By assets here we do not mean – as is usually assumed – individual assets or realizable income, nor investments in the form of goods or money, but very specific forms of speculative capital. In this section, we assume a progressive differentiation of three different classes of financial assets: a) the so-called generic asset (loan, bond, etc.), b) the so-called synthetic asset (CDS), which updates a whole new class of assets within financial exchange, also known as “synthetic finance”, and c) the securitized synthetic asset (CDO), a product of the processes of so-called securitization, which imply the transmutation of synthetic assets into securitized collateral. The “generic finance” category therefore includes forms of credit (bonds, loans, mortgages, etc.), equities and so-called vanilla derivatives (options, futures), while the “synthetic finance” category includes credit derivatives (CDS, TRS, etc.) and various synthetically structured products such as synthetic CDOs that only contain CDS. (Cf. Lozano 2013) The two synthetic classes of assets are usually analysed in terms of their structure only as insignificantly modified copies of the generic assets that existed before them, without, however, recognizing that the repetition of the synthetic assets by themselves generates a completely new economic quality, as we were already able to trace in our description of the theory of contingent claims in Ayache. Thus, as part of the process, structure and method of synthetic exchange, the synthetic CDO has the potential to aggregate a heterogeneous set of securities, initially consisting of different cash flows and risks, into a single homogeneous pool, which then functions as a single cash flow and a singular risk. The homogeneous pool can then be divided into different classes of risks and cash flows, which radically changes the quality of both components. The newly created risk classes are referred to as tranches, which in turn can be rearranged in various ways to create a variety of specified risks and the cash flows associated with them. (In this way, risks, which Luhmann generally defines as adaptation to opportunity, are identified and dispersed, while at the same time taking into account the diversification of access to risks that are not open to every actor in the same way, resulting in a differential and at the same time normalizing regulation of individual risk strategies). With each new tranche added within a CDO, new levels of dependency on other tranches are also created, which in turn contain series of additions, graduations and separations; new differentiation processes and at the same time punctualizations are thus created, which record, register and distribute the respective losses and gains of the various tranches. And whenever tranches are used to re-differentiate risks, new levels of differentiation are created, constituting series of so-called “attachment points” and “detachment points”. (ibid.) An “attachment point” is a point that indicates that risks belong to a particular tranche, while reaching a “detachment point” releases risks that from now on affect a differentiated tranche that may belong to a higher level in the ranking of risks. “Structured finance” is the term used to describe the processes of differentiation and redifferentiation as a method of tranching risks – processes of bundling and distributing risks that not only keep the money flows fungible, plastic, mobile and interchangeable, but also free up potentially infinite capacities to create dynamic systems of order and disorder in the financial markets.
Securitization, sometimes called “structured finance”, involves the process of creating collateral for a financial asset. Two types of collateral can be distinguished here: 1) collateral based on pre-existing generic financial assets (“cash securities”), 2) collateral created by new synthetic replication qua credit derivative (“synthetic securities”). Consequently, with regard to synthetic finance, a radical transformation of assets takes place in the process of securitization insofar as the already existing generic asset, e.g. a loan, is constantly divided and its economic quality changes in the process of division itself. And the subsequent bundling of any number of generic assets in a single portfolio, which attempts to homogenize different risks and cash flows in a single asset that contains only a single risk and a single cash flow, simultaneously allows a redifferentiation or diversification of new risks and new cash flows, and this as differently and flexibly as the trader wishes. In this way, we can actually speak of a new hyper-fungibility of the synthetic asset, which the generic financial asset definitely does not have.
In economics, “synthetic finance” is dealt with under the heading of derivatives. However, as we have already seen, this should be treated with caution. In the case of so-called credit derivatives, a type of synthetic financial asset, the difference to traditional derivatives such as options or futures, which incidentally have been around for two millennia (e.g. Aristotle wrote to Thales to buy options on olive oil presses), quickly becomes apparent. Since around 1995, synthetic assets have begun their triumphal march on the globalized financial markets as hyper-fungible and at the same time highly scaled symmetrical classes of economic objects. Although these assets have some economic similarities with generic financial assets, they also add completely new economic properties to them, which ultimately thwart the concept of the derivative as such by not only expanding it, but also inventing completely new qualities. Synthetic securities are not closed entities that have exact coordinates in a Euclidean space, but rather the topologies of curved surfaces that are defined by their vectors and their transformation, i.e, these virtual economic objects are simultaneously to be understood as spatiotemporal events with which a current entity touches an infinite data stream, and this through a physical and/or conceptual selection, evaluation, inclusion, exclusion of the data and their transformation, in order to be able to intervene and invest in a current field of potentialities of economic objects.
If in this section we initially assumed derivatives whose value relates to underlying underlying assets, this does not apply at all, as we have already seen in the discussion with Ayache’s theory of contingent demand, to synthetic financial assets, which causally add new properties to the value of generic assets and are thus at best to be understood as a quasi-referent of generic assets, but not even that, because conversely it is precisely the generic assets that are ultimately determined by the movements of the synthetic assets. (ibid.) In the subprime crisis of 2007f, the price movements of CDS insurance policies relating to mortgage loans, among other things, led to huge reductions in the value of these loans, which ultimately manifested themselves in higher interest rates on variable-rate mortgage loans, falling house prices and subsequently in mass defaults on the loans themselves. As a result, the price of mortgage loans (a generic asset) rose precisely because CDS insurance became more expensive. If the market value of a physical economic object (classic goods such as clothing, food, computers, etc.) is directly affected by a loan, and this in turn can be massively influenced by the value of its synthetic “replicant”, can we really maintain the previous hierarchical order of classes of exactly three economic objects, with synthetic securities still being referred to as purely derived securities, derivatives? Let us take the case, for example, that a portfolio containing various assets is structured synthetically, i.e. the assets are formed according to a very specific replication technology and are thus ultimately derived from the constantly changing value of the synthetic portfolio. How is the hierarchy between the economic objects to be understood here? Even if the synthetic asset announces itself as a mere replicant of the generic asset, it should not be forgotten that its economic characteristics differ considerably from those of the generic asset: Namely, the synthetic asset is the production of pure difference articulated as a simulation. This is a real illusion that no longer bears any resemblance to the classical economic object, so that the immanent “copy” of the synthetic model in itself quickly destroys any symmetrical and purely representational relationship between the physical object and the value-forming imago. (ibid.) At this point, the synthetic diagram, which is to be regarded as a germ of the order and rhythm of synthetic assets, can at best be understood as a trigonometric, but not as a depictive construction, ultimately as a topological relation between the economic properties of the synthetic assets themselves, their nomadic distributions, and this in contrast to the conception of purely logistical distributions. In the diagram of a synthetic asset, the discrete elements, which are nothing more than the economic properties of the asset (cash flow, maturity, price, risk, volatility, etc.), are set in relation to each other. (The diagram generally includes elements such as graphemes, text, symbols and mathematical formulas, but may also include mimetic images). The production of synthetic derivatives, which can at least potentially be understood as infinite, theoretically no longer requires any transfer of private property, it does not require any significant production by means of exploitable human labour, it does not require the classical physical objects in which value is objectified, although the potentially infinite proliferation of synthetic assets and their economic properties has profound material consequences for the entire economy as a whole. Furthermore, it can be assumed that in the trading of synthetic derivatives, the traders act neither as debtors nor as creditors of credit transactions; they do not have to have any relationship to the pre-existing generic exchange as the so-called referent of their own exchange transactions.
For Deleuze, too, the term “derivative” as a conceptual equivalent for the synthetic security would probably only have been partially correct. Similar to Ayache, with reference to Deleuze’s way of thinking of the non-quantitative differential calculus, a radical break in the relationship between synthetic securities and traditional derivatives is much more likely to be assumed, so that the structure, value and price of the synthetic assets are causally added to those of the generic assets, indeed the synthetic assets are to be understood as quasi-causality with regard to the generic assets and their underlying values. If the economic mode of existence of a classic object (clothing, computer, food, etc.) is directly affected by the generic asset (share, loan, etc.) and its value is in turn affected by its synthetic replicant (CDO, CDS), then it does indeed seem difficult to speak of a derivative at all in the case of the latter. Rather, the chain of effects runs the other way round, because in general the object that has the highest power of effect, i.e. reality, is the one that in its plurality comprises the most, the most variable and thus the most effective properties and components within a specific constellation. It is precisely the real-virtual object of the third order that is able to produce a differential self-referentiality at high speed, whereby it does not require any externality in order to convey its own self-referential movement. Thus, the CDS is a (commodified) asset that possesses an economically independent and at the same time diverse structure in order to simultaneously initiate a process as a technology that in turn concerns the synthetic replication of a generic financial asset; finally, it is the constitutive process of synthetic exchange itself that actualizes the synthetic asset as such, without at this point still requiring the exchange of pre-existing economic entities. Different quanta of symmetry can be assumed within each of the three different classes of exchange – classical, generic and synthetic: We define symmetry as the invariance of the exchange itself, which measured by the number of transactions does not significantly alter the object or process, which in turn means that different quanta of symmetry mark different acts of exchange, which can then be categorized into different classes of exchange. And insofar as synthetic assets, which form their own class of exchange, make the least restrictive invariant demands on an object, they can offer a higher scaled symmetry than the other two classes of exchange, from which they have historically and logically differentiated themselves. We can initially assume an economic symmetry or equivalence between commodities (and money), without which no exchange takes place. However, the economic space of the market actualizes different quantities and qualities of symmetries because the market is open to contingencies, which, however, turn out quite differently for the various economic objects. For example, the classic barter transaction requires a congruent and immediate transfer of the physical object in exchange for money, and this must be regarded as an invariant requirement of the economic property of the duration of objects, whereas in the case of generic assets such as credit, this invariant requirement of an immediate transfer of the object no longer applies – the monetary imago of the physical object (money) now has the potential to grow within the framework of a specific time horizon of the new barter transaction; with the synthetic asset, the invariant requirements to which the generic asset is subject dissolve even further, whereby the economic properties of the object or event finally assume the freedom to fold, twist and bend or devour. i.e., synthetic assets have an extraordinary reality, one that is much more powerful than other economic objects or events in terms of their register of reality, potentiality, actuality and virtuality. The virtual causality of the synthetic assets should be understood as performative and material, i.e. the assets virtually push with their effect towards real material consequences, including in relation to the past and future development of the generic assets: the performative impetus of the synthetic exchange even redefines the material terms of the underlying assets on which the generic asset is based.
And it should be borne in mind that even if CDS insurance were to be described as a mere copy of a generic asset, it is not the same copy, but a radically excessive and variable repetition of the “copying” process, which permanently generates differences within itself, so that the economic characteristics of the synthetic asset such as cash flow, maturity, volatility, price and value also permanently differ from those of its so-called generic referent. If the simulacrum is the “true” form of being, then the hyper-fungible power of synthetic assets consists precisely in setting in motion a clothed repetition in Deleuze’s sense, which neither leads to an identity nor presupposes one, but instead interiorizes the conditions of its own repetition in the course of the repetition of variation in order to achieve a highly fragile identity, i.e. clothed repetition is the interiority of value as difference in itself. And it is precisely for this reason that the properties of synthetic assets cannot be purely intrinsic properties, but rather the properties of the exchange processes themselves that initiate the transformation of assets into illusory images of value, which occurs in simulation spaces commonly called the market. Factors such as moneyness, divisibility, maturity, risk and cashflow can be isolated as properties of the synthetic asset. However, it is not the extensive actuality of the asset that is its decisive component; rather, it is the fungible virtualization potential of the asset itself that prompts us to speak of an almost limitless, an ad-infinitum creation, which, for example, places risk and cash flow in a potentially synchronous relationship without, however, ever being able to eliminate the moments of desynchronization. The simulation space in which synthetic securities such as CDSs or CDOs are traded today is neither fixed nor flat, neither uniform nor homogeneous, but must be regarded as non-Euclidean or topological and is not limited by any reference classes. While the architecture of stratified space mobilizes discrete units at the center of its design, which connects points through lines, the topological curves of smooth space, which are generated by algorithmic or parametric architectures, mobilize the generative power of the point, its meshing and folding towards the emergence of a new form. This simulation space can be defined economically, it is capable of bending, twisting, curving and folding economic events, it is extremely malleable and supple. However, it is precisely in this context that neoliberal control techniques intervene, i.e. the reality of synthetic exchange is and remains part of speculative capital, whose materiality is defined by a cash flow if it is actualized in the process of exchange.
The synthetic security can therefore be understood as a production of pure difference that takes place in a topological space of simulation, the synthetic security as the differential capital event, so to speak, which usually bears no resemblance to the respective referent, as an immanent “copy” of a model that constantly produces diffusions, replications and novelties. As is usual with a simulation, neither the framework of rules nor the regularity of the synthetic process are known from the outset, which means that we are dealing with the construction of a new economic, non-representative reality, and it is precisely the negation of this problem by financial capital itself that really drives so-called financial crises. The significance of simulation, with its monstrous performativity, lies in an economic reality radically affected by contingency (cf. Ayache 2010a), without, however, ever escaping the ultimately determining regulative of capital. And this virtual performativity can express itself in very different ways, for example as a prognostic force for newly planned or to-be-planned capital processes or alternatively as the instance or image of a different way of thinking. Deleuze understands the image of thought less as a method than as a system of coordinates, a system of movements, dynamisms and orientations. (Cf. Deleuze 1993b: 215f.)
We have already seen that the buyers and sellers of synthetic securities do not necessarily have anything to do with the so-called reference transactions, so that one can speak of a creation ex nihilo with regard to the synthetic-financial transaction. And with every further financial transaction, a new asset is created that has real characteristics (cash flow, price, risk, time, etc.) that did not previously exist. And these properties are only realized in relation to their transformation in the simulation space of the exchange, which we call the market here with Ayache. (Cf. Ayache 2005) The identity of each individual synthetic economic object appears to be resolvable, namely into various shreds and fragments, which in turn possess differentiated properties; the differences that swallow the current identity of an asset, so to speak, in order to produce very rigid disorganizations of the new classes of assets reign supreme here. And thus the concatenation of synthetic exchange transactions leads, at least potentially, to an ad-infinitum proliferation of differential money flows and risks. In the course of synthetic trading with synthetic assets, new economic properties of the synthetic objects are generated, which appear to have lost all structural reference to the respective reference products. The structuring and structured process itself also produces new economic properties, so that we ultimately speak of the synthetic asset appearing as an avatar of the generic asset by acting through the so-called disguised or virtual repetition (Deleuze), which, in contrast to the naked or actual repetition, produces pure differences, which are not related to underlying or “true” facts, but rather permanently produce new concatenations and constellations of syntheses on the basis of virtual structures that they imply. Such structural processes lead, for example, to new economic properties such as “credit enhancement”, the determination of the rating of an asset-backed security by a rating agency, or “leverage”, the leverage effect of debt capital on the return on equity. New differences and, at the same time, new economic properties are constantly being generated that did not previously exist with the referenced asset and its trade, and this is achieved through a clothed repetition. (Cf. Deleuze 1992a: 355ff.) In fact, we can now assume a new kind of differential quality of synthetic assets, with which we are ultimately dealing with the cartography of a purely functional-analytical mapping, the representation of which, however, can never be understood as independent of objectives, to which a selection of instruments for the implementation of objectives is inherent, whether these are individually known or not. As instruments of financialization, synthetic derivatives manage, among other things, the variable attributes of values such as interest rates on loans, expected rates on mortgage loan defaults or rates on exchange rates between two currencies. They are able to bundle the variable characteristics of different sources with different expected income, e.g. loans with expectations of high and low default rates and the resulting expectations. The synthetic derivative is considered to be a contract to buy or sell a certain proportion of these variable characteristics at a certain point in time. Since commodity prices and services fluctuate continuously and even local markets have their own volatile characteristics, synthetic assets are used as insurance to simultaneously hedge against future transactions in which currency and interest rates, mortgage loans, etc. can fluctuate between the time the contract is concluded and the time it matures. Different gains or losses can therefore be balanced or hedged against each other, for example with CDOs that mix safe mortgage loans with sub-prime loans, which ultimately failed in the USA when interest rates for mortgage loans rose and the ability of borrowers to service the loans fell. In this sense, synthetic assets bring very different things together and make the future actionable now. And their form of circulation takes place on global markets, even if the bundled things – houses, cars, student loans, etc. – may be local assets. And all of this is always in relation to the changes in the modes and operations of capitalization on the international capital markets, the governance of financial capital, the growth of the so-called shadow banking system, the ongoing experiments of central banks with the easing of their monetary policies, the mixing of money and capital markets and the sovereign debt crises, the unpredictability of new solvency and/or liquidity crises.
As already indicated several times, in this chapter we draw on Deleuze’s work Difference and Repetition, in which he presents a rigorous method of analytical differential problematization that also enables us to think of the structure and process of synthetic securities as a topologically founded manifold. In general, the concept of manifoldness refers to immaterial entities that are immanent to material processes. For Deleuze, qualitative multiplicity is a term to indicate the constitutive process of a virtual object. (Cf. Deleuze 1992a: 233ff.) In contrast to the numerical, discontinuous manifold and its extensive and quantifying properties, which are always located in the actual and potential realm (in a homogeneous time), it is based on intensive, continuous properties and is more inclined towards the virtual – for Deleuze, it shows itself in his Bergson studies in pure duration and can only be divided at the price of a change in essence. While the numerical manifold is actual in the full sense and has little power of virtualization, is only gradually divisible and does not change qualitatively or as a unit with the division, thus remaining a Euclidean object in the broadest sense, the qualitative synthetic manifold is an a-numerical, continuous manifold that cannot be divided without changing its essential quality itself. Deleuze/Guattari find points of reference for this type of manifold in fuzzy logic, Mandelbrot’s fractality and Riemann’s smooth space.
In the Thousand Plateaus, Deleuze/Guattari maintained the distinction between two types of multiplicities, but integrated them into the category of space itself. They contrast the (virtual) smooth space, which is structured analogously to Riemann’s model of general space or the qualitative manifold, with the notched space, which is characterized by an actual, extensive and metric manifold. The virtual hypercomplexity of smooth space corresponds to a non-order that can be characterized by the heterogeneity of the elements and the variability of the relations, and this under the dominance of the relations that determine space and number: dissipative structures of differences that permanently generate mediality in their operative mode (media only exist in use, they do not exist as unused). In the context of synthetic finance, economic media (number, volatility, etc.) are characterized above all by fuzziness, an almost infinite plasticity and contingency. A fuzzy set A can be represented by the following function: Ma: X – (0,1) (the range X is determined on a case-by-case basis). Obviously, the fuzzy set defined by the binary membership values 0 and 1 proves to be only a special type of fuzzy set and therefore has less power than the fuzzy set. We now assume that Deleuze’s concept of the manifold leads us to methodological and technical terms with which the constitutive processes of an economic relationship such as synthetic finance can be better understood. Thus, the synthetic manifold possesses n-dimensional aspects of the creation and assembly of an economic event that is always in a state of becoming because it possesses a superabundance of reality whose parts are not always or only actual, not always or only virtual, not always or only potential, but offer a mixture or confluxion of the three components or registers of reality: Potential, actual and virtual. It is thus a concept that indicates reality, the fullness of a reality whose parts are neither entirely in the virtual nor entirely in the actual. While Deleuze uses the concept of dimensionality to refer to the diverse variables of a coordinate system on which the actualized asset is based, in terms of continuity he refers to the sets of relations that correspond to the changes in the variables; definition in this context means that the elements are defined by these relations, whereby the elements never change without the multiplicities changing their order and metric.
In this context, we describe synthetic assets as dynamically composed, formless un-orders that inherit various economic properties such as maturity, abstract value, price, risk, cash flow, etc. In any case, these properties are constantly changing. In any case, these properties can be constantly plastically revealed and injected elsewhere, they are created exogenously and can suddenly be destroyed again, they circulate ad infinitum and non-linearly – swarms, vortices and fractures of differential repetition, a thousand plateaus of their concentration, compression and dissolution. And synthetic exchange signals the birth of hyper-fungible forces that have the capacity to dissolve the respective identity of the assets. Thus the assets already interiorize their own repetition as value, i.e. they are the value of (clothed) repetition: repetition as the interiority of value in itself. The synthetic assets possess the ability to constantly change the variables of their coordinates with which they are actualized, i.e. they are not to be understood as invariant. And if the variables of the coordinates through which the structure is distributed in the space of possibilities of economic properties bend, rotate or otherwise change, then this must also be possible with the relations between these variables. (Cf. Lozano 2013) The elements of the assets must always be understood as their properties. And if we then say that these properties do not change unless the respective asset also changes its relational structure and rhythm at the same time, then this also means that the structure, rhythm and material properties of the asset can only change through structural repetition, namely in the synthetic exchange itself. This means that the generic asset is repeated in a differential way by the synthetic asset and both experience a qualitative change in and with this repetition, and this as a process of differentiation of quite different properties of the two assets. First, the generic asset has repeated the physical object and with the repetition has added new properties (maturity, profit, default risk, etc.) to it and to itself. However, a radically new repetition process takes place in the relationship between the generic and synthetic asset. Nevertheless, the classical economic objects (coffee, clothing, table, etc.) and the generic financial assets (credit, etc.) appear to us to be more “objective” than the synthetic assets, and Deleuze’s distinctions in repetition and difference help us to understand why: the classical, flat object is filled with extensive economic properties, which can also be divided to a certain extent, but the quality of the objects does not change in the course of these divisions. The properties can be written as points on a line and these points are to be understood as uniform, i.e. divisions only produce gradual changes. If there is a flat, atmospheric space, then the structure of this economic space is equal to a zero-curve-dimensioned surface on which diverse sets of commodities with all their variable and invariable properties move around in order to ultimately meet in exchange. However, even the complex numbers are to be understood as multidimensional and the imaginary numbers can neither be represented as representative numbers within Euclidean axiomatics nor derived from them. At this point, we deal with the transfer of operations to the relation of structures that are geometrically non-existent in the classical sense, i.e. we construct a deterritorialized analytics that completely abstracts from the representational logic of the geometric grid. Thus there are indeed qualitatively different, indeed virtual spaces of exchange that are equipped with one or more curvilinear planes, i.e. markets span simulative spaces of potentials for economic properties of synthetic objects that populate such spaces. These are multiplicities that populate a completely different space than the space of Descartes, namely a Riemannian space – a mathematical construction that was taken up by Henri Bergson in order to shift the continuous multiplicities from the spatial to the temporal. (Cf. Deleuze 2007) For Bergson, the continuous multiplicities are simply not measurable, but they last, i.e. they only divide when they significantly change their quality, which means that they can only be measured under the condition that the principle of measurement also changes with each further subdivision.
Thus the property of division always also contains the unequal, so that the actualization of the properties in synthetic exchange leads at least to the temporary dissolution of the identical and is completely freed from those invariant instructions on collinearity with which both the classical object and the generic asset are still integrated. Such indetermination means that the synthetic assets have no pre-determined form, they are, so to speak, free of pre-defined variables of their coordinates as well as of pre-defined relations, apart from those that now exist between their variables. We are dealing here with multiple, non-localizable relations between differential elements that are constantly translated into real relations and actual terms in trade. Finally, there are essentially different relations between the material properties and the various registers of reality of the synthetic assets themselves: their actual, potential and virtual shares of reality. Roughly speaking, Deleuze defines the actual as that which is, he defines the potential as that which is and can be everything possible and the virtual as that which is neither potential nor actual, i.e. that which was possible in a given place and at a given time in the past, is possible now or will be possible in the future and thus by definition has comprehensive reality status. (Zechner 2003: 103) The virtual primarily possesses a register that records and distributes intensities that structure the topological space of what then appears possible to actualize in the future. And intensity, as intense quantity, encompasses the unequal in itself, it indicates the difference in quantity, it shows what is ineradicable in the so-called difference in quantity, i.e. what is unequalizable in quantity itself. (Cf. Deleuze 1992a: 308ff.) Accordingly, it is regarded as the essential quality of quantity. If, according to Deleuze, virtual multiplicity has neither form nor signification, does not challenge any prior identity or one, but rather testifies to pure difference in its indetermination, then any actualization of synthetic securities as a result of their trade is not to be understood as the actualization of a prior form in economics either; rather, the actualization always implies differentiation processes of the structure, without a pre-definition being required for the synthetic asset, i.e. the structure exists only in and from its effects. The synthetic security thus has a part in the virtual and a part in the actual; in Deleuze’s sense, it is a hybrid virtual object: The virtual object is doubly inscribed in reality, on the one hand as a parcial object derived from a generic object in that the latter actualizes the former; on the other hand, it exists in its own process of becoming, which above all moves from the virtual to the actual – and thus it is incorporated into reality including its virtual aspect, insofar as the unilateral process from the virtual to the actual points beyond the virtual, namely towards a global integration into an open whole (actualization) and insofar as it does this, it becomes a parcial object. This hybridized, partially actual and at the same time virtual object gives the synthetic a monstrous material force. Deleuze says that the actual object is subject to the law of being or not being somewhere, while the virtual object has the property of being or not being where it is. For the hybrid object, it ultimately depends on the degree to which it is both a virtual and actual object, insofar as it can be partially incorporated into all possible objects in order to have an effect on them. As a result, the synthetic asset is created in the concurrence of what it is and what it is not. As speculative capital, it is what it is, a replicated embodiment of the generic asset (e.g. credit or government bond), but at the same time it is more than it is, because it functions much more fungibly than the generic asset and has a much higher symmetry than the generic asset, it can radically affect, even determine, its trade, and it possesses a series of independent, constantly changing, different economic properties. (Cf. Lozano 2013) But it is also less than it is, i.e. a fragment of the generic referent (e.g. the CDS does not replicate the entire risk of the reference credit). Thus, one should by no means assume a one-to-one mapping of the full range of economic properties with respect to the replication of the particular reference event by the synthetic security. (Ibid.) What generally distinguishes the mapping here from the search for traces involves a non-representative orientation towards a synthetic experiment that invents its own reality and thus simultaneously infiltrates other realities, although it ultimately remains determined by the reality of capital. If Deleuze says that mapping does not reproduce the unconscious in itself, but rather constructs the unconscious, then financial instruments such as CDSs or CDOs should certainly be understood as part of the unconscious of capitalist reality.
Synthetic securities therefore always have a virtual sphere, or at least they are located in a sphere close to the virtual, an admittedly somewhat unfortunate spelling because, as we have seen above, the virtual cannot be considered a sphere. Rather, it is about virtualization capacities in and of the actual (material properties of synthetic financial assets are marked by a growth in fungibility or virtualization). And if synthetic assets are not only divisible, but also include reversibility, then we should understand this as a move towards an even easier fungibility and an even higher symmetry within their virtualization capacity. No more physical identity can be found here, no representation in a pre-existent space can be indicated, rather the synthetic assets, which with their virtualization/acutalization capacity are to be understood as part of an accelerating dynamism of speculative capital, flow in non-Euclidean spaces, the synthetic markets. The non-Euclidean presence of synthetic assets manifests itself as a progressive differentiation of the financial system itself, which completely obeys the rule of inclusive disjunctive synthesis, in and with which there can no longer be any significant distinction between original and copy, no dominance of the referent over the derivative, of the concrete over the simulacrum, instead we are always already dealing with virtual, non-postal concatenations of infinite “copies” that arrive nowhere and that no longer allow any original to survive. With its intensive virtualization capacity, the synthetic spans all its previous registers as well as its own actuality in order to allow us to recognize the universality of a non-foundation. If synthetic securities can be regarded as attractors for the behaviour of generic objects (credits) and now operationalize even the classical forms of exchange such as those between commodities and not vice versa, then they increasingly define the economic scope of generic assets and classical forms of exchange with their peculiar power of action. As we can see, there is an inversion here, insofar as, for example, the price, interest rate and value of a loan or a government bond are now set by a synthetic “derivative” and thus have to be regarded as derived. And we observe that the increasing differentiation of “synthetic finance” sets in motion a truly paradoxical quantitative metric of economic properties, while at the same time the synthetic exchange processes demonstrate a higher quantitative symmetry that arises, among other things, through the bundling and tranching of risks. (Ibid.) If it is easy to see that the projective metric is more general than the Euclidean metric, the synthetic properties of synthetic assets are also considered more general than those of classical forms of exchange and fictitious capital. Synthetic finance thus contains a higher, more powerful class of exchange, integrating generic finance and classical exchange, and ultimately every form of capitalization, but never the other way around. And this happens again as integration into the capitalist economy as a determination-in-the-last-instance. In the course of the progressive differentiation of financial capitalism, its seemingly infinite movement towards a constantly degraded similarity of its multiple economic objects among themselves, insofar as they proliferate and ceaselessly create themselves as new objects in order to progress from copies to other copies, until they finally mutate into pure simulacra and bring about a numbing and incremental change of capitalization itself – in the course of which we are dealing with a new abstract, hegemonic model of capitalism itself. This is about the virtual and dynamic consistency of the so-called neoliberal model itself, perhaps at this point also about the famous abstract machine of Deleuze/Guattari, which is characterized, among other things, by the immanent dynamics of an ensemble in which the consistency of each object always depends on a certain level of abstraction and less on the homogeneity of its concrete circumscriptions, so that consistency forms itself as part of a productive and dynamic process. The abstract machine is constituted by a set of vectors, emergent tendencies and potencies that have a greater or lesser chance of actualization. In terms of the neoliberal model, this means that there is a capital-immanent potentialization of the individual/different qua differences, while at the same time the emergence of all forms of potential collectivity and autonomy of the social is blocked.
We can still speak of temporal acceleration processes, whereby we are simultaneously dealing with an increase in the quantity of financial transactions per unit of time, i.e. with processes of continuous production, with which the technological-economic acceleration entails an even faster growth in the quantity of financial transactions, which can certainly expand into metastatic growth. (Cf. Rosa 2005: 116) The computerized real-time trading of synthetic derivatives – processes of acceleration that can hardly be surpassed technologically – thus correspond to increases in the volume of financial transactions per unit of time, whereby their growth rates tend to exceed the technologically induced acceleration rates, so that we are dealing with further shortages and compressions of time in the economy itself and ultimately (due to physical limits, among other things) with the tendency towards an instantaneous time that characterizes the economic simulation space. Finally, in this context Deleuze offers not just another concept of value, but a theory of the concept of value that indicates a self-accelerating dynamic system of capitalization and its stratagems, institutions and policies. In complete contrast, in traditional Marxist theory we are still dealing with concepts of the division and filling of value, in which (finite) space is conceived as a container, which in turn is filled with essentialistically conceived objects in which value (as a social relationship) is objectified. And money then represents the various objects, whereby differences are always erased in the name of the identity of the same. Synthetic finance, on the other hand, provides a new mode of dividing and distributing economic space, which is the simulative, abstract production of this space itself and now has a significant effect on the mode of all productions in the capitalist economy. Synthetic securities, which incidentally do have a materiality, are a sub-determined structure without content, whose radical determination, however, is taken over by the reality of capital itself. And the morphogenesis of synthetic securities, that of their money flows and their risk productions, their times and their prices, all this appears in the oscillation between virtualization and actualization, which in Deleuze’s context moves above all from the structure of the virtual to actualization, from the conditions and constellations of a problem to the cases of its solution. In this paper, we shift the problem and inscribe the non-structure of the synthetic asset into the virtualization-actualization circuits of capitalization that we are already familiar with.