people having their mortgages just waived away. Then, the likes of Summers talks about having negative interest (the saver has already seen that with savings bonds where supposed payout by Uncle Sam has diminished to insult level).

Now, back to savers versus gamblers. Without a stable value concept, savers cannot expect to have their future payout. It's easy to understand this. But, those who want to play games in order to rake in ill-begotten gains have perturb'd the issue. But, too, the reality is that the gamers get people to put their money into the system so as to take profits off the top. As sellers outweigh buyers (during the time when people want to profit), the water level goes down such that there are guaranteed losers (of a very large cardinality - plus, the magnitude of the losses for this large set is tremendous - but, such suckers (like cannon fodder) are given to the fat-cats/gamers as gifts to exploit). All the talk of equities lifting things is not true. It's a chimera. Were the real reports allowed to be shown daily, this would be obvious (oh, will accounting own up to this?). Real? Yes, those that account for near zero.

Remarks:  Modified: 12/19/2013

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

12/09/2013 -- Back in the time of the turmoil, when Ben was thinking of his easing (which ended up as QE infinity), he talked about getting the green shoots some attention. As in, help the economy grow. Well, he has done that. That trouble is that he hasn't applied his weed whacker. We now have a raging jungle where a nice garden would be more appropriate. Well, history will tell us how good of a gardener Ben has turned out to be.

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. Ben does get his print space.