Cheshire multiple

Moral: Wherein we re-look at a very old issue: only a few get it (many senses, but the dough, as in payout of note) - the most? losers (almost by definition).

A long while ago, I read Marilyn's and Investopedia's explanation of what happens when markets fall like they do (and will). Where did all of that money go? It just vanished, the presses reported. That question was back in 2009, when Ben was still feeling his way through the mess.

I railed then, and have since, about the "stupid" gaming (see chimera). Why is it stupid? Well, about now, when things have inflated (you see, Janet, look at how the financial assets have inflation - sheesh, also we have some costs of our living rising - her little chart is way off base), moms and pops are buying into the game. They are guaranteed losers (the late buyers). Then, we hear that people are borrowing to buy stock.

So, we have to revisit this again. An alternative? Yes, more stable approaches do exist.

One motivation for the revisit is looking at Dalio's take. He shows financial assets in his little model as something that money (and credit) can buy. And, he shows how financial assets can diminish in value. Also, leveraging came up in the video. But. the whole issue of why we have done it this way is ignored. You see, the game, as is, seems to provide a perpetual machine (which we know does not exist) that "feeds the multitude" but actually pays into the pockets of a few (most of them the game owners and controllers). Too, we have led other societies and countries into the same silliness.

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Now, the title of the post comes from Marilyn's remark. What I have done is put the two responses side by side (Marilyn at Parade, Investopedia staff). Let's look at them and comment below.

You see, Marilyn says that the money disappears. Too, she says that only "a small percentage" can sell to get what they expect (my words, but not arguable except for angel counting). Yet, we have people putting their life's savings, and their retirement plans, upon such a stupid (there I go, again, and I would ask Marilyn, do you think this is how it ought to be?) system. Investopedia says "disappeared into thin air" without an adequate explanation. Yes, financial community, explain yourself, please?

Those who are takers always gloat (ala the 99% and such {explanation 02/18/15 - 99%? yes, as in, those of the 1% who are sitting over the rest - as in, over the 99% in the graphed density function}). Those not taking (but, being took) are multitude, who are mostly enslaved to care for, etc. the gloaters (those who are slowly enmeshing/entrapping reality and us, insidiously - we, the users, need our modernization of the Magna Charta - we'll get back to that).

Anyone care about sustainability into the future? Anyone care that we have indebted future generations?

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All I can see is that these financial schemes expect an endless line of suckers. The past year or so has given us, once again, bubbles upon bubbles. Some, like the mortgage expert - what's his name? - who said the word but didn't go further. Janet seems to not notice, given her lessons from Alan and Ben.

Remarks:  Modified: 06/01/2015

03/07/2014 -- Not arguing that equity ownership is not necessary. Rather, it is the financial market's current state of evolution (madness, really) that is suspect; especially, the use of algorithms to game the system has no basis beyond merely mercenary motivations (resulting in useless churn accompanied by endless pilfering). ... One thing to notice is that these financial dealings have little to do with the operation of a business. And, as we will show, the modern configuration of these is very much like a casino (general adoption of gaming as the basis for ontology -- sheesh, I agree with my friend, Albert, on this - we'll get to that , too). ... We intend to get back to cosmology. And, the Wilshire 5000 looks like a better Index to use for our purposes. So, we will use it.   

10/16/2014 -- After a very lllooooonnnggggg upswing, we have seen six days of downward-ness. And, the falls are quick. Cheshire multiple goes both ways. But, we see, now, the coo-cooing of the Fed. Too, golden sacks is being a front man for the panhandlers that are the financial types. My query is who is priming the pump on these bottoms which funds the upswing. You see, that pulls in the hapless who feel as if they have lost out and want in. In reality: lambs being led to the slaughter. And, by the way, there is a better way to handle the whole affair. Let the ca-pital-sino folks play in a sandbox.

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?).

02/16/2015 -- We are elevating the discussion: see Wikipedia's Efficient-market hypothesis.(see the Talk page section on Cheshire multiple). The framework will use Minsky's thought. However, the importance goes broader and deeper. We will have to start from the beginning. The computer's value will (ought to) be a proper financial analysis (an analog of the old back office work, daily) that every day tells us the real value (to be defined).

02/18/2015 -- Same as illusion of liquidity (see Mohamed El-Erian's recent comment). ... With spring break coming up, here is a comment at another blog that used that occasion for a metaphor: June 9, 2014.

06/01/2015 -- A little late: Magical multiplier, Let them eat cake, Beyond your wildest dream.

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.

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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?

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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?

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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?

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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. 

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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.

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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.

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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)?

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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.

Remarks:

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 down; he 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

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?).

Greed vs simple living

Moral: Wherein we look at greed in a framework that ought to be familiar to Big Ben.

---

One question: Is greed mostly a New Testament concept? Well, there are some who use the Torah as the basis for discussing this human trait.

---

This could be considered Some Background II as we look how the smarties have packaged trash with the intent of selling it to us as being of value.

---

Why the question? I heard it said that 'greed' is largely running rampant, thereby causing havoc. I beg to differ, somewhat. Greed is always there.

So, what is different? Besides, of course, the idiocy that claims that 'greed is good' and the best and brightest are allowed to be greedy, without any limit.

---

Let's look at Kaku's opinion on the future. Or, we can discuss the opinions that he collected from talking to a bunch of scientists (see book).

By the way, he's the string theory guy. He makes some broad claims. And, he did this despite knowing how afar from the target have been almost all prognostications since the beginning of time.

---

However, Dr Michio does mention two trends. Now, remember that these are not new, in any sense, except for how we look at them.

There is the trend to peace and health (ergodic theory applies here). Then, there is that which is chaotic (which is behind the risk management mania as well as a new type of engineering).

Now, to use the Biblical thought, would that not be the angelic and demonic principles in their eternal conflict? Is it not nice that one convergence is toward worldviews that show how true are those old concepts?

---

One difference? As mentioned many times, mathematics and computation. And, remember that we have essentially dumbed ourselves down in order for these tools to work.

But, is not the zombie state of those entranced with the LED-lit (or other) screen not unlike some type of state of spiritual rapture? Except, we know how to quiesce this (remove the power from the device enabling the enrapture - yes, as in pull the plug).

----

By the way, Big Ben, all this is because of the season for both (of course, there are more than two) of the major worldviews that revolve around the Bible.

---

We're, today, in day three of the five gaming days. Every week, it continues. Winners and losers. Yes, people, where is the discussion of the basic truth of near zero? In fact, Big Ben's largess to the fat cats which is sacking/soaking the savers is one big example.

---

But, what can Big Ben do? I mentioned before that he's heavy into the equity index game. And, to think that he is expected to be independent in thinking. Anyone remember when he ran scared (yes, 2008/9 time frame) and loosened the book of our beans for the fat cats to feed on without any constraint (or, does anyone even care?).

---

Is it not remarkable that in 2011, we're still arguing age-old problems? Well, considering that each generation learns anew (and parents know the travails that can come from their kids -- examples abound -- some kids even exalting in trashing the past -- but, we did that as a country here (in a sense) in the revolutionary times (ah, how many atrocities could be attributed to the patriots), if we only knew?), what else can we do? Now, given the question, we'll now have to venture into these realms. You know? Big Ben does not have to care. Like King Alan, keeping those in power, and in the money, happy is sufficient for the guy.

Remarks:

07/22/2015 -- Some of these are, now, poster boys.

09/19/2013 -- All's not lost. Some accountants see a change that is problematic. But, first, savers are more than just risk averse; they put their actions where their mouth is by being prudent. Now, that was once considered a virtue; in fact, one could argue that it was expected for fiscal responsibility. However, some claim that accounting has removed prudence in lieu of theoretical nonsense leading to annual reports that are incomprehensible. Actually, the computer can make things such, too, so the whole bit that underpins our world seems to have been given a shaky basis (on purpose, to allow rooking the people? - or, through stupidity?). Of course, the side that argues that prudence is quaint (well, it seems to be for quants) is vocal, too. But, we have China asking prudence of Ben and the Fed?

02/12/2013 -- We ought to have nationalized these guys' playground.

10/11/2011 -- If the OWS wants specifics, there are plenty to list, such as this one. Can we only resolve the grabby-ness problem with an amendment (like the 13th) for the rights of workers (folks, employment is not unlike indentured servitude (you sign over your rights when you agree to the onerous nondisclosure rules) in many ways as it is now defined) plus a Magna Carta equivalent to give the big pants (egos) something to think about? Why is finance about greed? Rhetorical, in part, but only because those with money have defined the game. We can show how smart/non-greedy peoples can run this show, no matter how complicated some might think that it is. And, it would demonstrate what 'markets' are meant to show.

09/20/2011 -- This will be used in our constructive effort.

05/29/2011 -- Fair dealing, can that be brought back? Was it ever?

05/17/2011 -- Golden sacks (leftmost mug of the rogue table), by Rolling Stone and Daily Ticker.

05/09/2011 -- Savers are suckers?

04/21/2011 -- When 250K isn't enough? Flimflam & swindle.

04/19/2011 -- That systems thinking has led us awry is obvious. Answering why this is so is the task.

04/15/2011 -- Daily Ticker quotes the New Yorker on the wealth gap: the top 1% of Americans own 1/3rd of the country's wealth. That is, 99% share the remainder.

04/15/2011 -- The IEEE Spectrum has an article that talks game theory in an accessible manner. The example starts with the failure of Steve Jobs' demo of the new IPhone, last year, which was attributable to the many mobile hot-spots that were collected in the room. Essentially, selfish action is expected. We see this in finance where the best-and-brightest are allowed a favored spot at the trough with the result that they become fat cats. There will be a post soon on this. As these related blogs have argued for a concept which could be characterized as 'simple living' (which takes note of near zero) as that need to bring the dismal realm of the economy into a more humanly oriented state. Yes, indeed. The antithesis of the fat cat is what we need to run our markets and to care for our beans. And, those who grow to be huge giants ought not, in most ways, be honored or emulated. Lesson: for any of those who have accumulated hugely, how many bodies were left in their wake? Then, is there any amount of retribution that they could offer (yes, the philanthropist's dilemma - recompense) that would account for those who were thusly sacrificed.

04/14/2011 -- Golden sacks. Where to start on these people? 

04/14/2011 -- We ought to have nationalized the bunch. Cowtowing to them (thanks, little Timmy) reinforces their egotistical notions of their necessity and worth.

Modified 07/22/2015

Where are we?

Moral: Wherein we weigh in with a reminder that the story of Main Street's lingering effects from having to change the diapers of the gamesters (yes, the ilk of Wall, etc.) still needs to be told.

So, one chapter closed with the meeting of the Fed. According to the WSJ headline: benefit of bond-buying experiment remains unclear as central bank's focus returns to interest rates.

The graphic of the Fed's balancing act is a nice touch as it splits out their holdings by type. Note the amount of mortgage-backed securities. Some of these were from the toxic era. What would closer analysis show? All sorts of economic positions are being argued now.

One fact is clear. Yellen is focal and expected to remain as such. After that, all things are fuzzy. But, let me make two comments here that are very much apropos.

• The downturn, if you remember, was caused by financial gaming, especially that of the financial engineering type. What has changed there? Banking froze as none of the players knew who they could trust. Has that changed (as in, with the spiked punch bowl, who of that crowd cared?)? Has the coddling quit entirely? No, of course, not. Savers are not part of the equation. In fact, it's the opposite. The thrust is to load people up with debt (ah, dire straits to be expected when the rates do arise - like the burden the US will face with its debt). For the poor, it's an abyss of no end. For the smarties? You see, they are still leveraging with cheap (Yellen's) money. The ca-pital-sino soars, however the reality of most not getting money from that is ignored. What that means is not related to those who chose to not be in the casino. That most are losers, by definition - can be explained, is hard to see when you get the Zucks (and others) rolling in the dough. At some point, perhaps, we can describe this a little better (where is that pivotal point?) such that those who are now lost in the mania (of the media) can see these things from a more reasonable stance. 

• Prior to the downturn, and to the present, the blogger has had a mortgage that was taken on only after the banker assured the borrower that they, the bankers, were not selling their mortgages. Now, the same banking company still handles the payments, and such. Except, the downturn time saw the banker (meaning the company, of course, with the head guy's face as the representative icon) buy into a high-flyer (who crashed). The banker thought that they were getting a deal (and were very much surprised). So, what that means is that the bought company is the new mortgage department. I'm watching to see how this impacts things, as I can get out at any time. Too, the banker has received oodles of interest payments during this time (hey, someone has to bear the brunt - and, we pay taxes, too -- will expound, ad infinitum, about this to those who might want to learn about the real economy - meaning sustainable). Yes, the mortgage was 30-year, fixed rate. No complaint, but for this. Has there been any thank you from the banker? Sheesh, no. The banker has been paying fines (related to their, supposed, wind-fall) and licking their wounds. Oh, what a tale to tell (will be told, along with the tale of being thrown out of a bank for having the gall to point out a process that was bordering on illegal -- the Fed's response? oh, banking customer, you sue them - we see the merit of your claim but do not care). ... On the other side of the coin, the Fed then pushed obligations (interest paid, rather than fat skimmed) of bankers for their customers to near zero (aside, when I talk near-zero, it has to do with the fact of the ca-pital-sino not being zero-sum (which, then, allows those pushing it to talk as if they're saintly), but it is close (when one does the proper accounting - as in, not buy into the spiked-punch-bowl-colored  world view). ... 

Stopping now. The tales, to be told, are not, as of yet, touched any more than barely. How many more points to cover? Well, consider this. The view? Economics trained, econometrics focused, computer modeled facilitated, essentially scientifically predisposed, intuitively oriented (as necessary), and more. ... The whole caboodle needs a look (is time infinite?). 

Remarks:  Modified: 10/30/2014

10/30/2014 -- Pause would have a great influence on our models. Now, how to do this? For one, let's get back to the sandbox necessity. 

Sandbox, again

Moral: Wherein we remind ourselves that we need a sandbox to constrain risky (sandboxy) behavior and to introduce some concepts from the test engineer into the handling of our beans (and bread). Does the aura of mathematics and modelling make it less ad-hoc?

---

Big Ben likes to sack savers. He has had his hand in our pockets for years now. Having fun with that, big fella?

---

One of his guys, Richard Fisher, says enough coddling of the fat cats. Thanks, guy. Will Big Ben ever listen to you?

Richard says that he see evidence of speculative thinking. What? Heck, Richard, it never left, and, since we let the genie out of the bottle the past 1/2 century, it has only grown.

Hence, anyone thinking about how to get these 'gamers' into some type of corral? By the way, Warren, you could help.

---

So what does all that above mean? Well, here is some metaphor-laden garble from the leading, supposed, thinkers in finance. Too, notice the use of concepts related to gambling. At the same source, we see news about Warren's recent gains (with 'bet' in the title).

Is this business or ca-pital-sino? And, we all know that gaming is zero sum, not near-zero (except for a little public good from taxing the house, perhaps).

By the way, if the casino were to be corralled into a sandbox, what would be left? We'll need to look at that type of thing further.

---

Shilling: The stock market is rising because the Fed's free money policy is making the stock market rise, Shilling says. But the economic recovery is much less than meets the eye: Wall Street is doing well, while the rest of the economy suffers, and the critical housing sector is still a mess. So the stock market's run won't last forever.

Remarks:

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?).

03/22/2013 -- GW at ESPN (see image on right) has a nice point of view on the madness (and related comments). We ought to have something similar for the financial folks, using play money, with prizes. That's the sandbox, folks. Then, the real stuff would be handled by mature, stable adults (not the greed ridden - and similar ilks -- okay?). The madness has to do with animal spirits just like the market (ala Adam). Too bad that one loss gets one out the door. Perhaps, at the final four level, there ought to be a round robin, like college baseball. --- Now, having just written the above, this glorious bit of madness is really a sham (see comment at madness, 03/12/2012). The whole madness pits kids against each other, who are playing for naught (comparatively), being coached by millionaires, with big buck media behind the affair, and a bunch of other lucrative ploys benefiting from the labors of the few. If one looked at qualities (as in, abstract out a truthful look at this), one could find parallels (many, many) all across history (these things being not consider our best behavior). Granted some (as in, not all) of the kids go on to big bucks. Others find glory in their endeavors (what would be be without school spirit?). Yet, besides the commonality with historic events that aren't looked at as being our (humankind's) best moments, there are all sorts of analogs in business (which we've seen of late, in glorious detail, as being problematic at its core - the heart that is supposed to be related to finance). By the way, see the below comment (madness, 02/08/2013); that particular team ended up with a #1 seed.

09/14/2012 -- Ben just gave them, the runner amok'ers, the store. 

08/30/2011 -- Essentially, we have financial piracy.

04/04/2011 -- Tis tranche and trash. Need to look at some background.

03/28/2011 -- See 03/24/2011 Remarks (1/2 rant) and on March madness.

Modified 10/30/2014

Startling news?

Moral: Wherein we commiserate with Ben that he is not at the Fed desk as the results of his largess come to fore. Well, Janet can claim some credit; too, she'll have to handle the downside that is coming.

What results? Well, the DOW running sky high.

The headline says it all: Dow flirts with 17,000, but most people missed the ride. (emphasis mine)

It ought to read: Dow flirts, but most people cannot ride. (why not? to where does an illusion take one?)

---- This was brought from a Facebook post, dated 7/2/2014 ----

Most people missed the ride? Even those who got on that "train" will lose out. That is by definition how the system works. Its main purpose is to lure the hapless. 

Even under the best of situations, the "most" cannot get out of this type of market what they have put in. That message is never given. Rather, the talking heads say that people did not get on and missed the "train." It would be comical if it were not so sad. Ah, let's count our hypothetical wealth (and, arguing that the cash equivalents are as flaky is not proper - to be discussed).

Again, all of those on the train cannot get their booty (the Zucks of the world have and will). Why? The cheshire multiple, the chimera, and such.

Early sellers get the goodies. At some point, which is a lot closer to the top than you might expect, the majority of the rest become losers since they must sell below their cost. Oh, wait it out, is the adage? Not if you need your money (and a whole lot of other reasoned responses - these issues have always been known, but the gaming fills the pockets of those who run the system).

http://finance.yahoo.com/news/dow-flirts-with-17-000--but-most-people-missed-the-ride-202459906.html

So, one big disservice, of many, of the FED, of late, has been not allowing a rationally sufficient return to those who want to preserve principal. No, they would rather push gaming (as if that is the proper mindset for a sustainable economy - to be discussed). 

Remarks:  Modified: 07/03/2014

07/01/2014 -- Euphoric territory? How do images and illusions attract so strongly?

Money and value

Moral: Wherein we consider some of the consequences of using fiat money.

--- Foreword:

These consequences are strange, indeed. But, first, why is our money fiat? Well, consider that we have a system that is based on hot-air; that is, it looks to one guy's words as having meaning whose value considered by some as coming from an oracle. Talk about irrationality. So, what we see is that this gab standard leads to strangeness, a mindless form of gaming.

And, the notion of casino capitalism came about to depict the current state of affairs where daily a lot of energy, and money, goes into playing the 'market' game, for the most part for no real consequence, except the visceral reactions of the participants, whether as a winner or loser. We know that there are winners and losers since near zero is the actual situational outcome, folks.

--- Word:

Since we're after the year's cusp, let's look at three stories, of the past year.

• Mr. Woods allows us some data to consider. It is reported that shareholders of his sponsors have lost $12B (thereabouts) in the past month or so.
• Marilyn and Investopedia, and probably others, tried to explain to people where the value went that was absent from the markets, as they are defined currently, at the bottom which was the March, 2009 timeframe. Ah, it vanished, they claim. Well, if they are right, the hot air came back quickly.
• The AP reports that 150 (thereabouts) schemes (Made-off type) were uncovered in 2009 which is about four times the usual. Ah, why are these so easy to pull off?

Taking the first and second stories, we have to know that there is value behind those trades. That $12B did not disappear but went over to over assets. How does that movement, with those few (comparatively, that is, not across the board), differ from other downturns?

One thing missing is any type of accounting that would tie trades to something real which is due to the nature of the system. That is problems of a systemic nature.

We'll be going into this further later.

Now, that third story tells us about schemes which only reflect the large problems of the financial system (happy talking and its ilk).

Only part of the problem can be attributed to options, and similar, trading (CBOE can be partly justified), as there can be a basis determined for some speculation. That is, the type related to the originator of a commodity (the producer) has real value (as long as it isn't done by a jerk).

Also, some of the problem can be attributed to people who want the quick bucks, the greedy and the perpetual marks. But, just as we saw with the old guy, now in jail, it is more than that. As, computation, and accounting, allow these easy manipulations which ought to tell us something.

One thing to consider is Markov's contribution, though he is not to blame. Andrey showed us how we can ditch the past. That is, we can apply a pseudo-Now framework, yet it's not Zen. Andrey didn't show us that we can ignore value (especially the inherent and intrinsic (traditional connotations, mostly) as only that which someone will pay.

We'll go into this further, too. It's nice that the Quants ran after their attempt at taming stochastic (or supposed) entities. As said earlier: That the quants have run off after their stochastic taming attempts we'll be looking at further. That CAE folks have broken the rules of map/territory differentiation is another variation of mis-handling of that which this sequence denotes.

--- Afterword:

Error'd ways can be found on all sides as we'll continue to see. Who is without error?

Actually, we mainly, it seems, can just minimize pain since these issues rest on an undecidable foundation which means that the best that we can due is be quasi-empirical.

But, that is no excuse to allow the 'fat cats' and 'greedy' of each generation to run rampant over the innumerant, the sickly, and the frail.

Remarks:

01/26/2013 -- Updated stale pointers. Too, the subject is still of interest.

02/01/2011 -- The chimera shines.

05/03/2010 -- NYT article on the subject. Paper on wealth and savings.

01/06/2010 -- Poor Ben, getting grief and criticism.

Modified: 01/26/2013

Fiat money

Moral: Wherein we look at "fiat" money, again, plus the cheshire multiple.

We have not had a post on this topic, for a while, but a recent WSJ article (How the 'Reserve' Dollar Harms America, Nov. 21, 2014) prompted such. So, back to the old themes.

This topic has been touched upon in all three blogs:

• FEDaerated (see fiat, gab-standard, coo-coo, and goo-goo) 
• Truth Engineering (see fiat and gab-standard)  
• 7oops7 (see fiat and gab-standard) 

Call it funny money or what you may, the whole process depends upon wizards to control the process which easily veers out of control, as we have seen time and again. That the U.S. must lead the way is obvious to many; 'how is this to be?' is less so. 

Along with consideration of 'fiat' and 'gab-standard' having some focus, there ought to be, as well, some sensitivity to Minsky's thinking.

---

How high can it go? Well, the DOW is close to 18K today (12/3/14). There is a run-up going which we will watch. There are two caveats that need repeating.

• This is funny money, folks, except for those who are in the position to exploit the situation: those who run the game, those with the wherewithal (the Buffets and more) to rake in gains (ill-begotten), and such. The fact: this group is a minority (very small in cardinality even if their pockets balloon immensely). 
• Those who buy in now are lining up to be sacrificial lambs. Ah, the humanity. The fact: losers outweigh the winners by far. Even if we graduate the amount of winnings (ignoring near zero, for now) from reasonable to extremely greedy, the winner set would be small (far less than 10%, if that).  

Reminder: In the context of these discussions, 401K eyeballers are not "winners" (grieves me to even use the concept since the reality is so putrid - when the kimono is lifted) until they have cash in hand.

Now, having said that, what is needed? Rather than the headline says, Apple drops 22B in a day, we ought to think about another accounting approach where buyers/sellers bounce against an entity with a history (to be discussed). Yes, the peanut buttering of gains and losses across a whole population is stupid (always has been). 

When computers came along, were they applied to beefing up the accounting? No, they were turned into gamers to extract even more from a silly system. How has this gone on so long? 

The vested interests benefit, essentially. We do not have to rise to the level of ethics to bring the problems to public viewing. No, all that is necessary is to lay out the scheme's basis and how the ca-pital-sino is a type of "shell game." 

---

We were on this theme six years ago (Crooked games) and will go back to the earlier thoughts. The FED has changed the character of the game, delayed the consequences, muddied the water (really), and set us up for some interesting failings (will be worse than the last time - as many say). 

Remarks:  Modified: 12/06/2014

12/06/2014 -- Put here as placeholder: Capitalism's gravediggers.