Divining the Unknown Risk

Look at how analysts are busy trying to interpret what “normalization” of Fed policy really means.

While the real risk is naturally endowed, its actual price can be wrong. Divergence of the values, the difference between the real and the actual, measures the same thing. The differential identity is not at all alien but measures the “tendency” to converge the values despite whatever “intendency” there is to derive the difference. The difference between the tendency and the intendency determines the rate of repossession, which is measured by pricing the risk in options and futures markets.

An arbitrage argument forms to “rationalize” the risk proportion, which is the difference (the “ratio”) between the real and the actual determined now, at present value, on demand. Since current value is useful value, its actual determination has a causal attribution. A rising Fed Funds rate, for example, causes the rents to go up, and the effect is declining income, for most people, depending on whether you are paying the rents or collecting them–i.e., what Randians call your “objective identity.”

Since economic performance depends on the strength (the virtue) of the middle-income identity, it is what actually determines economic strength, not the elite identity. The misattribution effectively misprices the risk, resulting in an accumulation of errors that CAUSE failure (by default) in a TBTF risk dimension. The default dimension indicates that the values are integral, not derivative, which then defines the natural identity of the objective described as reality.

Divining the risk is a function of knowing integral and derivative values, which is what Isaac Newton did, for example, when he described the laws of motion using the calculus. Divining the risk associated with Fed policy and programs is not much different.

For the market-price analyst, raising the Fed Funds rate now is ambiguous, which causes a lot of pricing ambivalence. This forms the arbitrage argument, speculating on what the real price actually is now, which can be wrong although the real price is always there.

(Like Kant said, we intuitively know what the real price is by trying to make it actualize something else, effectively defining the default dimension that expresses the integral value of “the existence” he referred to as “the categorical imperative.”)

Even though you may know what the real price is, do you possess the power to actually determine it on demand, or is the risk so consolidated that it has a random, divine-like appearance, which is described as naturally paying tribute (the rent) to the “job creators.”

For the price analyst, raising the interest rate can mean the economy is recovering against declining median income, or it means the economy is really not improving and the Fed needs to have a way to maintain the rate of repossession against the fully assumed risk of loss.

It appears that the Fed is signaling a missing value. Maybe there is a leveraged margin of risk in dark markets that is accounted for only by deriving it from the arguable ambivalence that expresses as available ambiguity. It is no accident that, under these circumstances, the risk, and the value derived from it, appears as random events, being then “known” as ontologically derived and thus having a divine-like attribution.

Newton said that science measures causes unknown. Is that what is really going on here, or is the marketplace being made by the “market makers” to have the appearance of reward distributing by the invisible hand, naturally endowed by default?

When JPMorgan pays a record fine for non-disclosure of a conflict of interest, for example, although it said it was unintended, it profited from what it knew it didn’t know it was doing because doing it is only natural, right?

Like the Objectivist says, it is not proper to just guess what the motive is for doing something. Despite whatever measurable harm it may do, the motive (the causal identity of the law of motion) is unknown, properly described as being naturally endowed (possessed in priority), then, isn’t it?


About griffithlighton

musician-composer, artist, writer, philosopher and political economist (M.A.)
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