The Riskless Return

There is no such thing, so the marketplace arbitrages away gains without risk. If oil is made to be in short supply, for example, although it is readily available on demand, the quantity of price returns without risk to anyone who owns a contract for forward delivery. President Carter, however, had a “windfall profits tax” in the 1970s, which added risk to the reward, but remember, risk is a constant value.

Risk is the probable existence that gives meaning to life, adding measure, resisting nothing, always becoming something.

(Keep in mind, adding measure does not add or delete risk but over time may make it more predictable. Being more predictable does not reduce the risk. It makes it more avoidable–less probable now–but its full value always exists in all the futures, which is why you are avoiding it now.)

Risk can be accumulated and distributed, not added and subtracted. Positive or negative on the time line, its probable value is unavoidable.

(There is a big psychological component to the determination of risk. Look in any standard, psychology textbook and there is a lot of space on judging what the risk is and how to manage it.

What we attribute to being “risky” is a perceptual problem to be solved. There is the mathematical determination and then there is the “gut-feeling” attribution, for example, that may in fact be more luck than sense.

In any case, what accounts for most of the arbitrage is to think that risk can be reduced. This perceptual “problem” accounts for error–a discrepancy in the values over time–that always shows up as predictable patterns of rising and falling expectations. These patterns are the “stuff” that pre-tend the probable risk, from people that “play” the stock market to intelligence officers designing a risk-phenomenology in the field.)

The Future is Always Now

Let’s say you avoided risk to yield return. No, the risk is still there–probable (existing in all the futures now), being determined on demand. If you want to verify that hypothesis, just do whatever determines yielding the risk against the reward. It is self-determined, like a math problem, and we learn how to solve the problem (existing measure) over time. The value is universally constant (categorically imperative); the risk of loss (the sum of the squares that addjects reality depending on–determined by–the circumstances) is fully assumed in priority. The sum of the squares is always now, always was, and always will be. Its value is fully reduced (like Kant tells us) and exists on demand.

Sometimes we can postulate the truth without having all the evidence, like when Kant said that the fuzzy objects seen in telescopes are “island universes.” It wasn’t knowledge (it was an arbitrage–it could be right or wrong) till it verified, but it was right, nevertheless, existing in all the futures. (Kant could have quantified the value into the future by making a “bet” like hedgees do with risk-value, but he, or someone else, would have to “make a market” for that.) Even if it was wrong, its truth value (being wrong) still exists now (past present future) as pre-existing knowledge to be discovered (pretending) on demand.

(Articles on “pretending risk” by griffithlighton can be found on the World Wide Web.)

In retail arbitrage, for example, the seller discovers the rational price on demand. The seller speculates on whether “the price is right.” Over time, the measure exists by volume (occupation of space over time).

It’s the same process of discovery (arbitraging the risk) in the macro dimension but the risk-value is more commonly divisible (i.e., it affects a lot more people all at one time in a TBTF proportion, which is why the “big risk” should always be commonly divisible, on demand, in priority, in a non-TBTF, free-market dimension). If you want to accelerate the volume (occupying more space over time) then you have to make a market for it. There’s an “ap” for that–“futures markets” where the rational price is determined (pretending) to arbitrage away the value of a riskless return by discovery on demand.


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.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.