Conventional economics fails based in theory consisting of 'fantastic objects'. Equilibrium in efficient markets is a fantasy in fogginess. Clouds are a fact of open systems process.

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Page 1 of 3 April 2012 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited.
The author does not provide investment advice. In order to use reproduce or convey the material herein,
in any way, written agreement must be obtained from the author or its agent Architypes Inc.
StockTakers Limited is an Alberta corporation providing information on “likeables” equities.
StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions.
The Obduracy of Clouds?
At the heart of efficient markets hypothesis price is said resolved as a balancing of forces, a form
of equilibrium. The after-happy-hours “relaxed” walk of brokers on Wall Street is of course an
amusing parable for the irrational patterns stock prices gyrate. That randomness is Brownian
Motion traced in mingling gasses.
The gas-clouds rising as bubbles out of “gently used” equities salesmen in cartoons do not seem
fruitful science for study. However, someone speculated, if ones closes-off the boundaries we
might adapt the Second Law of Thermodynamics and predicate markets tend to equilibrium, but
“looks like” and “is” are quite different. This is gossip, not science. These assumptions are ill-
considered hypotheses in the range of a bunch of slammed together Wild-Assed-Guesses.
Markets are closed-off when they are monopolized or all shadiness and degrees thereof, from
dark pool trading, to insider dealing or front running. For good reasons such manoeuvres are
censured. We know and seek open and free trading markets as fairer for all.
Besides, price is resolved in agreement. All other issues are aside and most likely are in
imbalance while the hypothesis assumes otherwise. Some price always leaves someone a-kilter,
as in the cynics adage, “He loses who says yes first.”
Randomness is important to economists who assume their hypothesis markets are efficient,
though they know they are not. In their world view of markets there cannot be any clouds.
However the transaction costs and other kinds of stickiness prevail, even sticky fingers.
Clouds are pervasive indication of how randomness in the real world actually plays out, and, of
how such theory of open markets activity cannot exist without clouds. The aggressive
algorithmic trading models gleefully seek these “inefficiencies” of anomalous cloud formations
to churn their arbitrage from these scuddings of clouds.
Gratefully clouds obstinately form into great fluffy symbols all the time. Fortunately they often
bring us rain to grow grains thus allowing us to make bread to feed our children. Our children are
grateful the economist gets on the wrong side of this phenomenon of obdurate clouds forming for
entertainment of our imaginings of a temperate summer’s day. Even children know better.
Mr. Soros understood economics as taught and widely discussed is not the world of practice. The
failing of classical sciences classifying and quoting life out of context was useful but just a rough
start. All that achieves as abysmal science are realities rendered as "exogenous events" impacting
the fantastical economic models, just as King Canute raged against the tides. George Soros
As happy children of a summer’s day we will marvel in reverie at the changing shapes of clouds
in the sky. We would happily share our imaginings and inventions of shapes. That clouds should
form is most interesting to theory in economics. The economist would have us believe clouds are
near impossible.
As children we all knew better. We still do. Clouds happen, sometimes happily and sometimes
menacingly, because this is not a closed world we live in. We hope markets are not closed either.

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Page 2 of 3 April 2012 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited.
The author does not provide investment advice. In order to use reproduce or convey the material herein,
in any way, written agreement must be obtained from the author or its agent Architypes Inc.
StockTakers Limited is an Alberta corporation providing information on “likeables” equities.
StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions.
The Obduracy of Clouds?
unconventionality is being followed by Ray Dalio observing the rhymes of the market. Both
have rewritten the records for sustained high gains in free markets.
The rhymes of the market are what make the relevance of our Risk Price work, as 2 out of 3
equities trading above our risk price continue to rise in price in the longer term. Twelve years of
back testing have proven that is the case, obtaining 26.53% average IRR each year from 2000
through 2011. We distributed live example with our Dare or Truth ABC-Zs portfolios. It is the
rhymes of the markets that make our Risk Price work the way it does, obtaining unusual gains
with unprecedented consistent result in all free markets.
Such economics theory as Perry Mehrling identifies as “fantastical objects” is just myths about
open systems rendered in closed models and other fantastical objects. These we believe is why
all that diligence in calculating standard economics epicyclicals led managers to lose -4.5% as
average markets rose 2.98% last year. That is not cynical but is real chronic proof. Milliman
reports Canadian mutual funds averaged a 1.1% return over the past five years though each year
we add almost another 5% in just our contributions. Our government promotes programmes for
raising contributions by doubling our personal plans into pools not obliged to perform either.
Fantastic myths get in their way, not able to see the equilibrium for the clouds.
The gold standard for reserve banking is just a fatted calf of economics debate. Gold is irrelevant
as money but works fine as fetish. Gold standard is another fantastical objective that consumes
the air out of our political debate two centuries late.
The Napoleonic Wars proved gold was unnecessary, as Thomas Tooke, began to understand and
then point out in his testimony to parliament as one of Britain’s most respected bankers,
"unwarranted credit" was then (1810) and remains today the problem two centuries later that
wrought such harm. Credit script of the banks had replaced coin as industrial growth demanded
credit with the practice expanded to finance the wars against Napoleon, and later, corporations.
Without realising the transactions were as a derivative go back to Adam Smith’s description of
the paper receipts used as "money" drawn on the Amsterdam Bank and read that chapter very
carefully as his description on the discounting of those receipts against the bank fees for holding
the bullion meant there was more script in circulation than gold. "Unwarranted credit" is the real
factual issue behind fiat currency failures. Gold exploits these credits, but does not work it out.
Gold standard enters the political debate as a straw-man and like all straw-men awaits Guy
Fawkes Day to create smoke on the water obscuring real objectives. Gold is irrelevant to that
repair of credit raised to feed on the promise of cash flowing through our virtuous business plans.
The bailout was Federal Reserve accepting script money credit contracts, other banks were
refusing, to enable credit flow be maintained. The system had to absorb flawed credit extended
by the aspirations of some for creation of new wealth in society coming from other viable and
functioning businesses that could sustain the cash flowing through society. Society as a whole
benefits from credit enabling viable business creation. Credit is endogenous money created to
flow through business plans, ultimately as a cipher of ‘real’ money through balance sheets.

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Page 3 of 3 April 2012 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited.
The author does not provide investment advice. In order to use reproduce or convey the material herein,
in any way, written agreement must be obtained from the author or its agent Architypes Inc.
StockTakers Limited is an Alberta corporation providing information on “likeables” equities.
StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions.
The Obduracy of Clouds?
Reserve banking is the smallest portion of the banking system that in 2010 had created 770
trillion dollars in credit contracts and instruments which is world wide wealth, while GDP hit of
$63.12 trillion as monetary gold reserves were 1.9 trillion, just 0.2%. Camels can and should fit
through such needles they would say? That is, outside the shadow and black-market economies.
Our real economy is irrigated by Phantastic Money of endogenous banking, it is what drives our
aspirations to root and grow into vibrant business with incomes flowing through our purses on
the production streams it enables. That is the "whatever floats your boats" of endogenous money
created by credit extensions of the banks.
As much as Kahnemann's position is that we rely on the rational analysis system 2. However, it
is the intuitive and heuristic "Blinking" of his System 1 that tells us most where to start and
continue to adjust our sails. The adductive is fundamental whether we are charting our way on a
flat land supported by tortoises charted in downward sloping lines over the edges, or in a curved
surface or warped space evolving into our future aspirations in new lands and opportunities.
Sailors struggled with charts of a flat land geometry for more than four centuries navigating a
Mercator projected globe until Reimannian geometries were realized. The Modal Geometry of
the Firm and Balance Sheet Worth of the Trading Connections1
is a new analysis letting
investors know where they are.
The Modal Geometry gives us unprecedented clarity into the health of companies. From that we
derive the Risk Price. The markets have determined the consequence our knowledge of the Risk
Price of any equity obtains for our “likeables.”
Our reasons for having any equity in our portfolios are clear, concise and consistent. The equities
we hold are “likeables” tending to gain 67% of the time. We do not make stock prices but can
reasonably respond to stock price movements, by our knowing the price of risk, the downside,
and buying and holding accordingly. That is theory we have put into policy obtaining 26% IRR
average. Know What You Have. Have What You Know
Of course we require a fee for doing that. Mail us for our help.
Hans Goetze,
Architypes Inc and StockTakers Limited
Head Office
76 Midridge Close SE
Calgary, AB
T2X 1G1
72 Cornwall Street
Toronto, ON
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351 Chemin Boulanger
Sutton, PQ
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450 538-1270
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E. Goetze,“The Modal Geometry of the Firm and the Balance Sheet Worth of the Trading Connections”, 2006.