Yielding to the Subordination

Objectivists say the little people are naturally subordinate to a small number of elites. We all yield to that “natural identity.”

The Confederacy, during the US Civil War, sent massive numbers of people to their death in support of the Objectivist concept of natural identity. While slavery was defeated, we still operate with the Objectivist notion of “objective reality,” nevertheless.

People are now subordinated to debt. The subordination is economically structured, having on-demand attributes, which means it also has a naturally political dimension. A conservative, political philosopher like Thomas Hobbes said, for example, that the on-demand attributes of the elite identity are unavoidable.

The result of the US Civil War was: the on-demand attribution winning the argument for legitimate, objective distribution of power. It is a political identity, economically derived, and like Hobbes said, it is a natural identity that yields to objective reality, self-assembled (randomly creative as it may appear), existing on demand. It has the attributes of an efficient cause.

Today, elite experts are always appealing to the efficiency attributes of economic means to ends. The beauty of the free market is that it legitimately yields to subordination on demand; and since it requires money (currency, or useful value) to actually make demands (cash being king), we have a compounding debt burden, expertly referred to as the “credit-default risk.”

For most people, making demands means running to the store — where the value is stored in the form of accepted-useful currency. Since most of the stored value is privately owned by the top 10%, everybody else, Objectivists contend, for example, is naturally subordinated to the debt to make demands in the marketplace, which critics then describe as just another form of slavery, and which the alt-right does not disagree with.

Currently (as I noted in previous articles), we are back to levels of consumer debt before the 08-09 credit-default crisis. To bank on this, yielding to the subordination, uncle Warren Buffet recently dumped his shares of GE and bought shares of SYF, which is a consumer-finance company.

A lot of household income will be “used” to pay the debt (being naturally subordinated) both public and private, which results in a declining rate of profit for firms that make things, like GE.

Remember that people like Buffet say they do not exploit the adversity of others to profit; but there it is, plain as day!

There is a lot of money to be made as consumer confidence rises with the debt proportion, making uncle Warren and company a whole lot richer, and everybody else a whole lot poorer, yielding to the subordination, existing on demand.

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Technically Bull

President Trump said today that record stock market indices indicate an improving economy.

Since the current bull run began before he ever did anything at all, the Trump rally is a laughable sentiment.

To be more technical, looking at a 6-month chart, while strength of the DJIA was falling, recently, the index did not fall below its 50-day MA, and its MACD still showed a positive trend. Despite the positive indicators, to buy in, there is an extreme price to be paid. The risk is at record levels and rising.

Saying that record equity indices indicate an improving economy is, technically, just a lot of bull.

Using his logic of identifying the efficient cause, President Trump can also claim his presidency, having preceded it in time, will have caused the sun to eclipse. Technically, the temporal sequence would be correct, but the identity of the efficient cause would be a pathological psychosis — the distorted logic characteristic of wanna-be-king, bourgeois elites who profess knowing the Objectivist truth of our “natural identity.”

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Actualizing the Real Price, to be Paid Now, in the Futures On Demand

http://www.marketwatch.com/story/this-warning-siren-is-blaring-but-thats-not-stopping-the-wall-street-hype-machine-2017-08-14?dist=markets

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The Efficient and Effective Cause

When white nationalists violently clash with counter-protestors in Virginia, for example, what is the efficient cause?

Aristotle said really knowing something is to understand why. A wood table, for example, has an effective identity, which is its useful value. Its efficient cause is the carpenter who actualizes the formation of the effect, which is the useful value of the table. Useful value is, then, the apparent good of forming the effect on demand.

What is the efficient cause of violence in the streets? Is it because we allow immigrants to take jobs? Or is it really the effect of this…

What is the good to be derived from the bad, here and now, to the vanishing point, existing on demand?

What is the obtaining natural aesthetic in all the futures now?

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The Price Signal

The Fed says it is now reviewing its inflation forecast. Being data driven, and thus reacting to whatever the open market serves up, the Fed’s statement of probability has a causal identity, nevertheless.

Price signaling is supposed to be illegal because it defeats free-and-open market economics. It is collusion to fix prices and defeat demand attributes.

Defeating demand attributes is bad because it renders an ambiguous interpretation of the outcome’s legitimacy. Rather than being measurably economic it is immeasurably political. It is then much more difficult to verify causal identities, and it is much more likely for the risk, associated with what actually triggers its expression, to be mispriced.

The financial crash of 08-09 was a function of mispricing the risk. Suddenly it became real, actualized on demand, reflected in actuarial markets (in which the obligation to pay is insured, or hedged, in the form of “swaps”). Demand for liquidation far exceeded the supply to actually pay the debt, obligated at the real price.

Collateralized Debt Obligations (CDOs) were mispriced. The debt was extended (leveraged, sometimes 100-1) far in excess of the ability to actually pay it.

CDSs and CDOs are derivative financial products that are supposed to make financial markets more efficient (according to the Ivy-League, anyway, knowing very well that capitalism overleverages the risk-value into a crisis dimension). These hedge devices were supposed to accurately signal the real price of the risk… but they didn’t… and we are still supposed to believe it is the best and the brightest way to signal the probable risk!

Making the same mistake over and over again is pathological unless, of course, it is not really a mistake.

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Laughing Stocks

It’s laughable!

Expert analyses on extreme equity valuations have been focused on everything but the major causal factor.

It’s laugh till you cry… till you realize how pathological it is.

The extreme valuation is because we are all chasing yield. Or it’s because the Fed is forcing us into high-risk assets. Or maybe it’s more because big corporates have been buying back stock… and the list goes on.

What has been driving equity value to the extreme is primarily consolidation of the wealth, but the best-and-the-brightest, highest paid professionals, are not allowed to say that. Instead, analyses focus on derivative values, tending to the political values of the masters of destiny who pay ambitious, upwardly mobile sub-elites handsome salaries and bonuses to do their will, bought and paid for, and thus subordinated, on demand, in the free marketplace.

At the extreme, being consolidated, and thus subordinated, how free is the marketplace, really?

The irony is so extreme it is pathological… and tragically comic!

(See articles by griffithlighton on the organized psychopathy.)

Look at, for example, the professed notion we have inflation so low it is not normal.

If the median income is falling, and the extreme, top-income class is rising, then prices naturally tend to deflate. This is being described as low inflation but, ironically, the normal rate of inflation still persists, deflating the median income.

Industry and markets have been rapidly consolidating, and there is a finance charge since it is paid for with borrowed money.

Financing is paid for by reducing the workforce, which is deflationary. Since the object is to force the median income down and the upper income up, inflation occurs in the form of product shaving to resist deflation.

With declining income and product shaving, you are actually working more for less, and paying more for less. The natural result is the extreme values being “accommodated” at abnormal rates.

Borrowing costs for consolidation are really low — deflated — along with the median income, being described as “the new normal.”

At this point, equity value is the laughingstock of risk-value in the political dimension. We laugh at what derives from it, on a regular basis, as a form of entertainment, with highly paid court jesters vested in the equity interest, and not a forum for actually doing something about it.

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More Extreme Indicators

When things get extreme it indicates a probability. Statisticians observe that extreme data points can indicate a probable trend, and in the case of financials, a decisional path.

Weak economic data combined with a convergent yield spread in the bond market, for example, indicates that the Fed may decide not to normalize rates. The data is still too extreme to chart a normal path.

Although equity values usually languish along summer’s path, indices are at record levels.

The narrowing spread between junk bonds and the 10-yr Treasury is said to be a bullish signal, but the bull is in the bear. The good is actually measuring how bad it really is.

There is every indication that the bulls will keep running to the store — grossing financial assets to chase up the yield that normally associates with taking the risk.

If you haven’t been selling into the strength, it’s a long way down to normal levels, yielding to less extreme measures.

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