Market volatility.

Good times.

Many major markets lost between 4-5% of their value last week.  Shanghai lost 9% in a day, starting the ripple.  There was fear the government was going to reign in speculation that drove up that market over 200% in a year.  Makes me want to know exactly what governing body decides Chinese economic policy.  I doubt anyone outside of China truly knows, and the Chinese themselves might not know.  This leads to questions of collective action.  It can't be one person, just as markets are not moved by one investor - no matter how rich. 

I'd like to devolve into a discussion of the bond vs. stock market, but all my understandings are too vulgar and easy to pick at despite whatever valid points I might make.

Instead, I'll simply point to aggregate action in the market and its irrationality.  In theory if all investors acted pefectly rationally there would be no rise or fall in stock prices - all outcomes would be determinable and the profit expected by any particular company would be a given.  Relaxing this we can either introduce irrationally driven investment strategies or bounded rationality, or a combination of the both.  Bounded rationality is simple - we can't know all outcomes perfectly because we have imperfect information.  Strict irrationality, however, is more complicated as its asymmetrical investment strategies often create the bubbles of speculation which tend to destabilize the market.  Eventually all bubbles burst, and someone loses and maybe a few people win, but there comes the question of truly causal financial collapse within and across markets versus simple fear.  Fear is obviously an irrational investment strategy, perhaps driven a bit by bounded rationality, but certainly tends to dominate or seed the collective behavior of market collapse. 

Thus, Chinese fear may be driven the Chinese collapse, but to what extent and how was this investment behavior and devaluation causally determining further world collapse.  There will always be rather mechanistic determinations of this equation, literally as certain as a computer-run algorithm, but then such collective market action becomes unstoppable if we are truly so linked to China now.  The more interesting aspect is the proliferation of subjective beliefs concerning foreign markets and their impact on investment decisions.  It would be very useful to know to what extent there exists an irrational motivation to the domino collapse of markets across the globe.  Only when such a motivation makes up a certain significant proportion of market action will it even be possible to avoid this outcome. 

That said, I write all this because I'm curious as to what will happen on the NYSE today.  Japan slid over 3% already today, FTSE and DAX are both opening distinctly lower.  Japan's slide was supposedly due to a surprising drop in the dollar.  If people are not careful this could run away, even if markets attempt to throttle trading.  At the same time, it's possible that a weaker dollar will strengthen our own position since it actually decreases the value of foreign held debt.  In the end, I expect that at some point traders across the world will themselves spontaneously attempt to support the market. 

As the Crash of 1929 was unfolding on Wall St. there were some very unusual heroics.  Financial moguls actually met and attempted to collectively hold back the fear of millions of investors, sinking vast sums into worthless stocks in order to recreate market confidence.  It was too late though, and they failed.  In 1909 the strategy had worked.  The question becomes at what point do investors collectively yet independently recognize when this strategy is required.   It does happen from time to time, still. The ironic thing about this is that such behavior is, in fact, collectively rational yet independently realized price-fixing. 

Let me step back a bit...

About 10 minutes ago I started downloading a fully subbed episode of Bleach. 

This episode aired in Japan about 15 hours ago. 

I am one of 15,000 other people downloading it right now.

10 minutes ago there were 5,000.

15 minutes ago there were only about 1,700.

Goddamn, does anyone else find this absolutely amazing?  Aired in Japan, ripped, translated, encoded, and I'm downloading it at 80k/sec within 15 hours.

This seems worthy of wonder, somehow.

(no subject)

Earlier this quarter my father said I seem to have lived a crazier life than he has.  Coming from a man who hitch-hiked across the country as a teenager, ran a youth hostel in San Francisco with a gay couple, grew up in England and Panama, went to a different school every year for ten years, played a dozen instruments then decided to become a writer, won an Associated Press award, has worked as a carpenter, security guard, journalist and layout artist, legitimately owned two Mercedes and a Porsche at the same time, had his neck broken in 3 places, and has two crazy brothers, perhaps I should meditate on his comment a bit.

Last of the night...

Research relies on money. It pays for more researchers.  When we decided to fund the atomic bomb, it got done pretty quickly.  We don't fund a lot of basic science, like fusion in particular.  If we did, in theory, it may get done pretty quickly.  Here's where it gets weird...

The assumption is always that scientific knowledge progresses continuously - but this simply cannot be the case, it has to go in fits and starts depending on particular breakthroughs.  These breakthroughs come from researchers, whose potential to discover a breakthrough is supposedly pretty close to random, so more researchers in a field should produce an answer faster than if less researchers were in that field.  So then what is the optimal number of researchers (with, theoretically, unlimited funding) to solve any given problem? 

For example:

If every epidemiologist in the world tried to find a vaccine or cure for AIDS, how fast could they come up with a cure?

If every physicist in the world worked on producing a viable renewable energy source, how fast could they discover it?

If every climatologist and oceanagrapher and geologist (and whoever else) in the world tried to find a way to prevent or reverse global warming, how fast could they save us?

This is not a meaningless consideration.  Each of these problems are equally unsolved, and require at least one breakthrough in science to solve them, yet some may require "larger" breakthroughs than others, or multiple breakthroughs.   It isn't hard to define the size of a breakthrough post hoc as the probability that someone would happen upon it.  For example, incremental discoveries are still breakthroughs even if they merely build on two highly related concepts that simply hadn't been combined before.  Those are fields people looove to study because it's easy work to be ground-breaking in a way. 

Other discoveries link highly disparate fields (biophysics, Fermat's Last Theorem perhaps, use your imagination) or require insane amounts of trial and error (edison's filament or current biological searches for particular compounds or whatever they call their widgets in epidemiology).  Still other discoveries require leaps of monumental scale, or at least more monumental than others.  It is difficult to say that any discovery is truly monumental once context has been given - Einstein actually combined a few things and built on them, most people don't realize this.  Perhaps the only example I can think of is Ramanujan, because we literally cannot explain even the proximal context of his dream inspired mathematics. 

My point is this: We know of unsolved problems, but we don't know how unsolvable they are, so we don't know the most efficient number of black box problem solvers (humans, with a certain probability of discovering a certain breakthrough) to solve these problems. 

At the same time, there is great empirical reason to believe that these problems CAN be solved, or at least that entirely unheard of solutions to certain problems can, do and will exist. 

Right now this particular optimization problem is entirely at the mercy of the market and its distribution of resources, based mostly on external constraints. We have atomic physics and the atomic bomb because we were at war.  Or at least, we had it sooner.  We have a flood of pharmaceuticals because society became obsessed with health.  It was more diffuse, but the concentration is undoubtable and its effects have probably led to certain drugs being developed sooner than without the effect. 

What if there was a more accurate optimization that would not waste resources oversaturating a particular field or problem with too many researchers than necessary?  The difficulty, of course, is that you would have to set an arbitrary time-to-completion that you consider most efficient as well as most effective.  In some ways we can probably say that the current market-oriented solution determines the relative balance between these two factors, except that we don't know if this method is actually optimal or we simply think it is. 

I'm going to sleep.

Physics Humor

Person A on /. "One prototype Schrödinger box for sale - cat may or may not be included."

Person B on /. "There is a universe somewhere in which you did not make that joke. And some luckier copy of me gets to live in that universe."

This brightened my day...

(no subject)

Knowing people is supposedly very simple.  You meet them, something happens, you either see them again or you don't - for whatever reason.  After so many iterations you either like them or dislike them, but you know them many degrees better than after the first meeting.

I'm a cheater.  I see short-cuts.  I'm impatient so I like trying to use those short-cuts.  Some people agree with the practice, some people disagree, and some people have no idea that such short-cuts exist.  I think only people with certain experiences can tap into them, but these experiences are entirely irrelevant to meaningful relations.  Not having or recongizing or using them has nothing to do with whether or not you will like who a person is.  This is simply a very long-winded way of saying that I'm amused when I have to stop myself because I'm trying very hard to very quickly know someone, and either my short-cuts aren't their short-cuts, or the idea is foreign.  In the end it's a very definite WAY of iterating a relationship and nothing more. 

Of course, when we lose perspective it becomes most worrisome when progress is slow, short-cuts are impossible and we face a great deal of unknown.  I've been getting much, much better at patience in certain situations - but perspective still seems a lost cause.  I conjoin truth with immediacy and bonding with utter bluntness.  This is a formula that I could plug past experiences into ad infinitum with very rarely great results, but there's a difference between pragmatic outcomes and authenticity.  This is a formula that's right for me, and how I process my world.  Perhaps the ego is creeping in again...

Rarely has the news ever so gladdened my heart...

(There should be a picture here!)

http://www.cnn.com/2007/US/01/31/boston.bombscare/index.html

http://www.fantent.com/2007/01/31/aqua-teen-hunger-force-media-alters-photos/

http://wonkette.com/politics/boston/stoners-media-conglomerate-responsible-for-boston-bomb-hoax-233012.php

http://forums.fark.com/cgi/fark/comments.pl?IDLink=2578800


Major national news, frontpage of CNN.com, Fox News pundits in an uproar, Bostonians looking like complete jackasses (I bet you it was a Harvard prof who made the call).... what more could I ask for?

CNN: "The devices displayed a "Mooninite" -- an outer-space delinquent who makes frequent appearances on the cartoon -- greeting passersby with an upraised middle finger."

At least one guy at freerepublic.com delivers in style: "Is it impossible that they might consider using cartoon or 'cultural' icons to set off a series of bombs in a major US city?"

Cheap headlines abound:  "Aqua Teen Hunger Force Promotion Bombs."

Three of the signs are on ebay already, this was the first: http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=190078492881

This all raises a horrible question though, as two men have been arrested on "charges of placing a hoax device in a way that results in panic."  Can it really be a hoax when you genuinely never thought anyone was stupid enough to think your device was a bomb?  If I have to go around all day trying to determine if what I want to do can even possibly be interpretted as threatening or hostile before I do it, (1) I'd be a large black man, and (2) I'd fail the exact moment I came across someone goddamn stupid enough to think a LiteBrite picture is a bomb.

On a more cosmic note, yesterday I said that this week was hell and it was 20 degrees outside, and something special better happen.  It's good to know that the universe can be so amenable sometimes.

That was fascinating

Lee's Unleaded Blues Club

You drive down cottage grove about 20 blocks (the same road Alli tells me never to drive down, day or night) then head down S. Chicago Ave a few blocks.  It's on the left, on a corner, and it's about the size of the hillcrest living room.

Memorable events?

Table dancing
We were not actually the whitest people there
"I like dipping my dipper in someone else's dip"
Super Percy
Brown Sugar
Everyone was exceptionally nice to us white college kids.