Wednesday, February 18, 2015

Illusion of liquidity

Moral: Wherein we let ourselves use some of the jargon though we wish to appeal to the general intelligence of those who are affected (namely, all good people).

El-Erian talks the illusion of liquidity. Is that not of the same issues as addressed by the Cheshire multiple?
    Related topics: Dark pools (allows manipulative trades in order to circumvent effects), HFT (adds to the illusion), ...
The plot will thicken as we go along. 

Remarks:  Modified: 03/15/2015

02/18/2015 -- The term "Cheshire multiple" was coined by Marilyn vos Savant during the last downturn  (time frame was 2009). 

03/05/2015 -- Cuban talking lack of liquidity (2000 like). See Remarks 03/05/2015.

03/09/2015 -- Cuban also brings in another dimension related to web/cloud efforts at funding. This, of course, can take money away from the traditional markets which have evolved to be giant siphons of value (we'll get back to this). Actually, a luddite recoil from computation ought not be considered as the theme here; on the contrary, the view is the epitome of human/computing interchanges (spiritually found, at the basis - hence, no room for the greedy mindset that looks to exploit things in their favor - which type of behavior was nicely exhibited (is now manifested) by the Lords of the earth - many of whom are the best and brightest). Earlier, FB was said to be a metaphor (did not go into how it is so), but that conceptual framework is being applied here (to be explained, where necessary -- actually, the God-give intuition ought to (will) come to fore if it were to be given a chance -- G*d, of course, as other than delusion, ...).

03/10/2015 -- Today is a slump day (1% as of noon) which does not mean much, as each lower sale brings down the total level. On the upswing, it looks like magic to have "value" appear out of nowhere. On the downturn, it's like a bug being squashed under a car tire. Yesterday was a seeding day. These have been more prevalent than the other for the past few years with the FED supporting the manipulation, albeit indirectly, albeit through various means. Ever notice how the seeding takes longer to recoup from a loss? You see, real money is put in to create the lure (trolling the waters) so that the suckers fall into the trap and bring in their money. Then, as each little bit comes in, the whole thing rises (as, if only nature worked that way - fortunately, it does not, otherwise life would not be sustainable) due to the magical multiple. ---- Now, the question is: do we have a better way?

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

Wednesday, February 11, 2015

Zero interest rate policy

Moral: Wherein we let Wikipedia do the talking (we have talked enough about flaying) after last time looking at a market manipulation stance.

Sufficient is this cutout from a page: Zero interest rate policy

Zero interest rate policy
courtesy of Wikipedia
Notice the warning sticker about the tone. Per usual, the drive-by sticking had no justification. People raising issues need to explain themselves or their views on the Talk page.

Any action by the Fed to unwind this thing is way overdue.

Remarks:  Modified: 02/11/2015

02/11/2015 -- Source for the list that is on Wikipedia: Barry Ritholtz. See the discussion. One asks why the consumer is leveraged. Oh, really, now. It is because that is the only way to survive, the system allowed such, entrapment that is perpetual is attractive to who want to fleece (move monies from the pockets of the hapless to that of the elite), etc.

Wednesday, February 4, 2015

80-year-old whiz

Moral: Wherein we look at financial engineering.

We will let the article speak for itself: Bloomberg Markets (March 2015). The image, from the article, describes how an e-bond is constructed.


There are words, like reduce risk and maximize liquidity. The former? Did we not hear financial types bragging that risk was no longer in our vocabulary? Yes, right around the time of the downturn. So, a Nobel guy has bought in. So, too, did we see the almost take down of the economy of such types; King Alan had to bail them out.

The latter? Seems to me that liquidity's purpose is to allow constant raking off the top of the cream; thereby, diluting the milk, people.


As said, this is informational. However, bear in mind the context in which discussions will resume. 

Remarks:  Modified: 02/03/2015

02/03/2015 --