Posts Tagged ‘Hedge Funds’

Gamestop: Secretary Of Treasury Stops Her Own Game

February 4, 2021

Short selling is extremely dangerous to those who sell short. On the face of it, it should not be unlawful. However it should be open to… everybody. Other financial strategies used by financiers of the Democratic Party should definitely be unlawful: high frequency trading, especially when leading the markets. Let me explain.

In Jan. 2021, short squeezes occurred on several stocks of companies which tend to be in difficulty, typically for obsolescence, including GameStop Corp. (GME) and AMC Entertainment Holdings Inc. (AMC), but also Blackberry, Bed Bath And Beyond, etc… Following efforts by individual traders on Reddit to drive up the price of the stocks. This resulted in large price spikes as short sellers were forced to cover their short positions for substantial losses. These volatile price movements were not driven by fundamentally new factors about the companies. Investors should be particularly cautious when considering trading stocks during short squeezes: highly leveraged institutional investors maybe forced to sell to raise cash from unrelated investment, putting pressure over the entire market (as happened in the last week of January. So broker-dealers reduced the buying of the highly successful mRNA company Moderna to just one share per account. With other stock, buying was outright blocked. This is often presented by the simplistics as a conspiracy of the wealthiest to get even wealthier… But that is not the case: instead to push the price of unworthy stock to the sky is simply a mechanical, let alone financial, impossibility.

Nice “short squeeze”. Gamestop price per share went from basically zero (actually $19) to around $500 dollars and back down again, all in less than three weeks. An institutional short seller investing twenty million dollars short at say $10 would have lost one billion dollars. Citadel, which funded ex-Fed chief and now Treasury Secretary Yellen with around a million dollars last year had to lend three billion dollars to another hedge fund which was collapsing in this short squeeze. A hedge fund lost 53% of its value. For comparison the famous collapse of LTCM in 1998 put 4.7 billion dollars at risk, and cause a worldwide panic and massive Fed intervention. Here the losses were larger, and the Fed no doubt intervened on a much larger scale than it did in 1998 (in 1998, the Fed only DIRECTED a number of banks, seven of them European, to intervene). That’s what I say.

In short selling, the seller opens a position by borrowing shares, usually from a broker-dealer (who is distinct from a market maker; Robinhood is such a broker-dealer; Citadel, which gave 810,000 dollars to the ex-Fed Chief and present Treasury Secretary Janet Yellen is a market maker… and also a hedge fund). The short seller tries to make money by selling, at a lower price, those shares it borrowed from the lender.

To open a short position, a trader must have a margin account, and only high worth entities can do this, considering the dangers involved, and will pay interest on the value of the borrowed shares while the position is open. As usual, the Financial Industry Regulatory Authority, Inc. (FINRA), which enforces the rules and regulations governing registered brokers and broker-dealer firms in the United States, the New York Stock Exchange (NYSE), and the Federal Reserve have set minimum values for the amount that the margin account must maintain—known as the maintenance margin.

 If an investor’s account value falls below the maintenance margin, that’s a margin call: more funds are required, or the position might be sold by the broker.

Selling short can be costly if the seller guesses wrong about the price movement. A trader who has bought stock can only lose 100% of their outlay if the stock moves to zero. However, a trader who has shorted stock can lose much more than 100% of their original investment. Having invested $10,000 in a ten dollar per share stock which shoots up in seconds to $100, one will lose one million dollars. The risk comes because there is no ceiling for a stock’s price, it can rise to infinity.

Short selling is not necessarily toxic: it can uncover crooks, or wildly exaggerated stories, such as Nikola, an electric vehicle company which claimed to have mastered technologies it does not have (after short sellers destroyed it, serious car companies discovered they were right, and ended their collaborations with Nikola). However, telling lies and conspiring to lower a stock price, as many short sellers have done, should be, and is illegal (this is the Wolf of Wall Street story, as related in the eponymous movie).

The real problem is that not everybody, but only a fraction of the top 1% can invest in hedge funds: that’s sheer inequity and inequality.

Reforming the financial market should aim at more equality and equity, and thus, to enact them, more transparency.

In particular high frequency trading, especially in connection with leading the market, should be made unlawful. However entities which became immensely wealthy and powerful so doing are the greatest donors to President Biden.
https://patriceayme.wordpress.com/2021/01/31/hedge-funds-and-financial-bandits-financed-biden-the-list/

I am advocating to open participation in hedge fund and short selling to all citizens… In the name of LEF, LIBERTY EQUALITY FRATERNITY… And that can already be done through some types of (new) ETF… However that does not mean that hedge funds that can collapse because of imprudent positions should be tolerated by the financial authorities: they should not. Nor that does it mean that I will do more short selling myself: my life is already dangerous and complicated enough…

Patrice Ayme

***

P/S: 1) Treasury Secretary Janet Yellen got all the regulators together today February 4, 2021, to look at what happened. As she got epically financed by the Gamestop market maker Citadel, which lent three billion dollars to another Hedge Fund, Malvin, she recused herself. This amply demonstrates how the elite operates, and how elitist the Biden elite is, and also how much a supposed leftist as Yellen is well fed by the financial industry… How do all the ‘progressives’ feel?

2) So let me repeat slowly: regulators and legislators should focus not on outlawing short selling, but on technical fixes such as quicker reaction when a vicious short squeeze surfaces. HOWEVER, high frequency trading and leading the market (as Renaissance technologies, a major “Democratic” donor, does, should be made unlawful, ASAP)

I have long suggested this. Here it is:

REFORMING WORLD FINANCE.

MAKING WORLD FINANCE SANE, EFFICIENT, AND DEMOCRATIC.
November 28, 2008.
***

The new US government of Barack Obama should push to reform the world financial system. Clearly the old order was not just unsatisfactory, but it outright collapsed. It has also collapsed in a highly unfair way, with some of the richest even profiting from the crash. If the old system is not reformed now, it never will be, because the need to do so will never be as strong

http://patriceayme.com/ltr_039-reform.html

Of course, Oblahblah did nothing much, as usual… Will Biden and Yellen do better? Right, Obama was ignorant, so he is excused that way. He did what he was told by his superiors, so he is inexcusable that other way. But Yellen and Biden are very old hands, they are not ignorant of the financial system… So they may well reform it along the lines I suggest (I am not ignorant either, at least in this domain, nota bene…)

Hedge Funds And Financial Bandits Financed Biden: The List

January 31, 2021

BEST PRESIDENT THUGS’ MONEY WANTED TO BUY. Read All About The High Finance Thugs Below!

Janet Yellen received $810,000 in speaking fees in 2019 and 2020 from Citadel, the hedge fund wrapped up in the Gamestop saga. Citadel has spent $240k per year lobbying Congress and the Treasury Department. The Gamestop story has thrown a light on one of the many ways in which the elite colludes. 

The collusion between immense financial wealth and politics is not new. President Jackson, a duellist with unextracted bullets in his body, the greatest general of his time, massive invader of a giant swath of what became the present USA, ethnic cleanser of civilized Native Americans on an epic scale, defeater of the British, declared on his deathbed that he was most proud of having kept the USA safe from European bankers. 

Well, they finally arrived through the backdoor… For example by secretly financing some American banks. This helped bring World War One, but was not really noticed. Next came the crash of 1929-1930, which ushered the Great Depression. The bankers had pulled the strings during the boom… but the politicians took the erroneous decisions, mostly by rising tariffs too brutally and letting everything collapse… In any case, bankers hated President Roosevelt, and he “welcomed their hatred” as he put it… FDR signed the Banking Act of 1933, repressing the financial plutocracy by separating speculative banking (investing in the financial markets), and industrial banking (investing in the real economy). However, under the reign of king Clinton I, the Banking Act of 1933 was greatly dismantled. The consequences were the collapse of an elite hedge fund, LCTM, which threatened the entire financial system. The Fed intervened, saving the system. The work of Clinton I came to light again in 2008, with a somewhat similar crash. This time the Fed , and kings Bush II and Obama I intervened and saved the wealthy, with taxpayer money, to the great applause of the ignorant Commons.      

President Joe Biden’s electoral campaign raised a known total of more than $1.6 billion that we know of so far, according to OpenSecrets (January 2021). This amount includes donations to his official campaign committee and outside groups like single-candidate super Political Action Committees and hybrid PACs. Many of those contributing to Biden belong to the Financial Plutocracy, the core of the Global Deep Plutocracy (the sort that already existed in the Sixteenth Century, when Francois I and Charles Quint, fighting each other, were financed by bankers… And the sort which financed the war against the French Republic in the Eighteenth Century, and their descendants which never seemed to have seen since something nefarious enough not to finance…)

During the Gamestop scandal, some financial institutions blocked trading to buy shares, advantaging massive hedge funds which were short. When Internet critters spoke about it, Big Tech shut down their babbling… Because it is nefarious to the elite, by suggesting that the elite conspires, which, obviously it does on a planetary, global scale. Not much of that Internet censorship differs in essence upon what is done in the Chinese dictatorship. The only difference is that in China, it’s the government which represses, whereas in the “West”, it’s the bandits themselves, without any pretense at governance, as they claim to be driven by greed… Whereas the Chinese Communist Party claims to be driven by its desire to make We the People thrive (and can justify this to a great extent!)

Where Is Big Money Funneled?

Large donations in U.S. presidential elections are directed toward super PACs (super Political Action Committees), or hybrid PACs because of the $5,600 limit on how much an individual can give to a candidate’s official campaign committee per election.

Priorities USA Action, a liberal, hybrid PAC in its fifth election cycle, has received the most money of any pro-Biden, single-candidate organization. Millions of dollars have come into the PAC from the affiliated Priorities USA nonprofit, but since it doesn’t disclose donors, it is a “dark money” group: we can’t be certain who contributed to it. Biden supporters may also give to joint fundraising committees set up for the presidential campaign and the Democratic National Committee like the Biden Victory Fund and Biden Action Fund.

Top Industries

The biggest industries represented among Biden donors are (thuggish) Finance, Securities & Investment, and Internet plotters, known as “Big Tech”.

The following were the top donors to the Biden 2020 election cycle, according to processed Federal Election Commission data.

1. Donald Sussman, Paloma Partners – $9 Million

The founder and chief investment officer of hedge fund Paloma Partners, Sussman has been a long time major donor to Democrat candidates. He gave to the Priorities USA Action and Pacronym political action committees. What is the problem with hedge funds? First only the hyper wealthy have access to them. OK, next donor, and here comes evil so deep, most people are never heard about it, as they pursue their enslaved low lives:

2. James Simons, Euclidean Capital – $7 Million

Jim Simons, a mathematician of definite renown (“Chern-Simons differential form”), co-founded the legendary, but all too real, hedge funds of Renaissance Technologies. Renaissance was founded in the 1980s by Simons and other mathematicians (who crucially contributed mathematical trickery). Simon, an award-winning mathematician and former Department of Defense code breaker, is known as the “Quant King“. 

The idea is actually extremely primitive: it consists in stealing people before they know it. As the idea is rather embarrassingly simple, pigeons do this everyday to each other, it is hidden below a mathematical mumbo-jumbo to make the naive and easily dazzled, believe in wizzardy. All what Simons and his henchmen do is to process massive trades a tiny bit faster than everybody else, while leading the market where they want it to go (by using their size and an arsenal of tricks). 

This sort of trading is thoroughly unethical that it should be unlawful, because it is a sure way to transfer more wealth to the wealthier, by giving a systematic trading advantage to the wealthiest. From there to systemic racism, there is a distinction without any difference. Thus, Simons is a revered figure, especially among mathematicians (he gives them crumbs, founding an institute… where I was hosted, sort of). Simons gave to the Priorities USA Action and Unite the Country political action committees.

3. Deborah Simon, Retired – $6.1 Million

Her father was the late Melvin Simon, the co-founder of America’s largest mall operator, Simon Property Group. This self-declared friend of man, “philanthropist”, gave to the American Bridge 21st Century and Unite the Country political action committees. Her sister Cynthia also donated $1.75 million.

4. George Marcus, Marcus & Millichap Co. – $4 Million

The billionaire real estate magnate is the founder of Marcus & Millichap Company and chairman of Essex Property Trust. Last year he co-hosted a fundraising event for Biden, and he has contributed money to the Priorities USA Action, Unite the Country and American Bridge 21st Century political action committees.

PPP On September 23, 1998, the chiefs of some of the largest investment firms of Wall Street—Bankers Trust, Bear Stearns, Chase Manhattan, Goldman Sachs, J.P. Morgan, Lehman Brothers, Merrill Lynch, Morgan Stanley Dean Witter, and Salomon Smith Barney—met on the 10th floor conference room of the Federal Reserve Bank of New York 

5. Michael Moritz, Sequoia Capital – $3.5 Million

The Welsh native is a partner at venture capital firm Sequoia Capital. He’s also an author and former tech journalist. The venture capital firms and Silicon Valley in general have been operating in concert with the US Deep State. They too use tricks which should be illegal (founding startups which are bound to get sure contracts with Big Tech down the street, in exchange for what are basically kickbacks…)

It is better than the anti-innovation attitude of the Roman imperial state… But not that much better. After all, Louis XIV financed the famous physicist Huyghens… And this sort of pseudo-intellectual pseudo-goodism may have persuaded Louis he was a good person, enabling him to engage in repression against Protestants, which brought tremendous wars which were catastrophic for civilization and Europe in general and France in particular. Moritz gave to the Pacronym and American Bridge 21st Century political action committees.

6. Kenneth Duda, Arista Networks – $3 Million

Duda is the co-founder, chief technology officer and senior vice president (software engineering) at cloud networking solutions provider Arista. He gave to the Pacronym and American Bridge 21st Century political action committees.

7. Seth Klarman, The Baupost Group – $3 Million

Billionaire investor Seth Klarman is a longtime independent and has given to the Republican Party in the past. “I’ve seen meaningful numbers of people put aside what would appear to be their short-term economic interest because they value being citizens in a democracy,” he grandly told The New York Times in August. He gave to the Pacronym, Priorities USA Action and Unite the Country political action committees.

8.Reid Hoffman, Greylock Partners – $2.5 million

Hoffman is the co-founder and former executive chairman of LinkedIn. The billionaire tech investor is currently a partner at a venture capital firm. He backed Alloy, a data exchange platform for the Democratic party which will begin to wind down its operations next year. He gave to the American Bridge 21st Century and Unite the Country political action committees.

9.Stephen Mandel, Lone Pine Capital – $2.5 million

Mandel founded hedge fund Lone Pine, which has an excellent long-term track record. He was among the top 10 highest paid hedge fund managers in 2019, with an income close to $1 billion. He gave to the American Bridge 21st Century political action committee.

10. Phillip Ragon, Intersystems Corporation – $2.5 Million

Also known as “Terry,”Ragon is the founder and CEO of private healthcare software company Intersystems. He and his wife, Susan, have signed The Giving Pledge, a trick to persuade the Commons that the plutocracy will redistribute all its money to them: so no need to tax plutocrats, aka “philanthropists”. Ragon gave to the American Bridge 21st Century political action committee.

Other Biden Loving Plutocrats:

Renaissance Technologies director Henry Laufer and his wife, Marsha, together contributed $4 million to back Biden. Stewart Bainum Jr., the chairman of Choice Hotels International, gave $2 million to the Unite the Country political action committee.

Big donors from the media industry include director Steven Spielberg and his wife, Kate Capshaw, who together gave $2.5 million. Jeffrey Skoll, the first president of eBay and founder and chairman of Participant, which has produced more than 100 feature and documentary films, gave $2 million. Family Guy creator Seth Macfarlane donated $700,000 and media mogul Jeffrey Katzenberg gave $200,000. Kathryn Murdoch and James Murdoch, son of News Corporation executive chairman Rupert Murdoch, together contributed $1.6 million. That’s called hedging, in case you wonder. The demolition of Donald Trump by Fox News’ “moderator” Chris Wallace in the first presidential debate looks less of a coincidence in this light….

Is Biden hopeless for progress? Not necessarily. As he put it long ago:

Politics is a damn expensive business. I had one hell of a time trying to raise money as a candidate. I had to put a second mortgage on our house to get that campaign started, and I ended up spending over $300,000 to get elected. I believe that public financing of federal election campaigns is the only thing that will insure good candidates and save the two-party system. It is the most degrading thing in the world to go out with your hat in your hand and beg for money, but that’s what you have to do if you haven’t got your own resources.

Well, it’s not just about little Biden getting humiliated. This is about the planet. When vicious thieves become the wealthiest, most influential persons in the world, we get a world founded on vice and thievery. No way to ensure the survival of civilization, being guided by the most despicable. This is a lesson to meditate worldwide, including with the Russian and Chinese dictators.

These bandits did not steal pizza slices. They stole the future.

Patrice Ayme

WHAT’s WRONG WITH THE ECONOMY?

January 15, 2016

The strategy. The tactics. Everything. Since 2008, the central banks have created money. Why? Key actors of the economy lost too much money in 2008 to keep on functioning. Some of these actors: banks and “shadow banks”.

How did the central banks create money? Mostly by buying government debts from the large private banks. The banks thus made money. Who caused the 2008 crisis? The banks. Thus the very strategy used is Orwellian, and promotes a vicious circle. Upon closer inspection, the situation deep down inside is more of the same and even worse.

The result has been a faltering of economic growth, a creeping destitution of the 99.9% in the West, and the blossoming of colossal inequalities and corruption, worldwide:

Inequality Has Brought Down World GDP Growth. And Bringing That World GDP Growth Too Low Brings War

Inequality Has Brought Down World GDP Growth. And Bringing That World GDP Growth Too Low Brings War

True, banks are more regulated than in 2008 (but much less than before the Clinton presidency brought devastation to the regulation of finance!) However, a large, maybe the largest, part of the banking system is “Shadow Banking”. That’s not regulated. By fostering fiscal heavens and anonymous financial entities, Great Britain and the USA are actually expanding the “Dark Pools” of money which feed “Shadow Banking”.

So what have the banks done with the money generously given to them by central banks? Did they invest it somewhere fabulous? No. There has been no new technological, industrial, economic, social breakthrough which needed, and provided with, the opportunity of massive investment.

(There were some efforts towards “sustainable energy”, but those subsidies and regulations are dwarfed by those in favor of fossil fuels, which total 5.5 trillion dollars, according to the IMF; the key is fossil fuels do not require much new investment, including in research, development and education as new energy sources would.)

No new nuclear program was instituted (say replacing all old reactors with better and safer ones), no thermonuclear powers plants (although a crash program would have probably produce those already), no massive space program (comparable to Apollo in the 1960s).

Even biomedical innovation, hence investment, has petered down (research has been smothered down by marketing, regulations, and cut-throat academia producing poor research).

But, mostly, there has been no new construction program in housing and physical infrastructure. Oh, there is a massive need: the dearth of housing is why real estate is getting out of reach of the middle class, in the top cities, worldwide. (Moreover one can now make positive energy buildings, which produce energy.)

And don’t forget public education has been let go to waste, in the leading countries (with few exceptions: Switzerland, Canada…) It is as if the leadership in the West was afraid that We The People would get knowledgeable and smart.

So where did the money the banks were given by the central banks go? To hedge funds and the like. To the industry of HOT MONEY. One day they buy this, the following week, they sell it, making money, both ways (thanks to financial derivatives). The money created by the banks (which are better regulated, as I said), at this point, once given to financial manipulators, escapes regulation (that’s the whole idea).

“Leaders” know about this. But they obviously intent to keep on getting money from shadow financiers. An example: Obama did not try to tax “carried interest” by hedge funds (although Donald Trump proposes to do so!)

The leading states (USA, UK, EU, China, Japan, etc.) believed that to provide money (“liquidity”) would relaunch the economy. Absent this, massive devaluations would help. Thus Japan devalued by 50%, undercutting South Korea and China severely.

Meanwhile the IMF has allowed these competitive devaluations, following the advice of economists such as Friedman, Krugman. However, this is tickling the tail of the worst devil. War. Economic war is the first step to all-out war, indeed. Competitive devaluations are a form of war.

And what’s the main mission of the IMF? Preventing economic war between the states. This is why the IMF has been created in 1945: “The International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.”

Thus the IMF is failing to do its main job. Notice that many American economists, from Friedman to Krugman, in their anti-European frenzy, have pleaded FOR the economic war of (European!) state against (European!) state, thanks to competitive devaluations.

Notice too that Abenomics, the devaluation of Japan, has not had much of a dent: Japan is still mired in stagnation, no doubt still afflicted by its main problem, the collapse of its population (a problem many developed countries have, especially in Europe; the USA and UK have escaped demographic collapse, mostly through massive immigration).

The world economic strategy reflects the mood of the times: the so-called “free market” is all the thinking and activity we need since Ronald Reagan. That’s in contradiction with policies followed by Colbert, Henri IV and Sully, or even emperors Diocletian and Darius. (Darius reigned over Persia 25 centuries ago.) They, like Julius Caesar, thought that the economy had to be governed by the state.

Will China try a massive devaluation, a la Abe in Japan?

Since 2008, the governments, mostly in the West, have been cowardly. The USA suffers from massive inequalities (and no, Mr. Obama, the situation is no as good as eight years ago), the European Union suffers from too much regulations (including at the level of services, where the European UNION has not been implemented), China is a dictatorship which became richer by exploiting workers relentlessly, etc.

Those competitive devaluations and lots of money sloshing around have been addictive: central banks engage in them, to give the states space, and the states, momentarily relieved, put off necessary reforms.

Inequalities suck up “liquidity” (so power and means) from average people, while putting huge amounts of money, and power, under the control of a few hands. And this money is invested in liquid investments, instead of serious things such as massive, affordable, state of the art housing and cities. Thus this money slosh around the world, like the waves of a tsunami, devastating all it touches (example: Greece, Spain, Portugal, Ireland, Iceland, etc.).

The reason the crisis goes on is the confusion between symptoms and disease. That the main actors in power have interest not to understand the nature of the crisis explains why understanding has not been fostered. Thus very few economists have seen it, let alone politicians. (From Obama down to Nancy Pelosi, Krugman, and countless “Republicans”, but also French Socialists, EC bureaucrats, USA universities professors, most actors of influence have interest to sound as intelligent as cows watching a train pass.)

How did the world come out of the slump of the 1920s to 1940s? Through reconstruction in the “30 glorious years” after 1945. Reconstruction from total war. Something to think of. One thing: many countries are on the verge of implosion. One culprit? The obvious world devaluation blatant in the collapse of the price of oil.

What is the way out of the world socio-economic crisis? The same way as it was done after 1945. Massive social, educative, health and construction programs in the West,  building a useful economy, by taxing those who create the inequalities, and grab all the economy, and opportunities to themselves.
Patrice Ayme’

Finance & Imbecility Supreme

May 9, 2014

 

Animal minds started with bacteria orienting themselves towards food sources.  What are the youngest parts of human minds? Reason, the will to find reasons for everything, including the reasons hyenas may have to act the way they do.

Speaking of hyenas, officially speaking, less than 100 individuals own more property than half the population of the entire planet combined. And the truth is way worse.

A particularly odious subset are the money changers. Here is Krugman in “Now That’s Rich” finally waking up to the nefariousness of Finance Supreme. After extensively relating Krugman’s belated coming of age, not to say wisdom, I will take off in the last few paragraphs, with the really big picture.

Hyenas Are More Social Than Hedge Fund Managers

Hyenas Are More Social Than Hedge Fund Managers

Krugman fired a broadside against hedge funds mangers, where the ugly splurge at the trough of conspiracy unchained. It is such a pleasure to have Krugman focus finally on what I have attracted his attention about, for years, that I will quote him extensively. He does not say anything I did not say in substance, say 6 years ago, but he has an incomparably louder and more respected voice:

“Institutional Investor’s latest “rich list” in its Alpha magazine, its survey of the 25 highest-paid hedge fund managers, is out — and it turns out that these guys make a lot of money. Surprise!

Yet before we dismiss the report as nothing new, let’s think about what it means that these 25 men (yes, they’re all men) made a combined $21 billion in 2013. In particular, let’s think about how their good fortune refutes several popular myths about income inequality in America.

First, modern inequality isn’t about graduates. It’s about oligarchs. Apologists for soaring inequality almost always try to disguise the gigantic incomes of the truly rich by hiding them in a crowd of the merely affluent. Instead of talking about the 1 percent or the 0.1 percent, they talk about the rising incomes of college graduates, or maybe the top 5 percent. The goal of this misdirection is to soften the picture, to make it seem as if we’re talking about ordinary white-collar professionals who get ahead through education and hard work.”

In truth, the concept of “hyena” comes short as an insult: hyenas are ecologically useful, they are part of the balance of a super-organism that evolved over the eons, part of which is simple grass, that herbivores ought not to eat too much.

Money changers, though, have no ecologically utility. Quite the opposite. The essence of humanity is learning, thus, first of all, the beautiful art of teaching. Yet, as Krugman reminds us:

“But many Americans are well-educated and work hard. For example, schoolteachers. Yet they don’t get the big bucks. Last year, those 25 hedge fund managers made more than twice as much as all the kindergarten teachers in America combined. And, no, it wasn’t always thus: The vast gulf that now exists between the upper-middle-class and the truly rich didn’t emerge until the Reagan years.

Thus by letting money changers earn much more money than teachers, the corrupt government of the USA (that includes the corrupt lawmakers assembled in a corrupt, money drenched organization called Congress), have decided that money changing is much more important than teaching. Or, in other words, that a sort of recent conspiracy of a few oligarchs mattered more than the essence of humanity, learning.

Krugman exposes in his own way what some of the money changers of the hedge type do:

“ignore the rhetoric about “job creators” and all that. Conservatives want you to believe that the big rewards in modern America go to innovators and entrepreneurs, people who build businesses and push technology forward. But that’s not what those hedge fund managers do for a living; they’re in the business of financial speculation, which John Maynard Keynes characterized as “anticipating what average opinion expects the average opinion to be.” Or since they make much of their income from fees, they’re actually in the business of convincing other people that they can anticipate average opinion about average opinion.

… hedge funds are a bad deal for everyone except their managers; they don’t deliver high enough returns to justify those huge fees, and they’re a major source of economic instability.”

Amusingly, Krugman used to want many currencies, hence many currency changers, inside Europe. And that, in turn, to prevent, precisely those instabilities, is why the European currency, the Euro, was created. But let’s let that awkward observation glide away, in a spirit of communion…

It’s such a delight to have Krugman making famous these theses long obscurely exposed on this site, that I will quote him some more:

“More broadly, we’re still living in the shadow of a crisis brought on by a runaway financial industry. Total catastrophe was avoided by bailing out banks at taxpayer expense, but we’re still nowhere close to making up for job losses in the millions and economic losses in the trillions. Given that history, do you really want to claim that America’s top earners — who are mainly either financial managers or executives at big corporations — are economic heroes?

Finally, a close look at the rich list supports the thesis made famous by Thomas Piketty in his book “Capital in the Twenty-First Century” — namely, that we’re on our way toward a society dominated by wealth, much of it inherited, rather than work.”

Bloomberg View’s Matt Levine points out, these days a lot of top money managers’ income comes not from investing other people’s money but from returns on their own accumulated wealth — that is, the reason they make so much is the fact that they’re already very rich.

And this is, if you think about, an inevitable development. Over time, extreme inequality in income leads to extreme inequality of wealth; indeed, the wealth share of America’s top 0.1 percent is back at Gilded Age levels.

There is a more general problem here. Ultimately income reflects the worth some values are perceived to have. By making finance, that is, money changing, more valuable than, roughly, anything else, we have money changing, that is, nothing, more valuable than anything else.

I sent a comment, that Krugman published right away. Here it is, slightly modified. It attracts attention on how Finance Supreme causes a global collapse, economically, morally, socially, and even genetically:

Hedge fund managers earn unfair amounts of money. Fairness is very important in primates. Confronted to injustice, even the simplest monkeys, experiments have shown, start to throw things at the heads of experimenters rather than working. So one will guess that an unfair society is not just abusive (and that’s bad for the genes themselves!), but also economically inefficient (if apes can’t throw things, maybe they drive dangerously, attack others, do drugs, and the couch potatoes).

Let me now add further dimensions to the complaint against the hyper rich. As is well known, as they can’t spend it all, they just store servants (slaves), land, anonymous companies (thus an entanglement of conspiracies worldwide, all the money in Dark Pools). Meanwhile worthy jobs (such as teachers) go starving.

Still another aspect is that, as they hold all the power, only those oligarchs are consulted to steer the world. We saw what it gives in Russia: a dictatorship harking to the most vicious tribalism, when the herd charges ahead to gore and trample whoever they have been told threaten it.

We saw what consulting that handful of oligarchs gave worldwide: a head-on rush to a catastrophe for the biosphere, unequalled in 600 million years, complete with a run-away greenhouse, acid ocean, and hypoxia.

In other words, the reign of hedge fund managers, the reign of Finance Supreme, and, more generally of oligarchy and plutocracy unchained, is the reign not just of unbounded greed, but the reign and rule of complete imbecility.

Human beings, and democracy, are smarter, when they are free to think and decide. Minds in chains have little worth, and we all end up poorer. This world needs more than 100 of the greediest, to think for us all, as if they were the greatest. In truth, we need all the minds we have.

Patrice Aymé


Rise, Republic, Plutocracy, Degeneracy, Fall And Transmutation Of Rome

Power Exponentiation By A Few Destroyed Greco-Roman Civilization. Are We Next?

SoundEagle 🦅ೋღஜஇ

Where The Eagles Fly . . . . Art Science Poetry Music & Ideas

Artificial Turf At French Bilingual School Berkeley

Artificial Turf At French Bilingual School Berkeley

Patterns of Meaning

Exploring the patterns of meaning that shape our world

Sean Carroll

in truth, only atoms and the void

West Hunter

Omnes vulnerant, ultima necat

GrrrGraphics on WordPress

www.grrrgraphics.com

Skulls in the Stars

The intersection of physics, optics, history and pulp fiction

Footnotes to Plato

because all (Western) philosophy consists of a series of footnotes to Plato

Patrice Ayme's Thoughts

Striving For Ever Better Thinking. Humanism Is Intelligence Unleashed. From Intelligence All Ways, Instincts & Values Flow, Even Happiness. History and Science Teach Us Not Just Humility, But Power, Smarts, And The Ways We Should Embrace. Naturam Primum Cognoscere Rerum

Learning from Dogs

Dogs are animals of integrity. We have much to learn from them.

ianmillerblog

Smile! You’re at the best WordPress.com site ever

Defense Issues

Military and general security

RobertLovesPi.net

Polyhedra, tessellations, and more.

How to Be a Stoic

an evolving guide to practical Stoicism for the 21st century

Donna Swarthout

Writer, Editor, Berliner

Rise, Republic, Plutocracy, Degeneracy, Fall And Transmutation Of Rome

Power Exponentiation By A Few Destroyed Greco-Roman Civilization. Are We Next?

SoundEagle 🦅ೋღஜஇ

Where The Eagles Fly . . . . Art Science Poetry Music & Ideas

Artificial Turf At French Bilingual School Berkeley

Artificial Turf At French Bilingual School Berkeley

Patterns of Meaning

Exploring the patterns of meaning that shape our world

Sean Carroll

in truth, only atoms and the void

West Hunter

Omnes vulnerant, ultima necat

GrrrGraphics on WordPress

www.grrrgraphics.com

Skulls in the Stars

The intersection of physics, optics, history and pulp fiction

Footnotes to Plato

because all (Western) philosophy consists of a series of footnotes to Plato

Patrice Ayme's Thoughts

Striving For Ever Better Thinking. Humanism Is Intelligence Unleashed. From Intelligence All Ways, Instincts & Values Flow, Even Happiness. History and Science Teach Us Not Just Humility, But Power, Smarts, And The Ways We Should Embrace. Naturam Primum Cognoscere Rerum

Learning from Dogs

Dogs are animals of integrity. We have much to learn from them.

ianmillerblog

Smile! You’re at the best WordPress.com site ever

Defense Issues

Military and general security

RobertLovesPi.net

Polyhedra, tessellations, and more.

How to Be a Stoic

an evolving guide to practical Stoicism for the 21st century

Donna Swarthout

Writer, Editor, Berliner

Rise, Republic, Plutocracy, Degeneracy, Fall And Transmutation Of Rome

Power Exponentiation By A Few Destroyed Greco-Roman Civilization. Are We Next?

SoundEagle 🦅ೋღஜஇ

Where The Eagles Fly . . . . Art Science Poetry Music & Ideas

Artificial Turf At French Bilingual School Berkeley

Artificial Turf At French Bilingual School Berkeley

Patterns of Meaning

Exploring the patterns of meaning that shape our world

Sean Carroll

in truth, only atoms and the void

West Hunter

Omnes vulnerant, ultima necat

GrrrGraphics on WordPress

www.grrrgraphics.com

Skulls in the Stars

The intersection of physics, optics, history and pulp fiction

Footnotes to Plato

because all (Western) philosophy consists of a series of footnotes to Plato

Patrice Ayme's Thoughts

Striving For Ever Better Thinking. Humanism Is Intelligence Unleashed. From Intelligence All Ways, Instincts & Values Flow, Even Happiness. History and Science Teach Us Not Just Humility, But Power, Smarts, And The Ways We Should Embrace. Naturam Primum Cognoscere Rerum

Learning from Dogs

Dogs are animals of integrity. We have much to learn from them.

ianmillerblog

Smile! You’re at the best WordPress.com site ever

Defense Issues

Military and general security

RobertLovesPi.net

Polyhedra, tessellations, and more.

How to Be a Stoic

an evolving guide to practical Stoicism for the 21st century

Donna Swarthout

Writer, Editor, Berliner