What? A train!

Moral: Wherein it can be supposed that there is a train. Actually, we can say there are many trains.

---

The problem? That, which those who tout that the train is leaving the station, is a train to nowhere, for most.

To follow further on the metaphor, as the train adds cars for those clambering aboard, dynamics work so that the value from the pockets of those in the rear cars moves up toward the front. We'll discuss how. Then, at some point, the front cars (fat-cats-ville) are kept while a whole slew of cars full of the valueless (supposed, as they've been sucked dry) is cut loose.

Now, given that we know that there is a train, actually many, we can start to define them. Meanwhile, we can also relax in the knowledge that no train, worth our attention, has left (or is going to leave) the station.

It would be better if we could get the sandbox defined and established. That would isolate the gamers from those who want to prepare for the future in a rational fashion. It would also allow means to not sack the savers.

Remarks:

03/05/2013 -- Ben reigns, but the savers' faces are bruised from his slapping.

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

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

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

11/08/2009 -- The gigantic chimera needs proper attention.

Modified: 03/05/2013

The markets II - There ain't no such train

Moral: Wherein we have to say that there ain't no such a train, folks, just like there's no free lunch (TANSTAAFL); all this clambering otherwise is from those who stand to gain from picking our pockets if we board their train to nowhere.

---

Earlier, we had a brief introduction here to market ideology and its realization in casino capitalism. As we saw, there were many uses for a market, one of which is establishing value. Except, didn't we see this year the bankers, and others, arguing with the law makers to get a relaxation of marking to market? Ah, markets as the ultimate thing to manipulate seems to be the idea for these people.

Now, that we're at some type of crossroads, again, due to all the support after the failure from people like Big Ben, and more, it may be time to start a little review of the past year. This will be brief and continuing.

• The Liar's Poker author weighed in on the problem last year (11/11/2008). He telling the tales of those, like the culprits. Last year, who knew that the low would be seen in March to be followed by a bear, and perhaps sucker, rally. Granted some have made money (see next bullet), however the issues of near zero (actually less than zero for the most) remain to be look at in detail.
• So, some have made money in the market this year (see GS, for example). Many may be beginning to wonder if a train might be leaving (has already left) the station and if they ought to board (or have been left behind to forever rue the loss). Suckers beware is the topic of a Tech Ticker talk now that everyone wonders what to do. The message ought to be that we don't need this type of marketeer meddling (actually, racketeering), folks. We actually never did; it's a clever means for those who can to suck the essence from the pockets of us all.
• Now, given the wisdom of crowds, how can all this baloney keep recurring, folks? Oh, wait, hasn't the Fed, et al, made money easily available for bailout purposes for decades? That finance (heart) has to pump money (blood) is a given, but we have a body that is just covered with leeches.

Why use the train as the metaphor? Well, it has been used in the news, so expect that we'll continue to use it.

Also, what has not been explained is that, in some cases, one person's gain is another person's loss. And, in some cases, for the gain of one, many lose. There are difficult issues to address.

Remarks:

03/05/2013 -- Ben reigns, but the savers' faces are bruised from his slapping.

02/01/2011 -- The chimera shines.

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

10/25/2010 -- Capitalism, as known now, requires an endless supply of suckers.

03/20/2010 -- The basic problem of capitalism is that the Made-offs are its chief representative.

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

11/07/2009 -- Actually, there is a train, or, at least, we can use the train metaphor to discuss the economy's purpose and how finance has evolved into a problem (in medical parlance, not unlike a cancer) within that purpose. Bankers are too used to their funny money world (see Remarks). Ben, wake up!

Modified: 03/05/2013

The Bankers II

Moral: Where we have several topics to discuss, yet, in regard to this ilk.

---

Why bankers? Well, it has been allowed to develop that these types rule the roost (see below). What? How can this be? Their derivatives are suspect, versus those ideas (of great utilitarian value) that are built upon the work of Newton. They maneuver the game's rules for their advantage (to wit, those letters now being distributed). That 'game' is used, in this context, suggests the reality of casino capitalism. That 'too big to fail' is a common concept points to bloat beyond any natural semblance, oh yes, the dead carcass of a beached whale might come to mind (but, they're still raking in the dough!).

Tech Ticker had someone from FT talking about the bailout that has unfolded in the recent year. To paraphrase, we, the taxpayers, have lent, via Big Ben and his infinite wisdom, to bankers by opening the pot of our gold; these bankers could not resist the temptation to extract (that's from our pockets - a less-than-zero reality for us, forget near zero) huge chunks (at zero interest). Then, these bankers make money off our gift and turn around with thoughts to distribute to their share holders and themselves (via bonuses) these smelly gains (they are not real gains, folks - new types of book cooking abound).

Too, they have not emphasized what might be needed to get the economy going which is one role for bankers. Somehow, the siren song related to markets (and their manipulation) has become the major focus (opinion, of course, but likely to be sustained through analysis).

Oh, wait, it's not the bankers' faults. No, they're just naturally exploiting the situation since they can! Yet, the situation has many factors of which some are very much related to what banks have argued for, and done, in the recent past.

Ah, twisted, indeed. How do we unravel the mess? It's not impossible, folks.

Remarks:

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

12/19/2009 -- Dead peasant, indeed.

12/15/2009 -- Requiem for the dollar (WSJ) and responses.

12/10/2009 -- It's interesting to see 'fiction' used in connection with banking. Old Karl, he who never left, would love that.

12/09/2009 -- The Street loves Ben who loves 'em back: The Street utterly loves the Fed's largess, earning massive profits from trading unstable currencies, the carry trade (borrow short-term dollars near zero, buy longer-term assets abroad), and the high-margin process of transferring America's capital abroad.

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

11/06/2009 -- There ain't no train, just like there ain't no free lunch (TANSTAAFL).

11/01/2009 -- Goldman Sachs, bankers taking a low road.

Modified: 01/03/2010

The Bankers I

Moral: Wherein we have to ask: how hard can this role be? The banker one, that is.

--

Let us see. In the old days (1800s or so), the banker was the guy in the suit who exuded some aura of stability and who stood up for the right. You know, the backbone of the community. Oh, wait, that was some caricature from the movies. Actually, in some westerns, the bankers cowered as bullying bad guys shot up the town and ran off with the bank's safe (or its contents).

There are some real tales, though, of the town's people helping save a bank, such as Northfield, MN and Coffeyville KS. This is real stuff, folks, and there are probably many other examples from frontier stories. How many such stories will there in the future be about these times?

We now have bankers that think that their rates (way beyond usurious -- 29% and above) are not so bad because they're legitimate (that is a long story and will require more analysis at some point, gosh, thanks Lawmakers, way to go). For now, these same bankers are sending out their (somewhat CYA-ish) letters about the new rules which will be in effect soon. The tone of the letter is ominous, actually it's irritating. What makes them think that we want their money (or credit) anyway?

For instance, one may be on their rolls because some merchant company decided to out-house its accounts receivable processing. Oh, we know, that was considered a step up at the time of the decision. Except, it was not in many cases. Have we not heard, of late, that all sorts of decisions were less than what we would expect of those who (ought to) think about fiduciary duty? How much fraud has been associated with this type of out-housing? Does anyone know? What cut does the bank take? That is, are the merchants making as much as they thought that they would?

There are all sorts of banker types to look at. Even Big Ben is one, albeit somewhat indirectly as his academic self has been thrust into a role of managing our trust (yes, of the American people) and of trying to control all those who want their fingers to be in the pot. Sorry state of affairs, one might think, yet we supposedly have the best system, since the industry is so full of the best and brightest.

We'll get back to all this soon and look at how banking ought to be and not to be (not be involved, at all, with casino capitalistic gaming, for instance). Of course, there will be a look at what is, to boot.

Remarks:

12/19/2009 -- Dead peasant, indeed.

12/15/2009 -- Requiem for the dollar (WSJ) and responses.

12/09/2009 -- The Street loves Ben who loves 'em back: The Street utterly loves the Fed's largess, earning massive profits from trading unstable currencies, the carry trade (borrow short-term dollars near zero, buy longer-term assets abroad), and the high-margin process of transferring America's capital abroad.

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

10/30/2009 - Of course, we're just doing a little jaw-boning, in the beginning. Listen to these following views from FT. Gives one pause.

• Banks borrowing at 0 and making oodles - some of which they want to pay out as dividends or bonuses (we know, two different types of payouts), yet, the economy is in the dumpers except for a few fat cats who are rolling in their take.
• Big Ben redefining profligacy - he ought to have unwound long ago, we thought. Ah, yes, someone said, oh, yes, Alan, finance is at the heart of the economy. Oh, that's the particular physiological piece? We thought differently.
  

Modified 12/24/2009

Gray areas

Moral: Wherein, it's nice to see the Nobelists check in on an important subject.

---

Also some bloggers, and their commenters, have a good grasp on the fundamental issues. The following was very much on the mark.

By anonymous: Because oligarchs draw incorrect conclusions about human evolution from Dawkins, “The Selfish Gene”, misunderstand mythological self-determinism fables from Ayn Rand, and don’t grok that Adam Smith’s tales about the “Invisible Hand” were allegorical, we all must suffer. And, somehow we believe our angry powerhouse of a cleptocracy is the absolute zenith of human existence. Absolute f***ing madness.

Ah, that person is more than on the mark. Absolutely brilliant.

So, people, what are we going to do about this? Ben, listen up. You're part of the problem.

By the way, Harvard, how do you support the autodidact's dilemma?

Remarks:

11/04/2011 -- Tech Ticker asks a good questions about the darker side of Apple. Are any of the other tech companies any better? These are not 'gray' areas; nope, they're black as night.

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

11/30/2009 -- From 'Our basis' can grow a whole bunch.

Modified: 11/04/2011

201K, 401K, 801K

Moral: Wherein we consider the middle (401K) as it was nicely provided to us by IRS code and has become a cultural icon.

---

Why didn't the IRS also allow us to put more into IRAs (constrained, of course, but with a higher limit). For those who are too young to remember, in the early days (decades ago, yes, with the 's' but within recent memory of many), the limit was a mere $2,500 per family.

What are the 201K and the 801K? Well, the former is the situation of many who lost with the recent equity drop, or any of those drops within those decades alluded to earlier. That is, those folks who bought the equity hype which is going to be deconstructed here (give me some time to do so).

As an aside, and at the same time, a conservative strategy based upon more a more reason approach has sustained a growth that has been impervious to all the drops, including the latest, except for the fact of being slightly susceptible to the idiocy of one role, namely big guy Ben, and before him, Alan, of course. Their antics are more irritations than of any real substance. Oh wait, Ben's trashing the dollar; we'll all pay for that.

The 201K joke was used recently in a session dealing with a pension problem in a State, for which the 401K was offered as an alternative strategy. Oh, yes, the 401K which is an archetype for alleviating manager and leader of their concerns since they can just throw the problem over to the unsuspecting worker. This has been seen, up close and personal, many times (except for the approach mentioned above as an aside).

There is not much respect, yet, here for those in the financial advisement game, yet some more wise souls of that ilk could very well play a necessary role. And, that whole financial structure ought to be non-profit, in the classic sense.

How do you un-bankrupt a pension system? Plenty are asking. Why is this particular system in trouble? Well, under-funding may be an issue. But, behind that is a buy-in to the usual mania of the market. Oh yes, put in a little, earn a lot. Is not that mantra sickening with its implications of ignorance?

Gosh, these finance guys (and mangers) need to learn something about how attractive is the siren of the perpetual motion machine. Yes, they're all after that old 801K. It does not exist, folks, except for the few.

Granted we do see people earn a lot in the markets; well, with proper accounting we would also see multitudes more losing their shirt. That's called near zero. That old win-win presupposes a whole lot of stuff being pushed under the rug. Well, a State has to deal with that reality. Good ones actually pull this off and deserve kudos (intractable issues, for sure).

The issue is that pension funds, with the backing of the taxpayers and using more conservative rules, would be more able to pay when the time come. Leaving the matter to the worker, in the sense of the 401K, seems to, typically, end in the 201K. That is not necessary and would not be if those in finance thought about fiduciary responsibility.

Their malfeasance needs to be described. It's very much a type of malpractice. With the computer, which is now being exploited for the fat cats, we could very well put into place what is better for the commonweal. Of course, States are supposed to worry about that.

Finance, as currently defined and played as a game, is basically for 801K derivation (ah, many times by derivatives); wait, actually, they want the 25601K. Yes, indeed.

Remarks:

06/05/2012 -- This piece was 1/2 jest and mostly not. Of course, at its time, October of 2009, we hadn't seen how things would unfold. Double-dip, as in W, was still a concern. The 787 had not flown (that was about two months away). We hadn't heard, yet, from the OWS (see 10/18/2011 Remarks, below). But, from this, you can see that 801K and 25601K are of the uppers (less than some small fraction of a percent). Savers didn't know that Ben was going to keep sacking them until 2014 (and probably beyond, thanks guy). Then, we have people arguing for unbridled leveraging.

10/18/2011 -- Hopefully, the OWS will bring this type of thing to public awareness.

11/08/2009 -- The gigantic chimera needs proper attention.

10/21/2009 -- Of course, Congress authorized the plan. IRS is the front man. Retirement USA's suggestions are interesting.

Modified: 06/05/2012

The autodidact's role

Moral: Wherein we ask: who is to know? Well, let's take that theme a little further.

---

We can say, within the framework of the US as our rights are defined by the Constitution and its Amendments, we all are. Who is this 'we' referred to here? Well, citizens and residents. Even some elsewhere. Perhaps, everyone, if the real dreams of America were to be entertained.

What does the Title mean? Ah, that is one issue to discuss. The autodidact, essentially, is someone who is self-taught. Examples abound in history, but Eric Hoffer, the longshoreman philosophical writer, is one example.

You know what? Those who serve us in Washington, DC ought to be such. That is, knowledge and truth ought to outweigh money and lobbyists. To be fair, some do try. And, some who lobby actually know what the hell they are talking about.

So, why stress the autodidact's role? Well, everyone, no matter how schooled or learned, can be expert only in their field, or a small set of fields; know any know it alls? Knowing, in this sense, is like a laser light shining in the darkness. It's very focused.

In fact, some would argue that one of the problems of the modern world, especially the dismal science of economics, is that we've succeeded into reducing things to where a whole lot of anything is really nothing. That's a t-issue, by the way. Also, business handling of their employees relates directly to this theme.

The computer has exacerbated the problem since we've learned to accept an expert's opinion; does not the computer have the greatest aura of infallibility in some minds? One might say that mathematics has enjoyed its little aura, to boot.

One of the most learned minds would be he or she who holds a joint MD and PhD degree. You see, the MD is the epitome of a schooling grind that results in maximal decision making in one area, essentially the medical specialty. Then, the PhD, by definition, is indicative of attainment of knowledge in one area or field. Trouble is that these disciplines, and fields, are becoming more and more specialized.

Any PhD, who has to weigh in on something outside his or her expertise, needs to do so as an autodidact. Now, would their self-learned role be superior to some others? Meaning, does knowledgeable-ness leverage to other areas?

Yes, indeed. Better than does the financial leveraging that we saw so rabidly expanding prior to the latest problem.

We're not done yet, as there are other items to touch in regard to this subject. However, here is one comment. It may very well be better for those who face financial decisions to do so as an autodidact, as the financial community has shown its true colors. They are after their own gain, folks, believe it.

Remarks:

02/26/2014 -- Acknowledgements for Lucio Arteaga.

05/14/2013 -- This is the fourth most-read post. Interesting. Eric can serve as a poster boy, of types. Could Jamie learn from this?

01/17/2013 -- One characteristic of the autodidact could be being mentor-less. Rather, we all learn from others. For normal families, one's parents would be the early mentors. Then, take it from there. However, the true autodidact will not see some superior on this planet, and, in that sense, they are iconoclastic as hell, for the most part. Think of it this way. The emperor may have clothes; but, he craps like the rest. Which brings up another point of the autodidact: they are not, typically, unaware that their shite stinks as we see with many who are in power roles (head trips - anyone know what that is?).

01/17/2013 -- Motivated by Rick Bookstaber's post. It's not the PhD or MD that is the epitome, especially not if they use their knowledge to get bulging pockets. I'm now convinced of that (and will say why, over time). Yet, how do we measure knowledge and effectiveness? For one, we need a better understanding of human potential (again, that will be covered). Too, in various collectives, one important one is the firm (Coase is 102 this year). For many, such are enslaving devices. Even, the likes of Jamie is not free from the chains of his (nod to Dylan). Then, we have roles that need certification. Yet, we need free thinkers, too, whatever that is. Engineers, and their roles, are a special breed. Finance? Not so much.

03/08/2012 -- This theme will be looked at further. For one, the MD/PHD is not, by necessity, the best basis. There are others that need to be considered. The issue? People who can see what is what and can think within their own cognitive setup (in other words, they know their 'holes'). I like Chaitin's approach, somewhat.

11/25/2011 -- Due to this characteristic's importance to our future, we'll need to redo this a little. For now, rank and file.

10/17/2011 -- If we're to challenge Harvard on its duty, then we'll need to beef this up. For one, is education only operationally important, measured in bucks? Ah, so much to discuss.

05/24/2011 -- Lemons problem, dark pools, ... Oh, so much to look at! Autodidacts have (and will continue to have) a very large role in taming those dynamics that spawn lemons (yes, we need some bankers to step up to the task -- where are the good bankers?).

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

09/28/2010 -- Capitalism is for the good of us, let's bring that forward.

12/10/2009 -- More roles include the consumer and the economy.

11/30/2009 -- No one climbs above our neuropeptidergic limitations. From 'Our basis' can grow a whole bunch.

11/10/2009 -- The mountain, and the mole hill, belong to the same range.

11/09/2009 -- One trait of the autodidact is measurable intelligence (discussions will follow). However, working alone also impairs peer review, a fact that needs discussion about resolution.

11/08/2009 -- The gigantic chimera needs proper attention.

10/16/2009 -- 201K -- lt;-- 401K -- gt -- 25601K, this denotes the current financial gaming.

Modified: 02/26/2014