I wrote: > these entities do, conventionally or not, what banks > do: hold shorter-term liabilities and longer-term assets.
Or liabilities that are more liquid than their assets. Or liabilities that are riskier than their assets. Or liabilities that are more opaque than their assets. Or some combination of the above. Quick technical clarification: In finance theory, the empirical dispersion of expected market return rates is rationalized as a function of (1) "term," (2) "liquidity," (3) "risk," and (4) "information." To the extent returns are monotonically related to each argument (and have the right algebraic sign), the formulations above are formally equivalent. Like Marx wrote about the reduction of diverse use values to homogeneous values, of diverse concrete labors to homogeneous abstract labor, of skilled labor to simple labor, etc.: "Experience shows that, in practice, markets carry out this reduction constantly." It's not a cop out. It just captures mentally the empirical fact that markets trade off concrete labors, translate more skilled labor into simpler labor and vice versa, and tend to place premia on term, iliquidity, risk, and opaqueness. (By the way, this is the same reason why the Cambridge Capital Critique is without substance. The abstraction of an aggregate of durable means of production is allowed by the empirical fact that capital, as value, is fungible. Or, put differently, CCCers see the difference between value and use value, but don't see their identity.) _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
