Inversion Indicators and Practical Organizational Modeling

Legislation that allowed commerce and investment banks to merge precipitated a creeping yield inversion. Many political economists predicted dire consequences, and indicators like the inversion, well before they presented.

Despite warnings that reorganization of the banking model into a practical model of consolidated command and control would bring the tendency of a pre-Keynesian deflationary trend back to life, neo-conservatives dismissed the critique as an ideological (a teleological) argument. It was, nevertheless, as time would tell, an ontological analysis.

After the "Jobs Summit," and at this point in our political-economic history, we should ask if the analysis and the predictive utility of current measures reflects an objective ontology.

Cutting capital gains for small businesses recognizes the causal relationship between organizational type--too big to fail--and the classical, pre-Keynesian crisis of liquidity that occured, very clearly indicated by the yield inversion. The measure is to cause capital formation for small businesses, correcting the effect of the inversion (to leverage capital into speculative bubbles instead of economic growth which expands the money supply and causes the weak dollar).

The weak-dollar-with-a low-interest-rate "phenomenon" (an inversion) is where analysts have been plunged into a virtual vortex of competing phenomenologies. The usual analytics do not make sense in this virtual world of conflicted tendencies...a source of uncertainty if there ever was one.

While this virtual world of analytical ambiguity creates a world of ideas in which anybody's guesse is as good as another's (giving the economy the apparent legitimacy of an undirected, free-market-like ontology), correlations and causal factors are still identifiable, and the truth is still veridically predictable and verifiable. (Oil down today despite draw in inventories, for example. What sense does that make? The inversion does not make sense but it indicates the truth about how the allowed consolidation of capital distorts market fundamentals, clearly indicating the truth of the organizational mode--enabling an illegtimate command and control--with highly predictable effects.)

While encouraging the formation of capital for small business enterprise toward job creation, the capital gains tax cut encourages speculative demand--a bonanza, a gamma-risk coup, for entities that fit the "too big to fail" model.

Capital will be leveraged into small entities and releveraged by these. Jobs will suffer. The declining rate of profit will continue to be financed by support of the unemployment/deflationary trend, which will keep interest rates low. The result will be, and is fully organized, to support the value of capital with minimal gamma risk (the uncertainty of government intervention in the marketplace--the goal, the telos).

The yield inversion is being slowly reversed to look more "normal," and indicates a slow recovery. The building blocks will appear to be reorganized to cause the benefits of pluralizing the maketplace (the change we really need), reversing the trend of consolidation. The stakes will be, nevertheless, conserved with a double-dip recession well indicated by the ontology of measures to reorganize for managing the systemic risk.

Support for the dollar will continue to be by means of regressive, and deflationary, tax measures. Support for a tax on all capital-gains transactions is highly regressive, diminishing the value of capital formed in the hands of small enterprise, advantaging firms "too big to fail" while giving the impression of generally progressing the code to reverse the trend that tends to invert the yield curve.

The Hamiltonian model gets full support, and nothing really changes with a very high degree of predictability. The gamma risk is minimized, and indicated, by an ontology of the organizational type.