Quantum Risk and Relative Value

When economists attribute the accumulation of value that is the Great Recession to "market makers" not properly pricing risk, they are referring to its relative value.

An effective zero-rate of interest indicates we are still in a recessionary trend, which empirically measures the relative price of risk going forward. Relative, future value is slow growth (unemployment) with high inflation (a rising rate of profit).

When we price-in effects that occur in in late order, and discount the probable risk to the present, however, relative, future value tends to be mispriced. The result is a quantum that is retributively valued.

Yes, we can expect slow growth, but contrary to the zero-rate, the slow growth occurs with high inflation because capital, industry, and markets are overconsolidated to achieve "efficiency" (a benefit with a detriment that is undervalued--value that retributes, in late order, in the form of crises). Consolidation is so efficient, in fact, that interest rates are effectively zero.

Too-big-to-fail, economy-of-scale banks know that the profit gained derives from the relative value of the risk. That is, they know that the profit causes detriment in late order, but at the time it is marked to the market it is considered economic gain (growth). Transfer of the detriment inflates the relative value of the equity because it does not price-in the retributive value until the catastrophe later occurs.

Economic growth for Q-1 was slower than expected and profits "surprisingly" high because the risk in transfer is undervalued and presents as high-frequency phase inversions (so-called, "unexpected" quantum risk, marked to the market in late order, which is a timing function).

The growth that did occur was not attributed to the risk-detriment, which is purposely made to appear ideopathic, non-local, and thus non-retributive, quantum value.

Quantum Self-Determination and Relative Value of the Risk

While self-determination is a philosophical concept, it has real, relative value. The value related to it is the legitimacy of the outcome.

When, for example, Paul Ryan says his religious conviction warrants his budget plan to render us all with the legitimate value of self-determination, he is saying that the outcome (status position, a la Ayn Rand) is a function of personal responsibility. The capacity to be in a position to avoid the risk is endowed by the creator (by nature).

In other words, to erroneously price the relative value of the risk is a function of status--it is endowed by natural (divine) right and demonstrated by how much power (self-determination) a person has to affect the marketplace.

(Keep in mind that Catholicism rejects the notion of "divine right" but, of course, Ryan only refers to the value conserved in historical perspective in the form of a natural right. It is also important to note that the "affective" value of the self in the marketplace is as much, if not more, psychological than a measure of tangible assets. As previously discussed, the quantum value to be retributed effectively measures how powerful, or affective, a person is, and remember, a corporation, supposedly, is a person.)

Affectation is a function of character, and participating in the marketplace is a function of personal responsibility; all of which are qualitative measures that have a philosophical construction to produce quantitative value or outcomes. If, for example, we do not conform to the tastes and preferences of the job creators in the marketplace (a quantitative, empirical, objective reality to be tested), we will not get jobs (the outcome of the empirical test, which is an objective reality freely chosen by those subordinate to the job creators). So, as Paul Ryan explains, advocating for job creation, we need to conform to the dictates (the demand for efficiency) in the marketplace, and because the outcome (the rent paid and the equitable value consumed) is self-determined it is non-retributive.

Although political-economy tends to operate within the ambiguity (the relative value) of a philosophical environment (Paul Ryan's antinomian interpretation of moral hazard, for example, being as good if not technically better than the Pope's, which rejects the notion of objective reality by determination of divine right), the empirical result (the objective reality) is technically predictable and much less ambiguous.

If the value is not relative to observation, it is not subject to interpretation and changing attribution. When the Pope says the sun revolves around the earth, and Paul Ryan says that welfare for the rich makes us all richer, empiricists are nothing but dangerous heretics who pervert absolute truth with the relative value of a changing attribution.

The differential between political-economic philosophy and science is a perennial struggle between absolute and relative value. This ongoing struggle over who has the right to determine what objective reality is (status) is conserved in historical perspective.

Following the Enlightenment and the emergence of empiricism, the ethic of thinking about the self has become a function of its verifiable determination, which identifies "the risk."

Embracing the philosophy of relative, empirical value (consumer pricing, tastes and preferences, for example) poses significant risk to those who claim to be our natural rulers. Self-determination is risky business, and to reduce the risk (which, remember, cannot be reduced, but can be accumulated) businesses consolidate the risk of self-determination and its relative value at the macro level.

Self-Retributive Value and Efficient-Markets Theory

If labor value, for example, is a cost to be diminished, then policy and programs, both public and private, tend to discount (mis-price) whether income is adequate to sustain economic growth. The technical effect is an accumulation of value that is self-retributive at the macro level.

A fully accountable and completely culpable valuation of the risk accumulates despite all attempts to technically alienate the cause from the empirically verifiable (scientifically philosophical) effect in the name of economic efficiency. So, we are experiencing a phase transition with big banks, for example, more profitable during the first two years of the Obama administration than throughout the entire Bush administration, and a current "objective" that is operantly more political than economic.

Despite Dodd-Frank and Affordable Health Care, the economic outcome (the "new normal") has not fundamentally changed from Bush to Obama. Technically, the objective is consolidation of industry and markets to allow for its authoritative management with the predictable effect being risk that does not properly mark to the market. (Remember that in a free market, risk is immediately retributive--political--and it is the objective of efficient-markets theory to technically transfer political risk into the hands--the timing--of elite management. So, you see, while the risk has self-retributive value, the value is affectively mis-attributed--it is mis-priced and timed to cause maximum detriment with minimal, political risk.) The predictable, self-retributive effect is an affective disorder: psychotically making the same mistake over and over again and referring to it as "normal."

Temporal sequence is technically critical for the philosophical constructions that describe and explain the empirical values that are attributable to the self and re-present as self-retributive value in a macro, gamma-risk dimension. While the Great Depression was for the average income nothing but blue sky, for the top one-tenth of one percent of income class the detriment that occurred later--the timing--was the opportunity to live what Romney and Ryan call "the American dream" and "the path to prosperity."

Rather than preoccupied with the dream to be acquired we are consumed with the angst of the dystopia that is required.

A utopian vision in which exacting detriment for public consumption is the relative value of success is just insane!

There is no perverse incentive or moral hazard acquired if we question the utility of success that demonstrates by means that are technically adverse and catastrophically self-retributive. Right-wing reactionaries regard the critique of success (self-interest) as class warfare (a moral hazard) because it calls into question the utility of risk systemically organized and consolidated to distribute detriment (the rent to be paid, or retributed) according to income classification.

If we want to understand why Treasury secretary Paulson abandoned the moral hazard that is supposed to be inherent to efficient-markets theory, we have to understand what measures the value.

Power is self-retributive, quantum risk relatively valued in a political (gamma-risk) dimension. Its "relative" valuation is a function of self-interest, and not knowing what affects your self-interest (fundamental attribution error) is a moral hazard. When a misattribution occurs, you have no one to blame but yourself--the value is self-retributive. You have earned the price to be paid and the price indicates not only your position to adversely possess the risk (your status), but the correction needed to reduce the rent according to value that is relative to self-interest both on a micro and macro scale.

In '08, the Treasury secretary abandoned the moral hazard that defines the legitimacy of the working model. Although the theory that supports the model extends to your self-interest and mine, both political parties continue to maintain its application despite working with a disconfirmed hypothesis, which defies the fundamental ethic, or moral imperative, of thinking.

Working with a disconfirmed hypothesis without fear of reprisal (disconfirmation) demonstrates power that retributes to the self in the form of positive law. Unnatural, or epistemically unethical as it may appear to be to those of us who do not share in the secret knowledge of objective reality, Paulson saw the light in "08, conforming to the demands (the self-retributive quantum risk) of "efficient markets."

Self-retributive value essentially measures (confirms or disconfirms) the "systemic risk" that the Treasury and the Fed acted to avoid in '08-'09 with philosophical abandon. It is value that measures the "too-big-to-fail" dimension fundamental to the power that accumulates in an economy-of-scale proportion.

To maintain the efficiency hypothesis of efficient-markets theory, and keep the value self-retributive (the measure of being powerful), analysts focus on the effect as a moral hazard rather than the cause. Not allowing for failure is the risk to be avoided rather than the "too-big" (gamma-risk) dimension. We are supposed to ignore that the moral hazard (government intervention) will not occur if firms are not too big, which means, ironically, that failure (the moral hazard) is the measure of success. It is not just a mistake, mind you, it is a deliberate, fundamental misattribution.

The system can't admit failure (firms causing mass detriment do not fail if they are too big) because it is the means by which we attain success.

Since "the bigger you are the better" is a foregone conclusion because it is the measure of success, it can't be considered a moral hazard. Fundamental attribution error occurs and the systemic risk to be avoided is psychotically considered to be normal. The extent to which the normative value diverges from objective reality is the self-retributive value that will reconcile in a systemic, catastrophic proportion, which demonstrates power.

The lack of failure is symptomatic (it technically indicates) the cause...being "too big" to fail, but out of self-interest, the moral hazard is maintained as morally imperative because it is the American dream.

Rather than being the application of a moral imperative, as Romney and Ryan explain it, self-interest is the hazard to be avoided. Instead of being the fundamental virtue that paves the path to prosperity, self-interest is the path to austerity, accumulating the retributive value that demonstrates power.

Without the accumulation and distribution of relative value, power does not demonstrate as a moral hazard. Accumulation of retributive value is what technically measures the extension of the risk--it measures how high the rent can go, which measures how powerful you are "on demand." Demand, of course, requires income, and so in order to demonstrate power in the marketplace on a macro scale (to "make markets") an accumulation of relative value (value to be retributed) is required in an insanely dystopic, self-retributive proportion.

(You see how this systematic psychopathy works: dystopia is adversely utopian and utopia is perversely dystopian. Good is bad and bad is good. Risk-off is risk-on, and on is off so that the fundamental, relative value of the risk--the price to be paid or retributed--is "surprisingly" always at an unpredictable premium. Understand, as well, that a self-retributive proportion is not exactly a self-correcting mechanism. It is more of a deliberate, cognitive process in which the value to be retributed is technically directed in the form of self-determination. In other words, it is more a deontology than an ontology of the risk proportion.

Relative value is complex, especially when reconciled with absolute values and principles. By definition it is subject to interpretation, and one person's interpretation is as good as another's, depending on how much power you have, and much of that depends on the technical tools at your disposal "on demand," or relative to market conditions.

It is not hard to see why relative value is reduced to an ethical construction. Deviation from the norm is a moral hazard not only because it conforms objective reality to the empirical power--the predictive utility--of the truth, but because it protects the delusion of power from inclusion in objective reality.

By means that test for the truth back from the future, today's power elite determine, or confirm, a retributive sense of self that is maintained out of proportion with predictive utility, which gives the appearance of having the empirical value--the power--of natural law. The relative value being attributed to self-interest--that selfishness is the only absolute, ethical value--only has the appearance of being non-retributive, and thus ethically stable, by natural right and positive law.)

To keep us in this dystopian dream of technical success we have technical measures that an MBA, for example, acquires to back test for it.

Assuring the utopia Romney and Ryan want us all to have the opportunity to participate in is the job of futures speculators. Proprietary trading divisions of big banks, including private-equity firms like Bain Capital and various other types of hedge-fund firms (which combine to form what we call "systemic risk"), back-time the value of the risk from a point chosen in the future. The reason market analysts advise not to try and time the market is because the market is retributively timed to your position.

(By identifying the probability of success--with an effective quantum value of zero--you have been warned by the professionals of the relative risk, and so it is "buyer beware." Probability of success is common knowledge, and with this exculpatory sense of non-retributive value that is self-retributive, you see, there were no criminal referrals, for example, from the Financial Crisis Inquiry Commission. Nor have there been any referrals from congressional committees that, along with Romney, have described the Great Recession as an economy-of-scale crisis proportion that occurred, and continues to occur, because firms were not allowed to fail, not because they are too big, which technically indicates the moral hazard that Dodd-Frank is supposed to prevent, caveat emptor.)

These technical indicators are based on the current position of investors now, and the outcome is a retribution of the value in that position. It is not a projection of future value. It is not a prediction, it is a technical manipulation that is philosophically maintained as self-retributive value at the micro level, which transfers into self-retributive value (caveat emptor) at the macro level, clearly observable as self-inflicted detriment that transforms into political risk that is never properly valued. Instead, it is "the dream" that we all aspire to participate in (but not without being informed of probable success--the quantum risk and relative value).

Technical extension of the affect is accomplished by cognitive means. Perceiving the detriment as an observable benefit is unreasonable. The affect becomes a cognitive disorder. Relative value of the risk (self-retribution) becomes the observable problem to be solved, not the solution.

Following a crisis only rivaled by the Great Depression (using Reagan's economic program without the marginal-tax increases needed to reduce the retributive risk), we now very clearly observe, a binomial, political process, in real time, bureaucratically engaged to manage retributive, economic value. We see how the political process is used to temporize the retributive value without risk to the accumulative, late-order effect of an expanding margin in zero-sum (the political risk) at the expense of labor value. The risk is entirely political, and because we are seeing it in real time (at a higher, monetized rate of interest that is not, for example, interrupted with world war), the value, rather than assumed in the future, is being dangerously consumed (retributed) at its present, current value.

Without general war occupying the financial space, for example, we see critical space being occupied by a prudential, populist pluralism derisively described by the elite as "class warfare." A large mass of peaceful, populist sentiment, if not redirected from welfare, warps the policy space to drive us toward recovery without catastrophic events, like world war, marking the passage of time.

Since consumer demand is the primary premise for economic policy and programs, it seems there would be more care taken to support it, keeping demand strong enough to keep us out of recession, but that is not the kind of consumer demand the financial sector focuses on.

Financials exercise control of consumer demand by demanding and consuming risk. Risk is arbitraged into consumption by posing its deprivation as added supply. As demand falls, both prices and supply rise under speculative pressure that determines the retributive value of the risk, characteristically mispricing it because the accumulated value is considered non-retributive.

As prices are speculatively demanded (with value that is too consolidated, or "too big to fail") against a rising supply (which hordes labor value in the form of consolidated wealth), demand is too weak to consume the supply (which is a sure cure for shortages, allowing the oversupply to be sold at inflated prices, which reduces demand without a declining profit). Due to welfare, however, the demand is not so weak that the effective quantum value (the affective price of the risk) is deflationary (full-blown, classic overproduction with a self-retributive declining rate of profit). Instead, the result is stagflation, like we have now.

With the quantum "risk" fixed in a long-wave distribution to manage the perception of its value (the price to be paid) with relative certainty, the prospect of achieving the American dream, for most people, is always just below the horizon.