Not Deviations, but..

September 23, 2011 § Leave a comment

I’d commented the other day at hottopic – to effect that Randy Wray@Levy Institute in the US and chair Prof at a Kansas campus and heavyweight hitter on long term commodities trading.

Quite expert he was in pointing to unexplainable deviations – standard-thru-factorial 4 or 5 (ie sometimes influencing values up to exceeding rare events) – on prices. What’s more the vastly greater incidence of such stuff in recent times. Pointing to more than market behavior… more likely human behavior… but oh such a sweet explanation… to wit, not hedgers and speculators pumping prices so much as ‘buy-and-hold’ dogma in actual practice on futures contract (eg. appreciated) methodology, which — and DO GET THIS — serves to lower prices in the supply-demand basic economics. Why so, or more to the point, so what! Answer: lower prices delivers those margins these operators are profiting from.

Growth, for makers, manufacturers, is a mirage.

Having read Wray’s doco myself I was left wandering well, could this lowering account for a seeming blindness by victims toward those who oft claim themselves as the hand that feeds them?

Then, tonight Chandran Nair of GIFT – h/t: ianfraser.org – with his clear HongKong perspective stepped up to say:—

With the end of colonies, we had the globalisation argument of economic growth and then the globalisation of finance.
When I speak about this in Europe, they say there has been 30 years of over-leverage, but I say they should multiply that by 10 and look at 300 years of essentially exploited growth.

What we need to recognise now is that the world is a very different place from what it was 100 years ago when we had one billion people. With a current population approaching seven billion, things will have to change.

A fundamental issue that the world will have to recognise, and which Western capitalism has conveniently ignored, is that the goods and services which companies and economies seem to thrive on are based on under-pricing resources and externalising costs.

That game is over and we need a fundamental restructuring – essentially about how people will live, and we need to move beyond simple notions about growth to more sophisticated, nuanced discussions about human progress.

Yes, granted, the ‘lost externalities’ argument has been around a while. From some. Though its presence now looks more tied to financialization than at any time previously.

Which had been my own pov in making constructive commentary at hottopic.

That said, let us hope that pertinent related contribs become less puzzled, frowned upon, or frenetically panicked by. In a couple o’ words: you’ll get over it!

Have a good weekend.. in French or Blacks entertainment.. me, I’m into Concert on Saturday night and the big boy boomers along with a promised intro tomorrow morning..

C U

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