Financializing Fiduciary Money

Asset Owners Peer Benchmarking Asset Managers

investment = speculating on share price movements in the share price trading markets

prudence = diversifying trading positions to manage risk

loyalty = extracting maximum profit from every trade/trading strategy, in reckless disregard for future consequences of present trading decisions

The wrong experts with the wrong expertise are in charge.

This is the economy they are shaping for us through the expertise they are expert in.

  • material abundance (for some)
  • technological diversity
  • a cascading cavalcade of social failings:
    • Short-termism;
    • Economic Elitism;
    • Corporate Gigantism;
    • Financial System Instability;
    • Retirement System Unreliability;
    • Social and Environmental Unsustainability;
    • Dark Money Capture of Politics and Public Discourse;
    • Political Divisiveness Degenerating Towards Violence;
    • Institution Inability to Take Action on Climate and other challenges in our changing times that require humanity to take action at the scale of climate, and in the time of climate, as Earthlings living together on one shared Earth.

A cardinal principle of fiduciary prudence is diversification.

Neoliberal Financialization is the concentration of Fiduciary Money exclusively to finance
the business of
Market Makers
Making Money
Making Markets.

That is a violation of the prudence principal of diversification.

This is called, in modern parlance, “systemic risk”.

  • Reductionist

  • Extractive

  • Externalizing

  • Dehumanizing

  • Uncaring

  • Recklessly Unreckoning

  • NOT fiduciary

A Failure of Ideology

to deliver in reality

Markets need growth in share prices to deliver liquidity to market participants:
no growth, no liquidity;
no liquidity, no market participants;
no market participants, no markets;
no markets, no opportunities for market makers to make money making markets

Experts in timing the markets are not experts in continuity for longevity

The intended beneficiaries of Neoliberalism are Market Makers Making Money Making Markets, not the Institutional Fiduciary Owners of Intergeneration Fiduciary Money, or the society and social order that supports and sustains the institutions of Fiduciary Money that Market Makers are currently using to Make Money Making Markets.

Neoliberal Financialization works by 

  • mis-directing the Institutional Fiduciary Owners of Intergenerational Fiduciary Money
  • into speculation over Exchanges & Funds
  • by placing bets on anticipated future movements in market clearing prices 
  • for securitized shares in standard form investment contracts (stocks, bonds, consumer debt, derivatives and other so-called “financial assets”)
  • traded on price in the public, and private alternative, markets for maintaining market clearing prices on those shares
  • according to the logic that growth in transaction volumes delivers growth in share prices
  • and growth in share prices delivers liquidity to market participants
  • so market makers (so-called “Asset Managers”) can make money making markets
  • extracting maximum profit from each trading position
  • by externalizing maximum costs/loss/risk onto society, Nature and other market participants
  • recklessly disregarding the impacts of present choices on future possibilities
  • wrongfully favoring current beneficiaries while faithlessly endangering income security for beneficiaries in the future in disloyalty to the Fiduciary Purpose of Fiduciary Money.

Risk being managed by Asset Managers (more aptly described as share price risk managers) is the risk that a bet placed through a trading position does not pay off.

This risk is managed through diversification across a portfolio of trading positions and trading strategies in different trading markets, know as Asset Classes.

There is no care being exercised to manage the risk that The Pension Promise (or Endowment equivalent) cannot be honored because financing activities are not delivering constant and consistent cash flows that at least equal actuarial assumptions (or Endowment equivalents)

Loyalty in the Neoliberal construct of Asset Ownership is to the Markets, not to the Fiduciary Purpose of Fiduciary Money.

How did we get here?

Text becomes more effective for sharing the new social narrative of The Fiduciary Way once we can put the social narrative of Neoliberal Financialization of Fiduciary Money into it proper historical context, as a mistake that got made in the later part of the 20th Century, as the narrative of Space as the New Frontier faltered as humans actually ventured into Space, and found that there are no habitats in Space that are hospitable to humans – or to any kind of life, for that matter.

The story of Neoliberalism begins before the faltering of the Space narrative, but doesn’t become popular until that narrative falters, and the Markets start looking for a new narrative to stimulate trading.