Calculating Bond Quotes

Why do I trust you?” Gal asks. My blood runs cold. But Gal’s tone isn’t cruel or calculating. It’s hopeful. Warming. He’s on to something. “Maybe you don’t trust me—I wouldn’t blame you if you didn’t, after everything—but I trust you with my life. I know I can trust you because you throw your life on the line to save me. Time and time again, no matter how little I deserve it. You’ve sacrificed everything for me.

There was no sign of life round the domed emplacement of the Moonraker, and the concrete, already beginning to shimmer in the early morning sun, stretched emptily away towards Deal. It looked like a newly laid aerodome or rather, he thought, with its three disparate concrete 'things', the beehive dome,the flat-iron blast-wall, and the distant cube of the firing point, each casting black pools of shadow towards him in the early sun, like a Dali desert landscape in which three objets trouves reposed at carefully calculated random.

Karl Marx already saw this in his time, writing in the Communist Manifesto: Wherever the bourgeoisie has come to dominate, it has destroyed all feudal, patriarchal, idyllic conditions. It has pitilessly torn asunder the motley bands that attached man to his natural superior, leaving no other bond between man than naked self-interest, inexorable “cash payment.” It has drowned the most heavenly ecstasies of religious fervor, of chivalrous enthusiasm, of philistine sentimentality in the icy water of egotistical calculation.

Why are women so ungenerous to other women? Is it because we have been tokens for so long? Or is there a deeper animosity we owe it to ourselves to explore? A publisher...couldn't understand why women were so loath to help each other.... The notion flitted through my mind that somehow, by helping..., I might be hurting my own chances for something or other -- what I did not know. If there was room for only one woman poet, another space would be filled.... If I still feel I am in competition with other women, how do less well-known women feel? Terrible, I have to assume. I have had to train myself to pay as much attention to women at parties as to men.... I have had to force myself not to be dismissive of other women's creativity. We have been semi-slaves for so long (as Doris Lessing says) that we must cultivate freedom within ourselves. It doesn't come naturally. Not yet. In her writing about the drama of childhood developments, Alice Miller has created, among other things, a theory of freedom. in order to embrace freedom, a child must be sufficiently nurtured, sufficiently loved. Security and abundance are the grounds for freedom. She shows how abusive child-rearing is communicated from one generation to the next and how fascism profits from generations of abused children. Women have been abused for centuries, so it should surprise no one that we are so good at abusing each other. Until we learn how to stop doing that, we cannot make our revolution stick. Many women are damaged in childhood -- unprotected, unrespected, and treated with dishonesty. Is it any wonder that we build up vast defences against other women since the perpetrators of childhood abuse have so often been women? Is it any wonder that we return intimidation with intimidation, or that we reserve our greatest fury for others who remind us of our own weaknesses -- namely other women? Men, on the other hand, however intellectually condescending, clubbish, loutishly lewd, are rarely as calculatingly cruel as women. They tend, rather, to advance us when we are young and cute (and look like darling daughters) and ignore us when we are older and more sure of our opinions (and look like scary mothers), but they don't really know what they're doing. They are too busy bonding with other men, and creating male pecking orders, to pay attention to us. If we were skilled at compromise and alliance-building, we could transform society. The trouble is: we are not yet good at this. We are still quarrelling among ourselves. This is the crisis feminism faces today.

God wants more than kin loving kin. He wants more than the natural bonds. He wants more than biology. He wants our love to do more than run around the tight circle of our self-interest; more, even, than that it should run around the wider circle of our altruism, if altruism means we get some kind of round-about payback for love in the end. God, he says, wants us to love wildly and without calculation. God wants us to love people we don’t even like; people we hate; people who hate us. He says this, and he looks away from the familiar faces who’re bobbing up and down behind the wall of shoulders in the doorway, calling to him, trying to be heard.

Fiat-money! Let the State 'create' money, and make the poor rich, and free them from the bonds of the capitalists! How foolish to forego the opportunity of making everybody rich, and consequently happy, that the State's right to create money gives it! How wrong to forego it simply because this would run counter to the interests of the rich! How wicked of the economists to assert that it is not within the power of the State to create wealth by means of the printing press!- You statesmen want to build railways, and complain of the low state of the exchequer? Well, then, do not beg loans from the capitalists and anxiously calculate whether your railways will bring in enough to enable you to pay interest and amortization on your debt. Create money, and help yourselves.

When a human sees a snake, fear arises because millions of neurons in the brain swiftly calculate the relevant data and conclude that the probability of death is high. Feeling of sexual attraction arise when other biochemical algorithms calculate that a nearby individual offers a high probability of successful mating. Social bonding or some other coveted goal. Moral feelings such as outrage, guilt or forgiveness derive from neural mechanisms that evolved to enable group cooperation. All these biochemical algorithms were honed though millions of years of evolution. If the feelings of some ancient ancestor made a mistake, the genes shaping these feelings did not pass on to the next generation. Feelings are thus not the opposite of rationality – they embody evolutionary rationality.

Pat Riley, the famous coach and manager who led the Los Angeles Lakers and Miami Heat to multiple championships, says that great teams tend to follow a trajectory. When they start—before they have won—a team is innocent. If the conditions are right, they come together, they watch out for each other and work together toward their collective goal. This stage, he calls the “Innocent Climb.” After a team starts to win and media attention begins, the simple bonds that joined the individuals together begin to fray. Players calculate their own importance. Chests swell. Frustrations emerge. Egos appear. The Innocent Climb, Pat Riley says, is almost always followed by the “Disease of Me.” It can “strike any winning team in any year and at any moment,” and does with alarming regularity. It’s Shaq and Kobe, unable to play together. It’s Jordan punching Steve Kerr, Horace Grant, and Will Perdue—his own team members. He punched people on his own team! It’s Enron employees plunging California into darkness for personal profit. It’s leaks to the media from a disgruntled executive hoping to scuttle a project he dislikes. It’s negging and every other intimidation tactic.

Economics should help us rise above fear and greed. It should not exploit these feelings. Economic science should be about how one turns a social vision into a modern economic system. It should be a tool to create opportunities for human and social development. Not just address our fears as they are expressed as demand in the market. It should be devoted to concrete questions that are important for humanity. Not to abstract analyses of hypothetical choices. It should see people as reasonable beings. Not as wagons hooked to the consequences of an unavoidable, coercive rationality. It should see people as embedded in society. Not as individuals whose core never changes and who float in a vacuum at an arm’s length from each other. It should see relationships as fundamental for us to even be able to individuate ourselves. Not as something that can be reduced to competition, profit, loss, buying low, selling high and calculating who won. It should see a person as someone who acts according to her bonds with others. Not just out of self-interest and the denial of all context and power relationships. It should not see self-interest and altruism as opposites – because it should no longer view the surrounding world as something that is in opposition to one’s self.

Mowbray! Been a while since you bothered with the season. What brings you to town?” Lord Adrian Montfort, Earl of Mowbray, shifted his gaze from the couples whirling past on the dance floor and to the man who approached: the tall, fair, eminently good-looking Reginald Greville. He and Greville, his cousin, had once been the best of friends. However, time and distance had weakened the bond—with a little help from the war with France, Adrian thought bitterly. Ignoring Reginald’s question, he offered a somewhat rusty smile in greeting, then turned his gaze back to the men and women swinging elegantly about the dance floor. He replied instead, “Enjoying the season, Greville?” “Certainly, certainly. Fresh blood. Fresh faces.” “Fresh victims,” Mowbray said dryly, and Reginald laughed. “That too.” Reginald was well-known for his success in seducing young innocents. Only his title and money kept him from being forced out of town. Shaking his head, Adrian gave that rusty smile again. “I wonder you never tire of the chase, Reg. They all look sadly similar to me. I would swear these were the very same young women who were entering their first season the last time I attended…and the time before that, and the time before that.” His cousin smiled easily, but shook his head. “It has been ten years since you bothered to come to town, Adrian. Those women are all married and bearing fruit, or well on their way to spinsterhood.” “Different faces, same ladies,” Adrian said with a shrug. “Such cynicism!” Reg chided. “You sound old, old man.” “Older,” Adrian corrected. “Older and wiser.” “No. Just old,” Reg insisted with a laugh, his own gaze turning to the mass of people moving before them. “Besides, there are a couple of real lovelies this year. That blonde, for instance, or that brunette with Chalmsly.” “Hmmm.” Adrian looked the two women over. “Correct me if I’m wrong, but my guess is that the brunette—lovely as she is—doesn’t have a thought in her head. Rather like that Lady Penelope you seduced when last I was here.” Reg’s eyes widened in surprise at the observation. “And the blonde…” Adrian continued, his gaze raking the woman in question and taking in her calculating look. “Born of parents in trade, lots of money, and looking for a title to go with it. Rather like Lily Ainsley. Another of your conquests.” “Dead-on,” Reginald admitted, looking a bit incredulous. His gaze moved between the two women and then he gave a harsh laugh. “Now you have quite ruined it for me. I was considering favoring one or both of them with my attentions. But now you have made them quite boring.” -Reg & Adrian

During his time working for the head of strategy at the bank in the early 1990s, Musk had been asked to take a look at the company’s third-world debt portfolio. This pool of money went by the depressing name of “less-developed country debt,” and Bank of Nova Scotia had billions of dollars of it. Countries throughout South America and elsewhere had defaulted in the years prior, forcing the bank to write down some of its debt value. Musk’s boss wanted him to dig into the bank’s holdings as a learning experiment and try to determine how much the debt was actually worth. While pursuing this project, Musk stumbled upon what seemed like an obvious business opportunity. The United States had tried to help reduce the debt burden of a number of developing countries through so-called Brady bonds, in which the U.S. government basically backstopped the debt of countries like Brazil and Argentina. Musk noticed an arbitrage play. “I calculated the backstop value, and it was something like fifty cents on the dollar, while the actual debt was trading at twenty-five cents,” Musk said. “This was like the biggest opportunity ever, and nobody seemed to realize it.” Musk tried to remain cool and calm as he rang Goldman Sachs, one of the main traders in this market, and probed around about what he had seen. He inquired as to how much Brazilian debt might be available at the 25-cents price. “The guy said, ‘How much do you want?’ and I came up with some ridiculous number like ten billion dollars,” Musk said. When the trader confirmed that was doable, Musk hung up the phone. “I was thinking that they had to be fucking crazy because you could double your money. Everything was backed by Uncle Sam. It was a no-brainer.” Musk had spent the summer earning about fourteen dollars an hour and getting chewed out for using the executive coffee machine, among other status infractions, and figured his moment to shine and make a big bonus had arrived. He sprinted up to his boss’s office and pitched the opportunity of a lifetime. “You can make billions of dollars for free,” he said. His boss told Musk to write up a report, which soon got passed up to the bank’s CEO, who promptly rejected the proposal, saying the bank had been burned on Brazilian and Argentinian debt before and didn’t want to mess with it again. “I tried to tell them that’s not the point,” Musk said. “The point is that it’s fucking backed by Uncle Sam. It doesn’t matter what the South Americans do. You cannot lose unless you think the U.S. Treasury is going to default. But they still didn’t do it, and I was stunned. Later in life, as I competed against the banks, I would think back to this moment, and it gave me confidence. All the bankers did was copy what everyone else did. If everyone else ran off a bloody cliff, they’d run right off a cliff with them. If there was a giant pile of gold sitting in the middle of the room and nobody was picking it up, they wouldn’t pick it up, either.” In

It was pleasant to see the Ladies Amelia and Alexandrina, as they sat within a vast emporium of carpets in Bond Street, asking questions of the four men who were waiting upon them, putting their heads together and whispering, calculating accurately as to extra twopences a yard, and occasioning as much trouble as it was possible for them to give. It was pleasant because they managed their large hoops cleverly among the huge rolls of carpets, because they were enjoying themselves thoroughly, and taking to themselves the homage of the men as clearly their due. But it was not so pleasant to look at Crosbie, who was fidgeting to get away to his office, to whom no power of choosing in the matter was really given, and whom the men regarded as being altogether supernumerary.

Become a 'game rearranger.' Cut the BS and WALK sharply in the TRUTH you can see...especially in calculated conversations which could be dangerous in their motive-operandi. Look and listen deeper into the spirit of your dialogues.

Grieving for their future, men and women often took their own lives. Others died when they could not maintain the feverish pace of the march. While the mortality rate of slaves during the Second Middle Passage never approached that of the transatlantic transfer, it surpassed the death rate of those who remained in the seaboard states. Over time some of the hazards of the long march abated, as slave traders - intent on the safe delivery of a valuable commodity - standardized their routes and relied more on flatboats, steamboats, and eventually railroads for transportation. The largest traders established 'jails,' where slaves could be warehoused, inspected, rehabilitated if necessary, and auctioned, sometimes to minor traders who served as middlemen in the expanding transcontinental enterprise. But while the rationalization of the slave trade may have reduced the slaves' mortality rate, it did nothing to mitigate the essential brutality or the profound alienation that accompanied separation from the physical and social moorings of home and family. ... [T]he Second Middle Passage was extraordinarily lonely, debilitating, and dispiriting. Capturing the mournful character of one southward marching coffle, an observer characterized it as 'a procession of men, women, and children resembling that of a funeral.' Indeed, with men and women dying on the march or being sold and resold, slaves became not merely commodified but cut off from nearly every human attachment. Surrendering to despair, many deportees had difficulties establishing friendships or even maintaining old ones. After a while, some simply resigned themselves to their fate, turned inward, and became reclusive, trying to protect a shred of humanity in a circumstance that denied it. Others exhibited a sort of manic glee, singing loudly and laughing conspicuously to compensate for the sad fate that had befallen them. Yet others fell into a deep depression and determined to march no further. Charles Ball, like others caught in the tide, 'longed to die, and escape from the bonds of my tormentors.' But many who survived the transcontinental trek formed strong bonds of friendships akin to those forged by shipmates on the voyage across the Atlantic. Indeed, the Second Middle Passage itself became a site for remaking African-American society. Mutual trust became a basis of resistance, which began almost simultaneously with the long march. Waiting for their first opportunity and calculating their chances carefully, a few slaves broke free and turned on their enslavers. Murder and mayhem made the Second Middle Passage almost as dangerous for traders as it was for slaves, which was why the men were chained tightly and guarded closely.

[Aza Raskin] designed something that distinctly changed how the web works. It's called 'infinite scroll.' Older readers will remember that it used to be that the internet was divided into pages, and when you got to the bottom of one page, you had to decide to click a button to get to the next page. It was an active choice. It gave you a moment to pause and ask: Do I want to carry on looking at this? Aza designed the code that means you don't have to ask that question any more. ...It downloads a chunk of status updates for your to read through ...when you get to the bottom, it will automatically load another chunk for your to flick through. ...'At the outset, it looks like a really good invention,' he told me. He believed he was making life easier for everyone. He had been taught that increased speed and efficiency of access were always advances. his invention quickly spread all over the internet ...But then Aza watched as the people around him changed. They seemed to be unable to pull themselves away from their devices, flicking through and through and through, thanks in part to the code he had designed. He found himself infinitely scrolling through what he often realised afterwards was crap, and he wondered if he was making good use of his life. ...Aza sat down and did a calculation. At a conservative estimate, infinite scroll makes you spend 50 percent more of your time on sites like Twitter. (For many people, Aza believes, it's vastly more.) Sticking with this low-ball percentage, Aza wanted to know what it meant, in practice, if billions of people were spending 50 percent more time on a string of social media sites. When he was done, he stared at the sums. Every day, as a direct result of his invention, the combined total of 200,000 more total human lifetimes - every moment from birth to death - is now spent scrolling through a screen. These hours would otherwise have been spent on some other activity. When he described this to me, he sounded a little stunned. That time is 'just completely gone. It's like their entire life - poof. That time, which could have been used for solving climate change, for spending time with their family, for strengthening social bonds. For whatever is it that makes their life well-lived. It's just...' He trailed off.

For example, to value a ten-year bond with a 6 percent coupon, simply calculate what each of the interest payments and the principal repayment are worth today, in terms of present value. The sum of these individual values is the bond’s total value.

However, a small flaw developed in this market that had dire consequences years later. No one added the coupon accrued interest to their Repo transactions. Coupon accrued interest is the interest that accrues on a bond between semi-annual coupon payment dates. Basically, a bond accrues a little bit of interest each day. The value of a bond increases each day by that small amount of one day’s worth of coupon interest. In the 1950s Repo market, in order to keep things simple, Repo transactions were priced with just the principal amount of the trade. The bond’s Repo price was calculated by simply multiplying the bond’s par amount by the market price. No one added on the accrued interest. Picture this: It’s the 1950s and you don’t have a mainframe computer, calculator, or even a phone that makes basic calculations. Yes, there were hand calculations and tables that the back-office used to calculate yields and bond prices, but can you imagine how long that takes? At the time, it made back-office work just a lot easier by leaving the coupon accrued interest off of the trade. This had dire consequences down the road.

The Modus Operandi of THE REGULUS CONCLAVE as spelled out in 1853! “We hold such and such opinions upon one point only; and that one point is, mutual interest, and under that; 1st, that we can govern this nation; 2d, that to govern it, we must, subvert its institutions; and, 3d, subvert them we will! It is our interest; this is our only bond. Capital must have expansion. This hybrid republicanism saps the power of our great agent by its obstinate competition. We must demoralize the republic. We must make public virtue a by-word and a mockery, and private infamy to be honor. Beginning with the people, through our agents, we shall corrupt the State. “We must pamper superstition, and pension energetic fanaticism—as on ’Change we degrade commercial honor, and make success the idol. We may fairly and reasonably calculate, that within a succeeding generation, even our theoretical schemes of republican subversion may be accomplished, and upon its ruins be erected that noble Oligarchy of caste and wealth for which we all conspire, as affording the only true protection to capital. “Beside these general views, we may in a thousand other ways apply our combined capital to immediate advantage. We may buy up, through our agents, claims upon litigated estates, upon confiscated bonds, mortgages upon embarrassed property, land-claims, Government contracts, that have fallen into weak hands, and all those floating operations, constantly within hail, in which ready-money is eagerly grasped as the equivalent for enormous prospective gains. “In addition, through our monopoly of the manufacturing interest, by a rigorous and impartial system of discipline, we shall soon be able to fill the masses of operators and producers with such distrust of each other, and fear of us, as to disintegrate their radical combinations, and bring them to our feet. Governing on ’Change, we rule in politics; governing in politics, we are the despots in trade; ruling in trade, we subjugate production; production conquered, we domineer over labor. This is the common-sense view of our interests—of the interests of capital, which we represent. In the promotion of this object, we appoint and pension our secret agents, who are everywhere on the lookout for our interests. We arrange correspondence, in cipher, throughout the civilized world; we pension our editors and our reporters; we bribe our legislators, and, last of all, we establish and pay our secret police, local, and travelling, whose business it is, not alone to report to us the conduct of agents already employed, but to find and report to us others, who may be useful in such capacity. “We punish treachery by death!” (from YIEGER'S CABINET or SPIRITUAL VAMPIRISM, published 1853)

for the stock market, corporate earnings and dividends; for the bond market, interest payments. Market returns, however, are calculated before the deduction of the costs of investing, and are most assuredly not based on speculation and rapid trading, which do nothing but shift returns from one investor to another. For the long-term investor, returns have everything to do with the underlying economics of corporate America and very little to do with the mechanical process of buying and selling pieces of paper. The art of investing in mutual funds, I would argue, rests on simplicity and common sense.

Buying a 100,000 yen bond keeps the capital sum safe while also providing regular payments to the saver. To be precise, the bond pays a fixed rate or ‘coupon’ of 1.5 per cent: 1,500 yen a year in the case of a 100,000 yen bond. But the market interest rate or current yield is calculated by dividing the coupon by the market price, which is currently 102,333 yen: 1,500 ÷ 102,333 = 1.47 per cent.

I’d like to leave all my interest in, please,” explained Paddington. “In case it rains.” “Well,” said the man in a superior tone of voice as he made some calculations on a piece of paper. “I’m afraid you won’t keep very dry on this. It only comes to ten pence.” “What!” exclaimed Paddington, hardly able to believe his ears. “Ten pence! I don’t think that’s very interesting.” “Interest isn’t the same thing as interesting,” said the man. “Not the same thing at all.” He tried hard to think of some way of explaining matters for he wasn’t used to dealing with bears and he had a feeling that Paddington was going to be one of his more difficult customers. “It’s… it’s something we give you for letting us borrow your money,” he said. “The longer you leave it in the more you get.” “Well, my money’s been in since just after Christmas,” exclaimed Paddington. “That’s nearly six months.” “Ten pence,” said the man firmly.

Explaining their allure, Milken said, “The opportunity to be true to yourself in high-yield bonds is great. It is not like buying a stock. With a stock, its value is generally dependent upon investors’ collective perceptions of the future. No matter how much research you have done regarding a particular stock, you don’t have a contract as to what the future price will be. But with a high-yield bond there is a date certain in the future when it matures, and if you hold it to maturity and your analysis is correct, you will be correct in your calculation of your yield—and you do have a contract as to future price. One is certain if you’re right. The other is not.

It’s not remotely likely, but then neither is anything. If the force of gravity were even slightly weaker, stars wouldn’t be dense enough to cross the Coulomb barrier and start thermonuclear fusion. It would be a completely dark universe. If gravity were slightly stronger, stars would burn too hot and fast, and there would be no life. If the attractive force between electrons and atomic nuclei were too weak, electrons couldn’t orbit; if it were too strong, atoms couldn’t bond with each other. Either way, there would be no molecules. There are more than thirty such parameters that must have almost the precise values that they do in order to permit a universe with life. The odds of that happening have been calculated to be one to the negative 230—that is to say, one chance in a number that has 229 zeros after it. Randomly finding a specific grain of sand on the first try among all the grains on earth would be millions of millions of times more likely than the universe existing. And yet here we are.

Hence, after this foreshortened discussion of the major considerations, we once again enunciate the same basic compromise policy for defensive investors—namely that at all times they have a significant part of their funds in bond-type holdings and a significant part also in equities. It is still true that they may choose between maintaining a simple 50–50 division between the two components or a ratio, dependent on their judgment, varying between a minimum of 25% and a maximum of 75% of either. We shall give our more detailed view of these alternative policies in a later chapter. Since at present the overall return envisaged from common stocks is nearly the same as that from bonds, the presently expectable return (including growth of stock values) for the investor would change little regardless of how he divides his fund between the two components. As calculated above, the aggregate return from both parts should be about 7.8% before taxes or 5.5% on a tax-free (or estimated tax-paid) basis. A return of this order is appreciably higher than that realized by the typical conservative investor over most of the long-term past. It may not seem attractive in relation to the 14%, or so, return shown by common stocks during the 20 years of the predominantly bull market after 1949. But it should be remembered that between 1949 and 1969 the price of the DJIA had advanced more than fivefold while its earnings and dividends had about doubled. Hence the greater part of the impressive market record for that period was based on a change in investors’ and speculators’ attitudes rather than in underlying corporate values. To that extent it might well be called a “bootstrap operation.” In

When they start—before they have won—a team is innocent. If the conditions are right, they come together, they watch out for each other and work together toward their collective goal. This stage, he calls the “Innocent Climb.” After a team starts to win and media attention begins, the simple bonds that joined the individuals together begin to fray. Players calculate their own importance. Chests swell. Frustrations emerge. Egos appear. The Innocent Climb, Pat Riley says, is almost always followed by the “Disease of Me.” It can “strike any winning team in any year and at any moment,” and does with alarming regularity.

I can explain this more easily by an example. Suppose the one-year interest rate is 5 percent and the two-year interest rate is 10 percent. This is a very steep yield curve. Suppose you want to put $100 in savings away for two years. You can either (1) lock in 10 percent for two years, or (2) lock in 5 percent for one year, and wait to see what rate you can earn during the second year. Which would you do? If you lock in 10 percent for two years, and the one-year interest rate stays the same at 5 percent, you are better off. But if you lock in 10 percent for two years, and the one-year interest rate soars to 50 percent, you are worse off. What is the one-year break-even rate? In other words, how much would one-year rates need to increase before you earned the same return with either strategy? The answer—about 15 percent—is the one-year forward rate for one year. That is, the current yield curve is predicting, based on current trading between one and two year bonds, that in one year 15 percent will be the one-year rate. The actual rate in one year might be 15 percent, or it might not. The 15 percent rate is implied by current rates. There are elaborate formulas for calculating all the forward rates for every maturity and for deriving an entire forward curve, but the analysis is no more difficult than the above example.

We have seen what significance, given socialism, the wealth of human needs acquires, and what significance, therefore, both a new mode of production and a new object of production obtain: a new manifestation of the forces of human nature and a new enrichment of human nature. Under private property their significance is reversed: every person speculates on creating a new need in another, so as to drive him to fresh sacrifice, to place him in a new dependence and to seduce him into a new mode of enjoyment and therefore economic ruin. Each tries to establish over the other an alien power, so as thereby to find satisfaction of his own selfish need. The increase in the quantity of objects is therefore accompanied by an extension of the realm of the alien powers to which man is subjected, and every new product represents a new potentiality of mutual swindling and mutual plundering. Man becomes ever poorer as man, his need for money becomes ever greater if he wants to master the hostile power. The power of his money declines in inverse proportion to the increase in the volume of production: that is, his neediness grows as the power of money increases. The need for money is therefore the true need produced by the economic system, and it is the only need which the latter produces. The quantity of money becomes to an ever greater degree its sole effective quality. Just as it reduces everything to its abstract form, so it reduces itself in the course of its own movement to quantitative being. Excess and intemperance come to be its true norm. Subjectively, this appears partly in the fact that the extension of products and needs becomes a contriving and ever-calculating subservience to inhuman, sophisticated, unnatural and imaginary appetites. Private property does not know how to change crude need into human need. Its idealism is fantasy, caprice and whim; and no eunuch flatters his despot more basely or uses more despicable means to stimulate his dulled capacity for pleasure in order to sneak a favour for himself than does the industrial eunuch – the producer – in order to sneak for himself a few pieces of silver, in order to charm the golden birds, out of the pockets of his dearly beloved neighbours in Christ. He puts himself at the service of the other’s most depraved fancies, plays the pimp between him and his need, excites in him morbid appetites, lies in wait for each of his weaknesses – all so that he can then demand the cash for this service of love. (Every product is a bait with which to seduce away the other’s very being, his money; every real and possible need is a weakness which will lead the fly to the glue-pot. General exploitation of communal human nature, just as every imperfection in man, is a bond with heaven – an avenue giving the priest access to his heart; every need is an opportunity to approach one’s neighbour under the guise of the utmost amiability and to say to him: Dear friend, I give you what you need, but you know the conditio sine qua non; you know the ink in which you have to sign yourself over to me; in providing for your pleasure, I fleece you.) This estrangement manifests itself in part in that the sophistication of needs and of the means (of their satisfaction) on the one side produces a bestial barbarisation, a complete, crude, abstract simplicity of need, on the other; or rather in that it merely reproduces itself in its opposite. Even the need for fresh air ceases to be a need for the worker. Man returns to a cave dwelling, which is now, however, contaminated with the pestilential breath of civilisation, and which he continues to occupy only precariously, it being for him an alien habitation which can be withdrawn from him any day – a place from which, if he does ||XV| not pay, he can be thrown out any day.

Arbitrages: The purchase of a security and the simultaneous sale of one or more other securities into which it was to be exchanged under a plan of reorganization, merger, or the like. Liquidations: Purchase of shares which were to receive one or more cash payments in liquidation of the company’s assets. Operations of these two classes were selected on the twin basis of (a) a calculated annual return of 20% or more, and (b) our judgment that the chance of a successful outcome was at least four out of five. Related Hedges: The purchase of convertible bonds or convertible preferred shares, and the simultaneous sale of the common stock into which they were exchangeable. The position was established at close to a parity basis—i.e., at a small maximum loss if the senior issue had actually to be converted and the operation closed out in that way. But a profit would be made if the common stock fell considerably more than the senior issue, and the position closed out in the market. Net-Current-Asset (or “Bargain”) Issues: The idea here was to acquire as many issues as possible at a cost for each of less than their book value in terms of net-current-assets alone—i.e., giving no value to the plant account and other assets. Our purchases were made typically at two-thirds or less of such stripped-down asset value. In most years we carried a wide diversification here—at least 100 different issues.

ECHOES OF LOVE: A DANCE BENEATH THE ARCHWAYS Beneath the archways, where shadows play, As the world gives way, begin the odyssey. Uncertainty weaves into the grand scheme of life, A mystical altar, where destinies are intertwined. I walk the path, seeking the balm of solace, Enduring burden, sweet hymn of love. With hopes gone, a peace is about to descend, Still the echoes remain, they dissolve in silence. The flawed script in the story I wrote, Whispers of well-being, truths worth absorbing. "I'm fine," I say, a deceptive glare, Exposing the lies, an invisible love. A waltz with shadows on your street, Cynic's steps, very judicious dance. Terrible notions, a conspiracy unfolds, Regret is echoing at the threshold of love. Rumors of happiness, far-fetched, As I stumble in the field of love. In excess, I stumble and strain, Hope of solace, of regaining love. Did I stumble in that fleeting call? Huge weakening of pride, slow decline of strength. A gift given, deemed inadequate, In closeness, bonds become inadequate. A crazy search for a cure for love, Wandering aimlessly, purpose uncertain. Your realm echoes with such blasphemous footsteps, In the despair of the night, capricious dreams. Happiness, heard a rumor softly, As I wrestle with love like a flightless bird. Juggling too much reduces the weight of love, In the noise of love, a desperate clown. The desire to turn back, the love to amend, Unraveling habits, unraveling at every turn. A desperate attempt, from the quagmire of love, Hope you find love worth savoring. GUIDE ME, LET SALVATION BEGIN, A CHANCE TO IMPROVE, A REVENGE FOR LOVE. TO IMPROVE, HABITS HAVE TO BE BROKEN, A SELF-CALCULATING, STRIVING SOUL. THOUGHTS ENTANGLED IN THE HOPEFUL VISION OF LOVE, A CHANCE TO IMPROVE, A DECISION OF LOVE. WITNESS THE TRANSFORMATION, LET IT HAPPEN, INSPIRE IT, IN THE DANCE OF LOVE'S LIBERATION. LET ME ENTER AGAIN, A DOOR A LITTLE AJAR, A LOVE REBUILT, A HEALING STAR. WATCH AS LOVE APPEARS, WATCH, IN THE RELAXATION OF LOVE, A STORY RETOLD. I KEEP DREAMING, MAYBE, JUST MAYBE, LOVE'S EMBRACE, WAVING DESTINY. WITH EVERY STEP FORWARD, LOVE IS BECOMING FREE, SELF-MADE AGREEMENT, THE DEGREE OF LOVE.

Beneath the archways, where shadows play, As the world gives way, begin the odyssey. Uncertainty weaves into the grand scheme of life, A mystical altar, where destinies are intertwined. I walk the path, seeking the balm of solace, Enduring burden, sweet hymn of love. With hopes gone, a peace is about to descend, Still the echoes remain, they dissolve in silence. The flawed script in the story I wrote, Whispers of well-being, truths worth absorbing. "I'm fine," I say, a deceptive glare, Exposing the lies, an invisible love. A waltz with shadows on your street, Cynic's steps, very judicious dance. Terrible notions, a conspiracy unfolds, Regret is echoing at the threshold of love. Rumors of happiness, far-fetched, As I stumble in the field of love. In excess, I stumble and strain, Hope of solace, of regaining love. Did I stumble in that fleeting call? Huge weakening of pride, slow decline of strength. A gift given, deemed inadequate, In closeness, bonds become inadequate. A crazy search for a cure for love, Wandering aimlessly, purpose uncertain. Your realm echoes with such blasphemous footsteps, In the despair of the night, capricious dreams. Happiness, heard a rumor softly, As I wrestle with love like a flightless bird. Juggling too much reduces the weight of love, In the noise of love, a desperate clown. The desire to turn back, the love to amend, Unraveling habits, unraveling at every turn. A desperate attempt, from the quagmire of love, Hope you find love worth savoring. Guide me, let salvation begin, A chance to improve, a revenge for love. To improve, habits have to be broken, A self-calculating, striving soul. Thoughts entangled in the hopeful vision of love, A chance to improve, a decision of love. Witness the transformation, let it happen, Inspire it, in the dance of love's liberation. Let me enter again, a door a little ajar, A love rebuilt, a healing star. Watch as love appears, watch, In the relaxation of love, a story retold. I keep dreaming, maybe, just maybe, Love's embrace, waving destiny. With every step forward, love is becoming free, Self-made agreement, the decree of love.

Seven years ago tonight, every dream I ever had came true. That's not something too many men get to claim. I'm very lucky, blessed, whichever you believe. Probably a lot of both. Tonight marks the anniversary of my debut performance at Ceasars Palace." On his cue, the crowd whipped into congratulary rapture. Blindsided by his recollection, Isavel was motionless. That's what he recalls happening on this date? "Indulgent, lazy, self-centered... jerk!" she said, grabbing her purse, thinking she'd climb over the seat. "I'm going home!" Before she could turn, hositing herself over, a spotlight landed on her. In the darkened arena Aidan and Isabel were face-to-face. He stared. The same way he did years ago in his pickup truck, holding tight to her wrist, the same way he did on the dance floor at the gala. The same way he did in the moment she left him. "If you can believe it," he said, still staring, "something even more important happened that day. As dreams of fame and fortune go, this topped everything. I've always know that." Then, in a softer voice: "And I'm a fool because I should have never given up." Even from her vantage point, Isabel could see the gulp roll through his throat. "It's my great privilege this evening to introduce my wife, Isabel Royce." He gestered to the box. Isabel responded by sinking to her seat. "What's he talking about?" she hissed to Mary Louise. "We're divorced!" From her right, Tanya nudged her. It was like being on a palace balcony, Isabel offering a deer-in-the-headlights wave to the subjects, a thoroughly baffled look at Aidan. In return, he smiled at her clear confusion. "My wife ..." Why is he calling me that? There was a mixed reaction, lots of gasps, some applause, and the disappointed groans from female fans. "She's done me the tremendous honor of making a rare appearance at one of my shows. Seven years ago, she agreed to marry me. At the time, my life was more trouble than promise. We were two scared kids who had nothing but each other. Really, it was all I needed. We were married in true Vegas fashion." Hoots and hollers echoed, his glance dropping to the stage floor. Sharing this was making the performer uncomfortable. He pushed on. "While most women would have been satisfied with a ring ... " His long fingers fluttered over the snake. "This was Isabel's idea of a permanent bond." It drew a wave of subtle laughter, Isabel included. "Do you remember how the story went?" he said, speaking only to Isabel in a crowd of thousands. "As long as I had it, I'd never be without you. Turns out, it wasn't a story, it was the absolute truth. Lately though," he said, turning back to his public narrative, "circumstance, some serious, some calculated, has prevented me from getting my wife's attention. So tonight I resorted to an old performer's trick, a captive audience. I planned this moment, Isabel, knowing you'd be here. Regardless of anything you may believe, I meant what I said on our wedding night, in the moment I said it. I love you. I always have.

A 360-day year also made the calculation of interest very convenient. Indeed, even today, the calculation for corporate and municipal bond interest accruals is based on a 360-day year. It is tempting to think of the Sumerian administrative year as a kind of idealized, cleaner, improved year—a year as mathematicians and administrators might like it, as opposed to time as defined by astronomical reality. In short, the Sumerians invented a model of time that would serve well as a framework for analyzing periodic economic phenomena. It was also a development of remarkable hubris; the assertion of human’s time over natural time.

As the modern era came into being, the avarice of the usurer was supplanted by interest in the broader and more abstract sense of a share or stake. This new concept of interest was ethically wide-ranging: it ‘came to cover virtually the entire range of human actions, from the narrowly self-centered to the sacrificially altruistic, and from the prudently calculated to the passionately compulsive’.49 The seventeenth-century English statesman and philosopher Lord Shaftesbury summed up the new thinking with his comment that ‘Interest governs the World.’50 In his Fable of the Bees (1714), Bernard Mandeville exposed the paradox at the heart of the modern world, namely that private vices brought public benefits. Adam Smith incorporated Mandeville’s wicked insights into his political economy. In The Wealth of Nations, Smith describes the individual as one who ‘By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.’51 A similar thought is expressed in another famous line, in which Smith writes that ‘It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.’ The spirit of capitalism was transmitted across networks of credit that connected lenders and borrowers through bonds of mutual self-interest.52 Daniel Defoe described credit as a ‘stock’, synonymous with capital, while the French in Defoe’s day referred to capital as ‘interest’, in the sense of taking a stake.fn6 From a technical viewpoint, capital consists of a stream of future income discounted to its present value. Without interest, there can be no capital. Without capital, no capitalism. Turgot, a contemporary of Adam Smith’s, understood this very well: ‘the capitalist lender of money,’ he wrote, ‘ought to be considered as a dealer in a commodity which is absolutely necessary for the production of wealth, and which cannot be at too low a price.’53 (Turgot exaggerated. As we shall see, interest at ‘too low a price’ is the source of many evils.)

Come on, I mean it, tell me, how does it work?' said Maxentius-Drontio. 'I am interested, and not just because I am bored.' 'Hmm, calculating potential for targeted, induced social embarrassment.' The magos stopped, stock-still. Something clicked in his chest. 'Risks acceptable. Bond with me. Pass me that size nine molecular manipulator, please, in order to initiate emotional pairing,' said Fe.

Figuring out how to allocate your assets doesn’t need to be difficult. Obviously, as my grandmother liked to remind me, you don’t want to keep all your eggs in one basket. But how do you know what proportion of your nest egg should be invested in equities vs. fixed-income securities? There are all sorts of ways to calculate this. For my part, I prefer the following simple rule of thumb. Take your age and subtract it from 110. The number you get is the percentage of your assets that should go into equities; the remainder should go into bonds or other fixed-income investments.

Over the last several decades, policy consensus has cautioned that the world would only tolerate responses to climate change if they were free—or, even better, if they could be presented as avenues of economic opportunity. That market logic was probably always shortsighted, but over the last several years, as the cost of adaptation in the form of green energy has fallen so dramatically, the equation has entirely flipped: we now know that it will be much, much more expensive to not act on climate than to take even the most aggressive action today. If you don’t think of the price of a stock or government bond as an insurmountable barrier to the returns you’ll receive, you probably shouldn’t think of climate adaptation as expensive, either. In 2018, one paper calculated the global cost of a rapid energy transition, by 2030, to be negative $26 trillion—in other words, rebuilding the energy infrastructure of the world would make us all that much money, compared to a static system, in only a dozen years.21

That is why the most important calculation to know in owning bonds is known as yield to maturity. Yield to maturity (YTM) takes this critical maturity value concept into account.

According to Poterba’s calculations, shown in Table 1.5, taxable investors in stocks might lose as much as 3.5 percentage points per year to taxes. In the context of a pre-tax return of 12.7 percent per year, the tax burden dramatically reduces the rewards for investing in equities. The absolute level of the tax impact on bond and cash returns falls below the impact on equity returns, but taxes consume a greater portion of current-income-intensive assets. According to Poterba’s estimates, 28 percent of gross equity returns go to the tax man, while taxes consume 38 percent of bond returns and 42 percent of cash returns. Table 1.5 Taxes Materially Reduce Investment Returns Pre-Tax and After-Tax Returns (Percent) 1926 to 1996 Source: James M. Poterba, “Taxation, Risk-Taking, and Household Portfolio Behavior,” NBER Working Paper Series, Working Paper 8340 (National Bureau of Economic Research, 2001), 90. Tax laws currently favor long-term gains over dividend and interest income in two ways: capital gains face lower tax rates and incur tax only when realized. The provision in the tax code that causes taxes to be due only upon realization of gains allows investors to delay payment of taxes far into the future. Deferral of capital gains taxes creates enormous economic value to investors.*

Nearly all the bull markets had a number of well-defined characteristics in common, such as (1) a historically high price level, (2) high price/earnings ratios, (3) low dividend yields as against bond yields, (4) much speculation on margin, and (5) many offerings of new common-stock issues of poor quality. Thus to the student of stock-market history it appeared that the intelligent investor should have been able to identify the recurrent bear and bull markets, to buy in the former and sell in the latter, and to do so for the most part at reasonably short intervals of time. Various methods were developed for determining buying and selling levels of the general market, based on either value factors or percentage movements of prices or both. But we must point out that even prior to the unprecedented bull market that began in 1949, there were sufficient variations in the successive market cycles to complicate and sometimes frustrate the desirable process of buying low and selling high. The most notable of these departures, of course, was the great bull market of the late 1920s, which threw all calculations badly out

The adjective “efficient” in “efficient markets” refers to how investors use information. In an efficient market, every titbit of new information is processed correctly and immediately by investors. As a result, market prices react instantly and appropriately to any relevant news about the asset in question, whether it is a share of stock, a corporate bond, a derivative, or some other vehicle. As the saying goes, there are no $100 bills left on the proverbial sidewalk for latecomers to pick up, because asset prices move up or down immediately. To profit from news, you must be jackrabbit fast; otherwise, you’ll be too late. This is one rationale for the oft-cited aphorism “You can’t beat the market.” An even stronger form of efficiency holds that market prices do not react to irrelevant news. If this were so, prices would ignore will-o’-the-wisps, unfounded rumors, the madness of crowds, and other extraneous factors—focusing at every moment on the fundamentals. In that case, prices would never deviate from fundamental values; that is, market prices would always be “right.” Under that exaggerated form of market efficiency, which critics sometimes deride as “free-market fundamentalism,” there would never be asset-price bubbles. Almost no one takes the strong form of the efficient markets hypothesis (EMH) as the literal truth, just as no physicist accepts Newtonian mechanics as 100 percent accurate. But, to extend the analogy, Newtonian physics often provides excellent approximations of reality. Similarly, economists argue over how good an approximation the EMH is in particular applications. For example, the EMH fits data on widely traded stocks rather well. But thinly traded or poorly understood securities are another matter entirely. Case in point: Theoretical valuation models based on EMH-type reasoning were used by Wall Street financial engineers to devise and price all sorts of exotic derivatives. History records that some of these calculations proved wide of the mark.

Mr. Smith. I confess to being surprised that you decided to join us in such a manner.” Victor gave him a mocking nod. “I was expecting a more...subtle...approach. But perhaps the rumours of your greatness are just that, rumours.” “Subtlety is over-rated. I prefer a more in your face method.” Reno hooked his thumbs in his belt loops and took a casual stance while rapidly calculating the odds that he’d make it out of this alive. Right now, it appeared to be around zero.

Maybe we are a weather system—condensation and evaporation: we are together, we look at one another, we touch one another, we condense, we come together, we make love, we fall asleep, we wake and revert to our strange bond, a quiet weather system with no natural disasters.