Shifting to Equity Paybacks

Profit Extraction

Profit Extraction is the financial mathematics for calculating the cost of savings for investment transformed into capital for business through profit extraction from volatility and growth in market clearing prices for securities in the markets for maintaniing volatility and growth in market clearing prices for such securities, as gain on sale.

Securities are large numbers of small, legally equal, commodity shares of ownership in large scale, long-dated financing agreements between Financiers and Enterprises that can be bought and sold between buyers and sellers without the consent or participation of either the Financiers or the Enterprises issuing such shares, and without affecting the use of savings for investment that is transformed into capital for business by that Enterprise, at prices determined by agreement between the buyers and the sellers, or through auction (bids [to buy] and asks [for a price, to sell]) in a market maintained by market markers and associated professionals.

Financiers are people who do the work of Finance.

Finance is the process of:

  • aggregating money set aside by others, for a future purpose, for a future time, that is made available as savings for investment in financing for enterprise; and
  • allocating those aggregations to Enterprise for use as capital in business.

Business is the social organization of physical/human Knowledge + Networks + Routines for transforming cost-for-value into value-for-price through the application of technology to create through curation a surplus of unique artifacts of that busy-ness in abundance, for sharing with others, for their use as solutions to one or another of the everyday problems of everyday people living our own best lives as best we can under the circumstances then prevailing, through exchnage for a price paid in money or other value that functions as money,

Technology is language (logos) for expressing insights into how the world about us works, in some particular way, and how we can take the world about us as we find it, in that way, and make it work more a way we choose to make it in that way (techne) [the Promethean gift of fire, and the Biblical curse of toil that is our uniquely human way of being in artificial worlds we curate for ourselves socially and individually, in which to live our own best lives as best we can under the circumstnaces then previaling, from among the possibilities we find in the world of Natrue into which we each and all are born, and upon which we each and all depend for our being and our wellbeing.

Enterprise is the legal form of ownership for investment and control over the conduct of a business to concentrate the time, effort and expertise of others to organzie the Knowledge + Networks + Routines for doing the work of using technology to transform cost-for-value into value-for-price in volumes that can pay the costs and earn of profit, for reinvestment or distribution..

It costs Enterprise money to pay cost-for-value that can be transformed into value-for-price.

When Enterprise needs money, Finance provides it.

Finance has to finance something.

Every Enterprise establishes, executes and eventually senesses a Social Contract with Popular Choice that flourishes for a time, before fading in the fulness of time, beginning as a vision for an innovation that is right for the circumstnaces prevaling at the time, that becomes over time a shared vocabulary for establishing capacity that becomes customary and grows into sufficiency that eventually always fades into history.

Finance finances that Social Contract at different times, for different costs, on different terms through diverse technologies of aggregation and associated mathematics of allocation.

Under the circumstances now prevailing, these include:

  • the aggregation of savings set aside to provide for our own through Family & Friends for allocation through the mathematics of patronage for IMPACT, where Impact is whatever the family and its friends agree is good for the family, and its friends;
  • the aggregation of savings set aside to provide for others through Church & Philanthropy, for allocation through the mathematics of grants for MISSION;
  • the aggregation of savings set aside to contribute to the shared, social costs of public health, public safety and the public good (the common weal, or wealth of nations), through Taxing & Spending, for allocation through the mathematics of subsidies for POLICY;
  • the aggregation of savings set aside to for safekeeping and future transacting through Banking & Insurance, for allocation through the mathematics of monetization of PROPERTY as money lent against a promise to repay, at interest, at a time, or over time;
  • the aggregation of savings set aside to idiosyncratically put money to work making more money, opportunistically, through Exchanges & Funds, for allocation through the mathematics of profit extraction from GROWTH; and
  • the aggregation of savings set aside to programmatically provide certainty against certains of life’s future financial uncertainties, through Pensions & Endowments, for allocation through the mathematics of capacity derived from character, true to AIMS.

The mathematics for calculating the cost of money in finance determines:

  • the conditions precedent (qualifications of the Enteprise) to the financing;
  • the time and timing of the financing; and
  • the conditions subsequent to the financing that must be honored by the Enterprise in order to keep the finacing in place as orginally agreed (failure to honor these conditions [default] results in premature termination of the financing and rights to immediate repayment [remedies on default]).

In this way, Finance curates the Economy by determining which Enterprises will receive the money they need to do business and the way that business must be done.

Which is why it is important to having the right Economy that the right financing finances the right businesses at the right times, to fit the circumstances then prevailing, as circumstances change from time to time, and over time, well and truly.

Which is why it is such a problem for our times that Pensions & Endowments are allocting their aggregations through the financial mathematics of Profit Extraction, which is the mathematics of securities trading for financing business for Growth.

and why it is so critically important that we rectify this problem with all deliberate speed, by shifting Pensions & Endowments into Equity Paybacks.

“What if pension capital is becoming systemically toxic?”

–Indy Johar

           “
 what kind of world 
             do we want 
      and how 
               can we make it happen?

Simon Mair, MEND Network

THIS is the world we want

THIS is how we can make it happen

allocating Fiduciary Money through Equity Paybacks from current cash flows through Enterprise, prioritized by contract for:

  • Suitability of the Technology to the circumstances prevailing at the time;
  • Duration of the social contract between Enterprise and popular choice over time; and
  • Dignity in how the business does business all the time, across all six vectors of cash flow through Enterprise, including:
    • Fair Trade, with suppliers;
    • Fair Engagement with communities, of place and of interest;
    • Fair Reckoning with the consequences, on Nature, Society and the Future;
    • Fair Working, in the workplace;
    • Fair Dealing, in the marketplace;
    • Fair Sharing, with savers whose savings are the “raw material” form which financiers fashion capital for business.