The money trail

My four year comes clean to tell us she swallowed a coin. Cryptically she uses the term ‘last-day’. Its her past-tense parlance. We mostly know it to mean yesterday, but it sometimes means last week or last month. I helpfully wonder out loud what denomination it was, deciding that the severity of the ingestion clearly lies in its numerical value (and therefore its cladding).

Seemingly my soliloquy is not that helpful.

And so we traipse off to radiology for some electromagnetic radiation.

I can’t help thinking that my parents would’ve never taken me for X-rays for something as trivial as M1-money-supply. I laugh at my dorky-economist joke (someone has to). They would have just let peristalsis do its thing. Or let me die of… I dunno… sepsis. (I don’t even know if that’s a reasonable cause and effect, but lets go with the overly dramatic)

I’m trying to embrace modern parenting though (because at the very least I’m competitive). And that means… eh… sunscreen, not trash-talking participation trophies, and knowing the Geo-location (which is apparently a proper noun) of your progeny at all times. Also taking your kid to the hospital every now and then.

Offering to ‘have a go’ with your rare-earth magnet in the workshop is (apparently) the opposite of this and frowned upon by everyone involved. And so I go sit quietly with my iPad, feeling severely reprimanded… but mumbling that I’m actually quite good at those sorts of games. And why does no-one ever listen to me? (and maybe I’m the victim in all of this)

My device, however, is a cluster-fuck of notes, screenshots, to-do lists and half-completed posts. It does not fill my bucket with love. And really, I need to block out some time to getting this digital-morass, un-mired and de-quaged. (and get my Zen back)

I’m not sure today is that day. (And so I hit up the news feeds instead)

‘JPMorgan CEO Jamie Dimon wants US regulators to consider a ban on the short selling of bank stocks‘

Which tweaks a raw-nerve with me, snarling my face up into a scowl. I can remember Elon Musk bemoaning short-sellers a few years back, calling them… ‘destroyers of value’ and suggesting that short-selling should be illegal.

I roll my eyes.

Bad companies destroy value, I gripe, edifices held together with toothpicks, papier-mâché and Scotch tape and then talked up and represented as something structurally sound and investible. Biblical its the fools who build their house on the sand and complain about the speculators outside doing a rain-dance when the tide is coming in.

No one bets against a lighthouse that has proven itself in multiple storms crewed by a competent keeper I allegory, feeling that people are talking smack about my ‘profession’ and so I need to clamber up onto my tiny stool and… you know… ‘Captain my captain’.

Jo… you sit in the basement wearing bunny slippers and nursing a warm beverage. Most of your day is spent whiled away on YouTube and raising your Systolic on Libertarian twitter. Its hardly a profession.

… I, yeah that’s… probably accurate. *sigh* I go back and add some single quotation marks.

It sounds counterintuitive, but the speculators and short-sellers actually make the market more stable. Not less!

Wait… I have notes on this… somewhere.

In the markets, fixing prices, or, equivalently, eliminating speculators, the so-called “noise traders”—and the moderate volatility that they bring—provide an illusion of stability, with periods of calm punctuated with large jumps. Because players are unused to volatility, the slightest price variation will then be attributed to insider information, or to changes in the state of the system, and will cause panics. When a currency never varies, a slight, very slight move makes people believe that the world is ending. Injecting some confusion stabilizes the system. Indeed, confusing people a little bit is beneficial—it is good for you and good for them. For an application of the point in daily life, imagine someone extremely punctual and predictable who comes home at exactly six o’clock every day for fifteen years. You can use his arrival to set your watch. The fellow will cause his family anxiety if he is barely a few minutes late. Someone with a slightly more volatile—hence unpredictable—schedule, with, say, a half-hour variation, won’t do so. Variations also act as purges. Small forest fires periodically cleanse the system of the most flammable material, so this does not have the opportunity to accumulate. Systematically preventing forest fires from taking place “to be safe” makes the big one much worse. For similar reasons, stability is not good for the economy: firms become very weak during long periods of steady prosperity devoid of setbacks, and hidden vulnerabilities accumulate silently under the surface—so delaying crises is not a very good idea. Likewise, absence of fluctuations in the market causes hidden risks to accumulate with impunity. The longer one goes without a market trauma, the worse the damage when commotion occurs.

Taleb, Nassim. Antifragile – Things that gain from disorder. Penguin Books Ltd. 2014.

Scans reveals no money in my daughter innards. Which means its was likely transitory. Har har. Again no one laughs. Seriously?

There is relief in not having to chop anyone open… which, I guess, would be incredibly inconvenient for everyone involved. And also expensive. I hate spending money on medical emergencies. Its like my biggest grievance in life.

Especially since money could be in short supply again soon. What with banks teetering (again), an industry, which if you actually added toothpicks, papier-mâché and Scotch tape it would likely improve the overall melange. But you know, short-sellers, those cunts (I’ve recently revisited some Guy Richtie and my day-to-day vernacular has suffered accordingly) are the problem!

To be fair institutional short sellers that publish a thesis on why your company is a hot dumpster waiting for a spark and then short your stock are probably the cunts in question. And the retail-traders slurping foam off their lattes in their boxers in-front of their widescreen monitors are… actually microbial in the grand scheme of things. Completely insignificant. So maybe I shouldn’t go into bat for the big kids.

Still. Short-selling is fine. If someone out there wants to hold up the other end of that contract (in the hope of profiting themselves) they should totally be allowed to do so. Free-markets and all that. If you don’t want to be shorted. Don’t list.

In any event. US Banks (and maybe Banks generally) ARE NOT lighthouses. If you could see their innards and could appreciate how wonky and dangerously cantilevered everything is, you’d have your life savings in Krugers and Morgans stacked in a Tupperware and buried in your backyard in a heartbeat.

Fortunately this stuff is hidden from us. And out of sight is out of mind. A happenstance that is much better for our sanity. Which is quite a precious commodity I’ve realized. Much more now that I have kids who inhume currency.