Deriving the Direction

Extreme data points result in extreme numbers in opposition, like the new record for an intraday drop in the DOW, for example.

The drop was less than 5% but it did break the 50-day moving average. MACD is operating at an extreme level, however, being directed by record consolidation of income, which results in record wealth to be managed.

We don’t hear much about what really derives the direction of risk-asset prices, like stocks, since it suggests the solution is less consolidation of income and wealth. Instead, the record drop is because the Fed will tighten interest rates, which is because wages and salaries are on the rise.

Since more equitable distribution of the efficient cause (income) is not the solution, but the risk to be avoided, it is a bad thing.

If record income inequality is the objective, then changing that is to be resisted. Capitalists say that rising wages and salaries is inflationary; but no, the Fed’s FOMC did not raise the rate of interest because there is “actually” a long, deflationary trend at work (real, rising income inequality) referred to as a “long-tail recovery.”

Deriving the direction of the risk can be seen in the method used to describe what the risk is, which is an attributive value, having a measurable yield.

(See articles by griffithlighton on the risk-value and the attributive yield.)


About griffithlighton

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