The Drunkard’s Walk on Raising the Federal Debt Ceiling/or Not

The Republican political use of the federal debt ceiling as a way to lever more concentration of wealth for the rich-the top 1% of U.S. earners take 25% of the national income now presents interesting laboratory experimental conditions in the real world for economic theorists. Pistis is the Greek word for faith or trust used in Paul’s epistles to express the reciprocal relationship of man to God. Full faith and trust in God, and his grace has brought the nation before to advance through challenging times. The Tea Party seems to lack that trust in the nation’s relations to God and taxation of the rich fairly. God historically has tended to look with disfavor upon ruling elites that oppress the poor.

Balancing the federal budget with a balanced budget amendment to hog tie future war spending such as G.W. Bush prosecuted may be a desirable idea, yet not perhaps a good one. It would also allow quants to have another technical point to lever money to special interests. One should pass an amendment to require balanced congressperson judgment on the national economy-the public is fairly disgusted with them as it is and might vote to ratify that quicker.

Reasonable people know the right way to pay off the Federal debt is to raise taxes on the rich and pay down the debt with it directly, thereby reducing the cost of paying interest on the federal debt (3/4 trillion annually as it is). Obviously spending should be reduced as well in a reasonable way. Yet increasing federal efficiency of existing spending would be a good idea too- there are limitless ways to go about that anytime.

I am just learning about historical developments of investor analytical tools to predict market trends on particular stock and bond values. The August 17, 1998 Russian default on debt set of a cascade of investment instrument runs abroad including LTCM, hedge funds, derivatives, CDO’s and other abstract market price value manipulations placing volatility themselves into the stocks and bond market. Exploiting a variety of mathematical models of market behavior to guide computer directed mass purchase strategies than can go wrong makes a national economy top-heavy in a ship loading metaphor.

It seems that Mayor Bloomberg sometime after being a Solomon Brothers trader developed a way to wire the world trading system making lots of money in the process. Creating an international stock pool that mathematical claves can exploit is something like making a predator class victimizing capitalism-fundamentally they don’t produce anything material at all and have no rational function except for extracting profit for themselves.

Of course humanity has all sorts of cultural inefficiencies reducing its health concurrent with the ecospheric decay. Cultural well being and ecospheric health is actually far more important than the existentialist idiot savant business approach to making the national economic prospects good.

NPR ran an excellent story (a rarity) on patent trolls and Intellectual Ventures that highlighted some of the problems inventors have with the patent process of the United States. I have written that patents should be non-renewable and exclusive for a shorter period of time with patent holders getting a small percent of profits by other users of the idea for the remainder of their lifetimes. Perhaps three years of exclusive use by the inventor of a patented idea would encourage development and roll back the hegemony of capital patent trolls intimidating inventors. The market quants and the deregulated corporation of what should be a far more fundamental market function might be rectified with a limit upon the number of corporations anyone might invest in annually to just three.
Investors ought to invest in a business in order to develop it rather than exploit owning its stocks for a few seconds or hours, days or weeks to take advantage of short or long selling opportunities and changes in the value of a business stock as an abstract item in-itself.

It will be interesting to view the hedge fund and other vast investment quant player positions on the present drunkard’s walk of Speaker Boehner in the debt ceiling negotiations to August 2nd. The random course-50-50 odds of raising the federal debt ceiling perhaps may be the object of vast short selling of the dollar and long Yuan buying along with other currencies. It is rather remarkable that the fate of many real U.S. businesses will be influenced adversely and in some instances positively as a consequence of the opportunity to exploit the volatility of primary and secondary rounds of EMH/Mandelbrot value eccentricities based on the Tea Party/Boehner Drunkard’s walk of Random course from the lamp post on the street formula…what way will the congress go?

http://en.wikipedia.org/wiki/Random_walk

From my own experience of being lost in the winter woods of Alaska a few times I would liketo make my own economic contribution to random event outcome theory; they aren’t really entirely random. The subconscious learns, or the conscious mind makes similar decisions on the same challenges to what might seem new situations. The market will tend to respond in previously learned ways to similar challenges.

Lost in that winter woods walking a few miles through snow up hillsides and thick brush and downed trees, boulders and minimal perspective maintaining a proper, accurate sense of direction and line of travel was tough. After much struggling and tiresome going I found myself approaching footprints a couple of time that turned out to be my own-left weeks before.
Even when one does not consciously know the way in walking through a complex forest the traveler may choose nearly the same course through the woods building up through a number of complex branch/decision of direction locations. I expect that a concatenated Wall Street behavior may reflect some of that trend toward using its best judgment on outcome. It is a two-dimensional way of viewing a three-dimensional market in a four-dimensional economy.

Louis Bachelier’s 1900 study ‘The Theory of Speculation’ began a statistical, quantitative approach to market analysis. Values of corporations were units that might be plugged in later to anticipate rise and fall of value. Viewed that way there was a fundamental 50-50 chance that the market and/or any individual business would rise or fall in value. The Bell curve represented the distribution of price changes with radical changes feathering out at the distal edges. A number of theoretical upgrades and algorithms were developed to guide large scale capital players gambling on the market to beat the odds. Needless to say those investment gambling houses added nothing to develop the real U.S. economy.

No they did not increase corporate efficiency like wolves eliminating the weak prey of a herd of caribou or like lions taking down sickly or young wildebeests. Maybe they were like computer programming hyena tearing the meat of the market or high tech mechanized whalers plundering flesh and blood defenseless victims. The new quant-mathematician predators of real corporations through Wall Street reinforced a developing existential business ethic of survival and prosperity of the most ruthless and uncaring of the wealth of the nation. That personal egotism as a Party ethic is the driving Republican Party momentum in the Federal budget debate today evidently.