Perry Glasser

Posts Tagged ‘transparency’

CONSPIRACY THEORY

In Business, Economics, Economy, Finance, Political Economy, Politics, Wall Street on February 12, 2016 at 1:09 pm
Janet Yellen

Wizard-in-Chief

Dollar$, always eager to explain the inexplicable world of Finance, that realm in which Wall Street Wizards and Corporate Buccaneers run rampant in their never-ending struggle to own, pervert, master, and control Political Weasels, has developed a theory.

 

Why should Plain Money Talk  be any different from every other blog?

 FACTS

2015 saw:

  • unemployment drop to new lows,
  • minimum wage adjusted up,
  • auto sales rise to recent highs,
  • home sales rise to recent highs with no speculative bubble,
  • the cost of gasoline and heating oil sink to new lows,
  • the United States become an oil exporter.

The Fed is so concerned at all this good news that Janet Yellen has begun to tighte credit, a tactic employed to throttle growth and forestall inflation. Yes, the Wizard-in-Chief, Janet Yellen, is worried things are too good.

Some apologist is sure to point out that the second largest economy in the world, China, is hurting. Dollar$ will give that point of view some quick attention.

CHINA

China’s weakening economy should mean the cost of living in the US will drop, meaning you and I will have more money in our pockets to pay off debt or buy more stuff, everything from furniture to T-shirts at Wal-Mart. The US – China trade balance is heavily weighted toward China—the US imports far more goods from China than China imports from the US. If those good become less expensive, the American consumer benefits. This does NOT harm American business.  Maintaining profit margins at lower prices is easy to do. The cost of commodities the world over is dropping because of the slowdown in Chinese demand. Commodities are the stuff that comes out of the ground from tin to lumber and to gold, the stuff from which everything else is made. Everything should be getting cheaper. Every time Wizards predict that Apple will stop selling iPhones in Shanghai, Apple sells another few million units, but at a lesser price. With inexpensive gasoline, Citizens will be driving  to Disneyworld this year, and they will be able to afford the Mouse’s uptick in prices.

This phenomenon confounds the Wizards., who have learned that bad predictions are clickbait, and clicks drive revenues. No one watches CNN until the shit hits the fan and the shelter under the table grows crowded and cramped.

In the face of positive economic news, the US stock market should be soaring. Instead, the Dow-Jones average has stepped off a cliff in 2016, shedding 2,000 points in 8 weeks, more than a trillion dollars worth of value has been erased from the books.

THE CONSPIRACY

Cui bono?

For the past 30 years,  at every presidential election, commentators complained of the choice between Tweedledee and Tweedledum. But this year, it ain’t so.

weasel candidates in days of yore.

US Presidential Candidates Since 1964

 

This year, on the one hand, we have a wealthy, self-funded foul-mouthed injudicious narcissist celebrity never elected to anything anywhere who is much favored by people who have felt disenfranchised for a generation. On the other hand, we have a New York Jew now from Vermont who has never accepted a dime from Buccaneers or Wizards. An older man, his followers are youth because he demands payback from the banks and companies who were too big to fail and in the past 20 years have sucked the economy dry, indenturing students with education debt. On the third hand, we have a woman who is indebted to the old politics, and on the fourth hand, we have a clown car of interchangeable Republicans who lacking economic issues promise to disallow what your neighbors do in their bedrooms while coyly ignoring that for those promises to be fulfilled they will have to rollback several Supreme Court decisions by what by any account has been a conservative court.

Dollar$ sees the common threat. The two leading candidates are not in thrall to Wizard or Buccaneers. Should either get elected, the summer house in the Hamptons, the private jet, and the 10-room Manhattan  condo are all in jeopardy.

How to dissuade Citizens from voting for either?

Scare the piss out of them. Scare the piss out of them by manipulating stock prices downward. It’s only temporary, and it’s not as tricky as it sounds.

  • Claim good news is bad.
  • Threaten us with defunded pensions, evaporating college savings, and the elimination of savings toward the American Dream, a house.
  • Imply that unless Citizens vote the status quo and allow rapacious policies to continue, grass will grow on Main Street as economic activity collapses.

The stock markets should be soaring, but never forget that 90 percent of all trading is electronic and that computer algorithms engage in a global battle to take advantage of a quarter point’s worth of arbitrage. There is no longer any such thing as investor sentiment. As they now say in Wizard country, My algorithm can beat up your algorithm!

Fear is the most potent means of keeping the harridans out of the White House. Without the creation of synthetic Terror, Weasel Business As Usual will come to a halt.

O the horror!

 

MINIMUM WAGE LAWS: THE BIG BUCCANEER BIG LIE

In Business, Economics, Political Economy, Politics, Uncategorized on April 30, 2014 at 12:11 pm

Big Lie Propaganda embraces the idea that the more preposterous a lie and the more it is repeated, the more likely some fools will be bound to believe there is something to it.  After all, they can’t keep saying such bullshit unless it is at least partially true, right?

The current debate on minimum wage is a case study in Big Lie operation.

This Weasel is so terrified of exposure, it is disguises as a  mongoose.

This Weasel is so terrified of exposure, it is disguises as a mongoose.

THE WEASELS

Owes allegiance only to profit

Owes allegiance only to profit

Weasels, who only live to be re-elected, are running in small circles trying to figure out which way to go on the minimum wage issue. On the one hand, Buccaneers will be displeased should they vote or utter words that might displease their Masters; on the other, a LOT of people in the service economy–the same economy those Buccaneers created–get to vote.

What’s a poor Weasel to do?

Go for votes or go for the money?

Weaseldom is no easy life.

 

FACTS

As John Cassidy has eloquently shown in The New Yorker, there is no relationship between minimum wage and unemployment. None. Not a scintilla.

Nor is there any negative relationship between unemployment among teens and any rise in minimum wage: in fact, the opposite seems to be the case according to research conducted by John Spenser.

There will be lies often repeated. That just makes them Big Lies. It does not make them true.

LOGIC

Let’s suppose you won and run a Mom-and-Pop store in a strip mall, party goods, perhaps. You employ 4 local people kids at 30 hours each, a total of 120 hours each week of sales and service employees. You deploy them as you need them. Two of them are smart and honest enough that they operate the register when you do not.

You do not hire 3 full-time employees working 40 hour weeks. For one thing, if you do, the Fed is going to require you to offer benefits you cannot afford. For another, you are smart enough to know your employees come and go: they graduate from high school and go off to college or, if they are older, they want and take long vacations when the grandchildren are in town.  Anyone in the demographic middle is, as you know, looking for a 40-hour-week job, and will give notice in a heartbeat.

You wish them well, and you consider your cost of training a rolling cadre of new employees a cost of doing business.

So if the minimum wage rises, will you fire anyone?

Of course not. If you have the brains of a carrot, you are not employing anyone out of some charitable impulse. You are in business to make money, not employ people.  You run your business with as few people as possible.

Will you endure less profit to meet a new law?

No, you’ll raise prices here and there.

It won’t matter if you have competitors: they are in the same boat.

If you have huge competitors, they may be able to endure the new wage with less profit for a while longer than you, but ultimately they, too, will have to follow suit.  You cannot compete with Wal-Mart or Target on price, buy you can kick butt as a matter of service.

WHY THERE IS RESISTANCE

Buccaneers are aware that they own most Weasels, but that Weasels have to be re-elected, so they issue solemn warnings of ruin and destruction if the 16-year-olds at McDonald’s get a 25% raise. Most Buccaneers have trouble envisioning any time beyond the next quarter, anyway.

At issue is only how large a profit can be made without any raise in prices.

Do you know anyone who will pass on the fries if the price goes up a nickel? Me neither.

The Weasel-Buccaneer Dance will go forward, and wingnuts on the right will see the Death of Democracy in the debate.

Try to ignore that crap. It’s been decades since we saw a minimum raise hike.

It is time.

 

Greifeld Makes World Safe for Computers!

In Business, Economics, Economy, Finance, Personal Finance, Wall Street on June 5, 2010 at 10:18 am

Chutzpah Award Winner

In today’s Wall Street Journal, Bob Greifeld, CEO of NASDAQ and Wizard Extraordinaire, Oak Leaf Cluster, writes of the new measures to prevent another Flash Crash.

Greifled assures us, “markets work when a willing buyer and a willing seller come together to determine a fair price. Markets only work when they are continuous and performing. Any intervention must be based on the principles of transparency, fairness, objectivity and sound regulation. …  Our shared objective is to help ensure that investors and listed companies feel confident in the integrity of the prices generated by their equity markets.”

Sounds good, don’t it?

But who are these “investors?” If you ever had any doubt that the mission of the markets was to make the world safe for Buccaneers and Big Money, check out the details. Griefled writes:

  • The triggering price for each Nasdaq-listed security is the price of any execution by Nasdaq in that security within the prior 30 seconds.
  • …the Nasdaq Volatility Guard will trigger a 60-second pause in trading on Nasdaq in the affected security. During the trading pause, Nasdaq will maintain all current quotes and orders and will continue to accept quotes and orders in the security, as well as disseminate an electronic Order Imbalance Indicator every five seconds showing the number of shares and the prices of the shares on the buy and sell side as they converge to a price to open a stock. At the conclusion of the 60-second pause, the security will be re-opened with an auction.

Greifeld concludes, “While no market can guard you from uncertainty, Nasdaq is committed to protecting you from excessive volatility.”

To whom, one can only  wonder, does you refer?  Why, all of us who can respond in 30 seconds. Investors means the 66 percent of all trades done computer-to computer-at light speed.

Feel reassured? Instead of your life savings vanishing in a flash, you’ve got 30 seconds! No one to blame but yourself if you are slow to respond.

All rise!

Bob, you Rascal you! For being First Order Apologist and selling Soft Soap, Bunk, and general B.S. ,a Dollars$ Chutzpah Award to Bob Griefeld!!!

An open market means equal access, as Greifeld knows: suggesting 30 and 60 second safeguards is just contemptuous of traders–the kind who breath air.

Open Market? What a Bunch of Maroons!

In Business, Economics, Economy, Finance, Personal Finance, Wall Street on May 20, 2010 at 10:17 am

Last week’s alleged flash crash and not quite full recovery underscored how and why the markets have evolved to screw Citizens. I say “evolved,” because if anyone thought it was by design, angry mobs, led by financiers’ mothers, would be carrying pitchforks, torches, and rope toward Wall Street.

The Wizards are trying the tired rhetorical campaign to persuade us that closed means open. As my friend Bugs Bunny says, “What a bunch of maroons.”

The idea bears no scrutiny:

Open market.

In an open  market, all players play by the same rules. But 70 percent of all stock market dollar volume is now performed machine to machine. Computers never sleep, and the electronic market where those transactions take place exists only in cyberspace. The NYSE abandoned trading pits, callouts, and specialists a few years ago, overcome by the lust for profit and envy of the NASDAQ where Buccaneers and Wizards conspired to make so much coin so fast the old farts at the NYSE felt like tortoises. You think it’s an accident that NASDAQ is dominated by high tech companies?

So while you are stupidly asleep, bad news about a country, industry, or individual company radically affects the markets in Asia and Europe. As you roll out of bed and grope for coffee, it’s likely that the opening price of your holdings is markedly different from the closing price the day before. See, “closing” means “closing” only for the individual investor. Big Money never sleeps; Big Money is global.

The situation is no better if you follow the conventional wisdom. Citizens are advised by Wizards to diversify their holdings in vehicles like mutual funds where professional management, for outrageous fees, will place their money in a variety of stocks and bonds. Seems sensible.

But you may have noticed that your money locked into your 401k, 403b, and 529 cannot be moved around until the close of business.  Oh, you can put in an order to sell 1,000 shares at 2 pm to pay junior’s tuition, but you get the price at 4 pm, and tough shit if there is a flash correction at 3:30. Good-bye Harvard; Hello community college.

No such inhibitions limit the Big Money hedge funds, trading all the underlying stocks in your mutual funds all day long and far into the night. In fact, when they leverage Big Money, the fulcrum is Citizen dollars, guaranteed to be inert for a few hours.

Ask me where to put your money. Ask me. Go ahead. I dare you.

Transparency & Deregulation

In Economics, Politics, Wall Street on October 10, 2008 at 1:05 pm

Expect the same financial advisors who once sold their expertise and accepted your assets to manage to be smiling like undertakers and shaking their heads that as a buyer of their services, you should have listened.
We bought their expertise, and when markets rise, they claim to be heroes. When markets sink, howver, they point at us for our ignorance.
Let’s be less ignorant.

TRANSPARENCY

Worshippers at the Holy Open Market like to use the word transparency. Finding this word in the mouth of Weasels and Bucanneers is a lot like finding a nail in your breakfast cereal. After initial revulsion, a Citizen asks: How did this get there?
When political Weasels cannot find a reason to educate American children to basic financial concepts, they leave us at the mercy of financial Buccaneers.
Worse, when Weasels, Wizards, and Buccaneers collaborate in designing an arcane vocabulary to cloud transparency, allegedly transparent markets are in fact con games. Blowing smoke is blowing smoke, and doing so deliberately is called “fraud.”
An open market requires buyers and sellers be equal parties. Either has to be able to walk away and say, “No deal.” Captive buyers are not members of a free market economy–they are its victims. When Weasels allow:

  • old age to be a time of terror by allowing what were private pensions to become 401k investment vehicles;
  • when Buccaneers are allowed to restructure and cancel what were solemn covenants between workers and corporations to improve profits;
  • when Buccaneers rake 500 and 1,00 times the compensation of line-workers;
  • when employment is the only means to obtain subsidized health insurance;
  • when healthcare is not a universal right;
  • when 23 percent of every healthcare dollar spent in America goes to non-providers called “insurance companies”;
  • when retirement vehicles that are allegedly conservative are managed by Buccaneers and Wizards who wrap that vehicle in rhetorical gobbledygook deliberately designed to obscure the vehicle’s true nature;
    Such a market is far from open. No amount of transparency will remedy that.

DEREGULATION

Weasels who philosophically embrace deregulation do so as a rhetorcial dodge. Dollar$ No BS translation: deregulation = The strong shall no longer protect the weak.
Proponents of deregulation whine that regulation limits (gasp!) profits: they do so while standing in the ruins of the American economy, an embarrassment to their teachers at Yale, Harvard and other leadership factories where History was taught.
Regulations were created  in response to bitter lessons. While times indeed change, no one has yet repealed the Business Cycle–Boom, Panic, Depression. Regulations were designed to smooth those cycles out–never to eliminate them. Wizards and Buccanners who dismantled the regulatory system to earn an extra buck have pushed the world economy over the brink.
Wizards engaged in inventing new financial vehicles are NOT engaged in financial innovation, but in brinksmanship. Their chief tool is faster than light computing; they are in and out of highly leveraged vehicles in minutes. Markets were created for human interaction, not for a war of algorithms.
Dollar$ No BS translation financial innovation = promoting a financial vehicle that purportedly does one thing but in fact does another. Thus, Citizens may be deceived and fleeced:

  • Citizens who conservatively save in a money market are dismayed to learn that the Buccaneer in charge has used the Citizens’s money for risky investments. The buck gets broke. The Citizen can’t send his kids to college. The Buccaneer retires to the Caymans
  • Citizens naively believing that the insurance industry is sleepy and safe learn after the fact that credit swaps are insurance on debt, but are called anything but “insurance” to avoid insurance regulations. Shepherds are unaffected; the rest of us are in a worlwide conflagration that will lead to political unrest, totalitarianism, fascism, and the abnegation of human rights.
  • Buccaneers who chafe at short selling regulations induce their Weasel colleagues to change the rules, the uptick rule dating from 1932 is banished, and in 2007 what was once a reasonable tool for hedging risk becomes the naked short, a light-speed computerized lever able to grind a company’s stock into the ground.
  • Weasels garnering votes push the American Dream by forcing Freddie and Fannie to make “subprime” loans, only for Citizens to later agree that “subprime” means “uncreditworthy” and that America itself has been mortgaged. Foreign governments holding American paper start to worry about repayment. The dollar plunges in value and worlwide credit dries up as banks horde cash. Even Georgie’s War on Shepherds seem imperiled.

What’s next? Well, the Chinese curse comes to mind: May you live in interesting times.