Zero Hedge is among my 5 or 6 websites that I go to each morning. I get my mind going with a cup of coffee and Huffington Post. Light stuff but sometimes and interesting thing that means nothing more than it caught my wide ranging interest, sometimes something really important. It is a hodge podge but a barometer of the general social media situation and what it considers important. Mostly not.
Then after waking up I get to Naked Capitalism. The best site on the web. I spend time there. Even the reader comments are valuable. Yves Smith is a hero. I thank her for her site, sometimes with a donation. What she does demands my moral, financial support. It is doing the right thing.
New Economics Perspective web site. Good. Absolutely great when Bill Black comments. Bill is also a hero. His best stuff is usually linked at Naked Capitalism so I have already seen it by the time I get to this web site. Good thinkers here. Both those that write for the site as well a those that offer comments. Math Babe is one.
Finally a trip to the finance side: Zero Hedge. I read somewhere that this site has a great degree of popularity on the web. It talks about finance matters that I read about, understand to some degree but I am mostly lost on 80% percent of what it presents. Hey, its finance! It was not meant to be understood by the common person's mind. That is how money is made in finance! That much I know but the daily content of the web site is a supreme challenge to my mind to comprehend. Smoke, mirrors, shadows on the wall.
At Zero Hedge this morning this caught my interest: Prepare For Epic Volatility: E-mini Liquidity Is Nonexistant
E-Mini is a futures thing. Defined here by Wikipedia.
Financial Futures are defined here by Wikipedia
My top of the head definition: Risky Business. Futures are bets that stabilize markets by managing, spreading risk. They involve margin. Putting down a little money on a bet that may, if it loses require more money to pay off.
Finance is one thing. Money is another. In my self created money conceptual structure they are fundamentally two different related things. In the real world of money and finance they are so wrapped up together that they can't be logically or conceptually separated because money is a function of debt and the entire financial structure of based on money created by the contractual debt relationship. Money is therefore a product of debt.
More debt creates more money. The big however is that there must be enough debt money (the most liquid form of financial paper) in the system to pay off debts when enough or all bets are lost at the macro level. If not the debtor goes broke, the whole system goes broke if there is not more money created to cover what is necessary to pay off lost bets.
The situation gets worse when there are bets on bets on bets.....all derivatives of bets build on nothing more than speculation and schemes to make others lose on their bets.
If money, the monetary system was not debt based it would be a different situation.
Finance is so complicated that I can't hope to understand it. If money was an independent SuperClass object used by the finance system but not a product of it that serves the financial system then it would regulate the application of money as a process of the monetary system.
In the current system of debt money Finance is the one and only Superclass and money is a system servant application of Finance in a Server/Client relationship.
The entire relationship between money and finance is backward. It is conceptually, structurally unsound and will fail when pushed beyond its ability to withstand shock.
Margin calls that can't be satisfied by liquidity are the shock.
That much I think I understand about money and finance.
The bottom line is who cushions the shock. The ones that caused it? No way. Finance is their system. It was designed to protect them from shock by making money a function of finance. Finance dominates money.
Money is the people's medium of exchange. If there is a shortage of it then who makes up the shortage?
Writing on the wall here?
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