fundamentals

ITALIAN ABSTRACT

Definiamo i fondamentali nelle scienze umane, come:

“Il risultato della relazione di auto sostenimento e correlazione tra due sottoinsiemi di fenomeni sociali:

1) un sottoinsieme “core” di valori osservati (di varia natura socio-culturale) strutturalmente stabili, in un certo gruppo sociale di riferimento.

2) Esso viene affiancato e confrontato ad un altro sotto-insieme di fenomeni a loro associabili o c.d.  “cause” correlate ai valori (ad es. fattori di costo, preziosità e rarità, requisiti e norme sociali, criteri di valutazione, tradizione e consenso sociale, intensità delle richieste).

La relazione di lungo periodo tra il comportamento di detti sotto-sistemi, getta luce sugli attrattori dei valori stessi; la conoscenza  di dette relazioni può quindi aiutare a ridurre il grado di incertezza sui livelli e trend dei fondamentali, distinguere varie componenti dietro ai loro livelli e variazioni, ed identificarne le eventuali, periodiche o meno, temporanee bolle o deviazioni dai trend e valori di fondo.”

I paradigmi, sia classici che neo-classici, che contengono una teoria dei fondamentali, e (salvo il caso delle dogmatiche) metodi empirici efficaci per applicarla e verificarla, possono sfuggire al relativismo almeno in linea di principio; e promettere ai propri seguaci un mutamento qualitativo dell’incertezza, da assoluta a parametrica. Essi quindi vanno ben oltre la definizione-proposizione  DI MINIMA precedente (condivisa da tutti i paradigmi), nel senso di potenziarla e rafforzarla in alcune direzioni (vedi def. B).

La critica mossa a quanto sopra dalle teorie relativstiche o anti-fondamentaliste, in particolare quelle bio-classiche, si ferma invece alla def. riportata, e precisa con scetticismo (etico o economico) che:

a) i decisori applicano certe routines nell’incertezza,  che prescindono da presunte componenti di base o fondamentali; le teorie dei fondamentali presentano qundi un vizio aristotelico-tomistico, di voler distinguere sostanza da accidente IN UN CONTINUUM, senza sufficiente sostegno né teorico, né empirico-fattuale o comportamentale.

b) I valori aggregati, economici o etici, ruotano attorno ad attrattori empirci MA NON  essenziali o “fondamentali”; oscillano entro corridoi naturalmente, socialmente o endogenamente fissati;  con comportamenti spesso mimetici (di gregge): pertanto nella realtà esistono solo bolle, mode e manie, ma nessuna metrica fondamentale su cui normalizzarle.

La definizione minimale riportata, si limita a constatare che esistono valori medi ed attrattori dinamici.

SVILUPPI in CORSO

non facciamo qui uno stato-dell’arte: ma avendoli visti ed avendone discusso con gli specialisti del campo, riteniamo di poter definire l’area teorica ed empirica dei FDM. come caratterizzata dall’apparire – – anche qui di un corpus eterodosso preciso, che affianca e critica la teoria neo-classica dei mercati degli attivi.

Proponiamo qui un termine ancora non in uso. Come area di “sfida” produttiva, e Popperiano confronto teorico-metodologico ed empirico-previsivo,  tra le 2 scuole (frontiera neo-classica, e neo-evolutiva di 2.a generazione):

“fondamentali dinamico-evolutivi”.

Con il termine, alludiamo ad una Sant’Anna-SantaFe  like “teoria dei mercati degli attivi” ancora incompiuta è vero, ma ormai in itinere e già qua e là abbastanza robusta. Auspicando che
– ai fdm statico-ottimizzanti (poco utili, anzi spesso fuorvianti nella pratica, come guida all’operatore ed all’analista di mercato; anche se restano una del tutto legittima ipotesi teorica, per chi aderisca e “creda” al frame neo-classico e lo stia pertanto sviluppando, adattando, completando di sempre nuovi moduli, ipotesi); si possano presto almeno affiancare, se non sempre sostituire, anche:
– degli attrattori forti di dinamiche complesse: siano esse caotiche, frattali o di altro genere.

The debate is over principles and ideas. Mr. McCain is being

challenged over his beliefs, actions and philosophies.

This is not short-term thinking, it is long-term thinking

at its best. It is all about fundamentals.” James W. Lloyd

Grosse Pointe Farms, Mich.

It’s Not Just Idle Talk; Ideas, Deeds Really Matter

WSJ. February 19, 2008; Page A17


But how and why do bubbles form? Economists traditionally haven’t offered much insight. From World War II till the mid-1990s, there weren’t many U.S. investing manias for them to look at. The study of bubbles was left to economic historians sifting through musty records of 17th-century Dutch tulip-bulb prices and the like.

The dot-com boom began to change that. “You were seeing live, in action, the unfolding of lots of examples of valuations disconnecting from fundamentals,” says Princeton economist Harrison Hong. Now, the study of financial bubbles is hot.

Bernanke’s Bubble Laboratory

By JUSTIN LAHART

WSJ. May 16, 2008; Page A1

Definition

A  – A GENERAL DEFINITION SHARED BY ETHICS AND SOCIAL SCIENCES.

Fundamentals, in social sciences and humanities, are

“a very small, core subset of all the cultural, economic, ethic, ethnic andor socially shared observed values, in a given social group.

This subset is often associated with a constellation of correlated fundamental causes -events -underlying factors (e.g., basic social norms and longrun value determinants). The latter are often labelled as the FUNDAMENTALS strictu sensu, which are supposed to affect value trends, once their variation in time and space is depurated by bubbles and local deviations.

Therefore, they are expected to throw some light on long term value attractors, and – once they are identified, known  and measured or estimated – they might allow to reduce the degree, and perhaps even (according to some fundamentals-driven paradigms in social sciences) change the nature of the uncertainty associated with fads and noise, value oscillations and random walks.” (SOCIALIST BIOPEDIA)

In neoclassic microeconomics, a rigorous definition has been supplied by GCE (General Competitive Equilibrium) and games theory. One shows that:

i) the economic value of an individual and his enterprise, a collective organization or a resource, has often a nonempty set of longrun equilibrium values.

ii) ROBUSTNESS condition:  a subset of these equilibria have some power to attract towards them a wide region of transactions.

iii) OPTIMALITY condition: under some restrictive assumptions about an “invisible hand” institutional frame (complete market mechanism success, not ambiguity or failure) [2], another nonempty subset of such equiibria are Pareto optima.

B –  NARROW DEFINITION IN NEOCLASSIC MICROECONOMICS.

Fundamentals are the subset of all LR equilibrium values, satisfying both conditions above (attractiveness- robustness; and Pareto or social optimality): e.g., a Nash-Selten (or even a more robust, the better) equilibrium, laying on the Pareto frontier of a noncooperative game (and highly evaluated by a social choice algorithm).

Such a product set (optimal LR values and robust attractors), when nonempty, and some causal or concomitant facts, are labelled the “fundamentals” in the human capital of a social agent, or the financial market evaluation of a firm, or laying behind the variable market prices for trading a commodity, an entitlement or a property right.” (BIOPEDIA)

In classic and bio-classic social sciences (from early, proto-evolutionary Malthus-Marx-Comte specifications after Darwin, …,  to bio-classicals like Simon, Kahneman and Tversky, Nelson and Winter, Diamond), one argues that: either Fundamentals don’t exist, or they are in fact irrelevant andor unknown, for some reason or another (e.g., indecidibility, inobservability, radical uncertainty, biases in estimation, collective beliefs and moods, herd behaviour, value bubbles and bursts, chaos or complexity, punctuated equilibria and log-log linear shakeouts).  Therefore longrun frames and rational behaviours do not take them into account, and diverge from “irrational” neoclassic dynamically optimal paths:

  • people make choices by applying more and more sophisticated heuristics, or just efficient “rules of thumb”, often imitating the success reputation ones, in conditions of bounded rationality (Herbert Simon) and bounded world (Niklas Georgescu Roegen).
  • In the aggregate, such long run behaviours give rise to disequilbrium sequences, and sometimes cumulative causation walks, where LR values depend: from the path and the bounded world floors-ceilings (Kalecki and Minsky, Brain Arthur and Paul David). Call this Irrational Bubble or not, it happens.

The scientific, methodological, ethic and philosophical debate about “Fundamentals” has a number of wide-ranging analytical and political consequences. We take only one  example (among many) from current debates: Bubbles. Since from the August 2007 bubble bust, Bernanke at the Fed must deal with all the disasters stemming from the repeated bubbles created by an unrepentant Greenspan, a man personally responsible for most of the current global catastrophe (he actually might be globally sued for a few trillion $: we have the proofs!).

While his young pupils at Princeton are inquiring on new ways to tackle the Beast – the accepted axiom at the Fed being now that policies cannot be neutral, even less pro-bubbles like in the Greenspan era, when the glut of surplus value over-accumulation that had no space available in K reproduction, was channeled on purpose in financial Minsky cycles (by the rentiers dominant class and their direttore d’orchestra Mister G).

But  such a Black Beast has as many heads as there are interpreters: see how Steimetz (who “believes” in fundamentals as they were conceptualised by mainstream economics) concludes his item Bubbles in the Concise Encyclopedia of  Economics:

What Are Bubbles?

In 1996, the fledgling Internet portal Yahoo.com made its stock-market debut. This was during a time of great excitement—as well as uncertainty—about the prosperous“new economy” that the rapidly expanding Internet promised. By the beginning of the year 2000, Yahoo shares were trading at $240 each.1 Exactly one year later, however, Yahoo’s stock sold for only $30 per share. (…)

Thus, as this account implies, the definition of a bubble involves some characterization of the extent to which an asset is overvalued. Let us define the “fundamental value” of an asset as the present value of the stream of cash flows that its holder expects to receive. These cash flows include the series of dividends that the asset is expected to generate and the expected price of the asset when sold.2 (…)

Because market fundamentals are based on expectations of future events, bubbles can be identified only after the fact. For instance, it will be several years before we truly understand the impact of the Internet on our economy. (…)

The Modern Bubble Debate

The jury is still out on whether or not bubbles can persist in modern asset markets. Debates continue among economists even on the existence of irrational or rational bubbles. And there is often confusion in trying to distinguish irrational bubbles from rational bubbles that might be generated by investors’ rational but flawed perceptions of market fundamentals. Most modern efforts focus on developing sophisticated statistical methods to detect bubbles, but none has enjoyed a consensus of support among economists.

He’s quite right as far as the academics is concerned: but in real life some hundred million people WILL STARVE in 2009, 2010 and further on, just because M Alan Greenspan liked to play with REAL BUBBLES in the ’90s and the early current decade, while sitting on one of the 5 most powerful chairs in the Planet, the Fed.

You see how fundamental are Fundamentals! This implies that the class struggle and the political agencing for a Libertarian Socialist solution to this huge recession, cannot avoid to deal even with this abstract issue in the Philosophy of economics and sociology.

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