Thursday, June 26, 2025

Functional Equation

 

The interest rate is in the denominator…



Plan accordingly…







18 comments:

mike norman said...

Where is the variable for gov't transfers?

mike norman said...

This formula leaves out a very important component. This is why everyone got the rate hikes wrong. It led to record highs in stocks. (Financial assets.)

Matt Franko said...

We went down 25%

Matt Franko said...

Total cumulative S&P return since Dec 2021 before Biden/Powell started rate. increases is 28% in 4 years … ie a shit return

Matt Franko said...

Trump wants rates at 1% if he can get a Fed head to do that we will go up then as much as we went down in 2022 …

Matt Franko said...

“ This is why everyone got the rate hikes wrong.”. Mike , How did they get it wrong ? We went down like 35% on NDX … so now it’s 4 years later and we’re up 28%. .. big deal… should be up over 40% …

Matt Franko said...

Set “new high!” today so what? We were already here February 20th … complete waste of 4 months.. haven't gone anywhere in 4 months … “pay with time”…

mike norman said...

We went down about that much during the tariff drama. So what? That's just emotion. This stupid formula is wrong. It's based on the theory of loanable funds.

Matt Franko said...

“ That's just emotion.”

It’s not emotion it’s a regulatory function…

Mike the system is regulated by those in authority…

They added 500b of regulated assets unexpectedly starting Feb 20 due to “debt ceiling” (reserve balances flood front TGA to Depository institutions and caused a 25% reduction in the price/value of financial assets,,

It’s a simple proportional control function … 8th grade algebra.,,

Matt Franko said...

It’s (A-L)/A =0.1 at t=0

Then govt adds 500b of assets so it’s [ (A-L) +500 - L] / A = 0.1 at t=1

So A has to be reduced,,, ie financial asset values are reduced.,,






Matt Franko said...

All the sell offs are caused by these Art degree monetarist morons adding reserves”to lend out!”

They think the Accounting abstractions are REAL…

It’s a textbook reification fallacy by these unqualified morons.,,



Matt Franko said...

MMT people are also Art degree morons who are trained to argue with them via dialogic method so they just counter with “no we’re not out of money!” and have been also jerking off like this for over 20 years.,, get nowhere ..,

Anybody can argue.,,

Matt Franko said...

Im not arguing I’m TELLING YOU how it is.,,,

Matt Franko said...

Mike where is your equation?

“Emotional reaction” is not an equation..,

EVERYTHING works via equation…

Matt Franko said...

“F=ma”

Matt Franko said...

PV=mRT

Matt Franko said...

v=ir

Matt Franko said...

AND.., they are going to do it AGAIN .., don’t know when though.,,