To reduce the angst and suffering of the business cycle, the Fed, for example, uses monetary tools. These tools are used to maintain the business cycle and adjust for the externalities.
Adjusting for the externalities is a regulatory function. In the case of the Fed, it is self-regulation, a private enterprise of privately owned member banks. When the cycle reaches attainment (i.e., assets are liquidated short of the actual liability, like what Michael Lewis describes in “The Big Short”), the Open Market Committee reacts using its monetary tools.
Operating with an open market by committee, however, isn’t exactly a mechanical ontology, as the name would suggest. The purpose of the committee is reactionary–to deliberately maintain the mechanics that models for a cyclical phenomenon capitalists refer to as cyclical risk.
Cyclical risk suggests a risk ontology, but it really isn’t. It just happens to be that the ontology has a purpose–exculpating the liability associated with deliberately doing harm to make a profit.
Doing deliberate harm to make a profit is criminal, but not if nature demands it, like when we experience bad weather and (as an act of the gods) harm is done. The committee, then, does not naturally exist to reduce the causal attributes of the harm. It reacts to adjust for the effects, which forms an “effective model” referred to as (like Ayn Rand describes it) “objective reality.”
Maintaining the “natural identity” of the force that does the harm (the force-majeure argument) is job one! It means everything.
After the big short, TBTF CEOs didn’t go to jail. No. They were handsomely compensated for a job well done! It was an act of attainment–self-regulation devoid of real, ontological, market mechanics.
So, how do you feel about that! What does your gut tell you?
(Feel The Bern!)
The Long-Short Fund (Going Long and Selling it Short)
Michael Lewis suggests that the short interest is “a bet”–meaning there is a risk ontology associated with the Big Short that DOES NOT exist! It is a work of art that imitates life, which is to suggest that relative random risk can be blamed for the harm done.
That’s a false argument! The reward derived from the harm deliberately done does not naturally reduce to a relative-random-risk argument at all. It is a blatant error of fundamental attribution (a blatant fraud!) that, unfortunately, is a work of art, posing as an imitation of real life. It’s an absurdist play in reverse!
Put to a real free-market test, the big short is a total failure for the perps (the people that go long and then “play” the interest short). They take the risk with no reward at the current (use-value) rate of interest.
Instead, the reward is a complete loss of market confidence. THEY are the ones that actually come up short (feeling the burn), and everybody is a winner going long (including “THEM”) at the current rate of interest. The risk-value, ontologically derived, yielding to the numbers, is imperative (actual instead of reactionary).
In order to do business (at the going rate of interest and repossession, effectively modeling the difference between US and THEM), “they” are induced by market forces to do the right thing (they have to care, and so they do!) or be naturally treated like the criminal element, ON DEMAND.