Re: Whilst Waiting for Godot

["Ronald Calitri" <calitrir@xxxxxxxxxxxxx>]

Godot never shows, all we get of god is what happens whilst waiting.

En attendant has another lesson - Burroughsed from Keynes as follows:

Instantaneously:
($Losers = $Winners) / %(Wealth Turnover) = $Wealth

Ergodically:
$Losers => Losers' return = LR = ((Selling Price/Original Investment)
^ -(Losers' Holding Periods)) - 1.
$Winners => Winners' return = WR = etc.

But:
WR=LR iff (Losers' Holding Periods = Winners' Holding Periods)


There seems to be no ex-ante solution to the instantaneous distribution of
returns. This suggests the need to study the historical record of such
effects. This seems to require an econometric approach to extracting the
structure, where effects are measured rather than expectations.

Paul:
 I believe "sensible" is the wrong word. The "sensible" word means to me
that the senses have been brought into play. That I believe is more
relevantly applied to the above mode of analysis. There is instantaneously
an ergodic distribution of sensed changes in wealth. In aggregate we might
call the total "sensible wealth;" but it is an unknowable aggregate since we
have [as yet] no idea of the many "sensible" accounting models in
application across society. This concept is "ex post" in the sense that it
will always be "in the mail." However there is no doubt a "structure of
sensibility," in the data, that it would be an enterprise to look for,
stretching from instantaneous mark-to-market across to monthly, or annual
investors to those who count only once in a lifetime, etc.

Why not try "palpable" for a post-keynesian expectations code? This leaves
open the way it is reasoned out for further development, and gives us a
concept more in tune with people's normal English usage.

Paul wrote:
>>The presence of
>>liquidity encourages investors to provide finance to entrepreneurs that
they
>>might not do if the investment was illiquid. Bernstein (12998) notes that
>>liquidity permits investors to have a very short time horizon by providing
>>"the ability to reverse a decision at the lowest possible transactions
cost".
>>Market liquidity provides each investor with what Bernstein labels a
"quick
>>exit strategy" the moment he/she is dissatisfied with the way matters are
>>developing. (It also provides a quick entrance strategy the moment the
>>investor is surprised how well matters are developing.)

All strategies are not created equal, nor do they have equal
contemporaneity. Shark eats Tuna eats Minnow. The outcome is irrepressibly
turgid.

Doug wrote:
>"Thus the professional investor is forced to concern himself with the
>anticipation of impending changes, in the news or in the atmosphere, of the
>kind by which experience shows that the mass psychology of the market is
>most influenced. This is the inevitable result of investment markets
>organized with a view to so-called 'liquidity.'


That is the only time expectations come into play then, amongst people who
are uncertain?

>The doctrine of liquidity assumes precisely that there is no liquidity for
>society as a whole - that is, that social arrangements should be stabilized
>as much as possible, by the state whenever necessary, to assure that
>markets continue to operate as smoothly as possible. Note that in Keynes's
>classic definition of uncertainty, he mentioned the place of private wealth
>holders in the system in 1970, along with things like copper prices.

The uncertainties of private wealth holders would seem to be the talking
point, Ya?
>
>I think I made it clear, both in the book and in the seminar, why "almost
>all economies turned to using" stock markets - as an economy matures,
>owners do not want to be tied to the fate of particular firms, and want to
>participate in ownership as a whole. That ownership structure is
>inseparable from liquidity.


    Almost everybody is more or less tied to the investments they make.
There is a mixture at any one time of stupid and intelligent investments. My
concern with your plan is that the intelligent are doing very well thank you
very much and are not interested in giving their money. That leaves the
stupid, who are very hard to convince of anything, and will elect bad
leaders. The outcome will be dependent on the number of the intelligent who
try to make things worse as against those who try to make things better. It
is an uncomfortable prospect.
    In any event, in at least the few long surviving central financial
markets, they are already very intimately tied with state finance and about
becoming more so. In the emergent markets there is much less of a "sensible"
"risk-free" component so the structure constantly shifts. But the same
"thing" has been happening in all cases, wealth has been sensibly though not
palpably shifted.

Regarding the debate, there is in Marx a distinction between industrial
capital that is concerned with the rate of exploitation and financial
capital concerned with the distribution of wealth. Anxiety about this
problem may be at the root of this business of jumping across each others'
fences and hurtling rocks into your own pastures!


Timorously,
Ron