Cambridge Non-commoners

Moral: Wherein we continue a look at the 'chimera' (and its lemons) in terms of an approach that can be sustainable.

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Last time, we looked at the Salem Commoners whose use of 'commoner' provides an interesting twist. Yes, many involved were not common, at all.

Fortunately, Fortune now provides another, more usual, twist that deals with the antithesis of common, namely the elite. The topic deals with the Ivies as a route to Wall Street.

As an aside, Cambridge also has MIT (juxtapositions, thereof, are of interest here).

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Mind you, this blog has said, from the beginning, that any worldview that puts its epitome on the Wall, rather than the Main, street, is very much suspect from a sustainable sense. Why? It continues the notions that were motivators for aristocratic excesses of ego and ignominious exploitation of the trodden; too, these ones, of the privileged heritage (some, lordly princes) and of a highly un-grounded basis, proliferate mindsets that are seemingly well-founded but that, in actuality, sliver and quake (house of cards).

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An appropriate Magna Carta must become part of the discussion.

Remarks

07/06/2012 -- Today, we have the one-year remembrance of George Edward Kimball III (GEK III). 

10/10/2011 -- If the OWS wants specifics, there are plenty to list, such as this one. We can only resolve this with an amendment (like the 13th) for the rights of workers (folks, employment is not unlike indentured servitude in many ways) plus a Magna Carta equivalent to give the big pants (egos) something to think about.

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

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

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

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

10/07/2011 -- Magna Carta, the celebration thereof.

09/15/2011 -- Henry and George.

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

08/05/2011 -- In case there is a need to be more obvious (the meme: the chicken or the egg -- below), which is the oldest profession: head-butt or mate. Note, if you would, that the latter is usually preceded by the former, in many cases.

08/03/2011 -- There are several ways to ponder economics within an evolutionary framework. However, starting with the two (no, not one) 'oldest' professions might be of interest: head-butting (see Remarks 07/29/2011) and, then, that which is usually cast as the oldest. Which came first (the meme: the chicken or the egg)?

07/29/2011 -- Another nod to GEK III would look at his thinking on the 'sweet science' of mankind (and analogs, thereof). As in, head butting (actually, this is the oldest profession). Rick had a post on his BJJ longevity (to which I commented, as it leads to discussion of the necessity of the sandbox) describing the various benefits of the martial arts. In the large, mayhem has been used by those of the upper realms to control the lower classes, plus they manipulate the energies for the uppers' goals. In the small, we have males trying to establish an illusory dominance (yes, zap your brain out to 1 million miles and think: to what effect?) among themselves while letting the uppers exploit the situation. That is, divisive energies prevent the necessary unity (that which would free the trodden). ... Now, to twist the view a little, can we learn lessons from the efforts at succeeding in these areas (as in, something equivalent to that considered by the ivory-towered minds)? Yes, consider a topsy-turvy change that is experientially (and not abstractly) based, if you would. We'll be getting more into this later.

07/28/2011 -- This is the second of the G.E.K. III, defender of justice, series. As one comment to the Fortune article notes: (bern 3922) Actually, I think we're becoming more like the feudalistic classist dumps our ancestors fled here to escape. Hopefully we'll realize we're making the mistakes of the past and change course. What we need is for elite education to be allocated to those most intelligent and capable instead of those whose parents have the most money. We also need legislation that will make nepotism a form of employment discrimination.

Modified: 07/06/2012

Salem Commoners

Moral: Wherein we start a look at the 'chimera' (and its lemons) in terms of an approach that is sustainable.

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Perhaps, Big Ben and Jamie can learn something. Little Timmy, too?

We'll use the context of the recently passed Fourth of July.

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I have been reviewing European and American history, using a genealogical framework, for the past couple of years. Somehow, putting flesh on the thing can create a whole new look.

And, it seems obvious to me that we have gone astray from the ideals of the early entrants (and those across the millennial span who may have wished that things were better) . Why?

Many reasons. We'll get to that. But, the thing to look at is how to recapture some of that 'spirit' (and, politicos, you are not 'it') that was behind 1776.

Adam Smith would have loved this, it is my opinion. So, would have Samuelson.

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What we are starting here will be a constructive viewpoint which has the intent of showing how to tame the chimera, to establish a more fair approach, and to do so without breaking the bank.

The series will be dedicated to George Edward Kimball, III (1943-2011) whom I first met 46 years ago in the central part of the U.S.A., who was continuation of a line from the early entrants to the 21st century, and who was for the 'little' people as many have said in their remembrances of him.

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In my research, I had earlier run across a book with 'Salem Commoners' in the title and finally decided to read the thing. George's ancestor settled in Watertown, MA (later, moving to Ipswich, MA), but that is a mere stone's throw away (at least, to those of us from the wider-expanses of the western US).

Aside: in the past two years, I've been trolling the Internet's ever-growing database (thank you, Internet Archive, for instance) and collecting material related to several genealogical trees, including material related to the milieu and the times (to understand motivations, etc.). Of course, some material I read (or scanned). A lot of it is there waiting for attention.

So I opened the book (use 'Read online' for a wonderful GUI presentation). The title can give pause; is it exalting in not having any royal or aristocratic blood and more? Mind you, no one is in power, ever, without some exploitation of situations (yes, unfortunately, John Dalberg was right -- even though he knew not of situational ethics). Too, there is noone from any time who does not have something in their past that people cannot harp about (should they choose to do so).

Yet, we know that many people want to know of their royal gateways, if they have any. We didn't continue the traditions here, yet we can find these things interesting (aren't Kate and William just great, for instance? -- by the way, she has royal blood -- it took an American to do the proper research) since it is the past for a whole lot of Americans.

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The above-mentioned book is a record of meetings that started in 1713. To put it in context, this would be about 90 years past the first group coming into the Salem area. What we see is a group of people who decided that they needed to organize efforts at maintaining the commonweal (we've mentioned that before). The attendee list consists of many stellar families.

Aside: a mere 50 years later, similar meetings had the role of 'shadow' government.

Now, one might ask in the context of the meeting, as opposed to what? Royal rule. Remember, George III stumbled here because he failed to see that 150-plus years of self-governance (despite royal overseers) led the American people to desire freedom sufficiently to risk their lives, health and wealth. You see, England had just gotten over decades of civil war. So, George III decided that he wanted to reign in those over here who had blossomed under the lack of constraint.

By the way, what were the British troops fighting for, in comparison? Oppression?

Aside: Because of the sweep of time here, we really need to look at the Crusades' influence on some modern dilemmas. Too, bottom-up (self-governance) versus top-down (aristocratic -- many, many types -- intelligence being the most insidious) is an age-old theme.

Ah, the allure of ergodics.

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So, this is the first of a series. 'Constructive' will be looked at next time. You see, the chimera is the result of mis-used mathematics and computation, pure and simple. 'How to show this?' is the problem. Of course, we'll try to be other than PTIME in the development.

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What is the historic-genealogical connection? Well, it'll unfold. But, Naisbitt was right in drawing parallels with our times of 400 years ago. We'll do the same drawing from a collection of individuals (including Richard Kimball) whose progeny continue to play out the 'American dream' (as it ought to be).

• 01/19/2010 -- ... Anyway, how do we get a new look at Adam Smith? We'll use US history. In particular, we're going to go back to Massachusetts Bay Colony and look at a few economic realities. We'll focus on several people, such as families of settlers, blowhards (like John White), and others, at first. Then, we'll expand it to other developments that were congruent in time. Note please, these things pre-date our friend Adam. ... Why do this? To honor Adam, for one. Also, Naisbitt, the futurist, is at it, again. His comparison of China with the U.S. two hundred years ago motivated me to look at his example's basis. Well, then we have to go back further than that (old planters). And, we expect to see that his paralleling example is not as well-founded as he may think. This look will be Economic History and Philosophy rolled into one.

Remarks

07/24/2012 -- Chompsky on the Magna Carta and our rights to Commons.

07/06/2012 -- Today, we have the one-year remembrance of George Edward Kimball III (GEK III). 

09/15/2011 -- Henry and George.

07/28/2011 -- Cambridge non-commoners.

07/12/2011 -- Posts here evolve, but they eventually settle down. GEK III is quoted as saying that life would be better without editors. However, they do slough through a lot. Unfortunately, bloggers (assuming that the person cares) have to do that work themselves (as we all know, multitudes do not).

07/12/2011 -- Big Ben wants to ease for the fat cats, as if they will create jobs. Guy, you know that you've trashed the heart of the economy, the savers, for several years now? Answer this: do you run your household economy by debt (I already know the answer, no; somehow you are enthralled by equity's sirens)? That is, are you indentured up to your eyeballs (wait, what political pull are you trying to buildup for the future?)?

Modified: 07/24/2012

Chimera, explained

Moral: Wherein we stop to consider why 'chimera' has been used in reference to that which gets more of Big Ben's attention than is warranted.

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Oh, some have benefited from the chimera's increasing heftiness. This is not unlike the house raking in the dough due to how odds are set.

For some reason, Big Ben has not pulled his head out of the '30s and seems to think that the ca-pital-sino is it. Sheesh, big guy. Will you learn?

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Most people's lives are in the crapper. Many get by on scraps. The fat cats (less than 10%, the new aristocracy -- where is our Magna Carta?) are gaining more weight. Those same fat cats are raking in over 80% of the takings (will not use profits, as stock rising in prices means nothing of value, folks, let's get that straight - future topic -- for now, recall near zero, please).

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Well, Big Ben's two targets (for which he has controls that supposedly help him aim) relate to unemployment (ah, that is one rub) and inflation. The first we all know is problematic (even, though Big Ben panicked early, supposedly worried all along, and wants to help), so we'll ignore that for now. Taking the second one, he has removed the chance of deflation. How? He trashed the savers, essentially junked the US Bonds (gosh, again, Big Ben, where is your head?), floated his QEs, and more. Liquidity, it's called.

From where I sit, looks like the banks got impacted (yes, think hose: high, hot, and hell of a lot -- old timers ought to know what this means) due to their improper diet.

Aside: Jamie? My jaw fell when I heard that some think that he ought to replace little Timmy.

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Big Ben has another thing going against him. Fake money. Yes, he's been allowed to print without restraint (oh wait! that's little Timmy whose presses have been running overtime). Big Ben's role in this is that he determines what is the balance that is related to money (how much, of each type, etc.).

Big Ben and little Timmy are two peas in a pod.

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What is this all about? Well, that which is termed 'chimera' has tenuous links to the bulk of the economy. How did this come to be? And, in a sustainable economy (yes, with an global focus) to what extent would the gaming called the market have a gambling flair? That is the question, folks. Mind you, there are many suited, lobbyists who do not want the game to be fair.

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Of course, what would be fair? After all, it has been interminable that we have the upper class (a small set) and then the masses who are there mainly to be exploited. Even the phenomenon of those who may be meritorious and who arise from the teeming-ness of the masses, forget their past real quickly. Human nature, 'tis.

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Given that we're just past the Fourth of July, let's, at least, not be pretentious that those ideals mean anything to the few who make the decisions. Oh yes, they mean a lot to those who need to think that things will get better. Or, to the idealist. ... Or, to the saint (yes, there are those).

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There is a firm (not to be mentioned by name) that is so much an example. It in part deals with jetting, that bailiwick used by the rich to keep their little selves out of the fray. Oh yes, by using private means of transportation (that is subsidized by our monies -- oh, if this were not true, why do you not see the masses lining up for fractional jet time? -- that is, let the rich pay for the 'real cost' of their chosen method (to keep from rubbing elbows with those who fly first class using their earned miles or to keep from hobnobbing with the working class who might also be million milers) ... oh yes, this is equivalent to costing out the expenses of a private suite -- how many day-to-day work traveler can do that?), these types can work faster to keep those teeming masses in chains. Well, there was a sell-out from public to private that left oodles of debt on the books. Oh yes, monies flowed to a few pockets. That debt's service cost has been just debilitating on the company. Yet, who pays? They cut people, move (or try to move) to places of cheaper (more exploitable workers), trash worker benefits (of many types), get the local community to belly up with tax breaks, and so forth.

Why are they in this state? Well, it isn't that Obama questions why tax breaks are necessary for the rich's flying toys. No. There is the fact of the deal (in which, golden sacks made oodles -- set up the details, reinforced the notions - yes, they're the best), plus there was a downturn. You see, the firm was not able to IPO yet. It had a sister company that did partly get to IPO (enriching a few pockets), yet it has debt, to boot.

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Well, that firm may have been of a sustainable mode for years. But, it's current turmoil ought to be studied very closely. For many lessons, such as leveraging's pitfalls, worker exploitation, limitations of pursuing the luxury market (except, what will be the reality of personal jets - strap on - equivalent to the flying bike?), and more.

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So, 'chimera' it is whose sirens seem to strongly allure. Even Big Ben has been seduced. What is the way out of this debacle?

Remarks

12/22/2012 -- Fair and open actually used in a WSJ article.

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

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.

03/11/2012 -- We'll use Alan more this year. 

08/10/2011 -- Weird stock market. Removes all arguments for the legitimacy/sustainability of this financial mechanism; that is, how ought this be done in a civilized, sane manner?

08/08/2011 -- Oh well, Little Timmy is staying. Anyone for a DOW of 8K?

08/03/2011 -- Today, the DOW is at 11.7K (hey, let it go to 8K) at mid-morning. Ah, what irrationality lurks? Yet, Big Ben wants to continue to sack the savers while being ultra-charitable to bankers (like Jamie).

07/13/2011 -- QE3? Sheesh, Big guy. The article says that stocks went up 6% during QE2. Let's see. How did the pockets of the savers diminish? More than that, it seems.

07/12/2011 -- See Salem Commoners for a continuation of the theme. Also, changed 'Jaime' to 'Jamie' (oh yes).

07/07/2011 -- Oh yes, Jaime probably wants a 0.01& reserve so that he can take even more due to supposed income from churning. Have to give Big Ben credit to standing up to the guy's rant. Let's put Washington Irving's theme to use.

07/06/2011 -- Yes, to get monies to service the debt, without the opportunity to sell more, what does the firm do? Take it from the workers, squeezing out the last drop of blood, selling assets, and such. How could they then be nimble enough to actually be effective in the future? Why is it that cuts seem to take on some equivalence with an anorexic drive? For all this, consider that no amount of cuts would come close to servicing the debt (where did that type of thinking become the paragon to which we all are supposed to bow?). Could they even sell all of their assets and pay the debt? Yet, when they do push out an IPO, it's supposed to be a great investment?

Modified: 12/22/2012

Chimera IV

Moral: Wherein we continue our look at the chimera and its shaky foundation that is attributable to Big Ben's largess, in part.

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The market (DOW) is below 12K. Well, let it go down below 8K, please. All this ballooning is due to the frenzy being sustained by Big Ben's free money. Whereas, savers have been sacked.

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Mind you, ca-pital-sino is not what we need for a sustainable future. Big Ben, the big boards, some politicians, and a lot more, really need to do something useful, with real consequences.

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So, let's track back through some comments.

• The Big Chimera (Nov, 2009) -- Since we got this thread started, the markets got to some type of low, started upward, and kept rising. So, some would think that the notion of 'chimera' would be wrong. Nope. Note that a recent report, looking at commodity trading, shows that 90% of some activity (see CFTC remarks) is related to speculation. And, that this ratio came about after a move to remove limits back in 2001. Minsky would love this. How is it that we care so much for the stupid game that enriches only a few?
• Chimera II (Aug, 2010) -- Still with the upturn in those things traded who have little behind them (derivatives), some were thoughtful enough to consider that we deal with 'myths' more than not.
• Chimera, again (Jan, 2011) -- Undoubtedly, things are complicated. Yet, folks, it is just that which those who want to malfease things hide behind. And, those in charge have just let loosen the rules in order for the best-and-brighest to play havoc.

One would hope that a proper basis can be defined, maintained, regulated, and improved.

Remarks

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

12/22/2012 -- Fair and open actually used in a WSJ article.

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

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.

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

07/12/2011 -- Also, changed 'Jaime' to 'Jamie' (oh yes).

07/05/2011 -- Chimera, explained.

06/26/2011 -- Changed 11K to 12K (typo). ... On another note, some recognize that derivatives can cloud the issue of value, especially if they're handled 'darkly' (implies several things to look at).

06/22/2011 -- This is Jamie's bank?

06/16/2011 -- Why doesn't golden sacks instill confidence? Too much rogue table?

06/14/2011 -- The cream is raked off, immediately, for fat cats only. What they're calling liquidity is maximized flow from all pockets to a few. Sorry state of affairs.

Modified: 11/24/2013

Lemons problem

Moral: Wherein we nod to an Ivy school (not Harvard), in the form of Sanjeev Arora, Boaz Barak, Markus Brunnermeier, Rong Ge, for offering insights about financial games that are remarkably accurate, in our opinion, and really bear on the issues (12/11/12 -- see: FAQ, at Princeton).

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The title? Yes, if the buyers know that sellers only have 'lemons' (not, in any way, disparaging the wonderful fruit), then buyers will not buy (without heavy discounts) and the game ends. To whom will sellers sell?

Did we not see that with the recent affair where the bankers (and other financial types) essentially froze their gaming as they knew that they were dealing mainly with crooks (like themselves).

Liquidity left; the economy dumped. What happened?

Big Ben, and his ilk, put savers, and taxpayers, on the line to provide a huge pile of wealth so that these idiots would get back to their gaming. And, folks, we have not yet unwound from that. The chimera's rise is due, essentially, to our monies being offered to those who crapped on the economy (diaper changing, folks).

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The 'lemon' concept is used in a very timely paper that covers some of the issues brought by computational support for finance. We have harped about that (many times).

(ACM Communications): Computational Complexity and Information Asymmetry in Financial Products. Abstract: Securitization of cash flows using financial derivatives transformed the financial industry over the last three decades. Derivatives have attracted criticism, but others say problems with derivatives would disappear with use of more accurate financial models, more vigilance by buyers and better governmental oversight.

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The authors talk about financial derivatives, their use, and the troubles. The example derivatives are based upon mortgages, which is a timely subject. The use, supposedly, is because we can: modern environment, global scope, computers, mathematics, oodles of money, lots of suckers, and so on. The troubles?

Well, they are several, and we'll get technical about these later. For now, let's just itemize them with some comment.

• The lemons problem - as mentioned above, this problem is why auto dealers offer a warranty. And, we might add, states enacted 'lemon' laws.
• Complexity - ah, dear to our hearts, as undecidability lurks, everywhere. I like the example that they use for intractability -- which then leads to the decision problem, as how can you decide when you cannot compute? Oh, intuition? Yes, folks, as an aside, one job, in the future, will be trained intuitionistic overseers (ah, have we not tried that from the beginning? - no, the computer turned things around - think quasi-empiricism and Chaitin, et al). But, in particular, they show how it is much easier to check an answer than it is to actually find an answer.
• CDOs - as a form of derivative (remember, Buffet said that these things were WMDs) for which there may be some value to we, the people - and, not via our bailing out the idiots. They talk tranches (trash, as we explained earlier).

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Their conclusions? Well, for one, how do you determine that you're not getting crap, after the fat cat 'cherry picked' out the best? That is, the 'wedge' (difference between what the banker who wants to sell you junk thinks something is worth and what you can discern with your limited information) can be complicated to discover (actually, we deal with this type of thing as a general rule (such as, measuring progress in any of our endeavors), yet do so well when the cards are not stacked against us as we find with the current financial game).

In short, ex ante, even with the best of efforts, is not 20-20. We know that. One solution? Simple living folks driving our money system - it can be done (the military personnel who put their lives at stake are an example - not the best and brightest).

Then, transparency (no, dark pools, idiots -- by the way, this needs attention, too).

Even, ex post can be a problem. Yes. Who the hell has gone to jail out of the rogue table?

The paper is well worth the read. We'll go back through this whole thing, with some technical focus (adding to M&M and ergodic states).

Remarks:

06/11/2013 -- CDOs and tranching, once again.

12/22/2012 -- Fair and open actually used in a WSJ article.

12/13/2012 -- In the 12/11/2012 Remarks, the use of barbarian was in the context of either migratory (or invasive) movement of people from one locale to another with the result of the populace in the receiving bit of land undergoing an adjustment that could range from minor nuisance to major upheaval and death. That, then, motivates a look at why there might be migration, such as being forced. Turns out that the Wikipedia editors have done a good job of collecting the instances that we know of: Diasporas.

12/11/2012 --  Rick asks of the new barbarians from a historical perspective. ACM Communications, this month, interviews Sanjeev. The issue is locked, however this FAQ covers the topic very well.

01/01/2012 -- Recently ran across the work of Kazimierz Dabrowski. We need to pay more attention to his theory on development. Yes, CEOs (and other takers) as immature (seriously, so).

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.

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

07/12/2011 -- See Salem Commoners for a continuation of the theme. Also, changed 'Jaime' to 'Jamie' (oh yes).

05/31/2011 -- Lil Timmy. What a guy!

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

05/28/2011 -- We'll put avatars to more use than just being glorified (hyper-dimensional) icons.

05/27/2011 -- It's good to see others raise questions: why are the too big still doing crazy things? Why were there not prosecutions? ... It's disconcerting to hear that the feds (as in our elected officials, and their appointees) allowed (are allowing) the bank's sleight-of-hand in order to not 'rock the boat' or to keep the ease for the fat cat (miscreant aristocat).

05/25/2011 -- What they're talking: How do we control financial sleight-of-hand, which may even be unconscious, driven by humanness? Is the 'lemon' the norm in finance (and its gaming)? We have to learn how to 'engineer' truth, thanks to the growing prowess of computation in the hands of the idiots.

05/25/2011 -- The referenced article is under controlled access. However, here is an editorial review (appears in the magazine as a one-pager right before the article) that is available.

05/24/2011 -- How many times did we hear bankers say that they weren't going to lend? Despite all sorts of jawboning. Well, we could have nationalized (what does that mean?) the game more than we have so far with the hands-off approach (oh, they're adults, can self-govern - hah!!)? Their not lending is like the kid who takes his ball and won't play the game (so obvious, yet do we see any embarrassment, at all, of recognition on their part of their immaturity?).

Modified: 06/11/2013

Hedge funds

Moral: Wherein we carry forward a look at the privileged, especially those who have taken advantage of Ben's largess.

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After all, Ben has sacked the savers for several years now, letting people like the last man gain at the savers' expense.

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Look who is at the Las Vegas meeting on 'hedge funding' this week, according to Market Watch. Yes, indeed. As a reminder to everyone, these things got their start to help those who have big pockets to grow them larger.

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Ever heard that any of this type are after sustainable growth? On the contrary, we could probably gather a whole lot of support to show otherwise. The main theme seems that these people want special deals, such as opaque transactions, and a whole host of other questionable practices.

A commenter (WalterScott) has it right: The Danish theoretical physicist and mathematician Niels Bohr looked at the problem and concluded that only people with inside information to act upon can consistently make winning picks on the stock market. So what you need is a connected hedge fund manager, or a very lucky one.  (bold added on 01/20/2013, see about Steven Cohen who was at the above-mentioned meeting) 

I would add, a clever one who can skirt the edges of the legal without getting caught and prosecuted or of the ethical without worry or dilemma or of the moral without suffering any conscience pangs. Yes, there are these type; there are those with money; technology evolved to allow manipulations; politicos are mere mortals; hence, hedge funds exist.

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The politicos are in this crowd, for good reason. Money. Notice the names (attendees) who are political.

Now all of that would be fine, if we had term limits and removed the career politician.

The way things are now, it pays for the politicos to belly up, how else to feed their hunger for money (the symptom? salivating when a buck is passed beneath the nose).

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Mind you, the 'way things are now' include fiat money and a whole bunch of other systemic problembs (providing handles that allow the fat cats to exploit the working people). For instance, putting money into speculating on oil can cause the price of gas to go up. In essence, price being set by other than supply and demand. Pro: US Newspaper Con: Seeking Alpha Mixed: Davies at FT

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As said in the prior post: hedge funds are for the rich; ponzis are for the poor. They both have smelly feet; the hedge funds are accepted since the money needs (or thinks that they need) their services.

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Caveat: there may actually be some reasonable use for hedge funds. However, none are apparent at this time, to me. Yet, I'm willing to consider the possibility further. Such as this: wouldn't it be nice if a never-losing hedge fund kept Social Security in the black?

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New attitude: Above are pointers to a Pro and a Con position on a subject. This will continue. Some have used the fact of no clear answer to exploit the system. How? By embedding what are systemic risks, essentially little hooks, that allow regular extractions to their pockets. Then, this has been done under the aura of intellectualism (flim-flam - even, to the Nobel level -- prize winner using rule-of-thumb when it counts, not his high-falutin' mathematics); the whole problem exacerbated by theory, and practice (namely, computational-ism), without mature rationality, and sense, ever getting its chance.

Remarks:

01/20/2013 -- It's been almost a year since any remark and almost two since the post. Of late, a post on busyness and silliness looked at some issues. The recent Business Week had something interesting article (Steven Cohen, of SAC Capital). Some employed in the business have misgivings about their ways of doing things. One talker, under questioning, was asked if he knew of any hedge fund that was clean, or above reproach using the old concept (as in, no shady dealings). No, he said. They could not survive, otherwise. It's like doping.

01/15/2012 -- It is or It is not. Jobs, labor, and disrespect.

06/15/2011 -- Said it before; we'll get into it again. Hedge funds are for the rich. Ponzis are for the poor (their hedge funds). How many characteristics match between these two (hedge fund, ponzi)?

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

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

Modified: 01/20/2013

Milking the system

Moral: Wherein we promise to use subjects other than Big Ben for awhile as there are other things of more importance.

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Retirement? What does it mean? Yahoo Finance had an article today (there is a regular series) about 10 issues that need attention. We'll look at a couple of these later on.

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Mostly, though, let's look at some of the comments.

In particular, there was this ('pa' denotes new paragraph) that relates to milking the system:

• Yep, I saved nothing. I will be living of the taxes produced from your savings. Your savers are suckers. I got to enjoy my life with my fancy cars, large houses and exotic vacations every year. When I retired at 62 I took my SS and declared bankruptcy. I was able to wipe out nearly 300k of credit card debt and a 550k home loan. (pa) Now I sit here in a nice condo that I bought using credit off the cash advances using a shell company. I paid nothing for my 1 bedroom condo near the beach on Hilton Head, and live very comfortably on my SS check. I sit back and enjoy life and all those goodies I bought on the credit cards that I stored for retirement. I have a 60 inch flat screen tv, surround sound, leather couches, brand new furniture oh and a 2004 BMW all paid for with cash and funneled through the shell company I set up in 1995. It was a long planed out process with lots of credit card shuffling and using all of my income just to pay the minimums. When they raised the minimums I was easily able to file bankruptcy. When the judge asked why I was so irresponsible, I blamed the CC companies for continuing to send me cards. (pa) Play the system people. I now have a fully funded retirement on SS, with no real expenses going out each month I enjoy my life walking the beaches and playing golf with friends. (pa) I have since met a nice lady whom I now live with, between my $1,803 a month and her $2,249 we live a really nice life. She also was one who saved about $100k and so we have a really nice emergency fund. We eat out 3-4 times a week, enjoy movies, golf, and the clubs. It is such a pitty you guys all seemed to struggle and not enjoy your life, only at the end of it to still be suffering due to debt. (pa) My advice to the young. Spend every cent you earn and then work on a plan to expand your Credit. Once you have racked up as much as you can and your income no longer supports the minimum payments, file for bankruptcy and start the process all over again. (pa) Keep on putting some nice purchases in storage for your later years. Then keep it all off the books buy opening up a shell company and hiding from your creditors, as they are too stupid to look much further than your own SS number when filing for Bankruptcy. USE THE SYSTEM TO YOUR ADVANTAGE....

Was that tongue-in-cheek? Wait, before replying, see below.

Makes one think about those who took money out of their houses, in the just past days of malfeasance'd finance (from which we have not recovered), for profligate living. Then, when the houses went underwater, many just walked away leaving a mess for those who had to handle unwinding the mortgage-related paperwork.

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Ben, tell me, since you sack the savers (your guys are into our pockets deeply), is this the type of economic behavior that you want to reward with your easy money (realize - there are those who put their lives on the line for these types)?

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Now, the above comment raised some discussion, including a reply from the original commenter.

• You sound like a thief.
• Yes, you sound like a mini-Madoff. Perhaps someone who is in law enforcement will take your logon and start an investigation and you will be living in a one-bedroom 'condo' overlooking the prison yard. And who knows, perhaps someone who really likes you (I mean really, really likes you -- you know - wink, wink) will share your living space and you can flip flop instead of wearing flip flops. But sadly, you will still be living off the taxpayers.
• (original commenter) Nope just somebody who works the system to my advantage. It is totally legal to file bankruptcy... You sound like a jealous person...
• Bay Boomer? Right?
• You took advantage of the system! It's people like you that put us in the debt situation that we are in! Living off the taxpayers. I hope you drop dead!
• Amoral, scum ... and probably also lied in the OP.
• You're obviously a former [snipped slur]
• This guy brags about having no morals whatsoever!! This may be a good reason to reinstate debtors prisons.

It's good to see that most of those who responded noted a problem with this logic.

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Yet, one has to think that this might very well be what the best-and-brightest are taught (tell me otherwise, Professor).

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In fact, much management effort is just this: getting something for nothing by sacking the suckers and the doers.

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Folks, this is one example of why near zero needs to be better understood (yes, even you can learn this lesson, Warren).

Remarks

12/22/2012 -- Fair and open actually used in a WSJ article.

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

05/17/2011 -- Golden sacks, by Rolling Stone.

05/13/2011 -- Yahoo Finance says that the sheriff is back. Good. Too bad that Spitzer had feet of clay.

05/11/2011 -- Insider trading conviction. Some say that this won't hamper anything as the money to 'too big.' Well, how about changing the context, and use, of trading? Matt Nesto somewhat suggests this. We all know that what has evolved is merely ca-pital-sino, essentially. Other panelist (the cynic), Minyanville.

05/10/2011 -- Not picking on Warren, but this is a nice little analysis. One thing to note is that there are other connotations of 'intrinsic' value which we'll have to get to at some point.

05/10/2011 -- As of 1338 EDT, now there's 14 replies to the comment. The reply above, that was snipped, was removed. The overall number of comments is 122 with this comment hitting the button and getting the most replies. Nice little piece of prose, even if fictional.

05/10/2011 -- On milking, is this not what the Street does daily? Are not those who run the system those with their hands deepest into the pot? ... Even if this were fiction, its threads represent real occurrences. That is, an interesting task might be to find events that are similar to what was written. ... But, back to milking, this would be an example of the little guy's take. Our reality is that those who can take do so in very much larger amounts than this story relates.

05/09/2011 -- Out of 15 replies to the comment, as of 6 pm EDT, about four mentioned that this story cannot be true (will the real commenter please stand up). But, this diversion does raise some interesting issues. For one, how illegal is any of the described? How many have seen themselves behind bars (other than Made-off) due their actions over the past 4 years? How many walked away from homes without any lasting mark (what business head saw justice?)? The mention of debtor prison points back to times when morals were supposedly definable and enforceable. Are we not now in an era where anything goes (if you're not caught), since the basis is gaming without much oversight (ruthless winners adored - Warren, et al)? For two, the commenter is bragging about $4k per month with a cushion of about $100. As we all know, a serious medical problem could eat into that cushion quickly. Too, all of the collectibles would require some type of maintenance (or replacement) in the future, causing another set of payouts that could be huge. ... Even if this was sham comment, it was a nice little aside. ... By the way, registering guests is one way to control little fictions such as this one may have been.

Modified: 12/22/2012