The Stock Market - Derivatives

I have written pretty in depth for this forum about the Stock market and have addressed this issue. Of course the real investing that is done in the Stock Market "produce something", I have made that distinction clearly, but that us not what drives the stock market today, it is the derivative market and other similar instruments that have nothing to do with the Sticks that these hucksters are betting on. When you buy a Derivative of a stock, that money is not invested in company. It is a side bet on what that companies stock will be at a particular time and at that time profits and losses are taken, but the stock can be affected by the careless gambling on that stock. That is why they are called derivatives, its “value” is derived from a real stock. It is gambling pure and simple and that is what most of the trading in the market is about today. The Price of the stock can go up because people are betting that it will and that may or may not help or hurt the company none of that money goes to the company. This hurts the economy and does nothing but to transfer money from one hand to the other without making anything or producing anything. It is like betting on sports when you bet on a game odds are established so the "stock" of a team can rise or fall depending on the bet, but at the end of the day, the score on the board does not change because of the surrounding gambling. OF course in the Market that is not true because these derivatives can actually cause the rise or fall of stocks, which is bad. If you do not know or understand any of this you should not be in the market or you need to have a broker you can really trust.

Need for new View of Economics

In this video after the dressing down of Alan Greenspan, there is a video of Alan Greenspan that says what I have been saying since the Mid 80's.

Using the revised view of Economics it is easy to explain the stagflation that was dominant in the late 70's largely because economists responded to high inflation with increased interest rates causing the stagnation of an economy that was not over heated with inflation because the models did not differentiate between domestic origins of inflation and external origins of inflation. 

This error gave rise to the highly flawed "Supply Side" economics of the Reagan Administration that we still are using with the absurdity of Austerity and Focus on trying to fuel the economy by putting money in the hands of the rich rather than the consumer class, which used to exist in the US.

One of the principles of Computer Sciences is "GIGO"  which simply put is Garbage In, Garbage Out.  That is true in Economics as well.  It has been the failure of Economists to realize that their craft that was shaped in the US Centric Post War Era which saw the US emerge finally from the Great Depression due to a false economy that was based in Huge Government Spending on Wasteful spending on unneeded Defense Spending. 

The decline of the US economy and Standard of Living is based in ideas that were forged in the heat of that atypical era.  The US Economy grew and there was great income created on the backs of nations that were struggling to emerge from under the Dominance of the US Economic Empire that used the rest of the world for their back yard garden.  By the 1970's the foundations of that empire were beginning to show, and those struggling emerging nations began to fight back. 

When Bernie is talking about the decline of the US he was exactly right as Greenspan later acknowledged.  The problem is we are aware there is a problem but there is no sound economic theory that can be used to forge a progressive model for a functioning Global Economic Model. 

This is clearly evident in the current Fiasco in the Euro Zone where Germany is stubbornly clinging to old ideas of how economies work. 

The solutions are pretty clear as soon as one divests their adherence to the old aberrant theories based in an artificial environment that was highly imbalanced.

The beginning is a very good place to start.  And that beginning is to accept that economics is not a natural science, but a made up science that can be remade up at anytime by adjusting the economic models to reflect ever changing conditions.  One constant in life is change and change is the factor that a rigid fixed view must integrate to make a broadly functioning economy. 

Value can not be a constant in our models but a variable. This is a tough nut to crack. but it is reality.  Different economies develop differently due to the variations in how countries are able to interact economically due to the differences in innate Wealth and Economic needs. An agrarian nation assigns value based upon different factors than an industrialized nation and as nations move back and forth between those models of economies there must be allowances for that variation which is ever changing. 

Over time the change will begin to decline and a more predictable model of local and world economies can be developed but for now we are on a roller coaster and we can not be reactionary about the fast downturns and slow assent back up to the top.  We need to look at these changes as being part of the system and allow for a wide variation of economic conditions. 

At the core must be an awareness that money is a tool and has not real fixed value.  The real value of money is in its ability to allow any given economy to make wealth liquid for the purpose of creating and exchanging goods and services.  That is the base line.  If money is not doing that in a given economy then money has not value at all and all attempts to give it value are wasted.

So if austerity caused an economy to not be able to use their wealth to provide goods and services, austerity is a heresy that must be gotten rid of. 

If we do not create a set of rules that meets the very basics of Capitalism, Production Capitalism, then we are just whistling in the wind. 

Populist Agenda 2015

It is time that the people take back the power of Governance as Farmers and Laborers did in the late 1800's.  It is the people, the many who make an economy work not the few wealthy who seek perpetual increases in their economic status.  Economic Growth must be in actual Production not artificial financial manipulation that produces nothing and causes imbalances in economic distribution. 

This is an agenda that is bigger than any single election.  It is about the welfare of the people of the US achieved by establishing an equitable distribution of goods and services.  The goal of an economy is to provide for the health and welfare of all people through the distribution of goods and services by a production centered Capitalist system.  That system needs to be made up of private economic units that are well regulated for efficincy and fairness to both employer and employee. 

Accumulation of Wealth needs to be in balance with the widest level of the ability of all people to care for themselves.  What we have now is a system of financial capitalism existing as Corporate Socialism. Hence there is no need to disparage socialism, just the way it is used. 

The US Constitution lays out a system where the people, all people, collectively own the land and resources within the borders of this country.  The Government grants and regulated the ownership of property.  Such grants and delegations of ownership must reflect the need of all the people not just the few.   

Finding Our Way Back Home (revised July 18 2015)

We should stop asking who is electable and start asking who has any idea about how to just be able to get back in the pack of countries in the world that are moving toward a social existence that supports living a equable and positive quality of life.

On January 3, 2015, I wrote that there is no one in sight that has any chance of escaping the taint of Corporate America because the US, we the people, worships at their alter.  Well there is now such a man, Senator Bernie Sanders, and it seems he is waking up people.  It seems that people are moving away  from the  "Alter Of Worship for Corporate America" and following the call that Bernie sends,

This is a democracy and our politicians reflect the people. To change our Government we need to change ourselves. We will never move forward as long as the money changers still are allowed to do their business in Democracy's Temple

The sad reality is that when Jimmy Carter said the US was in a malaise in the late 70's he was right. He nor any of his contemporaries had any idea how to get out of that malaise, still don't, but at least he had the direction we were going exactly right.

You can not get to where you want to go unless you know where you are. The United States still has the best form of government in the world, we just need to rediscover that form. Bernie speaks as did our founders of Government made up of the people, "We the People".  A government that seeks to offer the people, all people, the opportunity to be their best. 

It seems that once again we have the opportunity to return to the course that was set for us in 1789.  I just hope that we are not beat down by the same forces that turned the Hope of 1968 into the seeds of the Reagan Revolution that derailed the United States and allowed the Corporate American Engine to take over the tracks.

Runing For An Idea, Not an Office

If one is campaigning just to get elected to some office, they will never be able to govern any differently. One has to have a campaign based in Ideas to encourage a debate and let the electorate vote for the ideas they want rather than the people they want. We are not saved by people we are saved by ideas. I can not care a flip about party's who are basically all the same and all eat at the same trough. I want to hear some one who will state ideas and then defend them with something other than consultant generated pablum. I want to support a platform that is based upon sound reasoning that then engenders a passion based in reason. It is my faith that most of the American people are smart enough to talk like adults when it comes to politics and are best served when they are talked to in that fashion.

Being Aware of Propaganda

I ran across this graphic today.  It is a real good piece of Propaganda.  Not one single fact.  Just a comment "People who work for a living are being overwhelmed by people who vote for a living. 

Let's Break it down. 

1. How are people who work for a living being overwhelmed? 

This is left vague so that anyone who is overwhelmed will relate to it.  The target is a person who feels financially over whelmed.  Today that is a vast majority of the people. 

2. How does a person make a living by voting? 

The inference is the Romney tag about the 48% who do not pay taxes.  This of course was shown to be false as a lot of people who do not pay taxes are working people who earn their money by Working.  What we are asked to believe here is that our taxes are paid to people who do not work and  they make their living by voting for people who will pass more bills to give these "moochers" more "hand outs"

Again, there are not facts or figures to show this.  This is misdirection.  You are given a problem and the point to the person that you want to divert blame. 


It is true that there are a lot of people that for people who will give them "hand outs".  Corporate hand outs such as subsidies that never die and and tax cuts where many corporations pay little or no taxes.

Also everyone who votes votes for their own self interest.  Corporate owners give massive donations to make sure they can control the agenda in Washington so they get to keep their hand outs.  

3. What is the Target of this propaganda? 

People who are overwhelmed in a time of transition where labor and technology are displacing workers and placing larger burdens on Government Assistance.  This causes strains on the economy in general, but a further complication is the refusal to provide adequate money for Job Creation to provide relief for the overwhelmed worker. 

On its face, it is a bit strange to accept that the poorest least powerful part of an economy can be the cause of an economy that is overwhelming the remnants of the Middle class.

In the mid-70's the world changed and the US began a decline.  As corporations became international they began to move jobs out of the US.  The Corporations now also had to compete for  resources and that caused inflationary pressures in the Economy.  The old economic Models did not work and the US has been in decline ever since.  Coporations began to jump ship, so to speak, and i leaving those bound in the US struggle (being overwhelmed) with living on less.

It is all there.  Anyone who wants to can do the research, but struggling families are at the mercy of time and money and seek instead someone who will tell them what is going on.  The propagandists have fill that spot all to well, feeding the people with simplistic stories to misdirect them until it too late to do anything.  Read Animal Farm by George Orwell.  He has the model down but when he wrote the book he get the future antagonist incorrectly, but the book just states the model.