Wednesday, December 31, 2008

The Bacon's been Fried

There is a growing consensus that financial tools like credit default swaps, short selling, federally-re-insured mortgage backed securities, hedge funds, leveraged ETFs and other creations of the modern financial world require greater regulations.

The 2008 market implosion was dramatic. Lots of paper money was destroyed.

The modern progressive thinkers, who oddly were the inventers of these failed financial tools, wish to push the conclusion that failure of these weird financial tools prove what they've known all along that the American experiment in freedom is a failure, the free market is a failure and that wee need a new social order akin to the progressive regimes in Cuba, Venezuela, El Salvador, Haiti, North Korea and Iran.

My parting shot for 2008 is that all of the financial instruments that appear to require greater regulation should never have existed in the first place.

The best example is naked short selling. Our corrupt financial system created a network of centralized brokerages in cahoots with a secretive organization called the DTCC. The insiders in this group can dramatically increase the float of any publicly traded company on a whim. Naked short selling undermines the ability of companies to re-invest the capital that they have built up through the years.

Short selling itself is anti-market. Short selling is a creation of regulators that allow people to sell the equity in companies that they do not own.

A large number of regulatory failures came to light during the economic collapse. The message of these regulatory failures, however, is not that the free market failed, but that Americans were a bunch of chumps for having faith in financial tools that are dependent on the integrity of regulators.

Rather than more regulation, we need to return to a financial regime based on the direct ownership of equity and away from the leveraged and federally backed financial system favored by the elite.

Ending the Year on a Sick Pun

On an end note, I was devasted to hear that one of my favorite actor had his bacon fried in the Madoff scheme. Tremors was the best goll-darn movie every made. It shows the grim reality of life in Southern Utah, dagnabbit. Footloose captures the deep inner conflicts utopian dreams of Northern Utah ... Oh My Heck.

Tuesday, December 30, 2008

The Ruling Class Predators

Last night, I left a snippy comment on DeepCapture. The comment sums up a few of my thoughts on modern business thought. The comment was a response to a 2006 quote from a 13 year veteran rogue from the SEC named Richard Sauer:

SHORT sellers occupy a position in the stock market like that of predators in nature.

With a few edits, my rant was:

Saying that we need predators in the market killing companies is equivalent to saying that we need murderers roaming the street to keep the population healthy.

One of the primary themes of classical tradition was that man could use rationality to overcome the base state of nature.

That tradition works. It brings on prosperity.

Man is a rational creature. We can improve our lot through reason and deliberation. Short selling appears to be undermining the ability of investors to engage in the rational process of assessing investment options. With modern communication technologies, the market is so efficient that we no longer need artificial regulatory measures like short selling.

Just as we don’t need rogues roaming the streets randomly killing people, we don’t need an elite class of insiders in brokerage firms randomly destroying companies.

Human rationality overcomes the need for predators.

In the last several years, there has been a predator class randomly killing large numbers of people in Iraq. I see absolutely no sign that the average Iraqi is better off with the killings. They actually look quite miserable and unhappy about all the killing.

Anyway, the current rot in Wall Street is more like a plague than a sleek predator. Sauer’s argument is akin to saying that the market needs to be covered with a festering pustulation to be healthy.

Look ma! That man is oozing with superating sores ... he must be really healthy!

Mankind is a rational creature. We thrive by using reason to overcome the plight of disease and predators. That’s why there’s billions of us. Sauer is simply repeating a failed elitist ideology that causes widespread hardship and misery.

This funny little trick of using reason to overcome our base nature is called "civilization."

Sauer's use of the predator metaphor to describe short selling is quite interesting. Throughout history, a common trait of the ruling class is that they see and treat the lower classes as animals. The Marxist Dialectic out and out denies man's rationality. This ruling class mantality has always been the antithesis to civilization.

Personally, I think this division between the classical and modern view of rationality is much more important than the division between left and right.

I might write more about Sauer's editorial. It is a prime example of the progressive view of the way business works.

Monday, December 29, 2008

Freeloading on the Network

@microstock image

Wikipedia is doing their annual beg for cash. Their goal is to raise a modest $6M for operating expenses.

The thing that stands out in my mind about the plea is that the organization employs only 23 people. This highly centralized group that dominates the information distribution sector provides only 23 jobs.

This news actually breaks my heart as I would love to live in a world with millions of people employed in research. The Wikipedia model, with one nonprofit group, fueled by volunteers, dominating the information creation and distribution system wipes out the dream of a large number of independent agents gathering and distributing information.

Of course, a large number of the "volunteers" are people working with government agencies, marketing firms or investor groups seeking to influence public opinion through social media. I suspect that there is a large number of the volunteers getting paid for their service. They just aren't paid on the front end.

Judd Bagley's antisocial media project shows how hedge funds use wikipedia and other forms of social media in short attacks.

There are good things that come from social media. Like all things created by man, the social media fad has both good and bad characteristics. At its worst social media turns into a form of cyber mob rule in which groups try to manipulate themselves into ideological domination.

There is also a nagging voice in my brain that rejects the domination/submissive model pushed by the modern dialectical way of thinking. Even though many people participate in wikis, the model falls far short of the depth of real quality research. The homogenized content produced through the editing process falls far short of the depth I like to see. Group editing also mutes the multiplicity of perspectives that comes from traditional research.

I prefer a vibrant market with thousands of voices being heard to a centralized voice created by a group think mechanism. I would rather see small sites where people get paid for the content they produce. I donated to Wikipedia before it was cool. Today, I would rather just pay for Britannica where people are employed to do the research.

The Progressive View of the Market

Progressives are an odd lot. They openly discourage people from paying for individually produced content such as research, music, art, etc.. Progressives also seem to have a fascination with market manipulation. As mentioned in my last post.

I think this is the legacy of Marxist thinking. Marx did not define Communism, what he did was to create a destructive view of the market called "material dialectics." This view encourages people to actively work to undermine the public market, on which the middle class built its fortune. The dialectics then provides formulas for manipulating the market from a meta-level.

Not surprisingly, the names of famous progressives tend to pop up in discussions of market manipulations. In the current market crash, we keep hearing names like Sandler, Madoff, and Soros. In previous generations, we find that Joseph Kennedy made a fortune that was enhanced by insider trading schemes. Many of which became illegal when his son rose to power.

Conservatives are doltish lot who try to concentrate on an ideology where free people use the market to help achieve their life ambitions. Progressives (like George Soros) tend to reject the foundations of an open society and produce a cast of characters with billionaires manipulating the market from above and a legion of rogues from below who try to undermine the market by disengaging from the market.

The problem is that this iron fist/iron glove methodology that leads to wide disparities in society. I stopped being a progressive because I found that so much of what I was doing actually undermined my intentions.

The music piracy craze at the turn of the millennia wiped out a large number of small music promoters who were investing in music distribution schemes, and left us with only the conglomerates that had the funds to create music distribution channels with DRM programmed into the music.

I just completed a review for a new fad called Couch Surfing.

I really like the basic idea of couch surfing. Travelers create an international social network. This network allows you to meet people when you go trekking abroad. It is a beautiful idea. I love the idea of meeting people from distant lands. It is terribly difficult to meet people when traveling.

When I first logged into Couch Surfing, my mind jumped ahead of itself with the realization that a for-profit site social network that introduced travelers and locals could be worked out in a way that it provided local tour guides with an extra source of income.

My ideal of social networking is that social networking should be beneficial for all parties engaged in the process. Social networking will fall apart if it simply devolves into a system of freeloading.

Unfortunately, the CouchSurfing effort is dominated by the progressive anti-market message. The site is set up primarily to discourage people from staying at the small hotels and bed and breakfast inns that I adore. The owners of the site self-righteously rub in their nonprofit status as they brag about how they've diverted millions of visitors from marginal hostels and small hotels. Thousands of low income hospitality workers owe their pink slip and fall from the lowest rung of society to the sneering founder of Couch Surfing. The world is worse for each small hospitality business that fails, and for each hotel worker who receives a pink slip because of these bozos.

Anyone who fills out a form and pays the filing fee can be a non-profit. Although a large number of worthy organizations have 401c status, there is nothing about 401c status that makes a group morally superior to those filing as a corporation.

Of course, now that the Progressives have a successfully engineered a super majority in Washington, we might see a muting of the anti market message of the left. Most progressives simply want power, and only use the methodology when they are on the out. Few progressive leaders want to see the massive unemployment and starvation that their dialectics creates. As such they tone down the anti-market message when they are in power.

I am hoping that, after the transition to power, progressives will tone down their infatuation with social movements that leave millions unemployed and helpless.

Anyway, my favorite travelers are those who work hard, save their pennies and spend liberally when they travel. The money people spend on hotels, restaurants, museums and exhibits when traveling help make the world a better place one commercial transaction at a time.

Sunday, December 28, 2008

Debt as an Asset

I did some reading up on the 2006 merger of Golden West Financial and Wachovia. Golden West Financials was a media darling that was giving to all of the politically correct causes. The two principles of Golden West were Herbert and Marion Sandler. According to Wikipedia and other sources, the Sandlers were in tight with and George Soros and very much dedicated to bringing a progressive regime to power in the US.

The Wikipedia page for George Soros credits Mr. Soros as the financier who broke the Bank of England in 1992.

At the time of the merger, Golden West had a loan portfolio of over a hundred billion in loans. Oddly, in the years after the merger, Wachovia found itself saddled with several billion in bad loans (mysteriously centered in the areas served by Golden West). Wachovia imploded. Wells Fargo picked up the pieces of Wachovia for less than the price of Golden West.

Wachovia is a politically incorrect bank with accounts from tobacco companies and tobacco workers. Wachovia's greatest crime against humanity came in the form of donations to the hated George W. Bush.

As Wachovia and Golden West were contributing to vocal groups on different sides of the political fence, I suspect that there will be some intriguing books written about the merger.

As the players involved with this story are rich, powerful and desirous of producing a history which paints them in a positive light. I suspect that the telling of the story itself will itself become a story as players seek to slander opponents and whitewash their activities.

It is a story that should be followed closely by historians and the public. The Charlotte Observer has an in depth article on the merger.

What struck me about the story is the overall absurdity of developing a debt portfolio as an asset. This system where banks hold billions of dollars in loans as an asset is guaranteed to lead to calamity as economic times change.

I know little about this merger beyond press releases and articles about the event. I bring up the case as a sensational intro to the topic on my mind which is the absurdity and danger of this system where banks hold, trade and leverage huge blocks of debt as assets.

Such a system is inherently instable, and is prone to manipulation. In reading about this case, I realized that it would be possible for a person (or foreign power) of malicious intent to create a debt bomb. Skipping from headlines to a thought experiment, I present an argument on how a group of mal intent could create a debt bomb:

A Debt Bomb

A bank can easily create a debt bomb simply by approving questionable loans, then lending customers in default the money to make their loan payments.

Throwing good money after bad is suicide for a person trying to create a solvent bank. In a world where financial institutions treat large blocks of loans as an asset, the growing pile of festering debt would look like a valuable investment.

Lending money to insolvent borrowers earns kudos in the progressive press. It increases the overall size of the loan portfolio and it decreases, for the time being, loan defaults.

When the debt bomb is ripe, the group that created the bomb need simply sell the bank.

In this system that treats debt as an asset, the people who created the debt bomb would make out handsomely. They can make even more money if they begin aggressively shorting the party that acquired the bomb.

I should note that while it is possible for a person to maliciously create a debt bomb, it is also possible for a person to do so accidentally. They could approve bad loans out of the goodness of their heart and throw good money after bad in a desperate attempt to save face, then sell the bank to an unwitting party.


On watching the financial collapse of 2008, I am left with the observation that this thing where financial institutions hold and leverage massive amounts of debt is inherently instable. While I think our financial collapse occurred simply because financiers saw massive debt loads as good thing, exploring the question (Was any of this intentional?) is a valuable exercise. When one creates an instable structure, it is possible for a person to push it over.

The ability of a malicious actor to create debt bomb simply highlights the instability of financial system based on massive debt loads. The simple conclusion is that we should replace the financing mechanisms that create massive debt loads with financial systems based on a more direct and stable relation with the underlying equity that serves as the collateral for the debt.

Saturday, December 20, 2008

3900S Pictures

I had a few hours of free time; so I took pictures of 3900 South and the Jordan River Parkway. Here are a few of the highlights:

3900 South and Trax Geneva Rock Mount Olympus over the Jordan River

The focus was off on this one. It would have been a money shot if I did it right:

Bird Watching

Saturday, December 13, 2008

BSP Approval

Lake Blanche on Big Stock PhotoOn the issue of MicroStock, the editors of approved one of my images. This means I now have an active microstock profile!

Okay, there is only one image. It was probably a sympathy approval. I am not above exploiting sympathy. The picture is of Sundial Peak, and they actually have a better photograph of that peak in their system already.

Friday, December 12, 2008

Microstock Recorder

I created a program for recording MicroStock. The term "Microstock" refers to images created by graphic designers licensed for use in blog posts and what not. I encourage bloggers to use MicroStock. MicroStock lets you add fun images to posts while giving some cash to graphic designers.

Good netiquette demands that you credit artists for their work.

I included a stock photo in a snide little post called "Reason's Greetings" with a Christmas scene photo. Realizing that the artist may not share my opinions and would dislike having my page show up in a google search for his name, I decided that a better way to credit the designer would be to create a separate page with microstock credits. This page has links to the designer's microstock page, and a link back to my project.

On the SE0 side of things, good netiquette happens to make an inbound link back to my blog post.

I designed this Microstock crediting program for my own use. I decided to make the program open to the public at large. I invite anyone using MicroStock in blog posts to use this program. It is simple: You enter basic info about the picture and your project. That info creates a page. To credit the graphic designer, you simply add a link to the credit page. As there is a link back to your page, this process is beneficial to both you and the graphic designer.

NOTE, the program is intended to credit designers for their work. I will delete entries of people who fill up my database with spam.

If you happen to be a photgrapher or graphic designer, Scott Maxwell created the following graphic to explain the overall MicroStock process. (Clicking the image brings you to the "Microstock Credit Page," which links back here.)
crowd sourcing dollar

Direction of the Market

In my last two posts, I argued that price fluctuations convey valuable information about the current capacity and consumption of the fuel supply and that is possible to create futures programs to help people match consumption to demand to reduce peak capacity problems.

These observations are basic common sense. Price in a healthy economic system passes information from producer to consumer about local capacity. This information directly aids in the optimization of resources.

A corollary to the above statement is that, if prices aren't reflecting this ebb and flow of local consumption v. demand; then there is something wrong with the economic system.

When we look at the history of energy, we find a world where prices thrash from extreme to extreme. In this world, we find business warriors and third world dictators conspiring to push prices down to extremes to drive alternative technologies and capacity off the market. The conspirators then reap the spoils in the inevitable spike.

During the presidential debate, there was a great deal of animus aimed at independent speculators in the market. Some candidates were making suggestions that the spike in gas prices was the sole result of speculators and that there should be greater restrictions on who is allowed to participate in the market.

I am not buying the line that independent speculators are the problem, nor do I accept that they are bad. Independent speculators only make money when they manage to buy low and sell high.

In a futures trading system, the speculators should have a net positive effect in honing in on prices; otherwise, they would simply lose money.

Speculators are not the problem. Manipulators are.

Problems seem to occur because the energy market is structured in ways that allow manipulation on both the downside and upside.

(Personally, I think the deep dips in oil prices have a worse impact than the spikes as the dips drive companies providing alternative fuel under.)

Anyway, to solve our energy problem, we need to look beyond who is participating in the system to the over all structure of the system.

In earlier economic times, the energy market was largely local. Prices would be set in direct negotiations between energy producers and consumers.

The Twentieth Century saw the rise of centralized markets dominated first by Standard Oil, then later OPEC. Oil prices are set on commodity exchanges that are far removed from production and consumption.

My thoughts are that the path to energy independence should involve more direct negotiations between energy producers and consumers, and that we should be gearing the market toward a system with a large number of small local independent energy producers selling directly to energy consumers.

The market is heading in the right direction. To be labeled green, businesses have started buying directly from local wind and solar farms, and many small firms are eyeing the energy business.

Unfortunately, I fear that in our time of political "change," that the political machine is set on greater centralization of the market. I believe the better path to energy independence involves the creation of a large number of small firms. I fear we will head on a the path of large social programs that will peter out and fail to achieve sustainable energy market.

Wednesday, December 10, 2008

Divining the Future

My last post suggested that price fluctuations are a good thing as such fluctuations convey important information about the current balance of supply and demand.

This observation begs the question if the current price of a commodity provides sufficient information. The answer, of course, is "no." The current price does not provide sufficient depth for a rational decision making process. The current price of gas is a triviality. What really matters to us is the price of fuel when it is time to consume fuel. In most cases, people make the decision to consume fuel well before they purchase it.

The solution, to this quandary, of course, is to let people purchase fuel when they make their decisions. When you buy a product in advance, you have a futures contract. Futures contracts are wonderful things in that they allow you properly price your goods.

As the people selling oil know all about annual fluctuations in prices, the price for contracts at the height of the season would be higher than those when demand is low.

The futures contract adds depth to the price equation.

You can also create systems that communicate information about the current power supply through direct communications. For example, the local electric grid will have a mix of solar, hydro and other fixed power generation mechanisms along with expensive backup systems that come online during peak capacity.

The power grid can communicate information about current capacity and demand. At peak demand, the system could send a signal telling the world that they are at peak capacity. Rather than turning on new capacity, the signal would automatically turn off less essential services. Likewise, when demand drops below base production, the system could send out signals and products that store energy could on; so as not to waste the capacity. Devices that turn on and off could have special metering and pricing.

Financial tools and technologies that help us match our energy consumption to production allow us to maximize the return for invested resources and should be encouraged.

(I will have one more post on this topic.)

Monday, December 08, 2008

Smart Energy Future

© Stock Photo
The track to energy independence will be long tough haul.

Recent generations developed the idea that the path to solving the world's problems was simply to overpower the problem with energy. In recent years, the world hit capacity. We now need to develop an economy with a little more finesse. The high path to conservation is to improve the quality of our decision making process so that we make the best use of our available resources.

Apparently, Utah is considering changing the gas tax from a fixed rate per gallon to a percentage of the price.

Scott Hinrichs dislikes this idea as he feels that percentage tax would magnify price fluctuations. Let's say the base price of gas fluctuates from $2 to $4 a gallon each year; a 10% tax would cause the pump price to fluctuate from $2.20 to $4.40. A tax fixed at $.30 a gallon would even out the price fluctuations. The price would go from $2.30 to $4.30.

I countered by saying that, if there is something in our economy that causes massive fluctuations in prices each year, we don't want to have a tax policy that dampens the fluctuation, we want a tax policy that passes full information about the fluctuation so that people can make energy decisions based on the information conveyed by the price.

The thing that causes the annual jump in gas prices is, of course, the summer driving season when consumer demand pegs capacity. As there are constraints on supply, what happens is that prices raise to the point when consumer demand eases off and matches supply. The percentage tax gets us to the break point sooner than a fixed cent tax.

As we move into the world of alternative fuels, I suspect we will find ourselves enmeshed in an extremely complex fuel economy where different forms of fuel hit their maximum capacities at different times throughout the year, day or week.

Alternative energy is the art of storing and releasing energy so that it has maximum effects. Perhaps the best path to alternative energy is to create pricing variable pricing structures that communicate capacity information in the form of cost.

Imagine having an electrical grid that communicated costs throughout the day. Refrigerators, air conditioners and battery chargers could respond to this information by turning themselves off and on according to the price of the moment.

The wild fluctuations in price this summer seem to have left a good many people emotionally devastated. Personally, I see the wild fluctuations as a good thing in that the fluctuations have people more attuned to the nature of energy, which travels in waves.

Taxes distort prices. Perhaps the distortion of a percentage based gas tax would be better than the distortion of fixed penny tax because the percentage based tax does a better job of communicating information about current demand and capacity.

Just In Time Production

Interestingly, a system with fluctuating energy prices might cause us to alter some of our current ideas about business. For example, people are currently sold on Just in Time production. JiT techniques say "resource considerations be damned" we want material handled by production flow. Fluctuating energy prices might cause manufacturers to see their production line as a system that stores and releases energy and modify the JiT line with a little old fashioned material handling and processing wisdom.

A good portion of the alternative energy future is designing a system that accurately communicates capacity information so that consumers can meter their consumption of energy accordingly.

Wednesday, December 03, 2008

Reason's Greetings

There is a really strange group of people who hold with religious fervor the tenet that all war is the result of religion. Adherents to this belief have faith that, if mankind simply discarded religion for reason; there would be an evolution in the world spirit that leads to a state of eternal peace.

The statement is essentially that war is the product of religion. If we replaced religion with reason, there would no longer be war.

I feel like tossing a sabot in the machine.

When I read history, it appears that the irreligious are as likely, if not more likely, to go to war than the religious. Of course, since one finds religions on every corner of the earth; it is possible to frame a religion as the reason for any given war.

It is all but impossible to argue a person away from a religious tenet. Atheists would simply accuse me of framing the irreligious for participating in the various communist revolutions that were theoretically based on pure reason.

No, making arguments about specific wars just leads to shrill noise; So, I wish to toss my sabot at one of the central premises of the argument.

The term "reason," of course, simply refers to whatever ideas spurred people to action. Historically, everyone who has agitated for war has done so with a reason in mind.

As we argue about the reasons for war, one cannot help but realize that, if there is a reason for every war, then "reason," is somehow a common attribute to all wars.

If there is even one war where religion is not the reason for the war; then one might come to the horrible realization that "reason" is the cause of war.

This really throws in doubt the supposition that we could get rid of war if we replaced religion with reason.

If reason is the cause of war; some might reason that we could live in harmony with nature if only we learned to discard reason. You will actually find a very large number of people in our society trying to do just this.

I contend, however, that the statement: "if we discard reason we will return to harmony with nature" is flawed.

The ability to reason is part of the nature of man. Denying one's nature does not restore harmony with nature.

Sadly many people, at this point, throw up their hands in despair.

There is hope. I believe that it is possible for us to improve our method of reasoning to reduce the likelihood of war. The path is difficult. There are many paradoxes and ancient hatreds that mar the path peace. (An example of paradox is that one cannot stop war simply by surrendering as the propensity to surrender invites invasions. As for ancient hatreds, we find that the current wars in the Middle East seem to be part of a continuing conflict that reaches back to ancient wars between the Ancient Greeks and Persians.)

The secret to reducing war is to realize that there are different types of reasoning. There is sound and unsound reasoning. If our goal is to stop war, then the better path to blaming wars on religion would be to explore the foundations of our system of reason and to improve our rational skills.

Monday, December 01, 2008

Dialectics of the Short Sell

My contention is that ideas matter. Before we constrict our financial system in a new straightjacket of regulations, we should engage in a debate about what ideas went wrong.

The western tradition appears to have created two fundamentally different views of the economy. I will call these the analytical and dialectical view.

The analytical view traces to the days of Pacioli and The Renaissance and is centered quite solidly in the analytic tradition of Aristotle. Luca Pacioli (1446-1517) was a Franciscan friar who codified the system of double entry accounting. The early Florentine Renaissance was centered on the process of the creation of assets. Florence produced a plethora of grand master artists, because the town saw the work of the grand masters as a valuable asset.

Pacioli's system of accounting would produce balance sheets and income statements for businesses. Investors could use these balance sheets and income statements to determine how best to invest their resources. The basic idea is that when businesses are using the same standards of accounting you can move to a higher level that lets you use the ancient tools of analysis to figure out what is best use of resources.

The dialectical view can trace its history through antiquity as well. Most modern thinkers are enraptured with Plato. The writings of Machiavelli clearly indicate that there was a change in thinking toward the waning of Florence.

The dialectical view really took hold in the wake of Kant … the 1800s.

The analytic view is that commerce is this thing where rational people are engaged in a process of analyzing their resources and engaging in trade with the goal of developing assets and improving their condition. IMHO, this is the soul of classical liberalism.

The dialectical view has an extremely dim view of the common man which they see as irrational creatures yanked about by hormones and impulses. The merchant class is nothing but a petty bourgeoisie incapable of rational thought.

The view has permeated the intellectual class for centuries is that bourgeoisie is this horrible group of people engaged in these petty business wars each seeking domination of the market.

Short selling is a creation of this dialectical view. Short selling is a regulatory measure put in place by central banks and brokers that allow them sell stocks that they do not own. The trader sells the stock with a promise of buying the stock back at some point in the future.

The regulations that allow short selling create a market where anyone is able to sell shares in an asset at any moment without actually owning the asset. The goal here is to create a dialectical process where the price of assets by a conflict between shorts (those who sell the asset without owning it) and the longs (the people who actually own the asset.

Short selling is antithetical to the analytic tradition that sees the economic process as a system where people improve the assets that they own.

Short selling directly hampers the development of equity by confusing ownership. A system of widespread short selling creates a situation where multiple people believe that they own the same share of stock.

It is common during a hostile takeover for the robber baron in the hostile take over to heavily short the company under business attack. A business warrior laying siege on a company can have an army of agents short the asset. For example, they may have their agents short 51% of the shares in a company while buying 51% of the company. The business pirate can leap over the railings, storm the boardroom and claim ownership when in fact the pirate had simply engaged in a trick to confuse title.

Ideas matter.

The 2008 market collapse (and other historic market collapses) was fueled largely by short selling (people selling stock they do not own). This market collapse pushed many companies out of existence. Pushed many families out of their homes, and yanked food from the mouths of children.

Short selling is part of this absurd dialectical framework created by the tradition of Machiavelli, Hegel and Marx which leads directly to unnecessary conflict and division in our society.

Conversely, I contend that short selling is diametrically opposed to the concepts of free trade and analytical tradition that produces wealth. This tradition has people tending and improving the assets that they own. Short selling is an anti-market mechanism dreamed up by a ruling class which wishes to enmesh the market in absurd business wars that create massive inequities in society.

END NOTE: Please note, elitists on both the right and left support short selling and the dialectical dreams inherent in the practice.