Main Street’s view: Wall Street is full of cow patties.
There is the belief there following needs to happen:
Low interest rates
Lenders willing to lend
Consumers willing to borrow
The Fed has achieved the first item for at least three months. The questions are will lenders lend and consumers borrow? This leads us back to the primary problem, according Wall Street, will housing prices stabilize? My answer is NOOOOOOO!!!!!!!!!! Financial models due not by assets, people do.
Since the FOMC has decided to by long term US treasuries and GSE’s mortgage securities to affect their respective rate, I can bitch about the effect their actions have on the elasticity of the U$ dollar. I will use arc elasticity (percent change of the value of the U$ dollar / percent change of the value of another currency).
Category Theory is the study of “Objects” and “Morphism” between them. “Objects” are primitive in Category Theory, therefore there are no “Elements”. “Morphisms” are also primitive in Category Theory. Compos“Morphism” is a logic statement. Properties of “Objects” are specified by the properties of the “Morphisms”. Category Theory is composed of logic statements.
Example: If one has a chance to look at the Earth from orbit one can see brown, green and other colors, These colors represents “Objects”.
Example: f o (g o h) = (f o g) o h, is not an equation, but a logic statement that evaluates to either True or False.
Example: A Geographic Economist can create a “Morphisms” that describes the colors (“Objects”) of Earth. He/She can state they will be using category theory. Or, they can prove the objects in Earth form a category. Or, they can cast their model in a form that is a category such as the Set category.
Arc Elasticity on Wikipedia gives the mid point formula for arc elasticity. I’m not going to use this formula because I’m going to change the algebra to that of operators. One can always translate the origin of each variable, in the case given by Wikipedia, to the mid point. Therefore, one can just analyze the changes at each time interval.
Arc Elasticity(y, x) = {[Y(finish) - Y(start)] / Y(start) * 100%} / {[X(finish) - X(start)] / X(start) * 100%}
Y(start) = X(start) = 1 => Arc Elasticity(y, x) = {[Y‘(finish - start)] + 1] / {[X‘(finish - start)] + 1]}
Where X’ and Y’ are delta X and delta Y respectably.
The above Arc Elasticity always starts at (1, 1) which means that at time t to time (t + 1); I translate the origin at time (t + 1) back to time t. I am only looking at the change of Y with respect to a change in X. Figure 1 will be used to illustrate the operator aspect of elasticity.
Figure 1b shows the operation on X then an operation Y is the same as if a rotation of the angle theta for X and then a rotation of the angle theta for Y. The concept of using a rotation to describe a system is used in nuclear physic’s “isospin“ (isotropic spin space SU(2)). {hint on where a later post will be going; SE(2)}
Figure 1c shows that as time evolues; the end point transverses a curve center about (1, 1). Here’s is an interesting observation; at any time t, the end of r ( the position of the elasticity of y due to x) has a point group. See for An Elementary Introduction to Groups and Representations point groups. However, there is no operation that will allow the symmetry of the point group to be realized. Yet the curve (parameterized by the time evolution of x and y) indicates an operation, in elasticity space, can select a point group. Elasticity is an example of groupoids. Operations on elasticity, in time, selects the point group implies time becomes a symmetric transformation (Elasticity has an automorphism).
Okay, what does this mean???? Category theory is really the study of “morphisms”. This means I can have an economic model based on the Set category and I know there is a “morphism” (functor) between Set categories. I will look at the highlights of Future Cast’s analysis of the Great Depression and point out the “morphism”, which we now know are automorphisms.
- Germany was unable to pay off its war time debt.
- Germany was printing money which triggered an inflationary environment.
- Germany’s inflation was transmitted throughout the world via gold prices.
- Germany was unable to captialize internaly due to Germany’s investor base’s not investing in their own country.
- Forign investors did not want to invest in Germany due to its inflation and debt.
- Global instability developed.
The automporphims:
- Households hold too much debt which they can not pay off.
- FASB encourages financial companies not to renegotiate household debt. The Federal Bankrupcy laws have not been changed.
- The Federal Resereve is printing money. The U$ dollar is the global reserve which now plays the role gold once held.
- US of A investors are not recapitalizing this country. Their investor advisors tell them there is a greater return in other non-EU countries, such as China.
- China is in violation of its WTO obligations and blocks forign ownership of its companies.
- India is a low wage country which subsidizes consumers’ commodities. Global stability is now threaten.
- Foreign investors do not want to invest in the US of A due to our debt. China is bitching about the U$ Dollar and US Tresuries.
The direction of the U$ Dollar now depends on the actions of other countries. For example, if counties, within the EU, can not implment a recovery, the U$ Dollar will weaken. This in turn will trigger another period of U$ Dollar denominated inflation. One can expect the pheasants to grab their pitch forks and torches. Whoops, I need to update this action; to grabbing guns and Montav Cocktails.
President Obama has now shoved his head up Wall Street’s ass. President of the Moron League Obama has no credibility. President of the Moron League Obama is continuing Don Bush’s policy of Institutionalizing fraud. Don Obama’s can now teach Ponzi schemes, double book keeping and skimming off the top.
If one is laying in the street with multiple gun shot wounds and burns, one can thank Don Obama. The up shot of this will be:
- Don Obama and his fellow criminals of the Obama Syndicate, formally known as the Democrats, will have to pass multiple trillion dollar plus economic stimulus package for the next two years.
- The Rush Limba Party wanting to put Reagan’s portrait on U$ currency.
- “Token” Steele will be ousted out of his position in the Rush National Committee.
- The Obama Syndicate will lose Congress in the 2010 election cycle.
- Don Obama will lose in the 2012 elect cycle.
Nothing will get done after the 2010 election cycle due to the continuing bickering between the Obama Syndicate and the Rush Limbaugh Party. In other words, this period is going to increase the flare up between Capitalism and a Planned Economy.
Definitions
An economy where supply and price are regulated by the government rather than market forces. Government planners decide which goods and services are produced and how they are distributed. The former Soviet Union was an example of a command economy. Also called a centrally planned economy.
Definition: A free market economy is an economy in which the allocation for resources is determined only by their supply and the demand for them. This is mainly a theoretical concept as every country, even capitalist ones, places some restrictions on the ownership and exchange of commodities.
These two definitions are simplistic to the extreme. See Planned Economy and Free Market at Wikipedia.
So we are not talking about a socialist agenda vs. the free market, we are really talking about how much government involvement is too much.
Viva La Revolucion!
