Harvard, ..., II

Moral: Wherein we consider that even the best-and-brightest (big endowments) can get lured into playing the games offered by the sirens of technologically driven business; there are many of these games, but the big chimera (many faceted demon of our own design - Rick, of course) is a huge one. That shell games get out of control, now and then, is a lesson that does not seem to stick (no, the little people suffer and pay, always). No wonder the backbone of the economy breaks under such nonsense.

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There is much to look at. However, we will review this paper, at some point: Educational Endowments and the Financial Crisis: Social Costs and Systemic Risks in the Shadow Banking System 2010 (PDF at tellus.org). In the meantime, a few thoughts are collected.

In terms of disclosure, all this will lead to the following: discussions of near zero and its necessity.

The biggest brains are no better than the lowliest worker. That emphasis has gone so heavily into out-housing (use of this does not imply the inability to see the reality of our inter-connected and global world) results, in part, from a seemingly endless set of new exploitees always around the bend.

Too, talents not related to numeracy are essential to the planet's future; yes, techies, innumeracy is not idiocy. How can the numerant (those with numeracy) be allowed to innovate financially without oversight?

The Gulf spill might be a perfect metaphor. We can exploit only so far; at some point, real costs have to be considered. Oh yes, the current state of affairs shows just how easy it is to fall into a debt, and enslave the future, pattern.

Was it Harvard that led us on the path of short-vision'd and, ravage the landscape, business (Cat and mouse)? Well, can it dig back into its roots, those prior to the ingestion of the secularist potion, and develop a coherent non-secular stance that is so sorely needed by the world for a peaceful and productive future?

Suggestion: where is the notion of ethics ever brought into the minds of those who are going to lead the future? Ought not this be more prominent, period by period, throughout the educational experience? Can ethics even be absorbed by one who is reinforced in elitist thinking?

Divine right of the endowed (pun, of course, for best-and-brightest)?

Earlier posts that are related to the theme under development. Not picking on Harvard. BUT, you Crimson guys and gals, you were the first on this side of the pond which, then, brings especial responsibility.

• Harvard, value and quality I -- from whence will come the multi-faceted minds that we need and the training that will raise the worldview?
• Gravy train -- that is, will raise above the notion of massive taking?
• Gray areas -- and, will not try to exploit situations or potential exploitees?

• Win and lose -- success breed hubris; failure causes whining.
• Hedge Funds -- they say that money talks or that money has it privileges. Evidently, one of these is to make your own rules.
• Lessons to be learned -- gosh, the problem? Who's the daddy!
• Oops and more oops -- stumbling going on everywhere, almost densely.

• Cars and quality -- wonderful metaphor for the current economic mess.
• Roles for schools -- more than merely funneling out takers on a massive scale.
• Swarm proof -- even the brightest are under the laws of nature (more full use than normal).

Remarks:

01/23/2013 -- Things are looking up: Read free or die.

10/16/2011 -- Harvard is 375 this year. That, one might say, will precipitate a closer look, soon.

05/17/2011 -- Hedge funds need some of our attention.

04/20/2011 -- Simple living (see Remarks 04/15/2011 - game theory), as opposed to greediness.

04/12/2011 -- Now, we hear that Harvard wants Bernie to teach ethics to the best and brightest! It is obvious that he ought to be a case study and a specimen of what not to do. That is, analyze him to the core. His motivations would be included. The biggest lesson? How we have dumbed down ourselves in order to make the system, and its artifacts (see comments on hive mentality), work.

04/04/2011 -- Boston U's opinion.

02/24/2011 -- People matter.

01/19/2011 -- For the most, things are dire, not by necessity.

07/02/2010 -- Anyone at Harvard with the sense of justice like Perelman's?

06/01/2010 -- Some young MBAs want to get their reputation, or that of their discipline, out of the crapper. Nice. An oath is one theme.

Modified: 05/08/2014

Recap of sorts

Moral: Wherein we pause to reflect a little since the blog's first year passed without comment.

Well, we're three months behind on that aspect. But, then things are different now than they were just a mere two weeks ago.

In parts of the country, there were very small blue islands within a vast sea of red. Gosh, what does all that mean? In terms of the viewpoint being expressed here, not much.

Let's, for now, just look at a few themes that will continue further.

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We can use some of the categories as a means to organize the material.

• Ca-pital-sino -- it is obvious that some have taken Adam Smith's ideas too far. This we want to discuss further, as that tendency to the right has no stronger foundational basis than does any of the others. As already said, the gaming aspect needs some conditional limitations imposed. They are not going to be mathematical but will be social in flavor. How can this be?
• Ideology -- it is quite visible that ideological gaming spawned ca-pital-sino. Why? Our intent is to lay out a framework with which to condition the gaming. To date, we have brought forth the reminder that we all have drives which are, for the most part, toward individuation and maturity. That latter means that we don't want meddling in our lives. Yet, we ought not meddle in others' lives either. As well, that the related decisions need to be knowledge based is obvious. Again, how is this to be?
• Numeracy -- it is unfortunate that those who follow, to the limit, what we might learn by mathematization and algorithmization have imposed on the rest a type of bestial system. That this idiocy has gathered such strength is that fat cats have had their pockets filled to the detriment of the commonweal. How was this allowed to happen?
• Underdetermination -- it is the fact that we are serious lapse in what we can and do know. Now, our maturity provides the basis for decisioning under the resulting uncertainty. That the computer has become a major player raises a whole bunch of issues. The main one is that the underlying framework is undecidable. Plenty have danced around this subject, but linear logic allows us to look at the problem more realistically.
• Big Ben -- it is to our consternation that we see real-time, and less than insightful, experimentation with our selves and our monies by a handful of the best and brightest. There is only one thing to say. Sheesh!!! Well, we'll continue to discuss this problem and its potential resolution.
• Jobs -- it is the case that the best and brightest, and the fat cats, have exported work, via out-housing and colonization, to cheaper areas (read, easier to be exploited); the American worker has been short-changed; too, initiatives, such as six sigma (a form of Quant'ification), have resulted in the degradation of the work experience so that everyone is on the proverbial treadmill without any relief in sight. And, those not on the treadmill envy the state of those who are. How did all of this come to be?
• Consumption -- it is seen that without jobs that pay and without means for purchasing the populace must sink into a pit of debt with an unfathomable bottom. Yet, those who model the economy place the role of the consumer as primary, in size and importance. How can we see such continued inconsistency from the best and brightest?

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The intent is to continue with the analysis and discussion of things dismal (meaning, of course, economic).

Remarks:

12/05/2010 -- Raj Patel has the proper grasp on the 'financial madness' that is threatening us.

11/26/2010 -- On the Greenspan Put (Rolling Stone).

11/24/2010 -- We need to list trading types that would not be possible without computational support for the associated markets, permissive legal structures, unaware populace, and more: gaming by options, ...

11/22/2010 -- Tranching, under the guise of securitization? Silly games.

11/18/2010 -- We'll be taking a closer look at the numer-ants (my terminology for those who think that numeracy is it, which is about most of the best and brightest in the western world and those of the eastern who are coming over here and eating our lunch) this next year. Why? That the quasi-empirical framework is without due attention is why. Now, numer-ants like systems. What is wrong with the systems view will take a whole lot of attention. How about some convoluted system, such as this one. Ever consider why these come about? It's easier to hide book cooking and its ilk.

Modified: 12/05/2010

The big chimera

Moral: Wherein we need a series that can be done as an independent, and honest, assessment of the practices, based upon the usual market ideology, that we can observe without any inside information and that we can analyze because they use modern, computationally-supported frameworks that have had applicability in all the modern advances including the marvels behind ubiquitous computing and other major engineering systems.

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As mentioned before, recent review of the changes that have occurred these past couple of decades shows mind-boggling improvements, yet many of the supposed advances that have been implemented, albeit there were probably many more hair-brained notions never put into place, were suspect, as recent un-foldings of the whole financial scenario have shown. We're in a situation where no one knows what is good and what might be bad in all these schemes just as we do not know how many, and of what possible pain, are the toxic assets that have been shoved under the table. Things froze because those who do the playing know just how suspect are their practices; we, the taxpayers, had to bail them out in order for the game of musical chairs to begin again.

That the FED threw oodles of money at the problem to loosen liquidity has only made the problem worse, and it is more than just an issue of moral hazards.

Of course, some financial schemes stunk to high heaven (Madoff gave us new definitions). Yet, there is no axiomatic basis from which to found a proper view on either side, even though finance did lure many trained engineers and scientists into the game that has been coined as casino capitalism. Methods, of a quasi-empirical nature, can be established and, in fact, are essential to the health and safety of our economy.

That we have time to explore these options must be emphasized, as no train of any substance has left the station. We need to take the time to get this right.

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We can proceed in discussing markets as the train the drives things. Or, so one ideology might go. The trouble is that we think of concrete things being sold when we think of the market. At one time, a share had some definition and value. But it is not true now that anything real is processed in the financial markets, for the most part. Just like the gab standard founds our money, these markets mainly push ephemeral entities whose value is a matter of resolving issues related to highly abstracted models and the interpretations of associated rules that are legal, operational, and strategic. And, all this is done under layers of algorithmic mishmash.

What has evolved in the markets is a chimera supported by high-speed computing and algorithms whose potential impact no one has a real handle on. Oh, of course, some are filling their pockets, but the game is near-zero (in fact, it has been nothing but negative for the US taxpayers). Trouble is, as well, that those with numeracy skills have the roles in keeping this chimera going. For some reasons, we don't have any notion of fiduciary duty or of ethics.

Given the fact of innumeracy (which is not idiocy, by the way), the whole population is not served by the methods that have evolved. No way. In fact, the whole claim of best-and-brightest is a form of hubris, suggesting that what we have now is incredibly fantastic.

No, it is not. Rather, it's a house of cards of the most flimsy manner that has been pushed upon the unsuspecting public through the failings of several, especially lawmakers who ought to know better. Proper analysis will show that the markets need to be dampened which action will have several looks.

That some are making money in the current scheme, actually many, yet it's only a small subset, may suggest that things are fine. Well, it is not; the extreme imbalances between Wall and Main Streets, about which there is much clamor, is real, folks. And, it has been greatly exacerbated by computational advances of the past couple of decades.

Since it's rather complicated, we'll amber about while trying to keep some coherence. We can use two players to juxtapose a balance. The first would be Goldman Sachs whose recent overview (of the market structure, pdf) needs to be discussed. Actually, it is nice that they were so open with itemizing the important financial concepts and in explaining their side.

We need to look at ECN, dark pools, alternative trading systems, and much more. As an aside, the definition of the dark pool raised flags immediately as being a means to thwart natural market purposes. We'll have to look at the history of this thing.

The second player will be BATS Trading of Lenexa, KS. Why? They are relatively new and are not located near any other of the major players. Also, they offer an alternative system that has been successfully applied by traders. BATS has their own index which will be interesting to watch in comparison to those updated every day in the media (DOW, et al).

We'll have an old firm and a new one. The latter can serve as an example of what an open economy allows, that is, new entities to enter with a new game plan.

The intent is not to be anti-market. Rather, that which is called casino capitalism must be deconstructed so that we can allow a better approach to the 'market' and its majesty. These things, by the way, ought to be run in a non-profit mode (ideally, by monks who took the vow of poverty - some of those have a lot of numeracy).

Note: This is an introduction. Next up will be the start of the analysis and discussion. However, some thought will need to be put to (this view of, pdf) liquidity. Here's the deal. Okay, using the metaphor of blood, we do want flow. Yet, there are other phases (gas, solid, ...). Besides, the blood carries things, such as nutrients, defense cells, etc. There is something amiss, as what we're seeing is large outflows to bonuses and to supporting lifestyles that are far removed from any ever seen by Main Street. Hang on, as we're going to look from the basis forward. Whose basis? Good question. But, consider this. Cash flow, real liquidity, is only one concern of management. Some type of imbalance has been allowed to come forward where money churning (and froth) is seen as of real value. 'Why?' and 'how?' are the questions. That 'liquid' state, desired by finance, seems to not have any natural analog (remember, we cannot get perpetual motion).

Remarks:

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

12/15/2012 -- Coase, on the subject.

10/05/2012 -- Yes, yes, chimera it is.

03/11/2012 -- We need to update this, especially with a nod to Alan M. Turing.

04/03/2011 -- Need to look at some background. Too, tranche and trask.

03/16/2011 -- On the rise of the professional politician (will there ever be the citizen polico? that is, those who do not salivate when a buck is passed beneath the nose) toward robber barony. The M & Ms are apropos. As well, need to bring in Schervish's viewpoint.

10/28/2010 -- Warning, train wreck ahead. What train, I had asked? Yes, there is already a wreck, despite the inflated market (those who lost big are still behind).

05/25/2010 -- Who will (or can) lead out of the morass?

05/07/2010 -- Out of control, essentially, and not healthy for the backbone.

01/07/2010 -- We need to look at capitalism, closely.

01/03/2010 -- More news on Goldman Sachs as the uber example of 'not on the behalf' comes to fore regularly. It'll need to be a separate subject at some point. Thanks to McClatchy: Nov 1, 2009 & Jan 3, 2010 (update). Goldman has to respond, of course.

11/29/2009 -- Risk and rationality. As well, we'll need to go further into innumeracy.

11/27/2009 - Roubini on the coming unwinding.

11/20/2009 -- Societe Generale is getting negative?

11/10/2009 -- Glass-Steagall, again. Why not? Also, more on the gab standard.

11/10/2009 -- A floor guy (Chicago) reported on firstbusinessx today that GS was a big buyer yesterday. Was this on the behalf of? Or, is it to keep the boosting going? This type of buying, no doubt, has a floor to staunch any bleeding if things move downward which they are expected to do.

11/09/2009 - Forgot to mention securitization, which definitely requires computational support in its current form, as something to look at closely. It is more problematic than many think, and actually is more of an example of flim-flam than most. So, expect in depth analysis. Ah, structured finance, the bane of our existence, it seems.

Modified: 03/15/2015

Reflections on Steve Jobs' work

Moral: Wherein we look back at our computing history, a little.

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Mr. Jobs' work was central to several themes that will continue (such as, truth engineering). He'll be fondly remembered by many, for a long time.

The below reflection is not to be considered as critical, in any sense. Rather, it is meant to be the start of several posts that deal with the evolution of computing and with what might be needed to bring the genie back into the bottle (impossible in practice, but nice to think about).

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The blogger saw Steve Jobs in person before the blogger saw the first Mac.

The blogger was working on a project, based in Cupertino, that was trying to attain wafer-scale integration. As you would expect, the computational modeling requirements were enormous (as in, there was no possible way to print out the circuity on paper, let alone try to compute properties) and pushing the envelope. Of course, things may have been a little too risky from a business sense (but, that's another story).

That project was 30 years ago (Mr. Jobs wasn't the only former-hippie in the area); the idea was fairly progressive at the time. It was definitely too early for the desired scale. Mr. Jobs was interested in technological aspect, as were many, at the time.

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It was a mere few months later that part of the world went crazy over the little Mac. Mind you, it was cute. But, it could not be, at the time, compared to what the blogger had as a workstation (which you could not lug around, of course) that was needed to handle the demands for large-scale modeling. Yes, the workstations were networked (early use of the local internet facilities), had large memory and storage, and were somewhat fast.

In the early days, it was the non-technical ones who were enthralled with the Mac. Or, those who were not fortunate enough to be working on projects that could (had to) shell out $100,000s (in multiples) for networked workstations (see Remarks 05/02/2012 for some details) and their software (very fat clients, essentially).

Later, the blogger was able to use enhanced Macs. That is, we put special purpose cards into the little guys to make them capable to support the work demand.

Unfortunately, after that, the companies that the blogger worked for went with the IBM/MS thing (if you type 'win' you lose -- type of deal). So, Bill Gates, too, will be another part (much later) of the story.

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Now, of course, a device that fits into your palm is as capable, somewhat (cannot, as of yet, make any comparison of what are now termed 'apps'). Mind you, it takes banks of these devices to perform the types of tasks that we were attempting with workstations (needless to say, a lot of the speed-up is due to trickery, trimmings that may very well come back and bite us on our collective behinds).

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In the past thirty years, the computing world has changed; yet, the underlying pinnings are no more sound. In fact, one might say that Mr. Jobs' work exacerbated the problem. Mind you, that is not a criticism. It means this: in the hands of about everyone is a whole lot of computing power, much of it wasted, and all of it can potentially contribute to an increasing amount of mayhem.

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Of course, Mr. Jobs' outputs and devices have been crucial. For instance, his NeXT work was important in carrying forward several modeling technologies. Again, the blogger was involved with applying this capability.

There will be much, much more to look at.

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In essence, Mr. Jobs' life and work was central to an expanding theme; of course, many have made money (extreme amounts) on the back of this development; too, many have suffered (the latest? I-Phone/IPAD suicides).

We need to look at the whole picture; Mr Jobs' (and his zen-mind) would appreciate that.

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And, given that the recent protests are about what essentially is an exploitation by the best-and-brightest of computational frailties, the theme is very much apropos.

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So, the coming posts will have more of a technical focus, as the blogger reflects on the changes that were concurrent with Mr. Jobs' life.

Remarks

10/05/2012 -- In hindsight, Mr. Jobs' foresight looks pretty good (if only we could understand 'reality distortion' a little better -- and how we can observe effects). Talents come in many shapes, but being able to see around the corner (never 20-20) can be useful (if one can keep from being overwhelmed by the possibilities - lesson there? computability issues). The truly independent mind would have its own model that would be, perhaps, immune to energies related to phenomenon like Jobs' persuasive ability (this battle is age-old, folks -- to wit, the little ones on your shoulders leading you left-or-right [meant as facetious, during this muck-raking season, that is, thankfully, over in a matter of weeks] - Zen is one of many disciplines related to the theme). One adage I remember, from my long years, is that you get a bunch of managers together, and, before you know it, water runs up hill.

09/28/2012 -- Nice little issues continue to be ignored.

05/02/2012 -- Need to add a few comments about the technology alluded to earlier in terms of workstations. For one, the Lisp Machine (Xerox, Symbolics, LMI, ...). These workstations were quite capable and expensive. In fact, embedded within a couple of the modern approaches are the improvements gained from developing (and using) these machine. Too, about the same time, Unix-based machines were becoming more capable. Of course, SUN stands out, but it was much later. ... During those times, object modeling was maturing. C++? Infancy. Java? Not even a glimmer. ... Numerically, FORTRAN was still king and would be for awhile. Databases. The relational modeling that made some so much money? Being born. ... In essence. Work, at that time, was pushing new methods for creating algorithms and heuristics. Some of the approaches continued until the mid-2000s for the reason that they were still effective and, by that time, had not been duplicated by other approaches. ...

01/17/2012 -- I've been slowly reading his authorized bio; at some point, more reflection will be forthcoming, especially when we look at equity (private and otherwise).  

11/04/2011 -- Tech Ticker asks a good questions about the darker side of Apple. Are any of the other tech companies any better?

10/20/2011 -- We still need to follow up. USAToday on Mr. Jobs.

10/17/2011 -- There is so much to cover, however look at Rick's latest post. Of course, Turing's test doesn't deal with the 'being' issue (what test would?).

10/11/2011 -- Weathermen reminisce about what the Mac meant to them. These are interesting and relate to a couple of points that need to be addressed: function/presentation, metrology/close enough (of course, they're trying to solve a hard problem, yet, flashy graphics do not 'truth' make).

10/09/2011 -- The prior Remarks will bring in issues related to the 13th Amendment. Aside: do employer-driven non-disclosure agreements tread on rights pronounced there?

10/09/2011 -- Kings have sovereignty over their dominion however large it may be. There, currently, is no king of the world of this type. CEOs have sovereignty over their companies. Now, many of these have domains that are larger (measured many ways) than geographical types of kingdoms. BUT, each has sovereignty over themselves (or ought to), ideally (constitutionally, if you're in the U.S.A.).

Now, being able to exhibit sovereignty requires talent of various sorts. Throughout history, those who ruled others may or may not have had this talent. From all of the turmoil over the millenia, one has to just marvel at the stupidity of these types, exhibited, in the modern age, by the CEO MVPs.

Our task is to foster that which enhances one's self-sovereignty and diminishes others' influence on oneself. Oh wait. The social media seem to be antithetical to this notion. Also, all of those issues related to mature interactions (of a peaceful manner) must be resolved (philosophers have long been involved with that dilemma).

It is this type of notions that are behind a lot of what motivates the current protests. Those who could (LT 1%) have exploited (and have been allowed to exploit) the rest (GT 99%).

We need to discuss how much Steve's work may, or may not, have helped those who want to achieve self-sovereignty. Zombie-like attachment to an idiot box (yes, including the so-called smart phone) provided by technology (owned and ruled by another) is probably one of the worse types of enslavement.

See Washington Post article (link, next Remarks): kids won't glance up from their IPhones. They'll never need to. (Ah, we'll bring them bed-pans? Wait on the little zombies hand and foot?).

10/9/2011 -- And, the Washington Post weighs in.

10/8/2011 -- Interesting essay, at WSJ, that bears some response, at some point. Technology, in this sense, provides rose-colored glasses and puppet strings to be pulled by the wizard? Ah, ironic that the Mac appeared in '84. What conversations are George and Steve having?

10/8/2011 -- These Remarks are, in part, collecting themes for the future posts related the subject. The genie is out of the bottle, as noted above; we cannot go back (the time arrow is forward -- for all that we know, now); therefore, resolving 'truth' issues will be central (not unlike the need for defensive mechanisms -- albeit, we would like to think that peace and love are the norm -- not succumbing to Dick's paranoia). The context requires a technical focus, but a whole lot of intuition is in order, to boot. That is, trained intuition. Do we know how to do that, yet? Somewhat, Steve's work was directed toward this.

10/07/2011 -- Steve's efforts raised two essential ideas to the fore such that they had to become part of the milieu: usability and object-orientation. The two (and a few others, to boot) will be looked at further in additional posts. Usability, especially the touch-click notions assisted by graphical displays, is central to certain types of human-computer interface. That interface can get in the way, though, from a technical focus (we'll define this further). The whole notion of entities with behavior (we'll look at the history of this development) that are accumulations of disparate (not disjoint, necessarily) attributes is at the basis of a whole lot of modeling. Too, though, it can lead to confusion (computational vertigo). Again, this is not criticism, but, rather, it is an attempt to discuss the evolution of computing using the effects of Steve's participation.

There is a sort of dichotomy involved here. Apple allows an intuitive interface that enhances creative efforts, of a sort. That type of interface can inhibit others (we'll get into that). At the same time, though, this whole evolution has favored those who have numeracy (with the effect of reducing (or trying to) the innumerant set into the corner of eternal dumb-ness. Ah, no wonder things are so awry as the best-and-brightest are numerant and are exploiting the game.

One can argue (zen) that numeracy is more idiotic than not. Got that, smart folks? We'll be explaining why. Hopefully, the protesters of Wall Street do not lose their sense of urgency.

10/07/2011 -- Steve believed in his own intuition. We'll have to look at that a little, in this sense: mathematics and science have denigrated intuition (many examples of the counter-intuitive being correct - to a certain point) yet we know that we need this in order to be creative. Those two poles, or seeming poles, are at the crux of the computational problems of today.

Modified: 10/05/2012

Continuous and Discrete

Moral: Wherein we use: Say what? Well, think of the title as a headline aimed at an attention-grabbing.

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Of course, any implied reference to the dualities addressed (example) by physics is intended, however tenuous they may be at this point. But we'll get into that later, as are not many Quants from backgrounds in the hard sciences (see Remarks 08/20/2009)?

The idea is to start to address some issues in finance. It'll be slow, as there is a whole lot to cover.

Not that I'm an entire newbie, but it was nice to see that the notion of discrete and continuous has already come up in finance. Note, for instance, this bit in Wikipedia that compares binomial and the Black-Scholes models makes that distinction.

Having mentioned B-S does not mean that we'll get into the Greeks just yet. We have to start much more basically. Consider that the approach is both fundamental and foundational (f&f).

Now, doesn't our intuition tell us that some things are smooth and others are not? And, even if we don't use that particular word, could not any of us make this choice in a situation like sorting some set of objects? Even blindfolded?

But, being technical, we know that smoothness involves differentiability. As we all know, non-smooth, from noise or error, is difficult to handle, in fact causes very bad behavior. The advances in finance that we are to address came from several directions, but two major ones are the means to handle problematic mathematical objects, like the non-smooth (via Ito's and others' work), and to have computational means for this (hey, it would not have worked otherwise - get used to quasi-empirical as a concept, as it'll be used a lot).

As we know, it was a major step to realize that we could have continuous and non-differentiable functions (Bolzano, old KW, et al). Yet, there are other steps forward, like this one out of France (Levy process). Actually, there are too many to cover in brief posts like this.

At any time, various hints at background are all that we can do in order to state some theme. In this case, a whole lot of work has gone into handling randomness and high variability. Some attempts at bringing to fore some intuitive views can be seen, yet they also bear the danger of being problematic (thanks, Hail the Quants!). Actually, the intuitive is no more apt for this downside than is the most polished, theoretically-grounded construct.

The current excuse is that overlays that have people underneath are by definition too difficult, as opposed to physics and its particular entities that are mindless. Yet, consider, please. All that says is that derivatives (see Note 1) placed upon humans, or things that are highly influenced by human activity, have value derivation problems.

Yes, I know, plenty have made money. You know, of course, that the multitude lost out. Call it near-zero, if you must. If you look at overviews, like this one from the WSJ (Reagan's Bull Market), yes, things are a lot different than 1982 (gosh, some of the Quants may not even have been born). But, look at the median income line over that period (if that were a log chart, it would be flat lined).

The intent is not criticism. Rather, let me suggest that there are ways to do this modeling, that is, overlay people with more insightful structures, however, the concept of smoothness will be imperative. How can this be? Ah, that is what we'll be going over through time. But, start to think about boundedness as more than a limiting abstraction.

Hopefully, the discussions will come to code and test sooner than later; actually, that is the goal, though f&f will continue to be of major focus for now.

Remarks:

03/15/2012 -- Okay, might have used incomputability (see post on Alan M. Turing) but stand by the context, the issues, and the need for resolutions. Wake up, quants (you, too, Ben).

01/13/2012 -- A re-look at this. 

10/08/2011 -- The link is more than tenuous. In fact, numeracy (see Reflections on the work of Steve Jobs) ties right into support of the discrete model. Why? For now, we have to transform from continuous space to the not-continuous in order to obtain solutions. One has to wonder if there is some way that 'analog' views might help us grasp better the ways of the continuous (we all know that we're a whole that is much more than the sum of parts -- yes, we do).

02/10/2010 -- We could probably use the auto (and recent events) as a way to characterize the concepts of the blog. Of course, we have the value versus quality mis-think as part of the problem. Business Week reports that Toyota was asking suppliers for a 10% cut. Well, such scrimping would have an effect, even if it was only in looks. However, cutting into the life of a system may appear smart but, actually, relies on the same unstable basis as does a lot of economic thinking.

09/02/2009 -- Let's put undecidability on the table, please.

09/01/2009 -- Oh, one might ask, why do I pick on Quants? A good question that we'll expand upon over time. They're like explorers in a new territory who mainly pillage and exploit when we, the human race, need more those who can map and help us learn. Learn as in real knowledge not just moving monies to certain pockets. Yes, indeed, a map-territory issue here among many others.

08/25/2009 -- Overlays, yes, needing insights from across the pond.

08/20/2009 -- Note 1: 'Derivative(s)' has been used a few times in the posts. The context may imply the usage, hopefully. But, in general, we're talking two types: 1) from finance, where 'derived from' is the proper interpretation (or as one may surmise from posts here and elsewhere, something from nothing), 2) the usual mathematical variety.

Modified: 03/15/2012

Backbone of the Economy II

Moral: Wherein we consider the basis upon which an economic system ought to be built, from the viewpoint that capitalism has been usurped by interlopers.

---

We can start by addressing the issues related to the wielding of power through accumulations, such as money, access, and a whole lot more. At some point, we'll go back and look at royal continuance and its supporting peerage. We don't have to go far: our old Mother whose hammers we threw out a couple of hundred years ago.

In that vein, the upcoming 400th celebration of New England events will provide plenty of opportunity for discussion of the whys and wherefores that we see.

Thankfully, we do have a Constitution-based framework here with which to attempt to build a more solid future, albeit that we see plenty of side-roads due to human nature's ways. Too, we do see economic mobility, somewhat, though the past couple of years have pointed out how illusory this whole notion can be.

Yet, we do have the wherewithal to do these things better. That is, the ideals from the 60s seem to keep resurrecting themselves in the public eye suggesting that there are motivating factors involved that are other than our creation.

That wherewithal does have a heavy bit of numeracy (hence mathematics) involved, yet part of the problem is that we have not learned the main lesson, innumeracy is not idiocy. Our current 'now' is just crammed full of marvels acquired by improving our knowledge of the world and by applying this knowledge. Yet, hubris seems to be the norm from observing our prowess.

For instance, the blowout in the Gulf can be used as an example of how wrong things can go. That is, we are not as much in charge as we kid ourselves into believing.

That might be how peerage keeps the royal view sustained. A situational scheme of mutual admiration that keeps the fires of the balloon lit thereby allowing ascent. To where? Sort of like the market, as currently defined, do you not think?

Everywhere, dissenters are cast out. By the way, having dissenting voices is how science is supposed to work. There is no view that does not need some scrutiny, even if attempt at such obtains the casting of labels of 'freak' or 'pseudo' upon that one brave enough to venture the contrary position.

That we are here and now, in part, results from the many on that little island across the pond who could not abide their milieu. Some of the early ones who came over here were quite astounded, or would have been had their efforts not been mostly involved with mere survival, at their new-found freedom which turned out to be a brief dream (no cynicism meant).

The third and successive waves brought more of the same over to this side. In actuality, things here, at one point, were much more deleterious than would have occurred across the pond, one has to think. Put a bunch in a new milieu without the usual social constraints and watch out (nod to William Golding, of course).

Granted, for some of this freedom we see here, we ought to be thankful (law, etc.), yet one cannot but considered 'what ifs' when reviewing what has happened the past 400 and when looking at where we are.

Guess what? Economics is full of what-ifs as if by necessity. The main trouble is that the set of what-ifs is heavily controlled by those in power. Consider, if you would, why else was the past decade mainly characterized by the deceptive movement of work to another set of bonded slaves under the guise of giving the consumer, the supposed backbone, more things (of questionable quality), and a lower price, yet, at the same time, luring the same consumer into a recursively deepening pit of indentured-ness?

At the same time, a very small number (less than 0.5%) grabbed loot of massive amounts (greater than 90%). Too, we had the manifestation of the CEO as the new King, many times with a domain that was world-wide.

Yet, at the time, the politicos were salivating with their hands out, and that includes the top guy. Oh, one might respond, that is the nature of the times. Money is needed and is how the talking is done. Ah, is that so? What exactly is money? Ask, Big Ben to give you an accounting that doesn't allow him to wave his hand.

As a final note, the recent recall of the SUV was resolved by a software fix which ought to raise some eyebrows for a couple of reasons. Firstly, earlier, there were adamant arguments that the computational framework used by the automotive industry was robust and almost considered to be faultless to the extent that no question was allowed to be raised without aspersions being thrown at the one asking. Oh, some little shift here? Secondly, there is now a fix that was hacked (okay, tested) and pushed out. People, the 'blue screen' of death is called just that since it can happen at any time and without reason many times. Have we really looked at what is required for 'safe' computing enough to allow seemingly thoughtless application of it everywhere?

Our economy is so much dependent upon the computer that the car incident could almost be the metaphoric example. Then, we allow the amoral best-and-brightest, urged by the malevolent fat cat, to monkey with the keys to the domain in an ad-hoc fashion.

It's beyond cap-ital-sino. Due to oversight, any legal casino can (has to?) tell you the odds. We have no such thing with the economy, as it's being run by the likes of the golden sacks. The Nevada guy was right when he mentioned this at the GS grilling.

Lots to talk about, later.

Remarks:

02/05/2015 -- Recently on the most-read list. The subject needs a little updating, as, at this time, Ben was starting his QE (we still do not know the full ramifications). The chimera flew sky high (helped by many assists, along the way). ... That illusion is sustained by debt of an almost unimaginable amount. ... See: Chimera and the dismal, Tide that floats us (will extend this to show how the house of cards comes about), ..., 80-year old manipulator is still at it.

09/21/2011 -- On Wealth and the CEO MVP.

03/17/2011 -- On the rise of the professional politician (will there ever be the citizen polico? that is, those who do not salivate when a buck is passed beneath the nose) toward robber barony. The M & Ms are apropos. As well, need to bring in Schervish's viewpoint.

07/06/2010 -- The real Founders.

05/06/2010 -- Out of control, essentially.

Modified: 02/05/2015

Map and territory

Moral: Wherein we consider these two concepts, further.

Why? Alan Greenspan's (King Alan's) new book (soon to be released) uses them in the title. Nice. See pre-Review at WSJ.

---

Alan (the awakening?)
from WSJ review

We first broached the subject in 2007, under the auspices of 7oops7: Territory and map. Essentially, the problem causes lots of oops. You know what? It's not a simple little thing, rather the subject deals with the basis of our knowledge and effectiveness (has from the get-go, actually the topic allows to address broad-ranging issues that are of great depth - you see, the modern ilk with its computational frameworks (and money searching) tries to normalize, reduce to nothing the related complicated set of issues).

That centrality is why the next usage was under the umbrella of Truth Engineering: Territory, map, truth. Our effectiveness principally encourages hubris, it would seem. But, folks (especially the rich ones), there is more to the reality (if you don't know of near-zero, it's time to discuss and learn). Notice, too, slogans (Joel Orr is the source for one of these) can apply.

---

Now, in the context of FEDaerated, we have brought up the subject a time or two. The intent is to keep the discussion going, due to its importance (the whole issue is further troubled by computation, which is a bane of the worse sort).

Here are the posts, in reverse order.

• To computational hell and back (May 2013) -- Depicting a type of hell that results from several things, but two of the largest contributors are: over-reliance on systems to the extent that the map becomes the territory, inordinate chasing after the buck causing shortcuts to become the norm for systems.  
• Money and value (Jan 2010) -- Fiat money is an issue. Human nature is problematic. Where is the glimmer of sanity with regard to money (which could be a simple matter with the proper viewpoints allowed to surface)?  
• Year-end recap (Dec 2009) -- One has to ask: is it the best-and-brightest set, and those with numeracy abilities, that is more prone to the idiocy of map-territory mashing? Yes, Harvard, come talk to me about that. 
• Why not? (Sep 2009) -- Dealing with fundamental issues that some might see as a closed case. Ah, is that not hubris talking? A little while ago, risk managers were making claims about their prowess. Not long after, the mess started from which Main Street has not recovered, as of yet. Were lessons learned?     

---

Now, at the level at which Alan reigned, we see politics as being more important than reality (Oh, polls are supposed to be as strong as sensor input? By the way, markets have the same fallibility, though their usefulness has been demonstrated (without proper delineation of the limits that are necessary) somewhat.). We'll have to look at that in depth.

So, I'm looking forward to reading more about Alan's side of things. Of course, it can be fun to run after money, and big bucks. But, that is not the smart thing (yes, the Warrens, et al, notwithstanding) by necessity.

As I've said before, the whole financial thing ought to be run by people who are money-driven (just like the military is not run by the power-driven) and for whom morals are more important than big pockets. And, we can do this, despite the fact that those who lean to fat-catted'ness have run things (amok'ly) from the beginning.

Remarks: Modified: 10/27/2013

10/22/2013 -- Three articles of note: Interview with Druckenmiller (hearing the 0.001% talk about ill-begotten gains, not his, of course), HFT Algorithms (on bragging about short holding times), Barbarians at the Gateways (contrite?, but without mea culpas).

10/27/2013 --Ben has sacked the savers for years now, slapping them silly. Why? A WSJ article looked at high-class pawnshops a couple of days ago. These fill the need for people who need money but cannot get it from the banks (stupidity there, too). So, they use collateral for a loan and pay high interest. How high? Some pay over 200%, per year. What is Ben paying or having banks pay their savers (customers)? Way less than 1%. That is the best example of being out of whack with economic realities that one could ask for. Yet, does the Fed see? Why is the interest low? To push savers toward higher risk? To appease the gaming crowd (most likely this, as these are big-pocketed folks)? To help people afford housing (on someone else's back?)? ... Janet's take on this is unknown, but she has to know that they're looking like idiots. You know what? Most of those loans are paid, even with the high interest. And, still, Ben slaps the savers (King Alan mentioned saving, of late). We ought to ask the Fed, what happened to prudence or does it like to reward profligacy?

Golden sacks

Moral: Wherein we consider that the ideological problems, which might be exemplified by a firm of note, must be resolved so that we can redirect Adam Smith's baby from the shell game'd playground, the unconscionable exploitation via the Ca-pital-sino, and a ponzi'ed framework to something more amenable to the health and welfare of the people, by getting beyond 'cat and mouse' thinking.

---

GS, in other words, who might think that it represents the epitome and who ought to know that the 'real backbone' is far removed from its heighten'd views.

We'll get more into all this, through time. Look at the cartoon on this Tech Ticker page. The Wall Street firms just don't get it.

One theme will be to look a peerage, and royalty, and observe how the 'new royals' (at least, in their own estimation, as money can have its privileges) obtained their status through milking the 'market' situations under the guise of following Adam (poor guy, he's rolling around in his grave).

How do we train our brains to get above that muck generated over the past couple of decades?

One solution, as mentioned before, might be a type of 'national service' experience (for the youngsters) that could work wonders, especially for those who are overly privileged. Mind you, it's not necessary that this be militarily oriented. No, the purpose would be to introduce those from various cultures (yes, American is full of a very many) into a framework of service that has an uplifting theme, hopefully one beyond mere nationalism.

Another aspect would be to isolate various gaming efforts by regulating such to a sandbox. Then, quants would need fencing into the sandbox. You see, numeracy (and computational support thereof) lies behind a bunch of problems (again, we'll continue to get into that).

Something for all of us to note, please: many of these instruments of finance, that purport to be advanced and necessary, are neither. They exploit modern technology and knowledge, sure. But, it's in a blind-folded way. For those that may be necessary, a sandbox would allow a test environment. For the unnecessary, a sandbox would allow ad infinitum play (without the bonuses).

The question? Who owns what and why? Wall Street owns finance? Hah!!

Remarks:

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

08/24/2013 -- Why do I think of golden sacks? Well, they represent the worse of the rogues, though I know that there are some good people working there who are doing the right thing. However, I have personal knowledge of two deals in which they were prime players in the role of experts in the matter. In both cases, workers lost their economic lives, some lost their pensions, both firms struggled. One actually went bankrupt due to the debt left by those golden players as they took off with bulging pockets. The incidents were within the past decade just prior to the downturn. Of course, golden boys/girls couldn't see that things would crash. But, any reasonable stance (based upon integrity, okay?) wold have foreseen that certain types of risks were not adequately handled. But, no, the context of the gaming rushes after reward (greedy accumulation) without proper regard to things related to the reality of near-zero. ... Much more can, and will, be said, in due time. In the meantime, the golden sack'ers (search) are archetypal in the world of economic misdeeds.

06/16/2011 -- Golden sack'd scandals.

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

05/14/2010 -- Oh yes, smartest guys in the economy.

04/27/2010 -- Goldman's young guy as hero? See remarks earlier about fat cats and quants (look, defining these financial instruments and then modeling the payback are quantitatively flavored, through computation and mathematics). Fat cats do not know what the quants are doing and thereby let the young 'uns run amok. Why? 'Conceptual bliss' and 'abstraction' as Tourre suggested. Mainly using mathematics, and its modern selves, to create a whole lot of nothing, to make money doing so, and to then not accept responsibility for the fall out.

04/25/2010 -- Cartoonists ought to be having fun: Regulate the Banks? You'll Spoil the Fun.

04/24/2010 -- If it quacks like a duck, then ... Or, is it, in this case, if it waddles like a fat cat, ...? Those who run finance ought to not love money; that which these bankers are to provide is a utility, pure and simple.

Modified: 07/22/2015

Jobs, labor, disrespect

Moral: Wherein we look at Rick's words on the Bifurcated Society of which we are all (except for the fat cats sitting in their reverie while being divorced from the real world) now intimately aware.

---

From whence the jobs given that we've optimized out-sourcing (out-housing) to the max and that the newer positions seem to require a high level of numeracy (a bane, if we looked at it -- by the way, this is from one who is quite enough versed in mathematics -- yet, knows the importance of a quasi-empirical stance) which then reduces a whole set of people into uselessness?

At the same time, though, what is consider sub-human, touch labor, has been given to imports who will work for slave wages. And, infrastructure has been allowed to decay. Go to any city and try to not puke (it is sickening - and, we think that we're the epitome - we go around the world and try to impose our views -- as if we're that which mankind yearns for - that is, until they get over here to see the reality). Look at the status of all that work done by people (the ancestors of current Americans) in programs (CCC, for example) that were meant to keep people employed while improving our living situation. These people were not, nor were you, the progeny, degraded by this honest type of labor. Sheesh! America, without a proper infrastructure -- including the cyber type, does not live up to the potential.

---

My pity go to those who are so rich that they can't smell their solid output. Please, go live, without any assistance, sometime, in a hell-hole of a barrio, slum, or what have you (which, we might say, was created through the actions, and decisions, of your ancestors). To be reasonable, let me re-iterate that near-zero applies here (yes, your gain came at the expense of many others -- including the planet itself -- oil companies thinking that they own this natural resource -- pure crap).

By the way, we'll get back to looking at this using symmetry in an unorthodox manner.

---

Rick mentions his thought that virtual manufacturing could help. My caution would be to add constraints that prevent us from driving people like machines through computational models. In fact, this already happens.

Picture this! Sitting at a tube is someone who could not lift a 50 lb weight, yet that person is allowed, through scheduling and other means, to guesstimate how long a physical task will take (mind you, never having done that thing his/her self) and to plan some sequence that is outrageously inhumane and categorically stupid.

Aside: A corollary is someone sitting at a scope, applying gaming skills, and offing people (how to show? -- that is metaphysically atrocious, from several angles). Then, we give them medals?

---

I'm not a Marxist, but that guy had some things right (the twerps who run businesses, many times, are without any talent beside the ability to squeeze profit out of the workers and the customers without any thought for tomorrow -- and our great-grandkids' future) in several cases. He, by the way, used creative destruction. Somehow, the right-wingers usurped the thing (ah, interlopers everywhere one looks).

---

I haven't seen it, but we need some type of solution to be defined that makes sense in creating a balance. One would work with one's mind and body, every day. In fact, the latter would be done on something useful, not running to the gym and wasting one's energies. Then, the lower safety net would need some attention. However, we also need limits on the uppers (yes, like Warren, et al). Now, any type of coercive approach would be problematic. So, providing the ways to view this, with wisdom, would help some see the errors of their ways. Warren gave away a lot of his money. My question to him would be this: does he think that this act counters the karma (not strictly used, rather a commonly known term that suggests the reality) related to all of the near-zero side-effects that his decisions have accrued over the years? Same goes to Bill Gates. I've already brought this up to Jobs.

Well, I'll ask Mitt about that, too. Bain? Oh, I keep reading bane (especially, hedge funds).

---

We can look at Wichita, KS for an example of disrespect. Boeing is pulling out. Some say that the withdrawal started when McDonnell Douglas was bought by Boeing. Their head, Harry, didn't like KS for some reason. One thing in the later 1990s demonstrated this. He was actually booed by his workers at a meeting where he was trying to argue against the union's attempt to extend their services to a larger set of workers. Some remember the threats to pull out.

Turns out that six years ago, a few local managers allowed the beginning of this by helping with a buyout (private capital). So, a whole bunch of Boeing was sold off. The unions were toyed with. Thousands lost their jobs and pensions (that's a story for another time). At that time, many workers fled to the Boeing side in order to not have to deal with the new company.

Over these years, the tanker deal was worked out. Remember that Boeing was able to get the Air Force to withdraw its contract with Airbus and its American partner? In the rerun, Boeing won. Of course, KS people worked on the contract and expected to be part of the resource mix. Turns out, of late, that, no, there won't be any work at the Wichita plant.

---

To put that in context, remember that there were thousands, many of them good, workers who gave heart and soul to the Company. Everyday, we have people in situations where their love, in this sense, is unrequited (managers love a company, or is it the money?). For many, financial independence is far from their grasp. Why? It seems that the cards are stacked against this. First of all, going into a company is analogous to becoming an indentured servant. Then, whatever creative talent that you have is grabbed by the company as if it owns you as chattel, almost. That's understandable somewhat (isn't the argument, they make the job available, you don't have to take it -- disrespectful view, that it is), but then when people are squeezed dry, they're plopped out on the street.

With the recent downturn, we saw many who lost employment in their later years; building an adequate basis for the older years is something that needs to be done throughout a lifetime. In many instances, recovery after losses (the whole idiocy of 401K dropping their value is one thing that did not have to happen) is not possible due to several factors.

---

Boeing, of course, has a right to move. Yet, one wonders if there were any lessons learned by managers with regard to ethics (problems splashed across all of the papers, at one time). In 2005, the ethics consultant was touting this as the basis for ethical behavior. Guess what this is or was? I don't know if the consultant is even used nowadays. Some seem to think of ethics in terms of case-based considerations (situational, in nature) that are hard to pin down. Well, 'this' was the golden rule. Yes, imagine such a business environment (we could actually get to something similar with a Magna Charta, with labor getting more respect).

Remarks:

06/08/2014 -- Does time tell?

12/15/2012 -- Coase, on the subject of firms.

06/08/2012 -- Stiglitz talks inequality with Conard.

06/07/2012 -- We cannot recapture the innocence lost by the 'flower' generation who now glower with power. But, we can heed Hitch about speaking truth to power. Too, we can think of the burdens being put on future generations that are of a new type; even those exploiting the situation do not understand the depth of these problematic economical notions. One concept to apply is 'irreversible' process.

05/30/2012 -- As covered by flightblogger.

05/04/2012 -- A recent filing relates to this theme.

01/17/2012 -- Yesterday's USA Today had a good editorial about private equity, motivated by the interest in Bain because of Mitt's prominence. We'll have to look more at this. They (the pes) make their money,  oodles when things go well; they make a little less otherwise (but, in this case, the cost is offloaded to all of the workers who lose jobs, pay, pension, and insurance. The atrocity? The pe techniques can actually end up eating away pensions of the little guy!) Hawker, in Wichita, is a recent example that is still unfolding. As well, the issue mentioned Apple's problem with sweatshops. What was Steve thinking? 

Modified: 06/08/2014

Money and technology

Moral: Wherein we let the IEEE Special Report on the Future of Money get us back to looking at beans and money.

---

After all, those subjects being covered by the IEEE collection pertain to all of ours' future (to wit, the recent stumble). Not just those with massive accumulations (ostensibly, the best and brightest). I will need to revisit some of those articles here (later).

---

Meanwhile, a few thoughts on the matter suffice.

• One oversight, about which I'll approach IEEE, is how to explain 'fiat money' and not. Yes, money is an abstraction. We modern folks like our abstraction-phile-ness. We have carried it to far, way beyond attachment to being (give me time, not a simple issue).
• Yet, engineers abstract about real things (or about models that are eventually about real things). Ah, like leveraging? Not really. Why? Any point, their work gets back to nature (or Creation, if you would - it's an either/or issue, as Hitch knows). Money? Purely flim-flam (we're get there, too; it's a fact the big people do not want the populace to awaken).  
• IEEE, why didn't you talk about some natural analog (for one thing)? Sheesh, you guys are engineers. Just because we now have computational modeling and higher-order gaming via technology behind our 'beans and money' (and the 'markets' based upon these) does not make it anything more than a very shaky chimera.
• Stiglitz says that the American Dream is a myth. He's right on the bifurcation that has formed. See Rick's thoughts on the matter (and some consequences). 
• Another dichotomous relationship is between those who want it all and those who can live within their means (evidently, we've seen that most of the modern countries cannot do this). Of course, from some angles, the former may look smarter as they play with the lives of the latter (ah, one definition of royalty?). 
• One has to appreciate Tolstoy's remark: (see Remarks, 12/02/07) how much does one man need (by the way, Lev Nikolayevich was a class act as opposed to some)? 
• It's good to see engineers (beyond those of the financial idiocy) think of these matter; perhaps, they'll bring in some needed rationality. 
• Might add that one grating thing was that there was nothing about additional properties of 'money' (oh, you mean like? Can't buy me love, etc.). Wait, engineers don't deal with those things. Yet, they're willing to allow computer support for what is essentially pilfering (high-speed trading)?  

---

One thing about the modern age is that about every aspect of life has been superposition'd with some abstract'd thing which then goes back to Turing's foundation'l view (this is Alan's year). And, do not many consequences ensue (such as, the stress on STEM and numeracy as if that were what we need, solely)? Ah, so! The following may be beyond the pale of IEEE, but not of the scientific foundations that underlie the work. Ever wonder why the recent infatuation with zombie'ism (and states thereof)? Ever consider that it is our computational prowess that has led us down this path toward perdition?

Oh wait. The topic is money. Note, one article briefly touched upon was a role for 'money' (whatever is it) that was beyond the 'economic' usefulness. Yes, very briefly. That ought to be expanded upon, to boot.

Remarks:

07/25/2015 -- We're about six weeks after the June look back at 800 years ago (Magna Carta). Too, though, poster boys have popped out of the woodwork, including Zweig.

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

12/13/2012 -- Don't know how long this page will be there, Daily Ticker. But, when I looked, 69% had said 'no' (hurt rather than helped) as to whether Ben has helped.

08/04/2012 -- I can hear it: with the DOW over 13K, what are you talking about using 'chimera'? Well, look at the dire warnings, for one. Are you looking at FB as a poster boy? We'll get technical and explain the problem. Do we have a solution, at this time? Yes, essentially.

08/03/2012 -- So, the market pushers say that they need things like program trading, and whole bunch of other stuff that we'll get to. So, the idea is that we need computer-based 'gaming' in order to discover 'price' and to provide liquidity. Liquidity? Yes, like that put into the pockets of Zuck (see 7 points on FB) and his ilk after the IPO. You see, those who made money bailed when the price was high. It is estimated that if they sold now, the take would be 1/2. Notice that I didn't say return (for what? -- 'gains' obtained this way are near-zero). Whose to cheer that a few make some massive amount of bucks (well, beyond those personally involved -- even the bankers who put deals together)? This type of thing is capitalism? If so, do we really need this, folks?

07/21/2012 -- Another thing uncovered, gaming of LIBOR.

06/25/2012 -- Washington Post on Congressional non-ethics. 

Modified: 07/25/2015

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.

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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.

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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?).