вторник, 20 декември 2011 г.

В началото бе...

...едно злодейство: описано по-разговорно чрез "загадъчни хищници", за които пък има и "преки (научни) доказателства"
Следват накратко и двете:

Мystery predators contributed fiscal collapse
The study authors at the New England Complex Systems Institute (NECSI) retraced events to show that at a critical point in the financial crisis, the stock of Citigroup was attacked by traders by selling borrowed stock (short-selling) which may have caused others to sell in panic. The subsequent price drop enabled the attackers to buy the stock back at a much lower price.
This kind of illegal market manipulation is called a bear raid and the new study supports earlier suspicions that the raids played a role in the market crash.
"There used to be a rule that prevented it from happening by forbidding borrowed shares from being sold in large blocks that drive the price down," said Bar-Yam. "The Securities and Exchange Commission repealed that rule, known as the price test or uptick rule, on July 6, 2007."
On November 1, 2007, the number of borrowed Citigroup shares jumped by 100 million shares, a value of almost $6 billion. Six days later, a similar number of shares was returned on a single day.
Professor Yaneer Bar-Yam, President of NECSI, maintains this was no "freak" or coincidental event. "When 100 million shares are borrowed on a single day and then returned on a single day, the evidence that this is a concerted action is hard to refute."
Last year, the authors of the report sent preliminary results of their study to the financial services committee of Congress, and Congressmen Barney Frank and Ed Perlmutter sent it to the SEC. Unfortunately, Professor Bar-Yam says that he hasn’t seen any action by the SEC to identify or prosecute those responsible or to prevent its occurring in the future.
After the market crash, the SEC received thousands of requests from the public to reinstate the price test rule. Hedge funds that invest the money of wealthy individuals opposed its reinstatement. Eventually, the SEC put into place an "alternative" rule that only applies a price test when the price of a share drops more than 10 percent.
Professor Bar-Yam points out, "This watered-down rule would not have stopped the bear raid on Citigroup on November 1, 2007. This is only one example of the deleterious effects of the weakened rule. The overall effect of unregulated selling of borrowed shares is surely much larger and continues today."


Evidence of market manipulation in the financial crisis
Vedant Misra, Marco Lagi, Yaneer Bar-Yam
(Submitted on 14 Dec 2011)
Abstract
We provide direct evidence of market manipulation at the beginning of the financial crisis in November 2007. The type of manipulation, a "bear raid," would have been prevented by a regulation that was repealed by the Securities and Exchange Commission in July 2007. The regulation, the uptick rule, was designed to prevent manipulation and promote stability and was in force from 1938 as a key part of the government response to the 1928 market crash and its aftermath. On November 1, 2007, Citigroup experienced an unusual increase in trading volume and decrease in price. Our analysis of financial industry data shows that this decline coincided with an anomalous increase in borrowed shares, the selling of which would be a large fraction of the total trading volume. The selling of borrowed shares cannot be explained by news events as there is no corresponding increase in selling by share owners. A similar number of shares were returned on a single day six days later. The magnitude and coincidence of borrowing and returning of shares is evidence of a concerted effort to drive down Citigroup's stock price and achieve a profit, i.e., a bear raid. Interpretations and analyses of financial markets should consider the possibility that the intentional actions of individual actors or coordinated groups can impact market behavior. Markets are not sufficiently transparent to reveal even major market manipulation events. Our results point to the need for regulations that prevent intentional actions that cause markets to deviate from equilibrium and contribute to crashes. Enforcement actions cannot reverse severe damage to the economic system. The current "alternative" uptick rule which is only in effect for stocks dropping by over 10% in a single day is insufficient. Prevention may be achieved through improved availability of market data and the original uptick rule or other transaction limitations.

сряда, 7 декември 2011 г.

Niklas Luhmann, the Radical and Occupy Wall Street

Niklas Luhmann, the Radical and Occupy Wall Street

Hans Georg-Moeller:

Unfortunately, the radicalism of Niklas Luhmann’s theory of society has often been ignored, misunderstood, or watered down. This is unfortunate because the theory is probably the most powerful one out there right now for explaining how society works. Its radicalism is much needed. And why is that?

Simply put, because the dominating ideologies currently available still operate with the humanist vocabulary of early modernity, with all its notions of freedom, rights, recognition, the other, justice—you name it. These concepts may sound appealing, but they are theoretically shallow—for instance, with respect to understanding the social phenomena connected with the recent financial crisis. It happened because of “greed”? Is this all that the “Occupiers of Wall Street” can offer us as an explanation? We need a radical theory so that those protesting in the streets will begin to comprehend what it is that they are protesting against, and so that they may begin to drop their moralistic jargon (which they share with the Republicans, by the way).

In his 1997 essay “Globalization or World Society? How to Conceive of Modern Society?” Luhmann already described the “new centrality of international financial markets; the corresponding marginalization of production, labour, and trade; and the transfer of economic security from real assets and first-rate debtors to speculation itself,” which created an economy focusing on “financial products” rather than goods and undermined traditional economic couplings with, for instance, infrastructure, means of production, or the legal system. Luhmann understood that the “volatility of the financial market with its new derivative instruments for simultaneously maximizing security and risk with unpredictable effects” had led to the following situation: “He who tries to maintain his property will lose his fortune, and he who tries to maintain and increase his wealth will have to change his investments one day to the next. He can either use new derivative instruments or trust some of the many funds that do this for him.” For Luhmann all this cannot be explained on the basis of the traditional vocabulary of “exploitation” or tackled with ethical appeals.

What we need is a radical departure from seventeenth-, eighteenth-, and nineteenth-century thought, and the guts to look into the mirror without old wigs and fancy dresses that show us in all our assumed human dignity and moral beauty. Most disappointingly, in the course of the “Dialectics of Enlightenment,” the radical options that were once available, like Marxism, have now become the opium of the bourgeoisie. Luhmann’s theory is “radical” in the sense that it provides an entirely new framework for understanding how global society operates on a basic level, how social complexity emerges, how we are immersed in a relentless matrix of communication that has swallowed us and that provides us with a variety of comfort and illusions. Marx had meticulously and coldly described how the capitalist mode of production had shaped a society of industrialist production of goods and, in line with that, a merciless dictatorship of money. Luhmann, equalling Marx in meticulousness and coldness, describes how, in “postindustrial” times, communication systems have taken over and allow for a rich variety of modes of “exchange,” in which any claim for human control or for “making a difference” that the Wall Street occupiers hope for must seem absurd.

If society actually evolves, and this is one of Luhmann’s most basic premises, then it cannot be steered. The main difference between evolutionism and creationism is that the latter believes in “intelligent design” and “guidance from above.” Evolutionism, however, does not. Unfortunately, the illusion of intelligent design and guidance from above still dominates “postenlightenment” social theory, only in a secularized version. Once this was the job of God and His helpers on earth. Now the helpers claim that they can do the job alone. But this is not how the real world has ever operated. Perhaps we should finally liberate ourselves from the liberal premises that we can determine basically whatsoever on the basis of our “free will.” The free will and the free market are specters that still haunt contemporary society. To exorcise them, a little radicalism may be needed, and this will imply, as was the case with Marx, a radical departure from the values and ideas of bourgeois moralists, leading far beyond what is currently offered by the Occupy Wall Street movement.

We do not need to despair, however. Just as we survived the insights of not being at the center of the universe, of not being the crown of creation, and of not being the master of our unconscious drives and social constraints, we can also survive Luhmann’s sociological insult. The sociological insult finally liberates us from the illusion that we can, and therefore must, control society (or communication). It may be at first disappointing to let go of illusions of control and controllability, but it can turn out to be a relief. In a surprising turn, Luhmann offers us a new form of radical theoretical stoicism and thus enables us to find a degree of intellectual tranquility in the midst of the follies and the frenzy of a globalized world.