Banker?

Moral: Wherein we consider, just what does a banker do?

Gosh, we've been giving Ben so much grief that we've seem to have forgotten the real culprits. Jamie brings this back to focus.

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So, let me tell a tale, somewhat disjointedly. We'll pull things together, in time.

There is a local bank with whom I've dealt for over 10 years, that is until a few years ago. It was a nice little bank, locally owned and all. Then, about 2004, they got new management and started on the merger and acquisition trail.

Now, remember that 'M&A' still is being pursued but recall, too, that these types of deals diminished when the 'boys' took their balls home (as in, they all knew that the games were crooked; who could they trust (they knew that if everyone was like themselves, then the answer would have been nobody (lemons, essentially) at all) to deal with?). Well, the main guy loomed large with his photo in the paper. They're grabbing more banks and approaching an entity that has over $1B in assets (yes, billion).

My reactions were severalfold. For one, this same guy was arguing that they would become a State bank in order to get out from under certain types of scrutiny. Oh yes, be part of the little guys. Too, they hired someone from OCC to be part of their staff.

Aside: I found out that this bank had their proverbial thumb on the scale in calculating returns. I was only a depositor at the bank. Didn't even have a checking account. Okay, I was making money using their bank, yet they are the ones who advertised the deal. Anyway, for a few months, I watched as divergence built in accumulative returns, compared to several other banks with whom I dealt. Note, please, that as a retiree, I was being cautious in scrutinizing returns in order to firm up projections. Lo and behold, these guys were playing unfairly. I called them on it. They threw me and my money out. Without any forewarning. I received an envelope with checks written on all accounts closing them out. Hey, debtors get better (have more rights) than that! I made the rounds of the institutions that are supposedly supportive of the consumer (before the new deal, okay). The state org, FDIC, and OCC. Now, OCC got from them some diatribe about me as a harasser. What? I banked with them for 10 years prior to their reaction to scrutiny of a customer. But, management had changed. So, the whole atmosphere was different. Then, OCC says (essentially, acknowledging the validity of my evidence), sue them. What (again)? Me, a small investor take on someone who has (at the time) multi-hundreds of millions in assets? So, I let it drop and have been quietly watching.

Oh yes, it was gleeful to see them line up to the TARP trough.

Then, I noticed this year the thing about being a State bank in order to have less scrutiny. Also, I hear that they want to merge with a bank in another state? That is, is not that interstate banking and beyond one state's purview?

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Oh well, I read the boss' explanation. Oh yes, he says, merging has benefit from his level. What about his lowly depositor? You see, all sorts of 'M&A' has been going on because the best and brightest know that they can do it and can pull the wool over the eyes of the Feds (yes, Ben, you) and others. Yet, what benefit is there to the depositor?

Remember what happened to this depositor?

There are many questions of this sort. From where I sit, these guys are using banking as a playground to tweak their ego. I liked the bank better when they were almost a county bank with a few ATMs and little branches.

Now, the guy is trying to be Jamie II. What gives with this? I'm serious, folks, in my questioning.

Is not banking a mere utility mostly, to help us handle our beans and need for beans? Of course, 'our' can be at several levels, yet even commercial banking does not require the 'M&A' mania.

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Enough for now.


Remarks:

01/14/2013 -- Will Jamie be taking a pay cut? He was the highest paid last time around. He also was the one saying that they could "police" themselves, that was no need for oversight. He got one thing right in a recent interview. He said that with the "whale" problem, people were running around like children. Their concern was not fixing some problem. No, the worry as about the problem's impact on their career. Ah, career. We'll have to go into that. Most people are not effective a most things. Unfortunately, those who are effective carry these folks along. Always has been like that. Jamie needs to consider that he is not, as he may think in him mind, of the effective set.

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

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

Modified: 01/14/2013

Money and technology

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

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

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Meanwhile, a few thoughts on the matter suffice.

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

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

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

Remarks:

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

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

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

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

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

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

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

Modified: 07/25/2015

Facebook, again

Moral: Wherein we let Jamie be for a bit and re-look at Facebook.

Note (11/18/2022) -- FB, now Meta, is following predictable tracks. We'll be observing and commenting more closely, from outside the monolith, of course. See Remarks, below. Also, the posts that get references in this work will be cleaned up (normal little typos, stale pointers, etc.). 

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In another context, we started to consider Facebook's potential for showing us the future. Well, the context changed of late. Notwithstanding all of the hype and criticism, there are realities to consider. It looks as if FB might be a better poster boy (yes, Zuck) than is that old thing run by Jamie (but, maybe not, if we keep seeing things like this blog post -- 31 billion?).

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All along, we've pointed to articles in posts. Many of these, as we all know by now, can become stale, disappear, or turn out to be bogus and much more. So, we'll take a different tack from now on. The image shows headlines, today, on the Yahoo Finance page. Notice that it talks about other-than-clear activities. Yes, FB might want our information; how much is there that we ought to see beneath its opaque 'face' (pun intended to mean that we are all  much more than our faces -- FB's basic shortcoming)?

Well, given the IPO, we'll have to watch how these things unfold. The young guy ought not to have followed that ca-pital-sino route. Oh well.

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One cartoon this weekend shows Zuck and his father gleefully filling a large bag of money. Didn't read the caption. Just thought about how so many (and, folks, these people have been arguing this idiocy for a couple of centuries now) see capitalism (and this type of thing as its greatest form) as the epitome. Of course, who says such nonsense (yes, Wall Street -- what you and your ilk propound) is 'capitalism' as it ought to be for a sustainable economy?

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With FB as a focal point, we'll have a whole bunch of things to talk about.

• infrastructure - people, if you look around, you'll see that the physical infrastructure has decayed. It's frightening, from several angles. Now, FB (Zuck's little thing) is part of a new type of infrastructural entity. Look, its role is really very similar to what we expect from banks. They handle our beans and pennies. The computational thingees will handle our information, communication, and much more. So, Zuck, you believe that your thing provides more than sur-face value to our needs?
• IPO - or, milking the system. For any of these, those who are part of the system reap big rewards, usually (ought we hope that Morgan Stanley (yes, Peabody is on the ancestor list here, too) eats a little here?). Then, the hapless see the (legal, do I really need to explain this?) milking as justification for their type of mischief.   
• so what?  - FB comes from a mind not far out of high school. What is that thing we've read? Cognitive holes don't fill in until later, and with experience (actually, some never seem to fill in). I can only wonder how little Zuck's mindset has been influenced by his first big project's dynamics. You see, Google was more an exercise of a graduate-school level mind. And, it does operate some fairly sophisticated algorithms. FB? Perhaps, with added visibility provided by the 'public' ownership, we'll see more. However, look for this theme being explored further.  
• fictional money - nod here to an old guy from the 1800s who is vilified. But, Zuck's riches are paper, unless he can sell all of his holdings at his price to the lackless (hey, wait! -- didn't banks just do that to us the taxpayers?) who will then be left holding the bag. Think of the above-mentioned bag. First of all, the money is Ben's little faux set of beans. Secondly, even if it's removed by several degrees from reality, the 'money' represents some value that has 'reality' behind it. Just what is it about FB that draws so much of these bucks? That idiots and their money soon part, or such? 
• computability - and, I might add, issues of the singularity. From a proper view, FB is only a little step in a very long trek. Of course, a survey of all of the capable thingees that are out and about nowadays makes one marvel (look at ieee.org and the contributors, please). Yet, a whole lot of promise has not been fulfilled. Can it without some type of architectural viewpoint (to be discussed) coming into focus?
• yes, no - The USA Today editorial, and the opposing view, offer a nice look. Some things that FB provides: soapbox (love this), interaction (rather than passive consumption), representation (personal or even for an organization), ... We'll look at these things further.  
• ...

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These thoughts are offered within a framework of looking at how we can sustain ourselves while at the same time leaving a manageable world for our offspring, more than one generation out (okay?).

Remarks:

11/17/2022 -- See Quora, Psychether for a discussion that will use these concepts as point-in-time observations. 

04/09/2015 -- We need to get back to the metaphor issue.

10/08/2014 -- Many, many metaphors.

11/15/2012 -- SumZero, and more.

10/13/2012 -- The FB experience is some analog of spectral (of the spectrum) experience that is beyond the visible. FB (and the delivering technology) handle the non-visible element. Or, do they?

10/04/2012 -- 1B users, give or take.

08/04/2012 -- So, the market pushers say that they need things like program trading, and whole bunch of other stuff that we'll get to. So, the idea is that we need computer-based 'gaming' in order to discover 'price' and to provide liquidity. Liquidity? Yes, like that put into the pockets of Zuck (see 7 points on FB) and his ilk after the IPO. You see, those who made money bailed when the price was high. It is estimated that if they sold now, the take would be 1/2. Notice that I didn't say return (for what? -- 'gains' obtained this way are near-zero). Whose to cheer that a few make some massive amount of bucks (well, beyond those personally involved -- even the bankers who put deals together)? This type of thing is capitalism? If so, do we really need this, folks?

05/27/2012 -- Cuban's take and $13.80 as the price

Modified: 11/18/2022

The ideological errors of capitalism, VIII -- disingenuity

Moral: Wherein we continue the "ideological errors" with another post; ever wonder how economics, in terms of our beans (money), has gone so far awry?

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Ideological errors:

I - Casino, II - Adam Smith, III - Shell games, IV - Made-offs, V - Culture, VI - Classism, VII - Wealth, VIII - Disingenuity, IX - ... (list does not end)

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Did we not just look at illegality or mere stupidity as the motivator for errant-ness?

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There is much to look at, as a whole bunch of theory has been proposed the past century or so. We need to look at that; the idea is to not demean the old masters. That their followers idiotically mis-use great ideas is not a bad reflection on the master. If the master is not here to intervene, then who will? Besides, all of these ideas have a context that ought to be kept in mind.

Take Markov, for instance. His ideas are central to a whole lot of modern (such as, that of the quants) worldviews. He also plays heavily into decision processes in unknown ways which we'll bring out into the light. For one, we can ask: do we need to know how we got to our current dilemma in order to get things corrected and on their way again?

Say what?

Well, the answer would be no, but then yes. For the types of thinking that would say no, we could point to Andrey's ideas and extensions thereof. How many instances do we see now where decisions are made as if we can just cast off what has happened to date?

In fact, the illegal versus stupid thing says that we can use the latter for the bosses, in many cases. As in, stupidity is hard to legislate away (this is not cynicism, by the way). And, in many cases, the notion of 'to err is human' is applied, such as noone goes to jail. But, harming oneself through stupidity is one thing; bringing hard times to the multitudes is another.

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Aside: there have been subtle changes over the times since the 60s. We can talk two things. Take general aviation. I remember the arguments about dropping liability concerns which then opened up the field; have not many more planes been out and about on a daily basis? In fact, some wonder if that area just might be the one open to mis-deed at some point. Take computing. How many have had angst (more, measurable results from failures -- how many zeros after the $1 could one accumulate for all of the business costs related to software failure (no particular company in mind, I might add)?

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Of course, Andrey's take only works for particular decision types where we have information sufficient to build, and maintain, the decision chain. Now, overlaying human characteristics is where one type of issue comes to fore. The quants (mentioned above) bewail that people are not like particles whose states (though they may have unbounded properties) are far easier to handle by system thinking.

Take the modern corporate environment, for example, suppression of individuality is key to success; for all those, except for a favored few. In fact, off-shoring, in many cases, was motivated by the willingness (actually, their suitability for being exploited) of poor workers (in oppressive societies) to be amenable to doing unconscionable amounts of work for little to nothing (yes, Steve, what say you?). This suppression goes to the quick; talk to the top guy, he would love to have mindless automatons who follow orders (actually, they need to adore the guy or gal at the top).

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Economics goes wrong from loving abstraction too much, we have said. So, why is this dis-ingenuous? After all, how else does one get a Nobel?

Well, that love has led to a computational framework as if by necessity; then, that which is considered sufficient to "believe" the results of having this framework has been doctored such that we do not know what is what anymore. Yes, folks. But, we have to ask if it was any better before? Or, to put it another way, has it ever been what it ought to be? Well, no.

In fact, what is the 'it' being referred to here? What we need is a re-look that is constructive from an almost elemental sense. Some posts here have tried to do this, albeit somewhat cursorily (imperatives, knowledge, technology). The trouble is that we can't stop the world (as Buckley would have liked us to do, several times).

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Then, we'll need to show how the basis ought to be people. That is somewhat implied with the emphasis on the consumer (I, II, III) in the basic equation, however we need more (see rank and file).

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Expect more on this theme.

Remarks:

01/08/2019 -- Added in the index of posts on this subject.

12/15/2012 -- Coase, on the subject.

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

02/04/2012 -- This trait adds to the potential fraud power.

Modified: 01/08/2019

Harvard, again

Moral: Wherein we re-look at the esteemed institution (375 years old) that is (will, ought to, be) a focal for many things.

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Earlier, we had harped about Harvard and raised, no doubt, some hackles and may have confused some things. So, it's time to restart the dialogue and, for now, here are some of the themes that pertain to the necessary discourse.

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Harvard is a collecting point for the best and brightest. Who are the best and brightest? Those with mental acuity who, unfortunately, are not plagued by innumeracy (poor dears, those numerants, or poor us for being subjected to the outcomes). As such, they (not only those from the big H) have led us all astray through the mis-use of mathematics.

That is, they see the field in an operational sense leading, of course, to exploitation as motivation. Ah, our beloved mathematics, trashed.

Aside: What talent determines membership within the best-and-brightest set? Well, some of this is measurable using standardized tests, as we have seen develop (note the early interest by the U.S. Army -- there are analogs galore) in the past century or so. Some of the talent may (can) not be (subsumed under a metrical ontology); for instance, we see plenty high scorers who flunk out of life (but, then, we all know just how complex this issue is). Why the difference in scores (or what appears to be shown by scores)? Acuity was mentioned above. But, there would be energy, to boot (as in stamina to finish -- and, as well, trying to answer how perpetual motion is not assumed -- what? think about it!); also, patterns, and recognition thereof, are an important fact. It's an open-ended issue, folks (we'll get back to that and what it might (does) mean). And, preparation, as in S.A.T. tutoring, does NOT overcome innate issues (remember, as said above, that which is measurable is founded upon the very mathematics that is being mis-used -- so, suspicion is in order).

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The image came from BING which likes to put out an interesting bit every day with comments. This particular one celebrated the 375th of the big H and got more of the blogger's attention than usual. What's this about the H-bomb (Lord, what does that smell like?)? Perhaps, their opinion is that anyone who doesn't bow in their direction is too stupid to know better (or something similar -- these types of things (egoism) are inherent and inflict even the, supposedly, best-and-brightest types -- many of whom never scored high on any type of ethics scale).

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So given how higher-order education has kissed the behinds of the moolah'd, motivations related more to greed than not come to fore in those who pursue such achievements. What games are played by those who are possible candidates in order for them to be even considered by the institution? And, folks, not being accepted there does not make one a failure. Far from it.

Oh yes, being in Cambridge raises one's IQ (Institutional truths?)?

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Why is greed mentioned? Harvard decided to leave the Lord's work and become secular (and elitist). From whence, then, will come any direction? But, have we not seen others (meaning, of course, non-big-H) who tell us that they are serving the Lord and then founder under their greed, too?

Aside: Lord? Yes, early on it was that One about Whom the Protestants (even amongst themselves) and Catholics fought. Then, it was (and still is) the One at the core of the battle between the Muslims and the not. ... But, there are many more from which to choose, from the modern view as expounded by big H. In fact, that there is NONE is considered (without any rational support) by many. Why that assertion? Modern theorem proving techniques show that Anselm's view on the matter reduces to one premise. Does that not say that it's an either-or choice? Yet, the blogger mentions the Lord. Why so? Again, given the basic choice, one can pick what label to place on that which is beyond what one knows (even in the sense of the total). Why not 'Lord' for this reason? There are many, many connotative attachments (call them memes, if you would) that can make it more interesting and emotionally appealing. Except, there will be those who would prefer anti-Lord. You see, has the big-H ever followed through reviewing the consequences of their secularism especially since it has bled over to our culture and times (leading to massive indentured-ness at the personal, institutional, and national levels)? Another aspect to this is whether or not the Lord is embodied. Some have a long tradition of saying so (too long to mention). What 'Lord' is there for the best and brightest (see above reference to moolah'd)? Too, whether it's known or not, the Lord is there!

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Again, as we have said before, Harvard can extract itself from its mire by opening up to fostering the autodidact (perhaps, even pushing public service). Of course, their argument is that their students are self-directed. But, we want them to look at the talents beyond those amenable to numerant manipulation and to help these progress as needed to save humanity.

Again, they'll say that they do this in a sense. We'll see, if they can show this.

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One has to ask, are not some of the best and brightest out there with the OWSs?

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Now, when you consider the roles of the aristocratic over the complete history of us (the people, who else), what were these roles and how did they get to play them? Well, the types were smarter (see above about the best and brightest), in a way (or several ways). They were dumber in many others (this deals with being which is something still to be discussed). Yes, particularly the royals. What we have now is the means to measure to try to identify these types early on.

A perpetuating scheme, at the least. Then, we pave their way. As the crap of the recent downturn shows (and the big pockets of those who let loose the young'uns without supervision -- heck, the big pockets cannot even supervise themselves, how could we expect them to help others to be better? --- mind you), money as value is not much more than crap (who will lead toward a proper definition of wealth?).

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One could picture a world in which the Harvard area would be where the dynamics related to those who rise (or can rise) come into play, even doing so in ways that we have not thought of. Are we talking sandbox?

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Too, as we would learn things, we would improve situations such as preventing things like the most recent downturn that came about from the gaming of the idiots/geniuses (yes, computational mathematics is at fault, for one thing, since it empowered the a**es) in the finance world (our, as in OUR, beans). There are so many other ways that we will be at this for awhile.

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Yes, the real princes and princesses (of all types) would be in that New England area having gathered from around the world. Highly endowed responsibility, indeed, would be accepted by the institution.

Actually, one could argue that it could not be replicated elsewhere (ye olde country?), except that we don't want to deny that internationalism will be imperative at some point (before the little green men show up?).

Remarks:

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?

08/15/2013 -- Nice viewpoint. Farce, indeed (chimera). Buyers and sellers are Investors (sometimes). Many elites see their gifts as carte blanche to screw over those less gifted (in essence, a main cause of the continual strife that humans face -- Harvard, at one time, may have had an ethical edge - can it get it back?). Who is the fairest of the elite, so to speak? For sustainability to come about, those of the highest quality need to be of the service mentality (yes, perhaps we could find someone at Harvard Divinity to explain this to the gifted in their neighborhood). Service? Try military without being of the O-series, for instance. But, a national service would allow many types of contributions. Foreigners? Yes, they would have to do it to boot.

03/22/2013 -- GW at ESPN (see image on right) has a nice point of view on the madness (and related comments). We ought to have something similar for the financial folks, using play money, with prizes. That's the sandbox, folks. Then, the real stuff would be handled by mature, stable adults (not the greed ridden - and similar ilks -- okay?). The madness has to do with animal spirits just like the market (ala Adam). Too bad that one loss gets one out the door. Perhaps, at the final four level, there ought to be a round robin, like college baseball. --- Now, having just written the above, this glorious bit of madness is really a sham (see comment at madness, 03/12/2012). The whole madness pits kids against each other, who are playing for naught (comparatively), being coached by millionaires, with big buck media behind the affair, and a bunch of other lucrative ploys benefiting from the labors of the few. If one looked at qualities (as in, abstract out a truthful look at this), one could find parallels (many, many) all across history (these things being not consider our best behavior). Granted some (as in, not all) of the kids go on to big bucks. Others find glory in their endeavors (what would be be without school spirit?). Yet, besides the commonality with historic events that aren't looked at as being our (humankind's) best moments, there are all sorts of analogs in business (which we've seen of late, in glorious detail, as being problematic at its core - the heart that is supposed to be related to finance). By the way, see the below comment (madness, 02/08/2013); that particular team ended up with a #1 seed. Also, Harvard Crimson made it out of the Round of 64.

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

12/16/2011 -- Elizabeth Warren changes the opinion, somewhat; imagine, what if we got beyond situational ethics?

12/05/2011 -- It's interesting how idiotic the supposedly smart can be. The real issue: the failings of an idiot have a small influence; the failings of the 'real idiots' has wide impact (and, in so many ways). Somehow, we muddle through.

10/18/2011 -- How many of the 99% end up at this institution? Not fair? We know for a fact that not all of the 1% are related to the place. By the way, it's not always that ratio (1, 99); the ratio's use is effective in stirring up the pot, though.

10/17/2011 -- Finished the text on this old topic and added links (there may be more).

Modified: 09/19/2013

Greed vs simple living

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

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

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

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

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

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

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

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

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

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

---

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

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

----

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

---

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

---

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

---

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

Remarks:

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

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

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

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

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

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

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

05/09/2011 -- Savers are suckers?

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

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

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

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

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

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

Modified 07/22/2015

Some background I

Moral: Wherein we go back further than three hundred, or so, years ago, in order to show from whence the residue (apologies to Weierstrass) that keeps bubbles afloat.

---

Earlier, we looked at our-basis and how that affects our economic selves. That is, what ought to be behind how we treat our beans (current and future)? Too, how is it that the best-and-brightest get us into so much trouble? How is it that they chase after a chimera (albeit, for some, there are rewards indeed - as they get to pilfer, essentially)?

Aside: 3+ years ago, there were predictions of looming failure (we were finding the fiction in finance). There were revelations coming about of trashy tranching. We knew that the idiots had leveraged our futures, but we did not know it had been to the hilt. And, no one got slapped or jailed or even reprimanded (beyond the rogue table). Why? We'll explain that. Too, we learned some of the ways that the finance people are not class acts: George's rant, not fair, culprits, dead peasant. What we saw were people playing with our beans without getting fingered as culprits. No, looking at Jamie's attitude now, it was just business as usual.

---

Let's start from a real early time and leap forward. We'll go back and forth like that for a few posts. George Berkeley is the motivation, somewhat.

Ala Robinson and Poincaré, this is an appeal to the intuition. At the same time, we will not be too inconsistent (nod to Emerson). However, as the argument expands, the intent is to approach completeness as much as we can. Yet, science (the enlightened type) says that we cannot; noting, of course, that those with an operational view don't care.

---

By the way, finance professors, where are these types of basics covered? You know, emphasizing greed (unethics, if you would) is not it (examples abound)?

---

Let's go way back to Zeno (love that guy), namely his arrow paradox.

Aside: if philosophical topics are a turn-off, please read on for a just little. Why? We'll only touch on these things briefly.

The key to this notion is that it's age-old, yet the puzzle continues even to the present day. And, we intend to show that financial engineering has not resolved this issue as it ought.

For those who do not understand why all the energy gets put behind arguments of this kind, we all know that the arrow arrives at its point (with intended consequences if it's path is truth - as in, as anticipated by the slinger of the arrow - er, archer). That's taking the operational stance, somewhat. And, it really is how things get done.

Aside: Philosophers and ilk can deal in the abstract, as someone puts food on their tables. The rich can be idle, as the multitude want to, and must work. Finance folks reap ill-begotten gains because they are allowed to, as others do the real work and suffer from want. At the core of the economy are a whole lot of people doing the remarkable, under dire circumstances and straits, on a daily basis. Has any economic/finance hotshot, or system, ever looked out for the people (and, I do not mean any collection of that thing called the corporate entity to which the Court gave personhood)?

---

Except? Notice how things are going toward the benefit of the geeks and wizards? Why? The pervasive use of the growing computational prowess seems to be unlimited.

Yet, know this, please. At the core of computing is something very much akin to vertigo (the really insightful people know this). Too, the resolution of this deep problem rests upon the backs (and, insights, intuition -- albeit trained, and good sense) of people.

Topsy-turvy is how it has been characterized. Quasi-empiricism, by necessity, is not a bad thing to use for this.

Quants, show me any of you who are insightful in this sense. Please.

---

Now, coming forward, the computational progress rests upon the work of a whole lot of mathematicians, scientists, engineers, and experimenters. Tis true even now, to wit, the profusion of apps (and related effort) upon frameworks that have come out of ideas that were outside of corporate mindset (to wit, social media and much more).

It is to the basic, and residual, effects that we are going to put our attention here.

---

But, we have to set the context such that we can build a picture that makes sense and that suggests how to proceed.

Is this not what we see within the economic realm? Things start, bubble, and then collapse (see

George Berkeley - ghost of departed quantities, indeed)

, as we are all so aware of, given the past few years. And, the effects will linger a long time. Does it have to be that way?

---

In order to build the right mindset, we jumped back to Zeno. We'll now jump forward to George Berkeley (mentioned above) who argued the idealist position. Now, don't get upset with George (after all, we have a University, in California, named after him), as I've heard a philosopher of science argue that the table that we were sitting at did not exist. Of course, he was using the modern parlance and talking boundary conditions. Too, I have heard modern versions of Zeno's thinking casted as jokes for engineers.

Where we are going with this is that there is a strong, trainable, human intuition that has been given no (or little) attention in business schools (actually, the western world's view has thrown this out, for the most part -- except that it has not, rather only a few are allowed to dabble -- we'll get into the necessary role of the autodidact, to boot).

Aside: A few years ago, most enrollments were in computer science. Then, it went to finance. Say what? I thought, at the time. What the hell is there in finance that is so intriguing? Oh, I must have been sleeping to miss out on the shenanigans (give me a break; who would have thought that this idiocy would even gain the light of day?). What is the goal of many students? I saw Business Week with a review (only a couple of years ago) that characterized MBA pursuers. Essentially, it said this: CEOs, we're after your jobs; everyone else, we want to make lots of money (implied: get the hell out of the way).

Of course, the argument for those who agree with this is that the high tide lifts all boats (did we not hear that a lot? Simultaneously, the set of enriched grew their assets rapidly whilst the majority sank into poverty and want. The middle class? Squeezed out, for the most part).

The trouble: each of these succeeding cycle is putting us deeper into the crapper. The past 1/2 century has seen effects multiplied on the event of a downturn. Without due attention, it'll only get worse (ah, let the banks self-police, it was said).

---

So, what is behind a lot of belief, and energy, that goes into bubbles (besides, of course, the aeration by the FED and the like)? We'll get back to that next time, after March Madness is over.

Remarks:

06/05/2012 -- We have the cause wrong?

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

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

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

05/03/2011 -- With George B being mentioned several times, we need to address, more fully, the notions of adequality and what it means (Katz & Katz, Robinson) in the context of modern computation and its open problems related to certain types of applications.

04/19/2011 -- Some basics need attention, to boot.

04/04/2011 -- We will get technical with things like linear logic. The numerants (opposites of the innumerants - remember the discussions of innumeracy?) have over-laid upon themselves, and us, a choking cloud of numbers that will strangle out our very human essence if we do not wake up and smell its gaseous emanations.

04/04/2011 -- Gross seems to know the bankers well. Note that Big Ben (from our pockets) gave them (while sacking the savers) oodles of free money.

04/03/2011 -- For preparation, be sure to look at the 5 issues to be addressed.

Modified 09/21/2011

Tranche and trash

Moral: Wherein we go back to the basics to show a few things. Yes, to three hundred, or so, years ago.

---

We have to set the context, first. Tranching, under the guise of securitization? Silly games. What is tranching? Why silly?

---

For the 'what is' part, Wikipedia has a good overview. Essentially, something that has value is cut into pieces to be sold. Each of those pieces can be rated as to risk and payback which we know are reciprocal, in a sense. That is, to the risk taker goes the spoils; this is a long running concept in the western economy, seemingly being the essence of capitalism.

In terms of rating, some type of contrivance is thought to be smart (idiotic, really). Let's say that the thing of value is low in rating (meaning, highly unlikely to be successful - okay? -- or, junk, in the words of people like Milken). Yet, tranching will attempt to lift out something that is AAA. Well, of course, that comes about from the pockets of those buying into the junk.

Not to be long winded here; look at the wiki page. But, the question has to be asked: who thought that this was a step forward? Who would buy such junk?

You see, therefore the notion of 'why silly?' comes forward?

---

Firstly, the whole mechanism rests upon mathematical, and technical, advances of the past three hundred years which really accelerated around the 2000 year change. These are not as unproblematic as some would allow us to believe. That, of course, relates to the quasi-empirical nature of what we can know, even by mathematics.

We can also propose that those who want this type of chimera are those in position to milk the situation, via continuation of the scam.

As an aside: is it not scary that behind the derivatives, and other, markets is just such type of flim-flam?

---

Secondly, the approach tries to spread risk amongst several players. Yet, the underlying basis is not improved thereby. Assume that I have $7K. If you loan me $93K, I'll have $100K to play with (this a nod to Little Jamie, as opposed to Big Ben). But, is there, for me, really any more than that $7K?

The leverage is way out of line, except if there is a certainty in winning. That, folks, is one key which we'll get back to. For now, realize that if there is loss, leveraging amplifies the downward movement.

Please note, too, that all this stuff demands some type of accountability and bookkeeping. That is another area open to manipulation (via the book cook).

Tranching would split things into various layers and get buyers (probably by some overly optimistic selling) for these. Yet, does the reality become stronger thereby?

---

Thirdly, the whole money system seems to be based upon this type of insanity. We have funny money (whose value come about via jaw-boning). Who has clearly shown that money cannot have a physical basis? Is not the confusion from fiat money used to exploit the situation?

---

Fourthly, as said before, we go from one craze to another with reality becoming more bleak for the many. Too, moral hazardousness seems to be the thing that is reward. Why? Surely, it is not because we need the distraction, as entertainment.

---

Fifthly, we have that which appeals to the abstractphile (lover of the ephemeral). Such as, the M & M concern. For what it's worth, Milken (see Remarks 06/17/2009) thinks that structure is important. Or, things like the ergodic hypothesis wherein we see stability as the norm.

There is no end to the source for these concepts. Are they ever put to test? And, financial engineering has not met the challenge, yet.

---

Hence, we will pause to use George Berkeley's thoughts which, by the way, are very much apropos. Now, Weierstrass may have banished the 'infinitesimal' in an operational sense; he did not remove the motivational dynamics. This residue, folks, is what we see now behind the madness.

Remarks:

08/13/2013 -- Yesterday, we mentioned that President Obama wants to change the mortgage arena.This seems like a good opportunity to start a look back. One would hope that those who are in charge of the changes know the intricacies of why we have idiots running things now. If not, we'll attempt such an analysis here. Idiots? Yes, such inconsistencies of tying up money for 30 years, at a low interest (without acknowledging that taxpayers allowed this to occur in the first place, early on for veterans coming back from WWII). There are others things like this that seem so like chasing after the perpetual-motion machine. Finance, built upon bogus money, has no way to ground itself, essentially. So, let's start with Investors II.

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

06/05/2012 -- We have the cause wrong?

05/28/2011 -- Tranche on tranche, okay! If it has become apparent, this blog tries to attain a sound, naturally expressed (as in phrasing that is understandable) rendition of something. Tranches, trashy as they are, were thought to be some epitome of the best-and-brightests' schooling in mathematics (hence, flim-flam). Give us a break!

05/26/2011 -- This post appears to merge the concepts of leveraging and tranching. Well, folks, I'll be more careful in the future, but consider that the 'lemons' article talks about CDOs being built upon CDOs being built upon CDOs. Okay? Can you tell me that the motivation behind tranching is not to allow further leveraging (that is, raising the multiplier)? As I was writing, I assumed a position that would try to cut through these layers, looking for the basis. That is, at any point, something would collapse to what was behind it (which would be a fractional amount). You know what? I would bet that noone can say what is the basis at any point. OR, are not willing to admit publicly for many reasons, one of which would be to not look stupid. But, the nose knows when it smells stinky stuff which this whole financial apparatus apparently is at its core. So, again, tranching is trashy in many cases. When ought it be allowed, and what would be reasonable controls?

05/24/2011 -- Lemons problem, dark pools, ... Oh, so much to look at!

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

04/03/2011 -- On the 7% example (second bullet), some will quibble technical issues, much as multiplier effect, margins (upon what?), etc. True, enough, I'm using a broad brush. However, consider my example a gross approximation that bounds your technicalities (why? ergodics, man!). One of our problems will be defining a more solid (yes, or gaseous - based upon some type of matter) basis for how we account for wealth (and our beans) in a manner that gets away from the house-of-cards (and its gravy train). Another is the sand-box. There are many more, of course. Let's, at least, enumerate the more compelling.

04/03/2011 -- Changed the title to 'Tranche and trash' for reasons to be explained (earlier, Tranche and truth). But, first, some background.

Modified 08/13/2013

Sandbox, again

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

---

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

---

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

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

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

---

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

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

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

---

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

Remarks:

10/30/2014 -- Where are we? For one, let's talk how most are losers, okay (due to idiotically applied multiples)? This can be ignored when their reality is pushed outside of common awareness. So, we have the top tier (0.001 or less) gaining under the present scheme (even with it being stopped, QE, that is, the latest of it). The other? Dire straits, indeed. Yet. the talking heads chase the DOW daily, as if it has meaning (ah, why this?).

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

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

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

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

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

Modified 10/30/2014