Few hedge-fund firms that relied on technical patterns to predict behavioral trends are left standing. They have been bowled over by the fiats of consolidated risk management that can easily reverse, if not eliminate, expected coefficients, rendering what appear to be stochastic events that yield the "value" of surprise.
Obviously, the value of the surprise-premium is based solely on perception of the risk. That perception is conceived, or modeled, from experience of past events. If the events were ontologically derived, the stochastic models would predict the current value of the risk based on the probability of future events, but only "if."
A nearly trillion-dollar stimulus and next-to-nothing interest rates should be plenty counter-cyclical, for example, but...surprise!
All you have to do to fake-out the Fibonaccis is act with a high order of accumulated capital, consolidated risk, and order of intention. Without deconsolidation of the capital, and risk, the golden ratios are so much gooey glop with as much inelasticity as tapioca pudding.
Keynesian management of the risk is supposed to render a depressionary cycle obsolete. Surprise! The capital has become so consolidated that all it takes is a high order of intention to force our economy all the way back to a time when a "writ of extent" was financially fashionable.
All that has to be done to force the economy into a depression is to keep hording cash at the top, like the king could, leaving his "subjects" with nothing but the bare essentials, if that, and all the wealth, and risk, consolidated into the empirical sovereignty of the crown.
This economic gestalt is built into the perception of accumulated wealth, and the fiat distribution of risk, as a right or privilege not apparent by the sum of individual parts into a whole.
Something has value if the king commands it. Currently, the king (the gestalt of wealth and power) says employment does not have value. It is not worth spending his money on, which produces value for the king at his subject's expense. So, the sheriff is busy about, assessing the extent of the risk.
The king is so intoxicated with his power--his divine, providential right--that he does not realize what the sheriff's assessment is actually measuring. It is the gamma risk--the economic gestalt that at the time of mercantilism converged divine right with the natural rights of man, and diverged the coefficiency of power into a more pluralistic "extension" of the risk.
This process of convergence and divergence is still in procession, but with highly organized, technical means to slow its progress. The order of intent is highly sophisticated, making it appear that free society has reached the pinnacle of organizational efficiency by consolidation of its power (and the risk that comes with it).
The more latently gestalt the risk becomes, the more it accumulates until it breaks. Crisis, however, does not have to be at the pinnacle of operant conditioning, but a precognition that measures the extent of the risk with the highest order of intent.
The successful management of risk is the ability to predict and effect the behavior of others. It is a fundamental human endeavor that is defined, measured and delimited by the organized accumulation and distribution of power.
The gestalt is a delimiter of risk management, limiting problems to their appropriate solutions by delimiting the generalized concept of what the risk is. It compels a cognitive species to mirror the success accomplished by the freedom to choose, structured into a currency of value for all to see, indivisibly appreciating what is a divisibly immeasurable source of value.
Thursday, August 26, 2010
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