Equity Interest

With risk comes reward. That is conventional wisdom. A savings account currently yields .01% but, supposedly, there is no risk. There is also no equity in the interest. What equity there is, in the form of a “riskless return,” is in fact at risk in a macro dimension.

The equity interest of the average income is subject to racketeering and fraud Bank of America engages in as standard business practice and Warren Buffet supports with his dollar votes to yield a TBTF, riskless return that far exceeds .01%. The result is the “income inequality” (the inequity) pop media talks about, ineptly asking the racketeers how to solve the problem, the result being, of course, more of the problem.

The difference (the inequity, the comparative advantage), although it may occur in late order, is a zero-sum. Confiscation of property that occurred as a result of the Great Recession is now going to Buffet’s bottom line. The inefficiency is being advantaged (capitalized), so “the argument” goes, to yield the risk supposedly being avoided–divestment of property in order to invest it.

(Ironic, isn’t it, anyone who considers confiscation of property to be wrong due to foreclosure is a communist, which is to admit that the property was never owned to begin with. It was rented by extension.)

Gaining an equity interest is a false hypothesis. It is a lie…a fraud, and fraud is criminal behavior. The Republican Party is dead, and this is why; there is no equity in the interest. (When the Federal Reserve pays Bank of America/Warren Buffet interest on its reserves, what is your equity interest in the “riskless return?” Are you in-vested, or comparatively disadvantaged?)

Republicans operate with a failed hypothesis, perverting the republican form, and so this effete party relies on Ivy-League rhetoricians like Senator Ted Cruz to win “the argument” politically rather than correct the failure economically and stop capitalizing the inefficiency.

Even though savings are FDIC insured, when “systemic risk” occurs, savings are liquidated to pay rents. Discounted to probable future value, the equity is negative, and when savers realize the inexistence (the nihilism) of an equitable interest, the probability of being held liable increases. “The risk” is liable to go gamma despite every attempt to manage it in the form of “futures” to determine its present value (the value of its presence, hidden in dark markets, deriving risk from reward).

(Systemic risk is not gamma risk. SIFI’s, for example, are as much political as economic entities. The risk they apply is described as “systemically influential” in an economic dimension, but the risk attains a purely political dimension–it goes gamma.

Systemically, in the economic dimension, risk has certain value–rents are paid by default. In the political dimension, the risk is much more uncertain, gaining a command dimension that a ruling class must be absolutely sure is in its control; gerrymandering control of the House, for example, falsely yielding verification in the republican form, yielding an inefficiency that must be managed in the future.)

It is important to understand that a “riskless profit” is “arbitraged away” because it represents an inefficiency. The inefficiency presents as a price to be paid in the future. Rather than be surprised by discovery, the risk of not knowing is moved forward. It has a measurable presence now to reduce errors and stabilize (determine) the price in the future.

A profit is not riskless at all. Risk “flows” with the reward. The value is integral, and if liability is limited, the value gains inequitable interest–it becomes retributive.

We can “rationalize” disintegration of the values as an “objective reality” that demands active reintegration in the interest of stability, but F(t,T) = S(t)e^{r(T-t)} \ simply begs the question, continuously compounded. The problem is always offered as the solution, and being trapped in this risk tautology is to be trapped in the picture of “The Scream” where life imitates art.

Since we all own the future together, gaining an equity interest (a quantifiable, ownership stake), the future gains present value.

The time is always now.

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About griffithlighton

musician-composer, artist, writer, philosopher and political economist (M.A.)
This entry was posted in Political-Economy and Philosophy and tagged , , , , , . Bookmark the permalink.

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