Summary, 2013

Moral: Wherein we take a look at 2013.

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

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

Past 30 days                                           All time

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

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

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

Remarks:  Modified: 01/02/2014

12/31/2013 --  

Money, again

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

First, what is a bitcoin (WSJ video)?

---

Perhaps, the post is a little late. Two recent views from the WSJ are a good starting point. Fortunately, both of these are open to public reading. So, let's start there.

• How much is that burger? (12/15/13) -- Brian Wesbury looks at some of the challenges facing the adoption of things, like bitcoin. We all know about money's need to be useful in facilitating exchange and storage of value. But, money needs to be safe, as well. The technology behind Bitcoins must have a little more scrutiny. There are several things to discuss in that regard. 
• Evangelist sees cashless society (12/19/13) -- Michael J. Casey quotes the techie view: We are at the Mosaic stage of bitcoin. So, all sorts of things can ensue from this start.  

From talk at
Gresham College, UK

---

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

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

source to be identified

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

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

Remarks:  Modified: 12/19/2013

12/19/2013

New economy

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

DC and its CherryBlossoms

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

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

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

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

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

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

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

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

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

---

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

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

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

---

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

Remarks:  Modified: 12/16/2013

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

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

Parting shots

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

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

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

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

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

---

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

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

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

Remarks:  Modified: 12/19/2013

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

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

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

Stable value II: Seeding the chimera ...

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

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

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

---

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

---

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

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

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

Lesson four: ...

---

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

Image obtained from Seeking Alpha,
see posts on this blog,
2013/03/slaps-in-face.html
2013/02/bens-put.html
Source: Bernanke's put to expire

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

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

---

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

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

---

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

Remarks:  Modified: 01/15/2015

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


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

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

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

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

09/17/2014 -- Yes, she did. The coo-coo, goo-goo goes on. The landscape is strewn with the lifeless bodies of the savers. Thanks, Janet.

01/15/2015 -- At last, a series that will establish the basis and extensions, as required. We are going to go back to some simple and come forward to the modern, complicated economy. Why? My long chain of ancestors (inherited via Prof. Lucio Arteaga) is one motivation.

Blogs on Janet's inquisition

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

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

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

--

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

---

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

• Janet Yellen's nomination hearing - live blog and video
• Stock market live blog: Yellen says stocks aren't in bubble territory 

---

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

Worship,
as an imperative;
of what, though?

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

From whence that added 5K of supposed, value? 

Savers, for one. These have been slapped silly.

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

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

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

---

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

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

Remarks:  Modified: 12/29/2013

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

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

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

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

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

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?).

Miscellany

Moral: Wherein we look at what will change in the future.

Of course, Ben will go; someone new will come in. Janet? My question is, will that person know the importance of savings? Right now, we can find high-class pawners who get 200% or so for providing money to people who need it. And, people who generally pay it back. Why is this necessary? Bankers are not doing their business. Where the hell is the old banker who was the upright citizen of the community and who helped people with cash flow?

He has gone the way of Jamie, I'm afraid. Or, the way of the Jamies of the world. Which brings up the first point: Made-off's two-decade reign. Hey, King Alan was there. USA Today reminds us that some are still looking for a payout. Is JPMChase culpable? Them and who else? Made-off could not have pulled this off, for so long, without some one somewhere smelling the crap. You see, though, money filters the bad odor. The more money, the more perfume comes in.

But, that perfume is deadly, for several reasons.

Aside: In the King Alan post, note the Remark (yesterday) that considers how Ben broke the buck. USA Today also copied a Fools article about what not to do with your money. Buy into a CD's strangle'ment is one (as Ben will slap you silly). But, we ought to be able to get a good CD. Ben prevents this. Let's take $100 that we would put out as a pawn broker (high-class type). We could get back, in a year, around $200. Nice, right? Except, ill-begotten, for several reasons. What would Jamie pay us for our $100 (the last man standing)? Less than a buck. Coins, to be exact. How many? We would be lucky if it were more than a dime. Ben, Ben, what the hell economic world are you inhabiting?

---

We have another point. USA Today's Wolff talks about CEOs not knowing technology. Of course, we have all sorts of technology a lot of which is loved for its own sake or for its ability to be cool. Even Obama falls into the trap. Mind you, Obama is more than a CEO, yet the attributes of those realms are similar. Obama has a nation under his feet (what about the servant thing, of the people?). CEOs might be geographically spread, but their domain is different.

Still, those in the upper echelons expect others to know the details and nuances, as says Wolff. But, Wolff also quotes the Google guy as saying that Obama smugly (quote-unquote -- we'll get back to this as Obama might be used to represent the realm that needs more explanation - than has been done to date from a techno-fluent viewpoint, okay? ) asked about something. Yes, hubris abounds in the CEO realm, even among some in the tech world. Why wouldn't it with people laying money at their feet (like twit-ville's 1B plus evaluation, some think)?

Aside: King Alan bemoans the lack of rationality. But, don't throw in the towel, guy. Get a grasp of the situation with the proper approach which we'll help you lay out.

But, technology is like a ball and chain, to boot. Ah, let me explain this ad infinitum (I am old and have years under the belt of this stuff - hands on, mind bongle's, etc.). You see, Wolff uses clueless. However, in a sense, we are all clueless - it is quasi-empirically imperative that we are so. Hubris gets people to run amok (and, Facebook, et al, needs more scrutiny in this fashion) despite their failings. Hugh accumulations of money seem to smooth out rough spots, somewhat.

We'll have to point to 7oops7 discussion where the original impetus was related to an extremely challenging set of technologies going toward something real (not bits on a screen - mobile device - that mainly titillates - in many senses of that concept).

---

These are a couple of points motivated by recent articles. The tone seems to have changed in many cases so that necessary ideas can be expressed and that concepts can be discussed. That is, we have to get beyond rhetoric, grandstanding, and such.

Why? We have let several genies out of the bottle; handling these appropriately will be crucial. What genies? For one, letting the Internet loose (we'll have to do an exhaustive look at the associated billionaires - as in, those whose fortunes come from exploiting that which was let loose) without sufficient thought to consequences. The besieged DOD is one example (tsk, tsk).

Remarks: Modified: 10/31/2013

10/30/2013 -- USA Today, recently, had an op-ed piece about the website issues and how expectations were too high, partly due to inordinate pushing by the political agenda. They use the experience of South Park (which missed an air time deadline) and GTA (release being delayed). But, there are many others (just recall all of the delays that we have seen, over the years, with MS). Nowadays, some things are pushed out with the user community expected to adapt (but, the whole thing of requirements is another issue). The fact, though, is that computation has a shaky basis that we work hard to keep stabilized. For one thing, trying to do complete testing (proving) is prohibitively expensive (if not downright not possible) due to inherent complexity. But, we can all learn to live within the limitations; also, we need to know when limits are coming into play (safety nets, for example, come about from knowing these). For one thing, phasing in can be a good strategy; too, hard dates need to be met way before they occur (as in, you fuel the plane long before the scheduled take off time). In general, it's nice to see these considerations being presented in a public forum so that we can have a discussion that removes us from finger-pointing and other worthless stances. Hardness (of problems) is what it is; we need to respect that. At that rarefied level of managers, saying that something should be does not get the thing done (those at such heights are "clueless" of more than technology's details).

10/31/2013 -- CNBC article on the aerated market situation.

10/31/2013 -- Finally, a voice of reason. Just the headline tells the tale: Tapering without tears - how to end QE3 - by Ronald McKinnon, WSJ, 10/28/2013 (PDF is at Stanford - the WSJ version is locked down for subscribers only). Essentially, going to zero was an error. Thanks, Ben. There are too many negative effects. Besides, trying to control unemployment with that little knob (which Ben dialed to the maximum, early on -- see "out of bullets" discussions from 2008/9 -- which, by the way, was untrue as Ben creatively ventured into new areas, taking us down the perdition path). Actually, what Ben is trying to do is push string (try that for ringing a bell -- push needs to be changed to pull). McKinnon uses 'fetish' in relation to the monetary illusion related to interest rates (that, essentially, have been used the past few years to slap the savers silly).

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?

Nobel Prize

Moral: Wherein we stop to pay attention to the winners of the Prize in economics.

To be truthful, the first thing noticed was a feed from The Atlantic. Derek Thompson wrote with this title: This Year's Nobel Prize in Economics was a Big, Fat Critique of Financial Media. Derke says, and I quote, "Three economists won for showing it's impossible to predict short-term stock prices." Derek goes on to poke fun at the talking heads who spend an ungodly amount of time and energy in hyping a chimerical situation (Investors I).

Well, we had a similar reaction from Niels Bohr decades ago. One could "win" only with insider information or other types of rigging.

But, it's nice to see how these three views come together. Not so nicely in the eyes of some (see comments at Marginal Revolution, such as the post of Cowen and Tabbarok). Tabbarok tries to explain Hansen's contribution. We'll not look at that, for now, but we'll get back to these fellows'work under the general guise of being more technical.

---

At the page provided by The Atlantic, see the comment by Alpha Wolf for an overview of the situation. From a quick read, I think that AW has a good assessment with with I would agree.

---

Meanwhile, we'll get back with the details of this since it's so fresh. Too, Hansen's work is right along the line of those things that can lead us astray (see Transitions). Perhaps, I'll get a chance to be more specific. The old argument is that economics (even when augmented with behavioral views, neuro-economics, or what have you) cannot be like engineering with its domains resting upon the more hard of the sciences. Now, having said that, those empirical approaches, like Hansen's, are going to be important. Too, we'll have to topsy-turvy things so as to bring in a more full model of humans and their glorious natures. Such will take inspired intuition and modeling the likes of which we haven't really seen yet. Works, like these guys, are a start. It's nice to see the work offered up for public viewing.

Remarks: Modified: 10/15/2013

10/14/2013 -- Nice, an overview of part of Hansen's work (with an example) for the general audience: Jeff Leek.

10/15/2013 -- Minsky comes to mind when thinking of markets and churn (like fog, what is it being used to hide?). We could propose a hierarchy, perhaps, starting with savers (prudent ones looking for a future payment - as in, not expecting the cheese to be moved nor to be eaten by others), investors/traders (ranging from low-risk conservatism to just below those gaming the system), speculators (again, ranges: prudent hedging, collaring, etc.), gamesters (going for broke, knowing that the prudent will bail them out), and, then, idiots. --- Aside: Jamie used "moral" while talking about his bank. Lesson to learn, therein?

New game in town?

Moral: Wherein we pause while the transition unfolds as we have to await Janet's imprint.

Ben will be missed. But, it's a few months until he goes, so he'll still have the ability to sway matters.

Our prime concern is that he so willingly slapped the savers (from silly onward) in his effort to bolster those things that are called markets but, in reality, are chimerical game settings (or, if you would, ca-pital-sino). It took awhile, but about a year ago, things finally inflated to where new heights were seen almost daily. Yes, the grand old illusion came back.

How could this be called an illusion? Well, go talk to Main streeters, for instance. But, that's a punt. Talk to people, like myself. I'm as trained as Ben albeit I focused my energies on different problem sets. Given that I'm not in academia is not a bad mark, from where I sit. Actually, I'm allowed more freedom of thought than any of those institutionalized minds.

So, to answer the question: how is this all an illusion? There are several ways to characterize the thing. Firstly, I don't hear people talking near-zero (perhaps, we'll get this with Janet once she spreads her wings). You see, folks, those who have been enriched (always) get their takings off the backs of others (not arguing Marxism, but just go around and talk to folks doing the real work - let me be a guide - I'm eminently qualified to do so when you consider the wide range of jobs that I've had and environments within which I worked - to wit, Bachelors and Masters when in my 30s (prior to that, many, many jobs) after which I sampled life with the egg heads). Secondly, there have been trappings put upon the "market" such that it is far removed from being effective. How is this? Crap, abstraction-philos have had their way. Why? Money, power, ... From where I sit, I can show the shaky basis, the fact of which is too hard to see when you're playing with the jerks - which the Fed does, by the way -- all sorts of trappings of the rich (don't get hung up in the mahogany, Janet).

Aside: There's this thing called the C-suite where like knows like. Hah! I've seen members; too, I've seen those who got there as they progressed through the hoops (working since I was a kid and I'm 71).

Thirdly, carrying on from earlier, those things that the egg heads (though, endowments need to be re-considered in a newer set of lights and measures) think of have been enabled (fostered) by computational progress (by real engineering, by the way). Unfortunately, the lack of a sandbox is more than problematic. What we have is analogous to a plane loaded with people being experimented on in real-time while in the air.

Aside: A 737 went into the drink from just that type of thing where the ground crew was having the pilot run through some tests that made things worse when they ought to have landed while there was sufficient control. Those in the know will recall this incident.

Fourthly, along with the thinking and the computational resource improvements, there is a belief in mathematics that is unwarranted'ly held. How did this come about? Application focus, essentially, and an inordinate reliance on regression to the mean. Oh, we can go on about this at length, after we get some agreement about how not to use operationalist'ic urging (or, how to be more mature while succumbing to the sirens of money/wealth/greed/, et al.

Fifthly, ..., let's quit this for awhile.

---

We have to let Janet find her sea-legs, get her bearings, and any other number of types of things that a new person ought to be honeymooned for when starting a new venture. That is easy enough.

---

The focus here could be back to the Cosmology series. Too, we'll propose and discuss things not done.

• Why did Ben have to break 1%? There is no place where those who need a small income can go. No, he actually is drawing from these folks in order to lay flowers in the path of the idiotic fat cats (who, by the way, got the crap to hit the fan -- sheesh, Ben). 
• Given the dire straits into which Ben has forced the saver (note, please, that the loss did not come about for these types until there was an accumulative negative payout due to declining rates over the past few years) to go toward risk (as if someone will bail these people out for following the idiots) as that becomes the only choice (only those who cannot hold on for the longer term while awaiting for the economic brains to wise up). At any point along that route we've been on since 2008, Ben could have awakened to the reality of the set of people that he's tortured, willingly. 
• Tapering? The sillies got all anxious. Ben has been of so accommodating the past few years. For what? Yes, the fat cats love it. But, most are being taken to the cleaners. One example would be those who are leaving the job market due to its warped nature nowadays. 
• ...

In 2009, we posted A New Day, twice (Truth Engineering, 7oops7) plus More on New Day. We will have to take a re-look at the years since then. Many things, that could have been, did not come to be (we could have nationalized the stupid banks - the mess would not be any worse than it is now, folks). Jobs programs, training (several things here were not done). 

Janet's advent, "hope"fully, will be as expectant as then. How many months for a honeymoon? 

... mostly complete, except for editing, and links ...

Remarks: Modified: 10/26/2013

10/26/2013 -- 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?

Best and brightest of what?

Moral: Wherein we consider, just who are the best and brightest and why are they so important?

It has been awhile since I've seen an opinion, such as this one from the head of CME Group, but it does motivate a re-look at this subject. The op-ed is in the WSJ and was written by Mr. Duffy of CME.

• A new financial crisis: Keeping the best and brightest - Mr. Duffy argues the opposite position (see disclosure, next) from the one of this blogger. Nice that he does so. Since the link from the page on the CME's site to the WSJ article goes to a page that is locked down (requiring a subscription), I have provided a couple of images (that are photos taken from the print edition) below with commentary. 

---

Firstly, though, a recap, and disclosure. The first use of "best and brightest" was May 8, 2009. This was a reaction from hearing of big bonuses in times when things were dire. Why the bonuses? "Because, if we don't have the proper remuneration," said the Wall Street crowd, "we'll lose the best and brightest." Please note that a major theme for the blogger, in those times, dealt with the fiction in finance (truth engineering context - and, the inspiration for that concept was not Karl Marx' fictitious capital).

One main issue dealt (and still deals) with the gall of naming something financial engineering whose scientific basis has not been identified. As we come forward in time (all the while, the Wall Street, and its ilk, were being baby-glove'd by the Fed), several notions come to fore. For one, that talents differ among folks is as old as the hills leading to all sorts of problematic situations (not the least of which is the Lord/Serf dynamic, especially as demonstrated by the new phenomenon of CEO and more -- Wall Street type as serf (do you really see these as servants? - more below, due to Duffy).

For another, just because someone is facile enough to propose, and has the ability to dispose, of gnarly systems (I am prepared to discuss this at length, in depth, and to any degree necessary - both technically and philosophically - Out of control, May 7, 2010) does not give them the right to run the risks (despite the existence - perceived acceptance - of privatized gain and socialized loss). Of course, in the older days, I blamed the old fat cat who led the young, innocent best-and-brightest down the primrose path to our (and, perhaps, in some cases, their) perdition).

You see, the old fat cats could not handle the technical aspects (again, I'm a 70+ technically competent who can handle any of the discussions, at any level - at the same time, reminding all concerned of the larger issues that seem to fade out of the picture due to various things, of which the old anti-virtues (err, vice, but that relates to a squad?) loom prominent) so they get the younger set to run rampant (I've seen this many, many times while living with the results of emerging prowess - essentially, an advanced technology worldview). But, it was not just the fat cats who are at fault. Culprits abound . Some of this has been resolved; a lot has not.

---

WSJ op-ed

Now, to Duffy's op-ed. Notice, how WSJ's editorial staff (image) emphasized that there has been a decline in Harvard graduates (Duffy points to an article about MBAs; what about the undergraduates?) going to finance. There was a similar reduction found with Yale's and Princeton's graduates.

But, let's remind ourselves of something. We can be more specific, as required, but there had been an earlier movement around the time of the tech boom and bust (late 1990s to early 2000s) from other fields to finance. The blogger mentioned that he had wondered why (not interested enough to really look into the matter -- Nov 23, 2008) finance could be so attractive (if done correctly, it's fairly boring, folks). Well, it turns out that the finance types were given almost carte blanche (best and brightest gone wild) to play with their models. Why? There are all sorts of factors involved here. But, the prime one is that money does talk.

We'll use Duffy's words, though, to frame the issue. He says that "institutional money" does not exist. Why? Of course, ultimately, money is traced back to individuals who have entrusted finance types to care for their little accumulation meant for "savings, retirement or education" (their's, as in, Secured payment, Nov 28, 2012, not the finance guy's/gal's, okay). Duffy says that Wall Streeters can easily forget about Main Streeters (say what? Fiduciary duty - Oct 30, 2008)). From there, Duffy goes into finance's importance.

Yes, but he says that only "a few bad actors" were the culprits behind the latest downturn. We need to remind him that banks froze because they knew that their ilk wasn't trustworthy. How can these types forget those things, so easily - it's like they took their balls home, wouldn't play the game, due to knowing that the whole things was crookedly configured?

Duffy, of course, his firm deals with these matters, talks as if creativity is essential to something that ought to be as mundane as paving a street (by the way, I've been there - it's hard work that ought to receive more compensation than it does). We can characterize this thing many different ways, but, folks, the utility aspect of finance has been put to the background (by the way, not that utilities are angels - quite the contrary).

 ... much more could be said ...

But, let's go to the sweet ending. Duffy uses integrity with respect to Wall Street's business. Imagine that! Yes, Wall Street ought to think of helping people and influencing the world. One would hope that the influence would be for the better; Duffy didn't say. But, how does one get from the supposed reality of the situation where "help" seems to be more involved with picking pockets than not? As in, from the pockets of the hapless to that of the few (Jan 15, 2010). More recently,

All in all, it was nice to see the WSJ print this. Why tie it down so that people cannot see it in order to foster the necessary discourse?

We need Wall Street'ers to wake up and smell the reality related to their ilk. But, it's like the old adage of working oneself out of a job. As it works now, the whole thing, by necessity, runs toward a continuing of the ca-pital-sino. We cannot stop (nod to William F. Buckley), but we can improve, given the proper approach. Can anyone point out improvement activity (to the benefit of the commonweal, not of particular pockets) that occurs on a regular basis?

Again, let's thank Mr Duffy for starting the conversation.

Remarks:

01/06/2015 --  Best and brightest: 3rd most read (7'oops7),  1st most read (Tru'eng), 7th most read (FEDaerated). 

01/08/2014 -- We're patiently waiting for Janet to get her feet wet. At some point, she'll get out of Ben's shadow. Hopefully, it will be soon for the savers who are being slapped silly by the day.

10/21/2013 -- Alan has a book coming out. Ben still slaps savers silly; a new day is coming.

10/03/2013 -- Oh, yes, two posts (Fed-aerated and 7oops7), but no mention of savers being slapped silly. Notice in the savers post that an image says no bullets left. Ah, yes, Ben panicked and used up his ammo. But, has he not shown all of us (and the world) that there was a whole lot of other maneuvering possible? But, too, does he know that he's cowboy'ed us into a corner?

Modified: 01/06/2015

Pop, fizz, ...

Moral: Wherein we see more spiking of the bowl as Ben must want to go out with a bang.

Realistically, are some goats being led to slaughter?

Snaps from Market Watch

Savers? Still being slapped silly.

Remarks:

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

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

09/29/2013 -- Appealing to sociology?

09/28/2013 -- Obviously, the glee abated as several days of negative gains ensued. And, some Fed people got to doing their soothing talk (oh, 2014, before tapering, slowly, and no interest for the savers for years - they say). Stopping to get more information before going further. For instance, we have all sorts of viewpoints to consider, such as Matt Levine (talking about Schneiderman), Kid Dynamite (July 9th rant and discussion - shows how far behind I am), and more.

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?

09/19/2013 -- The real irony of Ben is that he's holding down interest rates, for what? He came in under a Republican regime, supposedly the lovers of "free" economics. "Free" as in more natural and market, rather than the heavy hand of government. It didn't take him long to set an unnatural rate. Think of it, Ben. What he has set up is a perpetually subsidized system. Which is good for the borrowers. But, what do they learn when they get further into debt with easy money? And, who would lend money at such low rates (without the subsidy making up some difference)? ..., Ben would rather have us play the ca-pital-sino than to have a reasonable interest rate. I'm not asking for much, but he didn't have to go below 1%. Sheesh. There is no rationale that he can offer that would make sense. Ben has to realize that the gaming of the market moves money from the savers, and the luckless, and into the pockets of those who run the system and are lucky. What the heck kind of economy is that? Look at your heritage, Ben, is you want to see how to frame the proper view. ... Ah, markets, that magical thing of the invisible hand (Ben really knows deeply either how close to crap that is or, if he dug deep enough, he would see the Hand of God - wait, he cannot go there due to the growth of secularization thanks to all sorts of factors -- but, if he did see Yahweh's influence, he would have to know that slapping saves silly so that the spoiled can have it their way is not the proper way). Another aspect of importance is the insistence that they're data driven as if their model provides sufficient ability to do such. Sheesh, Ben. Your data didn't do any good before the fact. That is, you were mouthing that things were okay right before they fell apart. So, we're to expect that you are more wise now. The issue is that Ben, and his crew, need to use their brains and knowledge. Data driven is not a silver bullet. In fact, in a lot of cases such methods result in down-right inhumane results. We'll have to explain that further. But, it'll be too late to help Ben (I wonder what he thinks of intuition - which is what we're paying him to use, given his roles as oracle, et al - don't blame the stupid computer and its data model, Ben).

09/18/2013 -- Pop, fizz, ... Ben had to show largess because of idiots who ran the economy to the ground (rogues all around). Ben is going. What do we have to look forward to? Businessweek has a review issue (of the past five years). Several articles are especially interesting. Too, phrasing shines: spin dross into gold (in relation to mortgage bonds). Perhaps, we'll get back to some of the more pertinent ones, at some point. If we do, it would be to bring forward what has been said here, from the beginning. To wit? Tranche and trash (WSJ has a good take on that). Securitization? This article brings on weeping (one example of the misuse of mathematics and computing that has been harped about). Adoption, and improved understanding, of lazy evaluation let loose the powers that resulted in the wild web and its little children, namely social media and more. To grasp the problem, we have to go back to computing that is in some type of responsible area. Avionics comes to mind. If what is couched as software in looser domains (financial engineering? -- looser?, yes bailouts are the norm despite all of the protestations of the ruling elite; or the whole cadre of the poorer folk can just suck it up when there are problems in order to relieve the fat cats' loss) were to used in flight controls, would we not have planes falling out of the sky? We'll get back to the simple issues that seem to not be seen by the elites chasing after the bucks that Ben has been throwing out of his helicopter.

Modified: 07/22/2015