Occupation of Space Over Time

Speed equals space over time.

Theoretically, you can gain so much speed that you can’t get ahead of yourself to determine the probable future. The future becomes distorted, uncertain, multidimensional, uncontained, unless it can be contained at high speed in well-defined batches, quantities of predetermined risk existing in a preoccupied space over time.

Fast money means occupying a lot of space in a short amount of time, and the HFT does that in batches. The HFT appears to be a small problem that occupies a limited space, but creating small problems to be solved occupies a lot of space over time.

Capital markets, instead of allowing you to occupy space, exist to invade your space by occupation. When it happens all at once–like the Great Depression–the mechanical device used to yield the result (yielding to the intention) naturally comes into question.

Having the occupation of Wall-Street executive has questionable value when it yields to the proportion of a Great Depression. The question then becomes whether the detriment is intended. Objectivists argue that the detriment is not intended but a naturally occurring value that, as Karl Popper says, we tend to give the value of intention.

If the value of the detriment has presence in smaller batches, so that instead of solving a big problem like capitalism we are always creating small problems like dealing with HFTs, then it appears that the macro-risk proportion is an imperative value that occurs whether we intend it or not.

If the present is preoccupied with an immediately emergent value, caring for the larger problem is always a future event. These “risk-transfer vehicles” (like credit-default swaps, collateralized-debt obligations, synthetic fixed-rate swaps, future-forward commodities contracts…just to name a few) shift the risk to the future where the financial sector bets on the risk-value at any particular time by means of contractual obligation. The obligation, although express, keep in mind, contains a contentious liability. While the risk shifts to the future, the liability is retained, along with a legion of lawyers, to occupy space over time, conserving the values.

The Settlement Date

Risk-transfer operates with contractual authority. Not paying your bills (the rents, a sum certain) on time (within a definite space) has legally enforceable consequences. In financial markets, the sum certain and the definition of space over time results in a legal liability that can be optioned and futured into a probable risk in the name of reducing it.

After the Great Recession, economic value has been compressed into a small economic space (the 1%). Economic value (ownership of the capital and the income it produces) is so marginal that rents are not likely to be paid on time for most of us any time soon. With reduced capacity to pay the rents, having options, determining the futures, on time, within a definite, quantifiable space, has been reduced to a batch program to contain the risk and conserve the values.

Notice that the immediate concern over HFTs forgets the larger risk at present value (which the existentialist describes as “psychological transference”). A “problem” that exists “now” is something we immediately know, but the future has unknown, probable value. A probable future is to be settled (discovered) in the form of potential (if-then) possibilities acted on (tested) with intention, which is the liability to be discovered now, looking back. (Notice how the process of discovery is preoccupied with intention, which is what it means to “yield to the intendency.”) To conserve the value of the risk it is best to practice transferring it to the future and deal with the liability of past transgressions now toward a final settlement.

(It’s no coincidence that the legal liability tends to be reactive and not proactive. If it is proactive, Objectivists like Rand Paul are screaming that it is the intention of want-to-be tyrants. While he is in some measure correct, we have to consider that most proactive measures are the result of an abusive practice–a nuisance–that yields value by causing detriment. The door then opens for want-to-be tyrants exercising power to satisfy themselves with the value of public health, safety, and welfare at the expense of liberty.

Notice the attributes of “psychological transference” and “yielding to the intendency” when it comes to the use of regulatory authority. The “public good” can be quite the nuisance, retributively valued, when it finally comes around to you, your tastes, your preferences, your way of life to be purged of the demons that make us all happy.)

If you want a scam like price scalping, or price gouging, for that matter, to have the appearance of ontological complexity (looking like a free market dynamic) then steep it in complexity so that it looks unintended. Use, for example, credit-default swaps, collateralized-debt obligations, synthetic fixed-rate swaps, future-forward commodities contracts, and/or HFTs. It will be so complex that even “the creators” don’t understand it. That lack of understanding, the principle of uncertainty, occupies a lot of space in the “now” dimension.

What classical economists said about managing the macro-risk proportion to avoid a catastrophic liability is all real interesting–academic–but not if a liability is coming to maturity now at {t-T}, timed to maturity, and counting. Adam Smith’s ethology of the probable, macro risk is nothing compared to a technical risk faced right now, approaching the settlement date in a too-big-to-fail proportion.

Since the too-big-to-fail proportion is so detrimental it can’t be allowed to happen, we settle for bonusing the malefactors and, of course, like any economist will tell you, the more you reward something the more of it you are likely to have. Not only that, the malefactors, posing as the best and the brightest–the benefactors of civil society, innovatively speed up the process to have more of it in less time. Approaching the speed of light, the amount of space occupied in the future is so distorted (warped) that it is impossible to avoid the detriment.

Speeding into the future, with no means to control the yield (having consolidated the means-to-ends to warp the efficiency), being distorted, underestimated, if not ignored, the risk goes gamma.

High-speed application of the risk is the picture of The Scream.


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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