2009 until now

 Moral: Wherein we do a quick recap. 

This blog started in order in 2009 which was about when the last recession was over. The topic tells it all; we watched the Fed's reaction to the downturn. And, were posting in the 7'oops7 and Truth Engineering blogs. But, that was extraneous to those two topics. We needed something financial. 

Two motivations? One deals with MIT and their clever development of the concept of financial engineering. I ask them, engineers mostly. What science is behind this bit of shenanigans? Okay, 2009, that was the timeframe. Now, messes. Even the supposed financial bots are supposed to be smarter than MIT folks (well, perhaps we ought to start there; they never had claim to all of intelligence). Now, another motivation (there are several more, btw)? As the financial stuff unraveled, the Fed seemed to react in an old mode and then just capitulated to those who push the ca-pital-sino. Oh yes. As I said, in 2009, it'll be worse the next time. We have not seen this yet, but people who consider these matters worry.   

In the meantime, follow discussion at Quora. It has been at Quora where most of our attention has been given and most of our energies spent since 2015

Remarks: Modified: 03/23/2023

12/30/2022 --

World without Wall Street

Moral: Wherein, we imagine a world without Wall Street.

Amen.

What a wonderful thought. Thanks, Nitin Nohria of Harvard.


The good professor, among other things, bemoans that his father did not buy a house until he was 60. Ah, poor guy.

Listen, professor, I did not buy a house until I was 62. As well, I, specifically, picked a bank that did not sell the mortgage. Albeit, they did buy into that mania after the crash as they thought that they were going to pick up a diamond for nothing.

The reality? They got a lump of coal. Yet, me, great customer? I have been paying my mortgage all of these years despite Ben and Janet.

Now, if you abstract'd types want to hear about reality, I am here.

Wall Street? We could run this with the discipline of the military. Look, Professor. You ever think of those who are dutifully protecting those Wall Street idiots?

At one time, I thought monks. Say, those who would take a vow of poverty. Listening, Zuck?

But, being that this whole thing is a utility, we need to run it thus. And, that would mean non-profit. Then, we would need some sense of service, discipline, order, fairness, and so forth.

Cambridge had that early on before things went awry.

Oh yes, financial engineering is gaming of the worse sort since it is unfair from the get-go. I am still looking for the scientific basis for this "engineering" (tsk, tsk, MIT).

Remarks: Modified: 06/06/2016

06/06/2016 -- 

 

My Sorry Social Security Return

Moral: Wherein we look at a prevalent view.

The title of the post comes from an Op-Ed published by the WSJ, Moday, 12/21/2015. The Op-Ed was written by Jeremy Spiegel (a frequent contributor) of Wharton.

Now, in his opinion, Jeremy would rather have had the money that he and his employer put into the Social Security Fund under his control. Remember, Bush, the son, wanted this, too.

The following compares his numbers (US$) on retiring at 70 with the maximum payout (if he lives to 90) from Social Security.

Soc Sec, 840K
Stock index fund, 2, 270K
U.S. Treasury bonds, 1,280K

We will ignore that the difference goes to support many others who have not been able to pay in, such as the disabled, etc.

But, there is another issue. The stock fund would have been using the magical multiplier in creating funny money. And, out of this type of bucket, not all who have ownership can extract to the full amount. Jeremy ought to know this. The current method favors the few.

Now, can this funny gaming change? Yes. Who is thinking along this line?

In regard to the U.S. Treasury approach, yes, this can work (see experience with Saving Bonds). But, bonds can change value, too, based upon the state of the current game.

Besides, how does Jeremy know that he could hold the bonds to maturity? Even if he could, how well could we expect the majority to do in this regard?

So, not picking on Jeremy, but there is a whole lot more to the issue than he allows for. But, then, considering the larger issues would detract from the message.

Since Jeremy is in finance, a professor, I would like to know what is the basis for the gaming that goes under the guise of financial engineering, albeit we already know that greed is one motivation.

Remarks:  Modified: 12/23/2015

12/23/2015 --

Ben's blog

Moral: Wherein we welcome Ben to blog sphere and ponder what that might mean.

Well, he has a book coming soon; and, the web/cloud has been a great avenue to get attention. But, it looks like he is offering his viewpoint, as well.

Plus, he is not (supposedly, as) constrained as before, to wit his lectures of 2012: Ben I, Ben II, Ben III, Ben IV, and, my Ah Ben. Gosh, it seems like yesterday that he took the time to tell us his view.

---

We, the savers, have survived being slapped silly, though. And, we will continue to tell the story from a position that is very much unknown to Ben and his ilk (albeit, they are more wont to smear over us with abstractions than to deal with the reality of our existences). Nevertheless, the view from the common man needs to be lifted to awareness (and, such a view is as educated, and can be as deliberate, as is that (those) of the ones who look down from their heights on the rest of humanity).

---

So, Ben blogs, early, on interest: Why so low?  Nice to see the comments that he got. We will have to see if he responds to any, specifically. The Brookings site says that the comment activity is high.

We will do our interchange via our own method, in this mode.

Right now, let's just introduce the new means to hear from Ben who has been away from our sight for a little bit. Definitely, his new way lightens up the landscape.

---

Note: the 1% and less (as in, that very small group) are more of concern to the Fed than the 99%. We will get to that. What happened to moral hazard (and how it might influence low interest)?

---

King Alan? You too old to blog (I'm over 73 myself)? We, the people, want to hear from you.

Remarks:  Modified: 06/04/2015

03/31/2015 -- Ben has a chart showing a decline in interest. Well, guy, that correlates, very well - inversely, with advances in computational mathematics and finance. You see. The computer allows easier gaming of the system, for some. Others bear the consequences. Like yesterday. It was a seeding day. Today, things turned around as those who can take their profits from the late-coming idiots. I can explain this in detail (and will, over time). Yes, the FED has to take normative stances. But, it, too, needs to wake up to the insidious cancer that comes from technology when it is let to run amok.

03/31/2015 -- Today, Ben gets to ruffle Larry's feathers. Four hours after his post, there were no comments. Technical glitch on the blog? Readers stopping to think (say what?)? The issue is secular stagnation. Janet is worried, says CNBC. Comments at the CNBC post bring in good points (that ought to be itemized). ... However, I'm stepping back so as to change the context. Notice that Ben has three objectives of economic (read, monetary) policy: full employment, low inflation, financial stability. Given his monetary leanings, how can he consider that the wizardry required (as now being attempted by Janet and her crew) is not unlike a planned economy (gosh, at the core, not unlike that attempted by the communistic/socialistic crowd)? ... For those who might wonder, think input-output model which is laughed at by the capitalistic (invisible hand - whose?) bunch. ... So, is there another view? Yes, that which embraces near zero as a crucial entity for sustainability.

04/01/2015 -- Larry's feathers are referenced in the 2nd post (see prior comment). Then, today, Larry responds. Plus, Ben goes on about the savings glut. ... Three major posts in three days. Well, that confirms that Ben is not the usual blogger, as in, sitting at the keyboard hacking out words. However, if Ben can show a better way to use the blog medium, I'm for that. How much help does he have?

04/02/2015 -- Ah, mercy. I was wondering if Ben would snow us with an avalanche that has been building for some time. Any bets on the next post and topic?

04/04/2015 -- Yesterday, Ben talked Germany's problem. My take before reading his post: how is it that such an industrious people have the rest of the community on their backs (some proverbial bit there?)? My take after a browse: infrastructural investment? How about suggesting that for this great nation's failing backbone? Ben needs to drive around, himself behind the wheel, and to take a close look at the erosion. ... There is a glimmer of hope; Ben talking socially-oriented steps (raise wages, fund infrastructure)? After all, my reaction comes from him having been installed by a Republican administration which does have implications about his view on the world or how his views were perceived (will we ever hear from Bush on Ben?).

04/08/2015 -- Now, the IMF weighs in (on Larry's side). Pissing contest? So, my take is to start from scratch and build something, constructively. I'll watch this from far enough away to not get splattered. Ah, males.

04/09/2015 -- Stability was Ben's topic on the 7th. I want to ask the guy how he sees such in the financial realm (irregardless of the FED's put) when the underpinnings are an amoral exploitation of mathematics and computation just because it can be done under various types of cloaks (proprietary, sleight of hand, etc.)?

04/15/2015 -- The last two posts were: Low interest #4 and Hiking wages in Germany.

04/16/2015 -- Monetary policy, what? This is last update here. We'll comment elsewhere, such as this bit in truth engineering.

04/20/2015 -- How long will Ben blog?

04/24/2015 -- The questions stands. As of now, the last post was April 14th. ... So, today, the NASDAQ was up in record range. Nice, Ben and Janet. Looking at the chart, we can see the drop after the tech bust and notice a little dip with the great recession (just past, caused by the finaglings of the finance crowd). ... The, straight up since the bolstering from the largess (all sorts). ... All on the backs of the savers.

05/01/2015 -- Well, Ben came back. Not for long, though: Taylor, WSJ's view.

06/02/2015 -- It wasn't my imagination. Ben slowed down. He was going bonkers there for awhile. The latest post has to do with inequality. Ben goes on about "value" and how it has been used. But, does he ever think of the magical multiplier? That is, the financial scheming that is done daily is the direct result of "Fed" dalliances with Wall Street (and similar ilk). ... So, Ben, please consider that the ca-pital-sino, no matter what infatuation that you might have for it, is not how we ought to base the poor's future. Unless, there are gigantic taxes on "capital" gains, especially those of the "fictitious" nature (which is most given the current configuration). ... Gosh, they sure cut off comments soon. Is it due to an accumulation of critical reactions?

Beyond your wildest dreams

Moral: Wherein we look at the simple example which shows motivations for machinations and do a few permutations which lead to insights about things which need to be more commonly known.

What do we see? Look below. But, you will see why we used the title for the post. Not only is the multiplier magical, it's the work of leprechauns (definitely, pot-o-gold'ísh, so to speak).

We step through 4 cases, here. The following does a little describing of the change and the results.

Cheshire meanderings

1. This is the simple example, as it goes through t=4 (formerly, t=3; we started at one this time and went one step further). There are only 20 stock with 2 being sold each time. The mcap (formerly, basis) accumulates. The "Cheshire" is the percentage increase that the lift (formerly, bulge) is over the mcap (dlt mcap - formerly, increment). Note, please, that Cheshire is in the hundreds. The lift% shows the percent that the lift is of the growing total. 
2. Same case and prices, but with a large increase of the number of stock (to 100,000) and in the number of stock sold. Too, a little variability of #sold is introduced. Note, the "Cheshire" is still tame, comparatively. 
3. So, let's keep decrease the number of stock to 100. And, starting with a price of 5, increase by 5, then increase by a fraction. Too, vary the number sold. Notice that the ""Cheshire" is still tame. This is still a very small example in number of stock (see below). 
4. Now, blow up the number of stock and stock sold. Too, we'll keep the price reasonable, in the range of one actual case that we watched closely from IPO (interested observers - say, anthropologists, not investors). Notice the wild "Cheshire" ratings. Too, you get that even with the lift being a small percentage of the total. What? Ripe cherries for picking?    

Reminder: See last's post example of the dark pool motivation. By the way, we have a whole slew of permutations on that theme which make the case stronger. 

Note: The lift accumulates (along with the mcap) and is not adjusted (this is a future post). Why? To continue with the extreme case upon which we will put the proper modeling of the natural dampers, etc. We will want to compare this extreme case with various dampening techniques (for Janet's crowd -- you see, the markets and their whole bailiwick - capitalistic arguments - are from olden times (way back); the computer came and was basically exploited by the greedy ones; it is time to rectify this through all sorts of improvements --- look, that computational power now being spent on gaming the system ought to be put to use in providing better accounting (regrouping) and auditing schemes (of course, truth engineering, see below) -- do you not think?). 

We saw, recently, a reminder that Warren (you all know who he is) has one rule of thumb, namely the ratio of the market cap to GNP, that applies here (there are many more of his rules to consider - but, Warren, you waffled on derivatives - we would like to know why? -- BTW, derivatives, and their ilk, play the lift - there is a whole lot of room for maneuvering). This ratio has been tracked historically. Too, we will have to be cognizant of the ratio of outstanding and actively traded. 

We will use several examples, like BAC (customer of their's - the original one of SF (not the interloper) - since the 60s), to wit: 63m of 10b traded (that's like 4% - wait, almost like the ratio we see with the voting populace?). 

BAC on a recent day

Also, in the spirit of openness, let's say that our thrust is to argue "lift" (formerly, bulge) and related themes (with a computational basis) as a necessary means to recognize the mania'd state (under the auspices of Truth Engineering where we first awoke, as old Rip - six years ago, imagine that, and saw the havoc wrecked by the baby boomers - ah, guys and dolls). 

Note: With all of that lift'ing going on, no wonder the eyes of the guys like those at golden sacks bug out (the mere thought gets the salivation activated -- reminder - you will see that we have argued that the financial pipes would be handled by plumbers, et al, as those of the greedy ilk are not required - needed for liquidity? give us a break). 

Remarks:  Modified: 10/06/2015

03/17/2015 -- Changed terminology to reflect that used commonly: basis to mcap, bulge to lift. For each of these, we have a delta. Then, mcap accumulates each step; this change will help facilitate the analysis needed for the adjustments which will reflect the true mcap (coming). In this extreme case, the mcap is understated as lift has not been adjusted as it ought (we have two lifts: the mcap itself and that which comes along for the ride - see the simple example of the rise of two stocks "lift"ing the value of eighteen others).

03/18/2015 -- Today was a good example of lift. Take the DOW. It hovered in the upper 17k region, until Janet spoke. Then, there was a swing of 400 upward. You know, on the downside, there are stoppers which keep things from going as they ought. Earlier, I would have said that coo-coo (goo-goo, whatever) was talked to the addicts. But, now, I want to be technical, in a normative sense.

03/22/2015 -- Jealous? No way, Jose. FED gives Wall Street what it wishes.

03/23/2015 -- Pew Research's reports will be useful: Only upper-income families have made wealth gains in recent decades. In some of the responses to comments, one author expresses disbelief in the Fed's influence. Well, we can work on helping clarify that (by more than griping about the addicts). Our research deals, in part, with how many simple folk get to experience, and enjoy, the book-based wealth that their financial reports offer them. That is, that which is beyond Social Security (but, being sensitive to take-backs as we see, recently, happening with retirees being informed that their pension is being cut). From my experience, it is a small percentage (comparatively). The one fact of the upper crust? They have more protection which we can enumerate and illustrate.

06/01/2015 -- Dampening the magical multiplier.

06/18/2015 -- We have to see how this insanity got its start. Then, we'll see why most do not get their money (the value is strained out daily by those who run the game). Everyone, it seems, has bought into the game (but, we're not tilting either at an illusion - despite having used chimera).

07/24/2015 -- Last night, we had an Amazon pop based upon activity of about 10M shares out of 500M (about) outstanding. Then, we have the media bragging about the Jokester's big payday (which would require him to be able to sell at the price) all day. These little games would be okay if they did not help preserve the less than 1%'s ability to suppress the remainder. See Remarks (this day) about the incident.

10/06/2015 -- While Yellen sits and keeps from giving savers a few cents (sheesh), the street (and not Main) pulls in 11+ billion in 1/2 of a year.

Let them eat cake

Moral: Wherein we look at machination motivations which arise from the attitude behind the statement whether it was, or not, expressed by the Queen.

There are many cousins of her's still around and about (as well, as a whole multitude of wannabes); that lordship-ness role - wild dreams - appeals, without end.

---

So, last time, we described a little example using a small number of stock with a price that was large enough to show effects. Of course, the whole notion was about the magical multiplier (which is in effect today - essentially, a prime the pump day). In that post, we said that it was to be used for an example of things that border on misuse (inequitable, for one thing).

This graphic shows the original state which is the final one of the prior. 

Aside: We can thank Andrey for helping us to realize that, in many cases, we do not care about why we are where we are. No, the thing is to know your choices. But, this whole thing has been twisted, unnecessarily, as we have seen time and again. 

Examples of orientation: market or machination

So, we start where we left off. We have 20 stock. 6 of these have been sold. So, the total value has gone up as did the bulge. Now, supposing that one of the holders of stock (we picked #8) needs to sell as that is the only way to get some cash (forced sell situation which can be of many ilk). Then, there are many ways that this can be done. 

But, the two here juxtapose a market approach (all sorts of positive qualities) and a machination type of thing (of which the dark pool is by definition). 

Aside: We could have picked any of these. If we had picked one that had been bought early, then the loss related to #8 and #13 would have been the classic case of the late comers being the sacrificial sheep. 

Now, a sale, in the market sense, below the current price would result in a general loss. In the machination case, all sorts of activity could be done without anyone being the wiser. 

Aside: We will need to look at the end result of machinations, of these types, as they move value to the pockets of a few leaving the rest settled in the bulge (yes, Janet, your continuation of Ben's approach has caused "inflation" in the bulge, in more ways than one -- the number of hapless, sacrificial, lambs has exploded). 

Remarks:  Modified: 07/25/2015

03/16/2015 -- One criticism of this little example could be that who would sell stock to get 4 bucks. Do I need to tell you of a 300K house being sold for 6 bucks (by some stupid public employees who were trying to collect unpaid taxes -- idiocies of this nature are rampant)? This little example is to set the stage. Next up is increasing the number of stock and adjusting the price. From this, we can start to see the factors involved so as to notice what conditions are good for those who benefit from running the system.

03/17/2015 -- Dogs of the Dow: Market Cap table, Most active. Beyond the wildest dream. How truth engineering comes into play.

03/22/2015 -- Jealous? No way, Jose. FED gives Wall Street what it wishes.

03/23/2015 -- Pew Research's reports will be useful: Only upper-income families have made wealth gains in recent decades. In some of the responses to comments, one author expresses disbelief in the Fed's influence. Well, we can work on helping clarify that (by more than griping about the addicts). Our research deals, in part, with how many simple folk get to experience, and enjoy, the book-based wealth that their financial reports offer them. That is, that which is beyond Social Security (but, being sensitive to take-backs as we see, recently, happening with retirees being informed that their pension is being cut). From my experience, it is a small percentage (comparatively). The one fact of the upper crust? They have more protection which we can enumerate and illustrate.

06/01/2015 -- Dampening the magical multiplier.

07/24/2015 -- Last night, we had an Amazon pop based upon activity of about 10M shares out of 500M (about) outstanding. Then, we have the media bragging about the Jokester's big payday (which would require him to be able to sell at the price) all day. These little games would be okay if they did not help preserve the less than 1%'s ability to suppress the remainder. See Remarks (this day) about the incident.

Markets, arbitrage, etc.

Moral: Wherein we are still in a pause, but events continue to roll along.

On Monday, 03/09/2015, there were several articles in the WSJ which had the typical flavor, being reflective (Friday was over and done with; there was time to look at what happened during the week; such times can offer to those who are thoughtful some slack time with which to get it right). This post at 7oops7 briefly describes three of these. Actually, the three require a lot more attention than being given now, but these posts (see link) are a reminder.

In this post, we are looking at the Bull and Bear charting for the past several decades. The graphic comes from one of the articles (How to Survive a Bear Market).

My time is from the 1970s and onward. In fact, in the mid-80s, I had the opportunity to see up close the floor and back office computational methods (Wall Street). That, coupled with my academic studies and general knowledge of the human economic experience, is the basis from which I will (continue to) argue the points. Much of what has been written, here, from the beginning is still apropos.

Note please, that the line is flat-ish from the 60s to the 80s. We can point to all sorts of influences, but I will argue strictly from the enabling influences of technology. The whole psychology has changed; too, you have the "brains" running amok with their mathematical prowess (when characterized properly, it's obvious). The resulting cloaking effect covers a whole lot of mischief.

Ah, Janet, you are talking ethics and the Wall Street in the same breath?

---

So, we need to look at the progress over that period since the early 80s. But, we really need to go back to the beginning and see how the floor and the back office adopted automation, as well.

Other changes, such as pricing methods, etc., came about, too. The effect of these will be duly noted.

---

We have looked, albeit cursorily, at markets. Arbitrage was mentioned a time or two. This was all a rage when I was a graduate student, but it did not interest me as much as it did others. You might say, my reaction was the same as with "financial engineering" (what a misnomer).

We will be getting back to arbitrage. These three papers are offered, for now.

• Too good to be true? - Somehow, we need to get the proper perspective back to fore. 
• Historical perspective - People have studied the evolution of markets and arbitrage. Why is no one, beside me, looking at the computational aspect (especially, those that are obvious - to most except the STEMers)? 
• Ancient roots - Indeed. Note, one example of an approach was to circumvent the strictures on usury. Yes, financial innovation is not new. 

Remarks:  Modified: 03/22/2015

03/10/2015 -- The one constant, as many say, is human greed. Too, the gradation of humans in all sorts of ways is age old. The current state seems to be especially attuned to the success of a small percentage (congratulations, guys and gals, for getting things to go your way). However, the problems that arise (imbalances) do not look favorably for sustainability of the mismatch. ... My experience leads to proper discussion (see Grind's little thing of remembering 5% -- yes, that and a lot more is my response).

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

03/17/2015 -- Dogs of the Dow: Market Cap table, Most active. Beyond the wildest dream.

03/22/2015 -- Jealous? No way, Jose. FED gives Wall Street what it wishes.

80-year-old whiz

Moral: Wherein we look at financial engineering.

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

---

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

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

---

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

Remarks:  Modified: 02/03/2015

02/03/2015 --

Talking to the addicts

Moral: Wherein we just take note of the goo-goo talk going on everywhere, now. Ben/Janet did a good job in that respect.

Canada? Who has been the epitome of good banking? Europe? Poor Germany (worked hard; kept their economy on even keel; they will be like the savers under the FED - slapped silly).

As an old timer, I don't know if I'll see fiscal sanity return in my lifetime.

Remarks:  Modified: 03/16/2015

02/05/2015 -- 80-year-old manipulator of the markets still at it. ... The questions remains, for the financial engineers: what is the scientific basis for your efforts (as in, real engineering bumps up against nature, which is a hard task master)? ... You guys exploit the multitudes (let me characterize this for you ... in my own time, of course).

03/16/2015 -- Let them eat cake. 

Where are we?

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

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

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

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

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

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

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

Remarks:  Modified: 10/30/2014

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

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.

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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.

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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?     

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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.

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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.

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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?

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. 

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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.

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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

Cosmology - consumer

Moral: Wherein we continue our trek toward a fully-discussed cosmology of business.

Last time, there were some preparatory remarks which considered, momentarily, the basic principles that ought to be brought to fore. How could such wavering come about? Why can't we just start from some easily agreeable foundation (been to DC lately? - oh, yes, establishing spy-ville has been the main accomplishment, it seems?)?

Well, let me point to the puddles, and mud pies, being stirred by the intellectuals. Too, who isn't chasing their tail after the mathematical overlays descended upon us (ah, think NSA's little shadow world in which all but them are suspect - if you don't know about this you've been asleep in the back of the classroom) and added to great confusion?

Aside: An insidious cloud has cloaked our ability to see truth. I'll be going on about this at length. Think blinders, folks (yes, even minds rated at genius are trapped within this web).

So, today, I might have stumbled upon a position from which to start and from which we can omni-directionally venture (hint: non-linear and temporally non-convergent). First, the inspiration comes via reading Horace Kallen (actually, browsing). Several of his titles intrigued me, but, being devoted to duty, I took up his work on the consumer (The Decline and Rise of the Consumer).

Aside: Please note several things. The guy is writing from a philosophical position. Too, he's way before the "stupid" computer (smart, my arse). And, he was before the robot which is meant, in the minds of many, to create worse hell on earth than we have so far (no Luddite am I, look it up). Horace does not have the long American heritage which some of the ruling class claim (a whole slew of the leaders do descend from the royal houses of Europe - not many saints there). So, his late entrant viewpoint can be compared with the heritage'd (mind you, we'll do that - my ancestry is post-Civil war, to boot).

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Horace Kallen,
The Decline and Rise
of the Consumer

Now, let us consider some words from the Epilogue, supposedly a look back from the year 2044:

• Throughout history, the many had sweated and slaved, with the labor of their hands and heads bringing to birth the shapes and services of life whose accumulation and remembrance compose civilization. They had sweated and slaved, but they had been prevented from consuming and enjoying. They had sowed but others had reaped; they had nurtured and tended, others had eaten. They had been the producers only, others had been the consumers. They had been the means, mere tools with life in them, others had been the ends, free lives with delight in them. And those who felt and understood the injustice of this division were filled with a righteous anger. ... Without labor there can be no food; without work no human good whatsoever can come to be, no desire could be gratified, no wish attained, no life enriched. 

Ah, well put, Horace.

Aside: Horace's father was a Rabbi while he was an early secularist. But, as he said, one didn't pick (nor can one throw away) one's grandfathers. Horace is credited with coining cultural pluralism.

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Consumerism has bad connotations since argument trend toward materialism, ostentation-ism (had to put that in for the Wall Street crowd), and such. But, corporations (with their God-give, and court-recognized, person-hood) and PACs (things of that ilk) are consumers, to boot.

Besides, looking at the economic equation (top view, as in GDP) shows a C. Guess what that represents and how large its effect upon the total?

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Markets? Well, forget the idiocy currently in vogue that leads to financial engineering. They (we'll get into markets and their need) are to facilitate "business" at its core. We will be going back into that subject, time and again.

Be aware, that humans will be at the fore. And, I don't mean just those favored few, like Jamie and his ilk.

Aside: By the way, one use of the computer ought to be to level the playing field. Again, no Marxist label ought to be brought up here.

Remarks:

07/26/2015 -- This has had some recent reads. Lots going on, including poster boys coming out of the woodwork. We intend to get back to this topic: consumer as central to things economic (metaphysically sound).

09/17/2013 -- New blog. What is enough? Anyone remember room and board? That is a wonderful arrangement where you work, get fed, a roof over your head, and some spending money. Now, that may be an old concept. Nowadays? Yes, one would have a room provided by a slum landlord, the food would be gruel worthy of a gulag, and the money would be given to you on a debit card with exorbitant fees. Then, there are those who can never have too much. This is an interesting twist to use for discussing a central notion.

09/17/2013 -- Atlantic: where money was spent. Presupposes money to spend (hopefully, not by debt alone).

09/10/2013 -- Atlantic article: language and savings. However, note the U.S. position on the chart. Ben has slapped the savers silly (making them battered and bruised). Is he anti-savings? Or, is it that he wants to maximize consumption?

09/09/2013 -- Clarification. Of course, the "C" is for consumption (say, the whole collection of types of consumers - including those who would fall into the consumerism set). Needless to say, wouldn't unlimited production (without elimination via consuming) lead to the proverbial compacted state?

09/08/2013 -- Of course, it's not mathematics that's stupid, it's the misuse (which we'll get into). Marilyn says that mathematics doesn't inspire like literature and art (for once, I agree with her wholeheartedly). In fact, she thinks that mathematics ought to be taught early, then the later involvement would be by personal choice. Perhaps, then, some of the misuse would abate. Perhaps not, but let's wait until we detail the misuse before discussing that. Now, in the meantime, if you want to contemplate large "M" Mathematics, go right ahead, we'll take it any way that you want or need. 

Modified: 07/26/2015

Cosmology - preparatory view

Moral: Wherein we continue to set the stage for describing a (the) cosmology of business.

As we know, Ben is leaving. So, we'll miss the guy. Too, how long before we wished that he were still there?

USA Today had a nice opinion written: Fed battle is about gender. Here are two quotes.

• Summers, as a certain kind of dominant man, is aligned with Wall Street, and hence with money, and hence with the existing power structure. He embodies the inclinations that have gotten us into so much financial trouble.

• Yellen, as an unshowy (read middle-aged) woman, is more academic and collegial in nature, and has done long and unheralded stints in government; she represents the collective self and hence a higher level of public selflessness and probity. 

Not my words. But, I wonder what would it be like if these two were switched (except for gender). As in, Larry and probity? Janet and megalomania?

Could that ever be? 

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Now, given this juxtaposition, and little bit of reality, we have to comment on how it relates to the economy, especially its basis in banking (assuming that we need such for handling money -- providing liquidity). The ilk of Summers needs to have a sandbox where they can crap all they want. How can we do this? And, clean up. 

The other side was represented by Ben who did not seem to shy away from shotgun approaches. Essentially, he has created a state of matters from which we don't know how to move forward. Mind you, don't know how means that science works from knowns. It just does not cast about in the unknown realm trying to find something. 

Same for engineering (are you listening MIT and the financial engineering crowd?). It's methodological, to the extreme, even though such is hidden under an avalanche of mathematical expression of knowledge states. 

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The main focus, as in origins, will have to deal with people. Those two types depicted, above, are along one type of axis. There are many other such polarities, actually spectral relationships. 

To where do we appeal, or begin, with an approach that is constructive. On the one hand, we can look to the U.S. Constitution. Before that, we can look at the Magna Charta. There are other forward-looking attempts at describing "mature" adulthood.

What is on the other hand? Ah, want me to venture there (not that I'm not prepared for such)?  Fortunately, we don't have to do that, just yet.

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We all know that being free to apply one's creativity is part of a healthy, happy existence along with a whole lot of other things. But, as we have holidays to remind us, there are those who put themselves on the line for the American way (by the second). We can look at that in depth, too, and at how this service/disciplined attitude differs (almost as if there were two universes) from the gluttony of the ilk represented by Wall Street (and many other descriptions exist for this side - not many of them flattering - oh, "I screwed an old widow out of her last dime today" sort of thing - get the drift?).

We'll have to talk about the middle which is fairly broad and its importance. Of course, we'll do it in an new way; fortunately, the current Congress has represented the antithesis of the ideal (making comparisons available that are apropos and up to date -- thank you, gals and guys).  

Remarks:

09/04/2013 --

Modified: 09/04/2013

Transitions

Moral: Wherein we consider the cosmology of business, further, as things are going to be fundamentally changing which gives us some leeway to explore major issues.

Tetons

Ben did not grace the Tetons with his presence this year. But, the bankers are there this weekend. Not all of those there have some solid notion about their influence on the world and their particular roles (including shades of them being irreplaceable - ego thing). And, they have that self-image despite dealing with fiat monies, crooked markets, and much more that ought not raise any hubris (except for accumulation comparison) especially given that their existence is oppressive, to the max, to we the people.

Before going on, let's review posts dealing with Ben's visits to the Tetons.

• Chimera II (Aug 2010) -- These guys, along with Ben, have pushed equity as the prime focal area. One has to wonder why when the reality has a strong flavor of ca-pital-sino which we know from the gaming industry means the house always wins (via leeching) and there are no fair deals. Plenty have talked about the myths related to equities, yet these types persist in their ways. Why? Well, all sorts of benefits come with their positions. Where is there any basic science (with regard to the issues of finance, in general) talked that isn't watered down for the management idiocies?  -- Note: we didn't know of the coming run-up in equity markets that waffles when Ben talks tapering. At the same time, savers are reeling from being slapped silly.   
• Financial piracy (Aug 2011) -- These guys traipse through one another's company as if they're the giants who rule the world. Ah, Pharaohs, indeed. Well, they do have major influence on how money impacts our lives. Yet, the way things have evolved are not sustainable. Little regard is given to "main" versus "wall" street issues. Though, lots of ink has been used on discussions of these matters, we'll attempt to add a missing viewpoint. -- Note: yes, we were still, at this point, removed from the maniacal bulge that fattened the pockets of the selected few. Then, we see jobs coming about that are not much more than indentured servitude as all eyes are directed to the chimera. 
• Ben, da man (Nov 2011) -- Provider of the largest teat that we've seen. And, those who suckled have turned out to be the fattest cats possible (addicts to the max). At the same time, the takings from the savers were never calculated, as they ought to have been. -- Note: Unwinding? Ah, cold turkey ought to have been the mode; have we passed that point? It's going to be painful for all of us. Thanks Ben (slapped silly for years, now we have to clean up the mess after the addicts mess up the world).  
• After all these years (Sep 2012) -- Yes, Ben's been slapping savers silly for several years now. And, he tells them to man up and continue to take it on the chin. Nice guy. -- Note: In the meantime, he has been worried about his little addicted equity investors who need coddling. He wanted an inflated equity market. Sure enough, it happened. At the same time, he's built up a large balance sheet (for which we are responsible) in proportions never seen before. Perhaps, we ought to thank Ben for giving us an situation from which we'll have to extract ourselves and by which we'll have to learn something (isn't forced education a wonderful thing?).  

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Earlier, we started to talk about the cosmology of business. Well, we'll get back to that. And, since we're looking a things from a "cosmology" view, we start by looking at origins. Origins? Yes, from the beginning, so that the resulting viewpoint will be constructively built from a firm basis using a reasonable framework for expansion.

You see, we're doing that purposely since we have made the claim of bastardized mathematics causing too much influence with abstractions. Yes, indeed. In fact, too many manager types (without proper understanding of foundation issues) are running amok with applied mathematics. It's frightening. But, worse, it's sickening (and the academics are pushing this - making them pushers as much as is Ben).

Once, we get past origins, we'll have players, roles, and much more. Of course, as one would expect, bankers will come into view. And, investors, of course.

Again, are there timelines and outlines with this? Let's put it this way. We'll start at the beginning; we'll get side-tracked with current events (have to mouth off about those); there might be fits-and-starts since the exposition cannot be linear (chicken-egg thing -- found everywhere in economics - the one truism? Ego gets itself in there, perennially. We're going to try to thwart that tendency during this discussion.).

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You see, as a look ahead, I've mentioned singularities, in a related context. That concept's use has several motivations, but the major one is to suggest that Black Swan thinking does not go far enough. In computation, we're talking entanglements that are unexpected (actually, they could be by design if the idea is to enhance the giant sucking capability) which have similarities to knotted manifolds (only possible in unreal worlds - hey, what is money in its current form?). However, Wikipedia has several connotations covered. In a computational situation, I've used vertigo (but that is more a reaction - behavioral view - a description of the underlying factors -- not talking causal, necessarily).

Remarks:

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

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.

08/27/2013 -- We'll start it here. Let's look to an American logician for awhile. Bayes has had his run, okay? He was Brit. Non-conformist, which is nice. Charles Sander Peirce has more to say to the changes that need to be made. ... By the way, we've talked to the true cost of putting out financial software; we'll try to get a handle on that. You see, the cowboy way is prevalent in finance and web apps (under the guise of agility (ah, so nice to misuse that) or entrepreneurial freedom). Of course, in the former case (finance, of course), the game is to fill the pockets of the favored few.

08/27/2013 -- You hear a lot about liquidity in terms of capital and markets. Ah, keep the wheels greased, too. However, liquid is only one of several phases. In fact, solid was mentioned above which brings up a few connotations to consider. ... The gist of the matter is "liquidity" is really used to cover the fool's game that they have us wrapped into. How did Ben fall into the trap pulling us with him? Well, in the future, we'll have his explanations ad infinitum. In the meantime, the prominence of equity (oh yes, it has greatly enriched the few -- while impoverishing the world, essentially) will decline toward a more balanced view. In fact, we can think of "capital" markets not yet conceived which will come about from computational creativity (bitcoin might be an example, but it's a metaphor (now) as is Facebook thusly so in another area).

08/27/2013 -- Steve Ballmer of Microsoft is retiring. On the announcement, MSFT went up so that Steve's holding increased by nearly $1B (billion). In one day! We'll have to put Warren and Ben aside for awhile and look at Steve as some type of example. How to characterize this is a puzzle (not archetype, exactly). Of course, that increase is in an environment that was aerated by Ben (so he cannot be forgotten, for long). Steve's overall worth is in the range of $15B. I don't know where that ranks him, however the whole set of issues related to that crooked game can be analyzed using SB along with WB and BB. It'll be fun, but, firstly, there has to be the cosmology post dealing with origins.

08/25/2013 -- Some are talking the plumbing aspects, such as the conduits needed to move thing around; this type of talking is supposed to reinforce the notion of liquidity (which is bosh). Bankers have warped the space (over the decades - abetted by politicos). Who knows the truth? So, our look will be from basics which might get some perturbed since they deal with intricacies and complexities (yes, I know, the sandbox would be where these types ought to play so that we mature folks could have an economy that is worthy of our attention). You see, no one seems to talk want to talk the fundaments (used purposefully). But, just as our ideal is a government of the people (Constitutionally established, supposedly), so, too, is the economy for the people and not for those in the upper strata (higher ups) who seem to think that the rest are peons (little resources) for their beck and call. Gosh, the hubris that Wall Street brings out!

08/24/2013 -- A professor said that the systems are too complex, in respect to the market issue of Aug 22, 2013 (three hours of thumb twiddling). He said that these things are not tested. In a sense, the cowboy approach has been prevalent. The people push out changes as if we're to marvel at their talent and brains. We are to adopt the changes and adapt ourselves and our lives (sound like the internet?). We'll consider the computer, its advent, use, and future, in our discussion of cosmology.

Modified: 12/05/2013