ETFs a warning.

Some time ago (May 2012) I wrote two articles about ETFs suggesting they were The Next Accident Waiting to Happen. In that first part I described how they work and who owns and runs them. My argument was that,

I think the signs are already there to suggest ETFs are where the instability and risk is accumulating. If I am in any way correct then ETFs will be to the next stage in our on-going state of siege-mentality crisis what CDOs were to the last.

In part two I looked at exactly how,

…the clever boys and girls of finance have found ‘innovative’ ways of pumping those ETFs up a bit, just like they did to Securities.

I detailed the alarming number of different ways ETFs and their market are being mutated into a monster of instability just as securities, CDOs and the like, were before them. I wondered about how many ETFs would be stuffed with high-risk sovereign bonds but held with a risk weighting of zero? I ended by suggesting that the claims being made for ETFs, of access to high returns via a product that massages away the risks, were as false now as they were when the same was said of mortgage backed securities in 2007.

I ended by saying,

ETFs have in their DNA everything it takes to become monstrously dangerous. They are wide open to all the fraud and shitty behaviour the banks seem not to be able to stop themselves from bathing in. They are awash in leverage and riding on a tide of derivatives which hide so much concentration of counterparty risk that it makes a mockery of ‘risk management’.

I haven’t written much about ETFs since, except for one brief update on bank etfs.

Then this week I have read a flurry of articles which set the alarm bells ringing.

First there was Andrew Haldane’s testimony before MPs at the House of Commons. Mr Haldane is Director of Risk Management at the Bank of England and in my opinion by far the brightest person there.

Mr Haldane made his bosses at the BoE very uncomfortable when, as the Guardian reported,  he rather bluntly told MPs,

 ”Let’s be clear. We’ve intentionally blown the biggest government bond bubble in history,” Haldane said. “We need to be vigilant to the consequences of that bubble deflating more quickly than [we] might otherwise have wanted.”

As if one cue Mr Bernanke confirmed earlier hints and guesses that the FED would start to reduce its bond buying from its current level of $85 billion a month, at some point this year . The response to which has been days of frantic selling of not just bonds but everything not nailed down. This served to accelerate a sell off that has been going on globally for the last month.

The Hang Seng in China has lost 10.62% in the last month. The Nikkei is down 8.6% In Europe, the FTSE has lost 7.8% while the Italian market is down 11.94%. In America the DOW is down 3.5% while Gold has lost 7.45%. All in one month.

At the very least this makes rather clear that at least that much of the traded ‘value’ of everything was never anything more than the bubble price inflated by the floods of central bank money flooding every market. The question unanswered is how much more of the value of stocks and bonds will suddenly turn out to be similarly illusory?

And that uncertainly is making the markets more and more volatile and unstable. Which brings me back to ETFs, because the marketing claims for ETF are that they give smaller investors a chance to ‘get exposure’ to – which means invest in – products that are normally only available to very large investors, such as sovereign bonds, or are not normally available locally such as foreign stocks and bonds from Korea or China for example –  or because they would normally be thought of as too risky and volatile.

But ETF’s claim to make the exotic available locally, the volatile stable and safe and the institutional sized, available in bite sizes. And people have been buying into the promise of return without the risk – again.

An Article in International Financing Review had the headline,

DERIVATIVES: Deutsche anticipates ETF ‘mega-trend’

The article began,

As a result of what it identifies as a ‘mega-trend’ within the investment industry as ETF inflows continue to grow at record levels, Deutsche Bank anticipates 50% growth of assets under management in its passive investment business by 2015, with fixed income ETF’s playing a significant role in that target.

A mega trend from ordinary stocks into ETFs.

In 2012, net new inflows into ETFs totalled US$262bn – the highest level on record for the industry. And 2013 remains on course for yet another bumper year with net inflows year-to-date at US$110bn – already 30% up on the same point a year ago.

Impressive or concerning as this growth is, it is the growth in what are called ‘fixed income’ ETFs which caught my attention. Fixed income ETFs are those which invest in bonds: corporate, municipal and sovereign. Most ETFS have some bonds in them but some, the Fixed Income kind, specialize.

According to a report  from Blackrock inc.  the world’s largest asset manager and one of the largest ETF managers as well, in an article at Bloomberg,

Fixed-Income ETFs to Own $2T in 10 Years

Exchange-traded funds that buy fixed-income securities may boost their assets more than six- fold to $2 trillion in the next 10 years as they transform the way bonds are traded, according to BlackRock Inc.

According to the Deutsche Bank study as the amount of debt in the world goes up – as it already dramatically has,

The funds will also benefit from a likely shift in the average investor’s holdings to include a greater proportion of debt, the report says.

Of course part of the reason the average investor will choose to hold more debt is because he will have been assured that with ETFs he will be able to ‘get exposure’ to the higher returns without any great risk. And in part that assurance will rest on the sales pitch which says, ETFs are a way of investing in a basket of products carefully chosen to track the whole market, rather that investing in a single stock or bond, AND unlike more old fashioned types of funds, which can only be sold at the end of each day, with ETFs you can trade them minute by minute just like stocks.

So according to those who sell ETFs it is all good.

“It’s really changing how to invest in the fixed-income market” by making it more transparent and liquid, Tucker, head of BlackRock’s iShares fixed-income investment strategy…

More transparent – you know what you own and more liquid. Liquid – that word again. Of course it used to be that securities, especially mortgage backed ones, and the CDOs based on them, were very ‘liquid’. And those who traded in them, especially those who traded in the CDS insurance, like AIG, which made such securities so super safe – they used to be the ones who provided all the liquidity. Until of course they didn’t. But that was then and this is now and the banks and brokers have all learned so much and everything is so much better and safer that nothing like that could happen with ETFs – could it?

21 st  June 2013  FT,

Bond market sell-off causes stress in $2tn ETF industry

A wave of selling caused many exchange traded funds to tumble below the value of their underlying assets as a bond market sell-off caused stress in the $2tn ETFindustry.

So if you owned an ETF of a stock it was worth less than the actual stock. Congrats.

According to Bryce James, president of Smart Portfolio, which provides ETF asset allocation models, quoted in the FT

“The losses for ETFs today were far beyond what the most sophisticated financial risk models could have predicated for worst-case scenarios,”

More than the models predicted fo even their worst case. Hmm, where have I heard that before?

Not only that but,

The selling also caused disruptions in the plumbing behind several ETFs. Citigroup stopped accepting orders to redeem underlying assets from ETF issuers, after one trading desk reached its allocated risk limits.

Oops. That’s called a lock in. You can’t sell when you would really like to and have to sit there while the value of the thing you are not allowed to sell goes down and down. So much for providing liquidity. Just like securities and CDOs before them, ETFs and those who make the market in them, provide liquidity when all is well but when everyone really needs it, when large losses are being made – the liquidity disappears and instead we are told of ‘rare occurrences’ and ‘risk limits’.

I described in those first two articles how this might happen through the concentration of ownership and  counterparty risk within a very few large players.

And it wasn’t just Citi.

Tim Coyne, global head of ETF capital markets at State Street, said his company had contacted participants “to say we were not going to do any cash redemptions today”. But he added that redemptions “in kind” were still taking place.

State Street, like Blackrock is one of the largest ETF players and market makers. They are the ones who provide all that yummy liquidity. Except on that day they didn’t, did they?

Of course everyone involved claimed this was a ‘very rare’ occurrence.

So let’s recap. Bonds are the biggest bubble in history. They are also the largest growth component in the bureoning ETF market which claims to be a safer version of what the securities market once claimed it was – safe, liquid and transparent.

I used to think ETFs were an accident waiting to happen. I still do. I just think the likely arrival date of that ‘accident’ has moved quite a lot closer.

 

, , , , ,

35 Responses to ETFs a warning.

  1. Phil T. June 21, 2013 at 10:36 pm #

    Thank you, Sir, for updating your readers from your prior (very relevant) thoughts on ETF’s.

    Any idea as to why the DOW has only declined 3.5 % in comparison to other Global Exchange Indices?

    Along similar lines of thought – Is there a vastly disproportional % ETF transactions vs. non-ETF transactions in the USA markets ??

    Best wishes …

    • Golem XIV June 22, 2013 at 2:12 pm #

      Hello Phil T,

      As far as i am aware the volume of ETF trades now dwarfs non ETF trades.

      As for the relatively low drop in the DOW compared to other markets – my guess – and it is only a guess – is that US money (and possibly Japanese and European as well) has simply chosen to see US markets as the most safe in an unsafe world and therefore money that has flowed out of European and Asian marekts has flowed back into US markets. Not necessarily back physically to the US but into US markets. I assume via off-shore vehicles that keep teh US taxman at arms length.

      Of course then those people have to decide what in America is the safest place to put their money. And there it gets interesting because it is not obvious is it?

  2. Chris Cook June 22, 2013 at 11:42 am #

    Good stuff, David: you’ve always been at the cutting edge.

    I’ve been writing about this – as has Izabella Kaminska who invented the term ‘Dark Inventory’ – for a couple of years as well

    http://www.eurotrib.com/story/2011/10/25/185749/31

    What underpins the ETF problem is the fundamental incompatibility and conflict of the Twin Peaks of modern finance capital – the absolute legal claims of ‘Debt’ and ‘Equity’.

    As ETFs invade a market they essentially reduce the ‘free float’ in the underlying, which increases volatility; enables ‘macro’ manipulation over time (eg Hamanaka in copper, and current antics by the Saudis and the US in oil); and creates a disconnect with the reality of the underlying flows of value which leads inevitably – via the madness of crowds, the concentration of risk in single points of failure aka clearing houses and clearing banks and the wonders of technology eg HFT – to market discontinuities and meltdowns.

    When the ETF phenomenon ends in turbulent falls at best and discontinuities at worst, we will see the next Great Regulatory Disaster as inflation hedging muppets realised they have been mis-sold market risk.

    Then the markets will move on fractally, as they always do, to the next Adjacent Possible.

    This, I believe, is the long forgotten Prepay instrument now re-emerging in use. This pre-dates the 300 year aberration of modern finance capital and will, I believe, be not so much the Next Big Thing but the Last Big Thing for the current market paradigm, since it dis-intermediates markets entirely.

    Interestingly, dis-intermediation – and a transition to service provision – is actually in the interests of the intermediaries themselves, as it minimises the need for finance capital, because all risk – market risk and credit risk – is now with the end users.

    This article of mine in the Sunday Herald covered prepay

    https://blogs.ucl.ac.uk/resilience/2013/03/11/the-myth-of-debt/

    There’s probably quite an interesting documentary to do here.

    • Golem XIV June 22, 2013 at 2:16 pm #

      Hello Chris,

      thank you for the kind words. I have read the two articles you link and they are very interesting indeed. I will have to read them again though.

      As you say we simply have to get away from trying to understand the 21st century using concepts that constantly miselad us simply because they were out of date even in the second half of the 20th.

  3. backwardsevolution June 22, 2013 at 7:38 pm #

    Golem – great article. Here’s an interesting one as well, from Zero Hedge.

    “We Want Fairness. There Is No Fairness If You Don’t Let Us Cheat”.

    To find what is perhaps the best analogy of the mentality behind today’s global capital markets and perhaps the entire US economy as well, one has to travel to Zhongxiang in Hubei province, where a university entrance exam for 800 students did not go quite as expected. Telegraph reports: “When students at the No. 3 high school in Zhongxiang arrived to sit their exams earlier this month, they were dismayed to find they would be supervised not by their own teachers, but by 54 external invigilators randomly drafted in from different schools across the county. The invigilators wasted no time in using metal detectors to relieve students of their mobile phones and secret transmitters, some of them designed to look like pencil erasers.

    In short: everyone was hoping to continue a historical tradition and simply cheat, but the proctors finally and shockingly pulled the plug. End result: hundreds of test takers who had no idea what to do when the system is not rigged. And summarizing best not only what happened in China, but what is going on in the market now that Bernanke has warned he may pull the liquidity Koolaid shortcut to wealth effects and riches: “Outside, an angry mob of more than 2,000 people had gathered to vent its rage, smashing cars and chanting: “We want fairness. There is no fairness if you do not let us cheat.” [...]

    We can only hope the crowd of furious E-trade babies, all margined out, that has been used to cheating in the market courtesy of the Fed, swarms the Marriner Eccles building demanding that the cheating continue or else.”

    http://www.zerohedge.com/node/475531

  4. Robin Smith June 23, 2013 at 12:42 am #

    If bonds are the biggest bubble in history, how do they compare to the bubble in property values now inflating?

    Lets not concern ourselves with the next housing led boom for now starting Jan 2012 which we forecast will be bigger than the last one ending 2008, which we can more easily analyse from data already on the public record.

    As a quick guestimate land values rose £2.5 trillion over the 2nd phase of the last boom of 7 years to 2008 in the UK alone. Multiply by 50 to get global numbers and 20 for US.

    Quid pro quo – if I furnish the exact property values, will you do the same for me with bonds? It may be simpler to use orders of magnitude rather than absolute numbers.

    So US$180e12 for the 7 years to 2008.

    Hint: Bond values are derived at the root from MBS and superficially from CDO. So it will be interesting to see how they can be higher. That would be quite a trick.

    On our forecast for the next mortgage rooted boom/bust ending 2026, this one will be very big. Looking at the markets over the long cycle we can see commodity prices reaching all time highs, the leading indices breaking new ground and new tech particularly in fossil based energy production increasing productive power yet further, all of this EVEN during a recession, all synchronising with the next mortgage cycle. Bingo! All the gains will go into property, all mortgaged, in the end.

    We were cheated by the peak oil gate keepers!

    So buy property now or make sure you are in the will and never struggle again. Rely on earned incomes and don’t say we didn’t warn you. True, this will be extremely difficult for anyone owning property or about to inherit it to affirm. Affirmation of this is what MeltFund is all about.

    As always please communicate through robinsmith@meltfund.com.
    http://www.meltfund.com

    p.s. still receiving objections and making clarifications from other readers all remain welcome.

  5. Eric June 23, 2013 at 9:34 am #

    I wonder, why anyone with some intelligence still believe a word what bankers say. I used to work in a swiss bank, and like 100% of all banks, its business model is making money off you, not for you! so, i never bought one single product banks wanted to sell to me, i always chose stocks from companies i thought they were doing good business. Over the last 10 years, i bought physical gold coins, not gold etf, even though it meant to pay a premium. A few months ago i sold nearly all my gold with a nice profit and i reinvested the money into a nice sailboat which i am sailing on the lake of zurich and this makes me very, very happy! The point of this story is, never listen to what a banker tells you to do, but always do the opposite. Also enjoy your hard earned money on something you really love to do.

    Great article David, like all your articles and thoughts. Unfortunately it seems that the ordinary person wants to be ripped off and never ends up on your blog to get some better understandig how they are constantly cheated.

    • Phil June 24, 2013 at 3:46 am #

      “never listen to what a banker tells you to do, but always do the opposite.”

      Except when the vampire squid tells you to short bullion :0)

  6. bill40 June 23, 2013 at 9:38 am #

    ETFs are indeed lethal especially in commodity markets and many blame them for contributing to soaring prices. The big guys love them and they are aggressively marketed to small investors (sound familiar?) but beware “Contango”

    “Contango isn’t the only reason commodity ETFs make lousy buy-and-hold investments. Professional futures traders exploit the ETFs’ monthly rolls to make easy profits at the little guy’s expense. Unlike ETF managers, the professionals don’t trade at set times. They can buy the next month ahead of the big programmed rolls to drive up the price, or sell before the ETF, pushing down the price investors get paid for expiring futures. The strategy is called “pre-rolling.”

    “I make a living off the dumb money,” says Emil van Essen, founder of an eponymous commodity trading company in Chicago. Van Essen developed software that predicts and profits from pre-rolling. “These index funds get eaten alive by people like me,” he says.”

    All the warning signs are there, the ETFs fund owns nothing but seed capital, it never takes delivery of what it invests in, it’s nothing but price manipulation. The bond ETF is identical you buy and interest rates go up, you’ve made the right call yet your investment shrinks.

    There is no limit to the downside. http://www.thecenterlane.com/?tag=next-financial-time-bomb

  7. stone June 23, 2013 at 5:03 pm #

    I’m not sure I get why you consider ETFs to be more problematical than other collective savings funds such as unit trusts or investment trusts. Are ETFs not simply a sort of half way between old style open ended funds such as unit trusts and old style closed ended funds such as investment trusts? Closed ended funds have always had the peril that discounts could widen when you need to sell up and open ended funds have always suffered attrition due to having to constantly buy and sell the underlying assets generally at the worst times. Investment trusts have been around for well over a century.
    To my mind the real issue is that nowadays profits are distributed by way of harvest-able price volatility rather than simply by dividend payouts. That is how the finance industry and insiders succeed in reaping return on capital that bypasses the other more pedestrian shareholders such as pension funds. Stock buybacks and manipulations of the capital structure of companies amplify gyrations in the stock prices and those can be efficiently harvested by elite traders.

    • Golem XIV June 23, 2013 at 6:51 pm #

      Hello Stone,

      I completely agree about the role of volatility. As to why I pick out ETFs I gave my reasons in the two first articles I wrote on them.

      In part my reasons are to do with aspects of their structure and counterparty risk concentration but partly just to do with how fast they are growing and doing so while the regulators don’t seem to be up to speed,

      But I don’t mean to suggest other funds are perfectly safe or so much better. I just think people have not appreciated the real risks involved in ETFs and have been lulled a little into thinking ETFs are safe as houses. If you’ll pardon the expression.

      • Cameron June 27, 2013 at 6:36 am #

        Golem

        Interesting articles on ETFs but I do not think you have established a case as to why ETFs are a major threat to the financial system and the largest of our financial institutions.

        As I see it all or most of the risks in ETFs are with the shareholders in these funds. When the Trust is created and the assets held by the ETF are effectively sold to the shareholders the risk attached to the base assets (which may be moderate or extremely high risk) are passed off to the shareholders. Those institutions that bought the assets to transfer to the trust have got their cash out to the extent that they do not hold any residual shares in the trust (ie those shares in the Trust not on sold on retail or wholesale investors).

        The Blackrocks of this world running the ETFs are not taking most of the risk. The investors in those funds are because if the asset values totally collapse for whatever reason the ETF shares become worthless and the shareholders lose their shirts not the sponsors or those used to purchase assets for the funds.

        The whole concept of an ETF is to pass the asset ownership and asset risk over to the shareholders who buy units in the Funds. That is what a mutual fund does and the fundamental difference is that a mutual fund does not have its units bought and sold on the exchanges. It may well be that in the case of a major adverse financial event many of these ETFs will begin to collapse because of declining asset valuation, excessive leverage, extensive use of derivatives and so on. But when the fund managers and others involved in the establishment and operation of these funds have transferred all risk to the ETF shareholders, it will be the shareholders that will take the hit.

  8. backwardsevolution June 24, 2013 at 6:15 am #

    Here is a very short article from someone who I really respect (he shut down his blog last year as he got into other things). Ex-commercial pilot, wrote his own financial book – the guy was incredible, a true Renaissance man, and he had a great sense of humour too. He became very disillusioned with his country, said he was embarrassed by what was going on.

    Here’s what he has to say about ETF’s:

    http://economicedge.blogspot.ca/2009/11/truth-about-2x-3x-and-4x-etfs.html

    A bunch of guys on another blog I used to visit had put money into ETF’s. You should have heard them complaining about not making money when their bets were correct, yet nothing came of it. Other experts I have read have said that they are strictly for day traders, not for long-term, otherwise you will lose.

    It’s a rigged game, ladies and gentlemen.

  9. backwardsevolution June 24, 2013 at 8:07 pm #

    Margin Calls:

    “The utterly-bogus crap that passes for “journalism” these days is a disgrace. This is especially true when the same cable channel runs ads telling you that with a $200,000 cash deposit you can borrow $1 million at under 2% to buy stocks.

    If you do that (and a lot of people have!) then you are not investing capital. You are trading with credit — money that is in fact vaporous and does not really exist.

    If you make a “profit” and cash out then you get to take someone else’s capital (maybe!) and turn it into cash in your account. But if you’re geared up 5:1 and the market takes a 20% crap your $200,000 is vaporized in a margin call and the supposed $1 million you “had” disappears.

    The truth then becomes evident — while the $200k in capital you put up was real (and is now the property of the broker) the $1 million you were playing with never existed. [...]

    See ‘ya in the poor house!

    Reality: Leverage was not taken out after the 2007/08 crash. The rot was instead papered over and the “recovery” was simply more leverage piled upon leverage rather than actual economic growth. Oh, and the margin clerk is on line 1.”

    http://market-ticker.org/akcs-www?post=222113

    • stone June 24, 2013 at 8:29 pm #

      backwards evolution, to my mind the best way to avoid that phenomenon is to tax gross asset values instead of taxing economic activity. Leveraged speculation is an inevitable consequence of how things are set up at present.

  10. backwardsevolution June 24, 2013 at 9:01 pm #

    Here is Oppenheimer Funds latest release to clients:

    “We have no new thoughts.

    Sell.”

    http://www.ritholtz.com/blog/wp-content/uploads/2013/06/CB-Worth.png

  11. Buck Turgidson June 25, 2013 at 2:04 am #

    Bulls eye Golem or as you Brits like to say spot on.

  12. Ceilidhman June 25, 2013 at 1:12 pm #

    Although this piece has come about as part of the Independence debate, it’s worth a read for anyone interested in how our economy is run. Margaret Cuthbert’s Reid Foundation paper is entitled the Mismanagement of Britain.

    http://www.cuthbert1.pwp.blueyonder.co.uk/papers%201/Mismanagement.pdf

    Enjoy!

  13. The Dork of Cork. June 25, 2013 at 8:55 pm #

    Off topic but are you going to do a piece about the structured nature of the Anglo tape releases and its very obvious political agenda of deflecting attention from much bigger fishes & their dark strategic agenda of slowly adjusting the Irish brain cell and its pocket ?

    Those little Anglo boys did refer to the Bank of Ireland as simply “The Bank”.

    Above that I imagine it was the true big boys calling the shots , espeically after they replaced Merrill Lynch back in 2009.
    The Feudal Knights and Lords nature of their political & financial power has become apparent for all with eyes to see.

    “PH: It’s not in the agreement. It’s not in the agreement. I mean you know the way the world works. There’s political room. There’s no political room. No political room was offered to him BY THE PEOPLE.”

    There you have it in a nutshell – politics is not in the hands of the people – it never was.

    This recent attempt to paint the Irish CB as a nice but dim outfit does not wash with me.

    We are under the umbrella of a extremely sophisticated & heavy propaganda operation.

    PS
    To my mind the above is linked up with deep efforts to destroy peoples wealth claims (deposits)……..remember energy is not destroyed – it gets transformed.

    The real scandal of the Irish and indeed Icelandic bailouts is that debts such as mortgages and such were not declared null and void given the criminal credit hyperinflation ………..and deposits declared national equity money.

    The great lidless eye wants to destroy peoples claims on wealth using their moral outrage as a weapon against them.

    This is a dark road beyond most peoples limited imagination.

    • patma2003 June 26, 2013 at 2:47 am #

      Yes. Been watching this story. I have a feeling you are correct and this is classic propaganda machinery.

      For all the contrasting, homegrown economic opinion, both of value and questionable, to not get a decent airing in the media over years…you then get this.

      The dialogue says how it is. You need all on board to carry it out however.

    • Roger June 26, 2013 at 10:46 am #

      Hi Dork, I am with you on the destruction of wealth claims in the hands of individuals I have been Joking for the past 5 years that I expect laws to be brought in shortly outlawing entrepreneurs anything that keeps corporates honest , like competition is not part of the plan.
      I have spent this week so far reading on Reality and contrasting it to concepts of rationality Heres a Bit from Wikipedia.

      http://en.wikipedia.org/wiki/Jürgen_Habermas

      http://en.wikipedia.org/wiki/The_Theory_of_Communicative_Action

      This ‘purposive rational action’ is steered by the “media” of the state, which substitute for oral language as the medium of the coordination of social action. An antagonism arises between these two principles of societal integration—language, which is oriented to understanding and collective well being, and “media”, which are systems of success-oriented action.
      Following Weber, Habermas sees specialisation as the key historical development, which leads to the alienating effects of modernity, which ‘permeate and fragment everyday consciousness’.
      Habermas points out that the “sociopsychological costs” of this limited version of rationality are ultimately borne by individuals, which is what György Lukács had in mind when he developed Marx’s concept, reification, in his History and Class Consciousness. They surface as widespread neurotic illnesses, addictions, psychosomatic disorders, and behavioural and emotional difficulties; or they find more conscious expression in criminal actions, protest groups and religious cults.[22] Lukács thought that reification, although it runs deep, is constrained by the potential of rational argument to be self-reflexive and transcend its occupational use by oppressive agencies.[citation needed] Habermas agrees with this optimistic analysis, in contrast to Adorno and Horkheimer, and thinks that freedom and ideals of reconciliation are ingrained in the mechanisms of the linguistically mediated sociation of humanity.

      I have been getting into some C S Pierce, of course all of this very good thinking is marginalised, forgotten and definitely not encouraged instead we Get Twats like Nial Ferguson thrust forward as great intellectuals of our time , when they are really jiust pretty boy parrots for the Fascist Mind police.

      • The Dork of Cork. June 26, 2013 at 12:47 pm #

        @Rodger
        The role of twitter to emasculate human thought into pointless & short soundbites and facebook to create “a other” fiction of oneself projected onto social media may have a deeper role in altering the so called “lifeworld”

        “By this means, lifeworld describes a person’s subjectively experienced world, whereas life conditions describe the person’s actual circumstances in life. Accordingly, it could be said that a person’s lifeworld is built depending on their particular life conditions. More precisely, the life conditions include the material and immaterial living circumstances as for example employment situation, availability of material resources, housing conditions, social environment (friends, foes, acquaintances, relatives, etc.) as well as the persons physical condition (fat/thin, tall/small, female/male, healthy/sick, etc.). The lifeworld, in contrast, describes the subjective perception of these conditions”

        Play this on your facebook page and see how many “friends” you pick up…….

        http://www.youtube.com/watch?v=srw2SzOifk0

        When the Irish CB Gov appeared on the Vincent Browne show and uttered the above words regarding the political force of “The People” – how many twitter feeds asked why the famously combative and legalistic Vincent Browne did not ask the simple question ?

        Who are these people and who gave them political power ?

        • Roger June 26, 2013 at 2:31 pm #

          Hi Dork, The idea of Facebook as Avatar existence alter Ego, our projecting back to others of what we expect them wish to see or that which will impress or meet with approval is really well set out in this piece I read last year, which I just looked up again.

          http://deoxy.org/egofalse.htm
          The society creates an ego because the ego can be controlled and manipulated. The self can never be controlled or manipulated. Nobody has ever heard of the society controlling a self – not possible.

          And the child needs a center; the child is completely unaware of his own center. The society gives him a center and the child is by and by convinced that this is his center, the ego that society gives.

          A child comes back to his home – if he has come first in his class, the whole family is happy. You hug and kiss him, and you take the child on your shoulders and dance and you say, “What a beautiful child! You are a pride to us.” You are giving him an ego, a subtle ego. And if the child comes home dejected, unsuccessful, a failure – he couldn’t pass, or he has just been on the back bench – then nobody appreciates him and the child feels rejected. He will try harder next time, because the center feels shaken.

          Ego is always shaken, always in search of food, that somebody should appreciate it. That’s why you continuously ask for attention.

          You get the idea of who you are from others.

          It is not a direct experience.

          It is from others that you get the idea of who you are. They shape your center. This center is false, because you carry your real center. That is nobody’s business. Nobody shapes it.

          You come with it.

          You are born with it.

          The feedback loop of PROJECTION AND REFLECTION leads us up the particular garden path we are currently up I guess personally I do not accept it is a matter of free will. I have been having an interesting exchange with someone on Alternet through Face book Here.

          https://www.facebook.com/pages/AlterNet/17108852506?ref=stream
          https://www.facebook.com/permalink.php?story_fbid=10151492686032507&id=17108852506&comment_id=26509059&reply_comment_id=26539941&offset=0&total_comments=148&ref=notif&notif_t=share_reply

          Superficiality isn’t an exclusive quality of social Media and invented meaning is everywhere, i personally think its a phenomenon connected to Urbanisation.

          • Phil T. June 26, 2013 at 3:55 pm #

            Well put Roger … sounds like it could be argued that social media is actually, well anti-social

          • The Dork of Cork. June 26, 2013 at 4:20 pm #

            @Roger
            Yes , I have got into the habit of posting on Facebook trekking & climbing images from 2 or 3 day /week or month backpacking routes I do every so often to clear my head.
            In the past these images remained in my little head or at least my computer.
            Now they are projected outwards – they are no longer a part of that inner me.
            in that sense It was no longer man stuff , it became social grooming stuff.
            Back to the monkeys picking nits off each others coat.

            I broke the camera on my latest little walk and now the images remain inside my head alone……their mine and nobody elses………its both a good and bad feeling.

            At the same time you don’t declare on Facebook that you had a good wank off a Suzie Diamond flick today….as you may degrade your ego currency in the light of others.
            Its not the done thing I suppose.

            This is perhaps not the best Brave new world (1980) but this segment captures the essence of what I am driving at.

            http://www.youtube.com/watch?v=WKgiVABR-9c

            “What did you do ?

            I hunted alone”

            We are in essence a village primate with a social orbit of a few 100 people at most.
            We however have been modified …………..
            We were not designed for this.

            We have a hunter gather brain.

          • steviefinn June 27, 2013 at 10:54 am #

            I would say that TV was & still is the biggest anti-social factor. For instance – How much empathy is diverted to & wasted on characters from soaps ? I have heard conversations emoted & constructed in reference to these figments of televisual imagination which appear to me to be no different whether those beings dicussed are flesh & blood or fictional. I wonder if the gossip over the garden fence about real people still survives.

            Facebook is maybe another tool that can be used for good or ill – a mixed blessing, like the fact I would not be here on this blog but for it’s existence. It’s actually made me more sociable in a virtual way, but that’s not saying much about someone who has always been ‘Just passing thru ‘. My ego could not survive on the small amount of likes I get from a hardcore of my friends while basically being ignored by the majority. Maybe I should not on the rare occasions appear drunk with a don’t give a f*ck attitude & perhaps put up more puppy pics, rather than tales of doom & gloom.

            As for us giving out an advertisement of ourselves, seeking approval etc, do we not do that all the time in whatever social context we find ourselves in ?

          • Roger June 27, 2013 at 3:35 pm #

            I think I’ll Download the whole Film Dork. I decided I wanted to Write a song about reality this week I ended up Writing this Poem. ( There are Notes on My Blog of how I arrived at this point.

            Reality is Infinity is Love is Infinite

            Real Love reality is.

            Self is Love, is Self
            Love is I, I Love
            Look in myself, Love is within

            Love thou, Thou Art Love
            Thou art other, you are love
            love each other, We are Love
            look for Love, Love is Without.

            Know love, Know each other
            See Love See Each Other
            Love is We ,We are Love
            Love each other, Each is Love

            Love is Everything, Everything is Love
            All is everything, Everything is Love
            Love everything, Love Everyone
            Love Everything, Everyone is love

            Love is Real, Real is Love
            Love Reality, Reality is Real
            Reality is Love, Love is Reality
            Reality is everywhere, Everywhere is Love

            Love is the centre
            Love has no Circumfrence
            Everywhere is the centre
            The centre is soul, Soul is Love

            The purpose is Love is The Purpose.
            Love is the Heart infinite reality is Love.
            Infinity is Reality is Infinity
            Love is Infinite, Infinity is Love

            Be Love,be infinite
            Love is infinity
            Love is
            The purpose of Love is .
            Love is

            We are
            it is
            all is
            Love
            Roger G Lewis 2013.
            http://letthemconfectsweeterlies.blogspot.se/2013/06/reality-is-infinity-is-love-is-infinite.html

  14. Just me June 26, 2013 at 10:31 am #

    “ETFs a warning.”

    Pensions a warning….

    http://www.wsws.org/en/articles/2013/06/26/spai-j26.html

  15. The Dork of Cork. June 26, 2013 at 2:09 pm #

    Ah , yes the counterpunch has arrived.

    http://www.irishexaminer.com/ireland/tax-state-subsidised-tracker-mortgages-urges-former-lenihan-adviser-235175.html

    This from a man who has kissed Greenspans ring.

    A breaking of contract law to somehow continue the debt based monetary system at all costs.
    The Irish state for want of a better word refuses to excercise sov power over the banks by issuing pure fiat in the same manner as the banks have done.
    The state is not what it seems.
    This would destroy the banks model of extracting wealth via double entry conduit “assets”

    This is the nature of Ireland – certainly post Cromwell when his new model army invaded and sheep replaced the labour intensive (but more productive cattle economy)
    The subsequent elimination of labour value produced more of a surplus for the people at the apex and the middlemen which grew out from the carnage & which serve this dark force.

    The middlemen serve a very important function – the BIS and the other organizations would not be able to excercise (profitable) power without them as more direct warfare is expensive but not out of the question either.

    Dan Cronin of 1971 vintage calls them for what they are. 18.00 minutes.

    http://www.youtube.com/watch?v=ci_mW4jVHX0

    Eoghan Rua the last great Gaelic poet.

    The Anglo tapes was all about directing anger at a certain junior branch of the Irish elite who are now out of the so called sov loop.
    The other banks remain with their fangs attached,

    We as always have been dealing with the darkest force ever to have roamed on this planet.
    The Money Cartel.

  16. freddie mac December 7, 2013 at 10:19 pm #

    Hello there, I hopped over to your web site via Facebook. Not some thing I ordinarily read through, however I enjoy your views nevertheless. Many thanks for generating something worthy of reading through!

  17. datpiff mixtapes January 5, 2014 at 1:29 pm #

    I am not sure wherever you will be having your information, nevertheless excellent subject. I have to devote more time to mastering additional or even knowing extra. Thank you for superb info I had been on the lookout for these records in my vision.

Leave a Reply