Gab standard II

The original post was dated June 10, 2008. Gosh, over 6 1/2 years ago. Since then, financial discussions have mostly been under the context of FEDaerated (fiat money) in a continuing fashion as problem abound. And, we all of rational mind are waiting for the bubble to burst. The FED's roles dealing with fiat money have exacerbated the problems as seen from the reality of the street (as in, Main and others not called Wall).

One problem is that there is a chimera that comes about, in part, due to charades. Yes, Wall likes to make sure that the game is in their favor. And, a good example of that type of thing could be the dark pools and like ilk. There are others (and, if we could lift the skirt or open the kimono, we would see many, many more).

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I noticed, today, that some of the older posts are being read - see the image - which could indicate several things. All of these were from back before the spurt of mania that came from the FED's largess. And, that spurt mainly is equity oriented; savers have been flayed to an inch of their lives (how much longer can they hold on?).

Be that as it may, no one seems to be pushing a normative view. Why? So, we intend to do that. One approach will be to pick up these old posts and bring them up to date. That, of course, will take work and time. But, then, we have already said that we're under no time constraint.

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The original post looked at the concept of stable money. You know, figuring that out is not easy. In fact, some approach, such as bitcoin, might be the solution. However, it would be a generally adopted scheme and not privately owned (ah, lots to discuss there).

Now, for a real gas, one of the WSJ articles was talking about the weak dollar. What we know has happened, of late, is that the dollar is strengthening, perhaps too much. One thing for sure is that manipulations like done with the FED's type of operations are oriented to the benefit of the country doing the machinations. Others have to react as best they can.

What kind of strategy is that (asking normatively, okay?) for a sustainable economy?

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Before quitting, notice that another of the posts is "Silly games" and refer to the dark pools above. Then, "Why finance?" mentions leeches; yes, still very much apropos.

Remarks: Modified: 01/15/2015

01/15/2015 --  

Toxic securities

Many point to particular things, such as sub-prime mortgages or tranche, and similar, methods, as the primary causes of the current mess. But, as we saw recently with the taxpayers paying for a bank to take toxic things off of the CitiGroup balance, the issues are more wide-ranging.

We can say that the systemic problem is deeper than we would like to believe. Essentially, a misuse of mathematics and computation are a couple prime factors that we need to get a handle on. Too, money-by-fiat (supported by a gab standard) is an important factor, too.

A WSJ article today was brave enough to suggest that we ought to re-define banking. To bad, we cannot just stop and start over.

So, where to go from here?

Remarks:

08/01/2013 -- We're relook at this as we consider the good side (as if there is one) of financial engineering.

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

11/04/2010 -- Big Ben is still putting us at risk and trashing the savers.

07/23/2009 -- After the bust and the rebound, toxic assets are still a problem due to tranche realities.

06/07/2009 -- Say what?

03/25/2009 -- Rhetoric can be fun, but we have to get into these issues with depth and technicalities.

02/13/2009 -- ASF 2009 shows that regulations abound; these, no doubt, need to be re-addressed for overlap, coherency, and such. As WFB, Jr said: Stop!! But, why do we need regulatory oversight to remind these people about fiduciary duty.

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.

11/26/2008 -- After the recent bailout news from the Feb, the government will own about 1/2 of the economy. How can enticing the consumer into even more debt be the answer?

Modified: 08/01/2013

Borrowing addiction

We have to get back to finance (the times). Our first post on that was in 2007. The topic was tranching. A recent post had the same topic. To me, the whole notion seems to be like wanting perpetual motion. But, then, finance does not have any real grounding, nowadays, due to many things, such as fiat money.

Of late, another bit of errant thought has come to fore. People are leveraging to increase their equity stake. Again, leveraging (think of uses) is not bad. Improper focus? Yes, problematic.

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So, this week we had a downturn. Those who bought with borrowed money would suffer more after a loss, due to the pain of debt. So, that's the oops. To take this type of stance when it is obviously not wise.

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Yet, the central banks have fed the situation. Some use addiction as the analogue. Too, the whole emphasis seemed to have been to push people toward the more risky. And, there wasn't much jawboning about boneheads increasing their risk with debt.

Debt is a way to mortgage the future, pure and simple. We have been using debt far beyond what might be reasonable as the downstream pain is too remote for most to consider. Even those with progeny don't seem to get the drift of the issue.

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Hence, oops abound, as was said before.

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).

Modified: 08/01/2013

Fair value

Yeah, this concept can get dusted with the fairy's charms like anything financial. As a reminder, we need to keep in mind the change that happened recently (see discussion on 3/13/2009 - there is much more to this to discuss) is showing several results, including billions in payouts to the supposed best-and-brightest, class act that they are. That is, as the Congressman says, the rules of the game were changed in the middle of the game for the clambering horde who wants to continue their ways.

The first touch on this subject here was in the context of measuring progress, which is an issue of earned value. That the engineering use refers to something real does not invalidate the suggested similarity. You see, if we were dealing with other than a fiat situation with money, we would have something that we could get our arms around.

Too, we could have more accountability. That is, the current approach seems to look at who takes the biggest part of the pie as a bonus as it's chief measuring stick. How did this come to be? Banking and finance are really just utility functions. Silly game, indeed.

Now, as we are reminded by the accountants, 'market' and marking can has its issues, to boot. We don't have recourse to a 100% fail-safe system, yet we could stabilize better by removing, or minimizing, the gaming element. Yeah, like adults trying to keep the world safe and livable.

One question: why do we let the media's glorification of these imbeciles rule our daily use of the airwaves?

So, it is time to get serious. See FEDaerated which, as promised, will deal with things economic. We'll still venture upon that theme here, as it's integral to good engineering. The difference? FEDaerated will be more serious in nature.

Remarks:

09/09/09 -- We'll need to look at UUUN, as a framework, for assessing valuing methods.

09/03/2009 -- Computational foci raise miraculous need. Yes, we need to talk NP and more.

08/11/2009 -- This post was incomplete. We didn't talk markets to which we are to mark. So, we'll need to look at that further. Also, we'll have to go more into intrinsic value.

Modified: 09/09/2009