Market capitalism circulates resources through an economy. Cybernetic finance keeps markets in equilibrium.

Capital takes many forms: intellectual, social, political, reputational, physical, monetary, informational.

Market capitalism posits monetizing all forms of capital by equating value to the last traded price. But not all prices are fair or representative. The distinction between fair value and extortion is invisible to third-parties. Price is an especially weak source of information about credit quality.

Cybernetic finance is centered on the use of informational capital, where expectations about future payment behavior are formed through the continuous reassessment of relevant performance data. They are a better guide to fair value than price.

Structured finance is a form of cybernetic finance. Structured finance is based on analysis of private data, but it is embedded in an informationally weak disclosure framework created for corporate finance. The information asymmetry between what is used and what is disclosed caused the Subprime Crisis. R&R Consulting has the only comprehensive set of tools for unifying the analysis of structured securities in the primary and secondary markets.

Close the loop on the market, and you restore the market to equilibrium.

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