(What’s Good about the Bad Sign)
The bad sign is good because it indicates what to do. It transacts a moral interpretation that Kant, for example, described as categorically imperative (the determinism of a self-determined moral existence that cannot be exculpated, just like the risk cannot actually be reduced).
When the yield curve goes flat, it means the wealth of the nation is too consolidated.
Who is going to pay the interest on a long bond? It can’t be “the little people” because they don’t have the money, which naturally yields to a low rate of return in the futures, referred to by classical economists as “the declining rate of profit.”
Like Sanders says, almost all new income goes to the top 1%, which means there is no way to pay the interest on the long bond except to tax the buyers, which is, well, unnatural, right? It does not make any sense…and there is your signal.
Since, however, capitalism is said to be the best practice because it naturally flows to good ideas, whatever consolidates the capital–forming the wealth of the nation–is a good idea. The natural result is then the declining rate of profit being the measure of success while at the same time being unnatural.
The risk is not a rational thing anymore. It goes gamma. The technicals don’t matter anymore. It’s a “new normal” (skewed). The risk is now political, subject to all manner of interpretation designed to ignore its objective reality in the name of being objective.
What happens next is not at all random but the measurable object of self-determination described as having a random attribution to exculpate the liability associated with it.
Random-attribution error then gets so big it cannot be avoided (ignored) and the real risk gets closer to its actual (objective) reality the more it is resisted. The TBTF proportion fails, naturally yielding to the moral imperative, which is always now, existing on demand in the form of self-determination.
It is possible to “be the change” without catastrophic failure, which has a measurable signature in the gamma-risk dimension, always authorizing the right thing to do (the real risk to be known) right now.
Do the right thing.
Vote For Bernie Sanders!