As said before, outsourcing is analogous to leveraging which seems to be a major factor in the current meltdown of the economy. In terms of outsourcing, happy thinking does not make things real; all it does is cloud the issues. Engineers have to know to make it real which implies up-close and hands-on experience.
Seattle P-I reports that Boeing plans to keep more engineering in-house for future programs (what about the current?). Does that appease SPEEA?
Remarks:
09/04/2009 -- Out of the house.
09/02/2009 -- Lets face it, folks, undecidability needs to be discussed and adopted in any complex situational setting, especially if computers are involved. Only hubris pushes us to make loud exclamations about what we're going to do in the future.
07/29/2009 --Nope, confounding continues. Yes, there are, at least, 5 issues to be considered.
05/18/2009 -- Testing in flight is within sight.
01/28/2009 -- Necessity of horses for the carts.
12/18/2008 -- Leveraging, in and of itself, is not bad.
11/01/2008 -- Or is it from real insight?
There is the saying that if one wants something done right, then do it yourself. Of course, there are many things that we cannot do ourselves, hence we need the expertise (and the good graces, sometimes) of others.
There is much to talk about on this subject, such as does not Boeing know that within its own boundaries it could not allow stove-piping? So, why would that not be an issue with disparate (in many way, geographically, politically, ...) parties?
Methinks that a marvelous engineering company needs to get its footing back. It is hard to believe the silliness displayed last fall (Cramming for the exam, Rush job, A new game (risky business), ...). This whole thing will bear oodles of scrutiny ex post facto.
Modified: 09/04/2009
Friday, October 31, 2008
Thursday, October 30, 2008
Fiduciary duty
So, what are these duties? Somehow, the financial folks got their pocket lining as their main goal. It's not just the financial folks, as CEOs, in general, seem to put their own reward first.
Now, as any good military officer will tell you, such behavior stinks. Yet, we have let these CEO types have their own way; why? Financial engineering surely has not been exemplary as its gaming ontology exacerbates the problems.
There are several questions to ponder: what trust is expected? how do we judge whether they are being fulfilled? ...
That the Feb and Treasury are experimenting in real-time does not negate the need for analysis related to these issues. For now, savers will continued to be sacked.
But, that has to do with the cyclic nature of business, we're told. Well, those that argue thusly, with the same breath, run on about the market growing over time. They need to realize that a near monotonically increasing function would result from getting away from the gab standard. This we'll look at more closely, too.
Remarks:
11/29/2011 -- Ah, Big Ben helped his friends more than he said, at the time.
06/07/2009 -- Say what?
01/26/2009 -- Lessons to be learned (as opposed to learnt), including, by necessity, Ponzi and bringing back security.
11/01/2008 -- One has to ask what is the parallel in engineering, and program management, to the fiduciary duty of finance. In regard to the 787 project, much has happened with regard to the schedule, the suppliers, and more. Boeing announced some insights about its 787 planning. Before that, the idiocy of a truncated (abbreviated) test cycle was changed.
Reminder: at this point last year (we can pinpoint the specific dates), there was still some talk about delivering in May 2008.
Modified: 11/29/2011
Now, as any good military officer will tell you, such behavior stinks. Yet, we have let these CEO types have their own way; why? Financial engineering surely has not been exemplary as its gaming ontology exacerbates the problems.
There are several questions to ponder: what trust is expected? how do we judge whether they are being fulfilled? ...
That the Feb and Treasury are experimenting in real-time does not negate the need for analysis related to these issues. For now, savers will continued to be sacked.
But, that has to do with the cyclic nature of business, we're told. Well, those that argue thusly, with the same breath, run on about the market growing over time. They need to realize that a near monotonically increasing function would result from getting away from the gab standard. This we'll look at more closely, too.
Remarks:
11/29/2011 -- Ah, Big Ben helped his friends more than he said, at the time.
06/07/2009 -- Say what?
01/26/2009 -- Lessons to be learned (as opposed to learnt), including, by necessity, Ponzi and bringing back security.
11/01/2008 -- One has to ask what is the parallel in engineering, and program management, to the fiduciary duty of finance. In regard to the 787 project, much has happened with regard to the schedule, the suppliers, and more. Boeing announced some insights about its 787 planning. Before that, the idiocy of a truncated (abbreviated) test cycle was changed.
Reminder: at this point last year (we can pinpoint the specific dates), there was still some talk about delivering in May 2008.
Modified: 11/29/2011
Tuesday, October 28, 2008
Secure and security
It's rather ironic that modern finance uses 'security' to name their instruments when any notion of 'secure' applied to these is problematic. Okay, risk management developed, in part, to handle the uncertainties. Yet, finance depends upon trust. We expect those to whom we entrust our money to show fiduciary dutifulness, for one.
That, for so long, things ran amok has many contributing factors and factions. Amongst these is thinking that finance can be engineered; can that notion ever be anything but twisted?
Remarks:
02/13/2009 -- Securities are toxic, in many cases, despite regulatory oversight.
01/18/2009 - We even need to look at why we need finance.
Modified: 02/13/2009
That, for so long, things ran amok has many contributing factors and factions. Amongst these is thinking that finance can be engineered; can that notion ever be anything but twisted?
Remarks:
02/13/2009 -- Securities are toxic, in many cases, despite regulatory oversight.
01/18/2009 - We even need to look at why we need finance.
Modified: 02/13/2009
Monday, October 27, 2008
Poll Completion 6
The Sixth Poll finished 10/01/2008.
Support bet2give: 787 will test flight in 2008.
Prior polls: First, second, third, fourth, fifth.
Remarks:
01/20/2013 -- See, will the 787 test flight in Q2 2009?
Modified: 01/20/2013
Support bet2give: 787 will test flight in 2008.
Prior polls: First, second, third, fourth, fifth.
Remarks:
01/20/2013 -- See, will the 787 test flight in Q2 2009?
Modified: 01/20/2013
Sunday, October 26, 2008
Leveraging and more
Yes, as we did with fiction and finance, we can also look at the oops related to leveraging. At one time, leveraging was consider not smart. Think of it, would you offer a large loan without any collateral (that you could verify in value) for some hair-brained scheme (how do you know how to evaluate the scheme? well, this is where skeptical thinking and experience come in).
So, in trying to catch up with the madness (having left school 30+ years ago and frankly not paying attention to the activities of idiots with money), reading like mad, watching results being analyzed (usually, the analysis was trifling and without substance), and considering how all this madness got started (related to age old issue, I know), on several occasions it was necessary to look at what it means to pile up debt.
As an aside, in Wichita, Hawker Beechcraft is loaded with debt from their split from Raytheon. The step of going IPO in order to spread the hurt, in little pieces, to others has not happened, yet. That whole game needs to be looked at, too. Hawker has a maintenance cost of 0.2B yearly; that must smart. No amount of belt-tightening or smart maneuvers can retire that level of debt. No, it requires the facilities of a market (who would want to buy?).
Leverage and truth -- March 25 . Looked at the underlying theoretics, which are usually fairly dismal in economics (the name fits perfectly). Ah, reinsurance is mentioned. Yes, didn't everyone think that risk was spread ad infinitum (Berkeley would love it!). And, then we have AIG, do we not?
Leverage and truth II -- March 31. Ah yes, the market dogma. It is touted by those whose pockets get lined immensely. Then, we have those who argue not zero-sum (hah!). What we'll have to do here is show that the best that we can do is near zero-sum.
Leverage and truth III -- May 19. Even by this time, I wasn't ready to accept all the idiotic changes to lessons from the 30s. We need to somehow make it clear that the CitiBank guy was wrong (Weill - well, he has his money) - Marx actually has a better take. Oh well.
Leveraging and oops -- May 19. So, we know that the financial community went out on the limb with leveraging. Do we not know that outsourcing (of certain varieties) is a type of leveraging? One problem with the engineering outsource is that of keeping it real (oops of this nature were coincidental to the start of this blog) and avoiding happy thinking. (Note 11/01/2008 - Well, now, Boeing is claiming insights about the possible banes of outsourcing.)
To the hilt -- August 19. Yes, like any addiction, the thing of going out on a limb grabs and does not allow one to let go. Evidently, to look at how smart people start to look like idiots. Of course, we really need to look at some physical binding (not gabbing) for money, that is other than a precious metal.
The idea here is to not just gab (that is the current basis) but to get technical and specific. After all, engineering computing handles similar issues, including the need to resolve several types of issues related to modeling, verification, and validation.
Oh, yes, the economy seems to be run like a real-time game. How do we get some notion of rigor applied? Well, it's not by chasing money.
Remarks:
05/30/2012 -- As covered by flightblogger.
05/04/2012 -- A recent filing relates to this theme.
03/17/2011 -- Politicos might actually be compounding the issues.
So, in trying to catch up with the madness (having left school 30+ years ago and frankly not paying attention to the activities of idiots with money), reading like mad, watching results being analyzed (usually, the analysis was trifling and without substance), and considering how all this madness got started (related to age old issue, I know), on several occasions it was necessary to look at what it means to pile up debt.
As an aside, in Wichita, Hawker Beechcraft is loaded with debt from their split from Raytheon. The step of going IPO in order to spread the hurt, in little pieces, to others has not happened, yet. That whole game needs to be looked at, too. Hawker has a maintenance cost of 0.2B yearly; that must smart. No amount of belt-tightening or smart maneuvers can retire that level of debt. No, it requires the facilities of a market (who would want to buy?).
Leverage and truth -- March 25 . Looked at the underlying theoretics, which are usually fairly dismal in economics (the name fits perfectly). Ah, reinsurance is mentioned. Yes, didn't everyone think that risk was spread ad infinitum (Berkeley would love it!). And, then we have AIG, do we not?
Leverage and truth II -- March 31. Ah yes, the market dogma. It is touted by those whose pockets get lined immensely. Then, we have those who argue not zero-sum (hah!). What we'll have to do here is show that the best that we can do is near zero-sum.
Leverage and truth III -- May 19. Even by this time, I wasn't ready to accept all the idiotic changes to lessons from the 30s. We need to somehow make it clear that the CitiBank guy was wrong (Weill - well, he has his money) - Marx actually has a better take. Oh well.
Leveraging and oops -- May 19. So, we know that the financial community went out on the limb with leveraging. Do we not know that outsourcing (of certain varieties) is a type of leveraging? One problem with the engineering outsource is that of keeping it real (oops of this nature were coincidental to the start of this blog) and avoiding happy thinking. (Note 11/01/2008 - Well, now, Boeing is claiming insights about the possible banes of outsourcing.)
To the hilt -- August 19. Yes, like any addiction, the thing of going out on a limb grabs and does not allow one to let go. Evidently, to look at how smart people start to look like idiots. Of course, we really need to look at some physical binding (not gabbing) for money, that is other than a precious metal.
The idea here is to not just gab (that is the current basis) but to get technical and specific. After all, engineering computing handles similar issues, including the need to resolve several types of issues related to modeling, verification, and validation.
Oh, yes, the economy seems to be run like a real-time game. How do we get some notion of rigor applied? Well, it's not by chasing money.
Remarks:
05/30/2012 -- As covered by flightblogger.
05/04/2012 -- A recent filing relates to this theme.
04/03/2011 -- Need to look at some background. Too, tranche and trash.
03/17/2011 -- Politicos might actually be compounding the issues.
12/23/2010 -- Do oops continue to emerge?
07/23/2009 -- After the bust and the rebound, toxic assets are still a problem due to tranche realities.
12/18/2008 -- Leveraging, in and of itself, is not bad.
Modified: 05/30/2012
12/18/2008 -- Leveraging, in and of itself, is not bad.
Modified: 05/30/2012
Friday, October 24, 2008
Savers sacked
There's talk that the Fed is considering lowering its rate to 0.75. Gosh, Ben, you blinked before. Now, you're desperate? [Note, originally pointed to Yahoo Finance page which has expired]
Look, Ben. That market and game that gets your attention is not worth its salt beyond being a field for fraud and froth.
So, you're going to throw more pixie dust at those who you want to put their money in stock. Well, Alan's low rate is considered a factor in the mess. Why should you follow suit with the equity bias (yes, keep those gamers on the Street and at the CBOE satisfied)?
In fact, it looks as if we need to bolster the models that are driving decisions; as well, why not start to consider getting beyond the gab standard, to start to remove the fiction (Marx' view, 7'oops7 view) out of finance?
Remarks:
08/01/2013 -- Ben cannot unwind or taper down; he has too many Doves. We'll have to get back to the king thing (yes, the divine rights of the CEO, new royalty, in other words) and dampening of these types by a new outlook (Magna-Carta'ísh).
06/23/2013 -- Ben sure has talked up (gabbed to) the investors; a recent downturn offers a lot to think about.
03/15/2011 -- The M & Ms are apropos.
Look, Ben. That market and game that gets your attention is not worth its salt beyond being a field for fraud and froth.
So, you're going to throw more pixie dust at those who you want to put their money in stock. Well, Alan's low rate is considered a factor in the mess. Why should you follow suit with the equity bias (yes, keep those gamers on the Street and at the CBOE satisfied)?
In fact, it looks as if we need to bolster the models that are driving decisions; as well, why not start to consider getting beyond the gab standard, to start to remove the fiction (Marx' view, 7'oops7 view) out of finance?
Remarks:
08/01/2013 -- Ben cannot unwind or taper down; he has too many Doves. We'll have to get back to the king thing (yes, the divine rights of the CEO, new royalty, in other words) and dampening of these types by a new outlook (Magna-Carta'ísh).
06/23/2013 -- Ben sure has talked up (gabbed to) the investors; a recent downturn offers a lot to think about.
03/15/2011 -- The M & Ms are apropos.
09/09/2009 -- Alan's reign will be looked at, in time.
08/24/2009 -- Last year, Ben blinked and panicked. He frantically pulled out all stops as if with no thought for tomorrow. Now, he has no use for 'mea culpa' big daddy that he is. Ben, start to unwind now. The Vienna School's view that these things are undecidable (which is a computational issue) is right on.
08/10/2009 -- As promised, FEDaerated is here.
07/31/2009 -- Let's see, 5,000 got over $1M for services rendered. Well, that's probably a sign of being a best-and-brightest, at least to certain eyes; it's called rolling-in-the-dough.
Now, this can be used to illustrate how the game it to fill the pockets of a small set to an exorbitant amount. Does the game need to be that way? Hell no. We'll look at that some more.
07/30/2009 -- The WSJ reports that Ben lost last year, despite his best efforts to keep the equity market afloat. Gosh, was there not a time when those guys had to forgo personal gain? Well, it's obvious from his portfolio that Ben's not on the savers' side. Nice to know. You see, Ben, some of us aren't looking to put our hands into the pockets of others (as do the best and brightest). No, we're looking for a little gain with preserved principle. Get it?
07/16/2009 -- Well, effects from several months of meddling (big Ben's economy) can be analyzed. Yet, the main questions is where is all this going? Systemic issues are still there.
04/25/2009 -- People matter.
12/18/2008 -- Savers still take it on the nose. We need to address inherent differences between debt and equity (Modigliani notwithstanding).
10/30/2008 -- A more robust basis is possible, but it would require better behavior on the part of those involved.
Modified: 08/01/2013
08/24/2009 -- Last year, Ben blinked and panicked. He frantically pulled out all stops as if with no thought for tomorrow. Now, he has no use for 'mea culpa' big daddy that he is. Ben, start to unwind now. The Vienna School's view that these things are undecidable (which is a computational issue) is right on.
08/10/2009 -- As promised, FEDaerated is here.
07/31/2009 -- Let's see, 5,000 got over $1M for services rendered. Well, that's probably a sign of being a best-and-brightest, at least to certain eyes; it's called rolling-in-the-dough.
Now, this can be used to illustrate how the game it to fill the pockets of a small set to an exorbitant amount. Does the game need to be that way? Hell no. We'll look at that some more.
07/30/2009 -- The WSJ reports that Ben lost last year, despite his best efforts to keep the equity market afloat. Gosh, was there not a time when those guys had to forgo personal gain? Well, it's obvious from his portfolio that Ben's not on the savers' side. Nice to know. You see, Ben, some of us aren't looking to put our hands into the pockets of others (as do the best and brightest). No, we're looking for a little gain with preserved principle. Get it?
07/16/2009 -- Well, effects from several months of meddling (big Ben's economy) can be analyzed. Yet, the main questions is where is all this going? Systemic issues are still there.
04/25/2009 -- People matter.
12/18/2008 -- Savers still take it on the nose. We need to address inherent differences between debt and equity (Modigliani notwithstanding).
10/30/2008 -- A more robust basis is possible, but it would require better behavior on the part of those involved.
Modified: 08/01/2013
Fairy dust
Fairy dust, like its sib Happy Talk, has been part of the run up in business from a shaky start to a very flimsy structure. That the stock markets are dropping severely today (before the open of the US markets) indicates that the recent dust has not worked; that it sometimes catches into a frenzy is very much suitable for study.
Part of the dust influenced Alan's (he of the Congressional query, yesterday) long-time belief that banks (and other capitalistic organizations) could police themselves, that derivatives were magical (did not need scrutiny), and that bubbles could not be seen.
Yes, Alan, we cannot see the future. Science, therefore, has ex post facto eyes, for the most part. Any forward looking is highly constrained. It is mainly the business types who go out on the limb, extrapolating like there is no tomorrow, carrying with them the rest of us into perdition.
Until economics and business is more empirically (actually quasi-empirically) based, these burstings will continue.
Gosh, even the quants started to believe in their magic and led the financial engineers astray.
How to stop this, as WFB asked? Well, there are several ways. Expect these to be addressed in an incremental manner, including more technical analysis of the mathematical problems.
Remarks:
07/31/2013 -- Ben cannot unwind or taper down; he has too many Doves.
03/23/2012 -- Ben is doing a series of four lectures on his, and the FED's, role.
10/10/2011 -- The public is recognizing that we've been 'fairy dusted' the past few years. Was it meant to be a means of cover-up? Hopefully, Big Ben is seen to be as much of a culprit.
01/19/2011 -- The quirks of capitalism are rank, not by necessity.
Part of the dust influenced Alan's (he of the Congressional query, yesterday) long-time belief that banks (and other capitalistic organizations) could police themselves, that derivatives were magical (did not need scrutiny), and that bubbles could not be seen.
Yes, Alan, we cannot see the future. Science, therefore, has ex post facto eyes, for the most part. Any forward looking is highly constrained. It is mainly the business types who go out on the limb, extrapolating like there is no tomorrow, carrying with them the rest of us into perdition.
Until economics and business is more empirically (actually quasi-empirically) based, these burstings will continue.
Gosh, even the quants started to believe in their magic and led the financial engineers astray.
How to stop this, as WFB asked? Well, there are several ways. Expect these to be addressed in an incremental manner, including more technical analysis of the mathematical problems.
Remarks:
07/31/2013 -- Ben cannot unwind or taper down; he has too many Doves.
03/23/2012 -- Ben is doing a series of four lectures on his, and the FED's, role.
10/10/2011 -- The public is recognizing that we've been 'fairy dusted' the past few years. Was it meant to be a means of cover-up? Hopefully, Big Ben is seen to be as much of a culprit.
04/19/2011 -- On territory and its map.
01/19/2011 -- The quirks of capitalism are rank, not by necessity.
11/04/2010 -- Big Ben is still putting us at risk and trashing the savers.
09/15/2009 -- Lessons, one year after Lehman. Also, Time on culprits. Ben is happy-talking, again.
09/09/2009 -- Alan's reign will be looked at, in time.
08/31/2009 -- Go to FEDaerated to see Quant series that will expand to cover topics both theoretical and technical.
08/10/2009 -- As promised, FEDaerated is here.
05/18/2009 -- Oh yes, got us in a mess and still wants the bonus.
04/17/2009 -- Minsky and the facts of ephemeral value are a couple of topics on the list.
12/17/2008 -- Shoes continue to drop, but they are of several types.
11/20/2008 -- Boon and bust, the way of fairy dust.
Modified: 07/31/2013
09/09/2009 -- Alan's reign will be looked at, in time.
08/31/2009 -- Go to FEDaerated to see Quant series that will expand to cover topics both theoretical and technical.
08/10/2009 -- As promised, FEDaerated is here.
05/18/2009 -- Oh yes, got us in a mess and still wants the bonus.
04/17/2009 -- Minsky and the facts of ephemeral value are a couple of topics on the list.
12/17/2008 -- Shoes continue to drop, but they are of several types.
11/20/2008 -- Boon and bust, the way of fairy dust.
Modified: 07/31/2013
Tuesday, October 21, 2008
Truth, fiction, and finance
As insight has grown, via the analysis needed to blog somewhat coherently, one theme that kept arising dealt with 'fiction' as it seems to apply to what is known about finance. Another theme dealt with leveraging which, at one time, was not condoned. The themes run across other blogs and seem disorderly.
One way to organize might be to have some integrating posts that can then be kept up to date and that can bridge views whereas categories apply only within a blog.
So, here is summary of three posts.
Truth, fiction, and finance -- Notice that the date was January. By then it was clear that things needed to unwind, but actions of the Fed and its cohorts kept the lid on the boiling pot. Well, the botched up workings have been patched over; steam still leaks out of the pipes. Perhaps, some semblance of settling down will appear in the future; one truth is that fat cats will have big pockets; the rest of the populace will have their crumbs. Oh, yes, the coming elections will have some influence.
Truth, fiction, and finance II -- March. As the insight grew, incredulity did too. What have those supposedly smart (best and brightest) idiots done? Gosh, the mess seems to have no end. How does one get the message out that the lemmings are all running after inherently unstable states?
Truth, fiction, and finance III -- May. All along, the 7oops7 message was that modern practices are made more difficult due to the computer; it's provable, yet the attention does not go there for several reasons which we'll have to address. But, we can all see that something like a plane has to fly, pass tests, and then perform in the world. What the heck does the silly instrument designed by the financial engineer have to do? Oh, yes. Move money from the pockets of the many to that of the few; looking at the fatness of some cats and the general thinness of the populace, their little bits of cleverness did work.
But, the idea is to not be only critical, even though there are words like this: It got even worse throughout the year, from Ben's blink, through spitting in the face of savers, to bailouts (what?) of those touting capitalism.
Rather, we'll slowly propose those truths that can be taken as solid enough for planning the future.
Remarks:
01/15/2015 -- One of the most-read, of late and of all time, as things do look unsettling. Did we learn anything?
09/19/2013 -- To some, evidently, grabbing oodles of money, without due consideration of ramifications to others or to the common weal, is the smartest thing; but, we do know that virtue is smart, to boot. Even the secularists are trying hard to show how their worldview can lead to right living (as in, they do not need God to have a conscience). And, what virtue might be prime important to this discussion? Prudence (see Remarks, this day).
08/01/2013 -- Ben cannot unwind or taper down; he has too many Doves. We'll have to get back to the king thing (yes, the divine rights of the CEO, new royalty, in other words) and dampening of these types by a new outlook (Magna-Carta'ísh).
09/29/2011 -- The question remains. Even with 'financial engineering' what is the science behind finance? Gaming, only? Who has the basic ontology (other than wealth for the few)?
04/03/2011 -- Need to look at some background. Too, tranche and trash.
01/19/2011 -- Update1 and Update2. The focus now will be mostly the idiots of economics/finance.
One way to organize might be to have some integrating posts that can then be kept up to date and that can bridge views whereas categories apply only within a blog.
So, here is summary of three posts.
Truth, fiction, and finance -- Notice that the date was January. By then it was clear that things needed to unwind, but actions of the Fed and its cohorts kept the lid on the boiling pot. Well, the botched up workings have been patched over; steam still leaks out of the pipes. Perhaps, some semblance of settling down will appear in the future; one truth is that fat cats will have big pockets; the rest of the populace will have their crumbs. Oh, yes, the coming elections will have some influence.
Truth, fiction, and finance II -- March. As the insight grew, incredulity did too. What have those supposedly smart (best and brightest) idiots done? Gosh, the mess seems to have no end. How does one get the message out that the lemmings are all running after inherently unstable states?
Truth, fiction, and finance III -- May. All along, the 7oops7 message was that modern practices are made more difficult due to the computer; it's provable, yet the attention does not go there for several reasons which we'll have to address. But, we can all see that something like a plane has to fly, pass tests, and then perform in the world. What the heck does the silly instrument designed by the financial engineer have to do? Oh, yes. Move money from the pockets of the many to that of the few; looking at the fatness of some cats and the general thinness of the populace, their little bits of cleverness did work.
But, the idea is to not be only critical, even though there are words like this: It got even worse throughout the year, from Ben's blink, through spitting in the face of savers, to bailouts (what?) of those touting capitalism.
Rather, we'll slowly propose those truths that can be taken as solid enough for planning the future.
Remarks:
01/15/2015 -- One of the most-read, of late and of all time, as things do look unsettling. Did we learn anything?
09/19/2013 -- To some, evidently, grabbing oodles of money, without due consideration of ramifications to others or to the common weal, is the smartest thing; but, we do know that virtue is smart, to boot. Even the secularists are trying hard to show how their worldview can lead to right living (as in, they do not need God to have a conscience). And, what virtue might be prime important to this discussion? Prudence (see Remarks, this day).
08/01/2013 -- Ben cannot unwind or taper down; he has too many Doves. We'll have to get back to the king thing (yes, the divine rights of the CEO, new royalty, in other words) and dampening of these types by a new outlook (Magna-Carta'ísh).
09/29/2011 -- The question remains. Even with 'financial engineering' what is the science behind finance? Gaming, only? Who has the basic ontology (other than wealth for the few)?
05/17/2011 -- Hedge funds need some of our attention.
04/03/2011 -- Need to look at some background. Too, tranche and trash.
01/19/2011 -- Update1 and Update2. The focus now will be mostly the idiots of economics/finance.
08/24/2009 -- Last year, Ben blinked and panicked. He frantically pulled out all stops as if with no thought for tomorrow. Now, he has no use for 'mea culpa' big daddy that he is. Ben, start to unwind now. The Vienna School's view that these things are undecidable (which is a computational issue) is right on.
08/10/2009 -- As promised, FEDaerated is here.
07/23/2009 -- After the bust and the rebound, toxic assets are still a problem due to tranche realities.
06/17/2009 -- A fresh look will be needed.
03/30/2009 -- The WSJ today looks at the Future of Finance. The idea is that finance is like the cardiovascular system. Okay. So leeches are a good metaphor for the sucking out that we see. Like the AIG guy who was central to the losses that we the taxpayers are paying and who left with $300M. We'll be referring back to this discussion.
03/11/2009 -- We also need to look at accounting's role messing up affairs.
02/18/2009 -- We can look at why securities become toxic, almost by necessity.
01/29/2009 -- Well, it just gets more interesting. Pick up the 1/28/09 Wall Street Journal and look at an article about a 'proliferation' of ponzi schemes. We all know about Madoff as he mis-handled a lot of moeney over a long period of time. But, a lot of states are finding that they have a madeoff/ponzi going on within their borders. How much of finance is a sham?
The WSJ mentions that the hedge funds' claims to high returns is one possible cause as people try to duplicate that. Sort of a Jones' keep up thing, we can suppose. Well, a reading of hedge fund tacits raises all sorts of suspicions to the rational mind. Just how legit are these things and why are they even allowed? Are we that much into some mass insanity?
01/18/2009 - We even need to look at why we need finance.
12/01/2008 -- We need to learn what we might be taught about money by Islamic Finance.
10/23/2008 -- Listening to Alan makes me wonder how modern mathematics encourages fairy dusting via computation. We'll go into that deeply.
Modified: 01/15/2015
08/10/2009 -- As promised, FEDaerated is here.
07/23/2009 -- After the bust and the rebound, toxic assets are still a problem due to tranche realities.
06/17/2009 -- A fresh look will be needed.
03/30/2009 -- The WSJ today looks at the Future of Finance. The idea is that finance is like the cardiovascular system. Okay. So leeches are a good metaphor for the sucking out that we see. Like the AIG guy who was central to the losses that we the taxpayers are paying and who left with $300M. We'll be referring back to this discussion.
03/11/2009 -- We also need to look at accounting's role messing up affairs.
02/18/2009 -- We can look at why securities become toxic, almost by necessity.
01/29/2009 -- Well, it just gets more interesting. Pick up the 1/28/09 Wall Street Journal and look at an article about a 'proliferation' of ponzi schemes. We all know about Madoff as he mis-handled a lot of moeney over a long period of time. But, a lot of states are finding that they have a madeoff/ponzi going on within their borders. How much of finance is a sham?
The WSJ mentions that the hedge funds' claims to high returns is one possible cause as people try to duplicate that. Sort of a Jones' keep up thing, we can suppose. Well, a reading of hedge fund tacits raises all sorts of suspicions to the rational mind. Just how legit are these things and why are they even allowed? Are we that much into some mass insanity?
01/18/2009 - We even need to look at why we need finance.
12/01/2008 -- We need to learn what we might be taught about money by Islamic Finance.
10/23/2008 -- Listening to Alan makes me wonder how modern mathematics encourages fairy dusting via computation. We'll go into that deeply.
Modified: 01/15/2015
Monday, October 20, 2008
Financial Engineering
The subject seems to be a new discipline that arose out of the computational framework of the 2000s. We'll have to look more deeply at it and its role in the current mess.
That is, this discipline plays heavily in the gaming ontology that has essentially put an unstable basis under our economic future. This we have to look at further, too.
We all ought to be skeptical of those who tout that 'engineering' solves problems, as if by necessity. The real engineers ought to get mad about this; gosh, what mindset would think of inventiveness as engineering? There may be a design aspect to engineering, but the discipline entails a whole lot more than just fancy thinking (it's applied science).
From one view, it looks as if 'financial engineering' is an offshoot of Operations Research which is a respected field, yet it too can be seen as just management science.
Ah, science. Any engineering discipline needs its underlying science. What science is behind financial engineering? This has been asked before.
The boss of the errant trader at SocGen, says of himself that he's a financial engineer and not a trading supervisor. Oh? So, an automotive engineer wouldn't know how to drive an auto?
Something is troubling about such a discipline using 'engineering' in its description.
But, on the other hand, wise airplane and process engineering can have it troubles too.
Remarks:
08/01/2013 -- We'll be looking at financial engineering, more closely.
04/03/2011 -- Need to look at some background. Too, tranche and trash.
03/22/2011 -- It's spring, and the garble uses gambling metaphors.
That is, this discipline plays heavily in the gaming ontology that has essentially put an unstable basis under our economic future. This we have to look at further, too.
We all ought to be skeptical of those who tout that 'engineering' solves problems, as if by necessity. The real engineers ought to get mad about this; gosh, what mindset would think of inventiveness as engineering? There may be a design aspect to engineering, but the discipline entails a whole lot more than just fancy thinking (it's applied science).
From one view, it looks as if 'financial engineering' is an offshoot of Operations Research which is a respected field, yet it too can be seen as just management science.
Ah, science. Any engineering discipline needs its underlying science. What science is behind financial engineering? This has been asked before.
The boss of the errant trader at SocGen, says of himself that he's a financial engineer and not a trading supervisor. Oh? So, an automotive engineer wouldn't know how to drive an auto?
Something is troubling about such a discipline using 'engineering' in its description.
But, on the other hand, wise airplane and process engineering can have it troubles too.
Remarks:
08/01/2013 -- We'll be looking at financial engineering, more closely.
04/03/2011 -- Need to look at some background. Too, tranche and trash.
03/22/2011 -- It's spring, and the garble uses gambling metaphors.
09/02/2009 -- The supposedly best-and-brightest have led us on a perdition-directed path through mis-using mathematics and computation.
08/18/2009 -- As promised, FEDaerated is here.
08/02/2009 -- Wait! More exposures: "computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone else's expense." To anyone who isn't at Goldman Sachs or the like, does that appeal to you as the way that we ought to be handling our beans?
So, is this what financial engineering is all about? Sounds more like leeching.
07/23/2009 -- After the bust and the rebound, toxic assets are still a problem due to tranche realities.
05/18/2009 -- Oh yes, got us in a mess and still wants the bonus.
03/30/2009 -- The WSJ today looks at the Future of Finance. The idea is that finance is like the cardiovascular system. Okay. So leeches are a good metaphor for the sucking out that we see. Like the AIG guy who was central to the losses that we the taxpayers are paying and who left with $300M. We'll be referring back to this discussion.
03/28/2009 -- Ties bind economics and engineering, reflecting on accounting and strategies for value assessment.
03/25/2009 -- Rhetoric can be fun, but we have to get into these issues with depth and technicalities.
02/18/2009 -- We can look at why securities become toxic, almost by necessity.
01/27/2009 -- Now a new day and way to consider these matters.
12/30/2008 -- Even Krugman asks why we have so many 'financial' engineers (who essentially work with bogus-ity) versus 'real' engineers. We'll look at that.
12/18/2008 -- As well as people, we can list ideas that are bogus. But, any of these, such as leveraging, in and of itself, is not bad. But, fairy dusting is, by its nature, problematic.
10/23/2008 -- The whole notion here is how to improve matters, not just harp, blame-storm, or other useless undertakings. So, expect that the whole 'quant' framework is going to be analyzed. That ontology is the basis for the mess that as the most importance. Greed, malfeasance, and such are old-time problems. Truth engineering is required to handle the 'quant' issues.
Modified: 08/01/2013
08/18/2009 -- As promised, FEDaerated is here.
08/02/2009 -- Wait! More exposures: "computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone else's expense." To anyone who isn't at Goldman Sachs or the like, does that appeal to you as the way that we ought to be handling our beans?
So, is this what financial engineering is all about? Sounds more like leeching.
07/23/2009 -- After the bust and the rebound, toxic assets are still a problem due to tranche realities.
05/18/2009 -- Oh yes, got us in a mess and still wants the bonus.
03/30/2009 -- The WSJ today looks at the Future of Finance. The idea is that finance is like the cardiovascular system. Okay. So leeches are a good metaphor for the sucking out that we see. Like the AIG guy who was central to the losses that we the taxpayers are paying and who left with $300M. We'll be referring back to this discussion.
03/28/2009 -- Ties bind economics and engineering, reflecting on accounting and strategies for value assessment.
03/25/2009 -- Rhetoric can be fun, but we have to get into these issues with depth and technicalities.
02/18/2009 -- We can look at why securities become toxic, almost by necessity.
01/27/2009 -- Now a new day and way to consider these matters.
12/30/2008 -- Even Krugman asks why we have so many 'financial' engineers (who essentially work with bogus-ity) versus 'real' engineers. We'll look at that.
12/18/2008 -- As well as people, we can list ideas that are bogus. But, any of these, such as leveraging, in and of itself, is not bad. But, fairy dusting is, by its nature, problematic.
10/23/2008 -- The whole notion here is how to improve matters, not just harp, blame-storm, or other useless undertakings. So, expect that the whole 'quant' framework is going to be analyzed. That ontology is the basis for the mess that as the most importance. Greed, malfeasance, and such are old-time problems. Truth engineering is required to handle the 'quant' issues.
Modified: 08/01/2013
Saturday, October 11, 2008
We know better
Not only do we know better, we can make the choice to do better.
A year ago, many knew that the market was over-priced. Heck, it was visible even before that.
So, what caused the reality that it took a year for this thing to unwind? Well, that we will look at, but a variant on Minsky's thinking is apropos.
But, words that come to mind are gaming, malfeasance, entitlement (of the rich, CEO, etc. - not so much the lowly work, folks), sheer stupidity, denial (wishful thinking), ...
Yes, there are culprits all around.
Remarks:
08/01/2013 -- We're relook at this as we consider the good side (as if there is one) of financial engineering.
09/15/2009 -- Lessons, one year after Lehman. Also, Time on culprits.
08/24/2009 -- Last year, Ben blinked and panicked. He frantically pulled out all stops as if with no thought for tomorrow. Now, he has no use for 'mea culpa' big daddy that he is. Ben, start to unwind now. The Vienna School's view that these things are undecidable (which is a computational issue) is right on.
07/17/2009 -- China has eaten our lunch (and dinner). Shows how silly our games are. Yet, finance can be run by people who can be non-profit in scope and who have an impeccable (oh, what quaintness!) un-interest in money.
11/24/2008 -- In the last two days, the DOW (and other indexes) were up 11% which is a record or close to one. With this type of volatility, how does one plan? Well, that's one problem to be considered.
10/15/2008 -- That the market jumped back with a large increase after more governmental meddling indicates the level of interest in the gaming approach. All sorts of infrastructure has been built to support this gaming (the casinos of the Street - and Chicago and ...). That we pay attention and cheer is another sign.
So, it's time to go back to the basics and start over in the analysis with comments, such as: now that we the taxpayers are involved, we know that it is absolutely true that the fat cats want their privatization of profit (rolling into their pockets) and their socialization of loss (rolling out of our pockets).
Too, if the government is going to be involved, then we need oversight. It is possible despite the protestations otherwise of Alan and Ben.
Modified: 08/01/2013
A year ago, many knew that the market was over-priced. Heck, it was visible even before that.
So, what caused the reality that it took a year for this thing to unwind? Well, that we will look at, but a variant on Minsky's thinking is apropos.
But, words that come to mind are gaming, malfeasance, entitlement (of the rich, CEO, etc. - not so much the lowly work, folks), sheer stupidity, denial (wishful thinking), ...
Yes, there are culprits all around.
Remarks:
08/01/2013 -- We're relook at this as we consider the good side (as if there is one) of financial engineering.
09/15/2009 -- Lessons, one year after Lehman. Also, Time on culprits.
08/24/2009 -- Last year, Ben blinked and panicked. He frantically pulled out all stops as if with no thought for tomorrow. Now, he has no use for 'mea culpa' big daddy that he is. Ben, start to unwind now. The Vienna School's view that these things are undecidable (which is a computational issue) is right on.
07/17/2009 -- China has eaten our lunch (and dinner). Shows how silly our games are. Yet, finance can be run by people who can be non-profit in scope and who have an impeccable (oh, what quaintness!) un-interest in money.
11/24/2008 -- In the last two days, the DOW (and other indexes) were up 11% which is a record or close to one. With this type of volatility, how does one plan? Well, that's one problem to be considered.
10/15/2008 -- That the market jumped back with a large increase after more governmental meddling indicates the level of interest in the gaming approach. All sorts of infrastructure has been built to support this gaming (the casinos of the Street - and Chicago and ...). That we pay attention and cheer is another sign.
So, it's time to go back to the basics and start over in the analysis with comments, such as: now that we the taxpayers are involved, we know that it is absolutely true that the fat cats want their privatization of profit (rolling into their pockets) and their socialization of loss (rolling out of our pockets).
Too, if the government is going to be involved, then we need oversight. It is possible despite the protestations otherwise of Alan and Ben.
Modified: 08/01/2013
Thursday, October 9, 2008
Big oops
Today, the DOW went down another 600+ in a continuing slide that has us in the 8,500 range which has not been seen for several years. The old comment of 201K rather than 401K is apropos again. It does not have to be this way.
But, for someone who is trying to build for the future, huge returns are not required. Gosh. There are adages up the wazoo about these things. The old story about the grasshopper and the ant comes to mind.
Okay, we all want the freedom of the hopper; who wants to be wrapped in the mantle of working for a large firm? Oh yes, the ant (worker) gets stepped on by the fat cat, usually.
Why the focus on the stock (equity) side of the market which has been allowed to 'derivative' itself into almost oblivion (oh, too extreme as we haven't reached the levels of the early 90s yet - is that where we ought to be?) when more stable approaches are available (albeit humdrum)?
Well, idiocy, for one thing.
We really do need to get away from the gab standard (and Ben and his pals trying to manipulate things) that is behind economics and put in a more realistic basis for money.
What? Yes, this can be defined.
Remarks:
11/20/2008 -- Boon and bust, the way of fairy dust.
10/27/2008 -- Yes, things fell apart for several reasons: fiction, leverage, and more.
Modified: 11/20/2008
But, for someone who is trying to build for the future, huge returns are not required. Gosh. There are adages up the wazoo about these things. The old story about the grasshopper and the ant comes to mind.
Okay, we all want the freedom of the hopper; who wants to be wrapped in the mantle of working for a large firm? Oh yes, the ant (worker) gets stepped on by the fat cat, usually.
Why the focus on the stock (equity) side of the market which has been allowed to 'derivative' itself into almost oblivion (oh, too extreme as we haven't reached the levels of the early 90s yet - is that where we ought to be?) when more stable approaches are available (albeit humdrum)?
Well, idiocy, for one thing.
We really do need to get away from the gab standard (and Ben and his pals trying to manipulate things) that is behind economics and put in a more realistic basis for money.
What? Yes, this can be defined.
Remarks:
11/20/2008 -- Boon and bust, the way of fairy dust.
10/27/2008 -- Yes, things fell apart for several reasons: fiction, leverage, and more.
Modified: 11/20/2008
Saturday, October 4, 2008
Happy talk
There was an Op-Ed in the WSJ recently with this title. One message is that business might be looked at as a "center of magical thinking" for several reasons. Some talk about group think, and how some type of convergence goes on in a collective's mentality. In business many times, those who might ask questions are suppressed (or, those who do are thought of as mere commodity, beyond the glamor and allure of the game). Ah, guy, you're not a team player, the questioner is told. We've seen that a lot.
This issue essentially was addressed earlier in a slightly different framework. But, that these issues might get the attention of psychology can be thought of as encouraging.
One might ask how this could be handled operationally, since management has the power and the authority to control thoughts. Well, some type of structure that allows critical thinking would be a start, not unlike some attempts at a technical excellence fellowship.
This applies as well to the gaming of the Wall Street and Chicago, but there are many culprits related to the latest bubble's creation.
But, sales is of this ilk. What salesman is truthful about quirks? So, too, those who were caught in the house ownership mania were no doubt happy talked.
Happy talk has sibs, fairy dust and happy thinking (to be defined).
Remarks:
07/31/2013 -- Ben cannot unwind or taper down; he has too many Doves.
03/23/2012 -- Ben is doing a series of four lectures on his, and the FED's, role.
10/10/2011 -- The public is recognizing that we've been 'fairy dusted' the past few years. Was it meant to be a means of cover-up? Hopefully, Big Ben is seen to be as much of a culprit.
09/15/2009 -- Lessons, one year after Lehman. Also, Time on culprits. Ben is happy-talking, again.
Modified: 07/31/2013
This issue essentially was addressed earlier in a slightly different framework. But, that these issues might get the attention of psychology can be thought of as encouraging.
One might ask how this could be handled operationally, since management has the power and the authority to control thoughts. Well, some type of structure that allows critical thinking would be a start, not unlike some attempts at a technical excellence fellowship.
This applies as well to the gaming of the Wall Street and Chicago, but there are many culprits related to the latest bubble's creation.
But, sales is of this ilk. What salesman is truthful about quirks? So, too, those who were caught in the house ownership mania were no doubt happy talked.
Happy talk has sibs, fairy dust and happy thinking (to be defined).
Remarks:
07/31/2013 -- Ben cannot unwind or taper down; he has too many Doves.
03/23/2012 -- Ben is doing a series of four lectures on his, and the FED's, role.
10/10/2011 -- The public is recognizing that we've been 'fairy dusted' the past few years. Was it meant to be a means of cover-up? Hopefully, Big Ben is seen to be as much of a culprit.
04/19/2011 -- On territory and its map.
09/15/2009 -- Lessons, one year after Lehman. Also, Time on culprits. Ben is happy-talking, again.
Modified: 07/31/2013
Thursday, October 2, 2008
A new type of colonialism
Yes. Guess what it is? Globalization. Yes, it's to do in the doers, allow speculators to reign.
There have been many tos and fros throughout history and even before. Many of these involved nations, where the most recent was the treading upon souls that accompanied Europe's (and the US's) conquests, which were economically motivated.
Who is the new colonizer? Well, business with its global model. That we'll be going into. Modern business seems to think that it has labor colonized.
Busyness is noted for marching after the buck. That manifests itself with the few at the top accumulating hordes of money (say, like the guy who took $161M from his position atop a company that tanked).
Many like to argue that we're not dealing with zero-sum issues. Yes we are, folks. Call it, near-zero if you must. Any who gets big pockets takes it from other pockets.
So, not only do we have the new colonizer, there is little to motivate efforts at a common basis. What basis? Well, for the USers, that which is pointed out in the Declaration of Independence. Supposedly, the Constitution of the US guarantees some type of pursuit of well-being.
Notice, that well-being is not pocket lining of exorbitant proportions. No, there has to be better ways. One of these would be to constrain the situations (via a type of sandbox) where some play with the assets of the many ultimately leading to perditious states (pity the hapless).
Such as we are in now.
Remarks:
05/01/2012 -- Need to bring this up to date. For now, some pointers: Steve, Rank and file, Errors of Capitalism, ...
12/08/2009 -- Consider Paul and current CEOs.
10/11/2009 -- Discussion has gone over to FED-aerated. Note the 10/11/2009 Remarks about the Business Week article on India's progress' inhibitors. 'Near zero' recognizes that some always suffer more than others, especially in win-win situations, as the whole notion of characterization minimizes visceral reactions by diminishing the real in favor of the abstracted (ah, the modern world, you say?).
09/12/2009 -- Sandbox was used without definition. Let's discuss that concept.
06/15/2009 -- Globalization, and capitalism, now a dirty word, according to one in private equity.
01/18/2009 - We even need to look at why we need finance.
12/03/2008 -- We need to learn what we might be taught about money by Islamic Finance.
Modified: 05/01/2012
There have been many tos and fros throughout history and even before. Many of these involved nations, where the most recent was the treading upon souls that accompanied Europe's (and the US's) conquests, which were economically motivated.
Who is the new colonizer? Well, business with its global model. That we'll be going into. Modern business seems to think that it has labor colonized.
Busyness is noted for marching after the buck. That manifests itself with the few at the top accumulating hordes of money (say, like the guy who took $161M from his position atop a company that tanked).
Many like to argue that we're not dealing with zero-sum issues. Yes we are, folks. Call it, near-zero if you must. Any who gets big pockets takes it from other pockets.
So, not only do we have the new colonizer, there is little to motivate efforts at a common basis. What basis? Well, for the USers, that which is pointed out in the Declaration of Independence. Supposedly, the Constitution of the US guarantees some type of pursuit of well-being.
Notice, that well-being is not pocket lining of exorbitant proportions. No, there has to be better ways. One of these would be to constrain the situations (via a type of sandbox) where some play with the assets of the many ultimately leading to perditious states (pity the hapless).
Such as we are in now.
Remarks:
05/01/2012 -- Need to bring this up to date. For now, some pointers: Steve, Rank and file, Errors of Capitalism, ...
12/08/2009 -- Consider Paul and current CEOs.
10/11/2009 -- Discussion has gone over to FED-aerated. Note the 10/11/2009 Remarks about the Business Week article on India's progress' inhibitors. 'Near zero' recognizes that some always suffer more than others, especially in win-win situations, as the whole notion of characterization minimizes visceral reactions by diminishing the real in favor of the abstracted (ah, the modern world, you say?).
09/12/2009 -- Sandbox was used without definition. Let's discuss that concept.
06/15/2009 -- Globalization, and capitalism, now a dirty word, according to one in private equity.
01/18/2009 - We even need to look at why we need finance.
12/03/2008 -- We need to learn what we might be taught about money by Islamic Finance.
Modified: 05/01/2012
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