Small investors need to recognize the differences between today's economics and the past. Identifying false indicators is key to successful investing and preservation of net worth.
The economy undergoes innovation to maintain control over the determinants (the indicators) of value and the distribution of the value. The innovation is largely driven by gamma risk--public sector intervention that affects value and its distribution (see the article, "Assessing the Value," and "Indications of Recovery" at griffithlighton.blogspot.com).
Gamma risk innovation occurs mainly to avoid and recapture payment of the retributive value (the distribution of capital that relieves liquidity crisis and reverses a deflationary trend). For example, the dip in the price of crude oil, oversold to nearly $30/bl signaled a recovery. The recent spike in the price, overbought over $50/bl reverses the trend.
The causal relationship between the price of the energy benchmark and the directional trend of the economy is quite clear. In spite of political measures to infuse liquidity to cause a sustained distribution that will stop and reverse the deflationary trend, the price of crude is being used to effect (command) the trend posteriori. The gamma risk is being effectively managed by the private sector.
As the retributive value is politically infused, energy prices increase, consolidating the infusion and reversing the trend. The portion of the capital infusion that does trickle down inches the economy toward recovery with a highly measured pace determined by the private sector.
The political element of the political economy can claim being in control to satisfy the demand for public action while, at the same time, the private sector commands the pace of recovery. The gamma risk has then been successfully managed and the distribution of value (the retributive value) legitimately conserved both publicly and privately. It is an ingenius application of the Hamiltonian model of power and political economy that maintains a strict class distinction as the result of the naturally endowed freedom of each individual to equally pursue life, liberty, and happiness without intervention of the sovereign (government).
Equal pursuit does not ensure equal results, thus the need to manage the retributive value and the gamma risk to the reward.
Self-determination of "The People" (the legal sovereign) obtains by a long and complex process of illusion in which both wealth and power are consolidated and conserved with the force and legitimacy of public authority.
The Hamiltonian model survives by innovative means. The main threat to its success is a progressive tax code that will not allow the capital infused to pluralize the economy to be consolidated and the elitist model conserved. Changing the model is not mere normative sentiment, but a descriptive analysis that accouchers the practical understanding of trend indicators and predictive utility.
Identifying what the difference is, the innovation, that gives meaning to the old adage, "past performance is no indication of future performance," and why economic data and trends are too often reported as "unexpected" by analysts, allows the small investor to manage the risk with the certainty of current means to ends that must predictably conform to old legitimacies (normative legal parameters).
Buying an oil futures contract is certainly not illegal, but if capital is allowed to consolidate and massively move into futures contracts, the effect determines the direction of the economy. The cause-effect relationship lacks the normative pluralistic legitimacy of free market economics. Technically correcting for it (the gamma risk) is where the innovation occurs and the predictive utility of the difference obtains.
Notice that the recent rise in the price of crude correlates with the "unexpected" trend back to deflation. It is a causal relationship that will keep the economy in a stagnant state (see the previous article, "Crude Indicator" at griffithlighton.blogspot.com).
Until there is a more progressive tax code in place, rising energy prices will falsely indicate a definitive SAR recovery point as long as it is a speculative means of directing it by reversing the trend.
A more progressive code will make pluralism more profitable. Energy prices will then rise on the health and wealth at the fundament (on demand and not command). The recovery phase will otherwise be weak and stagflationary with a strong deflationary tendency that will appear unexpectedly only by those that do not know the difference.
The precipitous drop in the price of crude late last year signaled the beginning of the recovery phase of the current business cycle. Recovery will be expressed with a positive, long and linear slope when the noise (the deflationary tendency: the short-term effect of the recovery indicator) is regressed from the oscillation.
At this point, falling energy prices is a means of controlling the depth and breadth of the deflationary trend and the amount of retributive value accrued, manageably spreading the gamma risk on that value over time. Each peak above or below $50/bl is a short term accumulation and distribution within a stagflationary macro model.
The cycle of boom and bust is innovated into more frequent, short-term events favorable for arbitrage and leverage finance that cultivates a take-the-money-and-run mentality. A more progressive tax code is a sure cure with a level of certainty that can be measured by the level of resistance to it if not the carefully deliberate ignorance of it.
Saturday, May 16, 2009
Friday, May 15, 2009
Crude Indicator
With the current deflationary trend, oil is overbought above $50/bl.
Since the energy sector is a primary determinant of the current macro trend, the speculative volatility indicates that future trends will be strongly determined by this sector while pop analysts are focusing on the financial sector to indicate trends.
While the popular analysis is to focus on the probability of recovery, small investors need to keep in mind that this deflationary phase of the business cycle is a fully intended economic event that consolidates wealth and capital. It will be fully applied. Recovery will not occur until the capital is so consolidated that economic growth cannot occur without a distribution from the private sector. Public sector infusions tend to prolong the deflationary cycle with more capital to be consolidated, which will abate when the private sector supplies the liquidity with a return decided by the private sector alone.
Energy prices will indicate the intent to capitalize the recovery phase of the business cycle (a buy indicator). Financials will only serve to indicate a confirmation of the effect. Small investors will make more money and minimize the risk monitoring the causal factors rather than the effect indicators. That's why pop analytics tends to focus on the effects as leading indicators.
Rising energy prices dampens public sector infusions of capital to effect the recovery phase. Thus, the recent run up in crude prices. It allows the private sector ultimate command and control of cyclical timing. For the trageur, timing is everything, and on the macro scale, our economy is being shorted (classically arbitraged), setting it up to go long (see the article, "Shorting the Economy" at griffithlighton.blogspot.com).
Volatility of energy prices is a means of controlling the macro cycle. It also indicates the intent to keep the economy in a highly speculative, rather than a pro-growth, mode. Financials will profit and distribute the proceeds to shareholders. This "effect" will keep the economy in a stagflationary trend that analysts are currently identifying as indicating a protracted recovery phase. The long term effect will look like a long stagflationary period (high profit with low growth) on the long-term macro chart.
The buy-and-hold investor needs to realize that stagflationary economics will once again cycle to a deflation (consolidation) of accumulated value. The investor must be able to detect the macro indicators to sell and avoid once again being victim of a punctuated devaluation of net worth.
Chief among the macro indicators is energy prices..."crude" indications of classic economic modeling with highly predictable (low risk) results for those that can read the signs.
Since the energy sector is a primary determinant of the current macro trend, the speculative volatility indicates that future trends will be strongly determined by this sector while pop analysts are focusing on the financial sector to indicate trends.
While the popular analysis is to focus on the probability of recovery, small investors need to keep in mind that this deflationary phase of the business cycle is a fully intended economic event that consolidates wealth and capital. It will be fully applied. Recovery will not occur until the capital is so consolidated that economic growth cannot occur without a distribution from the private sector. Public sector infusions tend to prolong the deflationary cycle with more capital to be consolidated, which will abate when the private sector supplies the liquidity with a return decided by the private sector alone.
Energy prices will indicate the intent to capitalize the recovery phase of the business cycle (a buy indicator). Financials will only serve to indicate a confirmation of the effect. Small investors will make more money and minimize the risk monitoring the causal factors rather than the effect indicators. That's why pop analytics tends to focus on the effects as leading indicators.
Rising energy prices dampens public sector infusions of capital to effect the recovery phase. Thus, the recent run up in crude prices. It allows the private sector ultimate command and control of cyclical timing. For the trageur, timing is everything, and on the macro scale, our economy is being shorted (classically arbitraged), setting it up to go long (see the article, "Shorting the Economy" at griffithlighton.blogspot.com).
Volatility of energy prices is a means of controlling the macro cycle. It also indicates the intent to keep the economy in a highly speculative, rather than a pro-growth, mode. Financials will profit and distribute the proceeds to shareholders. This "effect" will keep the economy in a stagflationary trend that analysts are currently identifying as indicating a protracted recovery phase. The long term effect will look like a long stagflationary period (high profit with low growth) on the long-term macro chart.
The buy-and-hold investor needs to realize that stagflationary economics will once again cycle to a deflation (consolidation) of accumulated value. The investor must be able to detect the macro indicators to sell and avoid once again being victim of a punctuated devaluation of net worth.
Chief among the macro indicators is energy prices..."crude" indications of classic economic modeling with highly predictable (low risk) results for those that can read the signs.
Thursday, April 30, 2009
Indicators of Classical Economic Modeling
Independent investors need to determine the objective of current political-economic activity to protect their capital from the fully intended predations of classic economic modeling--to consolidate the capital (your savings and the value of your investments).
The intention to confirm practical application of the classical economic model well into the future is fully indicated by innovative political means that correlate directly with the innovations within the financial sector. Federal Reserve chairman, Bernanke recently refered to innovative financial instruments and practices as a healthy market efficiency that needs to be closely regulated to both prevent this deep recession from getting deeper and prevent innovation that is systemically destabilizing in the future.
Bernanke is confirming the intent to support the predatory results of allowing the capital to consolidate into innovative market mechanisms that are a function of massive money flows and momentum that CAUSE "bubbles" (extreme overbought conditions that lure investors into a false-positive with the valuation being speculative and not fundamental--like $135/bl for oil and eight years of false economic growth policies--only to burst the bubble and consolidate the monetized value). The next phase of the business cycle, neo-classically refered to as the "infusion" phase in which new capital is injected by monetary expansion (monetarism), is when the unconsolidated capital intended to restore liquidity with minimal redistribution from the consolidated value (the distribution phase of the cycle) is carefully regulated to that end and allowed to be innovatively consolidated later in the accumulation phase of the cycle. (Buy-and-hold is a good strategy at this point of the cycle when the Dow dips below 7500 which has become a false support beyond which the market is overvalued in the next six to twelve months).
Bernanke is applying the Hamiltonian model of ensuring the welfare of the rich in priority (what is too big to be allowed to fail) that CAUSES the systemic crisis, ensuring the organization and operation of the systemic risk in order to prevent it (?). Capital is allowed to consolidate, antithetical to the legitimate means of a free-market (pluralist) mechanics. Expert (elitist) adjustment of the negative externalities occurs at the end of the process since financials will innovate to avoid non-market regulation. The result is an ends-justifies-the-means legitimacy of a command economy with a false free-market legitimacy.
Causing crisis, and the systematic mechanism of predation, in the name of innovative technical management of the systemic risk by operation of careful regulatory authority (state capitalism) administered by a professional class of MBA's is a confidence game intended to conserve the consolidation of the capital and a defeat of the free-market mechanism it pledges to ensure. This is where the political economy becomes so complex, so difficult to understand and confirm, that the machinations of the elite easily achieve the consolidation of power with a false pluralistic legitimacy.
That the political economy is being reinvented (innovated) to ensure the fair and equitably legitimate outcome of a free-market economics by public regulatory authority just indicates one thing: the market is being rigged so that the small investor will always be at a systematic disadvantage with a free-market legitimacy by operation and declaration of public authority.
The practical philosophy that we must replace the free-market mechanism with the operation of a public authority is not paradoxical, it is a contradiction. It indicates a fraud, not the operation of a genuine civil service acting in the public trust, but a bureaucratic political economy of elits entrusted to conserve the distribution of wealth and power in a continuous crisis proportion that always demands its elite management and the "bonus" compensation of a sub-elite class of loyalists to administer it.
The bonus payments to retain the elite talent to administer state capitalism (to administer a non-free-market organizational technology with a free market legitimacy, or to perpetrate the fraud) buys the loyalty of what is otherwise a tendency to be free and fair, rewarding the most corrupt and morally incompetent. For the investor, this affects the bottom line. It is not just an ethological and ethical consideration. It indicates what the macro-economic model will look like despite the recent political changes, and I am sorry to say it is a faux political change that will not ensure the cure for what ails us: a regulatory authority that ensures a free and unconsolidated marketplace in priority (pluralism).
Recent political change is an innovation that conserves the consolidation of wealth and power by systematic predation and a means of managing the retributive value (the full value to be distributed to recover from, and prevent, liquidity crisis) shammed as technocratic management of systemic risk and punctuated crisis that will ensure the probability of its recurrent accumulative and distributional macro-economic value. The classical economic model of capitalism in which the measure of success is to defeat free-market mechanics as a function of organizational size is conserved with the pluralistic legitimacy neo-classically administered, and carefully measured in posteriori, rather than ensuring its legitimate means, and the probability of fair and equitable results, in priority.
Ensuring an organized deconsolidation, and the plurality of opportunistic investment that will naturally occur, is a pragmatic priority easily set to be accomplished in the first 100 days. The Democratic party executive and legislative leadership, however, do not understand the economics well enough to effect the needed change even if they could see beyond the self-satisified dictates of their ideology and the thrill of politically gaming for it despite the president's penchant for pragmatism.
The change we really need (pluralism) is highly improbable. So, load up and hold on to equities of companies that are too big to fail the liquidity crisis they are organized to cause both now and in the future with the very highest probability being very clearly indicated.
The intention to confirm practical application of the classical economic model well into the future is fully indicated by innovative political means that correlate directly with the innovations within the financial sector. Federal Reserve chairman, Bernanke recently refered to innovative financial instruments and practices as a healthy market efficiency that needs to be closely regulated to both prevent this deep recession from getting deeper and prevent innovation that is systemically destabilizing in the future.
Bernanke is confirming the intent to support the predatory results of allowing the capital to consolidate into innovative market mechanisms that are a function of massive money flows and momentum that CAUSE "bubbles" (extreme overbought conditions that lure investors into a false-positive with the valuation being speculative and not fundamental--like $135/bl for oil and eight years of false economic growth policies--only to burst the bubble and consolidate the monetized value). The next phase of the business cycle, neo-classically refered to as the "infusion" phase in which new capital is injected by monetary expansion (monetarism), is when the unconsolidated capital intended to restore liquidity with minimal redistribution from the consolidated value (the distribution phase of the cycle) is carefully regulated to that end and allowed to be innovatively consolidated later in the accumulation phase of the cycle. (Buy-and-hold is a good strategy at this point of the cycle when the Dow dips below 7500 which has become a false support beyond which the market is overvalued in the next six to twelve months).
Bernanke is applying the Hamiltonian model of ensuring the welfare of the rich in priority (what is too big to be allowed to fail) that CAUSES the systemic crisis, ensuring the organization and operation of the systemic risk in order to prevent it (?). Capital is allowed to consolidate, antithetical to the legitimate means of a free-market (pluralist) mechanics. Expert (elitist) adjustment of the negative externalities occurs at the end of the process since financials will innovate to avoid non-market regulation. The result is an ends-justifies-the-means legitimacy of a command economy with a false free-market legitimacy.
Causing crisis, and the systematic mechanism of predation, in the name of innovative technical management of the systemic risk by operation of careful regulatory authority (state capitalism) administered by a professional class of MBA's is a confidence game intended to conserve the consolidation of the capital and a defeat of the free-market mechanism it pledges to ensure. This is where the political economy becomes so complex, so difficult to understand and confirm, that the machinations of the elite easily achieve the consolidation of power with a false pluralistic legitimacy.
That the political economy is being reinvented (innovated) to ensure the fair and equitably legitimate outcome of a free-market economics by public regulatory authority just indicates one thing: the market is being rigged so that the small investor will always be at a systematic disadvantage with a free-market legitimacy by operation and declaration of public authority.
The practical philosophy that we must replace the free-market mechanism with the operation of a public authority is not paradoxical, it is a contradiction. It indicates a fraud, not the operation of a genuine civil service acting in the public trust, but a bureaucratic political economy of elits entrusted to conserve the distribution of wealth and power in a continuous crisis proportion that always demands its elite management and the "bonus" compensation of a sub-elite class of loyalists to administer it.
The bonus payments to retain the elite talent to administer state capitalism (to administer a non-free-market organizational technology with a free market legitimacy, or to perpetrate the fraud) buys the loyalty of what is otherwise a tendency to be free and fair, rewarding the most corrupt and morally incompetent. For the investor, this affects the bottom line. It is not just an ethological and ethical consideration. It indicates what the macro-economic model will look like despite the recent political changes, and I am sorry to say it is a faux political change that will not ensure the cure for what ails us: a regulatory authority that ensures a free and unconsolidated marketplace in priority (pluralism).
Recent political change is an innovation that conserves the consolidation of wealth and power by systematic predation and a means of managing the retributive value (the full value to be distributed to recover from, and prevent, liquidity crisis) shammed as technocratic management of systemic risk and punctuated crisis that will ensure the probability of its recurrent accumulative and distributional macro-economic value. The classical economic model of capitalism in which the measure of success is to defeat free-market mechanics as a function of organizational size is conserved with the pluralistic legitimacy neo-classically administered, and carefully measured in posteriori, rather than ensuring its legitimate means, and the probability of fair and equitable results, in priority.
Ensuring an organized deconsolidation, and the plurality of opportunistic investment that will naturally occur, is a pragmatic priority easily set to be accomplished in the first 100 days. The Democratic party executive and legislative leadership, however, do not understand the economics well enough to effect the needed change even if they could see beyond the self-satisified dictates of their ideology and the thrill of politically gaming for it despite the president's penchant for pragmatism.
The change we really need (pluralism) is highly improbable. So, load up and hold on to equities of companies that are too big to fail the liquidity crisis they are organized to cause both now and in the future with the very highest probability being very clearly indicated.
Saturday, April 4, 2009
The Economic Stimulus Legislation
There has not been a lot of confidence in the congressional delegation, and the president's pragmatism seems to have devolved to a partisan deference to the congressional leadership. He will find that, despite what Emanuel tells him, to be a mistake, already showing up as a waning popular support.
If we can fully embrace pragmatism over partisanship, The People will be much better served. The economic stimulus legislation is a monument to old-school Keynesian economics and monetizing the debt. Nothing new about that except the size of it.
Without a more progressive tax code, and all we have seen is a penchant for regressive tax measures, the middle class will be hammered with the debtor assignment on this colossal debt. If this is intended to be anti-recessionary legislation, we have not seen anything yet!
The speaker of the house says Democrats did not gain a majority to compromise The People's business. That would be meaningful if there was confidence in the ability to recognize what that is. It does not appear to be a confirmation of pragmatism over partisanship that avoids outmoded, Keynesian technical measures. Rather, it appears as typical tax and spend legislation that will leave the least able to pay holding the big bag of debt.
Does anyone really believe the speaker of the house and the congressional delegation is really interested in change We The People need?
What I see is an old-school stimulus program that will be highly inflationary, setting up the realignment toggle switch to the Republican Party. Demand-reduction measures (a highly regressive tax code with a rising rate of interest--Reaganomics) will be used to then control the inflationary trend. We will just be churning the problem.
So much for building a pragmatic coalition for change we need.
You don't have to be a Republican to be part of the neo-conservative coalition.
If we can fully embrace pragmatism over partisanship, The People will be much better served. The economic stimulus legislation is a monument to old-school Keynesian economics and monetizing the debt. Nothing new about that except the size of it.
Without a more progressive tax code, and all we have seen is a penchant for regressive tax measures, the middle class will be hammered with the debtor assignment on this colossal debt. If this is intended to be anti-recessionary legislation, we have not seen anything yet!
The speaker of the house says Democrats did not gain a majority to compromise The People's business. That would be meaningful if there was confidence in the ability to recognize what that is. It does not appear to be a confirmation of pragmatism over partisanship that avoids outmoded, Keynesian technical measures. Rather, it appears as typical tax and spend legislation that will leave the least able to pay holding the big bag of debt.
Does anyone really believe the speaker of the house and the congressional delegation is really interested in change We The People need?
What I see is an old-school stimulus program that will be highly inflationary, setting up the realignment toggle switch to the Republican Party. Demand-reduction measures (a highly regressive tax code with a rising rate of interest--Reaganomics) will be used to then control the inflationary trend. We will just be churning the problem.
So much for building a pragmatic coalition for change we need.
You don't have to be a Republican to be part of the neo-conservative coalition.
The Tyranny of Liberty
The conservative element, busily remaining relevant to the dialectic of cyclical economic crisis and the demand for change in a post-industrial society, argues that correcting for the detriment experienced by the vast majority of Americans in the current crisis is a tyranny of liberty that must be reversed in order to preserve the fundamental principles that our nation was founded, has made us strong and will keep us strong.
The conservative principles refered to by the conservative element as fundamental are derived from pre-industrial society when making a profit was the entrepreneurial adventure on the wild frontier. Society has since progressed into a post-industrial productive capacity that is even beyond the classical economic problem of crisis of overproduction being just a lack of demand caused by surplusing value, but sheer productive capacity.
Post-industrial capacity is far beyond the conditions that produced the American Revolution. At that time, the tyrant was the king preventing the businessperson (the bourgeoise, the middle class) the full market value of their work in the marketplace to achieve economic growth and a peaceful prosperity--the profit. The middle class fully intended to replace the king's inherited right to rule with their inherited right to rule, or the natural right to liberty that the tyrant was preventing.
Once the king's power was supplanted by the bourgeoise, a private propertied ruling "class" emerged, no longer middle class. The productive capacity of neo-classical capitalism monetizes the retributive value and allows for the extension of credit for a burgeoning middle class now demanding the retribution of value (the revolution) Keynesian innovations are designed to prevent.
The demand for equitable distribution of economic value by government authority (the sovereign people) in opposition to the old liberty to accumulate it and cause general economic crisis must be rendered a threat to the post-industrial middle class by the conservative element. Fear and loathing is the agendae--liberty is being destroyed by the tyranny of the plenary and complete, absolute power of government (the legal, constitutional sovereign).
For the conservative element, the legal sovereignty of The People is self-rule. The fate of The People is thus self-determined and, therefore, retributing the economic value accumulated can only be ex-post-facto and by bill of attainder, or by illegal, tyrannical means that are the antithesis of freedom. Choosing to retribute the value is tantamount to choosing tyranny and the Hamiltonian (elitist) form of government is thus confirmed as necessary to conserve the liberty the Revolution has confered.
If The People are inherently incapable of ruling, self-rule is naturally the function of, it is to be "attributed" to, the power elite--the "old" liberty that resulted in the accumulation of wealth and power by what was once the middle class.
This conservation of liberty renders the conservative element relevant to the current dynamic of power to redefine, realign, and finally, restructure the elements of the power structure as the value is naturally "retributed" to the middle class. The change that will occur is not to be feared and loathed. It will be a tyranny of liberty that replaces the liberty of tyranny.
The conservative principles refered to by the conservative element as fundamental are derived from pre-industrial society when making a profit was the entrepreneurial adventure on the wild frontier. Society has since progressed into a post-industrial productive capacity that is even beyond the classical economic problem of crisis of overproduction being just a lack of demand caused by surplusing value, but sheer productive capacity.
Post-industrial capacity is far beyond the conditions that produced the American Revolution. At that time, the tyrant was the king preventing the businessperson (the bourgeoise, the middle class) the full market value of their work in the marketplace to achieve economic growth and a peaceful prosperity--the profit. The middle class fully intended to replace the king's inherited right to rule with their inherited right to rule, or the natural right to liberty that the tyrant was preventing.
Once the king's power was supplanted by the bourgeoise, a private propertied ruling "class" emerged, no longer middle class. The productive capacity of neo-classical capitalism monetizes the retributive value and allows for the extension of credit for a burgeoning middle class now demanding the retribution of value (the revolution) Keynesian innovations are designed to prevent.
The demand for equitable distribution of economic value by government authority (the sovereign people) in opposition to the old liberty to accumulate it and cause general economic crisis must be rendered a threat to the post-industrial middle class by the conservative element. Fear and loathing is the agendae--liberty is being destroyed by the tyranny of the plenary and complete, absolute power of government (the legal, constitutional sovereign).
For the conservative element, the legal sovereignty of The People is self-rule. The fate of The People is thus self-determined and, therefore, retributing the economic value accumulated can only be ex-post-facto and by bill of attainder, or by illegal, tyrannical means that are the antithesis of freedom. Choosing to retribute the value is tantamount to choosing tyranny and the Hamiltonian (elitist) form of government is thus confirmed as necessary to conserve the liberty the Revolution has confered.
If The People are inherently incapable of ruling, self-rule is naturally the function of, it is to be "attributed" to, the power elite--the "old" liberty that resulted in the accumulation of wealth and power by what was once the middle class.
This conservation of liberty renders the conservative element relevant to the current dynamic of power to redefine, realign, and finally, restructure the elements of the power structure as the value is naturally "retributed" to the middle class. The change that will occur is not to be feared and loathed. It will be a tyranny of liberty that replaces the liberty of tyranny.
Resurgent Conservatism: Or How to Play Your Eight-Track Tapes with a CD Player
Proponents of conservative philosophy are frantically publishing to capitalize on the Keynesian stimulus program.
The program will be inflationary. Commodities will begin to retrace the valuations that caused the deflationary trend. The SEC and treasury will act to limit leveraging into options and futures, but $4 trillion of stimulus will be extra hard to control.
It is just a reinvention of the problem, and the leadership driving the Keynesian stimulus are setting up the resurgence of the conservative element, with the sum of all the parts being, neo-conservative.
Conservatism will not be rendered politically obsolete because the medium to play it back is being reinvented.
The program will be inflationary. Commodities will begin to retrace the valuations that caused the deflationary trend. The SEC and treasury will act to limit leveraging into options and futures, but $4 trillion of stimulus will be extra hard to control.
It is just a reinvention of the problem, and the leadership driving the Keynesian stimulus are setting up the resurgence of the conservative element, with the sum of all the parts being, neo-conservative.
Conservatism will not be rendered politically obsolete because the medium to play it back is being reinvented.
Case Study in the Efficiency of Not Being Too Big to Fail
Ford Motor Corporation, having divested itself of acquisitions has had the cash to avoid needing a government bail out.
The success is dubious considering that GMC, a company that was designed to be an automobile trust (the business model of "too big to fail"), will benefit from both the government funds (a huge line of credit no one else is likely to get) and the prospect of a structured bankruptcy settlement.
Nevertheless, becoming smaller has prevented Ford from needing government assistance, and as a general statement, a government that ensures firms do not become too big to fail first and foremost, rather than bailing them out with what the macro business model "too big to fail" refers to as the "infusion phase," is a partnership of efficiency that accrues both public and private.
Automobile manufacturers are victim of the financial sector. The leveraging that went on instead of investment in economic growth deflated our economy. Combine that with an outrageous inflation of the healthcare sector driven by gigantic pools of cash generated by a tobacco tax scheme, and we have one colossal recession with a strong deflationary trend.
Do not discount the deflationary value of rising healthcare costs by means of public finance for the economy generally, and the automobile sector in particular.
Despite the reduced number of smokers over many years, the cost of healthcare did not go down, but up. Way up! It was not the smokers that caused the high inflation, it was the tax. All the tax means to the healthcare sector is more money available for price increases (derived from a cohort that are addicted to a product with a tax hypocritically argued to be by volition on the one hand, and to be controlled as a highly addictive substance on the other). The result is an extreme accumulation of wealth that is a major cause of the depth and breadth of the current deflationary trend (and the highest level of cynicism that only the most self-satisfied and illiberal deserve).
It needs to be made perfectly clear that much of what ails us is the economics built into the healthcare sector operating with an inelastic demand curve and a huge pool of tax money to drive (push) the cost up.
The inelastic demand curve gives healthcare that too-big-to-fail quality of being indispensable, and the public financing will always push the cost up as long as it is made available without limitation. Again, that limitation should be by ensuring it is a free and unconsolidated marketplace first, then adjust for the externalities. Adjusting for the externality of having no income as the result of deflationary pressure (because of its accumulation into the hands of a few people) just increases the cost (an accumulation of income) and the deflationary pressure, like we are doing now despite controlling healthcare costs being a pillar of our plan for economic recovery and reinvestment.
With the accumulation of wealth, verifiably, comes the accumulation of power and the need, therefore, to deconsolidate it.
The divestiture that needs to occur with the healthcare sector is the tax subsidy.
The success is dubious considering that GMC, a company that was designed to be an automobile trust (the business model of "too big to fail"), will benefit from both the government funds (a huge line of credit no one else is likely to get) and the prospect of a structured bankruptcy settlement.
Nevertheless, becoming smaller has prevented Ford from needing government assistance, and as a general statement, a government that ensures firms do not become too big to fail first and foremost, rather than bailing them out with what the macro business model "too big to fail" refers to as the "infusion phase," is a partnership of efficiency that accrues both public and private.
Automobile manufacturers are victim of the financial sector. The leveraging that went on instead of investment in economic growth deflated our economy. Combine that with an outrageous inflation of the healthcare sector driven by gigantic pools of cash generated by a tobacco tax scheme, and we have one colossal recession with a strong deflationary trend.
Do not discount the deflationary value of rising healthcare costs by means of public finance for the economy generally, and the automobile sector in particular.
Despite the reduced number of smokers over many years, the cost of healthcare did not go down, but up. Way up! It was not the smokers that caused the high inflation, it was the tax. All the tax means to the healthcare sector is more money available for price increases (derived from a cohort that are addicted to a product with a tax hypocritically argued to be by volition on the one hand, and to be controlled as a highly addictive substance on the other). The result is an extreme accumulation of wealth that is a major cause of the depth and breadth of the current deflationary trend (and the highest level of cynicism that only the most self-satisfied and illiberal deserve).
It needs to be made perfectly clear that much of what ails us is the economics built into the healthcare sector operating with an inelastic demand curve and a huge pool of tax money to drive (push) the cost up.
The inelastic demand curve gives healthcare that too-big-to-fail quality of being indispensable, and the public financing will always push the cost up as long as it is made available without limitation. Again, that limitation should be by ensuring it is a free and unconsolidated marketplace first, then adjust for the externalities. Adjusting for the externality of having no income as the result of deflationary pressure (because of its accumulation into the hands of a few people) just increases the cost (an accumulation of income) and the deflationary pressure, like we are doing now despite controlling healthcare costs being a pillar of our plan for economic recovery and reinvestment.
With the accumulation of wealth, verifiably, comes the accumulation of power and the need, therefore, to deconsolidate it.
The divestiture that needs to occur with the healthcare sector is the tax subsidy.
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