It's Time For A Rant. Marching Morons Or The Rise Of The Bureaucrat: Quant Hedge Funds Struggle To Survive As Fundamentals Expose Their Stupidity.
Cyril Kornbluth's Marching Morons is a favorite short story of mine. The meaning behind the story seems misinterpreted by many people but the title pretty much sums up the story's characterization of elitism, herd behavior and human nature. The story was published more than a half century ago and is very hard to find in print and expensive to buy. That's unfortunate because it has so many analogies to today. I'm not sure what the copyright laws are on the book, but I just Googled it and the book appears to be available in PDF form on the net. Do your own diligence.
Let's take a similar path to Kornbluth's award-winning short story with our own very short look at a Marching Morons dynamic in the field of quantitative finance and private for-profit banking.
We live in a society where money and power have almost exclusively determined the fate of our economy for the past few decades. This dynamic has developed because of undue influence over the rules to the game of economics. Put another way, money has bought and paid for the dismantling of our society. As we have said many times, Albert Einstein didn't die a billionaire and neither did most who sought truth and reason. In other words, truth and reason are not seekers of power and control over society. These two personality types are seldom contained in the same person. Power and control are the dominion of the a personality type I would classify as the bureaucrat or in extreme cases the psychopathic or narcissistic bureaucrat. These are the same personality types who rise to the top of the communist party in China, the Soviet Union, past fascist states like Germany and the like.
bureaucrat [byoor-uh-krat] - an official who works by fixed routine without exercising intelligent judgment.
Undue influence and power over the economy by CEOs, Wall Street bankers and politicians creates a perfect storm of personalities who seek power and control over truth and reason impacting our economy. Remember, all of these positions are ones which live off of the productive assets of society. They are not makers, inventors or creators of anything. They most definitely are not the creators or inventors of society's capital stock. They don't build cars. They don't teach our children. They don't grow our food. They don't create our expressions of art. They don't fix our air conditioning systems. They don't build houses. They don't create new forms of medical treatment. They don't nurse people back to health. They don't engineer the next iPhone. They don't invent green technology. They don't build bridges. They truly rely on others for their economic success. As it pertains to the economy, they are in fact economic neofeudalists who usurp their authority and wealth from serfs; the productive assets in society. That would be us. That they have gained so much power is telling.
The dynamic created by the comingling of like-minded bureaucrats seeking the same goals of power and control is a very esoteric topic that has been missed in the creation of this crisis but we could easily classify this intertwined relationship that has destroyed our economy and democracy as the rise of the bureaucrat. Bureaucrats have a common psychological profile - they have primary intent to control the world around them. (The human mind has only one of two intents in every interaction we undertake. The intent to seek truth and the intent to control. Intent to control is associated with an unhealthy ego and is a major inhibitor to an emotional and productive self. It generally manifests itself in a dysfunctional interaction with the world around those who exhibit such destructive characteristics. It's also a major reason why most bureaucrats are horrible leaders, why most bureaucrat-led companies are unpleasant places to work and why concentrated power always results in evil. It's why we have a belligerent foreign policy and on and on.) People who exhibit this psychological profile are not the purveyors of democracy or free speech or facilitators of free thought or individual rights, but, in fact perpetuate the intertwined and twisted of control via fascism or corporatism we see today. These are the people our founding fathers crafted a written constitution to protect us against. Yet these are the people who are currently making decisions about our economic future and the future of democracy. Government was given limited power and checks on that power for a reason. The collaboration of CEOs, bankers and the state is an end-run on the balance of power framework the United States Constitution was supposed to protect us against. There would be plenty enough to fill the pages of a provocative book on this topic. But in summary, our economic policy has little to do with the search for truth and a lot to do with megalomania, power and control and those who seek to dominate their fellow man.
Small and mid-sized business creators and owners are entrepreneurs, risk takers and architects of the American dream. They generally want a fair market to compete and then want government to get out of the way. Community banks are protective of business, investment and families in their community where they have a vested personal interest. This comingling dynamic could never develop between the personalities of small business, community banks and Washington politicians. But CEOs and Wall Street bankers rise to positions of authority through their intent to control rather than their creativity, imagination or inventiveness. And because they seek power, ie tilting the economic game in their favor, they generally care little about community or the local impact of their policies. Ditto for politicians in far-off Washington. We more often seem bureaucrats such as Mitt Romney who will do almost anything to gain positions of authority including buying their way into politics. The same dynamic drives the bureaucrat to become CEO. The lack of enforcement of anti-trust regulation allowed Wall Street and big business CEOs to gain unimaginable power and influence which they used in conjunction with Washington power elites to dismantle our rule of law and the concept of We the People. A More Perfect Union is indeed the characterization of community that bureaucrats have destroyed. With all three personality types operating under the intent to control, the comingling of the three creates a perfect storm of fascist or corporatist policy.
So using Marching Morons as a framework, let's take a look at how this dynamic perpetuates itself within the quantitative hedge fund and financial industry within the United States.
Under the control of the bureaucrat, the U.S. economy has developed a dynamic where one person who has no idea what they are doing hires another person. The hired person has no idea what they are doing but they are doing what they are told to do it by the person who hired them. When you multiply this across the entire financial system of the United States, you have an entire industry of people who have no idea what they are doing. But having a job gives them purpose and they are working as hard as hell to do what they don't know what they are doing. It's the herd mentality of humanity multiplied across millions of jobs. And then because these people, who have no idea what they are doing, control our money, they lobbying government using our savings to make wholesale changes that impact our entire economy. Government, which really has no idea what it is doing, then makes these economic changes on behalf of people who have no idea what they are doing. Then they both use the mainstream media to extol the virtues of said new policies, when in actuality, they have no idea what they have done. That is, other than to line their own pockets with campaign money or in exchange for future economic favor.
Now we see a whole new dynamic develop because of this. It's called quantitative finance. And a massive new industry springs forth around it. One that has no idea what it is doing because its very invention was that of people who had no idea what they were doing. Before you know it, people in the far reaches of the United States, in jobs that have nothing to do with finance or banking, are being negatively impacted and losing their jobs because of policies "invented" by people who don't know what they are doing with the backing of rules changes by politicians who never know what they are doing.
So, what do people in the far reaches of the United States do when they lose their productive jobs outside of finance and banking? Well, of course, they go back to be educated, in some form, to do what those who don't know what they are doing because those are the types of jobs available and they need to provide for their family. It's simple supply and demand. And the mainstream media, universities and retraining organizations fuel this dynamic by using their infinite wisdom to divine what the great jobs of the future are. (While they are at it, maybe they could give me the winning lottery number since they are so go at divining the future.) The next thing you know, we have an entire economy consisting of people who don't have any idea what they are doing but they are economically invested in doing what they don't know what they are doing because it provides economic livelihood for their family. Now we have a dynamic where people who don't know what they are doing are literally willing to fight to defend what they are doing because to not do what they are doing impacts their survival.
When this ridiculousness starts to implode, economists, who don't know what they are doing and politicians who really don't know what they are doing and bankers who are the top of this Ponzi scheme of having no idea what they are doing, try to throw more money at the economic system of people who don't know what they are doing in order to save all of the jobs of people who don't know what they are doing. Political morons and Wall Street con men soon tell us the economy is mending. We hear rhetoric that they are optimistic because America always reinvents itself and the American economy will return because that is the way America is. (It is the way America is as soon as we push these Marching Morons out of the way.) The end result is that for some period of time, everyone who doesn't know what they are doing gets to remain doing what they don't know what they are doing because politicians, who have no idea what they are doing, have given them other people's money to keep doing what they don't know what they are doing. Eventually, all of this not knowing what we are doing or why ends in chaos aka volatility - one of our main themes - as the system crumbles.
Nothing more pointedly represents this dynamic than the financialization of our economy of which quantitative finance and associated hedge funds and Wall Street trading desks are a part. It doesn't matter whether that is accountants, real estate agents, financial advisors, MBAs, CFAs, quantitative finance or any of the other careers that have become "hot" through this dynamic; all of which we wrote years ago are in a bubble. The massive shift into these careers was driven by Marching Morons. The bureaucrat is nothing if not prolific when there is no check on their authority. We can use this same dynamic to explain the incredible growth of financial derivatives, why federal government Orwellian spying now employs 1 in 300 Americans and on and on. It also manifests itself in other manner that precipitates a race to the bottom of the barrel economic model we call neoliberalism. Or you can call it Reaganomics, Clintonomics, Obamanomics or Bushonomics. Their administrations all subscribed to the Marching Moron mentality created by elitist bureaucrats.
How does the financialization of our economy in any way increase the capital stock of society? Finance is a consumer of capital not a creator of it. All of these excess financial jobs are a burden to society. They are effectively killing our economy. Wall Street is killing our economy. Washington remains its dysfunctional enabler. That is an economic fact. It is a mathematical fact. It is not an opinion for the editorial section of the Wall Street journal where Marching Morons often use their positions of power to opine their ideology.
The entire financial industry is built on a false positive - that finance creates wealth. It doesn't. It is pushing around paper. It is a tax. It shifts wealth. I giggled when I saw a sarcastic remark from an eloquent writer who said our economy consists of doing each other's laundry. That's all it really is. We have an economy where we pay quantitative hedge funds and financial mobsters hundreds of millions of dollars a year to do other people's laundry. And then these said bureaucrats say they have to pay these wages because the market demands it. That's right. For destroying our economy, they argue the market demands high wages. For God's sake, I'm Taylor on The Planet of the Apes. I'm Neo in The Matrix. I'm Winston Smith in 1984. It is the elites who are the Marching Morons. Seekers of truth and reason they are not. Power and control and its associated corruption is indeed the order of the day.
I have said this a hundred times in one form or another on here but the Marching Morons are still defending this false positive. They are doing so because they are economically invested in a complete lie built on propaganda. A lie perpetuated by economists and financial professors at Harvard and Yale and political idiots in Washington and dolts at the Federal Reserve and crooked psychopaths on Wall Street. The ruling class needs to go find something else to do and let the rest of us fix their mess. Maybe they could go do their own laundry.
I wrote on here at the height of Frankenstein finance's hubris I had a meeting with the top model builder and economist at one of the top hedge funds here in the U.S. And that, in a pleasant discussion, I told them their work was going to blow up. And the factors they were using to build their models were based on jello. Every single thing I said would happen from China to oil to commodities to their models to the American economy to the quantitative hedge fund business has either or is either in the process of coming to pass. All of these dynamics have already had substantial and negative consequences for the hedge fund industry. Not a single person in that firm had any idea what was about to hit them. Yet they looked at me like I was Butthead from Beavis & Butthead fame. And with a few of the quantitative experts, there was tremendous arrogance in their denial of reality. They were all good people so I have no reason to remark of who it was or anything of the sort. That's completely missing the point. My point is that they were Marching Morons. Not morons per se but they deluded themselves with this mindless herd mentality created by Wall Street's undue influence and the chain of people who don't know what they are doing perpetuating itself into a mania of idiocy.
Almost everything everyone believes is some form of social conditioning, brainwashing, unsubstantiated beliefs, pseudo-science or theoretical nonsense. That includes much of what we learn in college and almost everything reported in the mainstream media or accepted on Wall Street or by Washington politicians. There is no place that this dynamic is more prevalent than the science community whether it is the quants hired on Wall Street or in the bowels of universities. (As I have said before, science is a beautiful invention of humanity's effort to make sense of the the sensory world. But that doesn't mean much of what we confuse for science is beautiful in any sense of the word. We often delude ourselves that something is incontrovertible science with the same mentality as we discussed above.)
There is an enormous difference between scientific theory and scientific fact. There is very little fact in this world. Even less scientific fact. Most scientific theory is very questionable and will almost certainly be proven wrong but future genius or by new discovery or will never become anything more than it is today without some evolution of human consciousness. Hiring thousands upon thousands of physicists, engineers or math majors and spending hundreds of billions of society's dollars to develop financial models based on unsubstantiated theories is a house of cards that gives the illusion of knowledge and intelligence but in actuality is utter nonsense. Quantitative finance as we know it is doomed. All of the money in the world won't buy models that can tame financial markets or the world around us. Factor in a magnitude of incompetence when you realize the wonders of Wall Street scientists are used by bureaucrats to take enormous positions of risk and you have the perfect storm of idiocy. It's an illusion and an outright lie perpetuated by Marching Morons.
This behavior is part of the human condition and there is no way to ever stop it. We all succumb to it at one time or another. Or in some cases, we are always falling for it. So we should seek to contain its impact. And how do we do that? We should never allow concentrated decision-making over the economy to develop. In other words, protect us from the dynamics of neofeudalism and those who wish to be our rulers. We should never allow any economic interest to become large enough to create the Marching Moron dynamic. That includes government hijacked by special interests. There are many esoteric ways to accomplish this. But a good start might be to enforce the existing rule of law. Enforce the Sherman anti-trust act across all business. Reinvigorate State's Rights against federalism run amok. Break up the big banks aka make banking local. Bring back Glass-Steagall. Ban national political parties which perpetuate Gestapo-enforced political policy group think, have a written economic constitution and so forth. All are strong themes we have hammered on incessantly.
Those who lived before us did what they did for a reason. We had a rule of law for a reason. We had limited power of the government for a reason. We had regulations for a reason. To protect us from elitist Marching Morons and aberrant outcomes of giving them concentrated power. We have met the enemy and he is us. Five years ago on here we wrote that some believed monopoly created the Great Depression and we wrote about the dynamics surrounding that. Few people probably paid any attention because the world appeared in unprecedented peace and prosperity. But I suspect they will listen today because most people think with their eyes and the realization of what this dynamic creates is now clearly visible. What we are really witnessing today the repudiation of "big" or the fall of the bureaucrat.
Loving your spouse or your kids or your friends is about as factual as it gets. And the ironic thing is there is no scientific way to prove it. And what does that mean? The metaphysical world and the world of the unknown is far more powerful than Marching Morons and deserves much more respect than it is given. For we as humans literally know next to nothing about the world around us. You should question everything anyone tells you. It's almost always a belief or propaganda. To place all of society's savings and the economic welfare of a society in the hands of Marching Morons who believe they have the answers is at best a joke. At worst, it is a criminal travesty that will result in eventual disaster. That is why we have a constitution to prevent this from happening. Never again should society allow a handful of power-seeking bureaucrats the ability to make such massive decisions about our livelihood and our country in the secrecy of smarmy money-driven back-room meetings in a far off land called Washington DC.
The hedge fund business is a bubble. One we have talked about since starting this blog. Ironically, they have now entered the phase of the cycle where hedge funds must prey upon each other to survive. Effectively, the remaining finance industry must eat its own to survive. With investment and the money bubble hitting a peak in the United States and because our economic model doesn't allow investment to be replenished at a fast enough rate, Wall Street and its quantitative miracle ends up being forced to prey on each. Terrorists are not our greatest threat. The system is imploding from within.
As we have written, much of what we believe is genius is really an aberration created by macro factors outside of the control of the individual or the organization. The hedge fund business most assuredly fits this dynamic. At the height of Wall Street's multi-decades bubble there was endless money available to private equity, investment banking, hedge funds and other destructive forces in the economy. Their existence, when taken in the context of fundamentals, created the economy's ultimate demise. Yet most Americans were and continue to choke on their own vomit because there was no money available for them. In other words, a handful of Wall Street bureaucrats decided that ideas which were worthless and even destructive uses of money (quantitative hedge funds, private equity and investment banking) could have endless access to it while the productive people of society were often denied any of it. Most financial firms involved in quantitative finance will be consumed by loss and simply disappear.
None of this would ever have developed with a public banking system with a goal of democratically applying the one-citizen, one-vote access to society's shared resources. Criminal and incompetent Wall Street has already proven they are incapable of making democratic or competent decisions for our banking system. Wall Street needs to be terminated forever.
Every single major problem in America from poverty to lack of economic opportunity to overstaffed and bloated government to unemployment to racial tensions to crumbling infrastructure to underfunded pensions to Social Security shortfalls is a function of a private banking system. Every single one. It doesn't matter if the system is or isn't fractional reserve, it doesn't matter if our currency is or isn't backed by gold or or any other lipstick you want to put on the pig. The dynamic will always be the same; private for-profit banking should not be the backbone of a democracy. A democratic banking system by definition should be owned by society just as our government is owned by society; not by private for-profit bureaucrats. It's time for Wall Street to be dismantled by We the People and replaced with a democratic financial system.
title link also here.
Let's take a similar path to Kornbluth's award-winning short story with our own very short look at a Marching Morons dynamic in the field of quantitative finance and private for-profit banking.
We live in a society where money and power have almost exclusively determined the fate of our economy for the past few decades. This dynamic has developed because of undue influence over the rules to the game of economics. Put another way, money has bought and paid for the dismantling of our society. As we have said many times, Albert Einstein didn't die a billionaire and neither did most who sought truth and reason. In other words, truth and reason are not seekers of power and control over society. These two personality types are seldom contained in the same person. Power and control are the dominion of the a personality type I would classify as the bureaucrat or in extreme cases the psychopathic or narcissistic bureaucrat. These are the same personality types who rise to the top of the communist party in China, the Soviet Union, past fascist states like Germany and the like.
bureaucrat [byoor-uh-krat] - an official who works by fixed routine without exercising intelligent judgment.
Undue influence and power over the economy by CEOs, Wall Street bankers and politicians creates a perfect storm of personalities who seek power and control over truth and reason impacting our economy. Remember, all of these positions are ones which live off of the productive assets of society. They are not makers, inventors or creators of anything. They most definitely are not the creators or inventors of society's capital stock. They don't build cars. They don't teach our children. They don't grow our food. They don't create our expressions of art. They don't fix our air conditioning systems. They don't build houses. They don't create new forms of medical treatment. They don't nurse people back to health. They don't engineer the next iPhone. They don't invent green technology. They don't build bridges. They truly rely on others for their economic success. As it pertains to the economy, they are in fact economic neofeudalists who usurp their authority and wealth from serfs; the productive assets in society. That would be us. That they have gained so much power is telling.
The dynamic created by the comingling of like-minded bureaucrats seeking the same goals of power and control is a very esoteric topic that has been missed in the creation of this crisis but we could easily classify this intertwined relationship that has destroyed our economy and democracy as the rise of the bureaucrat. Bureaucrats have a common psychological profile - they have primary intent to control the world around them. (The human mind has only one of two intents in every interaction we undertake. The intent to seek truth and the intent to control. Intent to control is associated with an unhealthy ego and is a major inhibitor to an emotional and productive self. It generally manifests itself in a dysfunctional interaction with the world around those who exhibit such destructive characteristics. It's also a major reason why most bureaucrats are horrible leaders, why most bureaucrat-led companies are unpleasant places to work and why concentrated power always results in evil. It's why we have a belligerent foreign policy and on and on.) People who exhibit this psychological profile are not the purveyors of democracy or free speech or facilitators of free thought or individual rights, but, in fact perpetuate the intertwined and twisted of control via fascism or corporatism we see today. These are the people our founding fathers crafted a written constitution to protect us against. Yet these are the people who are currently making decisions about our economic future and the future of democracy. Government was given limited power and checks on that power for a reason. The collaboration of CEOs, bankers and the state is an end-run on the balance of power framework the United States Constitution was supposed to protect us against. There would be plenty enough to fill the pages of a provocative book on this topic. But in summary, our economic policy has little to do with the search for truth and a lot to do with megalomania, power and control and those who seek to dominate their fellow man.
Small and mid-sized business creators and owners are entrepreneurs, risk takers and architects of the American dream. They generally want a fair market to compete and then want government to get out of the way. Community banks are protective of business, investment and families in their community where they have a vested personal interest. This comingling dynamic could never develop between the personalities of small business, community banks and Washington politicians. But CEOs and Wall Street bankers rise to positions of authority through their intent to control rather than their creativity, imagination or inventiveness. And because they seek power, ie tilting the economic game in their favor, they generally care little about community or the local impact of their policies. Ditto for politicians in far-off Washington. We more often seem bureaucrats such as Mitt Romney who will do almost anything to gain positions of authority including buying their way into politics. The same dynamic drives the bureaucrat to become CEO. The lack of enforcement of anti-trust regulation allowed Wall Street and big business CEOs to gain unimaginable power and influence which they used in conjunction with Washington power elites to dismantle our rule of law and the concept of We the People. A More Perfect Union is indeed the characterization of community that bureaucrats have destroyed. With all three personality types operating under the intent to control, the comingling of the three creates a perfect storm of fascist or corporatist policy.
So using Marching Morons as a framework, let's take a look at how this dynamic perpetuates itself within the quantitative hedge fund and financial industry within the United States.
Under the control of the bureaucrat, the U.S. economy has developed a dynamic where one person who has no idea what they are doing hires another person. The hired person has no idea what they are doing but they are doing what they are told to do it by the person who hired them. When you multiply this across the entire financial system of the United States, you have an entire industry of people who have no idea what they are doing. But having a job gives them purpose and they are working as hard as hell to do what they don't know what they are doing. It's the herd mentality of humanity multiplied across millions of jobs. And then because these people, who have no idea what they are doing, control our money, they lobbying government using our savings to make wholesale changes that impact our entire economy. Government, which really has no idea what it is doing, then makes these economic changes on behalf of people who have no idea what they are doing. Then they both use the mainstream media to extol the virtues of said new policies, when in actuality, they have no idea what they have done. That is, other than to line their own pockets with campaign money or in exchange for future economic favor.
Now we see a whole new dynamic develop because of this. It's called quantitative finance. And a massive new industry springs forth around it. One that has no idea what it is doing because its very invention was that of people who had no idea what they were doing. Before you know it, people in the far reaches of the United States, in jobs that have nothing to do with finance or banking, are being negatively impacted and losing their jobs because of policies "invented" by people who don't know what they are doing with the backing of rules changes by politicians who never know what they are doing.
So, what do people in the far reaches of the United States do when they lose their productive jobs outside of finance and banking? Well, of course, they go back to be educated, in some form, to do what those who don't know what they are doing because those are the types of jobs available and they need to provide for their family. It's simple supply and demand. And the mainstream media, universities and retraining organizations fuel this dynamic by using their infinite wisdom to divine what the great jobs of the future are. (While they are at it, maybe they could give me the winning lottery number since they are so go at divining the future.) The next thing you know, we have an entire economy consisting of people who don't have any idea what they are doing but they are economically invested in doing what they don't know what they are doing because it provides economic livelihood for their family. Now we have a dynamic where people who don't know what they are doing are literally willing to fight to defend what they are doing because to not do what they are doing impacts their survival.
When this ridiculousness starts to implode, economists, who don't know what they are doing and politicians who really don't know what they are doing and bankers who are the top of this Ponzi scheme of having no idea what they are doing, try to throw more money at the economic system of people who don't know what they are doing in order to save all of the jobs of people who don't know what they are doing. Political morons and Wall Street con men soon tell us the economy is mending. We hear rhetoric that they are optimistic because America always reinvents itself and the American economy will return because that is the way America is. (It is the way America is as soon as we push these Marching Morons out of the way.) The end result is that for some period of time, everyone who doesn't know what they are doing gets to remain doing what they don't know what they are doing because politicians, who have no idea what they are doing, have given them other people's money to keep doing what they don't know what they are doing. Eventually, all of this not knowing what we are doing or why ends in chaos aka volatility - one of our main themes - as the system crumbles.
Nothing more pointedly represents this dynamic than the financialization of our economy of which quantitative finance and associated hedge funds and Wall Street trading desks are a part. It doesn't matter whether that is accountants, real estate agents, financial advisors, MBAs, CFAs, quantitative finance or any of the other careers that have become "hot" through this dynamic; all of which we wrote years ago are in a bubble. The massive shift into these careers was driven by Marching Morons. The bureaucrat is nothing if not prolific when there is no check on their authority. We can use this same dynamic to explain the incredible growth of financial derivatives, why federal government Orwellian spying now employs 1 in 300 Americans and on and on. It also manifests itself in other manner that precipitates a race to the bottom of the barrel economic model we call neoliberalism. Or you can call it Reaganomics, Clintonomics, Obamanomics or Bushonomics. Their administrations all subscribed to the Marching Moron mentality created by elitist bureaucrats.
How does the financialization of our economy in any way increase the capital stock of society? Finance is a consumer of capital not a creator of it. All of these excess financial jobs are a burden to society. They are effectively killing our economy. Wall Street is killing our economy. Washington remains its dysfunctional enabler. That is an economic fact. It is a mathematical fact. It is not an opinion for the editorial section of the Wall Street journal where Marching Morons often use their positions of power to opine their ideology.
The entire financial industry is built on a false positive - that finance creates wealth. It doesn't. It is pushing around paper. It is a tax. It shifts wealth. I giggled when I saw a sarcastic remark from an eloquent writer who said our economy consists of doing each other's laundry. That's all it really is. We have an economy where we pay quantitative hedge funds and financial mobsters hundreds of millions of dollars a year to do other people's laundry. And then these said bureaucrats say they have to pay these wages because the market demands it. That's right. For destroying our economy, they argue the market demands high wages. For God's sake, I'm Taylor on The Planet of the Apes. I'm Neo in The Matrix. I'm Winston Smith in 1984. It is the elites who are the Marching Morons. Seekers of truth and reason they are not. Power and control and its associated corruption is indeed the order of the day.
I have said this a hundred times in one form or another on here but the Marching Morons are still defending this false positive. They are doing so because they are economically invested in a complete lie built on propaganda. A lie perpetuated by economists and financial professors at Harvard and Yale and political idiots in Washington and dolts at the Federal Reserve and crooked psychopaths on Wall Street. The ruling class needs to go find something else to do and let the rest of us fix their mess. Maybe they could go do their own laundry.
I wrote on here at the height of Frankenstein finance's hubris I had a meeting with the top model builder and economist at one of the top hedge funds here in the U.S. And that, in a pleasant discussion, I told them their work was going to blow up. And the factors they were using to build their models were based on jello. Every single thing I said would happen from China to oil to commodities to their models to the American economy to the quantitative hedge fund business has either or is either in the process of coming to pass. All of these dynamics have already had substantial and negative consequences for the hedge fund industry. Not a single person in that firm had any idea what was about to hit them. Yet they looked at me like I was Butthead from Beavis & Butthead fame. And with a few of the quantitative experts, there was tremendous arrogance in their denial of reality. They were all good people so I have no reason to remark of who it was or anything of the sort. That's completely missing the point. My point is that they were Marching Morons. Not morons per se but they deluded themselves with this mindless herd mentality created by Wall Street's undue influence and the chain of people who don't know what they are doing perpetuating itself into a mania of idiocy.
Almost everything everyone believes is some form of social conditioning, brainwashing, unsubstantiated beliefs, pseudo-science or theoretical nonsense. That includes much of what we learn in college and almost everything reported in the mainstream media or accepted on Wall Street or by Washington politicians. There is no place that this dynamic is more prevalent than the science community whether it is the quants hired on Wall Street or in the bowels of universities. (As I have said before, science is a beautiful invention of humanity's effort to make sense of the the sensory world. But that doesn't mean much of what we confuse for science is beautiful in any sense of the word. We often delude ourselves that something is incontrovertible science with the same mentality as we discussed above.)
There is an enormous difference between scientific theory and scientific fact. There is very little fact in this world. Even less scientific fact. Most scientific theory is very questionable and will almost certainly be proven wrong but future genius or by new discovery or will never become anything more than it is today without some evolution of human consciousness. Hiring thousands upon thousands of physicists, engineers or math majors and spending hundreds of billions of society's dollars to develop financial models based on unsubstantiated theories is a house of cards that gives the illusion of knowledge and intelligence but in actuality is utter nonsense. Quantitative finance as we know it is doomed. All of the money in the world won't buy models that can tame financial markets or the world around us. Factor in a magnitude of incompetence when you realize the wonders of Wall Street scientists are used by bureaucrats to take enormous positions of risk and you have the perfect storm of idiocy. It's an illusion and an outright lie perpetuated by Marching Morons.
This behavior is part of the human condition and there is no way to ever stop it. We all succumb to it at one time or another. Or in some cases, we are always falling for it. So we should seek to contain its impact. And how do we do that? We should never allow concentrated decision-making over the economy to develop. In other words, protect us from the dynamics of neofeudalism and those who wish to be our rulers. We should never allow any economic interest to become large enough to create the Marching Moron dynamic. That includes government hijacked by special interests. There are many esoteric ways to accomplish this. But a good start might be to enforce the existing rule of law. Enforce the Sherman anti-trust act across all business. Reinvigorate State's Rights against federalism run amok. Break up the big banks aka make banking local. Bring back Glass-Steagall. Ban national political parties which perpetuate Gestapo-enforced political policy group think, have a written economic constitution and so forth. All are strong themes we have hammered on incessantly.
Those who lived before us did what they did for a reason. We had a rule of law for a reason. We had limited power of the government for a reason. We had regulations for a reason. To protect us from elitist Marching Morons and aberrant outcomes of giving them concentrated power. We have met the enemy and he is us. Five years ago on here we wrote that some believed monopoly created the Great Depression and we wrote about the dynamics surrounding that. Few people probably paid any attention because the world appeared in unprecedented peace and prosperity. But I suspect they will listen today because most people think with their eyes and the realization of what this dynamic creates is now clearly visible. What we are really witnessing today the repudiation of "big" or the fall of the bureaucrat.
Loving your spouse or your kids or your friends is about as factual as it gets. And the ironic thing is there is no scientific way to prove it. And what does that mean? The metaphysical world and the world of the unknown is far more powerful than Marching Morons and deserves much more respect than it is given. For we as humans literally know next to nothing about the world around us. You should question everything anyone tells you. It's almost always a belief or propaganda. To place all of society's savings and the economic welfare of a society in the hands of Marching Morons who believe they have the answers is at best a joke. At worst, it is a criminal travesty that will result in eventual disaster. That is why we have a constitution to prevent this from happening. Never again should society allow a handful of power-seeking bureaucrats the ability to make such massive decisions about our livelihood and our country in the secrecy of smarmy money-driven back-room meetings in a far off land called Washington DC.
The hedge fund business is a bubble. One we have talked about since starting this blog. Ironically, they have now entered the phase of the cycle where hedge funds must prey upon each other to survive. Effectively, the remaining finance industry must eat its own to survive. With investment and the money bubble hitting a peak in the United States and because our economic model doesn't allow investment to be replenished at a fast enough rate, Wall Street and its quantitative miracle ends up being forced to prey on each. Terrorists are not our greatest threat. The system is imploding from within.
As we have written, much of what we believe is genius is really an aberration created by macro factors outside of the control of the individual or the organization. The hedge fund business most assuredly fits this dynamic. At the height of Wall Street's multi-decades bubble there was endless money available to private equity, investment banking, hedge funds and other destructive forces in the economy. Their existence, when taken in the context of fundamentals, created the economy's ultimate demise. Yet most Americans were and continue to choke on their own vomit because there was no money available for them. In other words, a handful of Wall Street bureaucrats decided that ideas which were worthless and even destructive uses of money (quantitative hedge funds, private equity and investment banking) could have endless access to it while the productive people of society were often denied any of it. Most financial firms involved in quantitative finance will be consumed by loss and simply disappear.
None of this would ever have developed with a public banking system with a goal of democratically applying the one-citizen, one-vote access to society's shared resources. Criminal and incompetent Wall Street has already proven they are incapable of making democratic or competent decisions for our banking system. Wall Street needs to be terminated forever.
Every single major problem in America from poverty to lack of economic opportunity to overstaffed and bloated government to unemployment to racial tensions to crumbling infrastructure to underfunded pensions to Social Security shortfalls is a function of a private banking system. Every single one. It doesn't matter if the system is or isn't fractional reserve, it doesn't matter if our currency is or isn't backed by gold or or any other lipstick you want to put on the pig. The dynamic will always be the same; private for-profit banking should not be the backbone of a democracy. A democratic banking system by definition should be owned by society just as our government is owned by society; not by private for-profit bureaucrats. It's time for Wall Street to be dismantled by We the People and replaced with a democratic financial system.
title link also here.
<< Home