Wednesday, December 17, 2008

Madoff (made-off)

We can thank Bernard Madoff for providing a means to update the 'ponzi' idea. After all, Ponzi lived long before the computer era.

Henceforth, when discussing things related to the Minsky idea of the necessity of crap, we'll use 'made-off' in order to be more modern. That is, Minsky suggested that financial matters always lead to froth (control in financial engineering would start with making money real).

So, expect some definition, plus itemization of examples around the various pieces of infrastructure built to sustain the gaming. Too, how do we ferret out all those 'made-offs' that are now in operation?

Actually, the whole argument that we're not dealing with near-zero sum is bogus. Why? Because the accounting is not extensive enough to show all the necessary relationships. Will we get there?

Well, 'when?' might be a good question. It's easy enough, via a mind game, to see how any of the richest got there through a giant sucking-out of multitudes and multitudes of pockets who, in many cases, were more hapless than not.

Hapless how? Look at those who took the direct hit from Madoff's games to see examples.


04/04/2011 -- The M & Ms are apropos. Need to look at some background.

11/04/2010 -- Big Ben is still putting us at risk and trashing the savers.

10/11/2009 -- Discussion has gone over to FED-aerated. Note the 10/11/2009 Remarks about the Business Week article on India's progress' inhibitors. 'Near zero' recognizes that some always suffer more than others, especially in win-win situations, as the whole notion of characterization minimizes visceral reactions by diminishing the real in favor of the abstracted (ah, the modern world, you say?).

08/27/2009 -- Madoff exemplifies (albeit somewhat indirectly) systemic risk.

01/18/2009 - We even need to look at why we need finance.

12/18/2008 -- One thing to note in the Minsky hierarchy is a movement from the more concrete to the more abstract. Getting away from the gab standard would put a better basis on this, however any extrapolation goes awry (except in the special case of a linear extension - but even there we get to leveraging issues). All sorts of metaphors could apply, such as out-on-the-limb, bleeding-edge, ...

Modified: 04/04/2011

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